China will push forward market-based reform of its currency regime and make the yuan convertible on the capital account over time, President Xi Jinping told the Wall Street Journal in an interview published on Tuesday. Top Chinese officials have been trying to reassure jittery global markets about their policy goals after a run of soft economic data and China's surprise devaluation of the yuan rattled investors over the past month. China is advancing changes to make the yuan convertible on the capital account in a "steady and orderly manner," Xi was quoted as saying ahead of a visit to the United States. "Reform of the renminbi exchange rate formation regime will continue in the direction of market operation," he said. The yuan is also known as the renminbi. A drop in China's foreign exchange reserves was "moderate and manageable," and the level of reserves remains abundant by international standards, Xi said. "With improvement to the renminbi exchange rate regime and progress in RMB internationalisation, it is quite normal that China’s foreign reserves may increase or decrease, and there is no need to overreact to it," he said. Xi reiterated that there is no basis for continued yuan depreciation. China's surprise yuan devaluation last month and a plunge in its stock markets since June have fuelled fears of more shocks to the economy, although Premier Li Keqiang has brushed off concerns it was facing a hard landing. Since the devaluation, China has scrambled to keep the yuan steady, running down its foreign exchange reserves by a record $94 billion in August to $3.56 trillion. The reserves, still the world's largest, were down by $436 billion, or 11 percent, from a June 2014 peak of $3.99 trillion. Xi also said that developing capital markets was a key goal of China's reform, which will not change just because of current market volatility. (Reuters)
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Well-known food and agricultural policy analyst, writer and researcher Devinder Sharma gives his characteristically frank opinions on some questions on Indian agriculture raised by Sutanu Guru This will be the second consecutive year of deficient monsoon. Last year output declined by 4.66 per cent. What do you think will happen this year?This is in reality the fourth consecutive year of deficient rainfall. This year, as of date, there is a 12 per cent shortfall in monsoon and in a few days rains are expected to withdraw. The early withdrawal along with the deficit already experienced will certainly impact food production. Like the previous year, we can look forward to a drop in food production but that should not worry us since the country has ample stocks of wheat and rice. But what is more worrying is the impact a drought-like situation causes to millions of farmers across the country. It hits the livelihood security of the small farmers the most. Already Marathwada in Maharashtra has turned into a farmer suicide capital with more than 660 suicides recorded in this year till Sept 1. Karnataka and Telengana too are reeling under a terrible agrarian distress with an unprecedented spurt in suicides having taken a huge toll. The tragedy is that the harsh reality of the hinterland remains hidden. A recent report tells us that 100 districts in India continue to be faced with drought or deficient monsoon for 15 years now. Most of these districts have experienced drought for at least 9 of the 15 years. This means roughly 1/6th of the country has remained severely affected by drought all these years. I wonder if anyone can even imagine how people living in these areas must be surviving. Do you think we are witnessing a long-term change in monsoon patterns or it is too early to speculate?A lot of studies point to the changing monsoon pattern. At the same time, the meteorological data does not show much variation if you examine the past 100 years pattern. Nevertheless, considering that climate change is a distinct possibility, we need to be adequately prepared. Although the Government of India has launched some mission programmes in preparation, much of the focus is on mitigation and adaption. There is hardly any thrust on hitting at the root cause that leads to climate change in the first instance. In case of agriculture, I find the emphasis is on how to make farmers’ ward-of the climate change impact. Considering that agriculture contributes to 41 per cent of the greenhouse gas emissions, I think the main priority should be on how to change the agriculture cropping pattern to reduce its contribution to climate change. In China, for instance, a study by the Stanford University and Chinese Academy of Agricultural Sciences shows that adopting an integrated method of crop cultivation would reduce the greenhouse gas emissions by 25 per cent without affecting the production levels. Similarly, in Andhra Pradesh/Telengana, more than 36 lakh acres is under no pesticides farming. This in my understanding is a perfect model to reduce greenhouse gas emissions, and thereby reduce the impact of climate change. But we still haven’t worked out as to how much greenhouses gas emissions are reduced in AP/Telengana. The new farmer suicide zones in Marathawada and parts of Karnataka have seen the most deficiency. What will happen there?This is worrisome, as I said earlier, Marathwada is turning into a suicide capital of India. In fact, like the infamous Bermuda Triangle, Marathwada-Telengana-Karnataka is the new Suicide Triangle. Karnataka has witnessed 431 suicides till Sept 5, and Telengana has recorded 1,391 in the same period. While deficient rainfall is one reason, the real cause is not the mounting indebtedness but the deliberate attempt to keep farmers impoverished. Over the past few decades, farmers are being deliberately paid less so as to keep food inflation in check and also to ensure that agribusiness industry gets cheaper raw material. In one of my analysis I have shown that while the income of government employees has risen