Articles by ecothrust at Technorati Headline Animator

Tuesday, January 12, 2021

From Wuhan to Pune - China Hurts, India Heals Story with links from 10 major publications

As the Covid 19 vaccine roll out starts from India, the nation which traditionally vaccinates two third of the global population,  a message goes out loud and clear. If China can hurt the world then India can heal its wounds. The virus from Wuhan that killed more than half a million people worldwide in the year 2020 devastated the global economy with the top ten economies other than China recording negative growth. The vaccine development usually a 5 year process saw an innovative reduction to a year by scientists around the world. Several western nations like  UK, US and Canada started distribution of Corona Virus vaccines last month largely from Pfizer. The Chinese and Russian vaccines still reportedly in stage 3 trials are being given to many Middle East and African nations. With the two vaccines from India now ready for rollout a truly scalable counter offensive has been launched against Coronavirus.

3 Vaccines rolled out, a dozen more in line

At 5.40 AM on the 12th January 2021 the first consignment of Covishield Vaccine was despatched from Serum Institute of India Pune after the world’s largest vaccine maker got approval from the Indian Authorities. Three temperature controlled trucks containing 478 boxes of vaccines each left for Pune Airport, with each box weighing  32 kg, revealed a source involved in the vaccine transport arrangements. 

Despite the Corona virus pandemic and the repeated lockdowns, the disruptions and job losses and and the crisis in every major economy, the world bounced back rolling out at least 3 vaccines that completed stage 3 testing and a dozen more that had completed 2 rounds testing and were conducting the final efficacy tests on their products. The 3 vaccines that received approval from most of the Western economies were from Pfizer, Moderna and AstraZeneca. 

India the largest global producers of vaccine gave approval to two vaccines. The AstraZeneca vaccine  manufactured  at Serum Institutes Pune’s facility under the brand name Covishield  along with the Bharat Biotech producing Covaxin at its Hyderabad plant under licence from ICMR with indigenous technology. Covaxin is under 3rd stage trials the rollout of which is planned by end February after its results are released and approved. India’s vaccine roll out is significant for the poor across the world because the vaccine prices are affordable. 

How China Hurt the world 

That China hurt the world by letting the virus spread and intentionally delayed disclosure to WHO and the international community is fairly established by now. Here is the chronological sequence of events that is now available with documented proof from major global publications.

1st January 2020  : Hunan Seafood Wholesale Market area of Wuhan was sealed due to a mysterious  respiratory disorder An informative National Geography article points the finger of suspicion to the Wuhan wet markets and why they were responsible. 

7th January 2020   :  China identified the virus as a novel Coronavirus. 

11th January 2020  :  The first deaths happened in China 

13th January 2020  :  The virus spreads to Thailand 

15th January 2020 : China imposes travel restrictions from Wuhan to other parts of mainland China but keeps international flights open and the world contracts the Covid 19 virus. Business Insider in another informative  article  explained “Everything to know about the mysterious coronavirus from Wuhan

The Guardian in another investigative article exposed how China locked down early without informing WHO. The traffic data from Tom Tom Traffic Index explains the way how China locked down internally in the month of January and February but the rest of the world getting delayed information could lock down only in March after the virus had uncontrollably spread. So the death count in China remains lower than 5000 while more than half a million people died worldwide The scientific community of the world and the medical fraternity and the Corona healthcare, sanitation, emergency services and police across the world chipped in to see that the world recovers quickly. The vaccine companies innovated to bring out vaccines in record time. These vaccines will rescue the world from Covid 19 and India leads the healing process producing two thirds of the world vaccines.

China says political motives behind India’s vaccine rollout 

This story was perhaps anticipated by none other than the Global Times the official Chinese mouthpiece. In an editorial by expert  Jiang Chunlai from Jilin University's School of Life Sciences, on 6 January Global Times admitted grudgingly that  “ India's vaccine export plan could be good news for global market despite political, economic motive: experts


Here is what it said 


 India makes about 60 percent of vaccines globally and many countries are eagerly waiting for it to begin shipping doses, according to the BBC report. 

Experts suggested that India's vaccines are no less competitive than Chinese COVID-19 vaccines in both research and production capacity, considering that India has the world's largest vaccine manufacturer and lower costs in labor and facilities. 

