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Representatives of atleast three Russian banks operating in India, including Vnesheconombank, Sberbank and VTB, will meet executives from top Indian banks in Mumbai on Monday to discuss rupee-rouble settlements between businesses of the two countries.

According to sources close to the development, the meeting being organised by the Indian Banks’ Association (IBA) will also see participation from the RBI and Russia’s central bank representatives.

India and Russia have been trying to establish mechanisms for trade in national currencies, bypassing the US dollar, for about a decade, but there has been little progress on the ground.

The need for rupee-rouble trade has increased in the past one year as Russia continues to face pressure of US sanctions. India-Russia bilateral trade is highly dominated by defence deals and several Russian defence majors contracted by the Indian government are currently under US sanctions. Since the beginning of this year, Indian banks have halted defence-related payments worth several billion US dollars.

The issue was raised during the 24th meeting of Indo-Russian working group on banking and financial matters held in August in the Russian city of Tula chaired by Ksenia Yudaeva, first Deputy Governor of the Central bank of Russia, and Bibhu Prasad Kanungo, Deputy Governor of the Reserve Bank of India. According to the minutes of the meeting reviewed by BusinessLine, the infrastructure for such settlements is in place, but banks need to make further progress to start transactions.

The Indian side expressed concern over negative implications of the US sanctions against Russia while the Russian side said these challenges “can be addressed through a more accurate interpretation by Indian banks of the unilateral restrictions imposed against Russia by third countries”. The Russian side said it will provide the Indian side with regular updates on the sanctions regime which would then be communicated by the RBI to Indian banks. Experts believe the current volume of trade between India and Russia, which is around $10 billion, is too less to move to settlements in national currencies, and for the beginning the countries could start with agreement on currency swap.

“The trade volumes should go up by at least 30-50 per cent for the entire ecosystem to be interested,” an analyst with a Moscow-based brokerage said. “The rupee-rouble settlements could be more expensive and time consuming, at least in the initial phase. Hence, for business participating in this the governments and regulators of both countries should ensure they create a favourable environment,” he added.

Analysts said that the launch of rupee/dollar futures by the Moscow Exchange last month is a favourable step. Although technically it does not pave the way for settlement in national currencies, it could popularise the rupee in the Russian market.

Vijay Mohan

Tribune News Service

Chandigarh, August 20

Barely three weeks after the Supreme Court quashed the appointment of the Director General Medical Services (Army), the post has again come under judicial scanner with a Lieutenant General moving the apex court against the appointment of another officer as the new head of the Army’s medical branch.After the Supreme Court’s order on August 1, the Ministry of Defence posted Air Marshal Rajvir Singh, DGMS (Air Force) as the DGMS (Army) on August 10 in the rank of Lieutenant General.In his petition, Lt Gen Manomoy Ganguly has averred that he is one promotion batch senior to Rajvir Singh and also has a higher professional qualification and career profile. Ganguly, according to the petition that is expected to come up for hearing on August 27, is the second senior-most Lieutenant General after the Director General Armed Forces Medical Services, an Army Commander equivalent who heads the medical establishment of all three services.Although the Appointments Committee of the Cabinet notified Ganguly’s promotion to the rank of Lieutenant General on January 19, 2018, he is still posted as the head of the medical branch at Southern Command, a post tenable by a Major General.Earlier, Ganguly had moved the Armed Forces Tribunal for promotion to the rank of Lieutenant General. The tribunal allowed his petition, but it was challenged by the government in the Supreme Court. Upholding the tribunal’s judgment in its order of August 1, the apex court observed that there had been some attempt to deny Ganguly his promotion.

Petitioner’s argument

• Post SC order, the Ministry of Defence posted Air Marshal Rajvir Singh, Director General Medical Services (Air Force), as the DGMS (Army) on August 10
• In his plea, Lt Gen Manomoy Ganguly has averred that he is one promotion batch senior to Rajvir Singh and also has higher professional qualification and better career profile

One of the government’s plans to kick-start defence manufacturing in the country as part of its ambitious Make in India programme has run into a stumbling block on account of constraints on sharing original design details and drawings of Russian equipment and curbs on exporting these, documents reviewed by Hindustan Times show.

The specific case involves parts that go into the T-72, T-90 tanks and amphibious armoured troop carriers.

