News Wrap


Banks in India have lent money to private companies who are no longer returning their loans, or paying interest. Lending possibilities are hugely reduced, as the Banks could no longer lend. The corporate debt restructuring that gave borrowers additional time to payback after the crisis has not helped. Investment in the Indian economy had declined from 34.3% of GDP in 2011-12 to 27% of GDP in 2016-17. This has further fallen to 26.4% of GDP in 2017-18. Stalled projects under implementations, started declining in 2011, and have still not picked up after over six years. Public investment increased but at a much slower pace, than expected. Multiple rates and a complex Goods and Services Tax structure, have made compliance cumbersome and created gaps in the supply chains.

Rural distress is worsening. The main winter crop, wheat was planted 5% lower than a year ago, between October 2017 to January 2018. Planting of oil seeds fell by over 5%. Uneven rainfall during 2017 monsoons, leading to moisture stress have caused tepid progress in winter planting. There is an estimated 2.6% fall in India’s rain-fed Kharif production in 2017-18, compared with the year earlier. In October 2017, nominal rural wages for ploughing (men) rose 6.6% year-on-year, which is well below the growth of 17% (October 2014), and 17.6% (October 2013). Wholesale prices of major horticulture crops such as potatoes, tomatoes and onions have fluctuated sharply, forcing farmers, in some instances, to dump their produce. Farm growth rate has plummeted to 2.1% in 2017-18. This implies a dismal 1.9% average agriculture growth rate, in the first four years of the BJP ruled Union Government.

Mumbai metro tunnelling
The first phase of the Mumbai metro, opened in 2013 is a seven-mile east-west elevated railway. The second phase is 25 miles of elevated suburban train line, that is currently half-built. The under construction third phase, is passing under South Mumbai, where an abundance of rich residents have less need to use it. 11,000 Indian Zoroastrians have signed a petition to India’s Prime Minister, claiming that the latest phase of the 20-mile stretch under construction, is threatening their temples, and ‘‘dark forces’’ could be unleashed, if the line is not re-routed. The underground rail stretches if built would breach ‘‘the magnetic circuits’’ of two Zoroastrians fire temples, thus ‘‘diminishing their spiritual powers’’ and unleashing ‘‘dark forces’’. The Parsi community in India numbers fewer than 45,000 in Mumbai and only 56,000 in India. The ‘‘mystic circuits’’ are not part of the ancient texts of Zoroastrianism in its 6th-century incarnation but were introduced by the 19th-century Kshnum cult. The Railways point out that the tunnel was going nowhere under the sanctum sanctorum, and even the holy wells from which water is drawn for ceremonies, are safely distant from the tunnel alignment. The metro rail project is also facing opposition from environmentalists, heritage activists and cricketers. The metro would swallow 20 cricket pitches, from the open space of Azad Maidan. However, only 3.5 hectares of the 20 hectares would be affected, and that too, only during construction.

Democracy in Nepal
Since May 2017, people of Nepal have voted into office 753 newly created local councils, seven new provincial assemblies and a 275-member national parliament. A coalition of two ostensibly communist parties, the Unified Marxist Leninists (UML) and the Maoist Centre are controlling not just the national government, but six of seven provinces. Earlier the Maoists abruptly ditched their erstwhile partner in the outgoing government, the Nepali Congress, to join the UML. The leftists captured 70% of the 165 seats, allocated on a First-Past-the-Post (FPTP) basis, compared with a meagre 14% for Congress. Nepal’s communists differ more in brand than in ideology from other parties. Millions of migrant Nepalese workers in India, the Middle East and elsewhere, whose remittances are equivalent to 30% of GDP, were not allowed to vote, despite a Nepal Supreme Court ruling that theoretically gave them that right. The only province that did not turn left, number two province, was easily won by parties representing the Madhesis, low-land people seeking to change a political system, said to favour the country’s hinglands. Prime Minister K P Oli has offered China a list of investments, including airports, highways, dams and a high-altitude railway, to connect Kathmandu to Tibet. The passage through the Himalayas, would make Nepal less dependent on India.

Far Right in Austria
Sebastian Kurz, aged 31 years, chairman of the centre-right Austrian People’s Party (OVP) has been sworn in as Chancellor, after Austria’s President Alexander Vander Bellen gave the coalition between the OVP and the controversial Freedom Party (FPO), the green signal. The FPO, set up by a former SS officer after the Second World War, was last in government from 2000 to 2005, resulting in European sanctions. Vice-chancellor Heinz-Christian Strache and other FPO politicians will run key ministers such as interior, foreign affairs and defence. Strache, aged 48-years had been a member of an alleged far-right paramilitary organisation in his youth. The general election on 15 October 2017 was won by the OVP, while the FPO came third with 26%, after an anti-migration, anti-Islam, Eurosceptic campaign. President Van der Ballen is insisting for liberal basic values, and that it was in Austria’s interest to remain ‘‘in the centre of a strong EU’’. Critics raise concerns that the FPO, traditionally takes a pro-Kremlim line and has ties to Russia’s president Vladimir Putin’s United Russia party. The FPO has, however, toned down its earlier demands for referendums on key issues, and also dropped its Eurosceptic Rhetoric.

The coalition agreement between the Austrian People’s Party and the Freedom Party, of 16 December 2017, has led to the maintenance payments for accepted refugees to be reduced by more than half to Euro 365 a month. New-comers are handing over any cash they have and waiving some rights to medical secerecy. Islamic schools are monitored more closely and closed if they break rules or accept foreign funding. Drugs and sex crimes attract tougher sentences. Over 2000 more police are patrolling the streets. Income and Corporation Tax have fallen. The corporatist labour and welfare model has been liberalised. Maximum working time has risen to 12 hours a day. Job-based insurance funds have been consolidated.

Vol. 50, No.36, Mar 11 - 17, 2018