MB Lal Book -
10
122.
Nick D’Aloisio: 'It
was a massive gamble but a good one’
123.
Water is the
elixir of life, let us join hands to conserve it
124.
China to spend $16 billion to tackle Beijing
125.
Y.P. Narula, The Hindu’s Delhi
News Editor, retires
126.
Is it a phone,
is it a bank?
127.
The digital arms
trade
128.
The poor pope
129.
Know your own strength
130.
Can India
131.
Wal-Mart's Path
to Power in India
132.
Coveted
haven for Indian barons
133.
Delhi Metro contractors not
blacklisted despite complaints
134.
Rajiv Gandhi was
‘entrepreneur’ for Swedish jet, U.S.
Nick D’Aloisio: 'It was a massive gamble but a good one’
The 17-year-old has just netted £20 million for his app, Summly. It’s a big relief to his parents, who allowed him to quit school
10:40PM GMT 26 Mar 2013
55 Comments
He’s the 17-year-old boy genius who this week sold Summly, the smartphone app he created from his bedroom while revising for his GCSEs, to Yahoo! for a rumoured £20 million. He is friends with Stephen Fry, has hung out at Ashton Kutcher’s house, worked with Yoko Ono, and even done a deal with Rupert Murdoch. But there’s only one question I want to ask Nick D’Aloisio: has he got a new shoulder bag yet? During a recent radio interview, the bag topped the list of things he wanted to buy with his new fortune.
He laughs. “The whole of Twitter is talking about my bag. I couldn’t believe it. Mine is broken; it’s old and the strap’s not working. Someone asked me what I was going to buy now that I have all this money and I said, 'Well, I really need a new shoulder bag.’ It wasn’t like, 'What shall I get myself to celebrate? Oooh, I know, a man bag!’ ”
The young tech millionaire also wants to buy a shiny pair of Nike trainers. Like any London teenager, looking good is a priority for D’Aloisio. Unlike his peers, however, so are computer coding, investor portfolios and the multimillion-pound deal he has just brokered with one of the world’s biggest technology companies.
Tousle-haired D’Aloisio, dressed in magenta trousers and a white T-shirt emblazoned with a question mark, turns up to our meeting an hour late. It’s not his fault – he’s been up since 5am, politely sitting his way through back-to-back interviews, radio slots and international TV appearances. Halfway through our chat, he dashes out to speak to an Australian television company, all the while slugging a lurid orange energy drink from a can to help him stay awake.
When the Telegraph Saturday Magazine first interviewed D’Aloisio, over a month ago, the Yahoo! deal was just a rumour – and his free‑to‑download app was still in its infancy. Has he changed, now that he’s a multimillionaire? “No way,” he blurts, between gulps. “I don’t feel like a different person. My motivation has always been to do technology apps and companies, not making money. Just because the money’s come, nothing’s changed.”
D’Aloisio (full name Nicholas D’Aloisio-Montilla, although he drops the double-barrelled part because D’Aloisio is just, well, cooler) was born in London to expat Australian parents – Lou, a commodities trader, and Diana, a lawyer – in 1996. The family moved back to Melbourne shortly after Nick was born. When he turned seven (and his brother, Matthew, was three), the D’Aloisios relocated to Wimbledon, south-west London, where they have been ever since.
It was here, at the desk in his bedroom, aged 15, that D’Aloisio came up with the idea for Summly, a news summarisation application that shortens longer web articles into three concise paragraphs, making them easier to read on the screen of a smartphone. The app, which has been downloaded a million times and summarised 90 million articles since its launch in 2011, claims to save users enough reading time every day to take a long, hot bath.
The idea came to D’Aloisio when he was revising for his mock history GCSE. Frustrated by the number of irrelevant articles that kept coming up in web searches, he began experimenting with ways to filter information. “I’m impatient,” he explains, “like a lot of my generation. If this or that isn’t interesting to me, I’ll stop reading. I don’t have the tolerance. I want to know what content is appropriate to me – and I want to know quickly. That’s what Summly does.”
It’s easy to forget you’re talking to a 17-year-old when D’Aloisio gets going. Constantly shifting, almost bouncing, in his chair, he’s endearingly passionate about technology – and what the future holds for start-ups like his. Intelligent without being geeky, he throws phrases like “3D rendering” and “product road maps” into conversation, stopping to explain with great patience when my eyes glaze over in confusion.
He’s interested in more than just computers, too. At school (he’s on sabbatical from King’s College School in Wimbledon, having stopped full-time classes last year to concentrate on Summly), he’s studying for A-levels in maths, physics and philosophy. He’s learning Russian and Mandarin, and one day hopes to read PPE at Oxford. His Yahoo! deal involves a full-time job at the company’s London office, with schoolwork confined to the evenings. Too much for a teenager to handle?
“Education is something that naturally interests me, so I’ll be OK,” he insists. “If it doesn’t work out with school, I can go back when I’m 20 – or whenever.” And your parents didn’t mind you giving up classes? “I talked about it with them and my headmaster and we decided it was a once-in-a-lifetime opportunity and it would be silly not to run with it. Now, looking back, I can say it was a massive gamble. But it was a good gamble.”
D’Aloisio’s interest in technology started young. “I’ve always liked small details; weird, esoteric things,” he reveals. “I’m quite obsessive so I really go into depth. Computers became one of those passions.” Aged five, he became mesmerised by galaxies and the solar system, memorising entire constellations by heart. At nine, he got his first computer – and aged 10, he was trying out cutting-edge movie software, in a bid to emulate the programmes he watched on TV. He taught himself coding at the age of 12.
Before Summly, he came up with other smartphone apps, including SongStumblr, a music discovery program, and Facemood, which predicted the mood of a user through Facebook status updates. Summly, first called Trimit, appeared in Apple’s App Store in November 2011. It was downloaded 30,000 times and quickly came to the attention of Hong Kong investor Li Ka-shing, the world’s eighth richest man, who offered D’Aloisio $300,000 for a share. When the money came through on his 16th birthday, D’Aloisio became the youngest person ever to receive venture capital investment.
“Li Ka-shing was the dream investor,” says D’Aloisio. “It’s a credit to him that he took a gamble on a kid and it worked out OK.”
Wealthy backers including Kutcher, Fry and Ono came on board within months. Rupert Murdoch’s News Corporation was one of 250 online publishers to sign up. A year down the line, he still giggles at the mention of his celebrity backers. “It is a bit weird. Meeting Rupert Murdoch was definitely scary.” He falters. “I don’t say they’re my friends – I don’t know if they’d call me a friend. They’ve all been great.”
Famous friends aside, D’Aloisio’s life is normal – ish. He hangs out with schoolfriends at weekends, plays rugby and cricket (“I was on the A-team when I was 14, but I’m not so good now”) and has time for a girlfriend, whom he’s been seeing for 10 months. His mother accompanies him on business trips to Hong Kong, Korea and New York. None of this stops comparisons to Facebook founder Mark Zuckerberg, or hides the fact that he has been named one of Forbes magazine’s “30 Under 30” entrepreneurs to watch. Does he feel pressure to succeed?
“I’ve never thought, 'Oh God, I’m a failure if I don’t sell my company’,” he says. “When I was 15, I was naive. There is a story that when Li Ka‑shing phoned up, I asked when we should meet – before or after school. People ask me if my age has helped me do well, but Summly has been subjected to so many due diligence tests. The technology works.”
