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RBI Monetary Policy stance of October,2017.

 

 

 

Can be also read at

http://boecot.com/2017/10/05/rbi-monetary-policy-stance-of-october2017/

 

 

 

 

 

RBI.jpg

 

RBI Monetary Policy Committee decided to keep the key rates constant keeping in mind the the rising inflation rate which may settle within 4.0-4.5 % for the rest of fiscal 2018.This neutral stance has been consistent with the policy objective to keep CPI within 4% in a band of  -/+2, and also ensuring that growth momentum is also supported. During the August meet of MPC repo rate had been cut by 25 basis points to 6 % due to fall in inflation. However there had been genuine concerns raised due to loan waivers given to farmers of 88,000 cr which were expected to raise the inflation rate permanently by .2 %

 

RBI’s assessment

 

Since the last meet conducted in August 2017, Global economic activities have broadened.

Q 2 results in USA have been promising, although in near term the growth may be affected due to recent hurricanes which caused immense destruction of property. A positive opinion can also be made about the Euro zone economic activities too.Chinese; Japanese, Russian, Brazilian economies continued to be on trajectory of global growth thus enhancing global demand.

WTO assessment has also been positive for fiscal 2017 as compared to the 2016 financial year.OPEC crude production has been cut ,resulting in decline in the supplies and growth in demand, resulting in 2 year high price witnessed in the global crude price. Indian capital markets touched year high in September, before showing little decline due to conflicting situations in Korean peninsula. Equity markets have been on rise in most of the advanced economies. Same has been trend witnessed in the emerging markets. Capital inflows have been rising in the emerging market economies, but they also depend upon the stance of US Federal reserve.

Euro currency grew strong while Japanese Yen witnessed volatility. In India real gross value added (GVA) growth slowed significantly in Q1 of 2017-18.South west monsoon arrived at time but its activity slowed during the time from Mid July to August, thus registering a shortfall of 5 % by September end. This also reflected a decline of reservoir filling capacity to 65 % as compared to 75 % a year ago .Index of Industrial productivity figures grew as compared to June where they had contracted. Manufacturing has been weak although. Inflation figures did hit a 5 month high. Liquidity in the system persisted and at the same time currency in circulation also increased at moderate pace. Indian export growth picked up, better from previous declines over last 3 recorded months. Although Indian exports remained less as compared to many major economies. Gold import has declined, but the current account deficit has also increased considerably.Net FDI has been higher compared to previous fiscal. India’s foreign exchange reserves stood at 399 Bn $.Debt investment saw considerable rise, although there was equity outflow due to global uncertainties.

Repo-Rate.jpg

RBI’s Outlook and growth concern

 

MPC has assessed that food inflation will be around 4.2-4.6 % for the rest half of the year. Loan waiver given to farmers may put pressure on prices. State’s implementation of salaries similar to centre’s is also bound to put pressure on the inflation figures.Khariff production seems to be falling and so far GST has also seemed to have had adverse affect in manufacturing and thus may have slow investment over period of time.  The projection of real GVA growth for 2017-18 has been revised down to 6.7 per cent from the August 2017 projection of 7.3 per cent, with risks evenly balanced.

The MPC insisted the need to fasten up investment activity which, in turn, would revive the demand for bank credit by industry. Recapitalisation of public sector banks adequately will ensure that credit flows to the productive sectors. Infrastructure bottlenecks need to be checked. Stalled investment projects need to be restarted, particularly in the public sector; enhancement in ease of doing business, along with further simplification of the GST is needed; and ensuring of faster rollout of the affordable housing programs is  must  along with rationalisation of excessively high stamp duties by states.

Next MPC meet will be in December, 2017.

RBI policy.jpg

Opinion and expectations

 

Indian economic growth had slowed to 5.7 % for the first quarter of fiscal 2018, due to effects of demonetisation and change to GST regime. Many prominent economists believed a need to cut the rate to give a boost to the economy. But a slow growth accompanied with a rise in inflation left less room for RBI to cut rates. The policy has been in stance with RBI mandate to keep inflation in check.

Home loan rates are lowest and are unlikely to go down further. Few prominent investors viewed that inflationary pressures are on upside and considered it as a cautious approach. Some had opinion that downside risk to growth has increased. Dampened activities have shown negative effect in all sectors. If such price pressures continue then government will have to boost its spending that may affect fiscal deficit targets.

 

HARSH VARDHAN PATHAK

 

DOON UNIVERSITY

 

References;

Photos from online sources.

 

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=41852

 

 

 

 

 

 

 

 

 

 

 

 

Latest IPO trends In Indian Capital Markets-September 2017

 

 

Can be also read at

 

http://boecot.com/2017/10/03/latest-ipo-trends-in-indian-capital-markets-september-2017/

 

 

 

 

Month of September was very much vibrant with many IPOs hitting the Indian stock markets. The month saw IPO issue of Dixon Technology,Bharat Road Network limited, Matrimony.com Limited IPO, Capacit Infraprojects.ICICI Lombard and SBI life IPO among the major players. Along with these Pratap Snacks also went public.

 

Capacity Infraprojects IPO.jpg

Infrastructure entity like Capacit Infraproject was one among the most sought after with subscription demand as high as 82 times .Indian investors in IPO markets show a trend to earn profits on quick basis. It has been seen that majority of subscription is done with an intent to gain the listing profits. We cannot conclude, but it is observed that investment in majority of cases is not done keeping in mind a very long term of 5-7 years in mind.

