Sarsawa air base likely to host first Rafale squadron

December 28, 2016 webadmin Leave a comment

The first squadron of Rafale fighter jets are likely to be based at the Sarsawa air base of Indian Air Force in Uttar Pradesh, informed sources said on Friday.

According to sources, the air base is being geared up for the squadron, while two more bases are to be identified.

The deliveries of the aircraft will start in September 2019 and will be completed in April, 2022.

Sources said a team from Dassault Aviation visited the air base last month, and a feasibility test was carried out. The infrastructure for hosting the squadron and its maintenance is being created at the air base.

The Sarsawa air base comes under the Western Command of IAF.

The first squadron is likely to have 12 fighters, including pair of trainers.

India and France signed an inter-government agreement for purchase of 36 Rafale fighters off shelf on September 23 this year. This was after a long negotiation between the two countries over the price and other aspects of the deal which was agreed upon during Prime Minister Narendra Modi’s visit to France in April 2015

The procurement includes a provision for offsets of 50 percent of the value of the Aircraft and Weapons Package, excluding the value of Performance Based Logistics and Simulator Annual Maintenance, which will be discharged by the vendors through purchase of eligible products supplied by Indian firms.

Soldiers on duty as currency ‘coolies’

December 26, 2016 webadmin Leave a comment

AN DUTTA

(Clockwise from left) The Globemaster III aircraft, Air Chief Marshal Arup Raha and his successor Air Marshal Birender Singh Dhanoa

New Delhi, Dec. 22: The military has been summoned to flood the country with money. The soldier has been ordered to make and count cash.

A team of 120 Indian Air Force personnel – air warriors – have been deployed at the currency printing press in West Midnapore’s Salboni. Salboni has one of the most prolific currency note presses in the country.

In Madhya Pradesh’s Dewas, too, an army column has been tasked to a Reserve Bank of India currency printing press.

The deployment of the military – rather than the police or paramilitary forces – is indicative of the urgency that the Centre is dealing with in a situation of its own creation: demonetisation of the Rs 500 and the Rs 1,000 notes that were printed before November 8.

Currency soldiers were so far bank staff and air crew.

But now, there is military compulsion at currency printing presses, the Centre has determined. Soldiers have to be physically present at the presses. They are trained to fight. They are not trained to print money. But they have to do “physical labour”.

“Soldiers are coolies today,” one officer admitted. “We do physical labour, but to fight against enemies of the country. Now the government has ordered us to do this,” he said.

The Indian Air Force was drafted into transporting currency notes across the country just about a month ago.

In the twilight of his career, fighter pilot and Air Chief Marshal, Arup Raha, who has just overseen the marriage of his daughter and is fixing himself a retirement home in a township in Calcutta, is carrying out the Great Rupee Airlift.

So far he has had such other paltry stuff – like the depressingly dwindling fighter jet fleet – to bother about.

His successor has just been named: Air Marshal Birender Singh Dhanoa, the current Vice Chief of Air Staff is set to take over.

Dhanoa is also a former director of fighter operations and war-planning. His chief concern now is the deployment of cash.

Unlike in the army, the transition in the IAF is without question. Dhanoa is the seniormost in line to succeed Raha. He is a fighter pilot of distinction, a qualified flying instructor who has done sorties in the MiG21, the Jaguar, the MiG29 and the Sukhoi 30Mki. He has honed a generation of juniors in the skills of air-to-ground attack in high altitudes, like he did in the 1999 Kargil war.

When he moves into Air House in the afternoon of December 31 he, too, will be supervising the Great Rupee Airlift.

The Great Rupee Airlift compares difficulty with the Berlin Airlift of 1948-1949 when the air forces of the UK, US, Canada and France flew supplies to the people of West Berlin after Soviet Forces blockaded the-then divided city. But the Indian Air Force has confirmed to The Telegraph that it has completed more than 100 sorties between November 19, when the Union finance ministry called for its deployment, and December 19.

That is an average of more than three sorties per day – to transport currency notes from four airfields: Ozar (near Nasik), Kalaikunda (near Kharagpur and Salboni), Mysore in Karnataka and Indore (near Dewas) in Madhya Pradesh to more than 10 cities with RBI centres.

The acute shortage of cash led to the Centre directing the Indian Air Force to transport currency notes because chartered aircraft could not or would not do the job.

Repeat sorties have been made to at least six cities – the maximum to Bhopal and after that to Calcutta. These sorties are clubbed into 31 “trips”. Each trip contains within it three sorties – flying the aircraft from their home-bases to the airfields near currency presses, basing them at the airfields or mostly near airfields with maintenance facilities and then flying to and from the destinations where the currency notes are delivered.

An underestimate of the cost of transporting currency notes so far pegs the figure at Rs 65 crore in flying hours. The Indian Air Force has flown nearly 300 hours as currency soldiers.

IAF sources said they fly much faster than the RBI’s presses can print currency notes. Meaning, they are being forced to perform under par.

For the average of more than three sorties a day by the air force’s transport aircraft, plus waiting, many of the aircraft have had to be pulled out of regular duties like couriering soldiers from field stations – such as Leh or Thoise – to peace stations and back. The redeployment of transport aircraft that are in short number because most of them are grounded is stressing the fleet.

A Coordination Cell for the Great Rupee Airlift has been set up in the air chief’s office at Vayusena Bhavan, the air force headquarters in the national capital.

The aircraft assigned to the task are mostly carrying far less weight than they are capable of – an average of 18.4 tonnes only per sortie.

So far the US-sourced strategic airlifter C-17 Globemaster III aircraft – the latest transport planes in the IAF’s inventory – all 10 of which are based in Hindon, east of Delhi, have ferried 218.6 tonnes of currency notes. Each Boeing-made C-17 is capable of a take-off weight of about 30 tonnes. The C-17 is built for short take-offs and landings and inserting special forces and military materiel in hostile environment. The US air force has flown C-17 aircraft non-stop from its own shores to Australia.