Despite India's reputation for generic drugs, the country is not behind China in vaccine R&D, Jiang Chunlai from Jilin University's School of Life Sciences, who had visited Bharat Biotech, told the Global Times on Wednesday. 

"India has the world's largest vaccine manufacturer Serum Institute of India that has a very mature production and supply capacity, even stronger than some Western countries. Indian vaccine manufacturers also have a much earlier cooperation with global institutes including WHO, GAVI and the Pan American Health Organization in South America (PAHO), and earned their trust decades ago," he said. 

"They take a closer approach to Western standards in vaccine development and regulation that has also helped their exports," Jiang said.




The view became trending globally as China and India are engaged in a bitter border confrontation in high altitude Himalayan region of Ladakh. 

The New York Times in December 2020 had given a detailed report of the India China border brawl at 14000 feet in freezing Himalayan province of Ladakh  The NYT report highlights the border brawl and consequent arms buildup along the 2000 mile border and also the skirmishes China has had with other Asian neighbours like Vietnam, Taiwan and Malaysia and how China has changed after the coming to power of Xi Jinping.

The confrontation with India “fits a broader pattern of Chinese assertiveness,” said Tanvi Madan, director of the India Project at the Brookings Institution in Washington, noting that it was the fourth flare-up since China’s authoritarian leader, Xi Jinping, rose to power at the end of 2012.

So the Global Times report was instantly picked up by several media organisations and put the Chinese leadership on the backfoot.

The report whose link has been given above was carried by Yahoo news and reproduced by several other media sites globally. It clearly shows the Chinese media grudgingly acknowledge that India can heal the hurt the Wuhan Virus has brought about.




Wednesday, December 9, 2020

3 Myths of Indian Farming Dispelled

Myth 1 Small and Marginal Farmer can’t be productive.


India has the second-highest  acreage  of arable  agriculture  land next  to the US.  As per 2010-11 census,  India had an average land holding of 1.15 hectares against 0.6 hectares of China. China has two times more farmers than India and three times more marginal farmers and share cropper. Despite this China produces 40% more paddy  and three times more fruit with lower arable land dedicated to these crops. It is not only a manufacturing power but the world’s largest exporter of processed food. India’s two dozen food parks started a decade back but has a capital utilisation of less than 20% with little or no marketing or processing infrastructure. 



Myth 2 India’s water shortage is due to rapid industrialisation and urbanisation. 


Central Water Commission (CWC) report  states that 85.3% of  India’s water  was consumed by the  agriculture  sector  in the  year 2000. Since then no countrywide study has been done on sectoral water consumption but  India became a water deficient country as per the 2010–2011 census, when it’s  per capita availability of water fell to 1,545 cubic metres per person. This disproportionate use of water happens primarily in two states of northern India that has canal infrastructure and cultivate crops that are water intensive.



Myth 3 : MSP helps small and marginal farmers 


Punjab and Haryana account for a third of paddy and wheat procured at MSP by FCI. In the year 2019-2020 this rose by 15% to touch Rs 56000 crores for Punjab and Rs 24000 crore for Haryana. 

The two states have  just 5% of the country’s marginal farmers and 27% of rich farmer’s.  So it is the rich farmer who gets maximum benefit of MSP and not the marginal farmer. Besides  with emphasis on MSP procurement of wheat and rice the farmers have no incentive to diversify into production of pulses,fruits and vegetables which are often insufficient that will be beneficial for even the small

 and marginal farmer. 

For more on the subject read the extract 3 Myths of Indian Farmlands that needs to be dispelled :

Page 135 to 137 Chapter 12 Indian Agriculture at Crossroads 

India Emerging Policy Paralysis to Hyper Economics published by Bloomsbury in April 2019.

Thursday, December 3, 2020


For over a week tens of thousands of farmers  from Punjab have stormed the national capital demanding the roll back of farm reforms - specifically  the 3 Farm Bills 2020. Prominent among those leading the protest was Naresh Tikait President of the Bharatiya Kissan Union BKU a leading farmer activist  and Ravinder Singh Cheema President of the Punjab Arthiya Association who are usually at loggerheads with one another. Strange bedfellows? Why? 