D’Aloisio’s hopes for the future are as ambitious as you’d expect. He wants to invest the bulk of his money; he likes the idea of “angel investing” – that is, giving financial backing and expertise to another tech start-up. He plans to raise awareness of the importance of computer coding – a subject he hopes will one day be taught in schools. He’d like to expand Summly (which has now closed down, before being integrated into Yahoo!’s software) beyond news – “We’ve looked at summarising Wikipedia, books, blog posts; you name it,” he reveals.
These are all long-term goals, however. Like most of his generation, D’Aloisio is enjoying right now. When he and I part, he’ll tear off to catch a flight to New York, for yet another packed day of press appearances and publicity. What’s next, after that, for the whizz kid from Wimbledon? “I’m really looking forward to starting at Yahoo!. It’s exciting. Ten years from now, I might still be there. I might be at university. I might be in a totally different industry.”
He looks down at the question mark on his T‑shirt and grins. “In other words, I have absolutely no idea.”
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March 30, 2013 23:29 IST
Water is the elixir of life, let us join hands to conserve it
Cooperation is critical for achieving water access, security and poverty alleviation
The U.N. General Assembly has declared 2013 ‘International Year for Water Cooperation’. Further, it dedicated the 2013 World Water Day (March 22) to ‘Water Cooperation’.
The estimated global population in 2050 is 9 billion, all of which will depend on finite and vulnerable water resources. This indicates that our interdependence on water issues is growing every day. Water issues cannot be solved on their own, or be left to professionals. In reality, every one’s water use affects others. We use or waste or pollute the common water resources.
Challenges, concerns
Cooperation is critical for achieving water access/security, poverty alleviation and environmentally sustainable economic development. The growth of agriculture, industry and the service sector depends on water availability. However, various development activities create pressure on the sector through excess demand and disposal. Economic development should plan in harmony with the biophysical limit of the water cycle. In this respect, maintaining the environmental flow in surface water sources, stabilising groundwater stocks and managing water quality are important.
The availability of good quality water in adequate quantities for drinking and other domestic purposes is a criterion for health and social security. In the world of privatisation, water faces the threat of commercialisation; wherever water markets exist, the ‘ability to pay’ becomes the criterion for access. Hence, the water rights of the poor and vulnerable communities should be safeguarded.
Benefits of water cooperation
Water is a renewable natural resource and public good. But the ownership right on land bestows a private character on water. However, most rivers, ponds, lakes and aquifers are common property. Therefore, water rights (except for private wells) are not clearly defined and the right to using the resources is not protected.
Hence, excluding others from using water is not possible and the results are competition, over-extraction and conflict. However, cooperation has a greater role in achieving social harmony in water allocation and increasing human welfare.
Water cooperation can avoid the costs (tension and disputes) associated with conflicts between neighbours.
Cooperation at the river basin level can promote efficiency in water management through better storage, distribution, and expanding irrigation acreage.
Cooperation between municipalities and private providers can stimulate resource mobilisation. The Tamil Nadu Urban Development Fund developed the Water and Sanitation Pooled Fund, a Rs. 300-million facility generated through bond markets for 14 small municipalities, with a partial credit guarantee from the U.S. Agency for International Development.
Cooperation between the government and industry will succeed in mobilising finance and skills for water supply projects. For example, the Public Private Partnership (PPP)-based Tirupur Area Development Project in Tamil Nadu, at a cost of Rs. 10,230 million, succeeded in transferring 185 mld water from the Cauvery to Tirupur for textile industries and domestic users.
Through cooperation, a decentralised approach and community initiatives can operationalise in the water sector with better social impacts.
The success of pollution management strategies in the industrial (either through effluent treatment plants or cleaner production technologies), domestic (through sewage treatment plants) and agriculture (application of biofertilizer and pesticides and farm management) sectors will depend on the level of cooperation among the stakeholders.
What is required?
Water cooperation requires a multilevel inclusive and innovative approach. Water resources management must be addressed at appropriate geographical levels with multistakeholders’ involvement. Further, the government’s development policies should be consistent and in accordance with the water policy.
Water cooperation can build mutual respect among users, understanding and trust among countries, and promote peace, security and sustainable economic growth. However, operationalising this philosophy in a developing country like India (that possesses the world’s 17.5% of human & 11% of livestock populations, 4.2% of water and 2.4% of land) is an extremely great challenge. But cooperation is the only option available to us. Hence, each of us should be much more tolerant and sacrificial rather than adopting a competing approach.
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China to spend $16 billion to tackle Beijing pollution crisis
SHANGHAI — China will spend $16 billion over three years to deal with Beijing's pollution, an official newspaper reported on Friday, as the government tries to defuse mounting public anger over environmental degradation.
Beijing's government has pledged to improve sewage disposal, garbage treatment and air quality, as well as crack down on illegal construction, the China Daily newspaper said, citing a three-year plan released on Thursday.
Air quality in Beijing, a city of around 20 million people, has mostly stayed above "very unhealthy" and "hazardous" levels since the beginning of this year.
Pollution was one of the key themes at the recent National Party Congress, where China's new leaders were confirmed. Many Chinese feel the government lacks bite when it comes to enforcing policies designed to protect the environment.
Beijing's plan includes laying or upgrading 800 miles of sewage pipeline, building five garbage incineration plants, setting up 47 water recycling plants and upgrading 20 sewage disposal plants, said China Daily.
Beijing Mayor Wang Anshun called on the government to allow the private sector to participate in these investments.
The government also plans to curb illegal construction and land use, and will compile a list of illegal buildings for demolition next year, Beijing Deputy Mayor Wang Wei told China Daily.
Most of China's major cities are plagued by pollution of one sort or another. Earlier this month thousands of dead pigs were found floating in one of Shanghai's main water sources.
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April 3, 2013 05:01 IST |
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Cyber-security
The digital arms trade
The market for software that helps hackers penetrate computer systems
IT IS a type of software sometimes described as “absolute power” or “God”. Small wonder its sales are growing. Packets of computer code, known as “exploits”, allow hackers to infiltrate or even control computers running software in which a design flaw, called a “vulnerability”, has been discovered. Criminal and, to a lesser extent, terror groups purchase exploits on more than two dozen illicit online forums or through at least a dozen clandestine brokers, says Venkatramana Subrahmanian, a University of Maryland expert in these black markets. He likens the transactions to “selling a gun to a criminal”.
Just a dozen years ago the buying and selling of illicit exploits was so rare that India’s Central Bureau of Investigation had not yet identified any criminal syndicates involved in the trade, says R.K. Raghavan, a former director of the bureau. Underground markets are now widespread, he says. Exploits empower criminals to steal data and money. Worse still, they provide cyber-firepower to hostile governments that would otherwise lack the expertise to attack an advanced country’s computer systems, worries Colonel John Adams, head of the Marine Corps’ Intelligence Integration Division in Quantico, Virginia.
Exploits themselves are generally legal. Several legitimate businesses sell them. A Massachusetts firm called Netragard last year sold more than 50 exploits to businesses and government agencies in America for prices ranging from $20,000 to more than $250,000. Adriel Desautels, Netragard’s founder, describes some of the exploits sold as “weaponised”. The firm buys a lot from three dozen independent hackers who, like clients, are carefully screened to make sure they are not selling code to anyone else, and especially not to a criminal group or unfriendly government.
More than half of exploits sold are now bought from bona fide firms rather than from freelance hackers, says Roy Lindelauf, a researcher at the Netherlands Defence Academy. He declines to say if Dutch army or intelligence agencies buy exploits, noting that his government is still figuring out “what we’re allowed to do offensively”.