Various studies in past global IPO markets have indicated that IPOs are underpriced .This phenomenon helps the initial subscribers to gain heavily on the listing days, or during the 3-4 days of commencement of trading in the markets.

The month was also affected by the events transpiring in the North East Asia. Consistent verbal threats amongst North Korean regime and USA, multiplied with events of Europe, Chinese economy and USA economy led to a considerable decline in the markets.

Dixon technology and Capacit Infraprojects were one among the issues which were heavily oversubscribed; nearly 120 times and 82 times respectively. While on the day of listing both issues gave premium listings too. Dixon technology being as high as 54 % to Rs 2,725,high from the price band offered of Rs1766 INR per share while during  initial subscription.

 

DIXON IPO.jpg

Same was with Capacit infraprojects.It also listed at premium as high as 399 INR high by nearly 60 % from initially offered price of 250/- INR per share for  a market lot of 15,000 INR.

There were doubts about the Bharat Road network IPO due to registering losses. It somehow managed to get subscription of 1.8 times and even got some little enlisting gains. But since then it is been a decline in the share price.

Another interesting IPO was the matrimonial .com IPO.It was very heavily priced in the range of 985 Rs.It was oversubscribed 4.41 times .It started from slipping as low as 950 and today it is trading at 810 INR per share.

 

Matrimony IPO.jpg

 

2 IPOs were the ICICI Lombard and SBI life IPOs which were to be looked after keeping in mind very long term perspective .These could have been the biggest success.SBI life IPO was the biggest IPO{8500 CRORE} post since Coal India Limited launched in 2010.SBI life had been given subscribe rating by majority of Investment advisors.SBI life had been paying dividends consistently since 2012.These 2 IPOs although gave some initial listing gains. Higher valuations looked a concern and it was expected that these 2 IPOs may not be able to give strong listing gains. But since insurance market has been mostly untapped in Indian markets, it was advised to subscribe the IPO keeping in mind medium to long term gains.

 

SBI life Insurance IPO-Peer comparison.jpg

Indian investors are driven by the motive of listing gains. We did not see a very heavy demand for both issues.SBI life IPO was oversubscribed 3.6 times while ICICI Lombard has oversubscription of 3 times. Or even one can say that given the demands in last few months seen as high as 80-90 percent in cases of CDSL and Kochin Shipyard. These oversubscription figures then may look small. But still they sailed through with strong demand.

IPO market looked very vibrant for the month of September. In this month of October with Godrej Agrovet and MAS financial services going public. More activities are expected in the IPO market front.

 

 

Harsh Vardhan Pathak

Budget 2016 –ITC’s Expectations for its Cigarette segment.

slide4

 

{This was a report made by me under my internship trainer N Ravindranathan in 2016 Feb.It was about taxation impact on ITC and its share price movements}

ITC Limited is an Indian conglomerate with five diversified business, FMCG,  Hotels,Paperboard,Agri business and Information Technoligy.ITC   is globally the most successful cigarette company with an EBIT margin close to 67 %. In last 10 years studying in the context of ITC we witnessed that tax burden on Cigarettes has continued to increase. Government has been aggressively increasing the excise duties maintaining its stance on emphasis on public health .During the last 4 years it’s excise rate hike has been registering a CAGR rate of > 15 %.In coming budget it is expected that previous years trend might continue.ITC would be expecting a single growth rate or no growth rate, as it would allow it to raise its price by 12-15 %, thus enabling it to earn growth rates of 15 % in earnings .While forecast of hike in excise duties close to 15 % will be troublesome. Cigarettes continue to see the most punitive policy.

Other than this there are concerns about anti tobacco measures taken by different states like,Punjab,UP,where ban has been imposed on selling loose cigarettes, VAT hike, Pictorial warnings to cover 85 % of packing has to be implemented from April 2016.Now at all India level cigarettes pack will have to also mention tar and nicotine content.

Despite this, ITC has managed to raise its net sales as compared to increase in taxes. One reason for this is the real income increase of consumer has been more as compared to the hikes in tax rates. So the affordability level of consumers has not gone down. ITC has also benefitted from the multi layered tax structure for different lengths of cigarettes ITC’s.

Cigarettes are sold in India in 6 different tiered structures. It was 7 till 2014.ITC’s growth revenues from micros cigarettes 64 mm have increased from around 5 % in Fiscal 2013 to nearly 20 % in Fiscal 2016.While revenue generation from 64mm-69mm has gone down to nearly 60 % in Fiscal 2016 as compared to nearly 75 % in Fiscal 2013.ITC benefitted since when the excise duty hike was very heavy on 64-69 mm section. It curtailed the length and brought in tax tier of cigarettes less than 64 mm in length . Micros volume has seen rapid growth during the past three years. For ITC an important aspect will be to watch out for any probable tax hike for micros this year 64mm . Presence of 6 tiered regimes for taxation of cigarettes also enables ITC to hold on with its market base and profits. Although 64mm has seen much sharper tax hikes.

 

 

Price per 1000 rs and impact of tax hike can be shown in tabular form in last 5 years.

 

 

As of steady hike in customs duties for cigarettes, the burden was shifted to consumers. So a consistent increase has been seen in the price per unit of cigarette.There has been significant impact registered on the cigarettes volumes which has been contracting 7-9 %.It has been noted that the Fiscal 2016 volume will be likely around Fiscal 2006 of nearly 75 billion sticks.

Trends in ITC’s portfolio mix

64 mm  segment has been growing rapidly and has ITC to maintain its consumer base

 

 

The gap between 64 mm and 69 mm has been reduced to 32 % from existing 110 % in FY 14 ,and if there is another rise in 64 mm ,its relevance will be under threat.

