2013 – GD/PI CAT Session 2 (Current Affairs)

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Faculty: Hello everyone! It’s always good to be on the other side. You know, you listen to the people who are generously talking about you, and at the end you realize are they talking about. Simple point what I want to emphasize here is let’s understand what is happening around us. I divide them into economic issues, political issues, cultural issues. This covers everything in the world. And there can be science and tech. as well. The simple reason being, today the world is globalized. I begin the session with globalization. The reason being you take any newspaper today. If you open, they’ll be divided into local area, state wise. You’ll national, international, economy, sports, isn’t it? But the problem is if you open national, there’ll be international news. India, with other country speaking. If you go for economy, again there’ll be international issues. So what exactly is international, national or social issues? Rather than that, let’s see economic issues, political issues or cultural issues. So in this we’ll be covering both national, international, and what all is happening.
So talking about globalization. So how many of you think that we are in a globalized era? I hope all of us believe that we’re in a globalized era. To be frank, people have confusion regarding globalization. They say, you know, we’d globalization right from the early ages, where first people were nomadic. We used to move from one place to another and that itself was globalization for them. And later, people talk about colonialism, when there was huge amount of globalization going on. And the third phase is today where the globalization is due to information and communication technology. What has happened? There is space and time compression, isn’t it? Your media, your mobiles, what it has done, it has just compressed this space and time. So with this, all these issues are affected globally. So if you take any issue in south, earlier many of us didn’t knew what is happening in different parts of the country, even within India. But today, if you see, each one of us know what is happening in Delhi with Aam Aadmi Party, or even a minute issue, if they talk something rubbish it’s known to every one of us, if not through news, at least through Facebook, or any other social networking site. So when this has reduced, what is the role the economy has played? What do you see? Sorry. Earlier what I used to notice is whenever a foreign minister comes to our country, say UK Prime Minister, President, or anyone comes, he used to come with defense people, military people, but today, you’ll find they coming with a jet of, you know, entrepreneurs, where you have businessmen they are coming and they are talking. Anyways. So, today as I told you, people come with entrepreneurs, businessmen and the talk is business. Recently, South Korean President, when they visited India, Indian government said we’ll deal with POSCO. That means we’ll pass POSCO. I’ll be talking about these issues, but I’m just telling you how significant economy is. Especially when India has started growing. The world sees the fastest growing economy. The world is attracted towards you due to the economic strength. So if you’re talking with anyone it is due to the economy and if someone is coming towards you, they’re talking about the economy. So this takes us to the core issue that in the present globalized world all the countries are impressing the other countries for one important aspect, i.e. foreign investment. You agree? Every country in one way or the other way showcases itself. For what? Foreign investment. So the foreign investment if you see, it’s of two types. One, FII’s i.e. Foreign Institutional Investments. Another one is FDI’s. Foreign Direct Investment. What do you understand by Foreign Institutional Investments? See here, I’m not going to take current affairs separately. I’m going to bring in all the issues what happened within the spectrum of these discussions. So if you see Foreign Institutional Investments, here there will an institution which collects the individual’s money and invests in share markets. As it invests in shares, it can take back anytime. There is no regulation. You understand? There is no regulation. Anyone can come, they can invest and take back. So is it positive or negative? It’s risky. The simple reason being, I’ll just give you an example why there was depreciation of Indian Rupee. So here we’re going to see how this has effected in depreciating the Indian Rupee. In United States of America, Japan, European Union, all these countries post-2008 economic crisis, they went for a particular monetary policy which is not regular, and that was Quantitative Easing. Have you heard of this? So, as per Quantitative Easing, what happens? The countries, to reduce deflation, you know it’s not inflation. In India we talk about inflation. But there the problem was with deflation. With no demand on the products there was a stage where they may go to deflation. So, these countries started giving money on buying bonds. They bought as many government bonds as possible and they started pumping money into the market. When they started pumping money, what happens, the interest rates in the banks, they reduce it to almost zero in many countries. Interest rates reduced to almost zero. Now what happens, the people who’ve started taking loans from these banks, they started investing through FII’s in developing countries. It was not just India, all the developing countries. And as you might be aware, 2008 economic crisis did not have much impact on India, China and developing countries when compared to the developed countries. You know not going into detail of what happened but just remember that 2008 economic crisis hit developed countries more than developing countries. Then these FII’s, obviously where will you invest? In countries which are growing well, whose economy is good? Isn’t it? So when you are investing all the FII’s were moving towards India and your share markets were reaching to 20000 and above and all. So this was a sign of growth for us. But there is some problems even within this. As I told you FII’s are short term. They can be taken back anytime. When they invest into India, what I mean is first they come, they take, they keep dollars with RBI, take Indian Rupees and start investing in our shares. That means dollars are buying Indian Rupees. So that is demand for Indian Rupees is more, isn’t it? Rupee strengthens. On the other hand, what happened? 2013. United States Federal Reserve, like RBI, it said we’ll start you know taking back the bonds. That means we’ll give the bonds and take back the money. So these people, all these FII’s who’d invested in all the developing countries, they obviously will take back. So when they took back, when they asked for dollars, Rupee has to purchase dollars. Because you need to give back dollars. So when rupee purchases dollar, dollar value increases, rupee value decreases, isn’t it? So this is what had led to the depreciation. This was one reason. One simple reason. That Quantitative Easing was taken back. So if there is a question to you, why there was depreciation of currency, many people will focus on import/export differentiation, more of gold imports, less exports, isn’t it? They are also the reasons. But along with that internationally if you see, this was one. And unfortunately there was another international event.
You all might have heard of Syria. In Syria, let’s not go into what all happened, that I will cover in the cultural issues. But United States of America, planned to wage war against Syria. You know there was an opinion that US and its allies may wage war against Syria. So if you want to wage war, you want money. So for money where will a country go? It goes to its federal reserve. The Federal Reserve has to take money back from the people and give it to the state. Are you understanding the cycle? So, when the state wants money then the RBI has to take back or it has to print more. US has already printed enough, so it wants to take from the people. So this skepticism, rumor, actually made again this FII’s to take back. They again started thinking that if US wages war, US wants money, so let’s take back as much money as possible. So this actually led to depreciation of Rupee. So when there is depreciation of Rupee, what will you do? One, you need to improve in exports – you need to do more and more exports, so that the demand for Rupee increases. When you go for exports, you should have strong manufacturing base in the country. Services sector and all is fine but remember how will you attract more and more services sector in the economic crisis era? You might’ve heard of Obama telling jobs should not go to India, work should not go to India. He actually even mentioned Bangalore. Isn’t it? So when they are targeting us how can we attract more and more? But on contrast countries like China, you know, they were excellent, mainly due to the manufacturing base they had. You can even improve exports by manufacturing more. But in India, manufacturing is less and the economy is run by services.