Laws to ban the trade in exploits are being mooted. Marietje Schaake, a Dutch member of the European Parliament, is spearheading an effort to pass export-control laws for exploits. It is gathering support, she says, because they can be used as “digital weapons” by despotic regimes. For example, they could be used to monitor traffic on a dissident’s smartphone. However, for a handful of reasons, new laws are unlikely to be effective.
Exploits are a form of knowledge, expressed in computer code. Attempting to stop people from generating and spreading knowledge is futile, says Dave Aitel, a former computer scientist at America’s National Security Agency (NSA) who went on to found Immunity, a computer-security firm in Florida. He says that legal systems would not even agree on which code is good and which is bad. Many legal experts say code should be protected by free-speech laws—it is, after all, language expressed as strings of zeros and ones.
Moreover, tracking down exploits is hard. Hackers keep them secret so that the intended victim doesn’t identify and fix the vulnerability, thereby rendering the exploit worthless. As a French exploit developer puts it, those liable to be rapidly detected are about as useful as a “disposable gun” that can be fired just once. Secrecy surrounding the design, sale and use of exploits makes protecting computer networks from them akin to finding “unknown unknowns”, says Kenneth Geers, a cyber-security specialist at America’s Naval Criminal Investigative Service.
Several governments want firms to develop exploits. In 2010 a computer worm called Stuxnet was revealed to have attacked Iran’s nuclear kit. It used four main exploits to get in; at least one appears to have been bought rather than developed in-house by the government that launched the attack (presumably America or Israel), says David Lindahl, an IT expert at the Swedish Defence Research Agency, a government body in Stockholm. An unprecedented weapon, Stuxnet remained undetected for years by quietly erasing its tracks after “planting sabotage charges at exactly the right place” in Iran’s uranium-enrichment centrifuges, Mr Lindahl says.
Nearly all well-financed intelligence agencies buy exploits, says Eric Filiol, a lieutenant-colonel in computer intelligence for France’s army until 2009. Computer experts who years ago would reveal software vulnerabilities for mere prestige have realised that they were treating “diamonds as pebbles”, says Mr Filiol, now head of the Operational Cryptography and Computer Virology Lab in Laval. His lab is partly financed by France’s defence ministry to provide it with exploits.
Finding holes in the firewall
The price of exploits has risen more than fivefold since 2004, Mr Filiol says, referring to a confidential document. They vary greatly, depending on three main factors: how hard the exploit is to develop; the number of computers to which it provides access; and the value of those computers. An exploit that can stealthily provide administrator privileges to a distant computer running Windows XP, a no-longer-fashionable operating system, costs only about $40,000. An exploit for Internet Explorer, a popular browser, can cost as much as $500,000 (see chart).
Software firms also buy exploits to identify and repair vulnerabilities in their products before others take advantage of them. A small Vancouver firm called Tarsnap, for example, has paid 30 people who pointed out flaws in its encryption software for online PC backups. To develop better defences for its clients’ computer systems, HP, an American giant, has spent more than $7m since 2005 buying hundreds of “zero days”, as undiscovered exploits are also known in hacker slang. (Once discovered, an exploit’s days are numbered, literally: it becomes a “one day”, then a “two day”, and so on until the vulnerability it exploits is patched.)
Such “bug bounty” schemes, however, will struggle to compete with buyers who want to exploit rather than seal vulnerabilities. Tarsnap’s biggest payout was just $500. Last year Google offered Vupen, a French firm, $60,000 for an exploit that burrowed into its Chrome browser. Vupen’s boss, Chaouki Bekrar, balked, noting that he could get more elsewhere.
Other reputable customers, such as Western intelligence agencies, often pay higher prices. Mr Lindelauf reckons that America’s spies spend the most on exploits. Vupen and other exploit vendors decline to name their clients. However, brisk sales are partly driven by demand from defence contractors that see cyberspace as a “new battle domain”, says Matt Georgy, head of technology at Endgame, a Maryland firm that sells most of its best exploits for between $100,000 and $200,000. He laments a rise in sales by unscrupulous vendors to dangerous groups.
On March 12th the head of the Pentagon’s Cyber Command, General Keith Alexander, warned the Senate Armed Services Committee that state-sponsored groups are stepping up efforts to steal and destroy data using “cybertools” purchased in illicit online markets. As an American military-intelligence official points out, governments that buy exploits are “building the black market”, thereby bankrolling dangerous R&D. For this reason, governments appear increasingly keen to develop exploits in-house. Paulo Shakarian, a cyberwar expert at West Point, an American military academy, says China appears to be moving in this direction.
Developing exploits in-house reduces the risk that a double-dealing vendor will resell code meant to be exclusive. Even so, the trade isn’t likely to fade away. When developers work out a trick that gives them control over the targeted software, they like to yell out a celebratory “who’s your daddy?” notes Pierre Roberge, boss of Arc4dia, a Quebec firm that sells exploits to spy agencies. Exploit trading will continue as long as people pay big money for the opportunity to utter the same joke—this time at the expense of a victim who has been hacked.
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Catholicism and economics
The poor pope
Francis wants to emphasise the church’s teaching on poverty. What does that mean?
A pilot aid programme in Assisi
PITY the pontiff. Not only does he face the urgent task of sorting out sordid power struggles in the heart of the Vatican; in the wider world of Catholicism, rival political camps are eagerly looking forward to his first pronouncements on social and economic questions.
On the political left, people have hailed a pope from outside Europe who had guided his Argentine flock through the economic recession and social upheaval that came to a head with the devaluation of the peso in 2001. That could affect his thinking on present-day crises, including the travails of the euro zone. Conservative Catholics, meanwhile, cherish how the new pope is personally close to his traditionalist predecessor, Pope Benedict XVI, whose retirement home is only a mitre’s toss away from Francis’s own humble hostel.
But the pope’s dilemma (and perhaps his opportunity) lie in the ambivalence of his inheritance. Benedict reaffirmed and in some way sharpened conservative ideas on touchstone issues like abortion, euthanasia, homosexuality and artificial contraception. But out of the Vatican also came some remarkably radical opinions about society, economics and global governance.
That paradox was palpable in the meatiest of Benedict’s three encyclicals—detailed and closely-argued pronouncements on faith and the world.Caritas in Veritate (Charity in Truth), published in 2009, seemed to vary in tone. Some bits bore Benedict’s personal signature (contending that economic development could not be separated from Catholic ideas on the sanctity of life); others (deploring inequality and exploitation) seemed to have been penned by the Pontifical Council on Justice and Peace, the most radical arm of the Vatican.
Bear in mind, it says, that “grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution.” In the document’s critique of the market, many saw the hand of a council consultant, Stefano Zamagni, an Italian economist.
The council has since burnished its firebrand reputation with two big pronouncements: one calling for a new sort of global central bank with a more interventionist mandate, and the other urging business leaders to observe stricter ethical norms, including “fair taxes to local communities” and to avoid “rent-seeking” behaviour.
Anna Rowlands, a professor at King’s College London, sees the Vatican’s critique of skewed economic transactions as a good basis for more radical thinking: “The church has already spoken about the need for reciprocity and justice in the marketplace.” She expects Francis “to have things to say about the extreme inequality that exists at the global level.”
Tell it to the birds
Philip Booth, a Catholic economist at the Institute of Economic Affairs, a British free-market think-tank, wants his church’s approach to move in a different direction—towards crunchier thinking about the state and the abuses that an over-mighty one can easily commit. Like almost every other Catholic, conservative or radical, who thinks about economics, he sees an important starting point in a famous Vatican document of 1891, Rerum Novarum, which recognised the usefulness of trade unions and collective bargaining. But he thinks that ideas like “solidarity” and “subsidiarity” or devolved decision-making have been debased in left-wing Catholic discourse, to imply support for a redistributionist state. In fact, voluntary or private initiatives can often be a better way of showing “solidarity” with the poor.