Trends in taxes on 64 mm vs 69 mm

Impact on stock prices during budget

Due to a excise hikes done during the budgets a stock prices of ITC showed volatility at times immediately before the day of budget. This can be shown that during the year 2015 immediately after the budgetary announcements of 25 % hike in cigarettes of length less than 65mm and 15 % for cigarettes in length exceeding 65 mm. The stock prices which were trading at 393 a day before the budgetary announcements immediately fell to 363 next day of the budget.

ITC has typically underperformed during the days before the budget .ITC stock has given negative to flat returns nearly 9 times over the past 13 years before the run up to the budget. It had been noticed that positive results were generated in 10 out of 13 times post budget. ITC’s stock performance has been better after the budget announcements have been done and uncertainties related to tax hike is over. Other major reason has been that strong pricing growth did offset weak volumes and lead to higher profit margins. So the stock continued to attain the faith of shareholders.

Other than this we saw that over the last 10 years 6 times the stock price fell before the budget in anticipation of probable excise hike. Barring 2013 and 2015 all years witnessed a growth in stock prices immediately after the budget declaration.

ITC EBIT margins are at an all time high and company is the most profitable cigarette company in the world.

10 year average stock price performance(in percentage)

.

Rise of illicit cigarette industry.

Factors such as rise of illicit markets have been getting worrying for the cigarette industry. India has emerged as one of largest markets for illegal markets in the world. It is estimated that illegal trade of tax evaded and smuggled cigarettes is 1/5 of overall cigarettes volume. Share of legal cigarettes in the overall basket of tobacco consumption has declined from 21 % at one’s existing level to 12 % today. In India, nearly 68-70 % of tobacco consumption escapes taxes as unorganised sector does not face regulatory oversight. It is estimated that revenue losses due to this may be as high as US $ 1 bn(6780 crores).However this is to be noted that despite sharp decline ,ITC’s excise duty payments to government have not declined over several years and same has been the case for the entire industry. But the declines in volume have been significant and a high price of cigarettes has been registered.

Selling price of illicit cigarette is even lesser than the tax

 

Study does show that government has not been losing on revenues as of its aggressive tax hikes and tax collection from cigarettes will still be on higher side. Trends in ITC’s excise duty payments.

Conclusions.

Study indicates that there is overall need to increase excise on all tobacco products as government is losing on revenues .If the unorganised sector of tobacco production can be brought under taxation, it will be beneficial .ITC has been shifting its focus and has diversified its sales as total composition of cigarettes in revenue generation has declined from the levels of 70 % a decade ago to 62 % now. Cigarette earning growth has been at historic low.ITC will be watching out the budgetary announcements as tracking whether any hike around 15 % is done or no hike is done.

Trends before budget on movement of stock prices

Year Before 6 month Before 3 mon Before 2 mon Before 1 mon Day before
2005 -19.55% -0.31% 1.85% 8.19% -0.54%
2006 888.37% -19.19% -19.77% -9.88% -3.49%
2007 5.26% 4.68% 3.51% 0.58% -3.51%
2008 -17.33% -7.92% 1.49% -0.50% -0.50%
2009 -24.89% -20.25% -22.78% 1.27% 1.27%
2010 2.91% 12.51% 10.16% 7.26% 6.35%
2011 -4.62% -0.24% 1.30% -0.50% -7.69%

 

2012 -4.62% -0.24% 1.30% -0.50% -7.69%
2013 -9.04% 1.09% -1.83% 2.02% 0.07%
2014 -7.38% -1.79% -0.53% 2.21% -0.92%
2015 -1.67% 0.50% 2.35% -0.33% 8.76%
         

Trends after budget in movement of stock prices.

Year Day after I month later 2 month later 3 month later 6 month later
2005 3.32% 1.62% 12.13% 23.57% 31.38%
2006 0.58% 11.63% 16.86% 3.49% 31.38%
2007 0.58% -16.37% -6.43% -2.92% -2.34%
2008 0.00% 1.98% 4.46% 9.90% -9.41%
2009 2.11% -0.42% -1.27% 9.28%  
2010 3.77% 13.84% 15.13% 15.87% -29.43%
2011 2.37% 5.74% 13.52% 11.80% 19.50%

 

2012 1.78% 11.52% 5.16% 14.74% 19.52%
2013 -1.63% 4.97% 10.13% 15.33% 1.15%
2014 1.88% 12.69% 6.68% 7.05% 7.14%
2015 -5.08% -9.35% -6.59% -11.04% -12.30%

 

Yellow portion shows the trends of stock in run up to budget while green portion shows hike in price post budget. After tax uncertainties have eased out.

Impact on net sales in cigarette segment .over the Fiscal years.

CIGARETTES SALES(IN CRORES)/YEAR

 

2008 2009 2010 2011 2012

 

GROSS SALES

 

14326 15754 18111 19827 22232
NET SALES 6634 7556 9321 10673 12954
EXCISE DUTIES,TAX 7692 8198 8790 9154 9278
% EXCISE DUTIES,TAX 53.69% 52.04% 48.53% 46.17% 41.73%
NET SALES GROWTH% 113.90% 123.36%

 

114.50%

 

121.37%

 

GROSS SALES GROWTH %

111.63%

 

109.97%

 

114.96%

 

109.47%

 

112.13%

 

 

CIGARETTES SALES(IN CRORES)/YEAR

 

2013 2014 2015
GROSS SALES
25986
29076 30452
NET SALES

 

13969
15546 16804
EXCISE DUTIES 12017

 

13530

 

13648

 

% EXCISE DUTIES 46.24%

 

46.53%

 

44.82%

 

NET SALES GROWTH % 107.84%

 

111.29%

 

108.09%

 

GROSS SALES GROWTH % 116.89%

 

111.89%

 

104.73%

 

 

 

 

 

Harsh Vardhan Pathak

Msc Economics

Doon University

Japanese PM Shinzo Abe’s India Visit-September 2017

India and Japan have shared very strong bilateral relations. Historically Japan was influenced by Buddhism which reached on the Japanese mainland from India via China and Korea. People of both nations are guided by principles of democracy, open society and pluralism. Both nations are very important geographic entities and have capabilities to respond to global and regional challenges.Indo Japanese bilateral trade is expected to reach 50 US $ by 2020.