Ordnance Factories Avadi, a defence public sector unit, manufactures the tanks under a licence arrangement. It isn’t financially viable for the factory to make all parts for these and the plans to outsource more to Indian private sector firms.

Hence, it wants to share the original Russian designs with the private sector.

The government was also of the view that this would boost the manufacturing of defence equipment in India, especially by the private sector, one of Prime Minister’s articulated objectives.

India imported about $ 41 billion worth defence equipment last year despite the government push to make some of that in India. It also sees export opportunities in doing this.

The Russian origin T-90 and T-72 tanks are the mainstay battle tanks for India. India bought about 124 T-90 tanks directly from Russia and contracted to make another 1,375 tanks in India by December 2018.

“As regards items of Russian designs, namely for tanks T-72, T-90 and ICV BMP-II, (armoured troop carriers), it has been mentioned that all three contracts have clauses governing maintenance of secrecy with regard to Russian ToT (Transfer of Technology) documentation…While procuring items of Russian ToT from indigenous sources (OFB), factories have to prepare their own drawings/specifications based upon absorption of ToT and share the same for purpose of indigenous sourcing,” the joint secretary (land systems) in the department of defence production wrote in August in response to a query whether designs can be shared with Indian manufacturers.

Put otherwise, this means the original details and drawings can’t be shared; only those made by the ordnance factory can.

And even these cannot be used to make equipment for export. Nor can the manufacturers make derivative products from these drawings.

The ministry of defence spokesperson did not respond to queries seeking comment.

Dr Ajay Kumar, secretary, defence production, said in response to an e-mail that his department is “examining the issue”. “No final conclusions have been arrived at. Any solution will have to be within the framework of our existing agreements.”

“MoD has been pushing very hard. They are reaching out to vendors on both sides at various platforms. And, at the military industrial conferences between India and Russia, several agreements to share technology were signed to address this issue.

“Also, Russia has now agreed to certify components and spare-parts made in India which is a great help. Importantly, Russia is also open to working with the private sector, including the small and medium sectors. A good beginning has been made, things will change soon,” said Lieutenant General Subrata Saha (retd), the former deputy chief of Indian Army and founding DG of Society of Indian Defence Manufacturers.

Russia has now agreed to certify components and spare-parts made in India which is a great help. Importantly, Russia is also open to working with the private sector, including the small and medium sectors.

Khalsa Aid supporters cook food at Gurdwara Shri Guru Singh Sabha in Kochi, Kerala. Photo: Twitter

Tribune Web Desk
Chandigarh, August 18

Help continues to pour into Kerala as the state battles unprecedented flood. Among those volunteering is a UK-based Sikh philanthropist organisation.

Photos and videos posted on Facebook show the Khalsa Aid International serving flood victims at the Gurdwara Shri Guru Singh Sabha in Kochi, Kerala. Photos and videos posted by the organisation quickly went viral, drawing unanimous praises.

Vijay Mohan

Tribune News Service

Chandigarh, October 30

After decades of sustained deployment in some of the highest operational areas in the world, the Army is now exploring the feasibility of developing hybrid vehicles for use in high altitude areas to overcome the problems of degraded performance and high attrition that combustion engines face due to extreme cold and rarified air.

Army Design Bureau (ADB), the nodal agency dealing with the project, has flagged the issue for urgent redressal by the industry or research institutes as there is effective means to mitigate the problem as yet. ADB is the repository of all technical know-how for the Army and is the interface between government and private establishments for design, development and innovations.

At present, special grade fuel and oil is being used in high altitude areas, but these are not very effective during peak winters from November to March, often leading to vehicles becoming off-road.

Many areas where the Army is deployed — Ladakh, Kargil, Lahaul and Spiti, Sikkim and Arunachal Pradesh — experience sub-zero temperatures for several months in a year.

The engine horse power of conventional vehicles drops considerably in high altitude areas due to lack of air density and pressure. Further, due to extreme low temperature fuel and oil freeze or their viscosity increase, thereby affecting flow through the engine hoses or blocking injectors and filters increasing the risk of seizure, according to an Army engineer. Lubrication of engines and other moving parts is also affected, leading to frequent change of parts.

Hybrid vehicles with dual power source can overcome such problems as electric drive achieves greater efficiency in stop and go mission profiles as compared to conventional engines. The regenerative braking resources stores power as electrical energy resulting in greater fuel efficiency and an electric motor can generate instantaneous power for better off road maneuvering, engineers said.