by 120 times in the past 45 years – between 1970 and 2015, college/university professors by 150-170 times; school teachers by 280-320 times, the minimum support price for wheat has risen by only 19 times. Look at the huge gap. If only the farmers’ income had progressed in the same ratio as other sections of the society, agriculture would have seen reverse migration to villages. There is enough buffer stock of food grains. So prices may not be affected?Yes, there is enough buffer stock of wheat and rice. There is nothing to overtly worry about food prices provided the government is able to maintain a check on hoarding and speculation that normally hits fruits and vegetables. In 2007, when the world was hit a food crisis leading to food riots in 37 countries, India had escape any such crisis situation because Indian agriculture was not integrated globally. India had enough food stocks even at that time. India therefore must ensure that its agriculture remains protected from the vagaries of the international markets. With such a huge population, India cannot afford to be at the mercy of global commodity traders. There is a pressure from some mainline economists who would like India to open up for cheaper imports from European Union and Australia but let’s not forget that importing food is like importing unemployment. The more the cheap and highly subsidized food India imports, the more the small farmers are pushed out of agriculture. This also increases the current account deficit for no apparent reason, just faulty policies. The real crisis seems to be in pulses and oilseeds with hardly any growth in yield or output and massive increases in imports. What has led to this?It is the faulty import-export policies that have led to this piquant situation in oilseeds and pulses. I remember way back in 1985, the then Prime Minister Rajiv Gandhi, had launched the Oilseeds Technology Mission to boost domestic production of oilseeds. His worry was that India was importing Rs 15,000-crore worth of edible oils, then the third biggest import bill of the country, for no apparent reason. If Indian farmers were to increase oilseeds production, the imports could be drastically cut which means the current account deficit bill would also fall. He was right. In just ten years, by 1993-94, India became almost self-sufficient in edible oils. The country produced 97 per cent of its requirement domestically, with only 3 per cent imports. But then, India started reducing the import tariffs. From a bound rate of 300 per cent, India brought down the import duties to almost zero over a period. The result is that India is now importing more than 50 per cent of its edible oil worth Rs 60,000-crores every year. In all fairness, if India was to re-impose import tariffs and give farmers an incentive to produce oilseeds, it will not only help millions of farmers but also re-start the processing industry which lies shut. Similarly for pulses, India has always relied on imports to meet the deficit in domestic production. Giving farmers an assured price and also ensuring that whatever pulses farmers produce is procured by the government, imports can be easily stopped. But this would only be possible if the import tariffs are raised from the existing zero per cent to at least 15 per cent to protect any negative fallout on domestic production. Five things that Sharad Pawar did wrong as agriculture minister that this government can rectify if it has honest intentions?I wouldn’t like to blame anyone in particular. Instead let us look at the five mistakes successive government have made that is in a way responsible for the terrible agrarian crisis the country is faced with. a) Successive government have followed the World Bank directive of 1996 to move 400 million people out of the rural areas into the cities by 2015. Conditions have been deliberately created that forces farmers to quit agriculture and migrate into the cities. This is evident from the way agriculture has been kept starved of public funding. In the 5 years of the 11th Plan, only Rs 1 lakh-crore was made available for agriculture. In the 12th Plan, this investment was raised to Rs 1.5 lakh-crore. In fact, such is the neglect, that the MNREGA budget is higher than that for agriculture. This urban bias in planning needs to be immediately corrected. India should be looking for a reverse migration – from the urban centres back to the villages. b) Farm incomes have been deliberately kept low to ensure food inflation remains within check and also to ensure that industry gets cheaper raw material. This means that the burden of keeping the prices low falls on the shoulders of the farming community. In other words, farmers are being penalized for producing food for the country. According to the NSSO 2014, the average income for a farming family from agricultural operations is only Rs 3,000. Compare this with the average basic income of roughly Rs 15,000 per month for a chaprasi. Under the 7th Pay Commission, the minimum salary for a chaprasi is expected to be Rs 29,000. The Minimum Support Price (MSP) therefore needs to substantially jacked up, with food supplies subsidized for the consumers. India needs to learn from Japan, which has paid farmers an economic price and subsidises food for its consumers. Farmers cannot be penalized for producing food. Instead there should a guaranteed monthly assured income for the farmers. They too produce economic wealth for the country. c) Although the industry wants cheap labour and therefore we see a clamour for shifting population out of agriculture, the fact remains there are no jobs available in the urban areas. To say that 300 million jobs will be created by 2022 is simply to stress on the need of dehari mazdoors that the industry would be requiring in the next 7 years. What is now being witnessed is jobless growth. And as Dr M S Swaminathan rightly said it is only agriculture that has the potential to provide job-led growth. It is therefore time to