Within the enormous caverns of the Barack Obama's $787 billion stimulus plan is a nugget for US companies to spend a few billions to construct roads and bridges, mass transit rails and national parks. The US president is right in expecting a massive spin off for his economy from the measure that will improve the top lines of construction companies, if not their profits and lead to a surge in job creation. In more or less the same period the European governments too plan a similar push to their infrastructure investments.
This is one part of the plan that should be of most concern to India, probably even more than the proposal to cut tax breaks for firms which ship jobs overseas. Because, in the same time frame ie within the next two years or 2012, we also plan to spend about $500 billion to develop our infrastructure in a massive way. The dampener on outsourcing will be moderated as Indian and US companies will be on the same wave length on this—cut costs. But that benefit will not work in the race to capture the global infra funds.
Put simply, after a nice lull of several years, companies planning to invest in Indian infra sectors will now face steep competition in attracting the attention of global infra fund managers. They will have to sound convincing that India offers a better deal than the US or Europe in the infrastructure business, in the next few years. This will include the rules for doing business and the rules for raising finance. All this has to be done, in the midst of the ripples that have already begun in the global financial markets about the Obama plan. At least one global fund house has already begun mobilising finance at Libor plus 500 bps to invest in US infrastructure.
We also have to remember that even for domestic infra funds, the rules for investment abroad have been simplified. Few fund managers at this stage will be able to say that given a chance they will prefer to invest in a special purpose vehicle to develop a road project in India than one in the US. These are not academic exercises but real bread and butter choices that companies in very harsh financial markets will be making very soon.
If that sounds challenging there is no doubt it is and talking to the Indian companies has made me sure that they too think the Obama plan will impact them big. So it is very urgent that we get our act right on the stuff that crimp infra investment in India.
And here, instead of moaning about the problems, I feel there is cause for cheer if one looks at some things we have recently got right. Of these, the one that needs a big round of applause is a government proposal to allow single bidders for projects, especially for roads and highways. This might seem like playing with government money but it is not. Of the 34 projects that the NHAI had advertised, only 16 have received any bids. Of these, six stretches have got only one bid.
Before readers begin to draw pictures of cartels playing cahoots with rules, it is worth recounting that the railways face the same problem. Its flagship project to construct a locomotive factory at Madhepura in Bihar has received only one financial bid out of the three companies that had put in technical bids. The phase II of the Mumbai metro project has done worse. It has got no bidders from among the seven companies that put in technical bids.
The central government is plainly waking up to the sudden drying of funds in infrastructure sector. But what is most needed at this juncture is similar realisation among state governments too. Indian infra projects with the glorious exception of the Delhi Metro have consistently been delayed in completion, largely due to state level bottlenecks. The latest flash report of the ministry of programme implementation shows that 47% of the 523 biggest projects involving the government are running delayed. The more important piece of statistic is that this has raised the cumulative cost of these projects by over 11%. The implications are obvious. Since infra project developers rarely get funding at less than 14-16% rate of interest in normal circumstances, an 11% cost over run means adding one more per cent to the project cost.
So, it is quite pleasing that governments, both at the centre and states, have revised their take on land acquisition. On February 23, for the first time in nearly two years states and the Centre publicly acknowledged that they need to go for the jugular to get land for projects. Infra projects were almost paralysed as a fall out of the problems in acquiring land from 2007 onwards. But at a meeting of the state chief secretaries with the cabinet secretary to work out ways to make the government stimulus package work, ministry officials, to quote the government release, told states to give "special attention to land acquisition wherever projects are stalled on account of this reason". In Indian government speak that could mean a big step forward.
