News Wrap


The Reserve Bank of India said on 29 August 2018, that nearly all of Rs 500 and Rs 1000 notes, which were withdrawn from circulation on 08 November 2016, has returned to the banking system. As per the RBI's annual report for 2017-18, the RBI has received Rs 15.31 lac crore of Rs 500 and Rs 1000 notes, or 99.3% of the Rs 15.417 lac crore worth of notes, which were in circulation, as on 08 November 2016. Just Rs 10,720 crore of Rs 500 and Rs 1000 notes failed to come back to the RBI as against expectations that over Rs 3 lac crore of black money would not return to the banking system. The RBI had introduced new Rs 500 and Rs 2000 notes in place of the notes withdrawn from the system, but the pace of the remonetisation has been slow. Total expenditure incurred on security printing during July 2017 to June 2018, stood at Rs 4912 crore, as against Rs 7965 crore in 2016-17. It is suspected that the bulk of the unreturned currency (Rs 10,720 crore)  was in Nepal and Bhutan, and some of that was lost or destroyed. Demonetisation led to the loss of over 100 lives. 15 crore daily wage earners lost their livelihood for several weeks. Thousands of small and medium units were shut down. Lacs of jobs are destroyed. The economy lost 1.5% of GDP in terms of growth. This was a loss of Rs 2.25 lac crore a year. The overall notes in circulation added up to Rs 18.03 lac crore as on March 2018, displaying a growth of 9.9% over March 2016. The currency savings fell to –2% of Gross National Disposable Income (GNDI), as much of the currency moved into banks as deposits.

Power crisis in J and K
There is a joint statement of the Union Government of India and the Jammu and Kashmir state government of 2016, relating to augmenting the electricity power sector in the state, and providing 24×7 electric supply by 2019. But the number of unelectrified households has increased since then. The number of unelectrified households in J and K increased by more than 32,000. In 2016, the number of unelectrified households in the state was 3.56 lacs. This has increased to 3.88 lac in 2018. The Union Government has allocated Rs 1100 crore, to meet the target of electrifying all households by end 2018. The state authorities have been going slow on the centrally funded electricity schemes. There are huge losses in the power sector. In the absence of a proper electricity board in J and K, the Power Development Department (PDD), known as one of the most corrupt organisations, is allegedly causing huge transmission losses of over 45%, which is perhaps the highest in the country. Hurdles have been created in smooth implementation of centrally funded scheme by the IRCON, to replace the traditional steel electric wires, with rubber coated ones, and install prepaid meters to curb power theft. In 2016, 8,92,632 domestic power connections in J and K state were metered, while 6,45,385 were unmetered. Power theft in Kashmir Valley is higher than in Jammu Division. Between April 2015 to November 2016, for a supply of 10,778 million units of electricity in the Jammu division, the PDD realised a revenue of Rs 1703 crore. Whereas in the same period, against the consumption of 13,304 million units in Kashmir Valley, the revenue realisaton was Rs 1120 crore.

Leh and Amazon
Tiny town Leh is perched high in the Himalayas, near India's border with China. Modern technology has scarcely touched Leh. Internet and Cell Phone service are far less than efficient. The two roads to the outside world are snowed in every winter. Buddhist monasteries, compete with Indian military outposts, for prime mountain top locations. The convenience of the digital age arrives early each morning, by way of a plane carrying 15 to 20 bags of packages from Amazon. Leh has an elevation of 11,562 feet. It is the highest spot in the world, where Amazon company offers speedy delivery. When the plane arrives from New Delhi, it is met by employees from Amazon's local delivery partner, Incredible Himalaya. The local office then shuttles the packages by van, to a modest warehouse, where the packages are sorted. The couriers must follow exacting standard set by Amazon, from wearing closed-toe shoes and being neatly groomed, to displaying their ID cards, and carrying a fully charged cell phone.

Amazon began offering doorstep delivery in the region since mid-2017, as part of an effort to better serve the remotest corners of India. Sales volume in Leh has increased twelve fold since Incredible Himalaya took over deliveries from the governmental postal service, which was much slower, and required customer to pick up packages at the post office. Local delivery partners like Incredible Himalaya are vital to the Amazon company's global strategy. Couriers get to the shoppers via motor cycles and scooters. When the snow is heavy, in the winter, they will occasionally use a car. Amazon is supplying everything from clothing to kitchen appliances, to cosmetics. Orders typically arrive in five to seven days, slower than the two-day delivery than Amazon's big city customers receive.

Cuba and Private Property
Cuba's new constitution reforms allows private property to be recognised for the first time. The property market was banned shortly after the 1959 revolution brought Fidel Castro to power. Cubans were permitted to exchange homes. Supposedly no money changed hands, though it almost always did. Under Castro's brother Raul, the law was changed in 2011, allowing Cubans to buy homes. The new constitution follows the appointment in April 2018 of President Diazcanel, the first non-Castro to lead the country since the revolution. The new constitution maintains the ban on foreign ownership, while also re-affirming the state's right to compulsory re-purchase property. A mini underground boom in the market for houses, especially in the capital Havana, has been driven by foreign money, often from Cuban Americans.

War remains
Beginning August 2018, North Korean handed over the remains of 55 American servicemen killed during the Korean war to American authorities. It arose from a concession that was agreed to at a summit between Mr Trump of USA, and Kim Jong Un, North Korea's ruler in June 2018. Donald Trump thanked the North Korean regime for returning the remains. The remains will be examined by a forensic team in Hawaii for identification. In 1990, the remains of what were thought to be five American soldiers returned by North Korea, turned out to be seven.

Vol. 51, No.20, Nov 18 - 24, 2018