Hybrid vehicles are a relatively new concept in India that is available in some passenger cars, but it is restricted to start and stop functions rather than drive power. The US Army is also said to be developing hybrid vehicles.

Ajay Banerjee

Tribune News Service

New Delhi, August 12

In an important signal on optimum use of available funds, the armed forces have been asked to avoid fresh accretions — adding any more numbers to the existing strength — while continuing with right-sizing of the Army, Navy and the Air Force.The matter of force numbers, the resultant man-power costs and redundancy caused due to technological upgrades was raised by a top government official at the two-day Unified Commanders’ Conference held in New Delhi on July 30 and July 31, sources confirmed to The Tribune. The matter of not increasing numbers was referred to and the rising costs were discussed, a functionary confirmed about the meeting.The Ministry of Defence (MoD) is clear: “Addition of new equipment (modernisation) does not mean a corresponding rise in the strength of men,” said sources. The foundation of this was laid by Prime Minister Narendra Modi very early into his tenure. In his address at one such conference in December 2015, Modi said: “Modernisation and expansion of forces at the same time is a difficult and unnecessary goal.” Over the last decade, the armed forces have absorbed a fair amount of technological developments, including communications and digitisation, which means some of the troops can be redeployed.The high-powered Defence Planning Council (DPC), at its first meeting in May this year, asked for “leaner, meaner and restructured armed forces ready for future wars enabled by proper use of budgetary allocations”. Army Chief General Bipin Rawat had ordered restructuring of the Army on June 12 this year.The Army, the biggest of the three armed forces, about 1.3-million strong, has been asked to improve its teeth-to-tail ratio. In simple words, it means have more fighting units and reduce non-fighting numbers. Last year, the MoD announced a major change as 57,000 officers and soldiers were to be redeployed to have more combat-oriented roles by 2019.It was an outcome of a committee headed by Lt Gen DB Shekatkar (retd), which suggested 99 points for structural changes in the Army, among them being cutting down flab and reducing revenue (maintenance) expenditure. Of these, the MoD has accepted 65 suggestions.Focus on right-sizing

• In this year’s budget ending March 31, 2019, salaries of the three services and civilians work out to Rs 1,18,966 crore
• Another Rs 1.08 lakh crore is the pension bill—both salaries and pensions account for 40 per cent of the entire budget
• More money had to be earmarked for salaries and pensions than for modernisation (Rs 99,563 crore)

P Stobdan
Former Ambassador 

Protecting Ladakh against prolonged troubles in Kashmir was long overdue and so was the imperative of addressing some of the aspirations of the people there. Ladakh holds 60 per cent of J&K’s territory and plays critical role for national security that can’t be overlooked. Also inconceivable has been how Independent India (at the behest of Nehru) reduced Ladakh’s profile of being one of the five kingdoms in the Himalayas into a mere neglected district of the Valley.

Joseph Korbel, father of former US Secretary of State Madelaine Albright, wrote in 1950 that Kashmiri leadership was playing a trick on the people of Ladakh, if not frightening them to surrender under their control. For seven decades, New Delhi has turned a blind eye to Kashmiri sabre-rattling and the trickery upon the people of Ladakh — perhaps even worse than Pakistanis’ exploitation of the people in Gilgit & Baltistan. In the late 1970s, Sheikh Abdullah drove a wedge between Kargil Shia versus Leh Buddhist, besides creating a nefarious ‘Greater Kashmir’ concept to obliterate Ladakh.

The myth of J&K as a unitary state (a heritage of Dogra fiefdom) has outlived its historical inviolability. India should have thought about doing away with any subjugation links that Ladakh notionally had with J&K. After persistent articulation for the status of a UT, the Union government finally agreed in 1993, as interim measure, to create the Ladakh Autonomous Hill Development Council. In 1995, the Ministry of Law, Justice and Company Affairs announced the Act enacted by the President under the powers conferred by Section 3 of the Jammu and Kashmir State Legislature (Delegation of Powers) Act, 1992, to provide for the establishment of Autonomous Hill Development Councils and an Inter-District Advisory Council in the Ladakh region. 

The Act had to be passed during the phase of the third and longest Governor’s Rule (1990-1996). But the Ladakh Autonomous Hill Development Council (LAHDC) Act in 1997, passed by the NC government, was toothless. It was in 2002, during the time of the PDP-led coalition government in J&K, that a semblance of power was devolved to LAHDC of Leh district through an amendment to the 1997 Act.