So what is the other alternative that you have? Someone should come and invest in you so that FII, through FII people are taking back the money. So now someone should come and invest in India, isn’t it? How will it happen? Through FDI. So if, FII’s you cannot stop because it’s mere speculation. They can go anytime. For long term stability country has to focus on FDI. So what is FDI? Foreign Direct Investment apart from just elaborating the statement. The simple thing is in FDI, the companies whoever come they come for long-term investment in a country. And when they come they invest on, say, manufacturing, they invest on infrastructure. So when they invest on manufacturing and they invest on infrastructure, can they take it back soon? It needs to build, right? So you need to focus more on FDIs and not on FIIs. So, coming to FDI. FII is done. Here we saw US’s quantitative easing policy and you should know why FII is better than FDI. And you should also understand why there was depreciation of currency. One important aspect is either increase your exports or decrease your imports. So, see, depreciation of Rupee is just, the simple word is, dollar demand is increasing and rupee demand decreasing. That means rupee is purchasing dollars. Internationally dollar is the only currency through which you trade. You have dollar, euro, there are 3-4 currencies, but let’s take dollar as standard. Now, when you purchase gold, when you import gold, that means to pay for the countries from where you’re importing you need to purchase dollars. That means rupee is purchasing dollars. Dollar value increases, rupee value decreases. So either you need to increase exports or decrease imports. So one thing what we found is our people are more fascinated about gold. You know, the more the rate we purchase more. It’s not the other way. So they started focusing on reducing imports. You cannot reduce imports in all the sectors. But definitely you can reduce imports on luxury items, luxury goods. So that was, gold was seen one such. So if I stop importing gold, people will not revolt against. But if I stop importing some other essential good, it will have large impact on the society. So, that was one of the reason. So now coming to FDI. As you know FDI is long term. You need to focus on the people who all are ready to invest in your country. So, who are these people? The first is, your NRI’s. Earlier, we used to call them bling bling. You know, these people are not true citizens, they are going out of India, all this. But now we have a special day, Jan 9th, Paravasi Bharatiya Divas, where you know all NRI’s are called, we facilitate them, we joke at, sorry, we laugh at their jokes. We do all these things for the only reason that they bring in money. To the extent today that the parties are fighting that we’ll give them vote, like you know they have the right to vote as well in India. They are saying that. So, one thing is through NRI’s. They will be good to attract. You can see excess buying and all, telling if you are an NRI, just message me that you’re an NRI, we’ll come to you. Okay. So, even you need not go. The second important people whom we actually focus. I wanted to bring NRI’s, the reason is you can actually get a question on the role of your nonresidential Indians. How can they play in improving your economy? And there is some other aspects even related to NRI’s. The simple thing is you see United States of America. There, the country is run through lobbies. Where each group, like Jews from Israel, they form a group and they tell how the policy towards Israel should be. The same way even our people have started making lobbies and started influencing United States and other countries. So for that, from that point of view you actually need your NRI’s. The second important, before I go to the companies traditional part. You see countries who have more exports and less imports. In the world if you see, you can see them in Middle East. Kuwait, Saudi, all these countries. The reason is – oil. They export oil, import all small things which actually help them to be more. Another country is China as of now. Now, you need to get FDI. How will you get? India recently asked Kuwait to invest in infrastructure. LNG. LNG terminals need to be built. Today you know due to climate change. You know, using more of petrol and all more emissions, climate changes increasing day by day. To decrease this, you need to move towards gas. That is one alternative which is being seen in the world. Shale Gas, or LNG, which is more useful than anything else. I’ll just give you an example why this is important. In a UPSC interview, forget about this, there was a question. There is a huge debate on climate change, variations which are happening around the world. In Bangalore, there was one policy made by the state. What is that most important policy? And the answer was, turning these autos into LNG autos. In Delhi, you can see CNG buses coming out. So, it is the gas which is an alternative for climate change which is being predicted. So if that is the case the entire country needs LNG terminals. The reason being. See, you cannot pass gas through containers. You should’ve pipelines. Pipelines are the best way to pass. Who’ll invest? For roads only people need to pay toll. Right? Who’ll come and invest. Government will never be bothered to interest in pipelines. So they told countries like Kuwait. For them the problem is they don’t know what happens tomorrow if oil gets over. Till now they’re very happy. They are getting lot of money. But tomorrow, once if oil gets over, what’ll you do? They don’t have manufacturing, they don’t have services and they don’t have people even. So what will they do? So, countries like India, Manmohan Singh, I see him more as a foreign minister rather than as a prime minister. He takes good foreign policies decisions. If he goes out people respect him. Chinese premier he told, see Manmohan Singh, listen his economic policies. He is the one who has brought India to this level. He told 2 years back but he did not realize what he has brought today. But the simple point is, see India, when it is growing you need to attract FDI from the countries which has more money kept in their exim banks. Every country has its own exim banks, export-import banks. So from that we need to take investments. So what India is planning, let’s take investments from Kuwait, Saudi and all telling them invest in infrastructure. You invest in gold and quadrilateral which we have planned so you can raise tolls and collect money for the rest. So these are some of the things which we offer them.
What about China? If you say, as China, China has almost you know, it has the highest, it has some trillions of dollars in its exim. So you cannot ask China to invest for the simple reason of security. You know if China comes and starts investing in India, how China invests, China brings 100 billion dollars, let’s say, okay, to construct a port. It brings its own people to construct the port. It also brings the equipment from China. So it brings, it builds port and it takes back 100 billion dollars of that. And meanwhile, when they are here, they also start seeing, you know, like RAW and other IB agencies, they also start working. What is happening against China and India. All secret agencies start working. So there is a big threat, especially from the military establishments whenever they talk about Chinese investments. That is the reason why you can see Indian investments are not allowed in Pakistan and Pakistan investments are not allowed in India. But you cannot neglect China. Isn’t it? So Manmohan Singh did a good idea. This is not official stance, but, we can get from it is. I’m sorry. I’ll just ask them. But before that he asked for BRICS bank. B R I C S – Brazil, Russia, India, China and South Africa. He asked for BRICS bank. BRICS development bank. The reason of BRICS development bank was IMF World Bank all these banks they do not give loans for infrastructure. So let’s get money from developing countries for infrastructure. We will give from BRICS bank to the developing countries. And the simple benefit what India will get is now who’ll contribute in BRICS. Definitely not India. It is China. Earlier you have to ask them for FDI. Now you’re the owner of a bank, you know, partner of a bank where money is of China and you just take it as a loan. When loan comes, 100 billion dollars come, without Chinese entering. Isn’t it. That’s more better than going with something else. So this is how the diplomacy works. You talk in a different tone, you do a different thing. But everyone will be happy at the end of the day. Why China wanted to come? Why China want to invest? Is China mad? I told you in the beginning about dollar. Dollar replacing. If you want to trade in the world, it is dollar. So every one of us here, whenever we become entrepreneurs or anything, we’ll keep in mind that the dollar value should never come down. The world fights, all banks in the world fights to make sure that the dollar value is not depreciating. Because it’s difficult for the world. US base is in that. China wants to replace dollar with renminbi. Why? So, the BRICS countries at least whenever they trade they will accept renminbi tomorrow, Chinese currency tomorrow. So these are some of the inherent logics which are present.
Before I start with FDI from foreign companies, I will just call them, can anyone just call them? Any doubts till now? Yeah?
Audience member asking a question.
Faculty: No, it’s not every time but intentionally when it goes to the extent of pumping around 600-700 billion dollars then the interest rate comes to zero. How will the banks give 600-700 billion dollars? People will purchase only when it is zero.
Audience member asking a question.
Faculty: No, the interest rates are low. When you take from some country and invest outside, you think, you look where you get more profit. So the profits are more in shares. Anytime you see shares are more profitable than bank interest rates, though it comes with risk. They can but if when they want to go for these then it will be usually prevented. Only certain amount can be, can come. And it will be for certain time limit. All these institutional investors who purchase from this quantitative easing they will be focusing on places where they can remove it, when they want to go back. So to control this, countries like Brazil, solution, to control this countries like Brazil what they did, whenever you want to invest you need to pay some money. Whenever you take back, you need to pay some money. You understand? I invest 100 billion dollars so pay a part of it. So that you don’t think of taking back immediately. Yeah.
Audience member asking a question.
Faculty: More imports?
Audience member asking a question.
Faculty: No, no, not Brazil. Not Brazil completely. But even they have, every country has some, even India is you know if you see the number, India’s export, total money is more. In exim bank, we’re in plus. Reason is more and more FDI comes in. Not because of export.
So let’s talk about FDI’s of foreign companies.
Yeah.
Audience member asking a question.
Faculty: No, BRICS is a group. BRICS is an organization like SAARC, UN and others. It’s a multilateral organization. So that was a platform where they decided to build a bank. So it was a BRICS development bank.
Audience member asking a question.
Faculty: Can we take questions with later? We’ll just finish it off.
So, the next important thing, how do you attract foreign companies? You have SEZ’s. You know you need to, earlier post-1991, all of us in our economy classes, we have read about LPG. Famous terminology. Liberalization, privatization and globalization. It happened in 1991. Before that FDI was not allowed in India. Then it was a closed economy. No one can come in. That’s why we were not too happy with our NRI’s. Later, when India opened its economy. Liberalized, it got privatized, and it also go globalized. So this is the time when we started expecting more and more FDI. How do we bring in FDI? India do not say open 100% FDI. India don’t say, that someone can come and invest completely. FDI usually you get by, you know, opening up slowly. You say, take insurance sector. You’ll tell first 49% in a company can be through FDI and 51% should be of India. Why? Why is this? One is the majority. The second thing is, see different sectors has different. One there can be 74-26. Or they can go 51-49. There is no logic behind each and every sector. So it is sector specific. You cannot generalize why certain, this is done. But, the simple logic of opening up slowly is, see before 1991, what was the, we should’ve given some reason for not allowing FDI, right? And the reason at that time was, domestically our countries are not in a position to fight with global companies, MNCs. So when we cannot fight with global companies, we should be allowed to build ourselves. You give us some time so that we also will be technologically advanced. We also will be able to compete. 1991 was almost 40 years, 40-45 years. These people never changed. So, when they opened, they opened slowly. Telling that one, you get finance due to this. You get huge money, due to the 49% stake they get. Second, I really don’t know. You people need to answer me – managerial skills they call. As if our people don’t have managerial skills. We have the best IIT’s and IIM’s which you people are aiming for, right? Then if these are not doing anything, then you can aim to go out. But you need to give some official reasons. And one such official reason was managerial skills. So you get money, you get managerial skills on how to use. And third thing you get technology. Companies, when they come, when they hold stake in your company, they give some sort of technology to you. Isn’t it? That to improve the company they also invest. They know how it has to be run. They start investing. So that was the period the collaboration starts in these phases. 49-51 and all. You can see Bhartiya-Airtel, all these companies, Tata Docomo. Why there are two? Those telecom companies, they can’t come with 100%. So you should have a person within your country, so that you just tie with them. And then when it becomes 100%, then you can go out. You understood? This is how you start attracting more and more people.
