Three consortia led by Alstom, Siemens and Stadler Bussnang eye Rs 2,000 crore ($310m) coach factory project

By Rajat Arora – The proposed rail coach factory that would produce coaches with aircraft-type interiors is expected to come up on railway land in Kanchrapara near Kolkata on a public-private partnership basis and will involve a total investment of Rs 2,000 crore.

This is the second-largest tranche of foreign direct investment (FDI) in the rail sector under the government’s ‘Make in India’ initiative.

The first major FDI in railways came in 2015 when projects to set up two locomotive factories were awarded at a total cost of Rs 3,300 crore ($511.5m). more> https://goo.gl/RJGrrK

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Reliance rattles Indian telcos again by unveiling ‘free’ 4G phone

By Promit Mukherjee and Sankalp Phartiyal – Despite Jio’s rapid rise, funded by mega-profits churned out by parent Reliance Industries’ (RELI.NS) core refining and petrochemicals operations, it has been unable to tap more than 500 million non-smartphone users in India, who still rely on old feature phones to make calls and send text messages, as its network only supports 4G-enabled phones.

Reliance sees the new handset, named JioPhone, allowing it to target India’s entire mobile market for the first time. more> https://goo.gl/bmB5N6

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India’s inward nuclear turn

It has taken 12 years for the Indo-US nuclear deal hype to give way to sober realism
By Brahma Chellaney – India, duped by its own hype over the nuclear deal, had announced plans to import Western reactors costing tens of billions of dollars. The Indian plans helped to motivate Toshiba to acquire Westinghouse – a takeover that ultimately proved a huge blunder, plunging Toshiba into a grave financial crisis.

Having invested considerable political capital in the vaunted Indo-US deal, India today confronts an embarrassing situation: the nuclear power promise is fading globally before New Delhi has signed a single reactor contract as part of that deal. To save face, India, with one of the world’s oldest nuclear energy program, has embarked on a major expansion of domestically designed power reactors.

Given that the Indian nuclear plant construction time frame averages seven years, India’s decision to ramp up its nuclear power capacity may contribute little to meeting its goal of making 24-hour electricity available to all villages and towns by 2022. But the decision will yield major economic dividends, including boosting domestic industry and creating tens of thousands of jobs. By providing $11 billion worth of likely manufacturing orders to Indian industry, the decision will help to transform the domestic nuclear industry.

In this light, the travails of the Indo-US deal may be a blessing in disguise for India. more> https://goo.gl/WXPswv

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Modinomics rings hollow

Look beneath government hype, and signs of deep economic distress are evident
By Kapil Sibal – This government is in denial.

It believes that black economy has been given a fatal blow. At 7.1% India continues to be the fastest growing economy in the world. Spurt in public investment has created jobs. FDI flows are evidence of investors’ confidence in the growth story of India. Reforms have led to ease of doing business.

Let us critically examine each of these claims.

On November 8, when the prime minister announced demonetization of all 500 and 1,000 rupee notes freezing 86% of India’s economy. If this ill-thought decision was an attempt at eradicating unaccounted wealth then it failed miserably. Most cash is either invested in real estate, gold or is stashed abroad. Undisclosed cash in circulation represented only around 5% of unaccounted wealth.

Now that real estate is outside the GST net, cash will continue to be a factor in real estate transactions. What is alarming is that unaccounted cash entered the banking system and is slowly being withdrawn and reconverted into undisclosed cash.

Modi believes in seducing foreign investors in digitizing the economy, little realizing that most of India earns less than Rs 10,000 a month and seldom accesses digital platforms for bank transactions.

Record levels of Sensex, we all know, do not reflect the true state of the economy. With real estate giving no returns and interest rates down, the only option for investors is in equities. This is risky because once the bubble bursts investors will be badly hurt. more> https://goo.gl/PjHNHq

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Farmers revolt

India’s farm distress needs structural solutions, quick fixes such as loan waivers won’t do
Times of India – All of a sudden it seems to be Kashmir in Madhya Pradesh: at least five protesters shot dead in Mandsaur district, prohibitory orders and internet shutdowns enforced.

This is testimony to the deep-seated crisis in India’s agricultural economy and must serve as a wake-up call to the Centre as well as state governments. The usual populist fixes – such as farm loan waivers – is not going to defuse this crisis.

