Saying Tata to a public model

In a private limited company, it will be difficult for investors to sell their stake to rivals

In a significant move, an overwhelming majority of shareholders of Tata Sons, the holding company of the $105-billion cars-to-software group, last week voted in favour of changing the legal status of the firm to a private limited company from a deemed public company.

The move by Tata Sons, no doubt, has to be cleared by the National Company Law Tribunal (NCLT). Nonetheless, the significance of Tata Sons’ move is not lost on the avid watchers of India’s corporate scene. It has introduced an additional dimension, especially since it comes almost a year after Ratan Tata, the patriarch of India’s biggest conglomerate, ousted Cyrus Mistry as the chairman of the group in what was billed as one of the biggest surgical strikes in India’s corporate world.

Much earlier, in 2015, the 106-year old T.V. Sundram Iyengar and Sons (TVS and Sons) Ltd., the holding company of TVS Group, converted into a private limited company from a public company.

The action by these two venerable institutions can be a pointer to the way businesses will be run henceforth in India. In a way, it also signifies a certain sense of discomfort and trust deficit in the operating environment which forces enterprises to expend precious management time and resources on issues other than running the businesses.

Disclosure norms

The Companies Act of 2013 may have a lot do with the new-found business route. For, the new norms have made disclosure requirements much more stringent for public limited companies. “This move will help Tata Sons reduce the cumbersome disclosure on its day-to-day activities required under the Companies Act, 2013,” said Suresh Surana, founder, RSM Astute Consulting Group.

“It will also give more control in the hands of promoters as Tata Sons will also not need shareholders’ approval for selling any of its undertakings, borrowing money to invest in trust securities and appointing people to key positions,” Dr. Surana said.

The conversion is bound to have a significant fallout on the Indian corporate world. Read especially in the context of the current ongoing imbroglio at the Tata empire, a private structure is a sure-shot route to secure the organisation from the ill-directed adventures of its members. A private structure puts restrictions on share transfers and sale. In a public company, for instance, a shareholder can sell his/her stake to anyone, including its rivals, or, in other words, to people whom the current promoters might not be comfortable with. In the demat era, it has become even more easier to palm off one’s shares However, this is not possible in a private limited company. This may yet prove a push-factor for many companies to contemplate conversion into private entities.

Tata Sons, it is reckoned, will continue to have independent directors on its board like earlier even though a private limited company is not required to have such positions. The fact, however, is that on conversion into a private company, the board shall have more power in terms of decision-making.

Not surprisingly, Mr. Mistry, whose family still owns just over 18% in the holding company, has opposed the move.

The move will restrict his family’s freedom to sell its stake. And, it may have to drive a hard bargain with the Tatas who will have the first right of refusal under the ambit of the private limited company.

S. Santhanakrishnan, an expert on corporate law and governance and also a director on the board of Tata Global Beverages, defends strongly Tata Sons’ move to become a private company.

“Earlier you had the option of being a public company, deemed public company or a private limited company. Now, under the Companies Act of 2013, you can only be a private limited company or a public company. They have chosen the route of being a private company,” he said. There is absolutely nothing amiss in the move, according to him.

“You can use a toll road or a non-toll road to reach your destination. Both are right means to achieve your objective. The choice is yours. So, why make a noise about it? ” queried Mr. Santhanakrishnan.

The group always upheld a high level of corporate governance standards and integrity, he said. “Whether it is a private limited company or a public company, all the dividend pay-out goes to trust, and, therefore, to charity,’’ he pointed out.

Ease of doing business

The law is not moving in sync with the ease of doing business. It has made doing business more complex. Hence, going through the private company route makes sense.

While the Companies Act 2013 had many welcome changes, it made the compliance aspect excessive. “The choice of being public or private is based on your choice of ease of doing business,” said Mr. Santhanakrishnan. “There can’t be a living-in relationship in a corporate set-up. It needs the patronage and identity of the parent.” After all, he argued, a private company is also a regulated company under the Companies Act. There is a calibrated level of regulation. So, what is wrong in choosing one of the methods provided by the law?

Compliance norms

Many compliance norms just go away under the private company structure. The most important one pertains to related party transactions, according to Arvindh Pandian, a Chennai-based corporate lawyer. “Another advantage in such a set-up is you can have like-minded people on the board,” he added. The related party transaction is one of the important aspects yet in this context. It was indeed one of the major points of friction between Mr. Mistry and Mr. Tata. Whatever way one looks at the Tata Sons’ move, it is likely to embolden more firms to convert into private companies. It will be more so where management bandwidth and compliance are turning out to be critical.

A report by a standing committee on Finance, Ministry of Corporate Affairs, tabled in the Lok Sabha last year, also seems to acknowledge the new trend in corporate India. The committee observed that more and more private limited and limited liability partnerships (LLPs) are being registered as compared to public limited companies. As many as 52,144 LLPS were registered as on December 31,2015, of which only 51,315 LLPs were active. It, however, noted that such a trend was not very healthy for the growth of the corporate sector.

Pointing out that the trend could be due to the detailed and cumbersome procedures and rules under the Companies Act, 2013, it urged the Ministry to examine the issue with a view to simplifying and rationalising the related rules and procedures under the Act.

Tata Sons has gone by what is permissible under the rules in doing what it did. Yet, Mr. Mistry and his family will take their battle to the NCLT.

However, one thing is certain. The Mistry war at the Tata empire has indeed sent out a new lesson or two in partner management in business.

Who’s lending to Indian businesses?