What is the benefit of FDI? What is the benefit?
Audience member answering
Faculty: One, infrastructure. Third, technology we have covered. Employment. And sea of foreign exchange. Today our country is mainly dependent upon this. And fifth, it increases exports. Who are these companies coming in? When they come, they actually invest more in manufacturing sectors. So when they invest more and more in manufacturing sectors, that is the area where you can export more. So to improve exports even, the FDI is more important. This is fine.
The next point is, who opposes them? Who opposes FDI? Domestic industries. Left wing. The second thing is, most important aspect apart from domestic industries, local people. Why do local people protest? If you see where these FDI’s come in. Not. We’ll go to multi-brand retail, but generally speaking these people want land, huge land and for land you need to vacate the local people. And it’s not always that you vacate them peacefully. Sometimes you need to use forces as well. Isn’t it? There is a huge opposition due to this. For example let’s talk about Vedanta. You all have heard of this. Vedanta. There is a hill by name Niyamgiri hills in Odisha. Here what happened, you know it’s like a movie. Avatar movie I hope you, most of us would have watched. You replace the plant with Niyamgiri hills, the same story is running there. The people, the tribal community who stay there, they believe that this hill is their god. They are associated culturally with the hill. But it’s India’s fate that unfortunately all the mineral resources in our country are present in the forest areas where the tribal communities exist. So in this case, Vedanta, it is believed that you may earn up to 300 billion dollar. That’s box side resources being present you may earn up to 300 billion dollar. In UK, there was a criticism on Indian government telling no to Vedanta. That can’t you replace 600 or 1000 people and benefit, you know, with economic benefits of 300 billion dollar in a country where you have 67% poor. So if poverty has to be removed then you need economic development and how will the economic development come? Through these things. So you can replace few for the benefit of all. Movies we fight for one. You know, real life we fight for different things. Here, Indian government, it severely criticized due to the pressure of the civil society organizations which worked there. And you know the slogan. We want Niyamgiri hills and the Niyamgiri hills want us. The people believe there, the tribal community that, it’s you know, both are living together. So allow us to be as we are. Here it is cultural impact. So when there is a problem of this sort, UPA government has lot of problems. So they should do something, right?
They introduced a bill, Land Acquisition Bill. So today we’ll be seeing problems along with our government’s solutions. You know this Land Acquisition Bill, 2013, it replaces British Land Acquisition Bill which was passed in 1894. Many people say we are still colonial. The reason is, whatever we want, we kept it from the Britishers. Whatever is not required, that only we removed. So, 1894 Land Acquisition Bill, what it says, acquiring private land for public use. So if government want to construct a, recently when there was land acquisition problem in Karnataka, the Karnataka minister he told, see without taking land where will you construct airport? Where will you construct roads, where will you construct metros? It has to be on road, on land. So if you want development then you need to take land. So this was the mentality of even Britishers. Forcefully they were taking so many lands for railways, and many other purposes. Today, with this land acquisition bills, certain changes are being made. I’ll tell certain important features. Why I want to talk about the features is when you understand the features you understand what were the problems which earlier were. So, it stops displacements, i.e. forced displacements. The feature, one of the important feature of this is, before acquiring land, there is something called EIA – Environmental Impact Assessment. You’ll will, have you all heard of this? Environment Impact Assessment means, before a project is being taken you need to see the environmental implications of the project. That means when you construct a nuclear plant, you need to tell where you’ll throw the waste, how the water will be taken, how it is going to create trouble, how the wastage will be disposed. You need to tell all these. Sometimes the cost of environmental damage will be more than the benefit which you’ll be getting. So this is very important concept. To prevent environment. Environmental Impact Assessment. But in Land Acquisition bill they brought social impact assessment. That means you need to see what is the societal impact of grabbing the land. Once you have displaced people the biggest trouble is you know where will you rehabilitate them? Take tribal community, where will you rehabilitate them? Will you bring them and place in Bangalore? You give them software jobs. What are we aiming towards? They need to be kept in the forest and once you move from your home territory to the other areas, especially the people who are more culturally bounded to it, it creates lot of trouble. And to be frank, friends, it’s not for IIM interviews but one of the major reason why leftwing extremism or Naxalism get support in this country from the people is due to displacements. You remove people from one area and you place them in the another. I’ll just give you a simple example. There was a community, a tribal community in Odisha. Due to construction of dam they were displaced. They moved to Andhra Pradesh. Telangana region. Fine. So what’s the problem? As per Indian constitution, every state has fixed number of tribes. You understand? So there is a defined set of tribes. These tribes are present in these state. Now if you move from Odisha to Andhra, you lose the tribal status. The police in Andhra, they wanted to remove these people. But Naxals came and supported them. And due to Naxal pressure it was difficult to remove them. Now, if you were one among the guy who was there, won’t you support Naxalism? Or its cause? If you don’t go and fight with them, at least? So there are certain aspects which actually have direct impact. I hope the day is not good. Anyways I am just writing few points by the time it starts. What is the another problem with these people is they have deep pockets, which is being opposed by the domestic people. Deep pockets in the sense they have huge money that they can bear loss for some time. You all have heard of Metro. Not trains. You have Metro retail shops. Initially when it came, it was said that for 4 years they predicted loss. They knew that for 4 years we won’t be gaining anything. Let’s run the shop in loss. So when they run in loss, when they run in loss, obviously it is having impact on other people. We will be dealing more with it when we come to FDI in retail but here I just want to tell one of the opposition from many people are that these people can sustain losses, which the local domestic people cannot. So you need to take care of it. And from policy point of view who will control these MNCs? Though government has control, it’s not complete control. They do not run the show as you want. It’s their style of living, they have certain independence. So whether they are in norms or not, these are some of the criticisms. You may have different opinions here. FDI threatens certain issues. You know, FDI threatens something in a globalized era. Like, relation between countries. Countries compete to get more and more FDI. For example, though we have good relations with United States, Obama’s policies we do not like. We openly criticize. The countries are becoming more and more conscious due to the FDI rush. When there was some problem, Hilary Clinton said, make sure that Indian companies will not take it seriously and don’t invest in US. So if there is any trouble, the first thing they think is what will be the impact of it on FDI.
The second thing is, environment. I’ll join environment with land. You all have read history, Economic Brain Theory of Britishers. At least you know that Dada Bhai Navroji, the grand old man. He gives, he gave economic brain theory. Even from the time of Dada Bhai Navroji, India was against FDI. Why? During the British rule, the problem was, whenever who, who brings this FDI? It is the foreign countries and you have a colonial power here. So to attract more and more FDI these people will frame policies which are against the locals, and local environment. Because you need to attract more and more FDI. 1947, after independence till 1991, India was of the same opinion with FDI. But suddenly we also started. When South Korean president came, the POSCO project which was actually scrapped by the environment ministry telling that it creates environmental issues, as soon as the South Korean president they came we signed and gave the project to them. Though it looks, but see the threat. The country is ready to compromise on the environmental and the local issues to attract more and more FDI. The same colonial thought is applying even here. So, one, FDI threatens relation between countries, FDI threatens environment, you know how. Vedanta, POSCO. Tomorrow you never know Vedanta maybe passed. Vedanta may start mining. The Niyamgiri people may go if there is a demand for more and more FDI. There is no thinking about the environment, what are the impacts, just because you’re more interested in attracting FDI’s.
Then, last, FDI inflows to a country depend on what? The first aspect is political stability of a country. You take countries like Maldives, Nepal, you know where there is, there is no proper government, no proper structure. Today Maldives has got but there are many countries where there are no proper structure. Isn’t it? There is no government to take care. Afghanistan, Iraq. If you take, who’ll go and invest? As a businessman tomorrow will you go and invest in a country where there is no political stability. Egypt. Who will go and invest? And on the other hand, countries will also not invest in those where there is no security. Terrorism, Mumbai attack. You see series of speeches. Apart from security the only thing what they wanted to tell is, terrorists have attacked Mumbai to threaten the economic stability of the country. Economic growth of the country. They just wanted to show to the world that India is not safe. So don’t invest in India. Don’t go for tourism. Don’t go for this. So security is one aspect where the country started telling, no India is safe. You take the case of rapes against the foreign nationals. So what is the immediate thing that India says? No, India is safe for foreign nationals. Why? Because you know it is going to have impact in the economy as well. One is your image, second is economy as well. Another important issue with security is especially with terrorism. Though it is a global issue, this can hinder relations between countries or also strengthen relations between countries. India and United States came together due to this.