Rather, policy makers must now remove the structural bottlenecks in India’s farm economy. Agriculture supports more than half of India’s population but makes up just 15% of its economic activity. It follows that holistic solutions to farmer distress will have to combine creation of non-farm jobs and enhancement of farm incomes.

A bird’s eye view of agriculture points to an anomaly. Around 77% of farmland is devoted to staples such as cereals. This results in output almost equivalent to what high value crops such as fruits and vegetables yield on less than 20% of the land.

Rectifying this mismatch will solve many problems. This is where government policy has a crucial role to play.

The Indian farmer has to function in an over-regulated environment made worse by capricious bans on exports. This is compounded by restrictions on internal food trade, unfounded fear of new technology such as genetically modified crops and the new bogey that has coincided with the unchecked rise of gau rakshaks: restrictions on cattle trade. more> https://goo.gl/o30N06

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Head off digital colonialism

How Indian IT can compete with Google and Facebook and show the world a better way
By Mishi Choudhary and Eben Moglen – The world’s major societies are now wrestling with the enormous social power wielded by the internet’s “platform companies.”

In Europe they speak of “GAFA”: Google, Apple, Facebook and Amazon. Twitter, Uber and other aspirant companies hover just out of the main ring. Europe’s open and democratic societies have been as fully colonized by the platforms as the US: the plurality of their citizens’ email is read by Google, most of their citizens’ social and family lives are surveilled by Facebook, and so on.

Essentially, three basic approaches to deal with the power of these American data miners have emerged.

First, the US government sees them as pillars of post-industrial American power, and as an immense national security intelligence resource. It is therefore their strategic ally.

Second, proponents of “digital sovereignty,” mostly autocracies, have chosen to build national search engines and social media structures, favoring domestic private market entrants (as has happened in Russia and China), and by exercising control over national telecommunications networks to block the US companies.

Third, the European Union has attempted to control the companies’ behavior by regulation and litigation.

India has a golden opportunity to find a fourth way.

India can. India can invent competition that challenges not just the platform companies but their basic, anti-environmental business model.

Indian internet companies can provide global digital service platforms that protect, rather than destroy, privacy. Indian internet industries can provide reasonably priced, universally available, privacy respecting services that compete directly with services provided by the US data miners, priced reasonably in local terms in all the developed and developing societies. more> https://goo.gl/IuSU18

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Mind our language

Attempts to depose English subject our universities to dangerous social engineering
By Indrajit Hazra – To artificially push the case of ‘vernacular languages’ at the cost of endangering higher education learning and teaching – especially in, but hardly confined to, science and technical subjects where textbooks and research material in non-English Indian languages are overwhelmingly unavailable – is a recipe for widening the very knowledge divide being sought to be bridged.

“.. Technical education is entirely due to English [language] education. It is no use saying that ancient India was very advanced technically, for it will not alter the fact that today we are more backward than any Western country.”

India that doesn’t need any prodding any more to use Hindi, the ‘new’ aspirational language, let’s stick to English for our higher education. It’s just more fruitful – and easier – to not end up dumbing things down just to try and balance a lingering ‘cultural imbalance’. more> https://goo.gl/6h2OzQ

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A breakthrough strategy

According to The Times of India report, “Path-breaking economic strategy” (Sep 27, 2016), the finance and coir minister, Dr T M Thomas Issac stated, “My first objective is to find the resources for government expenditure. All available funds are now being used run the government and with the salary arrears for government personnel due next year, it is even more critical. The next target is bring revenue deficit below one per cent. The third and the biggest mission is to source loans and investments on the budget of Rs 20,000 crores ($3B) for the first year.”

That doesn’t read like a “path-breaking strategy,” but a desperate effort to continue the failed Kerala status quo activities. Here is a breakthrough strategy for reviving Kerala economy.

Bruce Katz at the Brookings Institution provides an effective formula for regional economic development. He says, “The development of new platform technologies benefits entire economies, but the big winners are the cities and regional ecosystems that invent them and become centers of entire new industries.” Couple this formula with a historic trend to act as effort multiplier, and you have a true path-breaking strategy.