Banks’ share in new credit fell in FY17, as corporate bond issuances rose 56% and NBFCs lent more

With the banks busy chipping away at their mountain of bad loans and operating on precarious levels of capital, who will fund the credit needs of Indian businesses? Reserve Bank of India’s recently released annual report for 2016-17 shows that many new sources of finance are springing up. Domestic businesses are increasingly turning to the bond markets, Non-Banking Finance Companies (NBFCs) and foreign direct investors to meet their funding needs.

RBI’s compilation on the ‘Flow of financial resources to the commercial sector’ shows that FY17 marked a watershed year for Indian banks’ share in commercial credit.

In the four years ended FY17, domestic businesses soaked up between Rs. 12.8 lakh crore and Rs. 15.1 lakh crore, per year in credit funding. Until FY16, the banking system met 50% or more of this requirement.

But in FY17, banks’ share in new credit slumped to 35%, while non-bank sources met 65% of the financing requirement. Non-bank sources lent as much as Rs. 9.25 lakh crore to businesses, dwarfing bank credit flow of Rs. 5.02 lakh crore. So, who are these non-bank lenders to enterprises and how are they funding themselves?

Bond market buoyancy

For years, market players in India have bemoaned the underdeveloped state of the domestic bond market. But the bond market has seen a remarkable pickup in the last three years.

In FY17, public issues and private placements of corporate bonds (including commercial paper) raised Rs. 3.16 lakh crore for firms, a 56% jump from the Rs. 2.03 lakh crore in FY16. This took care of 22% of the total funding requirements of commercial enterprises.

This number has almost doubled from Rs. 1.65 lakh crore in FY14. This data only includes the bonds directly floated by commercial enterprises, and not the money raised by finance companies for on-lending.

What has prompted this sudden takeoff? On the borrowing side, firms have taken to bond issues to source more of their requirements because bond markets have transmitted the recent fall in interest rates much more quickly and effectively than banks. In the last couple of years, it has been much cheaper for high-quality corporate borrowers to tap bond markets.

On the lending side, retail savings flooding into mutual funds, insurance firms and pension funds have helped stoke the domestic institutional investors’ demand for bonds.

These trends, taken with active efforts by the RBI, suggest that bond markets may continue to remain a leading source of credit to businesses, offering stiff competition to banks. The only caveat is that the bond market route is more accessible to large enterprises with good credit ratings, than SMEs or borrowers with low ratings.

NBFC scale-up

Non Banking Finance Companies (NBFCs) have emerged as key financiers to businesses, especially MSMEs. RBI data shows that in FY17, NBFCs and housing finance companies extended Rs. 2.59 lakh crore in credit to commercial enterprises, meeting 18% of their total credit needs. NBFC lending jumped 28% over FY16.

For long, it was a sore point with entrepreneurs that the large corporate borrowers ended up cornering the lion’s share of bank credit, with lending procedures effectively keeping out Micro Small and Medium Enterprises. In the last three years though, wholesale NBFCs have aggressively stepped into the breach. Leveraging their deep regional reach, closer relationships with customers and alternative credit appraisal systems, NBFCs have driven a manifold expansion in loans against property and unsecured business loans to MSMEs.

‘NBFCs gain share’

A Crisil study in November 2016 noted that NBFCs had gained a 3 percentage point share of overall credit pie from banks in the last three years as a result of their mortgage and MSME lending push, and would continue to gain share over the next three years. Housing finance NBFCs have emerged as a major source of funds for real estate developers too, with financial institutions such as LIC, SIDBI, National Housing Bank and NABARD playing a complimentary role in funding other businesses.

Two factors have helped NBFCs expand their lending activities at the cost of banks — their comfortable capital adequacy ratios and their ability to borrow at lower costs due to falling interest rates. In the last couple of years, NBFCs have been even more aggressive than corporates in tapping the bond markets for capital. They have also augmented their resources by borrowing from banks and institutional investors through securitisation deals. Lately though, there is worry the sluggish property market will force NBFCs to tread more cautiously on loans against property.

While domestic non-bank sources such as bond markets and NBFCs have met about 46% of the total credit needs of businesses in FY17, foreign sources have chipped in with about 19% (Rs. 2.75 lakh crore).

Here, the good news is that rather than External Commercial Borrowings or short-term credit, it is the more durable FDI money that is meeting this need.

While it heartening to see these alternative sources filling in for bank credit, it is essential to recognise that these cannot completely substitute for bank lending. In April-June 2017 for instance, bank credit flow to the commercial sector actually shrank by Rs. 1.92 lakh crore. Despite non-bank sources pumping in Rs. 1.65 lakh crore, the aggregate flow of finance to business contracted by Rs. 27,300 crore.

The other useful takeaway from the analysis is that one can no longer assume a one-to-one correlation between bank credit growth and the GDP growth numbers. To really measure credit expansion in the economy, we need data on both bank and non-bank lending. To extend this logic further, if bank credit growth slumps to a 20-year low as it did in March this year, it needn’t necessarily spell doom for the economy.

India canters to series deciding victory

Rohit, Rahane and Pandya put the Aussies to the sword; Finch scores a century on return

The Australian top-order, bolstered by Aaron Finch’s presence, fired for the first time in the series. Despite India pulling things back at the death, a target of 294 — although below par considering the belter of a strip at the Holkar Stadium here — was far from being a cakewalk for India’s batting line-up.

However, the batting unit that hadn’t really come into its element in the first two ODIs ensured that India overhauled Australia’s 293 for six without much of a hiccup to seal the five-match ODI series with a five-wicket win.

