News Wrap


There are 75 "Particularly Vulnerable Tribal group" (PVTG), earlier known as "primitive tribes", in India. Seven of these tribes live in Chattisgarh. The Pahadi Korvas, of the PVTG, largely inhabit remote hilltops in four districts of Chattisgarh. According to government records, there are fewer than 38,000 members of the tribe remaining. The hamlet atop a hill in Govindpur has 105 households. Their lives are virtually untouched by the government, even when an election is close. A few years ago, the government built a check dam down in Govindpur valley. The tribals are digging a narrow winding canal, to somehow raise the water from the dam to their cultivation fields. Without the canal, water will not reach the fields. Earlier the tribals had informed the government officials supervising the work on the dam. But no one listened. The panchayat bhavan is just a kilometre away. In the 19 years since the formation of Chattisgarh state, the tribals have had no contacts with their political representatives, even though the tribals vote in elections. The eighteen families live on the hilltops, and have been farming their land for three generations. Suddenly, six years ago the tribals have been told, that records showed the farming land belonged to someone else.

Burning crop stubble
From the beginning of winter and the rabi season, the air quality in Delhi, Punjab and Haryana deteriorates, as farmers set on fire the crop stubble and loose straw, left after harvesting paddy. On either side of metalled roads that cut through villages in Haryana, Punjab and Delhi, on an average size 3 acre farm, the state government inflicts fines of about Rs 24,000 for burning crop stubble and straw. The fines are failing to act as a deterrent, as farms with open fields are being set on fire again. It required at least Rs 5,000 per acre to take care of the agricultural waste, and farmer owners do not find it viable. Government deterrents and policies to curb stubble burning have had little impact on the ground. Compared to the cost of specialised farm equipment required to manage stubble, farmers in the northern states, believe fines are cheaper. Till 2017, balers came to the model villages, and made bales out of the paddy straw, and took them away to local waste, for energy plant; all for free to the farmers. Since the last eight months, the government wants the farmers to buy or hire machines, and manage on their own. There are no incentives for bailing currently, and the government is promoting in-situ management of agricultural waste, which enriches soil, when the straw and stubble are incorporated in the soil. The government is also offering subsidies from 50% to 80% to buy farm equipment. With the sharp increase in diesel prices, and the September 2018 rains which damaged crops, farmers are more willing to burn the waste.

Credit risk contagion
The Infrastructure Leasing and Financial Services (IL & FS) is an infrastructure development and finance firm, incorporated in 1987, and initially promoted by Central Bank of India, HDFC and Unit Trust of India. Shareholding in IL & FS, as on 31 March 2018, comprised mainly of LIC, Orix Corporation of Japan, Abu Dhabi Investment Authority, HDFC, IL & FS Employees Welfare Trust and others. It is an important Non-Banking Finance Company (NBFC) and a core investment company which during 2017-18 had 169 group companies. IL & FS bid for various infrastructure projects over the past few years. These were financed largely through debt. The debt over the conglomerate has now risen to over Rs 91,000 crore. IL & FS is hit hard by infrastructure problems over land acquisition, cost and time over runs. The IL & FS firms defaulted on payment of debt obligations, leading to credit rating down grades. In September 2018, there was a market melt-down, causing the sensex to tumble over 6%. The mutual funds that had bought the debts sold them in panic. Credit markets were impacted with mutual funds refusing to lend to NBFCs. On 01 October 2018, the Union Government of India, through the national company law tribunal, superseded the seven-member IL & FS board, for hiding the severe mismatch between cash flows and payment obligations. In past years the LIC was compelled to bail out IL & FS. Uday Kotak, vice-chairman and managing director of Kotak Mahindra Company now heads the new six-member IL & FS board, which manages the affairs of the troubled non-banking financial company. As on September 2018, the consolidated financial statement of the IL & FS holding company and subsidiaries showed a highly exaggerated depiction of non-current assets, in the form of intangible assets amounting to over Rs 20,000 crore. The company had negative cash flows operations. There was a net outflow of Rs 7,020 crore in 2017-18.

The debt market shocks are now being transfered to the equity market, leading to sell-offs particularly in NBFC stocks, and sectors linked to NBFC financing. The IL & IFs group, especially its subsidiaries, viz and IL & FS Engineering and IL & FS Transportation Networks, have faced major problems since beginning 2012. A number of infrastructure developments were stalled even before 2014.

Cleansing Rohingyas
Myanmar's military leaders had unleashed ethnic cleansing on Rohingya muslims since mid-2017, a campaign so brutal that the United Nations has recommended that the top military commanders be tried for genocide. At a rare appearance at an international forum in Hanoi, the Vietnamese capital, on 13 September 2018, Aung San Suu Kyi, Myanmar's civilian leader sidestepped wide-spread accusations on ethnic cleansing, maintained "for the sake of long-term stabilty and security, we have to be fair to all sides". According to a United Nations estimate more than 10,000 Rohingya Muslims have been killed. Suu Kyi declined to criticise what she delicately referred to as "the military aspect", in her talk at the World Economic Forum on Asean. Various international awards given to her for her commitment to non-violent democratic resistance have been rescinded. She did not attend the United Nations General Assembly in September 2018, an event she also skipped in 2017, as outrage mounted over the exodus of the Rohingyas. The Myanmarese government has not said how many non-Rohingyas have been killed in 2018, but numbers from local officials suggest that the total figure is somewhat higher than 50, who were killed by armed Rohingya militants in violence against members of other ethnic and religious groups in Rakhine.

Referring to the seven-year sentence handed down in September 2018, by a Myanmar court to Reuter's reporter who uncovered a massacre of Rohingya in one Rakhine willage, Suu Kyi has said that the reporter's crime was not journalism, but having violated Myanmar's colonial-era Official Secrets act. Suu Kyi blamed Bangladesh for having stymied the process of repatriating willing Rohingyas back to Bangladesh, which was to have begun in January 2018, as per an agreement of 2017, between Myanmar and Bangladesh. Since August 2017, more than 700,000 Rohingya Muslims have fled to neighbouring Bangladesh, amid a frenzy of executions, rapes and village burnings, in the north of Rakhine state, in Myanmar.

Vol. 51, No.32, Feb 10 - 16, 2019