The presence of Cheema and the Arthiya Association funding the protest was pointed out by me at the CNN News 18 TV Show The Right Stand on November 28th
The reason why Tikait shared the platform has been elaborated in the LSTV 6.00 PM show Public Forum on 2nd Dec repeat telecast at 10.00 PM and at 12.30 PM of 3rd December.
It is a very interesting story that reads like a potboiler.:

Farmer Unions like BKU and Arthiyas ( Mandi Dalal’s)  are usually at war in Punjab’s farmlands. 
In April 2016 in the Barnala District double suicide case when mother Balbir Kaur and son Baljit Singh committed suicide, the BKU ( Dhakonda ) activists fought pitched battle with the Arthiyas and their gun totting security who had come to take possession of the land of Baljit Singh in village Jodhpur of Barnala District. As a matter of fact a third of the farmer suicides in Punjab ( 8294 between 2000 to 2015 as per Punjab Vidhan Sabha statistics ) happens when the Mandi Dalal who is also the financer  and  money lender to the small farmer attains a judicial order for  Kukri of the small farmer’s land. 


At that time of the Jodhpur village twin suicide, Darshan Singh Sanghera who was the Vice President of Punjab’s powerful Arthiya association was quoted in the Chandigarh Tribune “There is no such thing as a crisis in Agriculture. The villains are the unions that defend farmers rights” In its detailed report  The sins of commission   it outlined the friction between the Kissan Unions that fight for the small farmer  and the money lender Arathiyas who are the very rich  farmers who control and deal with the FCI purchases. The small farmer usually sells his crop to the Mandi Dalal at a discount of 15% to  20% who in turn sells to the FCI, bribes them and the bankers who remit the money to the accounts and supplies to the mills. (No Govt purchase can take place without bribing and FCI is no exception ) The small farmer also borrows from the Mandi Dalal when in dire need and he has exhausted his limits to borrow from the local co-operative bank or his CIBIL score is below par. Needless to say that the interest of the Mandi Dalal is 15% to 20% which is 3 to 4 times that of the co-operative bank. 

Fakhre e Quam for Captain Amarinder 
In December 2016 Captain Amarinder Singh promised to waive farmers debt of Rs 10,000 crores if elected . But only Rs 1700 crores of  loans taken by marginal farmers with 2 acre landholding that was outstanding to cooperative banks were waived. Later that year The Indian Express published a report that gave addresses and names  of 21 farmers committed suicide in 45 days . So Captain Amarinder Singh declared that he would also get the loans taken by the farmers from the Arthiyas waived. Following that announcement the Arthiya Association facilitated CM Capt Amarinder Singh as Fakhr e Quam  as per the Indian Express.

Protecting the monopoly of Punjab Farmers 

Farm Bill 2020  passed in September 2020 permitted setting up of new markets while allowing the existing APMC Mandi’s to function. It merely increased the farmer’s buying options that set the cat amongst the pigeons in the APMC Mandi’s of Punjab that had been a monopoly market for FCI ( Govt buying) for the past few decades. The Union Government during the year had also increased procurement under MSP in the financial year 2019-20 by 15% benefiting Punjab and Haryana the most. The FCI procured rice and wheat of  Rs 56,000 crores from Punjab alone which was a third of its total procurement. If we look at the statistics we find Punjab accounted for 21% of the FCI procurement for rice which is way above what it procures from other rice growing states like UP 7%, Tamilnadu 4.2%,  Bengal 3.5% and Bihar 2.5%. Similarly in wheat procurement Punjab accounted for 37.8% and Haryana 27.3% of FCI’s procurement though a dozen Indian states produce wheat. 


“ In 2019-20 alone, government agencies procured 201.14 lakh tonnes of wheat and 226.56 lakh tonnes of paddy from Punjab and Haryana. That, at their respective MSPs of Rs 1,925 and Rs 1,835 per quintal, would have been worth Rs 80,293.21 crore. And all these purchases were done in the mandis” wrote the Indian Express in an insightful article titled ‘Farm Bills 2020: Actual text vs perception’.  Yet  a month later Punjab CM Capt Amarinder Singh bypassed the Central laws  3 bills to bypass the farm bill 2020 . and warned of unrest if the farm bills were not revoked. Why ?