The C-17s with the IAF are among other transport aircraft – the (also US-sourced C-130J Hercules and the Soviet-origin Antonov 32) – that are lifting currency notes from four airfields near RBI printing presses at Ozar, Mysore, Kalailunda and Indore.

The maximum number of sorties have been done by the C-130J Hercules (made by Lockheed Martin) aircraft. The 10 aircraft of this kind with the IAF have ferried 323.3 tonnes of currency notes.

The Antonov 32 aircraft, 100 of which are with the IAF, are known to be a workhorse have surprisingly carried out the least number of sorties. That is because the aircraft’s upgrade programme is caught in between the conflict that has hit the military industries of both Russia and Ukraine. Moreover, there is a drop in the confidence on the An-32 since it went missing, presumably into the Bay of Bengal, with 29 passengers and crew on July 22. Most of the An-32 in the fleet of the IAF are grounded.

The workhorse AN-32 aircraft have done only three “trips” so far carrying 10.8 tonnes of currency notes. Each AN-32 can carry 27 tonnes.

The total weight of currency notes ferried by the IAF transport fleet between November 19 and December 19 is 552.7 tonnes.

From Indore, the aircraft are flying notes of denominations of Rs 20, Rs 50 and Rs 100 printed at the RBI press in Dewas. From Mysore and Nasik (Ozar) and Salboni (Kalaikunda), the aircraft are flying notes of Rs 2000 and Rs 500.

The “trips” have been made to Jammu, Calcutta, Guwahati, Ahmedabad, Lucknow, Nagpur, Bombay, Pune, Bhopal, Thiruvananthapuram, Hyderabad, Visakhapatnam and Chennai.

In the North East and in Jammu and Kashmir, the IAF’s helicopters have also flown currency notes to smaller destinations. But that is part of the IAF’s regular tasking.

A BATTALION OF WOMEN IS AN INDEFENSIBLE IDEA

December 18, 2016 webadmin Leave a comment

JUST LETTING WOMEN KNOW THE ARMY IS A CAREER OPTION AND ONE IN WHICH THEY HAVE TO FUNCTION IN A GENDERNEUTRAL ENVIRONMENT WILL DO A LOT MORE FOR WOMEN’S ADVANCEMENT IN THE DEFENCE FORCES

Defence minister Manohar Parrikar is never at a loss for words. Neither is he shy of contradicting himself. After saying that there are no plans to induct women into combat roles in the Indian army — something President Pranab Mukherjee said would be done in his speech during the budget session of Parliament — the irrepressible Mr Parrikar now says that there should be an all-women battalion. He feels that psychological barriers had been broken with the induction of three female fighter pilots. But, he has also added that this battalion will come up gradually so as not to “compromise” the Army’s primary task of guarding national security. Make of this what you will, I am baffled as to how this pans out. His explanation is: “There is the thinking that soldiers will not listen to a woman commanding officer…I don’t agree. But if there is some initial resistance, an all-women battalion would take care of it.” Is it Parrikar’s contention that an all-women battalion is the only force that can make a male soldier listen to orders from a woman officer? He should do so because he is bound by the rules to listen to his officer.

Parrikar says women on warships where there are separate cabin facilities is fine, but not on unigender submarines. But we are getting ahead of ourselves here. The idea of an allwomen battalion hardly serves to bring about gender parity in the army. If women are to play a greater role in the army, they should not be segregated into exclusively female zones.

Most of the women who have joined the army, and the percentage is not very high in India, are actually resentful of any preferential treatment. They feel that it creates friction with their male colleagues and that they did not join the army thinking it would be a Sunday school picnic. Yet, the same prejudices we see in the workplace place constrain them. One is that male colleagues don’t feel comfortable as their banter could be misunderstood by the women present. The other is that women are not psychologically strong enough to withstand the enormous pressure.

Parrikar is, however, right that infrastructure is a major impediment for women to be deployed in many places. But the question of infrastructure obtains even for men. The lack of proper facilities in camps and barracks is well known but little has been done to improve things. The army is in dire need of modernisation and this means bringing in more technology. This is an advantage for women as the greater the technology employed, the fewer the boots on the ground. This will boost the number of women coming into the army.

Despite Parrikar’s espousal of an all-women battalion, there should be no effort to push this idea. The army’s purpose, that of defending the nation, simply does not warrant any forced gender equality in the form of allwomen battalions. It should simply function on the principle of the best man or woman for the job. One thing one often hears is that we had a tradition of women warriors like Laxmibai of Jhansi, Razia Sultana and Chand Bibi, to name a few. And, yes, women did take part in the freedom movement. But this did not become a tradition and women were largely unseen in the defence realm until the early nineties.

Such is the mystique surrounding the army and perceptions of how you have to be as tough as hobnailed boots to join it, that many women, I am sure, would not think of it as an employment option. Mercifully, today despite all the prejudices they face, women are venturing into fields that were not considered appropriate for them before. Our women wrestlers are a case in point. When it comes to imparting skills to women, the options still are the tried and tested ones of health work, teaching and social work. But why not encourage women, especially in rural areas, to think of the army as an option? For this, there should be more defence training schools, which should not be a problem, given the vast and skilled manpower available in the form of retired soldiers who can man these. Letting women know the army is a career option and one in which they have to function in a gender-neutral environment will do a lot more for women’s advancement in the defence forces than an all-women battalion.

AN OFFICER PAR EXCELLENCE :AN OFFICER WHO WON HEARTS OF ONE & ALL

December 25, 2016 webadmin Leave a comment

“General, state-of-the-art equipment adds to the might of the Army and the process of modernisation must keep pace with time. What lends a cutting edge to the weapon, however, is the man behind the machine,” was the response by Capt Praveen Bakshi to a question by the GOC Armoured Division on the impact of newly introduced T-72 tanks in a future war.