discard this flawed economic hypothesis and shift the focus to making farming a sustainable and profitable enterprise. Such a focus will lead to massive gainful employment, raise the GDP phenomenally, and reduce socio-economic disparities. Coupled with small and medium industries, building rural enterprise, an economic transformation of rural India will turn the country into a true economic super power. d) Green revolution has led to 2nd Generation environmental impacts. Excessive use and abuse of chemical fertilizers has led to soil health being devastated, water table has gone down drastically, chemical pesticides have not only disturbed the insect equilibrium but also created environmental contamination, and in essence the natural resource base has been under tremendous stress. Such a massive deterioration of the agricultural landscape is also responsible for acerbating the existing agrarian crisis. In addition, the contamination of food has led to the emergence of lifestyle diseases. The need therefore is to move to low external input agriculture as suggested by the International Agriculture Assessment for Science and Technology Development (IAASTD) to which India is a signatory. More so at a time when climate change is inevitable, business as usual is not the way forward. Time to overhaul farming systems to make it sustainable and healthy. e) Create a network of mandis across the country. So far foodgrain procurement is only restricted to Punjab, Haryana, parts of Andhra Pradesh, Madhya Pradesh and Maharashtra. Foodgrain procurement can only take place if an adequate regulated mandi infrastructure exists. This also helps in ensuring that farmers don’t sell their produce at a distress price. At present, the country has only about 7,000 regulated mandis. If regulated markets have to provided within a radius of 5 kms from a village, India will need 42,000 mandis. This is the rural infrastructure that needs to be the focus of rural investment. Along with mandis, there is also a need to set up a network of rural godowns. Local production, local procurement and local distribution is wherein lies the answer for ensuring household food security. What is in your opinion a durable long-term solution to the crisis in Indian agriculture?In addition to what has been spelt above, I think a durable solution to Indian agriculture is only possible if farming is taken as the pivot of economic growth. Industrial development is very important but it cannot be at the cost of agriculture. Industry should be supportive of agriculture. Since agriculture is the only sector which has the potential to provide job-led growth, and national sovereignty depends on a country’s ability to feed its population, rejuvenating Indian agriculture provides the only long-term solution for country’s economic security, which is also sustainable and meets the challenges of climate change.
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Growth in developing Asia will likely be slower than previously thought as a slowdown in China's economy hurts demand, the Asian Development Bank said, and urged policymakers in the region to strengthen financial-system buffers against external shocks.Developing Asia is now expected to grow 5.8 percent and 6.0 per cent this year and in 2016, down from the ADB's July forecast of 6.1 per cent and 6.2 per cent, the bank said in its 2015 outlook update released on Tuesday.The region, which groups 45 countries in Asia-Pacific, grew 6.2 per cent in 2014.The Manila-based lender also cut its growth estimate for East Asia to 6.0 percent for this year and next, from its earlier forecast of 6.2 for both years, with China expected to miss its growth target of around 7 per cent this year.Growth in China is seen cooling to 6.8 per cent this year from 7.3 per cent in 2014, and slow further to 6.7 per cent in 2016.Fears of a China-led global slowdown, which had sent global stock markets tumbling, prompted the US Federal Reserve last week to hold off on raising interest rates for the first time in almost a decade.The ADB said that the capital outflows could accelerate ahead of the Fed rate hike and urged policymakers to strengthen financial systems in the region to mitigate shocks."Implementing macroprudential policies and developing local currency bond markets can bolster financial system resilience and mitigate risks to borrowers," it said.The ADB slashed its growth forecast for South Asia to 6.9 percent this year and 7.3 percent next year compared with the 7.3 per cent and 7.6 per cent estimates made in July.India's growth is seen weaker at 7.4 per cent and 7.8 per cent for this year and next compared with its July forecasts of 7.8 per cent and 8.2 per cent.Southeast Asia's growth will be at 4.4 per cent this year, same as last year and down from its July forecast of 4.6 per cent, before accelerating to 4.9 per cent next year, the ADB said.Inflation in the region in 2015 is now forecast to be a slightly lower at 2.3 per cent, compared to the 2.4 per cent seen in July, before it bounces back to 3.0 per cent in 2016.The report is available on the ADB's website www.adb.org(Reuters)