Would these be enough? I doubt it. In the next few months, several Indian entities will approach the international markets to raise debt to finance their projects. To ensure they have any reasonable chance to compete, the entire infra project approval and delivery mechanism needs to be redrawn very fast
Showing posts with label indo-u.s. relation. Show all posts
Showing posts with label indo-u.s. relation. Show all posts
Saturday, February 28, 2009
Sunday, February 22, 2009
Mumbai terror, implications for US interests (Congressional Research report)
http://www.scribd.com/doc/9940655/001R40087 Congressional Research Service document. Terrorist attacks in Mumbai, India and implications for US Interests by K. Alan Kronstadt, Specialist in South Asian Affairs dated December 19, 2008
Excerpts:
A 2006 session of the U.S.-India Joint Working Group
on Counterterrorism ended with a statement of determination from both countries to further
advance bilateral cooperation and information sharing on such areas of common concern as
bioterrorism, aviation security, advances in biometrics, cyber-security and terrorism, WMD
terrorism, and terrorist financing.105 The Working Group has met a total of nine times since its 2000 creation, most recently in August 2008. Joint Chiefs Chairman Adm. Mullen was in New Delhi in early December to meet with senior Indian leaders, where he reiterated the U.S.
military’s commitment to work closely with Indian armed forces on counterterrorism. http://newdelhi.usembassy.gov/pr120408a.htm.
The Mumbai incident elicited more vocal calls for deepening U.S.-India counterterrorism
cooperation that could benefit both countries. Such cooperation has been hampered by sometimes divergent geopolitical perceptions and by U.S. reluctance to “embarrass” its Pakistani allies by conveying alleged evidence of official Pakistani links to terrorists, especially those waging a separatist war in Kashmir. Mutual distrust between Washington and New Delhi also has been exacerbated by some recent clandestine U.S. efforts to penetrate Indian intelligence agencies.
Despite lingering problems, the scale of the threat posed by Islamist militants spurs observers to encourage more robust bilateral intelligence sharing and other official exchanges, including on maritime and cyber security, among many more potential issue-areas. See Lisa Curtis, After Mumbai: Time to Strengthen U.S.-India Counterterrorism Cooperation, Heritage Foundation
Backgrounder, December 9, 2008, http://www.heritage.org/Research/AsiaandthePacific/upload/bg_2217.pdf.
U.S. law enforcement agencies possess specialized equipment that can trace voice-over-internet calls, along with other expertise for examining the global position and satellite phone systems used by the attackers. One unnamed senior Indian intelligence source was quoted as saying that FBI assistance in tracing VoIP calls will be a “test case for U.S. promises.” (Praveen Swami, “Key Test for Indo-U.S. Intelligence Ties” (op-ed), Hindu (Chennai), December 3, 2008; quote in “Terror Boat Was Almost Nabbed Off Mumbai,” Times of India (Delhi), December 10, 2008.)
Summary
On the evening of November 26, 2008, a number of well-trained militants came ashore from the
Arabian Sea on small boats and attacked numerous high-profile targets in Mumbai, India, with
automatic weapons and explosives. By the time the episode ended some 62 hours later, about 165
people, along with nine terrorists, had been killed and hundreds more injured. Among the
multiple sites attacked in the peninsular city known as India’s business and entertainment capital
were two luxury hotels—the Taj Mahal Palace and the Oberoi-Trident—along with the main
railway terminal, a Jewish cultural center, a café frequented by foreigners, a cinema house, and
two hospitals. Six American citizens were among the 26 foreigners reported dead. Indian officials
have concluded that the attackers numbered only ten, one of whom was captured.
The investigation into the attacks is still in preliminary stages, but press reporting and statements
from U.S. and Indian authorities strongly suggest that the attackers came to India from
neighboring Pakistan and that the perpetrators likely were members and acting under the
orchestration of the Pakistan-based Lashkar-e-Taiba (LeT) terrorist group. The LeT is believed to
have past links with Pakistan’s military and intelligence services. By some accounts, these links
are ongoing, leading to suspicions, but no known evidence, of involvement in the attack by
Pakistani state elements. The Islamabad government has strongly condemned the Mumbai
terrorism and offered New Delhi its full cooperation with the ongoing investigation, but mutual
acrimony clouds such an effort, and the attacks have brought into question the viability of a
nearly five-year-old bilateral peace process between India and Pakistan.