It was in 1986. Capt Bakshi, who is now a lieutenant general and was recently superseded by a fellow general for the post of Chief of Army Staff (CoAS), was one of the first officers nominated to go to a friendly foreign country to get acquainted with this battle-winning weapon. As a nodal expert, he would thus be the fulcrum of conversion process of the army to this high-technology machine. While travelling back to the headquarters, the GOC, impressed by Capt Bakshi’s professionalism, remarked to his ADC (self), “This Captain will go places.” We, the younger lot, were not surprised by the GOC’s pronouncement. In the words of one of his batchmates Commander Rohit Kaushik (retd) of the Indian Navy, “We had a premonition that he would achieve heights. Doughty, competent, fair, affable and cool, he was just different. Indian Defence is blessed to have him at the helm.” Lt Gen Bakshi, blessed with savoir faire, has an uncanny ability to always remain a step ahead of the fast-evolving environment. Computers were making a debut in the army during the early 90s. I remember Maj Bakshi, our downstairs neighbour at a military station, would sit on his computer for hours to get grip of the newly introduced gizmo. It was fun and challenge playing squash with him. A fitness freak, his “funda” was, “Only a healthy body can withstand the pressures that make the grey matter flourish.” Now, Lt Gen Bakshi, a Cavalier is likely to be the first CDS (Chief of the Defence Staff) of the Indian Defence Forces. The CDS will be the single-point advisor to the government of the day on all matters of defence. The armed forces, in recent times, are increasingly being subjected to a variety of challenges.The incessant efforts by the powers that be, to undermine and short shrift the armed forces in matters of pay, perks, status and credibility need an effective stance.

Thankfully, here we have a thoroughbred officer, who in the words of city-based Maj Gen SS Grewal , a veteran skinner’s horseman, “Praveen’s soldierly but amicable demeanour, coupled with an exceptional equipoise and professional brilliance will see him tackle all issues like hot knife in butter.” On having missed the boat to be the next COAS, I messaged my emotions to him to which he replied in his characteristic demeanour,” Thx Avnish… We take this in our stride..Looking forward to the future with positivity… for better things to come.” A soldierly poise indeed.

Of Defence Analysts and Defence Experts An article by Lt Gen BPS Mander

December 17, 2016 webadmin Leave a comment

(This article is just in jest. If you are a cynic, do not read further)

These days it is fashionable to become a ‘Defence Analyst’, and if you cannot be one, then at least you can become a ‘Defence Expert’. In foreign armies ‘defence analysts’ are appointed; and they work with the government or the military to examine, evaluate, and review information, and write reports with recommendations.

No such thing here. Some exposure in the IDSA can make you an ‘analyst’. Be that as it may; anyone can become an ‘expert’. All that is required is that he should have retired. And should you have served in the Valley, even as an Adm Comdt, your credentials take a big leap.
You are the authority on all issues in the Valley irrespective of your level of expertise.

When the trend began, a lot of officers became experts without any expertise. And in keeping with the established principles of seniority, the level of intelligence got related to the rank, thehigher the rank the higher was considered to be your level of expertise. Dramatically some ‘Colonels’ inserted themselves with a patent on ‘command experience’ and so the net result today is that you have Colonels and Generals on TV, with only ‘Brigadier’ Mahalingam as the link between the two.

When the trend of these specialists caught up, a lot of people wanted to join the bandwagon; but soon the positions were saturated as TV channels could only accommodate X number of people. So those who did not make it as ‘experts’ harboured a grudge against those who did.

Since I had done a study on the issue, some approached me for consultations. I gave them my view on what is the best way to get into this field. If they wanted to enter this field they would need to follow some guidelines. These would need to be practiced before the mirror if they were to make an impression on TV. I advised them on a three point formula:-
– ⚔First, practice putting up a glum and serious face. After all war and insurgency is serious business.
-⚔Second, grow a handlebar moustache, and if not possible, at least a sizable one, which endorses your dominance over the clean shaven civilians.
-⚔Third and last and the most important, unless you have some catch phrases in your vocabulary, you stand no chances of making it for more than one time on TV, unless you know someone on the Channel. You can represent, but can never be an ‘expert’. It is time to forget the weapon that you carried in service. Your new weapon is the ‘catch phraseology’, the flavour of the day. Be clear on what you have to say. You should speak of ‘an intended legitimate military target’ with ‘minimal collateral damage’, as against ‘carpet bombing’ which damages the ‘local psyche’. Operations must create ‘shock and awe’ and yet not ‘rattle’. Army is a ‘broad sword’ and not a ‘scalpel’, but yet the Indian Army used the ‘scalpel’ to carry out strikes with ‘surgical precision’.

This much would be enough to establish your position on TV, but should you wish to hold on to it, you need to do more. You cannot say that ‘the enemy was caught napping’, it has to be ‘enemy was caught in a stupor’. And no proof can be given of our ‘surgical strikes’ as ‘National interest’ and ‘National security’ are ‘non negotiable’. After all the matter has been discussed it the ‘Cabinet Committee on Security’ and decided that ‘graphic accounts’ of ‘routine operations’ are never given out.

And all this will be of no use if you are not seized with how cross border terrorist camps and ‘launch pads’ are organized and the ability to counter ‘unprovoked and naked aggression’ and the ‘existential phenomenon’ of ‘cross border fire’.

Since arguing on Pakistan is a fashion these days, you have to be armed with some specific phrases.. Forget about ‘guerrilla warfare’, ‘insurgency’ and ‘terrorism’, the catchphrase is ‘asymmetric warfare’, a war ‘between belligerents whose relative military power differs significantly’ to ‘offset deficiencies in quality and quantity’.