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Days before Reserve Bank of India (RBI) Governor Raghuram Rajan unveils his bi-monthly monetary policy, Finance Minister Arun Jaitley on Monday (22 September) asserted common sense says the interest rates should come down.Jaitley said inflation is "very much under control" and the country is better prepared than most emerging economies to weather the global economic turbulence."Common sense says the rates should come down," he told Britain's The Financial Times.The RBI is scheduled to present its fourth bi-monthly monetary policy of the current fiscal on September 29 amid clamour by the government and the industry for an interest rate cut to bring down cost of capital and boost growth.Jaitley said if interest rates were lowered, the economy could grow faster than 7-7.5 per cent.This year since January, the RBI cut interest rates by a total of 0.75 per cent in three tranches but refrained from taking any action at the last monetary policy review in August."If oil is selling at half the normal price, commodity prices are low, and we have stocks and stocks of food grain, then inflation is the least of our worries," he said. India imports about 80 per cent of its oil needs and is a big beneficiary of low global prices.On the proposed interest rate setting monetary policy committee (MPC), Jaitley hinted that a compromise had been reached and that the government might not have the deciding vote after all, FT said."The government and the bank are on the same page as far as this is concerned," he said, adding that India's proposals were in line with many other countries.Rajan said on Friday that India must focus on keeping inflation low and avoid using monetary policy alone and short-term government incentives to fuel short-term economic growth. The RBI chief is under growing pressure, from industry and from within the government, to cut interest rates as India's economic growth stutters and inflation cools. Rajan said monetary policy can help strengthen the current economic recovery, but he added India will ultimately "expand sustainable growth potential only by continuing to implement reforms the government and regulators have announced." "For us at the RBI, the key tasks are to keep inflation low, not just today, but well into the future," he said in a lecture organised by the Confederation of Indian Industry. (Agencies)
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Asserting that India offers immense opportunities, External Affairs Minister Sushma Swaraj has sought investments from the US industry in both public and private sectors in the country for a "win-win" outcome.In her address at the 40th Annual Gala of the US India Business Council (USIBC), Swaraj said the US businesses are "best placed" to make their business decisions."But, it would help if I underline here the scale of India's economic ambition and the size of economic opportunity that it represents for both our countries," she said.The focus now is on building 100 smart cities; rejuvenating the Ganges river and developing cities along its banks and skilling 300 million youth by 2022, she said, while addressing America's top corporate leadership."The business of diplomacy in India's present government is business. The government's priority from day one has been to make it easy to do business in India -- and with India," Swaraj said."We have plans to boost urbanisation and we are determined to provide affordable power and housing for all. We want to connect manufacturing in India with global supply chains and target to develop product based and service based industrial and governance platforms around Digital India," she said.All of these initiatives and plans present real commercial and business opportunities for the US industry to partner with Indian public and private sector, and with a larger economy for a "win-win outcome", the Union minister said."In doing so, and as is your key goal, you would of course create wealth for your organisation," Swaraj said, adding equally importantly, the US companies would add value to the society, build long-term links with India' economic growth story and strengthen economic underpinnings of the India-US strategic partnership."We see business between our two countries not simply as transactions, but as yet another manifestation and another multiplier of that very important strategic convergence. We hope this will be reciprocated by the businesses," Swaraj said.India, she said, wants to ensure that the concerns of those who create jobs and bring value to the two countries, are addressed.The decisions taken by Government have led to a significant jump in FDI inflow into India in the last one year, she said.US President Barack Obama, and Indian Prime Minister Narendra Modi have set an ambitious target on bilateral economic front, said Indian Union Commerce Minister Nirmala Sitharaman.The Modi government, she said, has taken a "series of steps" to boost the confidence of foreign companies to invest in India.This includes a number of measures with regard to ease of doing business. There are so many opportunities within India infrastructure sector, building smart cities, she said. "We welcome all of you to take greater interest in India and invest."(PTI)
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BW Online Bureau After a backlash, the government on Tuesday (September 22) clarified that it will keep WhatsApp, Twitter and Facebook out of the purview of a new draft encryption policy that seeks to control secured online communication. Secure banking transactions as well as password protected e-commerce businesses would also be kept out of the ambit of the proposed National Encryption Policy, it said. The government’s climbdown came following protests from users objecting to any stringent state controls on the way people use their emails, social media accounts and apps. Following the backlash, the government proposed an addendum to the draft document, saying: "By way of clarification, the following categories of encryption products are being exempted from the purview of the draft national encryption policy: The mass use encryption products, which are currently being used in web applications, social media sites, and social media applications such as Whatsapp, Facebook, Twitter etc. SSL/TLSencryption products being used in Internet-banking and payment gateways as directed by the Reserve Bank of India. And the SSL/TLS encryption products being used for e-commerce and password based transactions." According to the original draft policy, users of apps such as WhatsApp and Snapchat would be required to save all messages for up to 90 days and be able to produce them if asked by authorities. The draft policy was posted online to seek suggestions from the public before it is finalised by the government.