He also wants a sharper critique of bodies such as the European Union. The English version of Caritas in Veritate calls for a United Nations “with real teeth” even though the rendering in other languages was somewhat milder. In Mr Booth’s view such rose-tinted thinking about international bureaucracies fails to understand the problems of mission creep and corrupt in-house cultures. Something that Francis may find all too close to his new home.
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India as a great power
Know your own strength
India is poised to become one of the four largest military powers in the world by the end of the decade. It needs to think about what that means
UNLIKE many other Asian countries—and in stark contrast to neighbouring Pakistan—India has never been run by its generals. The upper ranks of the powerful civil service of the colonial Raj were largely Hindu, while Muslims were disproportionately represented in the army. On gaining independence the Indian political elite, which had a strong pacifist bent, was determined to keep the generals in their place. In this it has happily succeeded.
But there have been costs. One is that India exhibits a striking lack of what might be called a strategic culture. It has fought a number of limited wars—one with China, which it lost, and several with Pakistan, which it mostly won, if not always convincingly—and it faces a range of threats, including jihadist terrorism and a persistent Maoist insurgency. Yet its political class shows little sign of knowing or caring how the country’s military clout should be deployed.
That clout is growing fast. For the past five years India has been the world’s largest importer of weapons (see chart). A deal for $12 billion or more to buy 126 Rafale fighters from France is slowly drawing towards completion. India has more active military personnel than any Asian country other than China, and its defence budget has risen to $46.8 billion. Today it is the world’s seventh-largest military spender; IHS Jane’s, a consultancy, reckons that by 2020 it will have overtaken Japan, France and Britain to come in fourth. It has a nuclear stockpile of 80 or more warheads to which it could easily add more, and ballistic missiles that can deliver some of them to any point in Pakistan. It has recently tested a missile with a range of 5,000km (3,100 miles), which would reach most of China.
Which way to face?
Apart from the always-vocal press and New Delhi’s lively think-tanks, India and its leaders show little interest in military or strategic issues. Strategic defence reviews like those that take place in America, Britain and France, informed by serving officers and civil servants but led by politicians, are unknown in India. The armed forces regard the Ministry of Defence as woefully ignorant on military matters, with few of the skills needed to provide support in areas such as logistics and procurement (they also resent its control over senior promotions). Civil servants pass through the ministry rather than making careers there. The Ministry of External Affairs, which should be crucial to informing the country’s strategic vision, is puny. Singapore, with a population of 5m, has a foreign service about the same size as India’s. China’s is eight times larger.
The main threats facing India are clear: an unstable, fading but dangerous Pakistan; a swaggering and intimidating China. One invokes feelings of superiority close to contempt, the other inferiority and envy. In terms of India’s regional status and future prospects as a “great power”, China matters most; but the vexatious relationship with Pakistan still dominates military thinking.
A recent attempt to thaw relations between the two countries is having some success. But tension along the “line of control” that separates the two sides in the absence of an agreed border in Kashmir can flare up at any time. To complicate things, China and Pakistan are close, and China is not above encouraging its grateful ally to be a thorn in India’s side. Pakistan also uses jihadist terrorists to conduct a proxy war against India “under its nuclear umbrella”, as exasperated Indians put it. The attack on India’s parliament in 2001 by Jaish-e-Mohammed, a terrorist group with close links to Pakistan’s intelligence service, brought the two countries to the brink of war. The memory of the 2008 commando raid on Mumbai by Lashkar-e-Taiba, another terrorist organisation, is still raw.
Pakistan’s nuclear capabilities are a constant concern. Its arsenal of warheads, developed with Chinese assistance, is at least as large as India’s and probably larger. It has missiles of mainly Chinese design that can reach most Indian cities and, unlike India, it does not have a “no first use” policy. Indeed, to offset the growing superiority of India’s conventional forces, it is developing nuclear weapons for the battlefield that may be placed under the control of commanders in the field.
Much bigger and richer, India has tended to win its wars with Pakistan. Its plans for doing so again, if it feels provoked, are worrying. For much of the past decade the army has been working on a doctrine known as “Cold Start” that would see rapid armoured thrusts into Pakistan with close air support. The idea is to inflict damage on Pakistan’s forces at a mere 72 hours’ notice, seizing territory quickly enough not to incur a nuclear response. At a tactical level, this assumes a capacity for high-tech combined-arms warfare that India may not possess. At the strategic level it supposes that Pakistan will hesitate before unleashing nukes, and it sits ill with the Indian tradition of strategic restraint. Civilian officials and politicians unconvincingly deny that Cold Start even exists.
Bharat Karnad of the Centre for Policy Research, a think-tank, believes Pakistan’s main danger to India is as a failed state, not a military adversary. He sees Cold Start as a “blind alley” which wastes military and financial resources that should be used to deter the “proto-hegemon”, China. Others agree. In 2009 A.K. Antony, the defence minister, told the armed forces that they should consider China rather than Pakistan the main threat to India’s security and deploy themselves accordingly. But not much happened. Mr Karnad sees feeble civilian strategic direction combining with the army’s innate conservatism to stop India doing what it needs to.
The “line of actual control” between China and India in Arunachal Pradesh, which the Chinese refer to as South Tibet, is not as tense as the one in Kashmir. Talks between the two countries aimed at resolving the border issue have been going on for ten years and 15 rounds. In official statements both sides stress that the dispute does not preclude partnership in pursuit of other goals.
But it is hard to ignore the pace of military investment on the Chinese side of the line. Brigadier Gurmeet Kanwal of the Centre for Land Warfare Studies points to the construction of new railways, 58,000km of all-weather roads, five air bases, supply hubs and communication posts. China would be able to strike with power and speed if it decided to seize the Indian-controlled territory which it claims as its own, says Mr Karnad. He thinks the Indian army, habituated to “passive-reactive” planning when it comes to the Chinese, has deprived itself of the means to mount a counter-offensive.
Unable to match Chinese might on land, an alternative could be to respond at sea. Such a riposte was floated in a semi-official strategy document called “Nonalignment 2.0”, promoted last year by some former national security advisers and blessed by the current one, Shivshankar Menon. India’s naval advantage might allow it, for example, to impede oil traffic heading for China through the Malacca Strait.
China and India are both rapidly developing their navies from coastal defence forces into instruments that can project power further afield; within this decade, they expect to have three operational carrier groups each. Some Indian strategists believe that, as China extends its reach into the Indian Ocean to safeguard its access to natural resources, the countries’ navies are as likely to clash as their armies.
Two if by sea
An ocean needs a navy
China’s navy is expanding at a clip that India cannot match—by 2020 it is expected to have 73 major warships and 78 submarines, 12 of them nuclear—but India’s sailors are highly competent. They have been operating an aircraft-carrier since the 1960s, whereas China is only now getting into the game. India fears China’s development of facilities at ports in Pakistan, Sri Lanka, Bangladesh and Myanmar—a so-called “string of pearls” around the ocean that bears India’s name; Mr Antony called the announcement in February that a Chinese company would run the Pakistani port of Gwadar a “matter of concern”. China sees a threat in India’s developing naval relationships with Vietnam, South Korea, Japan and, most of all, America. India now conducts more naval exercises with America than with any other country.
India’s navy has experience, geography and some powerful friends on its side. However, it is still the poor relation to India’s other armed services, with only 19% of the defence budget compared with 25% for the air force and 50% for the army.