Please remember that “Osama Bin Laden’ is no more in fashion and unless you mention ‘Masood Azhar’, ‘Hafeez Sayyed’, and ‘Sayeed Salauddin’ , you are shooting in the dark. And if you can throw in ‘Burhan Wani’, you will be considered topical

And if you want to be called repeatedly, you have to obliquely throw in the ‘ Haqqani Network’, since it is popular with US as it irks them. And to be super savvy, throw in names of some ‘non state actors’ like ‘Jalaluddin and Sarajuddin Haqqani’, and their relationship with each other.

A young officer, who had done ten years in the Army before being released, asked me if he could become a defence expert. I told him that by all means he could. So I gave him the catch phrases and told him to go ahead and make his mark. Incidentally he already had a handlebar moustache.

Armed with this knowledge he approached a Channel, confident that with the all the phraseology under his belt there was no stopping him. The first question they asked him was his rank, and when he said Major, they told him it is a no go. He shot back that Sir Basil Liddell Hart was just a Captain and he taught Generals. But they were not impressed. They asked him if he was from the Infantry, and when he said no, he had already lost the race. He gave them examples that Napoleon was a gunner and Mc Arthur was an Engineer and so on. But of no avail.

So frustrated he came back and told me that he had not made it as he was not from the elite Infantry, so I consoled him that he need not worry as there were other options. So I told him that he should become a ‘defence observer.’ And what does a defence observer do, he asked. Nothing, he just observes and enjoys the tons of wisdom doled out on TV, something we missed in service.

So a word of advice to those who could not make it, just become defence observers and you will enjoy the unending sermons and will also be able to assess that some who could not find their feet in service, have now established themselves as ‘experts’.

Modi, Parrikar to decide on chief of defence staff role

December 24, 2016 webadmin Leave a comment

NEW DELHI: Major military reforms are in the offing with defence minister Manohar Parrikar slated to meet Prime Minister Narendra Modi early next month to discuss the mandate of a proposed chief of defence staff (CDS).

Work has begun on creating joint commands to optimise resource utilisation among the three armed services; the Army, Navy and the Air Force.

South Block sources told Hindustan Times that the Modi government has decided to appoint a CDS, a single point military adviser to the political leadership in matters of acquisition, procurement policy and resource rationalisation.

The mandate for the proposed CDS will be decided by defence minister Parrikar in consultation with the PM and National Security Adviser Ajit Doval. “The new post of CDS will not be used for parking slots for super-ceded generals and a new man will be tasked with the job once work profile is clearly defined,” said a senior official.

Parrikar is currently studying the report of retired General DB Shekatkar on making military more effective with better teeth-to-tail ratio.

The Shekatkar committee has also identified areas where there is redundancy, and downsizing of the military could be undertaken without compromising combat effectiveness.

“For example, a couple of hundred signal troopers had been deployed to listen to radio broadcasts in 1962. This unit is still functional despite it being technologically redundant. Similarly, the National Cadet Corps could be downsized by more than 50% by hiring retired soldiers,” said the official.

After preferring merit to seniority in appointment of Army Chief, the defence ministry is now examining the case for a joint command as a step towards integrated theatre commands.

The Army, Air Force and Navy currently operate in silos with each protecting its turf and operations. The ministry now is looking towards creating integrated structures where all three services are synergized towards military operations.

For example, it is proposed that Northern Command could come under one overall commander from any one of the three services, with overall control of all military and air assets. “This does not mean that top level vacancies will be reduced. Only that there would be one overall commander in one theatre and future roles of military chiefs being redefined and refocused. Essentially, the reforms will be close to what has been done in US Armed Forces with tweaking on ground,” said a senior official.

However, top defence analysts are sceptical about the theatre command concept as it not only required dedicated military resources but also command synergy at the cutting-edge levels. According to them, maybe the first step could be formation of triservices battle groups before the theatre command concept is followed.

“US has global armed presence and hence the theatre command concept works with dedicated land, air and naval assets earmarked for each command. In India, we have flexible air and naval assets that are earmarked as per operational requirement,” said an analyst.

NEW MILITARY ORDER

Once the proposed post of chief of defence staff is made official, the Army, Navy and the Air Force will have a shared command structure For instance, it is proposed that Northern Command could come under one overall commander from any one of the three services with overall control of all military and air assets Currently, the three wings of the military operate in silos, each protecting its turf and operations But experts say the concept should come only after joint battle groups are created

Parrikar writes to Didi, says ‘deeply pained’ at allegations against Army

December 10, 2016 webadmin Leave a comment

Tribune News Service

New Delhi, December 9

Defence Minister Manohar Parrikar has written to West Bengal Chief Minister Mamata Banerjee saying he is “deeply pained” at allegations made against the Army. He said the forces were “apolitical”.Mamata and her party members in a series of tweets had alleged that the Army had carried out its movement in West Bengal without any sanction from the state government. The country-wide exercise was to keep a count on movement of heavy vehicles on December 1 and 2.Parrikar in his letter written on Thursday cited the allegations made by the West Bengal CM and reported in the media and told her, “Your (Mamata) allegations in this regard run the risk of adversely impacting the morale of the country’s armed forces and the same were not expected from a person of your standing and experience in public life.”The Defence Minister reminded the TMC supremo that there was extensive correspondence between the Kolkata-based Eastern Command of the Army and the state government.He said the Army was one of the most disciplined institutions of the country. “The country is proud of their professionalism and apolitical conduct,” Parrikar said, adding that as political parties we have the luxury of making wild and unsubstantiated allegations but one must be very careful when referring to our armed forces. He also assuaged the CM that the Army was forced to go public with the correspondence after allegations.Mamata hits back at Defence MinisterKolkata: Unrelenting West Bengal CM Mamata Banerjee on Friday replied Defence Minister Manohar Parrikar’s letter, saying while she has the highest regard for the Army, she will not tolerate if the Centre uses the Army to intimidate BJP’s political opponents. In her letter to the minister, she reiterated that the exercise was carried out without taking permission of the state government. She also claimed the police had objected to deployment of jawans at the toll plaza near the state secretariat and the objection was ignored by the Army. TNS

PARRIKAR ‘PAINED’ AT MAMATA OUTBURST, BENGAL CM SAYS GRIPE WITH GOVT, NOT ARMY

KOLKATA: Defence minster Manohar Parikkar has written to Bengal chief minister Mamata Banerjee expressing ‘anguish’ at her recent remarks against the armed forces and said her comments could adversely impact the morale of the forces.