While maintaining its 100 per cent record while playing in Indore, India also ensured a sixth successive bilateral series triumph.

The ninth successive win also equalled India’s longest winning streak registered between November 2008 and February 2009.

The locals, almost 25,000 in attendance, would have hoped for India’s famed top-three to do the job. And for a while, the Mumbai duo of Ajinkya Rahane and Rohit Sharma converted the city that’s referred to as mini-Mumbai into a home ground.

Rohit tonked the Australian pacers’ short-pitched stuff into the stands at will, with a pull off Kane Richardson in the ninth over that sailed over the roof being the highlight.

Rahane, meanwhile, preferred to find gaps through the field, driving and cutting without much difficulty.

Even though the duo perished in the space of two overs — with Rohit miscuing a pull off Nathan Coulter-Nile to offer a skier to Hilton Cartwright who ran in from deep mid-wicket and Rahane paying the price for playing across the line and missing one from Pat Cummins — their 139-run association at over-a-run-a-ball had laid the foundation for India’s win.

Rahane’s dismissal meant Hardik Pandya had another opportunity to make a case for the No. 4 slot. The all-rounder grabbed it with both hands, his flawless 78 ensuring India didn’t suffer heavily from the loss of captain Virat Kohli and Kedar Jadhav in quick succession, with the latter throwing his wicket away with an obnoxious swat off Richardson.

Pandya pounced on Ashton Agar, sending the left-arm spinner into the stands four times.

The shot of the match came in the 45th over when Pandya waited till the very end to just whisk a short one from Marcus Stoinis over ‘keeper Peter Handscomb’s head just when the ball was crossing his head.

So late did he time the ball that the cut even left Australia skipper Steve Smith perplexed.

Pandya’s impressive knock finally got over with a dolly to mid-on off Cummins. But the crowd didn’t mind it since it offered them an opportunity to have a glimpse of Mahendra Singh Dhoni, who accompanied Manish Pandey for the last 10 runs.

However, had it not been for Finch’s rampage early in the afternoon, Dhoni would perhaps not have had to take guard. Finch, playing his first game of the series after having recovered from a calf strain, expectedly started off tentatively.

But once he got his first boundary, an edge off Jasprit Bumrah in the fourth over, he played confidently.

Such was his onslaught that he didn’t spare any Indian bowler, especially going after chinaman Kuldeep Yadav. His scintillating century — his first in 25 innings over 20 months — set up the platform for Australia to put on an imposing total.

However, once he and Smith perished in quick intervals, India tightened the noose around the Australian lower middle-order.

While the spin duo of Kuldeep and Yuzvendra Chahal frustrated Glenn Maxwell by not pitching a single delivery in the batsman’s arc, Bhuvneshwar Kumar and Bumrah finished on a strong note to ensure the batsmen didn’t have a gargantuan task.

ISRO working on substitute spacecraft

This became essential after the main back-up was lost in a failed launch on August 31

Work has begun in Bengaluru to assemble the alternative substitute navigation spacecraft, which became essential after the main back-up was lost in a failed launch on August 31.

IRNSS-1I was earlier approved as a ground spare, to be sent to space in an emergency.

The Indian Space Research Organisation (ISRO) has been training a team from an industry consortium to assemble this spacecraft and its lost fellow satellite, 1H.

Will there be another back-up, a ‘1J’, and if so, who would assemble it?

M. Annadurai, Director of ISRO Satellite Centre (ISAC), Bengaluru, said the current approval is for seven navigation spacecraft (all of which are in orbit) and two spares — 1H and 1I. Should a new back-up be sought and approved, it may be part of another model of outsourcing of its satellites to Indian industry.

External partners

ISRO has just begun identifying a set of external partners who would assemble its future satellites, he noted. Until now all Indian spacecraft have been assembled at ISAC by its engineers.

Modi may speak on slowdown today

His speech will be the highlight of an ‘extended’ BJP national executive meeting of 2,000 delegates

Prime Minister Narendra Modi is expected to respond to concern over the economic slowdown, in his speech at the “extended” National Executive meeting of the BJP here on Monday evening.

Mr. Modi’s speech is slated to be the highlight of the meeting inside the Talkatora stadium.

A meeting of party office-bearers took place on Sunday afternoon to set the agenda for the executive.

Grand meeting

A key departure for the meeting will be the presence of all elected BJP lawmakers, including close to 337 MPs, 1,400 MLAs and all MLCs, besides its core group leaders from the States.

More than 2,000 delegates will attend what has been described by senior party leaders as an “extended National Executive” to mark the end of a year-long exercise to commemorate Deendayal Upadhyaya’s 100th birth anniversary.

BJP president Amit Shah will deliver the inaugural address at the event, which will also see an exhibition of events associated with the centenary celebrations of Upadhyaya, founding general secretary of the Jan Sangh.

Sources said the Prime Minister, who would deliver the valedictory address, might use the opportunity to highlight his government’s pro-poor measures and other policy decisions.

Policy initiatives

He is expected to answer critics on the state of the economy and efforts at financial transparency and inclusion. Party sources said that a political and economic resolution, drafted by party general secretary Ram Madhav, will be taken up at the meeting and is expected to repose faith in the work of the NDA government.

The rollout of the GST has been described by the party as a major success of the government which, it asserted, will integrate the economy.

A senior party leader said the issue of Rohingya immigrants, who the government has termed a threat to security of the country, may also find a mention.