The air force also receives the lion’s share of the capital-equipment budget—double the amount given to the navy. It is buying the Rafales from France and upgrading its older, mainly Russian, fighters with new weapons and radars. A joint venture between Hindustan Aeronautics Limited (HAL) and Russia’s Sukhoi is developing a “fifth generation” strike fighter to rival America’s F-35. As well as indulging its pilots’ need for speed, though, the air force is placing a new emphasis on “enablers”. It is negotiating the purchase of six Airbus A330 military tankers and five new airborne early-warning and control aircraft. It has also addressed weaknesses in heavy lift by buying ten giant Boeing C-17 transports, with the prospect of more to come. Less clear is the priority the air force gives to the army’s requirements for close air support over its more traditional role of air defence, particularly after losing a squabble over who operates combat helicopters.
With the army training for a blitzkrieg against Pakistan and the navy preparing to confront Chinese blue-water adventurism, it is easy to get the impression that each service is planning for its own war without much thought to the requirements of the other two. Lip-service is paid to co-operation in planning, doctrine and operations, but this “jointness” is mostly aspirational. India lacks a chief of the defence staff of the kind most countries have. The government, ever-suspicious of the armed forces, appears not to want a single point of military advice. Nor do the service chiefs, jealous of their own autonomy.
The absence of a strategic culture and the distrust between civilian-run ministries and the armed forces has undermined military effectiveness in another way—by contributing to a procurement system even more dysfunctional than those of other countries. The defence industrial sector, dominated by the sprawling Defence Research and Development Organisation (DRDO), remains stuck in state control and the country’s protectionist past. According to a recent defence-ministry audit, only 29% of the products developed by the DRDO in the past 17 years have entered service with the armed forces. The organisation is a byword for late-arriving and expensive flops.
The cost of developing a heavy tank, the Arjun, exceeded the original estimates by 20 times. But according to Ajai Shukla, a former officer who now writes on defence for the Business Standard, the army wants to stick with its elderly Russian T-72s and newer T-90s, fearing that the Arjun, as well as being overweight, may be unreliable. A programme to build a light combat aircraft to replace the Mirages and MiG-21s of an earlier generation started more than quarter of a century ago. But the Tejas aircraft that resulted has still not entered service.
There are signs of slow change. These include interest in allowing partnerships between India’s small but growing private-sector defence firms and foreign companies, which should stimulate technology transfer. But the deal to buy the Rafale has hit difficulties because, though Dassault would prefer to team up with private-sector firms such as Tata and Reliance, the government wants it to work with stodgy HAL. Even if Dassault had a free choice of partners, though, it is not clear that Indian industry could handle the amount of work the contract seeks to set aside for it.
Richard Bitzinger, a former RAND Corporation analyst now at the S. Rajaratnam School of International Studies in Singapore, sums up the problem in a recent study for the Zurich-based International Relations and Security Network. If India does not stop coddling its existing state-run military-industrial complex, he says, it will never be capable of supplying its armed forces with the modern equipment they require. Without a concerted reform effort, a good part of the $200 billion India is due to spend on weaponry over the next 15 years looks likely to be wasted.
Our interactive mapdemonstrates how the territorial claims of India, Pakistan and China would change the shape of South Asia
The tiger and the eagle
The money it will spend abroad also carries risks. Big foreign deals lend themselves to corruption. Investigations into accusations of bribery can delay delivery of urgently needed kit for years. The latest “scandal” of this sort surrounds a $750m order for helicopters from Italy’s Finmeccanica. The firm denies any wrongdoing, but the deal has been put on hold.
Britain, France, Israel and, above all, Russia (which still accounts for more than half of India’s military imports), look poised to be beneficiaries of the coming binge. America will get big contracts, too. But despite a ground-breaking civil nuclear deal in 2005 and the subsequent warming of relations, America is still regarded as a less politically reliable partner in Delhi. The distrust stems partly from previous arms embargoes, partly from America’s former closeness to Pakistan, partly from India’s concerns about being the junior partner in a relationship with the world’s pre-eminent superpower.
The dilemma over how close to get to America is particularly acute when it comes to China. America and India appear to share similar objectives. Neither wants the Indian Ocean to become a Chinese “lake”. But India does not want to provoke China into thinking that it is ganging up with America. And it worries that the complex relationship between America and China, while often scratchy, is of such vital importance that, in a crisis, America would dump India rather than face down China. An Indian navy ordered to close down China’s oil supplies would not be able to do so if its American friends were set against it.
India’s search for the status appropriate to its ever-increasing economic muscle remains faltering and uncertain. Its problems with Pakistan are not of the sort that can be solved militarily. Mr Karnad argues that India, from a position of strength, should build better relations with Pakistan through some unilateral gestures, for example cutting back the size of the armoured forces massed in the deserts of Rajasthan and withdrawing its short-range missiles. General Ashfaq Parvez Kayani, head of Pakistan’s army, has declared internal terrorism to be a greater danger to his country than India. That may also offer an opportunity.
China’s confidence in its new military power is unnerving to India. But if a condescending China in its pomp is galling, one in economic trouble or political turmoil and pandering to xenophobic popular opinion would be worse. Japan and South Korea have the reassurance of formal alliances with America. India does not. It is building new relationships with its neighbours to the east through military co-operation and trade deals. But it is reluctant to form or join more robust institutional security frameworks.
Instead of clear strategic thinking, India shuffles along, impeded by its caution and bureaucratic inertia. The symbol of these failings is India’s reluctance to reform a defence-industrial base that wastes huge amounts of money, supplies the armed forces with substandard kit and leaves the country dependent on foreigners for military modernisation.
Since independence India has got away with having a weak strategic culture. Its undersized military ambitions have kept it out of most scrapes and allowed it to concentrate on other things instead. But as China bulks up, India’s strategic shortcomings are becoming a liability. And they are an obstacle to India’s dreams of becoming a true 21st-century power.
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India
Can India become a great power?
India’s lack of a strategic culture hobbles its ambition to be a force in the world
NOBODY doubts that China has joined the ranks of the great powers: the idea of a G2 with America is mooted, albeit prematurely. India is often spoken of in the same breath as China because of its billion-plus population, economic promise, value as a trading partner and growing military capabilities. All five permanent members of the United Nations Security Council support—however grudgingly—India’s claim to join them. But whereas China’s rise is a given, India is still widely seen as a nearly-power that cannot quite get its act together.
That is a pity, for as a great power, India would have much to offer. Although poorer and less economically dynamic than China, India has soft power in abundance. It is committed to democratic institutions, the rule of law and human rights. As a victim of jihadist violence, it is in the front rank of the fight against terrorism. It has a huge and talented diaspora. It may not want to be co-opted by the West but it shares many Western values. It is confident and culturally rich. If it had a permanent Security Council seat (which it has earned by being one of the most consistent contributors to UN peacekeeping operations) it would not instinctively excuse and defend brutal regimes. Unlike China and Russia, it has few skeletons in its cupboard. With its enormous coastline and respected navy (rated by its American counterpart, with which it often holds exercises, as up to NATO standard) India is well-placed to provide security in a critical part of the global commons.
The modest power
Yet India’s huge potential to be a force for stability and an upholder of the rules-based international system is far from being realised. One big reason is that the country lacks the culture to pursue an active security policy. Despite a rapidly rising defence budget, forecast to be the world’s fourth-largest by 2020, India’s politicians and bureaucrats show little interest in grand strategy (see article). The foreign service is ridiculously feeble—India’s 1.2 billion people are represented by about the same number of diplomats as Singapore’s 5m. The leadership of the armed forces and the political-bureaucratic establishment operate in different worlds. The defence ministry is chronically short of military expertise.