In the evening, Banerjee shot off a reply alleging she has never seen such a political vendetta.

Parikkar’s letter, dated December 8, also said that the comments were not expected from the Trinamool chief who has decades of experience in public life. “Your allegations in this regard run the risk of adversely impacting the morale of the armed forces and the same was not expected from a person of your standing,” wrote Parikkar.

Mamata shot back saying, “My complaint was not against the army. It was against your government and the government policy as they act under your directions. During my long political and administrative life I have never seen such political vendetta by misusing the role of an esteemed organisation.”

The chief minister is yet to receive the letter that has been leaked to the media. She will send a strong reply as we have a strong case,” remarked Trinamool Rajya Sabha MP Derek O Brien on Friday.

On December 1, Banerjee had lashed out at the Centre for deploying army in her state without informing the government, which she said, amounted to a coup. Her comments came against the backdrop of her high-pitched battle against the Centre on the Prime Minister’s demonetisation move.

As the news hit headlines, army officers retorted saying it was nothing but a “routine exercise” that was conducted in other states.

Parrikar ‘pained’ by Bengal CM’s remarks on army, Didi cries vendetta Screen govt’s public campaigns in theatres: Centre tells states

In the evening, Banerjee shot off a reply alleging she has never seen such a political vendetta.

“The chief minister is yet to receive the letter that has been leaked to the media. She will send a strong reply as we have a strong case,” remarked Trinamool Rajya Sabha MP Derek O Brien on Friday.

As the news hit headlines, army officers retorted saying it was nothing but a “routine exercise” that was conducted in other states.

Economists speak up on demonetisation

December 4, 2016 webadmin Leave a comment

Venkatesh Athreya

Featured are summary views, solicited by The Tribune, on the government’s demonetisation move from nine economists of impeccable credentials, differing ages, a spectrum of ideological persuasions, and a variety of locations. We encounter amidst this diversity of backgrounds a profound sameness of opinion, as reflected in unanimous denunciation of the government’s action in sentiments and assessments such as: “essentially political move,…insensitive,…,gratuitous,..,appalling”; “firing cannonballs to kill mosquitoes”; “arrogance and insensitivity”; “an exercise in Manichean economics”; “authoritarian quackery”; “heavy cost to the economy”; “frightening abandonment of reason”; “throwing the baby out while retaining the bathwater”; and “a cavalier or even cynical political calculation”Here’s a cross-section of scholarly opinion.Essentially political move

Venkatesh Athreya

(retired Professor of Economics, Bharatidasan University, Tiruchi)The demonetisation measure of the Government of India may, at best, disable a portion of black wealth held in the form of currency notes that have ceased to be legal tender. The stock of black wealth held in currency form has been generally estimated at around 5 to 6 per cent of the total. A portion of this stash has already been laundered. Current estimates of black money trapped through demonetisation do not exceed three lakh crore. The claim that the demonetisation was aimed at immobilising counterfeit currency is lacking in credibility, with such currency estimated to value no more than Rs 400 crore, a very small proportion of the value of the high-denomination notes that were in circulation. The current measure does not address the continued generation of black money through tax evasion. Demonetisation as a weapon against terrorism is a claim bordering on the ridiculous. Corruption is not a one-time activity to be put an end to through this measure. The move seems essentially political. The Prime Minister’s statement that the opposition parties are unhappy because they were not “prepared” can be construed to imply that the ruling party at the Centre was prepared. The mounting criticism of the government on its failure to bring back black wealth stashed abroad as promised in the Lok Sabha polls, agrarian distress, industrial stagnation, rising unemployment, intolerance of alternate points of view, and the perception that this government is anti-Dalit and anti-Muslim, could all have been seen as negative in the context of the impending elections in some major states. Demonetisation may have been seen as a “big-bang” measure that would enhance the regime’s credibility in fighting black money and divert attention from its perceived failures. The informal economy accounts for 80 per cent or more of the workforce and nearly a half of total output. It has been grievously stricken by the government’s woefully inadequate preparation and complete failure to anticipate the impact of the move it has unleashed. This has been the inevitable consequence of the massive reduction in liquidity visited on an economy that conducts nearly 90 per cent of its transactions in cash. It has not only meant a great deal of avoidable distress, including deaths, for the mass of the people but also a devastation of the economy in the short and medium terms, with no guarantees for a revival subsequently. The advice to ordinary people to go digital in a context of poor bank and internet penetration is not only insensitive and gratuitous, but positively appalling.

Huge collateral damage

Maitreesh Ghatak

(Professor, The London School of Economics and Political Science, London)The demonetisation policy, at best, is a one-time tax on black money that is stored in the form of cash. But only around 5-6 per cent of undisclosed income is held in cash. Therefore, even if all of it gets targeted by this measure, it will not be an effective way to go at the existing stock of black money. Moreover, black money generation is a continuing process that involves evading taxes and regulations, and engaging in corrupt and criminal activities. These cannot be tackled with a one-time measure. They will continue unabated with the new currency notes. Ironically, this reform may even increase the stock of black money held in cash in the future by facilitating hoarding in currency notes of a higher denomination (the Rs 2000 notes). Even if the effectiveness of the policy in curbing black money will be minimal, the cost will be very high. Other than the direct cost of printing new notes, given that the affected currency notes constituted 86 per cent of the total volume of cash in the country, this policy effectively led to a much higher drop in liquidity than even the drop in the money supply (about 30 per cent ) that the US Fed is criticised for doing during the Great Depression. The informal sector is largely cash-dependent and alone accounts for 40 per cent of the GDP and employs 80 per cent of the workforce. It, along with the rest of the economy, is suffering perhaps the biggest policy-induced recessionary shock in post-Independence India. Add to it the physical hardship imposed on ordinary citizens in terms of standing in line, and strain on the capacity of the banking sector, which have resulted in deaths. This may go down in recent history as the biggest example of firing cannonballs to kill mosquitoes (granted that these were causing the malaria of corruption), with huge collateral damage.