At last, FDI depends on vat GDP. FDI depends on GDP grow, i.e. economic growth of a country. So a country which do not have a good economic growth, which do not show the prospects of economic growth. Do you see them to be interested? So let’s take two examples. One, FDI in education, i.e. foreign institutions bill. See Indian government has planned to open up foreign universities within India. So, is it good or bad? It depends on how we have opened and what are the factors we need to consider with it. So, the first thing is, initially when it came up in 2011, there was serious criticism, telling that who will first, I – I have given in your FDI, so who will be the first one to retaliate back? Does domestic institutions? They tell, apart from IITs and IIMs, you know the standard of education or the quality of training is not on par with these. So if these institutions come, we may not be able to compete with them. And the second thing was, fine if they come, it is 100% FDI where they can come and open the universities. So if they come and open the universities, who’ll control it? Will it be under the control of UGC? Or will it be under the control of AICTE? Who will do it how? But, these were some of the concerns raised. But what were the positive points? They told, almost around 1,60,000 students, they go abroad every year for studies. So if you get the foreign universities within India, let them give their own degree. The campus is just established here, so that, that foreign exchange will be reduced. I know one, and money moving into those countries will be reduced. So ask them to come and open the institution here. Give degrees here only so that you reduce. The second thing what they said – it is equal to a foreign degree. So it’s not an Indian degree. Today, if you take a degree in UK. If you want to apply here, there may be some complications. Not government organizations will not accept a foreign degree. You can’t apply for a government job. There are certain formalities that needs to be done. So to satisfy these people, the end. In India most of us plan to take government jobs, so that is one alternative which prevents people from moving towards these institutions. And the second thing was, in India only 12.4 % people they enroll for higher education. World average is 23%. But in India it’s only 12.4%. In developed countries it goes up to 40%. So, to increase these foreign universities will play a major role. But still, the fee, the universities was not ready to accept government’s proposal. So, government changed the proposal completely and said we’re not calling universities. We’re calling companies. You know, you change the term. It’s not university, it will be foreign companies coming and establishing in India. So what is the benefit? If you call it university, Department of Education has to pass it. HRD department should give permission. If you say it as a company, Department of Industrial Promotion, they should pass it. That’s a loophole, backdoor entry. When you call it company. So now they are coming in at any cost. They can come as a company, it’s not institute but company. They have given certain restrictions for them. They are, when you come, you should invest minimum 25 crore in India. Next, you should be not for profit. Because many believed if these institutes come they charge more and it will be bit difficult for the poor to go and join. So not for profit. And who will decide? If a university is coming from US, US should have accredited it for 20 years that it is a good university. And, it should be among top 400, as per Times higher education report. See what I like to say here, you might have heard of FDI in retail, debate about it. FDI in education, wherever there is a debate, democracy, the best part is have debate. When you have a problem, have debate. When you have considerable debate, and when the government is desperate to pass that particular bill, then it will consider almost all the problems that the people are raising. That itself make the bill to be too good that no one can reject it. Nothing is bad. But it depends on how you control it. So if you have the power to control it its more that enough. Isn’t it? What is liberal economy at the end of the day? State should have minimum control but that minimum control should be in such a way that the companies don’t exploit the poor. Any doubts here?
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Faculty: I can’t hear you.
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Faculty: There, see, this is what India wants to bring them. The reason is, you see the influx of for Indians in these universities. Isn’t it? There are huge number of people. So if you can setup institute in India, so it’s better for them because more and more students rather than going somewhere, they’ll come and join your university and you can earn more. Not for profit, IITs and IIMS are also running for not for profit and you know how much is the cost.
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Faculty: See that’s what I am telling. You have different things which comes in. Here what not for profit in the sense you don’t exploit and you take back. It should be like a NGO running here. But, you know, once they come we do not know how it goes back.
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Faculty: See not everyone just go there for this, but the only thing is what they see is from a university point of view if they come. What is the benefit that I get? Now if 100 students are coming there will be 500 more who could not come and join me just because I am in UK. My other expenditure costs are there. There are other people who are aiming to do it in this.
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Faculty: No, not yet. It is a bill still. There is a debate going on. It is going to come soon. It’s not a company. University will be called company. The term will be company here.
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Faculty: Yeah.
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Faculty: See don’t think that. Many universities they want to establish their brand everywhere and they want to establish one in the countries which flow. You can see the numbers. India, China, is the, are the countries who are moving towards these for the foreign degrees. So obviously, obviously these institutes will be interested.
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Faculty: See that, that always happens. FDI is always like, if even from US you are going outside that means that even for a manufacturing hub if you move out of that. There the liberal policy allows them to.
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Faculty: No, not against companies’ policies. Why there are countries, who, which country restricts FDI flow?
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Faculty: See that always happens. That you don’t go. Obama openly says you don’t go. Service sector, see that depends on the universities at the end. The policy of the country, I will just show you. As per WTO, the policies of the country should not be discriminatory. And the liberal US, UK and all, they do it because if we prevent them, you see today all Tata and all, they are having more and more investments in these countries. So FDI today is not only moving from developed to developing, but even developing countries are also investing. So if they stop, you’ll stop. Backdoor channels will always be there. You can’t say it doesn’t exist, but it’s minimal.
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Faculty: That always happens. You just need, what is FDI all about? Export/import. You know you get in one sector and you give in another sector.
Next is retail. FDI in retail. I think from 2009-2010, this has been a hot topic. And this year something positive is happening so we may expect again.
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Faculty: See we will discuss. They actually told me its camera recording so don’t ask questions first. But, you know good to have discussion. Let me complete as much as possible then we can have one-to-one discussion on these aspects. So why do you want FDI in retail? The demand was, there was huge wastage of grains. It was to the extent that they claimed 50,000 crore of money is going to waste. You know, of grain worth is going waste in this country due to poor storage facilities.
What is another problem? You saw inflation. Onion prices going that high. But was the farmed benefited due to that? It said that less than 40% of money goes to the farmer. Whereas in developed countries, more than 70% goes to the farmer. And it is also said that, India has huge retail market. Which is unexploited. They go to the extent of telling that today we have 28 billion dollar market in retail, but it has the capacity of 1000 billion dollar, by 2020. 2020 is a magical number everywhere. So what was the problem raised? Retailers and the numbers keep varying. 80% retailers, 90% retailers. Numbers are like 2 lakh retail shops, 8 lakh retail shops. They will be affected. Isn’t it? So, government did one thing. Let’s establish this only in million plus cities. That is tier 1 cities. So if these people come only in tier 1 cities, what is the benefit that we will have? Retailers are spread across the country. If you call 80% retailers, 90% retailers, they are present in tier 2, tier 3 as well. So the one who will be affected more will be those who are in the million plus cities. And the second thing is they told 50% of whatever you bring should be invested in backend infrastructure. I have told you in the beginning why do we want FDI? One is for money. Another one is for technology. So here, money for backend infrastructure and also you can have the technology which can be used for preserving all these.
Third, they have given 30% of whatever you bring for construction or anything. You should purchase from MSME’s. That’s from the local, you know, companies you need to purchase 30%. You all agreed that there was a huge debate on rating, isn’t it? Now you see because of that debate the negatives are covered here. That if these companies come they’ll invest in what? Invest 50% of the money whichever you bring in backend infrastructure. Like you know storage capacities, movement and all. And, you’ll be helping more and more smaller companies to live as safely as possible. And then retailers will not be removed through establishing them only in MSME’s. But I didn’t understand one simple concept for the people who rejected this idea initially. Because, we have, we don’t have FDI in retail, but we have retail stores of our own companies. So if you talk about the negatives, what all the negatives you point? If these local companies, if they are not troubling or if they are not troubled with the same problems, how can the FDI trouble you. And this was one issue where BJP and the Communist, they came together. You know, both were against the retail. But, now interesting to see that the bill which wants to be passed does with these modifications as minor as possible. Fine. Sorry.
Audience member asking something.
Faculty: I’ll just talk. See one important problem for this 30% is, Walmart or oil, even it’s against the WTO law, because you cannot restrict the companies when they coming to you. You cannot put restriction that 30% should be from here. It’s due to the WTO law that they are saying no, but definitely, you know, that will be talked and settled.