These weaknesses partly reflect a pragmatic desire to make economic development at home the priority. India has also wisely kept generals out of politics (a lesson ignored elsewhere in Asia, not least by Pakistan, with usually parlous results). But Nehruvian ideology also plays a role. At home, India mercifully gave up Fabian economics in the 1990s (and reaped the rewards). But diplomatically, 66 years after the British left, it still clings to the post-independence creeds of semi-pacifism and “non-alignment”: the West is not to be trusted.
India’s tradition of strategic restraint has in some ways served the country well. Having little to show for several limited wars with Pakistan and one with China, India tends to respond to provocations with caution. It has long-running territorial disputes with both its big neighbours, but it usually tries not to inflame them (although it censors any maps which accurately depict where the border lies, something its press shamefully tolerates). India does not go looking for trouble, and that has generally been to its advantage.
Indispensable India
But the lack of a strategic culture comes at a cost. Pakistan is dangerous and unstable, bristling with nuclear weapons, torn apart by jihadist violence and vulnerable to an army command threatened by radical junior officers. Yet India does not think coherently about how to cope. The government hopes that increased trade will improve relations, even as the army plans for a blitzkrieg-style attack across the border. It needs to work harder at healing the running sore of Kashmir and supporting Pakistan’s civilian government. Right now, for instance, Pakistan is going through what should be its first transition from one elected civilian government to the next. India’s prime minister, Manmohan Singh, should support this process by arranging to visit the country’s next leader.
Our interactive mapdemonstrates how the territorial claims of India, Pakistan and China would change the shape of South Asia
China, which is increasingly willing and able to project military power, including in the Indian Ocean, poses a threat of a different kind. Nobody can be sure how China will use its military and economic clout to further its own interests and, perhaps, put India’s at risk. But India, like China’s other near neighbours, has every reason to be nervous. The country is particularly vulnerable to any interruption in energy supplies (India has 17% of the world’s population but just 0.8% of its known oil and gas reserves).
India should start to shape its own destiny and the fate of its region. It needs to take strategy more seriously and build a foreign service that is fitting for a great power—one that is at least three times bigger. It needs a more professional defence ministry and a unified defence staff that can work with the country’s political leadership. It needs to let private and foreign firms into its moribund state-run defence industry. And it needs a well-funded navy that can become both a provider of maritime security along some of the world’s busiest sea-lanes and an expression of India’s willingness to shoulder the responsibilities of a great power.
Most of all, though, India needs to give up its outdated philosophy of non-alignment. Since the nuclear deal with America in 2005, it has shifted towards the west—it tends to vote America’s way in the UN, it has cut its purchases of Iranian oil, it collaborates with NATO in Afghanistan and co-ordinates with the West in dealing with regional problems such as repression in Sri Lanka and transition in Myanmar—but has done so surreptitiously. Making its shift more explicit, by signing up with Western-backed security alliances, would be good for the region, and the world. It would promote democracy in Asia and help bind China into international norms. That might not be in India’s short-term interest, for it would risk antagonising China. But looking beyond short-term self-interest is the kind of thing a great power does.
That India can become a great power is not in doubt. The real question is whether it wants to.
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By MEGHA BAHREE
Wal-Mart had big plans to expand in India, with its sights set on becoming the country’s top retailer by 2015. But the WSJ’s Megha Bahree tells Mariko Sanchanta how licensing issues are preventing the U.S. retailer from hitting its targets.
MUMBAI—Three years ago Wal-Mart Stores Inc. set out to be India's top retailer by 2015. The business plan was called Project Jai Ho, a Hindi phrase meaning "let there be victory."
Today, Wal-Mart's advance on India is barely moving.
The company opened just five wholesale stores in the country last year—well below the 22 planned. This year, Wal-Mart plans to open eight locations, a person familiar with the company's plans said.
Part of the reason lies in what people in the industry say is India's labyrinthine process for developing commercial real estate and operating stores. But one of the biggest reasons has been a compliance crackdown at Wal-Mart.
The Bentonville, Ark., company disclosed in November that it is investigating possible violations of the U.S. Foreign Corrupt Practices Act, an antibribery law, in India, Mexico and other countries. The company hasn't been charged.
Since that internal probe began, Wal-Mart says it has stepped up efforts to keep partners and employees in line with U.S. and Indian laws. Running people through those hoops has slowed its expansion, the company says.
Wal-Mart's international operations are driving its overall growth. The company's sales rose 5% to $466 billion last year, with sales in its international division up 7.4% to $135 billion. However, the U.S. stores still account for a disproportionate share of Wal-Mart's operating income.
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In India, the retailer is well behind its modest goal of opening eight outlets this year; it last opened a store in the country in October. Wal-Mart has been operating wholesale stores in the country since 2009 and has 20 now. The company plans to open supermarkets in two years, after the government in September opened up foreign investment in such stores.
"As we develop and introduce enhanced procedures for obtaining licenses, there have been some temporary delays in store openings," a Wal-Mart India spokeswoman said. "We are committed to doing things the right way, every day."
To that end, Wal-Mart in the past several months has enlisted a phalanx of lawyers from a U.S. firm to develop compliance procedures and train employees in India. The company also has begun requiring its Indian landlords to attest that they haven't greased any government palms.
Developing and operating stores in India is complicated, even for locals. Dozens of permits and licenses are required from various agencies down to the municipal level, and businesspeople in various industries say they commonly pay bribes to move projects along.
In the southern state of Tamil Nadu, piles of bricks and mounds of weed-ridden soil at a halted project attest to Wal-Mart's hurdles and frustrated plans.
In September 2011 Wal-Mart approached a developer with an eye toward building a wholesale store in the state. Within three months they had signed a contract saying the developer would build and then lease Wal-Mart a building for a wholesale store on a four-acre plot.
The developer told Wal-Mart it would take up to nine months to get the permits needed to begin construction and an additional year to build the store, a person familiar with the matter said, meaning it would be almost two years before the store could open. But Wal-Mart wanted the store to be ready for business within 12 months, the person said.
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Eager to start earning rent and recouping his investment, the developer started construction soon after, even though he didn't have the required permits, the person said.
In December the developer received a notice, reviewed by The Wall Street Journal, from a municipal agency ordering a halt to construction because of the missing permits. In February government officials sealed the site. Rows of metal containers and a half-built water tank sit hidden from public view behind a wall. Steel rods poke out of masonry.
"We are committed to complying with all laws and regulations and are in the process of implementing a number of specific, concrete actions to strengthen our compliance program in India," the Wal-Mart spokeswoman said. She addressed company policy generally for this article but didn't comment on specific incidents.
Licensing requirements also get thorny for companies throughout India, which requires separate permission for some individual types of produce. In the southern cities of Bangalore and Mysore, Wal-Mart partner Bharti Enterprises Ltd. in October opened retail stores without having licenses for rice, lentils, fruits and vegetables, a Bharti executive said. The store had to remove the items from shelves and has refiled license applications. Bharti shares some administrative functions with the U.S. company.
"We are in the process of implementing additional controls for our new store permit-and-licensing program to ensure the process is handled appropriately and in full compliance with all laws and regulations," the Wal-Mart spokeswoman said.
Wal-Mart's own policies sometimes have been circumvented as well, said current and former employees who have observed the practice.
Under company procedure, according to current and former employees, a team in India identifies potential sites for new stores and presents them to a real-estate committee for the country, several people familiar with the company's practice said. That committee's approvals are then sent to a similar panel for Asia, which, in turn, seeks the sanction of Wal-Mart's international real-estate committee in Arkansas, which includes company CEO Mike Duke. The entire process can take around 45 days before a contract can be signed and work can begin.
