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The Bhutan vote

General election in Bhutan
India-Bhutan ties are expected to be accorded their customary priority by New Delhi and Thimphu
Bhutan’s monarch, Jigme Khesar Namgyel Wangchuck, retains a considerable influence over the nation’s foreign policy.
DPT, which lost elections in 2013 after India suddenly pulled fuel subsidies for Bhutan, has campaigned on the slogan of “sovereignty and selfsufficiency”.
50th anniversary of formal relations between India and Bhutan: this year .

Not just liquidity

Default of Infrastructure Leasing & Financial Services (IL&FS)
Underlying weaknesses in the non-banking financial company (NBFC) sector as a whole.
Both international and domestic interest rates continue to rise.
The Reserve Bank of India, the National Housing Bank and the State Bank of India last week decided to increase the supply of liquidity in the market to keep interest rates under control.
State bailouts: can trigger moral hazard

Decoding the Rafale controversy

- 3 questions to neutralise the snowballing controversy.
- 2000: process for acquisition of 126 aircraft to replace a part of the aging fleet
- 2007: global tender issued
- 2011: Rafale’s selection
- 2012: negotiations commenced with Dassault
- Squadrons: authorized 42 at present 32
- Former Union Defence Minister A.K. Antony was indecisive, thereby prolonging the process.
- France April 2015: announcement made by Mr. Modi that India would buy 36 Rafale aircraft in a government-to-government deal, thereby scrapping ongoing negotiations with Dassault Aviation for 126 aircraft.

Then Defence Minister Manohar Parrikar acknowledged that he was unaware of the decision.
Paris announcement & speculation.
CJI Ranjan Gogoi headed bench has sought details of the ‘decision making process’
Rafale: ₹1,025 crore per aircraft
The third question relates to the offset share given to Dassault Reliance Aerospace Ltd, or DRAL (a 51:49 joint venture between Reliance Aerostructure Ltd and the Dassault Group).
The agreement for 36 aircraft was signed by the two Defence Ministers on September 23, 2016. DRAL was registered on October 3 while FDI in defence had been liberalised to permit 49% through the automatic route in June of the same year. In October 2017, the foundation stone of the DRAL facility was laid in Nagpur in the presence of Maharashtra Chief Minister Devendra Fadnavis and Union Minister Nitin Gadkari.
The casualty is national security because the IAF’s squadron strength will drop to 23 in 2032, unless there is fresh acquisition beyond the 36 Rafale and 123 Tejas fighter aircraft.
The second casualty is the much-touted ‘Make in India’ defence programme.
Sadly, this could have been prevented if only the government had chosen to address the three questions with candour and transparency.

Castles in the air

“Charter Cities”: new cities with distinct rules that foster innovation and economic growth.
A developing country can host the “Charter City” in its territory by “delegating” some of the responsibilities of administration to a developed country.
Mr. Romer has come under immense criticism. He argues that you have choice to move in.
The guiding logic is that creating built-from-scratch cities with parallel rules and institutions can drive economic growth.
It ignores the pre-existence of multiple social and political claims over space in these supposed clean slates.

Hamstringing the RTI Act

Since October 2005, Right to Information (RTI) Act
Information Commissions does not have adequate authority to enforce their decisions.
Lower officer can be punished but not the high ranker.
The government proposes to do away with the equivalence of the Central Information Commissioners with the Election Commissioners on the ground that the two have different mandates.
The underlying assumption that transparency is less important for a democracy than holding of free and fair elections is preposterous.
The government also proposes to replace the existing fixed five-year tenure of the Information Commissioners with a tenure as may be prescribed by it.
This would be detrimental to the independence and authority of the Information Commissions.
Justice Srikrishna Committee has proposed an amendment that would broaden the definition of ‘harm’, restricting disclosure of personal information even where it may be clearly linked to some public activity.
Vacancy vacuum
Section 4 of the RTI Act requires suo motu disclosure of a lot of information by each public authority.

Important News

Saudi Arabia promises to meet India’s oil needs
Mr. Al-Falih said Saudi Aramco’s investment of $44 billion in the Ratnagiri refinery was “just the start” and that the company was keen to invest in an integrated downstream business, including on the retail side, as well as in storage capacity.
Akbar slaps defamation case on journalist
Pollution forecast system unveiled
The Central government on Monday announced a pollution forecast system that can alert, three days in advance, about the likelihood of extreme pollution events and dust storms.
‘12 courts set up to try MPs and MLAs’
A Bench, led by Chief Justice of India Ranjan Gogoi, on October 10, gave 11 States/Union Territories (UTs) and the High Courts of Karnataka, Kerala and Tripura a deadline of four weeks to comply with its September 12 order.
India, France in talks to conduct tri-service exercise
India and France are in discussions for a bilateral tri-service military exercise to take forward the strategic cooperation while also exploring ways to operationalise the logistics agreement.
Ahead of climate talks, India in touch with 40 countries
To forge alliances and compel developed countries to make good on promises, made over the years, to provide enough finance and technology to stem runaway global warming.
Wickremesinghe to meet Modi
October 19 and 20
From the Indian side, “priority projects” in the island include the Mattala airport, near the China-controlled port in the southern Hambantota district; the Palaly airport in Jaffna in the Northern Province; the Trincomalee oil tank farm in the east; the East Container Terminal at the Colombo Port and a Liquefied natural gas plant in Kerawalapitiya, north of Colombo.

Financial News

PM Modi Asks Oil Producers to Review Terms of Payment
Prime Minister Narendra Modi has urged oil suppliers to review payment terms to give temporary relief to the rupee, which has fallen sharply in recent months, amplifying the impact of higher global oil prices on Indian consumers.
“The oil market is producer driven; and both the quantity and prices are determined by the oil producing countries,” Modi
Modi “requested for review of payment terms so as to provide temporary relief to the local currency”, the statement said without elaborating.
The prime minister did not elaborate but oil company executives said one option could be to partly pay suppliers in rupee to lower demand for dollars.
India had paid Iran for oil in rupees the last time the US imposed sanctions on Teheran.
Oil supplies are mostly paid in dollars although Indian refiners sometimes also use euro.
Exports Fall 2.15% in Sept, Trade Gap at 5-Month Low
The gap between exports and imports, or trade deficit, declined to $13.98 billion in September from $17.39 billion in August following slower growth in imports.
Disaster Cess: GoM to Seek Response from all States
A panel of state finance ministers set up to deliberate a ‘disaster cess or tax’ under the goods and services tax (GST) to help states hit by natural calamities has decided to seek the response of all states on the matter.
The panel was of the view that the National Disaster Relief Fund (NDRF) was not sufficient to fund natural calamities and hence the decision to take the matter of a state-specific or nationwide ‘disaster tax or cess’ to all the states.
Bihar deputy chief minister Sushil Modi, who heads the seven member group of ministers, on Monday said the panel would also seek views of the attorney general on the legality of levying a ‘disaster cess’ or a ‘disaster tax’ to fund states hit by natural calamities.