It was remarkable that then CM, Mufti Sayeed, within two months of his coming to power, decided to delegate greater financial and administrative powers to LAHDC (Leh) and create a similar LAHDC for Kargil as well. Under the new Act, the LAHDC chief executive councillor was given the status and perks of a Cabinet minister and executive councillors of a deputy minister’s rank. The council was empowered to decide on the allotment and distribution of land, superintendence and control over the council employees. 

The LAHDCs of Leh and Kargil have been functioning well, rather in an exemplary way since. But in a major decision on September 27, the State Administrative Council (SAC) — equivalent of a Cabinet in Governor’s rule, under the chairmanship of Governor Satya Pal Malik, has approved yet another LAHDC (Amendment) Bill, 2018, to fully empower the councils with greater administrative and financial powers. Inter alia, the amendments gave more powers to the LAHDC to levy and collect taxes, more administrative control over the staff and more allocation and flow of funds from Centrally-sponsored schemes.

While the people of Ladakh had been seeking a separate legislative arrangement in the form of a UT status since 1951, which the ruling BJP agreed to fulfil prior to 2014, constitutional changes seem unattainable. Since the matter is perceived as linked with the Kashmir issue, it can’t be realised for now. Regions like Ladakh, which are in favour of deeper integration with the national mainstream, cannot be allowed to drift against the current context of destabilising forces in the state.

The Centre also cannot punish the region any longer on the ground of its demographic deficiency (low weight in electoral politics). Considering Ladakh’s geo-strategic significance and in the light of Pakistan recently promulgating the Gilgit Baltistan Order 2018 (entrusting it with an assembly with legislative power) a change in Ladakh is critical. New Delhi has to be mindful of China blustering its way through the region under its CPEC projects which will have direct consequences for Ladakh.

While UT status would remain a long-drawn process, strategic articulation and national security imperative should propel the government to upgrade the administrative status of Ladakh at least to a divisional level. Currently, only a DC-level officer in Leh and Kargil acts as the chief executive officer of the respective council, who, in turn, reports to the Divisional Commissioner of Kashmir and Ladakh based in Srinagar. The Commissioner sitting in Kashmir supervises and controls 12 districts, including Leh and Kargil, in terms of administrative, developmental and law and order situation.

Separating Ladakh from Kashmir Division and setting up a Divisional Commissioner’s office will go a long way in meeting the regional aspirations of the people. The launch of the overarching national vision of a tunnel through Zoji La (11,578 ft), connecting the Valley with Ladakh, in addition to building a high-elevation all-weather Bilaspur-Manali-Leh rail axis and Srinagar-Kargil-Leh axis will go a long way in removing Ladakh’s isolation. The projects are of great strategic, economic and developmental significance. The biggest spin-off will be the region opening up to better influx for tourism.

New York, August 7

A US Navy veteran, who shot and killed Indian engineer Srinivas Kuchibhotla and injured two others at a suburban Kansas City bar in 2017, was on Tuesday sentenced to life without the possibility of parole.Adam Purinton of Olathe shot and killed Kuchibhotla, and wounded two others — Indian national Alok Madasani and Kansas resident Ian Grillot — at Austins Bar & Grill in Olathe, Kansas, in February 2017.Purinton was sentenced to life in prison without the possibility of parole, Attorney General Jeff Sessions said in a statement.Earlier this year, he pleaded guilty in federal court to hate crime and firearm offenses arising out of the shooting.At his federal guilty-plea hearing, Purinton admitted in open court that he targeted and shot Kuchibhotla and Madasani because of their race, colour, and national origin, and that he shot Grillot during an attempt to flee the scene of the crime.Purinton has also pleaded guilty in state court to charges of murder and attempted murder, and has been sentenced to a term of life imprisonment in state prison.“The crimes at issue in this case are detestable,” Sessions said.“The defendant acted with clear premeditation in murdering one man, and attempting to murder a second man, simply because of their race, religion, and national origin. As a result, a promising young life has been tragically cut short, and other lives have been filled with suffering.”Sessions said in the statement that while the “irreparable harm” that Purinton has done cannot be undone, “some measure of justice for the victims’ families has been achieved.” — PTI