News Wrap


The Indian economy’s downward spiral has left a trail of job losses, across both old and new economy sectors. Fresh hiring opportunities are increasingly limited in the market, where there is a spreading employment distress. In the last three financial years in the textile sector, 67 units have closed down, across the country, affecting over 17,600 workers. Government data is restricted to just the organised segment of the cotton and man-made fibre textile mills. This excludes the Small Scale Industries (SSI) section of the textile value chain, where shut downs and job losses, are reported to be far higher. For fiscal 2016, 2017 and up to December 2017, capital goods major Larsen and Toubro laid off about 30,000 employees, across businesses, terming ‘‘strategic decision’’. Between April 2017 to December 2017, three of the five biggest IT companies, that together employed about 900,000 people, suffered shrinkage of workforce by over 3000 people. HDFC Bank’s total employment declined by 2000 (approx) between January 2017 to December 2017. Other private sector banks are also cutting down on staff strength. Job losses have hit the renewable energy sector. Wind Gear supplier Suzlon Energy Ltd and Turbine maker ReGen Powertech have retrenched over 3000 employees, during 2017. Inox Wind Ltd has not paid salaries to sections of its staff, over the last six months. Around 212 start-ups shut shop in 2016, 50%, higher than in 2015. Capital goods firms are struggling, as most of the downstream sectors are saddled with excess capacity and low demand.

Maoists at Tri-Junction
The Maoists has raised a new armed group, along the Madhya Pradesh-Maharashtra-Chattisgarh tri-junction. They continue to face the heat at their stronghold in Bastar. The new Maoist unit, ‘‘Vistara platoon’’ has gained a foothold at the tri-junction, which has lesser deployment of security forces, than the seven districts in the Bastar division of Chattisgarh, which is considered to be one of the last Maoist bastions. In the past, there has not been much Maoist activity at the tri-junction. CRPF forces have opened new camps in the once inaccessible Bastar region to ‘‘squeeze out’’ the militants. There are more than 1.6 lac CRPF personnel deployed in Chattisgarh of which 1.3 lac concentrate on a 40,000 sq km area in Bastar, known for rich mineral deposits of iron ore, granite, tin and corundum. The composition of Maoist Bal Sangams, where children are recruited with coercion, has been dismal in the past three years. Unlike the tribals in the Bastar area, those living in the tri-junction are more exposed to the outside world and understand Hindi. Muppala Lakshman Rao, alias Ganapathi, the elusive head of the banned CPI (Maoist) is grooming his Second-in-Command and Chief of the Central Military Commission, Nambala Keshav Rao, alias Basavraj.

New Icon
Soon after Narendra Modi became India’s Prime Minister in 2014, Deendayal Upadhyaya began to be deified. From the birth centenary, 25 September 2016, of the Rashtriya Swayamsevak Sangh (RSS) leader, who was also the co-founder of the Bharatiya Jana Sangh [later developed to Bharatiya Janata Party (BJP)], Upadhyaya deification became a huge state sponsored endeavour. The over a year long Upadhyaya commemoration, has consisted of state welfare schemes, ports, towns and educational institutions being named after Upahdyaya, who has become a towering ideological deity. Statues are being erected, and commemorative coins of Rs 10 and Rs 5 have been issued. Quiz competitions on Upadhyaya and his message are being held in Uttar Pradesh and Haryana. State libraries in Maharashtra and Rajasthan are stocking his books. All government offices in Uttarakhand carry his photo and logo. A spate of published articles by RSS and BJP members extoll the ‘‘simple life’’ and ‘‘profound vision’’ of the man. The RSS chief, M S Golwalkar described Upadhyaya as ‘‘a 100 percent swayamsevak’’. In his first speech, India’s new President Ram Nath Kovind, of strong RSS connections, saluted Deendayal Upadhyaya, avoiding any reference to Jawaharlal Nehur. A large number of institutions and government schemes in India are named after members of the Congress party’s ruling dynasty. ‘‘Antodaya’’ was championed by Mohandas Karamchand Gandhi. Later Upadhyaya advocated ‘‘antodaya’’ as part of the doctrine of ‘‘integral humanism’’.

Upadhyaya defended the four-fold caste system, as the epitome of social harmony. He became president of Jana Sangh in December 1967. His dead body was found on a railway track, near Mughalsarai station on 11 February 1968, which has now become a reason, for renaming the famous railway junction after him. His death has never been explained. The Jana Sangh leader, Balraj Mudhok, who preceded Upahayaya as president, accused his colleagues in the RSS-Jana Sangh of conspiring to kill Upahdyaya. A number of groups in Assam, recently protested strongly against the move by the BJP-led state government to name several new district-level colleges, after the ruling party’s current favourite national hero. Even Asom Gana Parishad has joined the vociferous protests.

Investment in Venezuela
Shorty after the populist left wing revolution in Venezuela, stock of Foreign Direct Investment (FDI) was 32% in 2001, of gross domestic product. Today, Venezuela’s stock of FDI is worth only 6% of GDP, by far the lowest figure in Latin America. In late 2014, president Nicholas Maduro passed a foreign investment law, which authorised expropriation, froze investments by obliging investors to keep their capital in Venezuela for at least five years, ensured all litigations to go through local courts, and eliminated the office of the Superintendent of Foreign Investments. In the second week of September 2017, president Maduro announced eight new pieces of legislation, including a foreign investment law. The second foreign investment law fails to address important issues of exchange-rate arbitrage and inflation. Over recent years, many foreign companies have quit Venezuela, despite the potential riches in the oil, mining and agricultural sectors. Although some oil majors such as Chevron, Shell, Eni, Repsol, Schlumberger and Halliburton continue to operate in the country, new FDI has slowed to a trickle. The Russians, particularly oil company Rosneft, are among the few still willing to invest. Venezuela’s economy has shrunk by about a third over the past four years, one of the deepest contractions in Latin American history. The monthly inflation rate is 34%. The new laws include a pledge to regulate foreign exchange houses, raise taxes on the rich and fix minimum prices for the sale of fifty items, such as milk, chicken and soap. If the new reforms improve the distribution of food, that would be a big help.

Vol. 50, No.27, Jan 7 - 13, 2017