Three wars—in 1947-48, 1965, and 1971—and a constant state of military preparedness on both
sides of the border have marked six decades of bitter rivalry between India and Pakistan. Such
bilateral discord between two nuclear-armed countries thus has major implications for regional
security and for U.S. interests. The Administration of President-elect Barack Obama may seek to
increase U.S. diplomatic efforts aimed at resolving conflict between these two countries. The
Mumbai attacks have brought even more intense international attention to the increasingly deadly
and destabilizing incidence of Islamist extremism in South Asia, and they may affect the course
of U.S. policy toward Pakistan, especially. The episode also has major domestic implications for
India, in both the political and security realms. Indian counterterrorism capabilities have come
under intense scrutiny, and the United States may further expand bilateral cooperation with and
assistance to India in this realm.
For broader discussion, see CRS Report RL33529, India-U.S.
Relations, and CRS Report RL33498, Pakistan-U.S. Relations. This report will not be updated.
www.fas.org/sgp/crs/row/RL33529.pdf
www.fas.org/sgp/crs/row/RL33498.pdf
Chidambaram’s visit cancelled; US report puts focus on 26/11
Livemint Posted: Fri, Jan 9 2009. 12:38 AM IST
Mint could not immediately ascertain whether the home minister’s trip had been put off because of the imminent change in the US leadership
Liz Mathew
New Delhi: Home minister P. Chidambaram’s proposed trip to the US to share evidence about the involvement of Pakistan-based groups in the Mumbai terror attacks has been cancelled even as a US Congressional research report said it may be time to evolve a new foreign policy for South Asia.
In less than two weeks, Barack Obama will take charge as the next president of the US. Mint could not immediately ascertain whether the home minister’s trip had been put off because of the imminent change in the US leadership.
According to a top official in the ministry of external affairs, or MEA, Chidambaram’s visit had been cancelled because India had already handed over evidence establishing links between the attacks and Pakistan-based “elements” to Pakistan and given copies to the US. The official did not want to be identified. When contacted, Chidambaram declined to comment. He had been expected to meet US homeland security secretary Michael Chertoff and secretary of state Condoleezza Rice in Washington.
Meanwhile, the report, “Terrorist Attacks in Mumbai, India and Implications for US Interests”, prepared by the Congressional Research Service for circulation among lawmakers, said the Mumbai attacks could complicate the US’ South Asia policy.
“Potential issues for the 111th Congress with regard to India include legislation that would foster greater US-India counterterrorism relations. With regard to Pakistan, Congressional attention has focused and is likely to remain focused on the programming and potential further conditioning of US foreign assistance, including that related to security and counterterrorism,” the report said.
Pratap Bhanu Mehta, president of the Centre for Policy Research, a Delhi-based think tank, said the attacks have “re-hyphenated India and Pakistan in the US foreign policy” and “it would be a fair hypothesis to say that the Mumbai attacks were partly carried out to complicate US foreign policy”.
“I think it is now time that the US does a fundamental rethink on its Pakistan policy rather than its South Asia diplomatic efforts,” Mehta said.
Former national security advisor Brajesh Mishra said, “Much is going to depend on the (Joe) Biden visit. Obama is sending Biden, along with four colleagues, to see for themselves.” US vice-president-elect Joe Biden is scheduled visit to Pakistan this week.
Independently, Ted Osius, minister counsellor for political affairs at the US embassy in India, told a conference organized by the Indo-American Chamber of Commerce on Thursday that the US would want to look at Russia as an alternative to route its supplies and equipment for bases in Afghanistan and thereby reduce reliance on Pakistan.