The next important aspect as Mohnish was also talking, it’s an election year. So in election year UPA did, Rahul Gandhi whenever he goes to ask for vote, he tells one thing, “I have brought Food Security bill. You know we are removing hunger.” So let us see what is Food Security bill first. So as per Food Security bill, rice, wheat and cereals will be given at Rs. 3, Rs. 2 and Rs. 1. It will be given to almost 67% of people, and each one will get 5 Kg. Many things that Food Security bill ensure, it’s not, they have certain other provisions even included in this. That is, within this there is a program called Antyodaya Annayojana. As per this, the poorest of the poor, they will get 35 Kg rice. There will be meal entitlements to pregnant women, lactating women, children. And also, pregnant woman gets Rs. 6000 and children aged from 6 months to 14 years, they can take home ration or hot cooked food, through your midday meal schemes. To empower women, in the ration card, the eldest woman in the family will be actually given the entitlements. And they also have plans to improve the efficiency of the system, through linking it to Aadhar, identifying loopholes. So all are good. Then what’s the problem? The biggest problem with Food Security bill was, it’s an election year so you have released. You know, the Congress was not criticized for what it is giving, but it was criticized for the timing. You know, it’s a bad time. That it’s an election agenda, nothing more. The second important aspect is corruption. You see all these FDI’s and all. Food EDA systems and all, why it’s not working properly is due to corruption. So how will you plug in them. There is nothing, you have not kept any separate money for that. And the third important aspect is, economic aspect. Whenever you go for subsidies, freebies, that’s a huge burden. So how will you actually act? For this they came up with direct cash transfer. The logic of giving money directly. You know this is not applicable for Food Security bill as of now but they want to expand this. What is direct cash transfer? This is not India’s invention. This was there in Brazil, Mexico and other countries where we’ll give you money directly so you just go and purchase what you want. This was one logic what was be given. Because, the PDS movement, food grain storage, all these, to give Rs. 1 subsidy, India spends Rs 3.65. To just give you this subsidy, I am spending 3.65. So we need to remove this. How will you remove? They told, let’s link it to Aadhar. Aadhar Card. In Aadhar Card, today in India, you give subsidies for food, you give subsidy for fuel and you give subsidy for fertilizer. Isn’t it? You might’ve heard of LPG. You know, if you want to get subsidy, link it with the Aadhar Card. You need to go to the bank and you need to link your Aadhar Card and the LPG. So, why you want to do that? To, when you link to Aadhar Card, first you eliminate more number of people, who are getting unwanted subsidy. The second thing is, you get directly. It is called financial inclusion through banking. What does it mean? See, government knows that everyone do not have a bank account. So, RBI has given a deadline that by 2016, 2 0 1 6, every individual in the country should have a bank account. So that if there is anything your bank account will be linked into the Aadhar Card, and, the money will be transferred directly to the beneficiary. Then there was a question. See in rural areas and all there won’t be any banks. So will the people get? So they told, there will be a person, like postman, one bank agent will be there. The bank agent will go to the villages with an ATM swipe machine. So, he will be a bank for them. So one, you’re increasing the efficiency of the system. Second, you know all this black money, later after 2016, there will be a day, where all transactions should be either through cards, or through checks. Now only if you see real estates. Real estate is complete, in many parts they don’t accept cash, liquid cash. They want you to give. So here two things are happening. One is the efficiency of the system, another one is reducing it. So when they talked about this Aadhar, they told, see you’re investing so much money in Aadhar. You know it’s for free, isn’t it? You see ads, “Don’t give money for Aadhar Card, it’s free!” But still people charge Rs 50 for taking our photos. But, the critics argue that if you take Rs 3.65, and you invest the same in Aadhar, the government will benefit 52 point, around 53%. You know the benefit is 53% more. Monetarily. So it’s better to invest in Aadhar and make it as good as possible.
Audience member asking something.
Faculty: In the sense, see, Aadhar is an infrastructure. To maintain Aadhar, you need to maintain the privacy of the individual who is giving the details there. So you need to take, you need to give cards to the people. You need, you’re taking fingerprints all these. You need to store this data. And it is being said that to maintain these, they need almost around 20-30000 software engineers. You know, to store this, to make sure that it is not being hacked by because it’s a security threat. Cyber security threat. If someone gets access to the details of the individuals who are present in this country. Many feel its security threat. So, maintain that you need to invest as much as possible in Aadhar. So that is an investment. Now again it is becoming, it will be.
Audience member asking something.
Faculty: Yeah I was, I was just coming to that. Food Security being linked to WTO. I’ll just talk about it. So, after the direct cash transfer, please remember if you’re debating, or writing an essay, especially regarding the loopholes which are present in the system. Government’s has already identified these loopholes and they are trying to fill it through different sorts of bills. So your knowledge about these bills are important to counter-argue. You know, which many people will not be knowing. And on the other hand, Santosh sir would have talked about essays. Whenever you write an essay, please make sure that two views are given. Both views, what you believe, and what others believe. And how you win the argument in your essay is by giving facts and figures regarding the arguments which you favor. Say, if you want to tell FDI in retail is good, then tell the wastage which is going, then tell the farmers are not being benefited. If you want to tell FDI retail is bad, then you give arguments but also make sure in telling that it is creating trouble to at least some part of the retailers. So it’s the facts which determine where you are going. So the first thing, Food Security bill, when we see, India told “We’ll give rice, wheat and cereals.” Isn’t it? So now what is the problem with this? To 67% of the people, if you want to give this, then government needs to procure the equal amount, isn’t it? Government needs to procure. If government needs to procure, the first thing is, farmers should grow that amount. Farmers may be dispersed. They may grow different crops. But, you should make the farmers to produce these first. To maintain the food security. When you want the farmers to produce, you should give minimum support price to these cereals. So minimum support price is the one which you give before sowing. You announced that this time if you grow rice, I’ll be purchasing it at Rs.100. Fine? But what happened, when you want to go for 67%, you should increase the MSP, 120. World as a whole in WTO, which is the core agency to talk about how the economic policy should run and all. They have an agreement on agriculture. As per this agreement on agriculture, there are 3 kinds of subsidies. And these 3 are: Amber box, they are called 3 boxes that happened. First take Amber box. Here, trade diversion. So where all will you see trade diversion here? First, if you take 120, farmers, you are forcing farmers to produce the crop which they wouldn’t have produced. That’s a diversion. One is crop diversion. And it is in turn trade diversion. How it is being explained there is, now the market has only these products and not the other. So trade is not free. It is restricted. You restrict it by giving MSP. You’re telling farmers that you produce this more and more. So when there is trade diversion like this, on the other hand, who is the one who compete with the state? MSP if you give, state has told it is Rs.120, but will the farmer sell to the state? It depends on the market price. So obviously, the procurement price will be more than the market price. You have procurement price, the government will tell market. You have market and government who are competing now. Market will tell I’ll give you Rs.130, you sell it to me. Then again government should increase procurement price which is 140, or something greater. Here, along with the market, the government is fighting. Now, all the farmers, they are, they want either to sell to the government or the market based on the price.
Now you take globally. Let’s talk from a global point of view. Rice is, rice, wheat and all is produced in different parts of the world as well. So, in a free trade era, those farmers will be willing to sell in India. Don’t you think they will be willing to sell in India? Because you know that the price is more. Than the domestic prices their prices in India is more, so they will be focusing on selling it to India. There is another trade diversion taking place in the world which would have been sold to other countries. Now what those countries should do? They should also increase the subsidies and all. Isn’t it? But we are not bothered how they are going to deal. But we are bothered about agreement on agriculture. In this the MSP which we give, India had agreed that, in 1988, when this was signed, India agreed that as per the present prices, we’ll give what is the MSP at in 1988, that we’ll give along with that you give us 10% levy. You know, if it is 400, so it can be 360 to 440. In 1989, you can give from 360 to 440. But they told, see, there is inflation. Factor of inflation. You need to take even that into account. So, here they added even inflation. 10% less inflation was allowed in 1988, every year this can be done. Your MSP can be within that. But today there is a fear that with 67% of population to be fed, the MSP should go high and they believe it goes well beyond 10% levy. So, US and other developed countries started taking the advantage. Diplomacy is all about one taking the advantage of the other. We know that this is an election year. Manmohan Singh wants to come back. So if this wants to happen, Food Security bill needs to be passed, so let’s bargain. So, in Bali Summit. So the WTO summit that happened in Bali. They are just passing a sheet, please fill it. So in Bali Summit what happened, they all came with 3 agenda. They know that this is going to happen. One was regarding the Food Security bill. So here, if you carefully watch the time when the Bali Summit was happening, you know there was a article in Hindu which was lightly written that US wants to have talk with India separately. You know, in the meeting, they just went and they started talking. And after that they started claiming that it’s a victory. So what did they do there? They agreed for a clause. The clause is there is discussion happening on the MSP, minimum support price. The reason is 1988 is too way back. Things have changed a lot. And this is not fair. So there is a discussion between developed and developing countries on this. So, regarding Food Security bill they all came to a consensus that until and unless the discussion comes, you know, the negotiation happens, we will not sue you in WTO. WTO has a dispute settlement body. So if someone, you can put case there. So if you go for a case in WTO, it is sure that India is going to lose because it is crossing 10% of what it had agreed. So this is the serious issue which was there. And it was solved due to the diplomatic pressure which India put. Earlier it was said that we’ll have a peace clause. That for next 4 years you won’t ask us, but now they have agreed for, till the negotiation comes to end, till the peace is being maintained. So next, what’s the time?