Since 1947,both nation have had warm political relations. Japanese major firms have had manufacturing plants in India. Our bilateral relations at times were affected by the equations of Cold War.USA was suspicious of us and thus it had an impact on our relations with the Japanese too. During WW2 Japan assisted Indian National Army to fight against the Britishers.Due to bombing of Atomic bombs on cities of Hiroshima and Nagasaki, the war ended in East Asia and Japan could no longer support India militarily.

Both nations have had immense cultural ties. Japanese have acknowledged the quality of Indian IT engineers. India and Japan have a memorandum signed which straightway gives a work visa for 3 years and same is being reciprocated by Japanese too. Both nations have also reduced tariff duties as high up to 90 % on each other’s exports. Japanese as a foreign language is taught at many universities in India and Sanskrit is studied in Japanese universities.

We had a very tough time during 1998 when India conducted nuclear tests resulting in severe economic sanctions and suspension of political activities from Japan. They could be re-established 3 years after and then they grew phenomenally.

 

Significance of relations in today’s geopolitical realities.

 

We have come a long way since establishing diplomatic relations since April 1952.Indian Iron Ore helped Japan to recover post WW2 and Japan extended Yen Loans to us. Japan has been India’s largest donor since 1986 and still holds the position. Japan is India 4th largest source of Foreign Direct Investment.

In 2016 Japan and India signed, the “Agreement for Cooperation in Peaceful Uses of Nuclear Energy”, a landmark civil nuclear agreement, under which Japan will supply nuclear reactors, fuel and technology to India. India is not a signatory to the non-Proliferation Treaty (NPT), and is the only non-signatory to receive an exemption from Japan. Deal was delayed due to Fukushima Nuclear disaster of 2011,March.The two sides also signed agreements on manufacturing skill development in India, cooperation in space, earth sciences, agriculture, forestry and fisheries, transport and urban development.

In 2000 both nations consented to establish “Japan-India Global Partnership in the 21st Century. In April, 2005, Japanese Prime Minister Koizumi visited India and signed Joint Statement “Japan-India Partnership in the New Asian Era: Strategic Orientation of Japan-India Global Partnership.”

Both nations have had strain in relations with China. This is primarily due to the territory-land boundary dispute {India and China} and Island disputes{China-Japan}.Currently India and Japan conduct Joint Navy exercise known as Malabar exercise which also sees engagement of USA and thus enhancing shared maritime Indo-Pacific concerns.

Japanese premier visit also showed inauguration of construction of Bullet Train between Ahmedabad and Mumbai. India and Japan had signed an agreement in December 2015 to build a bullet train line between Mumbai and Ahmedabad using Japan’s Shinkansen technology. The Indian Bullet Train that will be built will cost £12bn and a 0.1% interest rate loan. With the help from Japan, both countries hope this will strengthen their economic ties and suspend China’s influence in Asia.

Both nations ended up signing 15 agreements in fields of language training, disaster risk mitigation knowledge sharing, to promote institutional cooperation and plans to develop North East region of India via mutual cooperation.

The ties between both nations have strengthened over decades. Given the times where we see Korean peninsula in crisis times and doubts about the Chinese territorial ambitions. It is imperative for both nations to have strong and sustainable relations. This is also vital given the fact that peace is essential for the growth.

 

Harsh Vardhan Pathak.

 

Sep 2017 meet

Xiamen, China BRICS 2017 Summit

narendra-modi-brics-2017-china_650x400_81504495237

Can be also read at our website

http://boecot.com/2017/09/05/xiamen-china-brics-2017-summit/

 

 

BRICS nations have gathered to attend the meet at Chinese city of Xiamen for the 2017 summit from 3rd -5th September. Given the uncertainty which is happening in the region due to Korean peninsula situation and sanctions on Russia by USA {as of interference in 2016 US presidential elections, Crimea and military operations in Eastern Europe}, BRICS was becoming a ground where it was expected that some new declarations will be made which will reshape the world.

BRICS as a block represents nearly 40 % population of the world. Also collectively 5 nations have total GDP of US$16.6 trillion, equivalent to 23 % of global GDP.World bank has estimated that the group nations will grow at a pace of 5.3 % for the year 2017.BRICS as a meet not only allows the nations to discuss multilateral issues, issues related to global economy and climate change, but along the side lines provides the opportunity to discuss bilateral issues.

History

BRICS has come a long way since its formation in 2009.Initially it had Brazil, Russia, India and China as the founding nations. By 2010 South Africa was also included into the group. So formally BRICS as an organisation was formed in 2011 intended to enhance economic, cultural and political ties.BRICS so far has not only formed a financial institution to counter west dominated IMF and World Bank, but also started financing the infrastructure projects in the nations.BRICS has come up with the Contingent Reserve arrangement and Payment system in 2015.BRICS was coined by Jim O Neil, paper  Goldman Sachs Asset Management,  in his research publication Building Better Global Economic BRICS.Currently many nations are willing to join the group, namely AfghanistanArgentinaIndonesiaMexico .While EgyptIranNigeriaSudanSyria  Bangladesh and Greece have also expressed interest in joining BRICS.