Probe blames ammunition supplied by the Ordnance Factory Board

Probe blames ammunition supplied by the Ordnance Factory Board

A preliminary investigation has found faulty ammunition to be the cause of the accident involving an M777 ultralight Howitzer during firing trials early this month.

“A preliminary inquiry has found that the explosion took place due to faulty ammunition supplied by the Ordnance Factory Board (OFB), and a further probe into the matter is on,” an official source said.

On September 2, the gun manufactured by BAE Systems of the U.S. was undergoing field firing for compilation of range tables when the accident occurred. The ammunition exiting the barrel broke into multiple pieces damaging it.

Commenting on the findings, OFB spokesperson Uddipan Mukherjee said such accidents could be caused by multiple factors.

“Any such failure is attributable to a complex phenomenon pertaining to internal ballistics as the shell moves at a very high speed inside the barrel,” he said.

$737 million deal

Last November, India signed a deal with the U.S. government under the Foreign Military Sales Program for 145 M777 guns at a cost of $737 million. As part of the agreement, two guns arrived in India in April for calibrating range tables and three more would arrive in September 2018 for training.

Deliveries were slated to commence from March 2019 to be completed by mid-2021.

Kept politics out of broadcast, says PM

“I tried to keep the people of this country at the centre of the ‘Mann ki Baat’ programme”

Prime Minister Narendra Modi used the 36th episode of his monthly radio broadcast “Mann ki Baat” on Sunday morning to clear the air over his motivations behind the programme, and spoke of his conscious attempts at keeping “politics” away from it.

“I got a unique opportunity of connecting with people through the programme, and know their feelings, wishes, aspirations and even complaints and I never said that this is my ‘Mann Ki Baat’ (my voice),” he said.

“Acharya Vinobha Bhave always used to say that ‘apolitical is effective’. I too tried to keep the people of this country at the centre of the ‘Mann Ki Baat’ programme. I kept it away from politics,” Mr. Modi said.

“I have tried to remain connected with you, with a stable mind, instead of getting swayed by the heat, anger that may prevail at a particular time,” he said.

Key issues

During the 30-minute broadcast, he recalled some of the issues flagged by him through the programme over the past three years, talked about the cleanliness campaign, urged the countrymen to explore the incredible diversity and beauty of India and spoke about the FIFA Under-17 World Cup tournament being held in the country.

He also hailed the widows of two martyrs, Swati Mahadik and Nidhi Mishra Dubey, who recently joined the Army. “It is natural for every countryman to have respect for these brave women. I congratulate these sisters. They have created new inspiration and awareness among the people of the country,” Mr. Modi said.

The broadcast appeared to be answering critics in the Opposition who had accused him of being impervious to burning issues that concerned the people and only articulating what he felt was important.

He clarified that he received inputs from all corners of the country but he was able to articulate only a few of these during the programme. He recalled that in the last episode, a “pledge”, was taken for launching a cleanliness campaign 15 days ahead of Mahatma Gandhi’s birthday on October 2. Mr. Modi said President Ram Nath Kovind had started this campaign, and all sections had got associated with it, be it sportstars, cine stars, academics, schools, colleges, universities, farmers, officers or armed forces personnel.

He made a special mention of Bilal Dar, a Srinagar-based youth who has been carrying out a cleanliness drive for the past five or six years on his own and has now been made brand ambassador of cleanliness by the Srinagar municipality.

The Prime Minister noted that October was a month of greatness for India as several noted freedom fighters and social activists, including Mahatma Gandhi, Sardar Patel, Jayprakash Narayan and Nanaji Deshmukh, were born in that month. He mentioned Deendayal Upadhyaya whose centenary year would be ending on Monday.

Common thread

“What was the common thing among all these greats? Their sole objective was to live for the country and do something for the country and they proved it,” Mr. Modi said. On the birth anniversary of Sardar Patel on October 31, a “Run for Unity — Ek Bharat, Shresht Bharat” will be organised, he said.

He also urged the countrymen to travel within the country to explore the diversity and richness of Indian culture.

Tribals claim he was their ancestor, unhappy over portrayal as convict

Tribals claim he was their ancestor, unhappy over portrayal as convict

Satya Paul, a potter-artisan in his mid-50s, is a worried man. He has been commissioned to depict Gurmeet Ram Rahim, the godman convicted of rape, as an asur (demon) for Durga Puja. The goddess Durga kills the asur , usually described as a man with evil qualities in Bengali narratives, and Durga Puja is about the fight between the good and the evil.

“I’m in a terrible situation as the [ puja ] organisers want the asur to look like Ram Rahim and I cannot imagine an archetype as I have never made one before,” said Mr. Paul, who has been modelling clay for four decades.

Internet to the rescue

The committee members organising this puja — the Dinhata Exchange-Morh Durga Puja Committee in Cooch Behar district of north Bengal — addressed the problem by “extracting a smiling Ram Rahim” from the Internet, said committee’s joint secretary Bina Majumdar.

“The idea came to the organisers too late, when the skull and even the face of Mahishasur had not only been completed but had dried,” said Mr. Paul. “Now, I am closely observing Ram Rahim’s eyes and beard and trying my best to replicate some features from the image given to me,” he added.

The idea of having Ram Rahim as asur , however, has annoyed a section of locals, especially Santhals, who worship the asur . “The upper-caste Brahminical Hindu Bengali society does not care for the sentiments of other communities,” said Nityananda Hembram, head of the leading Santhal Samaj.