Breathtaking insensitivity

Jayati Ghosh

(Professor, Jawaharlal Nehru University, New Delhi)The declared motivation of this drastic demonetisation keeps changing: from stopping “black money” to combating terrorist funding through counterfeit notes, to moving to a cashless society. But the welfare of ordinary citizens clearly forms no part of the government’s agenda. The flawed design suggests a basic lack of knowledge of the nature of the black economy, and an unwillingness to address the processes that allow parallel untaxed incomes. To deal with counterfeit notes a more gradual withdrawal of old notes would have been possible. Instead, the blanket ban on the bulk of notes in circulation has abruptly denied liquidity to the bulk of the economy’s transactions, without providing a sufficient supply of new notes to replace them. The ensuing chaos has gone well beyond causing mere “inconvenience”, to immense and continuing personal hardship and even deaths among the worst affected; destruction of livelihoods in informal and formal sectors; terrible effects on farmers caught between harvesting and sowing seasons; contracting demand that impacts the macroeconomy. Constantly changing implementation rules point to more than inefficiency and lack of preparedness. They suggest that the government essentially has no trust in the citizenry. Therefore, the need for secrecy and the sudden strike; the constraints put on the exchange of old notes; the suspicion of deposits put into Jan Dhan bank accounts; the denial of exchange facilities to cooperative banks and other institutions run by state governments. The underlying premise is that anyone who is the holder of the now-delegitimised currency notes is either a criminal or acting on behalf of criminals. Effectively, only those using plastic or electronic money are “honest”. In this whole episode, the government’s arrogance and insensitivity have been breathtaking. But as the mess continues and the material damage grows, its ability to hoodwink the population cannot last for too long.

Save economy from slump

Parikshit Ghosh

(Associate Professor, The Delhi School of Economics, Delhi)The sudden demonetisation of 86 per cent of the country’s currency stock, ostensibly to fight black money, counterfeiting and terrorist funding, is an exercise in Manichean economics. The decision seems propelled by a desire to project an epic battle against evil rather than any pragmatic weighing of costs against benefits.Replacing one currency by another will not prevent the kind of cash transactions the parallel economy thrives on. Demonetisation will wipe out only a small fraction of the stock of wealth accumulated through illegal means, since most of it is held in gold, land and real estate. Fake notes are rare and the new ones do not seem to have vastly superior security features. The massive liquidity shock has predictably dealt a big blow to production and trade in a primarily cash-based economy. The agriculture and construction sectors, and textile hubs in places like Tirupur, Banaras and Ludhiana, are badly hit, as are day labourers, craftsmen, hawkers, migrants and 80 per cent of workers who earn a living in the shadow economy. The greater the delay in infusing liquidity, the more lasting will be the damage.Although banks are now flush with new deposits, a large part of it comes from the informal sector’s transaction money, which will flow out as soon as withdrawal restrictions ease. It is, at any rate, egregious to recapitalise banks by raiding the cash reserves of the poor, while the informal lenders and microfinance organisations who actually lend to them are crippled by demonetisation. This should not be a magic pill for the Non-Performing Assets (NPA) in banks caused by corporate defaulters. Nor can it be justified as shock therapy for promoting financial inclusion and a cashless economy. Those are worthy goals better pursued with gradualism than paternalism. The government’s immediate priority should be to restore liquidity and save the economy from a deep slump.

Authoritarian quackery

Arjun Jayadev

(Associate Professor, Azim Premji University, Bengaluru)Until November 8, 2016 independent India had by and large avoided financial melodrama. Certainly there have been foreign exchange crises and some credit bubbles that broke nastily, but there has never been the sort of widespread debacle and panic that have been experienced in other developing economies. This makes the demonetisation decree all that more puzzling. Demonetisations are really unheard of in the absence of a hyperinflation or a situation of war. It is perhaps the most explicit recognition of a failed state of affairs, an acknowledgement that the most basic universal dealings of human beings between each other have broken down and that the society needs a reset. Let us, for a moment, think of what has been shaken to the core. It is not “black money” or illegality. It is not a rearrangement of affairs in favour of cashlessness. It is the belief in the integrity of the monetary system—that legal tender will be widely accepted, that our “pay community” is meaningfully solid and not subject to the whims, however well-intentioned, of a small group of people. It’s important to think about what the rupee note has represented to people. Like very few of our social contrivances, it is universally accepted. The denomination, written in all the major languages, allows citizens of all creeds and backgrounds to make binding commitments to each other. A rural labourer with that note in his pocket can interact, coordinate and cooperate with people who might otherwise have nothing to do with him. It is this very basic trust that is in question. Already, rumours abound that the new Rs 2000 notes will be demonetised soon enough. If demonetisation is to work as an attack on black money, it will only work if it is done repeatedly to any means of settlement that is used for illegal activities, and illegality is of course, not limited to cash transactions. No form of settlement is then safe from the arbitrary fancies of those in power. This is far from either a “surgical strike” or a “dose of strong medicine”. It is quackery. Worse, it is authoritarian quackery that cannot help but do deep damage to the basic institutional understandings that underpin our society.