Ruhi Tewari, Rahul Chandran and Asit Ranjan Mishra and PTI contributed to this story.
liz.m@livemint.com
http://www.livemint.com/Articles/PrintArticle.aspx?artid=BA08F254-DDB1-11DD-A9CC-000B5DABF636
SP blows hot, and then cold, on pullout threat
8 Jan 2009, 0246 hrs IST, TNN
NEW DELHI: A day after the Supreme Court threw a spanner in the Centre's bid to bail out Mulayam Singh Yadav in the DA case, the Samajwadi Party raised the ante with threats of pullout from the UPA, only to suddenly calm down after an audience with Congress chief Sonia Gandhi.
The sudden rise and fall in SP temper, with party general secretary Amar Singh as protagonist, left political circles bewildered as observers linked the flip-flop to the brazen CBI attempt to get SP chief out of the agency's net.
SP linked its anger to the UPA government's refusal to act decisively against Pakistan, and the late-evening U-turn was also argued around terror, but few were ready to buy the argument.
While the Centre has done its part to help Mulayam Singh out of the CBI net, going to the extent of seeking a withdrawal of the case after having sought the SP chief's prosecution, Samajwadis feel that more needs to be done to clinch the issue.
As the drama played out within a day of the apex court's strong remarks on CBI, the terror-Pakistan link to the rise and drop in SP anger had few takers.
Amar Singh told reporters in the afternoon that SP could withdraw support to UPA as the latter had failed to take decisive action against Pakistan for the Mumbai terror attacks.
"During an all-party meeting 40 days ago, the government had promised party chief Mulayam Singh that decisive action against Pakistan will be taken in 15 days...that deadline is over," he said, adding that a decision would be taken at the parliamentary board meeting on Thursday.
As Congress downplayed the outburst, saying it only showed SP's concern over terrorism, Amar Singh drove to 10, Janpath, for a meeting with Sonia Gandhi. He emerged from her residence to say there was no question of a pullout and that he had only expressed the sentiments of his party workers.
After having built a case around terror in the day-long drama, SP leaders may gather on Thursday to raise the pitch even further. It suits Samajwadis to take a belligerent stand on Pakistan, having realised that public mood has turned completely against the politicking as it did during the Batla House encounter.
SP believes that a tough stance on terror would endear it to voters across the board. That rival Mayawati has also taken a strong line on terror only shows how language of UP politics has changed since the Mumbai attacks.
Excerpts:
A 2006 session of the U.S.-India Joint Working Group
on Counterterrorism ended with a statement of determination from both countries to further
advance bilateral cooperation and information sharing on such areas of common concern as
bioterrorism, aviation security, advances in biometrics, cyber-security and terrorism, WMD
terrorism, and terrorist financing.105 The Working Group has met a total of nine times since its 2000 creation, most recently in August 2008. Joint Chiefs Chairman Adm. Mullen was in New Delhi in early December to meet with senior Indian leaders, where he reiterated the U.S.
military’s commitment to work closely with Indian armed forces on counterterrorism. http://newdelhi.usembassy.gov/pr120408a.htm.
The Mumbai incident elicited more vocal calls for deepening U.S.-India counterterrorism
cooperation that could benefit both countries. Such cooperation has been hampered by sometimes divergent geopolitical perceptions and by U.S. reluctance to “embarrass” its Pakistani allies by conveying alleged evidence of official Pakistani links to terrorists, especially those waging a separatist war in Kashmir. Mutual distrust between Washington and New Delhi also has been exacerbated by some recent clandestine U.S. efforts to penetrate Indian intelligence agencies.
Despite lingering problems, the scale of the threat posed by Islamist militants spurs observers to encourage more robust bilateral intelligence sharing and other official exchanges, including on maritime and cyber security, among many more potential issue-areas. See Lisa Curtis, After Mumbai: Time to Strengthen U.S.-India Counterterrorism Cooperation, Heritage Foundation
Backgrounder, December 9, 2008, http://www.heritage.org/Research/AsiaandthePacific/upload/bg_2217.pdf.