“Adivasis have their counter-narratives on the slaughter of Mahishasur. Challenging the Brahminical interpretation of history, they claim that Mahisasur was their powerful and valiant ancestor, and an unfortunate tragic hero in real life,” said Maroona Murmu, assistant professor of history at Jadavpur University.

The argument that Mahishasur is “an egalitarian king” has now confused the puja committee. Ms. Majumdar admitted they had not explored this angle while planning their asur .

For Mr. Paul, though, the challenge is different. “I’m giving Ram Rahim a garish golden and white vest but what do you think would be the ideal wear below the waist — a blue dhoti with a gold border or a white border,” he asked. He will hand over the Ram Rahim asur and the goddess idols to the committee on Monday night.

Ahead of Puja, traffic snarls bring Kolkata to a standstill

Vehicles took hours to cross a distance of a kilometre in the City of Joy

Two days ahead of Durga Puja, Kolkata witnessed severe traffic snarls in several parts of the city as festive revellers hit the streets in large numbers. On Sunday, several areas in north and central Kolkata witnessed severe traffic congestion. Vehicles took hours to cross a distance of a kilometre or so in both south and north Kolkata, almost all major streets were chock-o-block with pandal hoppers.

Large footfalls

While traffic movement was stoped by the police at Kolutola Street in North Kolkata for several hours due to large footfalls at the nearby Durga Puja pandals, similar situation occurred at C.R. Avenue in central Kolkata.

“Puja rush has resulted in the closure of Kolutola Street and Eden Hospital road from C.R. Avenue,” stated the Kolkata Traffic Police in its official Facebook page. It also said that traffic movement in CIT Road in North Kolkata was stopped due to large crowds on the streets.

“Puja crowd has resulted in the closure of CIT Road,” Traffic Police authorities posted in the department’s Facebook page.

However, it was not just the rush of pandal hoppers that brought traffic to a grinding halt in the evening, but festive revellers swarming marketing hubs in the city also drastically slowed down traffic movement. Roads such as Bidhan Sarani and Aurobindo Sarani witnessed severe traffic congestion as people rushed to the market areas to complete Puja shopping.

Struggle for police

A similar situation occurred on Saturday evening. While large swaths of central and north Kolkata witnessed severe traffic snarls, in south Kolkata also the police struggled to handle the situation. By late evening festive revellers hit the streets by the thousands and traffic in areas such as Ballygunge and Jodhpur Park in south Kolkata where several big ticket Durga Pujas are located came to a grinding halt.

Later in the evening the EM Bypass which connects the eastern part of Kolkata to the southern parts of the city also got chocked with traffic. Areas such as M.G.Road and Vivekananda Road in North Kolkata and S.N. Banerjee Road in south Kolkata also witnessed severe traffic disruption due to Puja shopping. In places such as Bagbazar in North Kolkata traffic movement were temporarily closed due to movement of idols which only added to the problem.

In October 2015, the city came to a standstill with a near-stampede like situation at south Kolkata’s Deshapriya Park Durga Puja as a large number of spectators tried to rush inside the cramped pandal premises. Several people were injured in the incident. The 88-foot-tall Durga idol, then claimed by the organisers as the “largest” in the world was the reason behind such rush of spectators.

Japan keen on friendship with northeast

Tokyo will invest in infrastructure, education and people-to-people sectors, apart from inviting 25 youth from region to the country this year

Days after the visit of Prime Minister Shinzo Abe, Japan has begun its outreach for the northeastern region. At the fourth Northeast Connectivity Summit in Kohima from September 22 to 23, a representative of the Embassy of Japan said Tokyo would invest in the region’s infrastructure, education and people-to-people sectors.

The next edition of the summit will be held in Tawang, Arunachal Pradesh, which borders China.

“Kenko Sone, Minister, Economic Affairs, Embassy of Japan, speaking at the summit, said the northeastern region is located at a strategically and economically important juncture between India and Southeast Asia as well as within the Bimstec (Bay of Bengal) community. Therefore, Japan has placed a particular importance on the cooperation in the northeastern region,” said a press note by the Nagaland government on the summit.

Road network

The press release noted that for the northeast, Japan had undertaken works on road connectivity, energy projects, water supply and sanitation, forest resources management, Japanese language education and post-war reconciliation, which aimed to build a deeper understanding of the actions of Japanese forces in the region during the Second World War.

Mr. Sone announced that Tokyo would invite 25 young people from Manipur and Nagaland to Japan this year.

During the latest visit of Prime Minister Abe to Ahmedabad, Japanese officials said Tokyo was committed to undertaking two major road and infrastructure building projects in Mizoram and Meghalaya. But the event in Kohima provided a broader portrait of Japan’s interest in the northeast.

The next Connectivity Summit in Tawang is expected to take Japan’s representation into the strategically located region that borders China. It was noteworthy that during Mr. Abe’s visit, Japanese officials had declined to spell out if Tokyo would be interested in acquiring projects in Arunachal Pradesh.

Myanmar’s interest

The summit also indicated Myanmar’s interest in the potential of the region. Speaking at the event, Myanmar’s Minister of Cultural Affairs Sai Kyaw Zaw urged people from Arunachal Pradesh, Nagaland, Mizoram and Manipur to forge closer ties with Myanmar as the country shared long borders with all four States.

Nagaland’s Chief Secretary Pankaj Kumar also urged improved connectivity with Myanmar for unlocking the regional trade potential. The summit included diplomatic participation from Bhutan, Russia, Bangladesh, Laos and Thailand.