This was because his plan to waive the farm loans of Arthiya’s was reportedly not accepted by the Centre. So both farmer unions and the Arthiyas were asked to gherao Delhi which they have done so effectively forcing the Government on the backfoot. This is why the Arthiya association is behind the protest by the farmer unions against Farm Bill 2020 and BKU and other farm unions are being financed to stay put if necessary for months. After all it is a case of retaining status quo which gave Punjab and Haryana the unfair advantage of Rs 80,000 crores of centres FCI purchases at MSP for the last few decades. The state earned taxes of Rs 6500 crores and Rs 2000 crores commission was earned by the Mandi Dalal annually.

For further details please read the three back issues of the blog

Punjab Chief Minister Capt, Amrinder Singh will arrive and have a round of talks with the home minister Mr. Amit Shah on the 3rd of December. It will possibly lead to discussions on the loan waiver after which the siege of Delhi by Punjab farmers could be lifted. So like it or not the taxpayer has to foot the Bill for a crisis in which he has been held at ransom and made to pay. 

For knowing about the structural deficiencies in farming that led to Farm Bill 2020 

You can read my book

India Emerging : From Policy Paralysis To Hyper Economics 

Chapter 11 Volatility in Food Prices : Can it Be Controlled 

Chapter 12 Indian Agriculture at Crossroads : New Direction Needed 


 which discusses the 3 myths of Indian farming and wether MSP help reduce farm distress? 







Monday, November 23, 2020


RBI has finally moved in the right direction of granting permission to the Singapore based  DBS Bank to acquire the beleaguered Laxmi Vilas Bank. Importantly the depositors of the bank will be protected. LBV was drifting towards a chaotic end under RBI’s year long Prompt Corrective Action plan with two groups of shareholders jostling for control. 

Surprisingly the bank was healthy when RBI flagged off the banking reforms and started the asset quality review of banks in the last quarter of 2015. Both its revenue and profitability was on the rise and the Gross NPR was less than 2% while the Capital Adequacy Ratio was well above that mandated by Basel III norms in the financial year 2015-16.   

In 2016 LVB lent Rs 720 crores to Religare Finvest a company promoted by Malvinder Singh and Shivinder Singh the former owners of Ranbaxy against fixed deposits of Rs 750 crores. Several other loans were given to other industries that are now under scrutiny.  In 2018 DBS Singapore along with several other foreign banks expressed in acquiring LVB. The DBS offer was for 50% stake holding at Rs 100 per share which was a fair deal as per the valuation at that point of time. The RBI did not accept the offer because it did not want foreign banks to enter the banking space without diluting controlling stakes. 

      The story in Hindi.   

LVB meanwhile was loosing money by that time and started drifting. It was hard pressed for liquidity. 
In 2019 LVB encashed a Rs 790 crore  ( Rs 750 crore FD plus interest ) given by Religare in lieu of the loan. The borrower accused LVB Vice President and promoter K.R. Pradeep of fraud and registered a case of fraudulent misappropriation against him. It is alleged that one group of shareholders led by Board members and founders B K Manjunath and K.R. Pradeep started to siphon out money from the bank after Manjunath a member of the Institute of Chartered Accountants was permitted to be re-inducted in the bank board by RBI after 2016. The Lakshmi Vilas Bank with half a dozen other banks including public sector UCO Bank, Central Bank and IOB was put under RBI’s PCA watchlist in September 2019. 

But there was no signs of correction, nor any new investor in sight who would meet the investment guidelines and also pump in adequate liquidity into the bank. There were two proposals mooted by the  Pradeep group which was behind the merger proposal of LVB with Indiabulls Securities and Clix capital. Both were turned down by RBI.  Last week another group of shareholders led by founding members 
N. Ramamritham, N.T. Shah and S.B. Prabhakaran ousted the existing CEO and seven board members with the help of Institutional investors. 

The infighting between the shareholder groups was the last straw on the camels back that prodded RBI into decision making. It belatedly made the right decision and allowed the merger of LVB with DBS protecting the depositor interest which is a right decision. The merger will require the entire equity capital to be wiped out which though unfortunate is the only option today. However had the RBI permitted this merger 2 years back the shareholders of the bank would not have to go empty handed. 

