Morning Brief: Factory Activity Hits Five-Year High; Rs 10,000 Crore For Internal Security; Political Funding Clean-Up

Good morning, dear reader! Here’s your morning news and views brief for today.

India's Factory Activity Expands Fastest In Five Years: In yet another sign of firming up of India’s economy, factory activity expanded at the fastest pace in five years in December, a private sector survey showed on Tuesday, buoyed by a rise in output and new orders. Tuesday's data firms up views that business in Asia's third-largest economy continues to recover but also highlights risks that rising price pressures will keep the Reserve Bank of India (RBI) from slashing interest rates further. The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, rose to 54.7 in December from November's 52.6, marking its fifth straight month above the 50 level that separates expansion from contraction. The country's manufacturing sector witnessed higher payroll figures in December while the rate of job creation rose to its highest since August 2012. The latest survey showed the new orders sub-index, a proxy for domestic demand, also rose to 56.8 in December, the highest since October 2016. Foreign demand also expanded at its quickest pace since June.

Rs 10,000 Crore Boost For Internal Security: Union Minister Hansraj Ahir told Lok Sabha on Tuesday that more than Rs 10,000 crore has been earmarked for internal security-related expenditure in Jammu and Kashmir, Northeastern region and the Maoist-hit areas. "Central budget outlay of Rs 10,132 crore has been earmarked for internal security related expenditure for Jammu and Kashmir and Left Wing Extremism affected states," he said. Ahir said Rs 3,000 crore will be given to 35 worst Maoist-affected districts to address the underdevelopment there and an outlay of Rs 1,215 crore has been earmarked for the Northeastern states for police infrastructure upgradation, training institutions and investigation facilities among others. The central outlay for the umbrella scheme is Rs 18,636 crore. Its salient features include special provisions for internal security, law and order, women security, availability of modern weapons, mobility of police forces and logistics support.

Defence Ministry Go-Ahead For Buying Weapons For Navy And IAF: Defence Minister Nirmala Sitharaman on Tuesday gave the green signal for the procurement of weapons worth nearly Rs 1,700 crore to arm the India Navy and Indian Air Force (IAF). For IAF, she approved the purchase of laser-guided bombs that can hit a target accurately whereas more Israeli Barak surface-to-air missiles would be procured for navy's frontline warships. As many as 240 bombs in the category of precision-guided munitions would be procured from the Russian agency JSC Rosoboronexpert at a cost of Rs 1,254 crore. The second proposal pertaining to these missiles are surface -to-air missiles designed to be used as a ship-borne anti-missile defence system against anti-ship missiles. The approval for short-range Israeli-origin missiles is to replenish the weapons in several warships.

Clean Political Funding: Jaitley Announces Details Of Electoral Bonds: The Union government on Tuesday unveiled the contours of electoral bonds, in an endeavour to clean up political funding. Donors can buy electoral bonds from specified State Bank of India (SBI) branches, and receiving political parties can encash them only through a designated bank account. The electoral bonds, which are being pitched as an alternative to cash donations made to political parties, will be available at specified SBI branches for 10 days each in the months of January, April, July and October. The window, however, will be open for 30 days for general elections. The bonds will be valid for 15 days, and will not carry the donor’s name even though the purchaser would have to fulfil know-your-customer norms at the bank, Finance Minister Arun Jaitley said. The electoral bonds will be available in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore. The Finance Minister had first announced the idea of electoral bonds in Union Budget 2017 to make political funding more transparent.

Trump’s Latest Visa Tweak: 750,000 Indian H-1B Visa Holders Facing Deportation: An estimated 500,000 to 750,000 Indian H-1B visa holders could be sent home if Donald Trump administration decides to go ahead with the proposal which is aligned with his “Buy American, Hire American” vision to boost manufacturing and protect local jobs for Americans. The Trump administration is considering a proposal that could potentially lead to large-scale deportation of foreigners on H-1B visas for high-speciality workers waiting for their Green Card – mostly Indians – and drastically alter the way high-tech companies operate in the United States. The proposal circulated in the form of an internal memo in the Department of Homeland Security, which oversees citizenship and immigration, intends to end the provision of granting extensions to H-1B visa holders whose applications for permanent residency (Green Card) had been accepted. “If implemented this could lead to large-scale deportations, mostly of Indians, throwing hundreds and thousands of families into crisis,” said an official of Immigration Voice, an advocacy body in San Jose.