Theresa May’s top minister plotted to oust her: Book

Chancellor Angela Merkel was widely expected to win a fourth term in office as Germans went to the polls on Sunday in an election that is also likely to see the farthest right-wing party in 60 years, the anti-migrant Alternative for Germany, win seats in parliament. Merkel campaigned on her record as chancellor for 12 years, emphasising the country's record-low unemployment, strong economic growth, balanced budget and growing international importance. That's helped keep her conservative bloc well atop the polls ahead of today's election over the center-left Social Democrats of challenger Martin Schulz. Schulz voted together with his wife Inge in the city hall of his hometown of Wuerselen in western Germany. "I hope that as many people as possible will cast their vote today and strengthen the democratic future of Germany," Schulz told reporters.

Merkel's conservative Christian Democratic Party and its sister party, the Bavaria-only Christian Social Union, have governed the country for the last four years with the Social Democrats in a so-called "grand coalition." Most forecasts suggest that coalition will win another majority in today's election outcome, but several different coalition government combinations could be possible. Pollsters said earlier in the week that many of the 61.5 million who were eligible to vote had remained undecided until the very last moment.

That included Bernhard Sommerfeld, a 62 -year-old book seller, who cast his vote on Sunday morning in Berlin after the opening of the polling stations at 8 am (local time). US bombers flew off the east coast of North Korea in a show of strength carried out to demonstrate American military prowess amid escalated tensions between the two countries due to Pyongyang's weapons programs. "This mission is a demonstration of US resolve and a clear message that the President (Donald Trump) has many military options to defeat any threat," Chief Pentagon Spokesperson Dana W White said in a statement on Saturday.

The US Air Force B-1B Lancer bombers from Guam, along with the force's F-15C Eagle fighter escorts from Okinawa, Japan, flew in international airspace over the waters east of North Korea on Friday, she said, reports PTI.

The flight came after days of increasingly bellicose rhetoric between US President Donald Trump and North Korean leader Kim Jong-Un's regime, as international alarm mounts over Pyongyang's nuclear ambitions.

"This is the farthest north of the Demilitarised Zone (DMZ) any US fighter or bomber aircraft have flown off North Korea's coast in the 21st century, underscoring the seriousness with which we take DPRK's reckless behaviour," White said. She said that North Korea's weapons program is a grave threat to the Asia-Pacific region and the entire international community. British Prime Minister Theresa May faced a plot from her senior cabinet ministers to oust her in the immediate aftermath of the June general election that saw the Conservative party lose its overall majority in Parliament, a new book has claimed.

The four most senior figures in her Cabinet – Chancellor Philip Hammond, Foreign Secretary Boris Johnson, Brexit Secretary David Davis and Home Secretary Amber Rudd – plotted to remove her following an election seen as a failed gamble by the British Prime Minister, according to 'Fall Out, A Year Of Political Mayhem'.

Written by 'The Sunday Times' political editor Tim Shipman, with extracts published in the newspaper today, the book claims that Hammond texted Johnson in the early hours of the morning following the election on June 8 to say he would support him as the next leader.

It claims that a "triumvirate" plan was hatched under which Johnson would lead the UK as the new prime minister, Brexit Secretary Davis would handle the European Union withdrawal and Hammond would run the country's finances.

According to the latest political book, the plan failed once it became clear that May had not plans to step down and Davis indicated he could not work under Johnson. Meanwhile, moderates with the Tory party, including former prime ministers David Cameron and John Major, and leading figures like George Osborne and Ruth Davidson are said to have gathered behind Rudd, with the home secretary reported to have said she was keen to run. The revelations of the book came as the divisions within the top tier of the government are at their most pronounced.

Pro-Brexit Johnson has reportedly demanded a series of assurances over May’s recently proposed two-year transition period after Britain leaves the EU. The foreign minister wants Britain not to adopt any new EU rules and regulations after it formally leaves in March 2019, according to ‘The Sunday Telegraph’. The stance puts him on a collision course with the UK Treasury department headed by Hammond, who wants a "status quo" transition.

Johnson also wants Britain to be able to sign trade deals during the transition period and opposes paying billions of pounds for access to the EU single market after 2021. There are fears that Hammond is still pursuing a longer transition, with Johnson insisting two years is an absolute limit as announced by May in a key speech in Florence, Italy, last week.

National Pension System (NPS) – Part II

Last week we wrote about NPS – particularly with regard to the various withdrawal options that it offers. Severall readers wrote in and it slowly became apparent to us that though NPS per se has been introduced years ago, due to the various amendments made therein over time, investors are rather hazy about the updated latest features of the product. Hence, we propose to run a three part series on NPS detailing various aspects of the same such that at the end of the day, readers get reacquainted with what is essentially an excellent retirement investment product.

Opening NPS Account: Get an application form from any of the Point of Presence Service Providers (POP-SPs) consisting of public sector banks, post offices, some private banks, financial institutions and their branches. Copies of proof of identity and residence (passport, Aadhar card, ration card, voter ID, driving licence, utility bills, etc.) along with the application form need be submitted. Carry the original document for verification. You may also download the form from npscra.nsdl.co.in. The process is very easy if your mobile is linked to Aadhaar card. Just log on to enps. nsdl. com, key in your Aadhaar number and you will receive a one-time password (OTP) on your mobile. After validating it your details and photo will automatically get filled up in the online form. You may upload a scanned signature and a photograph if you do not want the Aadhaar picture.