But the India team, in a rush to open stores, on several occasions started work on sites as soon as it got the nod from the India committee, according to people who said they had observed the practice.
To strengthen compliance, Wal-Mart in July brought in U.S. law firm Greenberg Traurig LLP and auditing firm KPMG LLP, the Wal-Mart spokeswoman said. The firms have developed compliance procedures and provided training to nearly 1,700 Wal-Mart employees in India. The two firms also perform due diligence on the company's partners and suppliers in India.
J.R. Wildman, an assistant general counsel at Wal-Mart in the U.S., worked in the company's India headquarters from last July to February to set up procedures for complying with the FCPA, which prohibits U.S. companies from paying bribes to foreign officials.
Wal-Mart now asks each landlord to answer a five-page questionnaire stating that it won't give anything of value or make a bribe to any government official or political party to gain a business advantage.
Some landlords said a clause allowing Wal-Mart to audit any of their businesses is particularly objectionable because it goes beyond the transactions that directly involve the U.S. company. Landlords also have to complete a 25-page questionnaire on any unit doing business with the U.S. company.
Reporting lines have changed since February, as well, when the heads of legal, finance, FCPA and compliance began reporting to department heads for Asia and the U.S. They previously reported to Wal-Mart India chief Raj Jain.
Wal-Mart said the company changed its reporting structure to centralize control. Mr. Jain wasn't available for comment.
Write to Megha Bahree at megha.bahree@wsj.com
A version of this article appeared April 2, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Wal-Mart's Path To Power in India Hits Its Limits: The Lawyers.
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April 5, 2013 16:23 IST
Coveted haven for Indian barons
Investigation highlights how ‘nominee directors’ serve as on-paper representatives of several companies
The recent exposé by the International Consortium of Investigative Journalists (ICIJ) and its Indian partner, The Indian Express, has reflected the long-standing perception that Indian business barons have a particular hankering for the British Virgin Islands (BVI), and not just for its scenery.
Among the 612 Indians included in the list range are Lok Sabha Congress MP Vivekanand Gaddam and industrialists Ravikant Ruia and Vijay Mallya.
In some cases, the name of the investor is mentioned as a “director” or “beneficial owner” of the offshore company, which will contain names, addresses and passport details of the investor in question. The investigation has also shed some light on how a group of “nominee directors” serve as on-paper representatives of more than 21,000 companies, with some directors representing as many as 4,000 firms each.
Some of the companies have said that it was a case of “mistaken identity,” while others have claimed that it is “in accordance with all laws and that no transactions had taken place.”
In Vijay Mallya’s case, he had registered a BVI company called Venture New Holding in 2006 — in which he is listed as the beneficial owner. The UB Group, however, claims that this is normal practice. “Dr. Mallya is a non-resident Indian with business activities in different parts of the world. It is common practice to use BVI registered companies in connection with such activities which are not confined to India alone. All disclosures in regard to Dr. Mallya’s wealth have been duly made to Parliament,” Prakash Mirpuri, a UB Group spokesperson, told The Hindu.
The list also includes Thiagarajan Murugesan, who launched the now-defunct Paramount Airways. According to the ICIJ, he started five BVI companies in 2008 and is a director and shareholder in all of them.
Mr. Thiagarajan has clarified, however, that these companies were set up legally as “wholly-owned subsidiaries.” “No transaction has been carried out in these companies. These are non active, non-existent companies,” Mr. Thiagarajan told The Hindu.
Vice-Chairman of the Essar Group Ravikant Ruia, on the other hand, has registered three companies in the BVI, while Essar Power has five BVI accounts. “The companies have been disclosed to the Indian authorities as required under the applicable laws” said an Essar Group spokesperson said.
The eldest son of former chairman of Satyam Computers, Ramalinga Raju, is also on the list. According to the ICIJ, the Rajus set up two BVI companies, Global Network Overseas and Stapley Universal Limited. Teja Raju is listed as beneficial owner of both.
The ICIJ also named the sons and grandson of the founder of MRF over records showing that they have registered a BVI company, Moon Mist Enterprises Limited. The offshore company’s directors are MRF Chairman Kandathil Mammen, Managing Director Arun Mammen and MRF Director Rahul Mammen Mappillai.
There is no official word as yet from the Central Board of Direct Taxes (CBDT) on the veracity of the Indian Expressexposé. In fact, there is a studied silence on the issue, even as top officials were huddled in meetings late in the evening.
While a number of senior CBDT officials The Hindu tried to reach were busy in meetings, one top official called back only to excuse himself saying he was not authorised to speak on the issue and that the right official was the media spokesperson. The authorised spokesperson, however, is away in Japan. A Finance Ministry official said that an official statement would be issued in a day or two, if necessary, but no decision has been taken as yet.
(With inputs from Lalatendu Mishra from Mumbai and Ashok Dasgupta)
anuj.s@thehindu.co.in, lalatendu.mishra@thehindu.co.in, dasgupta.a@thehindu.co.in
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April 5, 2013 17:01 IST
Delhi Metro contractors not blacklisted despite complaints
A file photo of a Delhi Metro Rail train passing through Vaishali Station, Ghaziabad.
They are accused of violating norms on wages, denying DMRC workers Provident Fund and insurance benefits
Despite complaints received against three contractors employed by the Delhi Metro Rail Corporation to supply labour for ticket-vending operations, housekeeping and security guards, none of them has been blacklisted so far, the Union Ministry of Urban Development told the Lok Sabha recently.
Giving a detailed reply on the action initiated on complaints against the contractors, the Ministry said fines have been imposed on these contractors found to be in violation of norms for late disbursement of wages and for denying workers Provident Fund and insurance benefits. In some instances, the violations run into crores of rupees.
According to information furnished in the Lok Sabha last month, complaints have been received against M/s Bedi & Bedi Associates, M/s G4S Secure Solutions (India) Pvt. Ltd and M/s Prehari Protection Systems Pvt. Ltd, all of whom provide services such as ticket vending, customer facilitation or security services. For instance, the Employees’ Provident Fund (EPF) Authority has calculated dues from G4S Secure Solutions amounting to Rs. 85,02,38,258 and on which interest of Rs.48,73,75,918 is due.
While a penalty of Rs.22,800 “has been proposed” to be deducted from the bill of Prehari Protection Systems for February 2013 for late disbursement of wages, the complaint against Bedi & Bedi Associates for late disbursement of wages and EPF and Employee State Insurance (ESI) related complaints have led to the DMRC slapping a penalty of Rs.8,65,000 on the contractor. The paltry sum is despite a First Information Report lodged against the contractor by EPF authorities on February 19, stating that EPF contributions of Rs.3,35,315 have not been made for “58 DMRC complainants” for the period between March 2009 and January 2012.
Fake PF allotted
Rajni Saxena (40), who worked as a ticket vendor at the Akshardham Metro Station till January 2012, is among the 58 employees who had been allotted fake PF and health insurance accounts by her former employer Bedi & Bedi Associates. “The PF dues of Rs.3,35,315 are only for 58 employees and not for all the workers employed by the contractor. This is a conservative figure if you compare it to the amount of Rs.4,89,639 that Bedi & Bedi Associates owed for just one year to its workers contracted to the National Physical Laboratory,” she said.