What importance does this meet hold?

This can be referred to the joint statement which has been released by the nations. The theme of the summit is “BRICS: Stronger Partnership for a Brighter Future”. It shows the resolve to share a common vision for the future development of the participating nations.BRICS leaders also praised the formation of New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), formulating the Strategy for BRICS Economic Partnership. Recalling the success of past summits it has been expected that nations will continue to participate with each other for people’s welfare.BRICS now believe that they have potential to lead towards a more  just and international economic order .Same way these nations expects that world will continue to operate to safeguard international peace based on the central role of United Nations.

Excessive focus has been made on mutual economic cooperation. BRICS have broadly agreed on encouraging and improving trade cooperation and investment cooperation mechanism among them. Nations agreed among the finance ministers and central bank governors about cooperation on Public Private Partnerships (PPP).It is also agreed to financially integrate the network of financial institutions, within the nation’s regulatory framework and WTO compliances. A understanding has been made to promote innovation, industrial cooperation, research development, BRICS energy cooperation, green development, environmental cooperation, agricultural cooperation, wildlife conservation assistance for African continent,anti corruption cooperation, more interaction for manufacturing, e-commerce and skill development, strong labour market information system, competition protection, trade facilitation, mutual respect for use of outer space for space activities, natural disaster management and risk mitigation, making and economic order which gives voice to emerging market and nations, reiteration  towards commitment to the implementation of the outcomes of G20 summits, to achieve a fair and modern global tax system .

The declaration also had points to clarify the BRICS stand on international security.BRICS committed to   enhance communication and cooperation on issues concerning international peace and security.BRICS reaffirmed commitment to the United Nations as the universal multilateral organization entrusted with the mandate for maintaining international peace. Concerns have been made about Terrorist attacks and organisation in the region.BRICS reaffirmed the commitment to fully implement the 2030 Agenda for Sustainable Development. Need of Reform in UNSC were made.

BRICS are looking forward to 2018 summit to be held at South Africa.

What is in it For India ?

Russia

Vladimir-Putin-Twitter

Modi and Russian president met along the sidelines of the BRICS meet. Putin thanked Modi for India’s high-level participation at the Eastern Economic Forum, being held in Russia’s eastern port city of Vladivostok.

Both leaders discussed several aspects of bilateral issues in sectors like cooperation in the natural gas and oil sector

China

Chinese President Xi Jinping shakes hands with Indian Prime Minister Narendra Modi during the G20 Summit in Hangzhou

India has been having lots of issues related to trade ties with China. We have a huge trade imbalance with China, heavily in favour of China. Our borders have not yet been demarcated properly and local standoffs have been taking place. Use of Brahmaputra river has also become a issue of conflict between China and India due to construction of Zangmu dam and Lalho dam by China .Same way the issue of India’s inclusion to NSG have to be discussed. In the bilateral meet between Chinese premier Xi Jinping and Indian PM Narendra Modi, views were exchanged with regards to mutual cooperation, and non interference among member nations. Recall of Panchsheel to mutual respect for each others territorial integrity have been made.

As of now it seems that both nations have decided to move with mutual dialogue to resolve the issues given a fact that both nations are large and are bound to have differences. Indian PM and Chinese Premier bilateral meet can be considered forward looking to enhance mutual trade. Peace along the border is important .There is a difference in opinion in both nations’ media. Chinese media has considered Indian army troops move as forceful trespassing on Chinese land. But they never make mentions about Chinese excursion deep into Indian territories. Same way the pain of suffering of terrorist activities in India has to be understood.

Post border standoff between it was a meet that had to be successfully conducted. Nations expect the next decade to be golden decade for BRICS. We must look forward to more and more cooperation among the BRICS nation so as to benefit the populace of the emerging nations.

Harsh Vardhan Pathak.

Floods and Natural disasters In India-A short study on the administrative reform committee recommendations on Disaster Management

INDIA-WEATHER-FLOODS-HIGHWAY

This post can be read at our website also.

http://boecot.com/2017/09/03/natural-disasters-in-india-a-short-study-on-the-administrative-reform-committee-recommendations-on-disaster-management/

 

 

 

India in 2017 has been heavily affected by floods. We have been seeing rise in intensity of rainy spells where in a short time a huge amount of downpour of water takes place. Previously it used to be prolonged season where the precipitation was evenly distributed. Due to change exhibited in pattern of rainfall we are seeing instances of incessant flooding. In India Bihar, Uttar Pradesh and North East are highly vulnerable to floods. This year has seen numerous deaths in the states and recent excessive flooding of Mumbai has also brought to attention the serious problem due to water inundation.

India has also matured with passing years and has carved various laws to deal with various crises and protect human lives as well as livestock. At this time due to Hurricane Harvey in Texas,USA many animals have been abandoned. In India we have National Disaster Management Plan for Animals .

 

 

A little about the ARC on crisis management or Disaster mitigation.

 

Over past few decades due to unplanned urbanisation and excessive burst of population, new construction has taken places along the riverbeds. This practise has been homogeneous everywhere. Floods and droughts were not alien to pre historic humans too. But since the population was not staying close to the flowing rivers, during the rainy season even in case if it used to be excessive precipitation, water did not affect normal life and later receded.

