Mallya, A Potent Poll Issue
Vijay Mally will ignite poll slogans; More dollar woes; SpiceJet forays into cargo; and more
Photo Credit : Subhabrata Das
The Indian National Congress wants to make Vijay Mallya’s escape to London an electoral issue. Its MPs contend that the Karnataka industrialist had been seen meeting Union Finance Minister Arun Jaitley in the Central Hall of Parliament, just before he fled the country.
Leaders of the Bharatiya Janata Party (BJP) on the other hand claim that Jaitley had not visited the Central Hall on the said day. Congress leaders led by Rahul Gandhi also accuse a key CBI official, who they allege is close to Prime Minister Narendra Modi, of diluting the lookout notice against Mallya.
While the debate on the fugitive industrialist rages on, two questions remain relevant. The first is, how come the entire political spectrum of Karnataka backed Mallya’s bid for a seat in the Rajya Sabha? The second question of course is: who should be held accountable for diluting the lookout notice against Mallya?
— Suman K. Jha
India’s forex markets suffered a scare early in September as the rupee hurtled to an all-time low of Rs 72.91 to the dollar. Are the dog days over, or is there double trouble brewing?
If you reckon that the rupee could perform an encore as it did in 2013, think again. Short-term headwinds persist, of course.
The flaring up of crude prices is burning a crater in the current account deficit and slippages on the inflation front are not completely behind us.
To top it all, foreign portfolio operators are nicely balanced on the fence, pulling out dollars from the capital markets. However, that’s expected to keep the rupee volatile for some time.
The good news is that the rupee pulled back to Rs 71.88 against the dollar as the authorities concerned intervened. The bad news, though, is that the dollar is strengthening against a basket of jostling currencies, not just the rupee.
In fact, the rupee has, till about two months ago, been one of the most well-behaved currencies. Since then, the dollar gained 6.5 per cent on the rupee.
— Clifford Alvares
No Move Yet On Fame 2
India’s first ever Global Mobility summit MOVE turned out to be a damp squib. Prime Minister Narendra Modi inaugurated the event on 7 September but did not announce the much anticipated FAME2 schemes offering fiscal incentives for electric cars, two-wheelers and charging stations.
He said the focus must go beyond cars and stressed that public transport must be the cornerstone of mobility. He also said India was best placed to be an early mover in connected, clean, congestion-free and electric mobility. Newspaper reports, though, hint that the subsidy, now available for electric vehicles, may be extended to batteries as well. —Avishek Banerjee
Spicejet Gets Into Cargo
in times of high fuel costs and competition, low-cost carrier SpiceJet has chosen to enter the air cargo business. Beginning September 18, SpiceJet will operate cargo services under the brand name of SpiceXpress. To begin with, the air cargo operations will cover Delhi, Bengaluru, Guwahati, Hong Kong, Kabul and Amritsar. Like its commercial passenger aircraft fleet, SpiceJet’s freighters’ fleet too will consist of Boeing 737 planes and be operated on an ‘incremental direct operating cost model’, which entails extending its operations through its common pool of resources like pilots, engineers, ground staff and airport infrastructure.
Why SpiceXpress? “There is a huge untapped market for air cargo services in India and a player like SpiceJet — with its low-cost structure — is best suited to address this need,” says SpiceJet CMD Ajay Singh. “The freighter aircraft will be acquired on pure operating leases and we haven’t incurred any major capex, while the ground operations will be either self-handled by the existing Spicejet ground infrastructure or shall be outsourced till we develop a certain scale of operations,” he adds. Now that’s a smart move.
— Ashish Sinha
The Indian defence forces are in modernisation mode and on the verge of adding capability, technology and hi-tech gears. As a precursor, the Indian Army plans to trim its troop strength by 1,50,000 over the next five years, as part of a cost-cutting drive. A bulk of the defence budget now sustains manpower. The reduction in troops, reported by BW Businessworld earlier, is expected to be achieved by revamping different verticals on a priority basis, including directorates at the Army Headquarters, logistics units, repair facilities and communication establishments.
This manpower reduction is expected to help the Army cutback on expenses by about Rs 7,000 crore. The money could then be used to build capability and acquire advance systems. An 11-member panel headed by Lt. Gen J. S. Sandhu is conducting a review and will make its preliminary presentation to the Army Chief, General Bipin Rawat. The final report will be submitted in November.
— Manish Kumar Jha
Now Nepal Plays The China Card
A day after Nepal cancelled a scheduled military exercise with India under the aegis of the fourth BIMSTEC Summit, the mountain nation announced that it would take part in a military exercise with China. The BIMSTEC, constituted as a regional trade block comprising Nepal, Bangladesh, Myanmar, Sri Lanka, Thailand, Bhutan and India, accounts for 22 per cent of the global population, with a combined GDP of $2.8 trillion. It has of late focused on security concerns of its member states too. Nepal, it seems, is now playing the China card. The newly minted democracy is obviously being lured by its giant neighbour with massive unstructured loans, debt financing and promises galore.
Will Nepal’s marginal economy be able to service the debts it incurs from the Chinese largesse? Will it then go the way the Maldives and Sri Lanka have gone? Only time will tell.
— Manish Kumar Jha