If your mobile is not linked to your Aadhaar, send a request to the UIDAI to update your mobile details. The form can be downloaded at uidai.gov.in/images/application_form _11102012.pdf Print the form you have filled on-line, paste your photograph and sign it. This form should then be sent to the Central Recordkeeping Agency (CRA) at: Central Record Keeping Agency (eNPS), NSDL e-Governance Infrastructure Limited, 1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. CRA maintains all the NPS accounts, just like a depository maintains demat accounts for shares.

After you upload the form, you will be routed to a payment gateway for the initial contribution to your NPS account. The minimum amount is ` 500 per contribution with minimum of ` 6,000 per FY. You can pay by debit or credit card or Internet banking. You will receive a welcome kit from the PFRDA in a few days containing a Permanent Retirement Account Number (PRAN) card consisting of a 12-digit unique number. PRAN is portable. A subscriber can retain his PRAN throughout his life, even when he changes job or residence. You can have only one NPS account as is the case for PPF. Similarly, no joint account is possible.

Salient Features 1.Structure: The main mandatory account is the Tier-I account. Tier-II is an add-on having all the parameters identical with the Tier-I, but there is no tax deduction available and consequently, there is no restriction on any amount of withdrawals any time and any number of times, provided a minimum balance of ` 2,000 is maintained at the end of the FY. Any individual can opt for such add-on only after you have contributed at least the minimum contribution of ` 6,000 to Tier-I. This Tier-II is comparable with any MF scheme (other than ELSS) and can be likened to behave like a savings bank account, with much higher returns. It attracts the provisions of tax on capital gains. 2.At Maturity: When you attain the age of 60 years or super-annuation in accordance with the service rules, you have to use a minimum of 60% of the pension wealth to purchase a life annuity and withdraw the rest 40%. If closure is sought earlier than the age of 60 years, say, when the person opts for early VRS or resigns or desires to discontinue for any reason whatsoever after a minimum holding period of 10 years,, minimum 80% of the accumulated capital is to be used to buy the annuity.

The recent FA17, with a view to make the scheme more attractive, has provided further relief to an employee subscriber of NPS. Sec. 10 has been amended to provide for an additional exemption on partial withdrawal not exceeding 25% of the contribution made by an employee. For instance suppose your corpus at the end of its tenure is ` 2 lakh, consisting of your contribution of ` 1 lakh and a matching contribution of your employer. You can withdraw ` 25,000 which is 25% of your contribution during its tenure and ` 70,000 which is 40% of the balance ` 1,75,000 at the end of its term. The total works out at ` 95,000. On the other hand, if you do not withdraw any amount during its tenure, you will be allowed to withdraw only ` 80,000. All this is tax-free. With the rest of the amount you can buy an annuity which is taxable in your hands. 3.Annuity: You can opt for any of the annuities offered by any of the empanelled insurers — ICICI Prudential, LIC, Kotak Mahindra, Reliance Capital, SBI, HDFC, DSP Blackrock and UTI. LIC happens to be a default option. You can change the insurers at will, but only once a year.

Following are the generic annuities the subscriber to choose from:

1.For life at a uniform rate to the annuitant only.

2.For 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.

3.For life with return of purchase price on death of the annuitant.

4.For life increasing at a simple rate of 3% p.a.

5.For life with a provision of 50% of the annuity payable to spouse during his / her lifetime on death of the annuitant.

6.For life with a provision of 100% of the annuity payable to spouse during his / her lifetime on death of the annuitant.

7.For life with a provision of 100% of the annuity payable to spouse on death of the annuitant and with return of purchase price to the nominee on death of the spouse.

The last one is the default annuity. If the pension wealth is ` 2 lakh or less, you shall have the option to withdraw the entire pension wealth without purchasing an annuity. However, if it is more than ` 1 lakh but age is less than the minimum age required for purchasing any annuity you shall continue to subscribe to the NPS, until you attain the age of eligibility.

If you desire to defer the purchase of annuity, you can do so for a maximum three years from the date of attainment of age of superannuation. The intention to do so has to be declared in writing in the specified form at least 15 days before retirement. Moreover, if you do not desire to withdraw the balance amount, after purc$til the age of seventy years when it would get automatically credited to your bank account. During this period of deferment you can withdraw therefrom in maximum 10 annual installments or withdraw the entire amount at once.

The annuity and all the withdrawals will be paid through direct transfer to the subscriber’s bank account.

Next time we shall examine other aspects of NPS such as cost, the various investment options, nuances of tax treatment and finally whether it makes a good investment or not.

In the shoes of the Governor

Governors, prior to India becoming a Republic, were the agents of the Governor-General in Council, committed to sustain the Imperial power. They could dismiss Ministers and acted in the interests of the Raj. We hoped that after 1950, Governors would be committed to the Constitution instead of governments in New Delhi. Our constitutional scheme mandates Governors to owe allegiance to the Constitution. Recent experience shows that Governors have been errant in upholding constitutional values. They are, instead, committed to the partisan political interests of their benefactors.

Ideally, Governors are the eyes and ears of the Union. They inform the Union both in writing and otherwise of the governance in States over which they have jurisdiction. In the event, decisions are taken contrary to the letter and spirit of the Constitution, they are obligated to advise governments from time to time to act in accordance therewith. Yet, in the recent past, Governors are seen to represent the long arm of the Union, indulge in intrigue within the state and are catalysts in destabilising elected governments. We have witnessed situations where Governors help in manipulating legislators to install governments, through means fair or foul, as long as they can please their political masters.