Will impose cost on economyArun Kumar

(Retired Professor of Economics, Jawaharlal Nehru University, New Delhi; and author of The Black Economy in India, Penguin (India).The withdrawal of high- denomination currency notes from circulation is seen as a move to curb the black economy. Questions are being asked about its effectiveness and its economic costs. The immediate impact has been adverse and large.The current size of the black economy is 62 per cent of the GDP, or about Rs 90 lakh crore, and what may be held in cash would be only a few per cent, say Rs 2 to 3 lakh crore. Reports are that businessmen have found ways of converting their cash into new currency so that hardly any black money hoard may be demobilised. Thus, the expected bonanza to the government may be marginal. Most of those who generate substantial black incomes may be untouched by demonetisation. Further, generation of black incomes in different sectors is untouched by demonetisation and will continue.The heavy cost to the economy is becoming apparent. Households, farmers and businesses are being adversely affected as transactions have become difficult. A large part of the economy does not use plastic money or cheques. A black market has emerged for exchange of currency and there is a premium for gold and foreign currency, which will lead to loss of savings. Hoarding of currency is aggravating shortage of liquidity. Discretionary expenditure has dropped and this may persist, leading to demand shortage and dislocation of commerce and industry. This could aggravate NPA, and sickness in industry and unemployment, resulting in irreversible changes and hardship to the citizens even though most of them are not responsible for generating black incomes. Thus, while demonetisation will hardly impact the black economy, it will impose huge costs on the economy especially on the marginalised. The way out is to restore liquidity in the markets by allowing the older notes to continue in circulation till enough new notes are printed.

Abandonment of reason

Prabhat Patnaik

(Professor Emeritus, Jawaharlal Nehru University, New Delhi)For a government to demonetise overnight 86 percent of the currency, when nearly half the economy runs entirely on the basis of currency transactions and gets crippled thereby, makes no sense. When it transpires that this was done when no new currency had been printed, against which the old could be exchanged, then this move betrays an abandonment of reason that is truly frightening.This impression is not lessened one bit by the arguments advanced for the move. The first states that it attacks “black money”. But since the ratio of currency holdings to the volume of business in the “black economy” is extremely small, the profitability of engaging in “black activities” will be hardly affected by demonetisation, especially since only a fraction of the demonetised currency will be disabled anyway (the rest getting converted into new legal tender through a mushrooming of new “black avenues”). And since the “black economy” would continue, it would suck out the cash it needs, but which has been disabled by demonetisation, from the “white economy”, to the longer-term detriment of the informal sector. The second argument talks of moving to a cashless economy. Even if the need for it is accepted for argument’s sake, sudden demonetisation as a means towards it is like holding a gun to people’s heads to force them towards cashless modes of transacting. It is authoritarian and unacceptable.The third argument concerns counterfeit currency which terrorists apparently have injected into the economy. But getting rid of counterfeit currency does not require sudden demonetisation. Even if the old notes were replaced in a phased manner, as has happened occasionally in the past, counterfeit currency would still have been eliminated.Whether the people accept the hardships induced by demonetisation is immaterial; a government imposing such hardships betrays astounding irrationality.

Neither necessary nor sufficient

M. Govinda Rao

(Former Member, 14th Finance Commission; & Professor Emeritus , National Institute of Public Finance and Policy, New Delhi)The Prime Minister’s announcement invalidated 86 per cent of the currency with a sleight of hand, which has plunged the economy into a tailspin. In an economy in which over 96 per cent of the transactions are carried out in cash, such a chaos is inevitable. While nobody can find fault with the objective of curbing black economy, or ending terror financing or nullifying the counterfeit notes, the important questions are: first, whether this is the appropriate policy choice to justify the pain inflicted on the people and second, does the banking system have the capacity for implementing it to achieve normalcy within a reasonable time?As regards the policy mix, clearly demonetisation of the type undertaken is neither necessary nor sufficient. First, the policy will not impact the incentives for, nor deter, the earning of illegal incomes and evasion of taxes. The principal sources of the black economy in activities like political funding and election expenses, real-estate transactions, construction, tax evasion and bureaucratic corruption will continue. Second, the stock of black economy does not get affected much for, only a small portion of black money is held in currency. Much of it is stashed abroad or held in real estate, and gold and foreign currency. It is obvious that the shock therapy of such a magnitude cannot be implemented by the banking system. Over 30 per cent of the people employed in India are casual labourers who receive their wages and pay for their purchases in cash, and they have been put to severe hardships. With trade, tourism and construction activity coming to a standstill and with agricultural sectors requiring but unable to get cash for purchasing seeds and fertilisers at a time when rabi sowing is on, the GDP in the economy will decelerate significantly. This is a typical case of throwing the baby out while retaining the bathwater!

Avoidable human cost

Sanjay G Reddy

(Associate Professor, The New School of Social Sciences, New York)The government’s decision to scrap existing currency notes which make up a large proportion of those in use in transactions is an ill-thought out action which has little economic justification, and acts as a smoke-screen for the failure of the government to act in more fundamental ways to address people’s justified anger at ill-gotten wealth and ongoing corruption. However, better alternatives existed to what the Supreme Court has rightly referred to as “carpet bombing” and not a surgical strike, including the gradual replacement of targeted notes. The action has rightly been referred to as expropriation as it will lead to loss of wealth of many citizens who had trustingly stored their wealth in this form, either permanently or transiently, including the poor, thus also affecting economic activity. At the same time, those supposedly targeted have very likely avoided serious damage through a variety of evasive techniques. The question of whether the human cost is acceptable would be hard enough to answer if the move were somehow successful in addressing its supposed aims. In fact, there is every reason to believe that it will be unsuccessful, which makes the avoidable human cost a tragic consequence of a cavalier or even cynical political calculation, or of poor economic ideas compounded by incompetence. The loss of trust in the currency and in the ability of the government to manage the economy has, ironically, also dealt a blow to the confidence of the domestic and foreign private investors whom the government is otherwise keen to please. Despite its debacle, the government and its faithful, some pliant economists among them, will likely assert that it has advanced its aims, as it can always claim that things would have been still worse. In such a case, there is no better recourse than common sense.

