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8 May 2017 Editorial

 

8 MAY 2017

Space for all

South Asia satellite launch

UPDATED: MAY 07, 2017 22:48 IST

India's launch of the ‘South Asia satellite' sends a positive signal to the neighbourhood

By launching the GSAT-9 ‘South Asia satellite', India has reaffirmed the Indian Space Research Organisation's scientific prowess, but the messaging is perhaps more geopolitical than geospatial. To begin with, the Centre has kept its promise of considering India's "neighbourhood first". Within a month of taking over as Prime Minister in 2014, Narendra Modi went to Sriharikota for the launch of PSLV C-23 and "challenged" ISRO scientists to build this satellite for the South Asian Association for Regional Cooperation. The decision was then announced at the SAARC summit in Kathmandu, and the government has kept its commitment of gifting its neighbours at least one transponder each on the GSAT-9, a project that cost about Rs. 450 crore. India has no doubt gained goodwill across the subcontinent through the gesture, and the moment was neatly captured by the videoconference that followed the launch, showing all SAARC leaders (with the exception of Pakistan's) together on one screen as they spoke of the benefits they would receive in communication, telemedicine, meteorological forecasting and broadcasting. The message is equally strong to South Asia's other benefactor, China, at a time when it is preparing to demonstrate its global clout at the Belt and Road Forum on May 14-15. The Belt and Road Initiative is an infrastructure network that every SAARC nation other than India has signed on to. China has pledged billions of dollars in projects to each of the countries in the region; that, India is obviously not in a position to match.

Where India does excel is in its space programme, as it is the only country in South Asia that has independently launched satellites on indigenously developed launch vehicles. However, in recent years Pakistan and Sri Lanka have launched satellites with assistance from China, while Afghanistan, the Maldives and Nepal are also understood to have discussed satellite projects with China. Bangladesh, which will launch its first satellite Bangabandhu-1 this year, is working with a European agency. With the GSLV launch India is showing that where it is capable its commitment to the development of its neighbours is strong. Finally, by going ahead with the project despite Pakistan's decision to pull out, the Modi government is signalling that it will continue with its plans for the neighbourhood - ‘SAARC minus one' - if necessary. This vision was dealt a minor blow recently when Bhutan pulled out of the ‘mini-SAARC' alternative plan of a motor vehicles agreement for BBIN (Bangladesh, Bhutan, India Nepal), but the government's persistence indicates it will not be deterred by the obvious domestic constraints of the SAARC grouping. As Afghanistan President Ashraf Ghani, particularly aggrieved by Pakistan's refusal to grant transit rights for India-Afghanistan trade, said at the launch of the GSLV-F09: "If cooperation through land is not possible, we can be connected through space."

 

This time with feeling

RBI's new power must be accompanied by wider reform

The ordinance enabling the RBI to act on bad loans must be accompanied by wider reform

The Centre has empowered the Reserve Bank of India to get banks to take tougher steps, including insolvency and bankruptcy proceedings against defaulters, to address the growing volume of bad loans on their books. An ordinance to amend the Banking Regulation Act of 1949 has been issued to quell doubts whether the existing provisions allowed the RBI to direct banks to deal with specific stressed assets. The RBI has also been vested with the power to form oversight committees wherever it deems fit. Currently such committees exist only for loans brought into a scheme for sustainable structuring of stressed assets, also known as S4A. Now the RBI can bring in such panels to monitor the alphabet soup of other mechanisms for tackling non-performing assets (NPAs) such as SDR (strategic debt restructuring) through the JLFs, or joint lenders' forums. The hope is that this will let bankers take decisive calls on loan accounts that have turned bad, as an independent oversight committee's approval could keep investigative agencies off their backs. Bankers may not always have the sectoral expertise to monetise or leverage assets underlying bad loans in the best possible way. Yet, their paralysis on the NPA front, with its collateral impact being the worst bank credit growth recorded in decades, is driven by the fear that they could get themselves implicated for poor lending and monitoring decisions. The success of this latest salvo against bad loans will depend on the fine print on how the ultimate decision - whether to take a haircut on a loan and restructure it or invoke bankruptcy clauses - is arrived at.

Perhaps of equal significance is the reshuffle of certain public sector bank officials announced on Friday. This is a clear signal that the NDA government is losing its patience with bankers persisting with a status quoist approach. The ordinance is the latest attempt to resolve the twin balance sheet problem (of indebted borrowers and NPA-burdened lenders) plaguing India's domestic investment cycle. In 2015, the Prime Minister launched a Gyan Sangam conclave with bankers, and an Indradhanush road map to revitalise public sector banks. Last year, a Banks Board Bureau was set up to recommend the appointment of top bosses at banks and help them develop strategies and plan raising of capital. If the government wants to see a spurt in investment and job-creation, it needs to do more than just pin its hopes on new oversight committees. It must amend the anti-corruption law as has been promised for a while now, and accept the need to fix the policy-level stress affecting sectors such as telecom, power and highways. Above all, the government cannot in the same breath argue that the political cost of reforms is dissipating, but that the ‘re-privatisation' of banks as mooted by the RBI recently is still a holy cow for the Indian polity.

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