Following an investigation by The Hindu in October last year that revealed the plight of Ms. Saxena and 58 of her colleagues, the DMRC sent her a letter in November 2012 stating that it had asked the contractor to clarify the issue. The information furnished by Bedi & Bedi Associates showed that Ms. Saxena was provided an ESI facility with IP No.1113503955 and details of contributions made to her. Yet, corresponding salary slips with Ms. Saxena showed a completely different ESI number. Ms. Saxena has since hired a lawyer to take the matter forward.
The information furnished in the Lok Sabha states that “EPF and ESI authorities are carrying checks and audits including those based on received complaints [against Bedi & Bedi Associates]” and “case is sub judice/ enquiry being conducted in the Department of Economic Offences Wing, Delhi, Central Government Industrial Tribunal and Police Department…”
Despite repeated reminders, the DMRC is yet to respond to the e-mail sent by this reporter on the status of Ms. Saxena’s complaint and their action taken against the contractor. “The information is not readily available,” said a DMRC spokesperson when contacted on Thursday.
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April 8, 2013 17:14 IST
Rajiv Gandhi was ‘entrepreneur’ for Swedish jet, U.S. cable says
Revelation contained in Kissinger-era documents obtained by WikiLeaks
Much before he became Prime Minister, during his years as an Indian Airlines pilot, Rajiv Gandhi may have been a middleman for the Swedish company Saab-Scania, when it was trying to sell its Viggen fighter aircraft to India in the 1970s.
The astonishing revelation that he was the “main Indian negotiator” for a massive aircraft deal for which his “family” connections were seen as valuable, is contained in the Kissinger Cables, the latest tranche of U.S diplomatic cables obtained by WikiLeaks and accessed by The Hindu as part of an investigative collaboration. The cables will be released on Monday.
The British SEPECAT Jaguar eventually won the race, from which Saab was forced to withdraw by the U.S.
Rajiv Gandhi, who kept away from politics until he was pushed into it by his mother Indira after the death of his brother Sanjay in 1980, came into public life with a squeaky clean image. Years later, a controversy over bribes paid in another military deal with a different Swedish company, Bofors, was to lead to Rajiv’s and the Congress’s defeat in the 1989 elections.
A series of 41 cables between 1974 and 1976 give glimpses into the “fighter sweepstakes” in India, with one wryly observing that the Swedish company had “understood the importance of family influences in the final decision in the fighter sweepstakes.”
Dassault, the French aircraft maker, too had figured this out. According to the cable, their negotiator for the Mirage fighter aircraft was the son-in-law of Air Marshal O.P. Mehra, then Air Chief.
An October 21, 1975 cable from the New Delhi U.S. Embassy (1975NEWDE14031_b, confidential) details information given to it by a diplomat in the Swedish Embassy. “Mrs Gandhi’s oler [sic] son’s only association with the aircraft industry (to our knowledge) has been as a pilot for Indian Airlines and this is the first time we have heard his name as entrepreneur.”
Having noted what the Swedes had said, the cable makes the comment that there was no additional information to either refute or confirm the information.
The cable goes on to say, “Mrs Gandhi (according to the Swedish info) has made the personal decision not to purchase the British Jaguar because of her prejudices against the British. The decision would be between the Mirage [Dassault Mirage F1] and the Viggen.”
Importance of ‘family’
In another cable (1976NEWDE01909_b, confidential), the Swedes also made it clear they “understood the importance of family influences” in the final decision. The cable adds: “Our colleague describes Ranjiv Gandhi [sic] in flattering terms, and contends his technical expertise is of a high level. This may or may not be. Offhand, we would have thought a transport pilot [is] not the best expert to rely upon in evaluating a fighter plane, but then we are speaking of a transport pilot who has another and perhaps more relevant qualification.”
The first cable adds that Air Marshal Mehra’s son-in-law was the chief negotiator for the competing Mirage, but it does not give his name.
Contacted in New Delhi, Navin Behl, the former Air Chief’s son-in-law, denied that he was ever involved in any such negotiations. “I was never an arms dealer. We’ve got nothing to do with it. I am a chartered accountant, [I was] practising then [in the 1970s], and now we're in the manufacture and export of home furnishings,” he told The Hindu.
The Swedish diplomat quoted in this cable said his country’s neutral position in world politics was offsetting the Viggen’s higher cost. The cable also records the official’s “irritation at the way Mrs Gandhi is personally dominating negotiations, without [the] involvement of Indian Air Force officers. According to him, negotiations with the Swedes are for 50 Viggen aircraft to be delivered at $4-5 million per aircraft with the Swedes believing that the Indians have made the decision not to purchase any more Soviet military aircraft.”
U.S. blocks deal
But Sweden had to do an abrupt about turn with what appears to be a bit of arm-twisting. An August 6, 1976 cable(1976STOCKH04230_b, secret) titled “Saab-Scania requests for U.S. permission to export Viggen and license to India” appears to confirm this with a blunt message: “The USG, after careful consideration, has concluded that no version of the Viggen containing any classified U.S. components would be acceptable for transfer to India. It would also oppose any transfer to India, for local production, of the advanced U.S. technology represented in the Viggen’s aerodynamic design, engine and flying controls, navigation system, electronic components and weapons systems.”
Another 1976 cable (1976STOCKH04231_b, secret) details the negative USG response to Saab-Scania president Curt Mileikowsky’s informal request for export of Viggen aircraft to India and licence to manufacture such aircraft to India. Senior Swedish officials have also emphasised “that [the] most important consideration to their government was preservation of cooperation with the U.S. on military R&D, which they recognised as vital to maintenance of a viable Swedish defence effort and that the sale of the Viggen to India was of secondary consideration to them in comparison with the value of military cooperation with the U.S.”
Scramble for contract
The earliest reference to the IAF upgrade plan is in a 1974 cable (1974LONDON00554_b, secret), which elaborates how the Indians had nearly completed negotiations for two Navy Corvettes and an unspecified number of Jaguar aircraft, though negotiations temporarily stalled because of the oil crisis.
India, according to the FCO South Asian Department head, had “expressed desire for [a] modest alternative to the Soviets as an arms supply source, and had begun discussions with the British early last summer.” The British were smelling a deal “in the neighbourhood of 30-35 million pounds, probably only the first tranche of an ongoing program which could reach 100-120 million pounds over a period of time.”
The Viggen pitch to India was of immense interest to the U.S. As one cable (1975STATE270066_b, secret) said, the aircraft “contains a large number of parts and components of U.S. origin which are therefore subject to USG control in third-party sales.”
Jaguar, meanwhile, was aggressively in the hunt. A November 19, 1975 cable (1975NEWDE15350_b, confidential), said: “London has now decided to offer the Government Of India a more favorable financing arrangement, 71/4 percent over five years, than was earlier the case. The GOI has asked for two percent over 15 years, but the British tell us this is impossible. The GOI still wants 40 aircraft to be delivered within 36 months. The original British offer was 60 months, but they are now talking in terms of 40 odd months.” The cable ends by saying that the final decision was expected to be political and made by the Prime Minister.
Another cable (1975PARIS33184_b confidential) details French concern that “Mrs Gandhi’s advance toward dictatorship is now irreversible, and that French Prime Minister Chirac was unhappy with the idea of appearing to condone this development through his official visit” but also nursed the hope that the visit would be able to improve sales prospects for the Mirage F-1.
By the next year, the French Embassy is convinced (1976NEWDE00845_b, confidential) that it is Prime Minister [Indira] Gandhi alone who will make the final decision, and it will be on political grounds. The Swedes are also pushing their product. The French believed that the Swedes had dropped their price and offered to take rupees in payment. They were seen as moving towards delivering the first 24 to 36 aircraft to India, with the next aircraft being assembled in India under licence.
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