An Opportunity to Bring Heart Back to Kashmir

December 3, 2016 webadmin Leave a comment

Something that escaped most observers even as queues at ATMs increased and worries about the next purchase of vegetables kept attention focused, is the sudden quieting of the situation in the Kashmir Valley. In ferment since 08 July 2016, when Burhan Wani was killed, stamina just collapsed after the Durbar moved to Jammu for the winter. Perhaps it was realised well in time that demonstrations and stone throwing are supposedly instruments to communicate collective negative emotions and angst. However, when there is no government to paralyse, no tourists to harass and no minorities to intimidate, there is not much point in protesting. That is the phenomenon that always takes place around the end of the year in the Valley. No doubt this year the de-monetisation exercise is contributing to ensure that professional stone throwers cannot earn their bread nor the smack, ganja or other drugs because there is not cash around with the organisers.

There is an opportunity beckoning here that needs to be grabbed. The emerging window is one in which the missing outreach can be restored. There has been much public debate through the summer such that awareness levels on the real problem of J&K have risen considerably. Everyone blames Pakistan for creating the mayhem on the streets and the strife. But equally after many years there is a majority consensus that the governance and outreach deficits are as much to blame. It is long since any commentaries have appeared blaming Article 370, the failure of ensuring conditions for safe return of the Pandits or even the Armed Forces Special Powers Act (AFSPA). Jammu has approached the problem with sincere maturity through the last many months, without raising a voice of protest despite that there has been reason to feel slighted. There cannot be a better time than now to demonstrate how the Establishment can empathise with the plight of those in the Valley who want to be delivered from the control of the young vigilantes and stop becoming a mirror image of Pakistan with radical faith dictating their lives. Scratch and scratch hard, because under the surface, there is a public awaiting a kind word and a change of heart.

The Army has been the quickest to realise it, as usual, sensing an opportunity. Throughout the summer and the autumn, it doggedly continued its counter-terrorism campaign without getting involved with too many stone throwers and demonstrators. As Headquarters Northern Command made available two brigades to 15 Corps, the challenge was in understanding, evolving, communicating and executing the concept of operations. The demonstration of its concept is best exemplified not by its operations on the LoC, which have been professional no doubt and not by the quick control it established over the so called fedayeens who were threatening to go out of control at a point in time. Instead, it is demonstrated by the runaway success of the most innocuous of all things – a program called ‘School Chalo’ (Let us go to School), once again confirming the immense role of military soft power.

Readers would be aware that schools in the Valley have been shut for the last four months. An atrocious program of burning of schools has been undertaken by unknown elements that are anti-national in character. The Separatists perceive that a way of preventing the return of normalcy is to ensure schools remain closed. The young vigilantes in the rural areas, the ones controlling the stone throwing and holding their parents and elders to ransom, also have no wish to return to school.

However, a vigorous social media campaign run by the Army in South Kashmir to bring home the message of its support to elders and parents, resonated splendidly in the hearts of the weary population. Schools reopened, the examinations drew 98 per cent attendance and the enthusiasm as per ground reports, was palpable.

This is one of the major successes of the Army employing a combination of ground campaign and social media outreach. It gives an indicator that more than anything else, the Army has simply to lead the way in outreach, social engagement and restoration of confidence. The State Government must take ownership of this success; it is not the Army’s success alone because through and through it would have been discussed at the frequent Unified Command meetings and the Chief Minister would have been well aware of it, making it her success.

What does this signify? For those observing the virtual great game in the Valley, it should send home the lesson that a weary population needs to be handled with a heart and requires its hearts to be touched. This is a hearts game waiting to be played all over again. Restoration of self-esteem is the need as much as weeding out of rabble rousers. A degree of reverse vigilantism on the mosques; facilitation of the movement and meeting of political representatives with their constituencies; energetic return of governance demonstrated by good administrative performance against the vagaries of the expected severe winter; and domination of the social media space by positive messaging, will communicate the State Government’s will and capability. The Army must assist in this energetically and whole heartedly. Just remember, it is all about ‘whole of government approach’ which will turn the tide and the Army must guide the government through with all its experience and knowledge of conflict.

The concept of Moral Dominance of the narrative remains the job of the Army, just as I strongly advocated in September 2016 when two infantry brigades were moving into deployment in South Kashmir. That is the way forward. Subsequently, build on it next summer. India will yet mainstream the Kashmiri populace – the Awam.

Lt Gen (Retd) Syed Ata Hasnain
Member, Governing Council, IPCS, & former GOC, 15 Corps, Srinagar

Navy refuses to deploy ‘overweight’ Tejas on aircraft carriers

December 3, 2016 webadmin Leave a comment

New Delhi, December 2The Indian Navy has ruled out deploying indigenously built light combat aircraft Tejas on its aircraft carriers because it was “overweight” and did not meet their requirements.Admiral Sunil Lanba, Chief of Naval Staff, said the navy is looking at procuring another aircraft.”As far as the carrier-based aircraft is concerned, we need it in a time line of the induction of the aircraft carrier. We have the MiG 29K, which operates from Vikramaditya and will operate from (indigenous aircraft carrier) IAC Vikrant. We were also hoping to operate the LCA (Light Combat Aircraft-Tejas) from these two aircraft carriers.” Lanba said. “Unfortunately, the LCA is not being able to meet the carrier’s required capability. That is why we need an alternative aircraft to operate from these two aircraft carriers.”He said that the navy was currently identifying an aircraft that would meet its requirements and was likely to take 5-6 more years.”If you look around the world, there are not too many options available and we need this carrier capable aircraft sooner than later. So, I am looking at next five-six years,” he said.LCA-Tejas is an indigenously built fighter aircraft and has been inducted into the Indian Air Force.Lanba said the navy is still encouraging India’s Defence Research and Development Organisation (DRDO) to develop the Naval LCA.The naval chief said that it is also looking at UAVs that can operate from ships and autonomous sub-surface vehicles for surveillance. — PTI

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