Next we’ll talk about Aam Aadmi Party. At least last half an hour we will have some fun.
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Faculty: By the summit.
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Faculty: Bali Summit was a WTO summit.
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Faculty: No, the final conclusion was till the negotiation between developing and developed countries happen over the MSP we will not put case on anyone. No one will put case on anyone regarding food security. So India is free to have its Food Security Bill.
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Faculty: Yeah, till that time.
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Faculty: Not yet decided. That’s the victory.
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Faculty: See, the world if you see is divided between developed and developing. India claims to be the head of developing many times and on the other hand you have US. You know, if you convince US the rest will fall in place. You take the nuclear deal which we had, you take anything, it’s between US and the rest. So, if you convince US, it’s easy to convince the rest. Because US will try to convince them.
Audience member asking something.
Faculty: No, no, resolution is passed in the Bali’s. So let’s first take Aam Aadmi Party, fed up of corruption, fed up of Anna Hazare. They made a party. The movement started with India against Corruption. So in India against Corruption, Anna Hazare started fighting against, fast, all these were known. But what I want to tell here is look at the debates that are happening. Definitely, either in your GD interview somewhere you’ll get the question on, if not directly on Aam Aadmi Party, at least the issues being raised in the political spectrum today. So what are some of the problems which are, which the country is facing, which Aam Aadmi Party raised? One was definitely about the corruption. So when they talked about corruption, the UPA, when we see, what are the scams, you name a item that is a scam. But the worse to worse, 2g spectrum scam, and the coal scam. If you see the recent deals. For us, from 2013 point of view, coal scam is important. So let’s see what happened in coal scam. See before 1991, before this privatization and all, coal was completely under the governmental control. And you know that in India, the highest energy producer is through the coal. So, when the demand for coal was more, these institutes they could not provide, meet the demand and supply. The production was very low. So, the country decided to open it even for the private players. In 2000, between 2005 to 2009, the UPA, it adopted a policy called screening committee. So as per this screening committee, they’ll decide who should get the bid. You know, who should extract the coal. And one recent thing was regarding Hindalco. If you see near Odisha, the problem there is the energy is being produced by the coal is being generated by the government companies but the ores are being extracted by the Hindalco Group.
Audience member asking something.
Faculty: So you should be paid something for this. Right? So when this was happening, they went for a screening committee. In 2011, after 2011, government realized that it is not getting anything for us. So let’s have a bidding process. When they started this bidding process, CAG. CAG realized that, in from 2005 to 2009, all these years when you did not go for bidding, we lost 1.86 crores, .86 lakh crores. India is truly growing, isn’t it? Earlier the scam was of thousands, now you see lakh crores. I mean you take a scam it’s easily even if you have not read you can put 1 lakh crore.
Audience member asking something.
Faculty: That, see the present bidding rate. That’s the loophole of the entire story. That today if you put these for bidding, see how much we could have sold. How much you have sold at what price. Say at bidding it is Rs.100. You sold at Rs.10. You gave it at Rs.10. So there is a loss of Rs.90. So this is the loss. That means, see there are two types of corruption. One you can take money. On the other hand, giving resources which actually belongs to the people of this country. So you do not have 500 crores to monitor NAREGA properly. You all have heard of NAREGA if I am not wrong. It’s a government scheme to give right to work. 100 days’ work for the elders of the house. So government wants just 500 to 1000 crores to monitor it properly. They say that’s too much on the ipsekar. Rahul Gandhi’s election campaign is 500 crores. You know his media image being 500 crores. So, given this background there was a wave in the country. The wave started mainly because it is presumed that 12 crore youngsters are voting for the first time. Numbers vary. But there are at least some 10 to 20 crores youngsters who are voting for the first time. These youngsters are against corruption. So, one thing, what Aam Aadmi Party represents is, or its victory, if you see Delhi, it won 28 seats. And it is in government because of Congress support of 8 seats. This adds up to 36 out of 70. So this was one of the serious issue. Corruption. So for corruption, what did Rahul Gandhi did? He throwed an ordinance if you remember. It’s nonsense. So what was that all about? We’ll go to the Supreme Court judgment on. So what the Supreme Court said. I’ll just read out. MPs and MLAs will be immediately disqualified if convicted for serious crimes. And I hope you know Laloo was a, first guy to be convicted. Facts. Just. There was another guy, congress guy, who was sacked. He was the first who was sent to jail, if I am not wrong. So the Supreme Court said earlier what was the provision? Earlier as per, there is some representation of people act according to which the elections are being conducted. You know what it said? It said, if you are convicted of a crime, within 3 months if you apply for a higher court you can be, you know, you can continue. But now the Supreme Court said, “No, no, you cannot, if you are convicted you’ll be removed immediately. You’ll be disqualified immediately.” So what are the positives of this? If you see today, 162 MPs out of 445 in Lok Sabha have criminal background. That means who are either convicted, or have criminal cases pending against them. MLAs, 1258 MLAs out of 4032, who are having criminal convictions. So, in this background, actually the Supreme Court judgment is hailable. Let’s talk just few words about the Supreme Court. See the 3 arm is executive, judiciary and legislative. Within this, the judiciary is as independent in the country as anything else. The bill you, the reason is they do not, at least the politicians they have some political pressures if they talk anything then they have the problem that you know what one community feels or what another community feels. For example, take the case of Khap Panchayat. And recently you might have heard that Khap Panchayat ordered to rape a woman. The politicians including Aam Aadmi Party was supporting Khap Panchayat for it’s not the only way to see. Why? Because it is a community, you know, which takes decisions. But when you want to move beyond these crimes, who can help you? It is the Supreme Court. Though many may argue regarding section 377. Supreme Court judgment was taken negatively by many people. And the reason was they also have fundamental rights and they have their own choice. So that is a different debate altogether, but here I wanted to tell, for example, if you take Khap Panchayats and all, Supreme Court can play a very important role in moving out of these Khap Panchayats, because they do not have any political agenda. Their only, their only interest is to improve the society. See with globalization one important problem that has happened is westernization, which few call modernization. And the traditional Khap Panchayats in few areas they, it’s even believed that women should not wear jeans, women should not carry mobiles. But it is difficult for others to understand that few are left back and few are moving. The cultures are varying. Every society in the world, they had this transition. But their transition were smooth. In India, the transition is not being allowed, due to the political pressures. So to have the transition, to smoothen the transition, you need to have the Supreme Court judgment and all who come and intervene in these. Now the Khap, the issue of the rape has been taken directly by the Supreme Court. It says we will see into the matter. So, don’t bring the political class. They have their own things. So bring the judiciary. No one can question the judiciary. So it’s easy for some sort of transformation.
So another important thing with respect to Aam Aadmi Party was Lokpal money, See current affairs if you say I don’t know what is current affairs and what is not. Your main, you need to discuss about it. So here, let me just talk about Lokpal and Lokayukta. First we will see what is the government Lokpal bill. And then we will try to compare it with Jan Lokpal. I hope you know Anna Hazare along with his people in India against Corruption, they formed a bill called Jan Lokpal bill. But to counter this Indian government has brought Lokpal bill which is actually passed. So what does this Lokpal bill talks about? First certain features of it. There will be a chairperson with minimum of 8 members. So how this will be divided? 50% will include judicial members, i.e. from judiciary. 50% will include SC/ST’s, OBC’s, minorities and women. So, who all it can look into? Corruption of whom? Prime Minister is included. Ministers are included. Both current and former, not dead, legislators and all government employees. Along with this you may also have firms funded or controlled by governments. So there should be exceptions as well. The exceptions are bodies creating endowments, you know religious bodies. So if they do any corrupt activity NGO’s and all, they are free. What is a time? Time limits are there. I know it’s not important but just to give you certain facts and figures which you will not find anywhere else in detail. So time limit to complete inquiry, you want to give 60 days. Within 60 days you need to complete the inquiry. And to go further, the Lokpal should have heard the public servant as well. So if there is a public servant, so you should hear his version of the story as well. So once it is being heard, then you should complete investigation within 6 months. And if you want to question the Prime Minister, it should be on camera, one. And when a resolution is being passed, when the resolution is being passed, at least two third of the jury should agree. So what is a penalty? 7 years imprisonment. So what do you think? It looks good or bad? On paper everything looks good until and unless we compare with.
Audience member asking something.
