5 FEBRUARY 2016

Ø Mr. Jaitley, who was the first Disinvestment Minister in the Atal Bihari Vajpayee-led NDA, proposes to unveil in his budget speech a two-year road map for three types of sales of government stake in PSUs. First, a plan for winding up loss-making units, including rules for the disposal of their assets and land. Passage next month of the new bankruptcy code by Parliament during the budget session, it is expected, will aid these sales. Second, profitable PSUs will be listed on stock exchanges through public sales of shares. The government’s shareholding in enterprises already listed will be pared down through public offers to the minimum level depending on the sector and “in line with government policy.” The third category will be that of strategic sales of high-value and big-size companies such as BHEL, and the oil and defence sector PSUs. The government will invite global companies to bid for its stakes in such companies with the aim of inducting cutting edge technology and improving corporate governance in them. “The private partners will be expected to turn the energy PSUs into global giants spread across the world… India wants to be big in the energy sector,” the source said. The mega strategic sales in the oil sector will be part of India’s energy security plan. “The bureaucracy has not been very supportive of our plans for disinvestment but we will push ahead,” the source said. Based on inputs received from private investors, the government is finalising a new revenue model for irrigation projects to be developed in the public-private partnership space, which will bring down the downstream user charges for farmers. This technology-intensive concept will be selectively applied to high-yield, plantation and commercial crops. Changes in the policy regime for repatriation of returns by investors from their Foreign Direct Investment (FDI) on the basis of inputs from inland highways and waterways are also being worked out. Mr. Jaitley announced earlier this month that railways will soon invite bids for modernisation of 400 stations, including their development and management. The Centre has already opened up 100% FDI under the automatic route in rolling stock, services, catering and the development and running of passenger terminals. Measures are likely for addressing delays in land acquisition in various States that is leading to stalled rail projects.

Ø India has been kept in the loop on “each and every development” in the Taliban reconciliation process, Afghanistan chief executive Abdullah Abdullah said in New Delhi on Thursday, ahead of the next round of talks in Islamabad on February 6, 2016. In his first interview on the Pathankot attacks that occurred at the same time as the attack on the Indian mission in Mazar-e-Sharif in early January, Dr. Abdullah said he could not rule out both attacks being launched by the Jaish-e-Mohammad, but said it was “too early to make a judgement” on any link between them or to the transfer of Mi-35 helicopters by India to Afghanistan just a week prior to the attacks. Dr. Abdullah said that the visit of Prime Minister Narendra Modi to Kabul on Christmas had “re-energised” the strategic partnership agreement (SPA) between India and Afghanistan, and the SPA commission headed by the Foreign Ministers, that hasn’t met since 2012, would meet soon to take ties forward. In particular he said the transfer of four Mi-35 helicopters to Afghanistan had “boosted the morale and combat operations”. Significantly, Dr. Abdullah wouldn’t rule out the possibility of links between the Pathankot attack on January 2, 2016, and the assault on the Indian mission in Mazar-e-Sharif on January 3, 2016 as well as whether Pakistan-based group Jaish-e-Mohammad had carried them out in retaliation for the Indian helicopters being sent to Afghanistan. The helicopters marked the first such lethal military hardware transfer by India, and they have already been put into combat fighting terrorist groups in Helmand Province, officials said.

Ø The Ravindra Gupta Task Force Report on Defence Modernisation and Self Reliance submitted its report in September 2012, officially recording that the Hindustan Aeronautics Limited, India’s aerospace giant, has been importing most of its raw material from abroad, assembling them and supplying finished products to the Indian military. And that it has failed to create a robust supply network of domestic companies and R&D capabilities. Of the total raw material consumption of HAL, the import component has been going up over the years. Between 2000-01 and 2010-11, it was always above 77.3 per cent. And in 2009-10 and 2010-11 it went up further to 92.6 and 95.4 per cent respectively. Over the last decade, as HAL grew exponentially, its total raw material consumption was worth Rs. 12,280 crore in 2010-11. The indigenous component was just Rs. 565 crore, which was just 4.6 per cent of the total consumption as opposed to 15.8 per cent in 2000-01, the Task Force Report pointed out.

Ø Five years after signing the Convention on Supplementary Compensation for Nuclear Damage (CSC), India ratified the convention on Thursday, the IAEA’s Office of Public Information and Communication reported from Vienna. The CSC is a convention that allows for increasing the compensation amount in the event of a nuclear incident through public funds pooled in by contracting parties based on their own installed nuclear capacities. It entered into force on April 15, 2015. India had also passed its own domestic nuclear liability law, the Civil Law for Nuclear Damage (CLND) Act in 2010. Countries such as the U.S. have said that the Indian law’s provisions are violative of the CSC, but this has been denied by India.

Ø In a move that could become a model for countries keen on a share of India’s civil nuclear energy pie, India and Russia have set up a working group to locally build components for nuclear power plants of Russian design. Rosatom, as part of its plans for expanding its global footprint, is in the process of opening its regional office for South Asia office in Mumbai. According to Mr. Griva, the Action Programme includes areas of cooperation in the field of joint machinery production, especially for nuclear power plants, as well as cooperation in the field of joint development, mastering and technological support of the implementation of end-to-end production technologies of products for heavy and power engineering industries. The three joint working groups, set up under the Indo-Russian Coordinating Committee on cooperation in the peaceful uses of nuclear energy established in December 2014, are on the nuclear fuel cycle, nuclear energy and scientific-technical cooperation. The localisation plans are part of the government’s efforts to build manufacturing in the country under its ambitions Make in India initiative. Russia is currently building six reactors in Kudankulam of which the first unit was commissioned in autumn 2013. It was shut for the first scheduled preventive maintenance (SPM) and has now successfully restarted power generation.

Ø Ms Pall announced that the 500-MW Sampoor thermal power project, a joint venture involving Sri Lanka and India, was granted environmental clearance a few days ago. Chairman of the Ceylon Electricity Board, Anura Wijayapala, who also heads the Trincomalee Power Company Limited [a special purpose vehicle for the project], told THE HINDU that as per the revised schedule, it had been planned to get the project commissioned by the middle of 2020. Pointing out that Sri Lanka was importing coal from Indonesia, South Africa and Russia, Mr Wijayapala said any one of the sources would be tapped for the Sampoor project too. On the rehabilitation of the Kankesanthurai (KKS) harbour in the conflict-devastated Northern Province, Ms Pall said four phases had been completed [by the Indian authorities] and the RITES would send a delegation to Sri Lanka very soon. The issue of setting up a special economic zone in Trincomalee for India was also raised, she said, adding that the reconstitution of CEOs’ forum, a mechanism on trade and investment linkages between the two countries, was underway.