Disasters have been part of human civilization, and great civilizations have seen the testimony of this fact. Due to increased globalization and unplanned urbanization we are seeing more such instances in India. Intergovernmental Panel on Climate Change (IPCC) has concluded that worldwide the frequency of natural disasters is on rise.Droughts, cyclones; floods have become more and more frequent and affect not only human life but also the livestock. Impact on overall economy is severe and nations do end up spending a portion of GDP on efforts to normalize affairs post disasters. Thus disaster management has become a very critical issue over last few years.

 

What kind of disasters are mentioned in 2nd Administrative Committee report

 

ARC has mentioned reason such as climatic,eg;cyclones,floods,storms and droughts. Geological factors which trigger disaster are earthquakes, avalanches, tsunamis and landslides. We are also witnessing cases of epidemic which result in loss of public health and lives {cases like Gorakhpur tragedy}.Stampedes due to excessive large gatherings of peoples may also result in disasters. Hostile activities due to terror activities have also been summarized as a cause of disaster.

There is a life cycle of crisis. It is before crisis, during and post crisis time of recovery and rehabilitation .Except the earthquakes most of the disasters can be fairly predicted and since we have had frequent experiences of them in past years, our knowledge and experience of past can be helpful in dealing with them.

There has been a set of traditional knowledge existing, cases like tribals in Andaman islands surviving during Tsunami or old built houses of Uttarkashi which sustained the deadliest earthquake.85% of Indian mainland is vulnerable to disasters, with nearly 60 % it in seismic zone area. States like UP and Bihar has fertile land vulnerable to floods. It is concluded that every single rupee which can be spent on earlier mitigation saves 4-5 rupee later from rehabilitation.

Himalayas are very prone to seismic activities due to being young mountains. Around 14 states in eastern, western and central Himalaya witness seismic activities. Building norms have been codified under Indian standards on earthquakes engineering which have been timely modified to construct earthquake resistant structures.

 

 

8000 km of coastline can face hazards of cyclone . Landslides occur in hills due to excessive rains. Such things can hamper river flows and result in formation of temporary storage of water, which when bursts can cause havoc. It is important to regulate the standard of construction activities. Avalanches can be controlled by control blasting of snow deposits.

Industrial disaster is a manmade disaster. In 1984 Bhopal saw the Methyl iso-cyanide gas leak in Union carbide plant. It claimed more than 20,000 deaths and severely affected lakhs others. Bhopal tragedy resulted in enactment of new act Environment Protection Act, 1986 as earlier existing legislations proved to be inefficient.

We have been so far able to curtail any nuclear disaster, but lessons have been learned from Fukushima disaster of 2011 March. In India Department of Atomic energy is responsible to contain any impact due to radiological activities. There were points of concern even in Civil nuclear deal between India and USA due to lesser amount of sum to be paid in case of radioactive leak. This was a highly contentious issue in Civilian nuclear liability Act.

 

Disaster response mechanism

 

Communities and civil authorities are the first respondent during the disasters.Constituion has no specific mention of disaster management in India by either states or centre. But few states have their disaster management departments .Role of CM, cabinet secretary is important as they are responsible for timely decision making to ensure timely evacuation and rescue measures. Army has played a commendable role in India in post disaster rescue steps. Be in Kedarnath tragedy of 2013, or J and K floods, army always puts in maximum effort to rescue common peoples.

 

Conclusion-Laws In India with regards to disaster control

 

Decade of 1990 was observed as the International Decade of Natural Disaster Reduction (IDNDR) by United Nations. Post 2001 Gujarat earthquake government realised the role of an act as previously only Essential services Maintenance act was there to ensure the continuous delivery of important products during crisis. But these proved to be insufficient. Thus we saw formation of National disaster management authority in 2005.Earlier the disaster were looked after by ministry of agriculture, but later they were moved under Home ministry.

With maturing of our democracy we have formulated more laws to cope up with the impact of such tormenting events. National water policy of 2012 mentions about the initiatives to deal with floods.Similarly there are laws to mitigate negative impact of oil spills. {the National Oil Spill Disaster Contingency Plan of 1996 (NOS-DCP)” }This has been updated in March 2006.We now have much better National Oil Spill Disaster Contingency Plan.

Livestock are badly affected during crisis. Department of Animal Husbandry came up with Disaster Management plan for animals Government figures reveal that as many as 1.98 lakh cattle had lost their lives in floods over the past three years during 2013-15.

In India, animals are at the heart of everything, be it family, culture and livelihood, animals are an intrinsic part of our lives. It’s ironical that animals were missing in the picture till now.

DMP brought out standard operating procedures (SOPs) that are to be followed by the disaster management professions across the country for protection of animals during disasters including floods, landslides and earthquake.

National Disaster Management Plan (NDMP), 2016 is the first ever national plan prepared in the country for disaster management. With National Disaster Management Plan 2016 India has aligned our National Plan with the Sendai Framework for Disaster Risk Reduction 2015-2030, to which India is a signatory.

 

 

Harsh Vardhan Pathak

 

 

References

 

http://www.bis.org.in/other/quake.htm

 

http://arc.gov.in/3rdreport.pdf

 

Uttarkashi and Bhattwadi Block.

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Abstract.