This is one of the many cases of regulatory tardiness that is causing massive losses to the banking sector. The country lost Rs 1.82 lakh crore due to bank frauds in 2019-20 largely due to the fault of bank supervisors and regulators who need to act speedily and pro-actively. This was 160% higher than the bank frauds of the previous year and nearly 1.2% of the GDP. Regulatory reforms is necessary and urgent as pointed out in Chapter 9 of my book the Inside Story of Indian Banking published by Rupa in October 2020. 

Connected links : Why is Bharat Not Atmanirbhar? 

RBI needs to create a new route map for banking has to carry other regulators like the SEBI and the CVC along with rating agencies like CRISIL and CARE and get its act together so that the massive frauds in the commercial banks, the NBFC and the co-operative banks are reduced to the minimum and the bank NPAs are brought down to safe limits quickly.

#RBI, #LVB, #DBS, #merger,   #economy #banking  #economicrevival  #law ,  #investing

#SEBI , #CVC, #disinvestment

Wednesday, November 11, 2020

As Delhi Chokes Under Pollution, Bawana Gas Power Plant Lies Under-utilised.

Delhi along with large parts of Northern India has been choking under severe pollution since 2010. Every year the politician, who ever is in power, pledges to reduce pollution levels. Every year the tax payer invests thousands of crores in the name of pollution control. Nothing happens.  In 2018 I happened to investigate  the causes of air pollution in detail and wrote a piece for the think tank ORF about the directionless effort that placed responsibility on too many and actually led to accountability for none.   Delhi’s Toxic Air : Anyone Responsible  ?

The Government had then made yet another high powered committee where scientists and bureaucrats started passing the buck without any actionable output. Two more years passed since and the air quality has worsened.
On Monday the 11th of November 2020, a decade after the acute air pollution problem surfaced in Delhi, the Air quality dipped to show that PM2.5 particles ( 100 times thinner than human hair ) exceeded 1000 ug/cubic metre. These particles consist of dirt, smoke, dust from factories, farms, construction sites and severely affect the upper respiratory tract causing, asthma, breathlessness and even lung cancer. 

In 2019 Bloomsbury published my book India Emerging : From Policy Paralysis to Hyper Economics where some of the key reasons for Delhi’s pollution was discussed. Here is one of them 
Extract - Chapter 6 Opportunity to Build Oil Infrastructure Lost: High Taxes Hurt the Consumer Pg 74

While  Delhi chokes under  smog  each winter, Delhi’s gas power  plants—270 MW  Indraprastha  Power  Generation Co Ltd (IPGCL) unit  at  Pragati Maidan and 1500 MW gas station at  Bawana— lie  underutilised due  to lack of natural  gas. As a  matter  of fact, the generation  of  these  stations,  set  up  at  a  cost  of  over  ₹5,000  crore,  never even exceeded  50%  because  agreements for  buying  of  gas were  not completed. The  Bawana gas project  was set up with a lot of fanfare  by the  Sheila Dixit government  around a decade  ago. Politicians then promised to the people  that  with this massive  investment  Delhi will  have  clean air  and will be  self-sufficient. It  will not  have  to depend on dirty coal power from NTPC in Badarpur in the  heart  of South Delhi to meet the  power needs of the  city. 

But, those  politicians have  gone  and the  new Aam Aadmi Party ( AAP) ministry at  Delhi and the  Modi government  at  the  centre  have  not taken an initiative  to augment  gas supplies to run the  Bawana utility at its full capacity. 

When I talked to V. Kumar, additional general manager, Solar & Gas of the  IPGCL Bawana project, he  told me  that  domestic gas supply is insufficient  and imported gas is unaffordable. Production of natural gas has fallen by nearly 40% from 52,219 Million Metric Standard Cubic Metres  (MMSCM) in  2010–2011 to 31,897 MMSCM  in  2016–2017. Figure  6.3 gives the  details of the  steady fall in production of natural gas since  2011.  So,  the  IPGCL  plants  have  worked  far  below  capacity.  The unavailability  of local gas  and the high  cost of imported gas  is  to blame for the underutilisation of plants. The  distribution companies (discoms) will not  buy expensive  power  from  imported  gas. So,  IPGCL  has  not  entered into a  contract  to buy expensive  gas, immaterial  of the  fact  that  the  capital is high on health hazard.