Rafale deal

With every revelation, the mystery around the Rafale deal thickens. From the number of planes ordered to its extraordinary pricing, every aspect of the deal is disadvantageous to the country. India stands deprived of the transfer of technology for the serial production of the fighter planes here. The Inter-governmental Agreement has become a convenient instrument to hide the nepotism and complicity. The French Government has no perceptible liability in the discharge of the responsibility by Dassault Aviation, except that it would intervene if any failure in the performance of the contract is reported. And the obligations expressly given in the contract or the quality of the fly-away jets are not seen guaranteed with legally enforceable instruments.

It is not known what part Reliance Defence, the only known Indian offset partner, is expected to play in the discharge of the offset obligations. And the back-loaded offset obligation, with more than 50 per cent of it to be discharged only in the seventh year, could be a programmed route to escape through the time lag. To put in a nutshell, all the terms of the contract, without exception, are seen stacked to suit the requirements of the foreign suppliers and offset partner(s). Perhaps, the last word about the Rafale is yet to be said.

Kozhikode

It is disturbing to know that the BJP has once again reiterated its stand on the Citizenship Amendment Bill, and is hell bent on getting the same implemented. This move, primarily aimed at garnering votes (in West Bengal and some pockets in the North-East), goes against the will of the people of Assam. What is even more perturbing is that the AGP, the regional party, that had severed its ties with the BJP on this issue, has once again become a pre-poll partner of the ruling alliance. Post-poll, the AGP can never say that it was not in the same page with the BJP, as the latter’s election manifesto clearly states its position.

Nagaon, Assam

This refers to ‘Replicating IT success in manufacturing’ (March 9). There are differences between the the two sectors. The requirements of the industrial sector are difficult to meet. The sector has to grapple with issues such as getting large tracts of land, product selection, assessing environment impact, and getting manpower with different skill sets. The IT sector, on the other hand, mostly employs engineers, who are currently available in large numbers for employment. Also, the marketing of IT products is less difficult since in most cases the work is based on actual requirements of users, and valuation of the products is initiated on orders. The initial capital investments are also lower than for industrial units.

Coimbatore

This refers to ‘Banks to post better performance in FY20’ (April 9). More than the capital infusion programme initiated by the government, the performance of banks, especially public sector banks, in FY20 hinges on two key guidelines awaited from the RBI. In December 2018, the RBI dismantled the Base Rate/MCLR system as it was found to be an ineffective in transmission of policy rates. It announced that all floating rate loans issued by banks have to be benchmarked to the RBI repo rate/Government of India 91 or 182 days Treasury Bills. The final direction in this regard is yet be announced by the RBI.

Recently, the Supreme Court held the RBI Circular on ‘Resolution of Stressed Assets’ as ultravires. The said guideline from the RBI was a revolutionary one, which threw overboard as many as 28 of its earlier circulars. One is not clear if these circulars, in the context of the Supreme Court judgment, will get a new lease of life. Following the judgement, the RBI is expected to issue a revised set of guidelines on the effective resolution of stressed assets. The RBI will do well to issue the final direction after getting the feedback from bankers/stakeholders in respect of both these issues as they have got a direct bearing on the profitability of banks.

Kumbakonam, TN

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