This report is about Economy, Criminality and Overall Development of Bhattwadi block. Bhattwadi is the block in Uttarkashi District of Uttrakhand state. Bhattwadi block amalgamates 99 villages. Three of these pertinent points have further bifurcated into as follows. Failure of Agriculture and Devastation caused by flash flood and landslides, the curse of wrong research and policies, road connectivity and infrastructure, Health status and Education. Bhattwadi imbued with slew number of the proletariat and very less number of bourgeoisie and semi bourgeoisie population. But Bhattwadi also ensures punitive injection of wrong analyse, wrong interpretation, wrong economic policy implementation and wrong data collection problems which further have serious cascading repercussion in life of villagers. Health status of Bhattwadi block is on alarming state, although Janani “Suraksha Yojana” has shown some hope of improvement.

The economy of state:

The economy of Bhattwadi district is majorly dependent on Agriculture and farm based products this reason has a bonanza of famous Garhwal Potatoes, Rice, Brown flour(madwa) and rajma (pulses). But condition of Agric economy demise in sorrow state, reason being government have yet not identified its potential like quality of Garhwal products, government should provide and identified  their framer’s products and providing them common platform for agriculture market where they can sell at market prices( for an example Champagne a villages wine which have proliferated in international market.

Criminality:

 

While investigating in various villages our team has identified numerous amounts of cases of Bride trafficking and girls trafficking cases. Numerous numbers human trafficking has been observed.  Villagers, bride families, their natives and relatives positively responded for bride trafficking. We may assume all these as tools of marriage or bride trafficking.

 

Overall Development:

 

All most every village we have covered, lack with basic life supporting amenities like less number of CNG gas connections, Road connectivity, Health facilities, Education only up to primary level, Drugs dealing, the mellow cooperation of Police, Failure of MGNREGA, fragile old houses and high volatility of electricity supply.

 

Agriculture, Health and Infrastructure:

More than ninety percent of the people are engaged in agriculture. Agriculture is the only source of income for villagers. They had use Hybrid seeds for plantation provided by AJIVIKA and BHUVNESHWARI and RELIANCE. Reliance has adopted Barsu for 5 years. They also provide a POLY house for the incubation of their fields from wild animals and snowfall. Seeds that they brought from Punjab and Haryana are of a bad quality which reduces soil fertility and their production. But most of the crop got damaged by wild animals such as bears, wild boars, wild pork, monkeys and languor. Natural calamities like Floods, Landslide, heavy rainfall, hailstorms, Earthquakes, etc had affected these areas heavily. In June 2013, heavy rainfall resulted in flash floods and landslides and caused huge destruction in these areas.  After 2013 floods lead to the reduction of fertility of land. Whatever grown in fields it is used for self-consumption and not for income generation.  Agricultural techniques of farmers is either absolute or outdated, even now villagers uses traditional methods for agriculture due to which they do not get surplus production. This impedes them more dependent upon government Rationing. They have very fewer land left for cultivation, all their fields got eroded while flashing floods. Sometimes Government also takes their lands for the construction of roads but do not pay any compensation. Houses, roads, markets all the things had affected and connectivity of this area with infrastructural facilities had been hurdled. Roads, Bridges are still under reconstruction. Villages like Gajoli, Naugaon has poor road connectivity because road is broken and underwent reconstruction. Due to which these villages become isolated. After 1991 earthquake, aluminium sheets for houses were provided by HYDRA, RSS, INDRA AWAS YOJANA, Tata Trust and ANGLE SHADE had provided houses more than 30 percent of villagers. The health condition of the people alarming. More than 70 percent of the people do not have toilet facilities and proper sanitation. Bhattwadi often suffers from lack of access to healthcare presentation and rare time for emergencies evacuation. People living in rural areas tend to have a higher rate of tobacco and alcoholism. Around one in five of all women have a Hysterectomy due to pulling heavy wood stock, water canes etc. People are not concerned about their health and hygiene children’s were not even wearing slippers and were wearing filthy clothes.

Conclusion:

 

As if till now after visiting and a number of villages, interviewing villagers and their respective Pradhans the sorrow state of villages has been observed. Entire Garhwal area has been paved by proletariat population hence government should frame policy accord to support the agric sectors, government should also imping and revamp guaranteed employment scheme(MGNREGA). And should seriously implement recommendations by people like Comrade PC joshi, PS Rawat and Mr. Mangain.

Villages Reports.

Village and Block Village: Jhamak  Block – bhatwari

 

 

 

Key informants interviewed (who are they?) The local leader (Gram Pradhan) was very pessimistic regarding government allocation of funds, it is so ludicrous to construct china walls to protect proliferation of forest fire and spending millions on it, rather than understanding basic root cause why forest fire ignites, the very basic notion of forest fire is Palm trees(Chid) these trees do not possess any bonanza for mountain soil but rather act like impurities injections, the falling leaves of Palm tree ignites like fire in cotton he said. Government should initiate re-plantation of trees which are not only lucrative for mountains soil but also for wild animals and villagers, authorities should allot funds in these directions, coherently involving local villagers and other government departments he further stated.
Employment opportunity in the villages It was very astonishing that Jamak have such a naive percentage of MGNREGA employment scheme villagers are found in very negligible amount those who have participate in MGNREGA scheme due to lack of development projects in village. But Jamak also endure some favour after construction of dam, there are the villagers found to be employed in Hydro project dam.  But proportionate population remains unemployed with highly dependency on farming with disguise employment.
Challenges faced Entire Uttarkashi belt come under purview of high seismic earthquake zone so jamak. But jamak is also bless with human construction (Maneri Dam) this village endure heavy shocks of tunnel blasting from last 30 year the entire village soil has shaken and lost its density which has its cascading impact, soil sedimentation due to which villagers living in Kacha and semi kacha houses have to live in fear of   house demolition.
Case study Jamak is also observed seismic on the ground of Bride trafficking villages was not openly stating about incidences but mentioning three to five cases of such incidence. It was also observed that squareness of bride trafficking more diverted towards scheduled tribe rather than general category.