The historic trend to take advantage is internet adoption. Internet adoption has greater potential for economic transformation than the developments that followed postal mail service, telephone or printing press by enabling rapid exchange of information that aid economic interactions. However, focus in the developed economies have shifted more to entertainment applications [2, 3, 4, 5] of internet. The net result is that currently available network products are entertainment-centric. Deploying fully capable networks for economic development targets (such as e-payments) with currently available products incur excessive costs, since they are designed for high bandwidth entertainment applications.

This has created a market gap for economic-development enabling network systems and solutions. The author invented and patented underlying broadband technologies – US Patents: 6,674,749 / 6,807,169.

Developing economic-development-enabling network products will help fill the market gap, create new product categories and help emergence of a sustainable industrial base in Kerala.

A similar effort was launched in the past with KELTRON, but was not successful due to insufficient preparation and less than optimum market conditions. Now, conditions are ripe for an industrial initiative using KELTRON as a base for creation of a world class network industry sector.

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Pollution control is not a priority

The Times of India report, “Order industries to bear cost, CPCB requsts NGT” (Aug 26, 2016), illustrates the bureaucratic setup by the state and central governments for pretending to be doing something about the Periyar pollution, without producing actual results.

The report says, “The Central Pollution Control Board (CPCB) has pleaded to the National Green Tribunal (NGT) to direct polluting industries to bear the remediation cost to save Periyar in Eloor area.” [2, 3, 4]

“The treated effluents should not be discharged through Kuzhikandom canal as it may continue to wash the sediments further down the creeks. The flow has to be contained to facilitate remediation activity. Therefore, the industries should be directed to submit a time-bound action plan to stop discharging treated effluents to the canal, the board submitted.”

“It said that multiple contaminants including DDT, endosulphan, chlorobenzenes and metals such as manganese, vanadium, zinc and chromium have been found in soil, groundwater, sediment and surface water and immediate steps need to be initiated to rejuvenate the river body.”

Apparently, the Central Pollution Control Board (CPCB) and the Kerala State Pollution Control Board (KSPB) do not have any real authority. KSPB appeals to the CPCB, and CPCB in turn appeals to the National Green Tribunal (NGT). If governments were serious about solving pollution problems, KSPB would have had real authority. (And provided an appeal process regarding its decisions.). An empowered KSPB would have been able to take action on its own. For example, shutdown a polluting plant. Instead, it has to go through laborious legalistic procedures, while the pollution problems continue to deteriorate. Even though it was determined that Eloor region is one of the most polluted places in the world in 2006, no real action to control pollution has been taken so far.

The CPCB pleading to the NGT is also meaningless. Most of the polluting companies are running at a loss. So even if the NGT rules that the companies to bear the remediation costs of the pollution, it won’t produce any tangible results. The current situation is the result of bad industrialization policies in the 1930s. And time has shown that chemical industries are a disaster for kerala.

So the logical course of action is to close down the loss making chemical factories, and the Kerala Government to assume the cleanup costs. In addition, implement an Eloor-Edayar Redevelopment Program. Anything else will be prolonging the misery of the people in the Eloor area, and further collapse of the Periyar ecosystem.

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My encounter with the curse of God’s own country

By Rajeev Sunu – Last week, I was trying to soft sell Kerala to a multinational company director in Sydney [2, 3, 4, 5] and was listing out the unique advantages that give my home state an edge over Tamil Nadu [2, 3] for setting up an international logistics operation and an e-commerce platform.

But the executive asked me bluntly: “Isn’t that the south Indian state with 100 percent literacy and all those smart ones working in the Middle East and other countries? I have heard horror stories about trade union activism in that state and we don’t want to get caught in such politics and mess up our business.”

My own experience of trying to facilitate a global business group’s investment has taught me that doing business in Bangalore [2, 3] is far easier than doing it in Thiruvanthapuram [2, 3]. In a way it was simple: in Kerala the potential investor was made to feel that they are sort of receiving a favor from the administrators; in Karnataka [2] there were committed resources to market the investment-destination product and to service the clients on an ongoing basis.

Kerala’s tragedy is that it has no business development managers to market its potential in national and global markets. Innovation and change are alien to the state’s bureaucracy, which is primarily trained in the art of balancing socio-political equations while acting as advisory channels to ministers. more> http://goo.gl/5bl5Vr

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