Faculty: I’ll come to that now. So, exactly who selects? Here I want to discuss them by comparing it with the Jan Lokpal bill. So, here the government Lokpal bill versus Jan Lokpal bill. So in government they say 5 members should select them. Who are they? One, Prime Minister. Second, leader of opposition. Third, speaker. Fourth, CJI. And fifth is eminent jurist. Yeah, speaker of Lok Sabha. So the eminent jurist will be actually selected by these four. Now you see Jan Lokpal. It should be selected by 7 members. 2 Supreme Court judges, 2 High Court judges, and one nominee from CAG (Comptroller and Auditor General), CVC, and CEC. Vigilance, Election. And then comes Prime Minister, and leader of opposition. If you see the first one, there is 3 is to 2. Or even you can tell 4 is to 1. Now all political class and only one CGI independent. But here in Jan Lokpal, they wanted to be as independent body as possible. So if a new appointed a chairman and the members, how will you remove them? In Lokpal bill it says, 100 MPs, at least 100 MPs should go and complain for removal. See Jan Lokpal was not made of MPs and MLAs. So they know, any individual in the country can complain against the removal of the Lokpal. CBI. CBI is the agency which will take care. You know, investigation will be done by CBI. Government said CBI will be under our control. CBI under government control. And remember, CBI, earlier when it was formed its intention was to check corruption. Later, it got sensational cases also being driven into it. So whenever there is a sensational case, you get that.
Audience member asking something.
Faculty: Actually it’s not independent to that extent. But, CBI works under the government of India itself as of now. What will Lokpal say? It should be under Lokpal. It should be independent. No government pressure. See the, it is regarding whistle blower. Have you heard of this term? The people who raise the issues. There will be certain issues, who raises that there is a corruption happening in this. There is no proper government implementation. It’s not always the government institute which will find. There is no word about the whistle blowers protection in the Lokpal bill proposed by the government. But, Jan Lokpal says either under Jan Lokpal bill, or a separate act should be passed for whistle blowers. See if you don’t protect the people who raise their voice, then people will never raise. And there is this, the last one is regarding the citizen’s charter. Citizen’s charter in the sense if you go to banks or any government offices, there will be some, you know, paper kind board, notice board which says who is the guy, what is his position, what is his role, what, for what role you should go towards him, and if he refuses, to whom you can complain. All these should actually be written so that people will realize that whether the person is doing his duty or not. Citizen’s charter, it’s not mentioned in this, but the Jan Lokpal talks about Citizen’s charter. At last the states, the government says take one year, 365 days, and you form Lokayukta however you want. We don’t want to intervene in your independence. Jan Lokpal say, “No, no, we’ll frame guidelines even for the state.” So just they should follow and implement it.
Audience member asking something.
Faculty: Yeah, it is regarding states. We talked about Lokpal. Lokayukta is at the state level. So how will you form Lokayuktas? According to the present law, it says that states are free. It can do on its own. But Jan Lokpal says, no the guideline should be given and it should be followed as it is.
I know you are used to long sessions, but still can we just continue for half an hour, or? We can continue.
Audience member asking something.
Faculty: See there are guidelines already being placed, but there is a demand for it to be regularly placed. It is a suggestion now. I will tell you to do it, but they want it to be done through an act.
Audience member asking something.
Faculty: Yeah, it’s under the restriction of state government.
Audience member asking something.
Faculty: See Lokayukta bill was passed long back. It was Lokpal which was being stuck. But few states, whatever they tell is not up to the mark. The standards are not that high.
So shall we move to some other factors like international relations? So, international relations. There are few topics which are important in 2014. I don’t know to what extent you need it. The depth I don’t know but I’ll just give you a glance of what is happening in the world, so that it’s easy for us to understand. First let’s start with our neighbors. Bangladesh. So you see, whenever you see international relations the first thing is please see the geography of it. Where it is, and why it is so important for us. The geography, if you see. There is something known as chicken neck, in India. That is the portion which connects northeast with the rest of India. You might have seen this. So this is hardly 20-21 km stretch. So if you see northeast it is either completely surrounded by Bangladesh, or by Myanmar. So do not have port. If you need to go to this place, you need the support of Bangladesh. You understand? Till 1971, all our security threats, left wing extremists, the sectionist people who wanted to get out of India, all these people, they had a hideout in Pakis-sorry, East Pakistan. Till 1971, Bangladesh was part of Pakistan. So obviously you cannot expect Pakistan to do good to India. So what happened during this time, India actually helped Bangladesh to get independence. It was during Indira Gandhi period that Bangladesh became independent. So why did it become independent? What was the problem? You see Pakistan, as India, they also have provinces. The four provinces which you see is Punjab, Northwest Frontier province, Sindh and Baluchistan. In Pakistan, present Pakistan. And you had Bengal on the other hand. So during this period, there was elections to entire Pakistan, and the elections during 1968 to 71 I am talking. It is 6 naught 1 on an average. 3 naught 1 was in the East Pakistan, and 300 or something less the number, was in entire Pakistan. If you see the Pakistan political scenario, it is dominated by Punjabis. They have the military rule, they have the political rule as well. So the Punjabis, what they did, they wanted to have, be the Prime Minister. In the election which turned out, Bangladesh under Awami League under the leadership of Shaikh Mujibar Rahman, he won 3 naught 1. 3 naught one out of 3 naught 1 he won. So who should be the prime minister? Shaikh Mujibar Rehman. Punjabis, they did not accept. They told let’s have 2 prime ministers from now on. 1 for East Bengal, East Pakistan, another one for West Pakistan. So this was seen as humiliation. And on the other hand there was another issue. They wanted to bring Urdu to everyone. You know that Urdu should be the national language. And Bangladesh, if you see right from the freedom era, there people were the core Bengalis, you can see all your national songs and all had come from there. They were the, you know, academicians, you know academically strong. Literature they were strong. So those people, they were core Bengalis. Though they were Muslims by religious sect, but, they were Bengali still. They wanted when Pakistan wanted to impose Urdu on them, these people started rebelling back. The rebellion went to the extent that the Awami League asked people in the Bangladesh army, Bangladeshis in Bangla, sorry, Bengalis in Bangladeshi army should resign. And those people who were actually looking after the Bengal, the army did not fight against the local people. Pakistan, what it did, it sent a flight. The flight movements were there. The army men, they came in civilian dress, with the weapons and a huge massacre started. So when this happened, India helped Shaikh Mujibar Rehman, and we brought them independence. Clear? So, now, Shaikh Mujibar Rehman’s daughter, after this 1971, there was a military ruler. He, Ziaul Haq. So the military ruler, he killed Shaikh Mujibar Rehman and he established a party called Bangladesh Nationalist Party. So you have two people now. One Awami League, another one Bangladesh Nationalist Party. India brought independence to Bangladesh. Awami League was the ruler at that time. So Awami League is close to India. It makes sense. Bangladesh Nationalist Party and Ziaul Haq killed, India was the one which severely criticized. And that is the time when, many people get this question, if we brought independence, why are Bangladeshis against us? The reason is this. The Bangladesh Nationalist Party, it got support mainly from Pakistan. But as you know these people cannot get direct support from Pakistan. The people, 1968 to 71, whatever has happened, they won’t forget it easily, isn’t it? So, apart from Pakistan, there was China, which also started granting support. You had Pakistan, you had China. Supporting Bangladesh Nationalist Party indirectly. And BNP was anti-India. Please remember this. This is important for us to know what is happening today. And this was the, 1971 was the period of cold-war. Cold war between US and USSR. India was supporter of. So Awami League was supported by USSR as well. US supported Bangladesh Nationalist Party. Now, there was a group by name Jamaat e Islami. It was a fundamentalist group, even during 1971 when entire Bangladesh was fighting for independence, this group wanted to be with Pakistan. And they were also involved in lots of war crimes. So in 2001, Bangladesh Nationalist Party, it joined hands with JeI and came to power. So obviously these two are anti-India. So this is the time when if you see the northeast, there are some Naga insurgency. There are some insurgency groups who want to separate themselves from India. This became a ground. Bangladesh became a flourishing ground. See in India if they are present we can go and, our armored forces can work against them. But they want the support of arms, they want the support of money. So that used to come from Bangladesh from 2001 onwards. This created a security threat to India. In 2008, the Awami League, and Sheikh Hasina. BNP today is headed by Khalida Zia. Sheikh Hasina what she told, see there are Jamaat e Islami groups who were involved in genocide, so we will actually bring them, you know we will punish them. So when Sheikh Hasina said this in 2008, it was not only due to this but she came to power. So when she comes to power, you have Congress here. You have Sheikh Hasina government there. Both started removing as many insurgents as possible on both sides. Like, ULFA leaders. They, it is a separatist group in Assam. These people were hiding in Bangladesh. So the Bangladeshi government under BNP, sorry, Awami League, it helped to remove these. Trust started building between the two countries. In Bangladesh it is believed that whenever BNP comes to power, sorry, Awami League comes to power, the relations will be good with India. So if there is any problem between us, we can solve it.