Case 1. Anju is the daughter of Umeed lal and belong to scheduled caste, while investigating with her younger sister told that Anju was married to Mureet 3 years ago and hole marriage was sponsored by in laws.

Case 2. While investigating another case of bride trafficking mushroomed. Junk dealer sold his two daughters one in panjab and Uttar Predesh amount was not stated.  

Case 3.  The boy went to delhi in search of job opportunities but never returns, police did not support the search of boy.

No strong signals were identified between Umeed lal and its in laws nativness. Villages also told about the incompetency of poor schedule tribe who cannot afford expenditure like marriage, it is a bliss that some one ready to take away their daughter without demanding for dowry.

`Health From the last few year “Janani suraksha yojna” playing imperative roll on women after their deliveries, 1400Rs amount of money is given by the government hospitals to these ladies and Ambulance drop infant baby and mother to her native place (Khushi ki Gadi) called in local language. But due to lack of doctors in PHC and CHC villagers have to travel Uttarkashi government hospital even for basic health problems.
Education It has been observed that Jamak ensure satisfactory level of primary education facilities. But the higher level of education accessibility remains absent, children who wanted to pursue their higher studies have to travel or migrate uttarkashi for completing their higher degrees.
Overall experience Jhamak is the most fragile village, which comes under highest seismic zone of earthquake and heavy landslides reason being its geographical location paved by Himalayas most unstable up folding mountains, Maneri Hydro project Dam due its artificial lake, it continuously weakening Jamak soil density, causing heavy landslides now and then, the underground tunnel which passes through Jamak bed also plays pertinent roll for heavy landslides and earthquakes.

Its already mentioned about dependency on farming sector by Jamak people. Jamak already endured more than three-time mega devastation by natural calamities one in 1991, another in 2004 and the last in 2013. Heavy land slides and mellow earthquake tremors have eroded numerous amount of fertile land, reduce per capita land holding area of villagers. Which further damping the amount of farm products and their revenues.

Jamak was observed good cooperation of police, reason may be nativeness of Hydro dam, but good cooperation of police have reduce alcoholism of villagers and they feel sense of incubation from fear and crime. Reliance, RSS and Tata trust have provided villagers with seeds, fruit plants and teen sheets.

Village and Block Village:Naogaon  Block –Bhattwadi

 

 

Keyinformants interviewed (who are they?) Naogaon is the other interior and last village of bhattwadi block. While interviewing with Gram Pradam some fascinating facts have immersed. Earlier their use to be numerous amount of agriculture production use to happen, but now situation is totally ironical, our major crop use to be mandwa,Potato,Cholai,Rice but interference of wild animal usually destroy our crops due to which we have to depend on government regular rationing. In every landslides we usually lose our cattles and fertile land.
Employement oppertunity in the villages While investigating Naogaon it was observed that numerous amount of people acquire higher bachelor degrees but due to lack of employment apportunities they have to dependent of agriculture. The another fascinating fact was Naogaon do not have few numbers of people who are employed in MANREGA, most of house holds have worked only for nine to ten days that to without wages, neither government provide any unemployment guarantee.
Challenges faced Naogaon is the most difficult terrain with the point of view of road connectivity, medical emergencies and regular necessary ration supply, this village is the most affected by cloud bust, flash floods and weekly mellow tremors of earthquakes. Villagers complain about government negligence of not providing them 100 guaranteed employment scheme due to which they have to migrate Dehradun and other states in search of employment.
Case study Case 1.  While investigating villagers waffling about network of bride trafficking they said there are few shopkeepers in Uttarkashi who are in touch with some villagers, these villagers connect link between girls parent families and shopkeeper with clients.

Case 2. One case of child adoption was found where boy was adopted 10 years ago due to demise of this blooded parents.

Case 3. Three years back, case was found where intercaste marriage look place when parents denied for marriage ceremony couple decided move out from village but when they came back both of them forcefully re-married to different individuals.

Health This village face extreme difficulties during women deliveries.To reach Naogaon 5 kilometres upstream serpentine path breaks breath several several times, it can be imagine how these pregnant women could reach road side waiting for ambulance. From last four year “Janani shuraksha Yojana” have shown positive implementation, pregnant women are drop and picked by 108 ambulance service without any charges with 1400Rs to women. But due to absences of road connectivity it becomes way difficult for victims to reach road side area. Therefore almost every major and minnor cases have to approach Uttarkashi government hospital. Almost all the villagers do not have any medical  insurance, even small surgery like women uterus operation drag their entire savings.
Education Nawa Goa again faces hindrance in education sector, it has been observed that only primary education is available rest after completing 8th students have to move uttarkashi to attain his secondary and higher education.
Overall experience This village also endure reams of wrong research and policies. Villagers told that  few investigators also approach to their village, they have observed our few cattle due to which they wrongly pulled us from BPL to APL ration category which reduced our food share, we have to lost one to two cattles in every flash deluge and flash floods, if we would been been stayed in BPL category we would have gain some financial support from government in form of cattles or money villager said.

Mahila mangal daal (women community) also honestly fulfilling their social responsibility by control home made alcohol and other form of drugs.

Under Swach Bharatt Abhiyan Swajal department have to provide financial support to families for constructing toilets but in middle of construction Swajal have stopped its financial support to poor families.

By Mohit Pandey

Mohitpande2@gmail.com

Phone Number 7351705526