News Wrap


Gross non-performing assets (NPAs) of bad loans of state owned banks in India have surged by over 60% to Rs. 7,000 crore (approx) for fiscal 2016-17. The ability to service debts of borrowing companies has been attended by the continued slowdown and slumps in demand in many sectors. The ratio of such bad loans is set to rise over fiscal 2017-18, as many firms, especially small and medium scale units, struggle to cope with the impact of the ban on high value notes, announced by the union government on 08 Nov 2016. Bad loans now constitute about 12% of gross advances of state-owned banks. At least five government run banks have gross NPA ratios or the ratio of bad loans to total loans of over 15%. The Indian Overseas Bank has a gross NPA ratio of 22.42% (approx). The state of the balance sheets of banks reflects their inability to recover a large chunk of loans, especially from business groups, which were executing infrastructure projects. Private companies today are not keen to set up greenfield projects or to buy out already created assets on the ground, by promoters who had taken on huge loans to finance them. There is a lack of a market for distressed assets.

Drugs in Punjab
Heroin passes across Punjab’s fertile agricultural belt, on its way from Afghan poppy field, to users in western countries. With unemployment high and 2,30,000 men and women estimated to be dependent on opioids, Punjab’s drug problem is no longer discussed in a hush in family circles. It is being trumpeted by politral parties as a full-blown social crisis. Local politicians had enriched themselves, by protecting powerful smugglers from arrest, Government statistics show that a police crackdown over the last year, has had some success in reducing the supply of heroin. Public rehabilitation centres have proliferated. In Taran Taran district, every morning solitary farmers fan out through a border security fence to mist-shrouded cropland, along the 60 mile border with Pakistan. About two and half decades ago, smuggling networks moved gold bullion and weaponry into India to feed a militant Sikh insurgency. These rural pathways became the basis for a drug tratticking route, using villagers as couriers. Across the border, the smugglers throw parcels of heroin in bottles, or enlist farmers to carry the drugs after pushing the parcels into long plastic pipes, using a wire. Poorly educated villagers are offered Rs 20,000 (or about $300), to pick up the parcels of heroin. Punjab’s legislators are relying on drug cartels, in exchange for votes and cash assistance.

Medical Mystery
Every year in mid-May, as temparatures reached scorching heights, children in Muzaffarpur district of North Bihar fall ill. Some youths have seizures, and slip unto comas. In about 40% of cases they died. With the arrival of monsoon rains in July every year, the outbreak ends suddenly. A joint investigation by India’s National Centre for Disease Control and the India office of the Centres for Disease Control and Prevention in Atlanta, has identified the lychee fruit itself, when eaten on an empty stomach by malnourished children, causing the illness. Health officials are urging parents in the area to be sure to feed young children an evening meal, and to limit their consumption of lychees. In two seasons, the number of reported cases per year, has dropped to less than 50 from hundreds. It was an unexplained illness for several years. For twenty years, clinicians were unable to determine if the disease, which led to acute brain swelling, known as encephalopathy was caused by an infection, the immediate assumption in many outbreaks in India. Though orchards were typically guarded by care takers, children often ate lychees that were unripe or that had fallen to the ground.

Tigris River in Mosul
The Tigris river in Iraq’s second largest city, Mosul divides the city into two halves. The river is also a divider between territory still controlled by ISIS after more than two and half years, and an area liberated in Jan 2017, by Iraqi government forces. The Iraqi government launched an offensive to take the west of Mosul in the third week of Feb 2017, the battle looks set to be but long and brutal. The war of densely populated, narrow streets supports the Islamists and their brutal ideology. More than 2000 Isis fighters ramain in the west of the city, as well as 7,50,000 civilians, many of whom are on the brink of starvation. The Iraqi army and it allies, including British Special Forces, have cleared the more afflucent east of Mosul. Life is returning to the  streets of east Mosul, but suicide bombing and drone attacks are common. Armed security forces and militias check points on the streets, many of their faces covered with balaclavas. Some of the Sunni majority residents view their liberators are an invading force, allied to the Shite-led government in Baghdad. It is the
same dissatisfaction that enabled Isis to flourish in the city. Mosul has been plagued by insurgency warfare since the American-led occupation in 2003. There are over 5000 US Troops in Iraq, with several hundred embedded with Iraqi forces, besieging Mosul.

Timor Sea
Ever since Timor-Leste won its independence from Indonesia in 2007, there have been disputes between Timor-Leste and Australia, over how to delineate the sea boundary between  the two countries. In 2017, Australia was revealed to have spied on Timor-Leste’s cabinet, by bugging its cabinet room, under the pretext of renovations. After a year-long compulsory conciliation, overseen by the permenent court of arbitration (PCA) in the Hague, over the maritime boundary dispute, Australia and Timor-Leste have agreed to begin negotiations on a permanent maritime boundary between the two countries. An estimated $40 billion worth of oil and gas, lies beneath the Timor Sea. Timor-Leste has sought to abandon the controversial Certain Maritime Arrangements in the Timor Sea Treaty, that divides future revenue, alleging that it was unfairly negotiated because of Australian espionage. Canberra and Dili have agreed to discard the controversial agreements.

Vol. 49, No.46, May 21 - 27, 2017