News Wrap

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In the latest joint statement issued during US President Donald Trump's first official two-day visit to India, (February 24-25, 2020), India's prime minister Modi and president Trump encouraged the Nuclear Power Corporation of India Limited and Westinghouse Electric Company to finalise the techno-commercial offer for the construction of six nuclear reactors in India, at the earliest date. It has been clear for years that electricity from American reactors world be more expensive than competing sources of energy. Nuclear reactors can undergo serious accidents, as shown by the 2011 Fukushima disaster. Westing-house has insisted on a prior assurance that India would not hold it responsible for the consequences of a nuclear disaster, which is effectively an admission that it is unable to guarantee the safety of its reactors Mr Trump's re-election campaign for the US presidential election in November 2020 centrally involves the revival of US manufacturing, and he has been lobbied by several Nuclear reactor vendors, including Westinghouse. In 2018, Trump's son-in-law Jared Kushner's family was bailed out by a Canadian company that invested at least $1.1 billion in a highly unprofitable building in New York, Earlier that year, Brookfield Business Partners, a subsidiary of that Canadian company, acquired Westing-house Electric Company.

The six reactors being offered to India by Westinghouse would cost almost Rs 6 lac crores. If India purchases these reactors, the economic burden will fall upon consumers and tax payers. Even after reducing these prices by 30% to account for lower construction costs in India, the first year tariff for electricity would be about Rs 25 per unit. Recent solar energy bids in India are around Rs 3 per unit. Lazard the Wall Street firm estimates that wind and solar energy costs have declined by around 70% to 90%, in just the last ten years, and may decline further in the future. The Tarapur 1 and 2 reactors (Maharashtra), and the Kudankulam 1 and 2 reactors (Tamil Nadu) have been repeatedly shut down. In 2018-19, these reactors produced just 32% and 38% respectively, of the electricity they were designed to produce. The fraction of electricity generated by Nuclear power in India, has remained stagnant at about 3% for decades. An earlier plan to install AP 1000s in Mithi Virdi (Gujarat) was cancelled because of strong local opposition.

COMMUNAL DISHARMONY
The anti Citizenship Amendment Act agitation and the pro-CAA agitation between mid-February & 1st week March 2020 have led to communal frenzy in Jaffrabad, Maujpur, Babarpur, Chand Bagh, Shiv Vihar, Bhajan Pura, Yamuna Vihar and Mustafabad areas of North-East Delhi, leaving at least 46 dead and over 200 injured. The UN High Commissioner for Human Rights (UNHCHR) has filed an intervention application in the Supreme Court, in connection with the CAA. The UN Commission Michelle Bachelet has expressed serious concerns at the CAA and communal riots in North East Delhi. In its petition to the Supreme Court, the UN human rights chief said the CAA, in its present form, has raised important issues with respect to international human rights law, and its application to migrants, including refugees.

There is a tense situation in Shillong since end February 2020 following at least three deaths, especially of a Khasi Students Union (KSU) activist, in a clash between members of the students' body and non-tribals during a rally in Ichamati, which is close to the Indo-Bangladesh border. The killings occurred in separate attacks in Ichamati area (East Khasi Hills district), and at Shillong's Iewaduh market on 29 February 2020. The assailants were armed with machetes. Shillong is under indefinite curfew and mobile internet services snapped. The Khasis are believed to be at the receiving end of the fury of non-tribals, which is a euphemism for Bangladeshi migrants in East Khasi district. There are rallies against the Citizenship Amendment Act, and demands for implementation of the Inner Line Permit Regime.

Milk
April is the traditional beginning of the lean period for raw milk production in Kolkata. Scarcity of raw milk coupled with a surge in the price of skimmed milk powder may lead to another round of hike in prices from April 2020. Milk prices in Kolkata went up by Rs 5-6 in the first week of December 2019. The forthcoming rise could be in the magnitude of 10% to 15%. In the first week of December 2019 toned and doubled tone milk were selling in the range of Rs 40-Rs 43 per liter. The average dairy consumption of milk in Kolkata is about 14 to 15 lac liters Eastern India, particularly Bengal, is deficit in raw milk, and is largely dependent on skimmed milk powder to keep the supply flowing. Most leading diaries in West Bengal use skimmed milk powder to make up for the deficit in raw milk. There has been a 100% rise in the price of skimmed milk powder over the past four months. The global price of Skimmed milk powder is down to Rs 200/kg, following reduced demand in China, in the wake of the Corona virus outbreak. The central government has so far not allowed import of skimmed milk. The skimmed milk rates are domestic Rs 300/Kg, and international Rs 200/Kg. Currently, the milk rates in Kolkata are Rs 40 to Rs 49/per liter (all brands Amul, Metro, Mother Diary, Red Cow and ITC), while Mother Diary is Rs 34-44/per liter. Figures for West Bengal Government's "Haringhata" are not available, as they have stopped issuing milk cards since October 2019, and are selling directly across the counter to old customers. Milk producing companies are struggling to keep productions at an optimum level. The milk companies are facing a challenge to ensure increase availability of fresh milk. The agri-business division of ITC is currently working with farmers in West Bengal to improve milk yields.