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India and the United States have to resist the forces of intolerance and remain vigilant in their efforts to make the democracies stronger and more inclusive, American Vice- President Joe Biden has said.Speaking at the 40th Annual Gala of the US-India Business Council (USIBC) on Monday evening, he also said, America can be India's "best friend", and that the challenges of the current world bring the two countries closer than ever before."Both our nations have to resist the forces of intolerance and remain vigilant in our efforts to make our democracies stronger and more inclusive. It's not just the morally right thing to do, it's the economic necessary thing to do," the Vice-President said.Biden's address, his second major speech on India in the last 100 days, also kicked off the inaugural India US-Strategic and Commercial Dialogue."We are in a new era of India US relationship," he said."We're both major players on the world stage. And it's up to us - India and the United States - to lead not by the example of our power, but by the power of our example. As I said, it's not just the morally right thing to do, it's in the long-term economic interests of India and quite frankly the whole world. And it works," Biden said.The Vice-President also said, "We need to stand together on counter terrorism and counter violent extremism," adding, the most important issue of the era is the challenges posed by climate change.Addressing top corporate leaders from the two countries, Biden said, ultimately commercial success depends on the development of human capital.It's India's greatest resource, adding, the US has benefitted from that Indian greatest resource here."We've experienced it first-hand - 3 million Indian- Americans whose talent have shaped the fabric of this country in our schools, our hospitals, our research labs, in our courtrooms, in our government, in the arts and entertainment, and from Silicon Valley to Main Street," he said.It is reflected also in the uniform so many Indian- Americans wear for the US military, he added.Referring to Prime Minister Narendra Modi's visit to the Silicon Valley next week, Biden said, the visiting leader will see during his visit that "entrepreneurship is hard-wired in the DNA of both Americans and Indians."(Agencies)
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Every message that you send -- be it through WhatsApp, SMS, Email or any such service -- must be mandatorily stored in plain text format for 90 days and made available on demand to security agencies under a draft of the Indian government's New Encryption Policy that has triggered privacy concerns. Legal action that could also include imprisonment has been proposed in the draft policy unveiled by the government for failure to store and produce on demand the encrypted messages sent from any mobile device or computer. The policy also wants everyone to hand over their encryption keys to the Government. The draft proposes that users of encrypted messaging service on demand should reproduce same text, transacted during a communication, in plain format before law enforcement agencies and failing which the government can take legal action as per the laws of the country. The proposed policy, issued by the Department of Electronics and Information Technology, would apply to everyone including government departments, academic institutions, citizens and for all kind of communications -- be it official or personal. Generally, all the modern messaging services like WhatsApp, Viber, Line, Google Chat, Yahoo messenger etc, come with high level of encryption and many a time security agencies find it hard to intercept these messages. "All information shall be stored by the concerned B/C entity for 90 days from the date of transaction and made available to Law Enforcement Agencies as and when demanded in line with the provisions of the laws of the country," the draft said. The draft has defined 'B category' as all statutory organizations, executive bodies, business and commercial establishments, including all Public Sector Undertakings, Academic institutions. The 'C category' as per the draft are all citizens including personnel of government and business performing non-official or personal functions. In case of the user having communicated with foreigner or entity abroad then the primary responsibility of providing readable plain text along with the corresponding encrypted information would be that of the user in the country. Besides this, all service providers located within and outside India that use encryption technology for providing any type of services in India must register themselves with the government, as per the draft. The draft proposes to introduce the New Encryption Policy under section 84 A of Information Technology Act 2000. This section was introduced through amendment in 2008. The sub-section 84 C that was also introduced through the amendment has provision of imprisonment for violation of the act. "Encryption products may be exported but with prior intimation to the designated agency of Government of India. Users in India are allowed to use only the products registered in India. Government reserves the right to take appropriate action as per Law of the country for any violation of this Policy," the draft said. The last date for public to comment on the draft is October 16, 2015. "Having a draft on issue is a welcome step. It looks at everything with prism of law enforcemnnt. It will create a license raj. There is very much concern around privacy of citizen. The policy wants messages to be given on demand. If my private information is sought by government, it should be done through courts," Arun Sukumar,Head, Cyber Initiative, said. (Agencies)
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