One major issue between India and Bangladesh is water sharing. You know there are 51 rivers which moves between India and Bangladesh. And you have one water sharing treaty. That too on Ganga for 20 years. It’s not permanent treaty as well. Thinking that India will be good. You know India will treat Bangladesh nicely, Bangladesh, as soon as they caught this ULFA leaders and all, they started sending it to India, sending them to India. You know we’ve caught them to build relationship you take. And what did they ask? They asked let’s have Teesta Water Sharing Agreement. When they said this, and when Manmohan Singh was about to go, Mamata Banerjee said no. So why did Mamata Banerjee said no? Many people argue that it is the regionalism, you know, they just want to take their pride with the center, so many aspects. If you see Tamil Nadu with Sri Lanka. Whenever there is a talk on Sri Lanka, Tamil Nadu is the first one to rise. They tell this is right and this is wrong. They tell how the center has to behave with Sri Lanka. Foreign policy of a country is always independent. It is in the hands of the central government. But the question today is with coalition politics is the foreign policy being compromised. That can be one sort of debate that can be made. But here if you see, when you look at the Ganges treaty, you all might have heard of Farakka barrage. See this is the place where Ganga moves out between West Bengal and Bangladesh. That means that’s where a treaty is being signed. You know what the treaty says? If you have 100 cusecs of water at Farakka barrage, out of that, it should be distributed in a certain percentage between Bangladesh and West Bengal. Ganga flows through Bihar, UP and all but the restriction is only on West Bengal, because, the treaty doesn’t say every year there should be 1000 cusecs of water. The treaty says, how much ever water comes at Farakka, that will be divided. You see the difference? In the first go, if you say every year out of 1000, 500 should be for Bangladesh, then you will make sure that upstream usage is reduce. You’ll make sure that at least 1000 comes and reaches Farakka. But today the situation is, how much ever comes in Farakka, the fight will be between West Bengal and Bangladesh. So that’s the reason why Mamata Banerjee is more concerned than anyone else. The Teesta Water Sharing Agreement, the dispute why she said now was she believes that the center is more, you know, good towards Bangladesh. That means its sending more water to Bangladesh, rather than giving to the West Bengal. So this is one fight.
And on the other hand, there is fight on enclaves. You might have heard of this. Enclaves. So what are these enclaves? If you see a water body. Consider this as the land. You know you have certain islands here. Within these islands, there are few islands. You may have Bangladesh island here, and you may have another enclave here. See, enclaves are the one where the islands are encircled by other islands. And the problem here is, if you take this as Bangladesh, this will be India, and the inner one will be Bangladesh. It doesn’t make any sense, right? If you take here, this will be India, this will be Bangladesh. How did this happen? There were two kings. Playing chess. Okay. I’ll give you this enclave, you give me this enclave. So that has led to this and after 1947, these kings, they went one with India and the other went with Pakistan. So the lands also remained the same. Here if you see the problem of these people, just imagine the person who is staying in Bangladesh inside. If he has to go out, you know, he has to take the permission of India. And again, going here is difficult. The same with Indian people staying here. If they have any medical emergency, if they have anything, where will they go? Immediate thing is Bangladesh, but it’s not easy to go to Bangladesh. Even if the Indians, you know you want visa, all this. If you go without that, you’ll be called illegal migrants. Even if Indians, they come to India, you don’t know whether they, he’s an Indian or a Bangladeshi. So you call him to be an illegal migrant. So these are some of the complexities. So to solve this what they told, either you take everything or we’ll take everything. Let’s divide properly in such a way that the enclaves are also divided and give it to them. So if there are certain people who want to come back to India, you know, in Indian territories who want to come back to India, let them come back. One, give enclaves. For this, the problem was, if you see the net land, how much you will be gaining and how much you’ll be losing, there is different calculations. India obviously says India is losing more in exchange of enclaves. The same in Bangladesh we have near India as well. So India will be losing land when compared to Bangladesh. And the second threat was, illegal migration. In this name, there were two, two times migration happened severely from Bangladesh to India. One was 1947, another one was 1971. When Bangladesh independence, itself was formed there was huge variations. So this will be the third wave which they believe. And today there is a threat of terrorism. You know it is easy for those people to move. They can form a group and they can move into the country very easily. So this is, these are some of the criticisms which we get for this. Bangladesh, 2013, sorry 2014, January, went for elections. Awami League being close to India expected one thing that by the time it goes for election. Have Teesta Water Treaty in place. Exchange. Because back home when they go, it’s easy for them to tell that see because of our government we got. Isn’t it? Because of our government we got these enclaves and Teesta Water Treaty, so vote us back. But during the election, the JeI leaders were convicted. There is a place by name Shahbag Square. It’s usually called, you know, Shahbag Square Protests. So, Shahbag, what happened, I talked about Jamaat, the supporters of Awami League, the court said let them be for life term. No hanging, no capital punishment and remember this time there can be a question on whether capital punishment is good or bad. But before that, these people were imprisoned but not given capital punishment. So Awami League supporters from across Bangladesh, they met at Shahbag and they took oath that the country will boycott Jamaat e Islami. They will remove the institutions and they will boycott the institutions. And they should be given capital punishment. Now, in the election year when this comes, you know no one agrees with whatever logic you give. The BNP and JeI they told let’s have elections but who will be taking care of the government during the election? They told, let it be interim government. Sheikh Hasina said fine. The present government who is there they will take care. But BNP said, no, it should be a committee of equally represented by everyone. There was differences between this interim government and these people boycotted elections. BNP and JeI boycotted elections. Awami League won with full majority. There was no one to contest against it so it won with full majority. Now BNP and Khalida Zia says it’s foul. You know, we don’t agree with it. They say, you remove JeI with you. Remove your partnership with them. You know, don’t include the terrorists into your group. You come back. We’ll have elections again. This is fine. What is for India? The problem here is Bangladesh is a democracy. Whenever there is any problem with democracy, you’ve United States of America. United States of America it said see what kind of election you’re talking? No opposition and you claim your vic winners. Democracy, through democracy means even they should be included. And I told you, in 1971, US supported BNP, US supported JeI. They do not consider JeI as a terrorist group. So India told, see we’re neighbors. We know who terrorists are and who are not. From there through satellites you cannot find who is the terrorist and who is not. So please accept our version of the story. Here the problem today what we are facing is, United States is pressurizing Awami League to have a proper elections, whereas India is telling that what Awami League has done is correct. The support. China interestingly, whom should it support? BNP right? It was seeing United States, what United States will tell. Once United States tell, told, BNP, they told we welcome Awami League. We are ready to have diplomatic relations with Awami League. Now only thing is there is Chittagong port. Please give it to us. You know as an Indian we do not have anything. So China interestingly, it is part of P5. P5 is permanent five in United Nations. To get entry China actually rejected Bangladesh twice to get entry into, just because China was supporter of Pakistan. So if someone is against Pakistan, China was supporting. So China said no to Bangladesh initially. But afterwards, after the economic growth and all started happening, today, China has started selling its weapons. See in a region if you see, Pakistan also cannot take from US, India also cannot take from US. If there is war, then who will fight against whom? So one will go to one power, another one will go to another power. Bangladesh and all wants to take from China.
I just end with one last thing. Why this is important. China has offered to entire south Asia, Asian countries apart from India that they can start using their satellites for free. Navigational satellites for free. Till now all of us are dependent on United States. So, these countries, like Maldives, Sri Lanka and all, they purchase equipment even from India. Fine. But today the problem is if these countries start taking Chinese navigation system, then our weapons are useless. So this is a strategic thinking that China wants to bring these issues so that it wants to enter into South Asia. But South Asia, India always want to be, or want to keep China, or any other leader away from South Asia. So, whether it is Maldives, whether it is Bhutan, whether it is Sri Lanka, if any foreign country comes and involve into the issues of our neighbors, India cannot tolerate. Simple example. You might have heard of Bhutan. Bhutan elections. You know what Bhutan Prime Minister did? On the sidelines of United Nations, he actually had a handshake with China, Chinese Premier. United Nations, they were just meeting and they had a handshake and a picture together. And India stopped giving LNG subsidy to them. And this was seen one of the reason for the defeat of the Prime Minister who shook hands with China. So he was replaced with a new government there. So, this is the important thing that it’s India in the south Asia the same way it’s China in its backyard. If China wants to influence us we also have good relations with Japan, we also have good relations with South Korea, Vietnam and all to the extent that Vietnam said there was a dispute about the land between China and Vietnam last year. And they were fighting for who should take oil. Indian ships they, Indian ships went and they started drilling oil. Vietnam. China asked who are you, why are you here? Vietnam said see it is we have given them the contract to drill. So it’s like you come to us and we come to you. Fine.