India's Rs 2000 notes and Rs 500 Notes
While India's highest denomination currency (Rs 2000) notes will remain legal tender, it will gradually be pulled out of circulation. A major exercise to recalibrate India's 240,000—odd Automated Teller Machines (ATMs) is underway to replace Rs 2000 notes with Rs 500 Notes. Of the four cassettes within ATMs, three will now be filled with Rs 500 notes, and the fourth will either hold notes of Rs 100 or Rs 200 denominations. Cassettes holding Rs 2000 notes have already been replaced in many ATMs, and may well be on their way out within a year. Banks are not putting Rs 2000 Notes back into play as earlier. These are going into their currency chests, on way to the Reserve Bank of India's vaults. The RBI data shows that the share of Rs 2000 notes as a percentage of the value of bank notes in circulation 50.2%. in financial year 2016-17, has been taken up by the Rs 500 notes, which had a share of 51% in FY 2018-19, a near perfect swap. The Rs 2000 note is very much legal tender, it is just being slowly pulled out of circulation. One has more of the Rs 500 notes in circulation these days. In the post-demonetisation phase, the RBI needed to have higher denomination Rs 2000 notes, to get the economy re-monetised quickly. In November 2019, a good chunk of the Rs 2000 notes were actually not in circulation, having been hoarded. Presently, before the government's measures, the Rs 2000 note was not working as a currency transaction. Withdrawing these notes from circulation would not cause any disruption. A simple method of depositing these notes in the bank accounts, no counter replacement, can be used to manage the process.

THE CORONAVIRUS
The COVID-19 virus has hit over 3000 fatalities in China. New cases are declining, including in hardest-list Hubei province. Beijing's method of counting patients now include those diagnosed by sophisticated laboratory testing. More than 81,000 people have been infected by the virus in China, and hundreds more in over 25 countries. The number of deaths outside mainland China has climbed to nearly 250. Japan's toll rose to three as a man and a woman in their 80s who had been aboard on quarantined cruise ship died, while fears there mounted about other passengers who disembarked the cruise ship "Diamond Princess", after testing negative. South Korea has reported its first death, and the number of infections in the country has more than doubled. Iran has reported at least 1,135 deaths, and over 17,000 confirmed cases. Deaths have previously been confirmed in France, the Philippines, Taiwan and Hong Kong. There are around 116 deaths in USA. The drastic containment efforts, including quarantine tens of million in Wuhan and Hubei, and restricting movements in cities nationwide, by the Chinese authorities, have started to pay off. The extent to which the world relies on China as a manufacturing and trade hub, will steer global economic repercussions, which would play out both domestically and internationally, over the coming months and perhaps even years. The World Health Organisation has praised China for both its efforts and its transparency. It has not ruled out the risk of a pandemic. The 10 South-east Asian (ASEAN) countries is-a region-dependent on the flow of Chinese goods and tourists, faces a steep bill following restrictions on movement from China. France has observed that it would not bow to American pressure, to exclude Huawei from supplying equipment for its 5G Network. Critics led by Washington, say Huawei is too close to Beijing, and its equipment could be used as a tool for spying, a contention the company strongly rejects. France's stance echoes those of Bintain and the European Union. Worldwide, China has confirmed at least 81,000 COVID-19 cases, and exceeding 3100 deaths. Outside China there are at least 1,14,000 cases and 5,000 deaths. Confirmed cases in South Korea, Italy and Iran are over 8,500, 35,000 and 14,000 respectively.

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Frontier
Vol. 52, No. 41, April 12 - 18, 2020