‘Unviable’ To Support Air India, Says NITI Aayog: Air India, which has a debt of Rs 51,890 crore, may not get any more financial support. The government’s premier policy think tank NITI Aayog has said in its report on the debt-laden Air India that it was “unviable” to provide financial support to the national carrier. The government has initiated a process for strategic disinvestment of Air India as part of efforts to revive the national carrier. As part of a turnaround plan approved by the previous government, Air India was to receive a bailout package of up to Rs 30,231 crore for a period of 10 years, starting in 2012. “NITI Aayog in its report on Air India has stated that further financial support to an unviable non-priority company in a matured and competitive aviation sector would not be the best use of scarce financial resources of the government,” Minister of State for Civil Aviation Jayant Sinha told the Rajya Sabha in response to a question. In 2016-17, the airline had a net loss of Rs 3,643 crore, while the operating profit rose to Rs 215 crore, the provisional figures showed.

Green Signal For Bankruptcy And Insolvency Code Bill: The Rajya Sabha unanimously passed the Insolvency and Bankruptcy Code (Amendment) Bill on Tuesday that replaces an ordinance that prevents “unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code”. It was passed by the Lok Sabha last week. Replying to the two-hour-long debate on the Bill, Finance Minister Arun Jaitley said the recent experience with loans has given a big lesson to the banking system in the country. “You need a strong banking system ...You need banks which are able to lend money to large industries, to infrastructure projects, to small industry, for educational loans... It is all part of the economy that you need a robust banking system,” he said and added that as far as asset-owning companies are concerned, fetching the best price is the target and any bid which is not viable can be rejected. “It is for creditors to decide how much haircuts they want,” he said.

China To Pakistan's Rescue After Trump's Attack: A day after US President Donald Trump lashed out at Pakistan for providing safe havens to terrorists, China defended Pakistan saying the world community should acknowledge its all-weather ally's "outstanding contribution" to counter terrorism. "Pakistan has made enormous efforts and sacrifice for the fight against terrorism and has made very outstanding contribution to the global cause of counter terrorism. The international community should acknowledge that," Chinese foreign ministry spokesman Geng Shuang said when asked about Trump's criticism of Pakistan. He said China is glad to see Pakistan engaging in international cooperation, including counter terrorism, on the basis of mutual respect so as to contribute to regional peace and stability. "China and Pakistan are all weather partners. We stand ready to promote and deepen our all-round cooperation so as to bring benefits to the two sides," Geng said. In a scathing attack on Pakistan, Trump had accused it of "lies and deceit" and of fooling US leaders while sheltering terrorists.

Farmer-Politics Is A Self-Defeating Exercise In Today’s India: Farmer politicians have neither aspirations nor the power of coercion working for them. It is hardly surprising that dominant farmer castes are lending their support to agitations for reservations whose ultimate objective is to facilitate their exit from farming.

Monetary Policy’s Cryptocurrency Challenge: Blockchain could help monetary policy makers turn the clock back to money supply targeting. Central banks will eventually have to grapple with the powerful challenge that blockchain has thrown at the traditional monetary systems.

India Must Tread With Caution At Davos Meet: India must remain “realistic” about what is doable at Davos, particularly against the backdrop of the current global economic and trading climate.

SWARAJYA SPECIAL

Five Legal And Other Flaws That Will Make Assam NRC List Of Illegals Meaningless: The only logical and sensible way to proceed in the matter of illegal immigrants is make changes in the law, and get Bangladesh on board to admit that at least some of the illegals are its citizens.

We hope you enjoyed reading our morning brief. Have a great day ahead!

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