This is not something new that has happened since 2014. Previous Governors also have ostensibly, though not as blatantly, acted in concert with the interests of their political appointees. The verdict in Bommai’s case encapsulated the brazen misuse of Article 356. The Supreme Court dealt with how in each state when exercising powers under Article 356, the then Union sought reports from Governors which were found to be wanting and thus held that imposition of President’s Rule in some states was illegal.

Over the years, recommendations of both the Sarkaria Commission and subsequently that of the Chief Justice MM Punchhi merely remained on paper. No political party is willing to give up attempts to destabilise opposition ruled states by us- ing the office of the Governor. That Governors have allowed themselves to be used in this fashion and thereby compromised the dignity of the high office they occupy, is a matter of concern. Both Justices Sarkaria and Punchhi have enunciated salutary guidelines to be followed by Governors for determining whether or not the incumbent government in the state has lost the confidence of the House. These guidelines have been discarded. Machinations of the Union, by using the office of the Governor, have been seen in full play for motives that are constitutionally suspect.

Both in Uttarakhand and Arunachal Pradesh, Governors acted with intent to destabilise elected governments. In Arunachal Pradesh, the Governor at the instance of a break-away group from the Congress led government, acting in tandem with the legislative members of the BJP, went to the extent of advancing the Assembly session, which was slated to meet in January 2016. This was done to facilitate the fall of an elected government. The Governor went to the extent of determining the manner in which proceedings in the House would be conducted by setting the agenda of the House with respect to the ‘No Confidence Motion’ moved against the Speaker. The Supreme Court commented adversely on the actions of the Governor as he had stepped outside the realms of his powers. The ensuing fiasco saw the imposition of President’s Rule in the state. If Governors start compromising democratic values, motivated by partisan politics, democracy will be under threat. Similarly, the Governor of Uttarakhand recommended imposition of President’s Rule, fearing “possible pandemonium during the floor test”. Governors, though advised not to get involved in the thicket of politics, have been proactive in destabilising elected governments. In Uttarakhand, the Governor acted on the unverified version of rebel MLAs of the Congress party along with the BJP and on a suo motu report to the Centre, acted unconstitutionally to satisfy the political aspirations of the BJP.

Most recently, in Nagaland, the Governor did not even wait for a Court verdict and hastily installed a new government, knowing that the matter was to be heard by the Division Bench of the High Court. Contrast this with what happened in Tamil Nadu. The Governor has chosen to procrastinate in requesting the Chief Minister to prove that he still enjoys the confidence of the House. The prevailing circumstances clearly point to the contrary. The Governor by his wanton inaction gave time to the Speaker of the House to disqualify 18 members of the Legislative Assembly belonging to the break-away group of the AIADMK to ensure sustenance of the present government, which in the absence of disqualification of 18 MLAs, would be in minority.

These events reflect the amoral nature of incumbent Governors, willing to subvert the Constitution, besmirching the reputation of the high office they hold.

Perhaps the time has come for Courts to intervene. Where it is found that a particular Governor has acted in a blatantly partisan manner, inconsistent with established constitutional principles and norms, his instant removal through court diktat will serve as a deterrent. The message will be clear. Unless their decisions reflect their commitment to the Constitution, their tenure will be in jeopardy.

The author is a Member of the Rajya Sabha, and a senior Indian National Congress leader. Views expressed are personal.

Will Kamal bloom for Kejri?

Delhi chief minister Arvind Kejriwal resurfaced after months of hibernation to call on superstar Kamal Haasan to declare their joint resolve to fight corruption and communalism. Clearly, the Aam Aadmi has acquired some filmi chakkar. Kejriwal is known to be allergic to kamal ka phool but is a different kamal set to bloom south of the Vindhyas? Kamal Haasan has played so many different roles, a neta may not be difficult. In MGR and Jayalalithaa’s land, movie actors generally deliver political super hits. Kejriwal may be hoping that Kamal Haasan doesn’t play Chachi 420 with him, and Kamal must be hoping that Kejriwal’s friendship is not just a photo-op but a case of ek duuje ke liye.

There seems to be a North-South divide between Kejriwal and Kamal Hasan, but then politics is full of odd couples. Remember even Mayawati and Mulayam Singh were once allies before elephant and cycle had such a head-on collision that mercifully there were no fatalities on either side. The oddest political couple is Subramanian Swamy and Sonia Gandhi. Today Swamy is hell bent on bringing down the House of Gandhi but was once spotted with Sonia Gandhi trying to bring down the house of Vajpayee. After that famous tea party Jayalalithaa, who was also Swamy’s guest, did pull down Vajpayee showing that in politics, opposites attract because of power in their stars. Another odd couple is PM Narendra Modi and Bihar CM Nitish Kumar whose relationship is secular one day and communal the next, leaving both singing kabhi khushi kabhi gham. There seem to be no made-for-each-other couples in politics: even the original jodi of BJP and Shiv Sena is troubled. Too much saffron seems to be spoiling the vegetarian biryani.

It’s not just Kejriwal, Kamal Haasan wants to bring Rajnikant into his star cast. If that happens, the event will be such a multi-starrer, it will have to be named Baahubali 3. At the moment, there are too many odds and evens in the Dravidian landscape. Jaya departed, Sasikala in jail, the TTV men in resorts, EPS-OPS increasingly sounding like alphabet soup, and DMK’s Stalin the senior-citizen dynast whose time, like Prince Charles, never comes. In this situation a Kamal-Rajini jodi could be more explosive than gunpowder. When it comes to shotgun marriages in politics, if miya and biwi are razi, the voter has no option but to play qazi.