U.S. law enforcement agencies possess specialized equipment that can trace voice-over-internet calls, along with other expertise for examining the global position and satellite phone systems used by the attackers. One unnamed senior Indian intelligence source was quoted as saying that FBI assistance in tracing VoIP calls will be a “test case for U.S. promises.” (Praveen Swami, “Key Test for Indo-U.S. Intelligence Ties” (op-ed), Hindu (Chennai), December 3, 2008; quote in “Terror Boat Was Almost Nabbed Off Mumbai,” Times of India (Delhi), December 10, 2008.)
Summary
On the evening of November 26, 2008, a number of well-trained militants came ashore from the
Arabian Sea on small boats and attacked numerous high-profile targets in Mumbai, India, with
automatic weapons and explosives. By the time the episode ended some 62 hours later, about 165
people, along with nine terrorists, had been killed and hundreds more injured. Among the
multiple sites attacked in the peninsular city known as India’s business and entertainment capital
were two luxury hotels—the Taj Mahal Palace and the Oberoi-Trident—along with the main
railway terminal, a Jewish cultural center, a café frequented by foreigners, a cinema house, and
two hospitals. Six American citizens were among the 26 foreigners reported dead. Indian officials
have concluded that the attackers numbered only ten, one of whom was captured.
The investigation into the attacks is still in preliminary stages, but press reporting and statements
from U.S. and Indian authorities strongly suggest that the attackers came to India from
neighboring Pakistan and that the perpetrators likely were members and acting under the
orchestration of the Pakistan-based Lashkar-e-Taiba (LeT) terrorist group. The LeT is believed to
have past links with Pakistan’s military and intelligence services. By some accounts, these links
are ongoing, leading to suspicions, but no known evidence, of involvement in the attack by
Pakistani state elements. The Islamabad government has strongly condemned the Mumbai
terrorism and offered New Delhi its full cooperation with the ongoing investigation, but mutual
acrimony clouds such an effort, and the attacks have brought into question the viability of a
nearly five-year-old bilateral peace process between India and Pakistan.
Three wars—in 1947-48, 1965, and 1971—and a constant state of military preparedness on both
sides of the border have marked six decades of bitter rivalry between India and Pakistan. Such
bilateral discord between two nuclear-armed countries thus has major implications for regional
security and for U.S. interests. The Administration of President-elect Barack Obama may seek to
increase U.S. diplomatic efforts aimed at resolving conflict between these two countries. The
Mumbai attacks have brought even more intense international attention to the increasingly deadly
and destabilizing incidence of Islamist extremism in South Asia, and they may affect the course
of U.S. policy toward Pakistan, especially. The episode also has major domestic implications for
India, in both the political and security realms. Indian counterterrorism capabilities have come
under intense scrutiny, and the United States may further expand bilateral cooperation with and
assistance to India in this realm.
For broader discussion, see CRS Report RL33529, India-U.S.
Relations, and CRS Report RL33498, Pakistan-U.S. Relations. This report will not be updated.
www.fas.org/sgp/crs/row/RL33529.pdf
www.fas.org/sgp/crs/row/RL33498.pdf
Chidambaram’s visit cancelled; US report puts focus on 26/11
Livemint Posted: Fri, Jan 9 2009. 12:38 AM IST
Mint could not immediately ascertain whether the home minister’s trip had been put off because of the imminent change in the US leadership
Liz Mathew
New Delhi: Home minister P. Chidambaram’s proposed trip to the US to share evidence about the involvement of Pakistan-based groups in the Mumbai terror attacks has been cancelled even as a US Congressional research report said it may be time to evolve a new foreign policy for South Asia.
In less than two weeks, Barack Obama will take charge as the next president of the US. Mint could not immediately ascertain whether the home minister’s trip had been put off because of the imminent change in the US leadership.
According to a top official in the ministry of external affairs, or MEA, Chidambaram’s visit had been cancelled because India had already handed over evidence establishing links between the attacks and Pakistan-based “elements” to Pakistan and given copies to the US. The official did not want to be identified. When contacted, Chidambaram declined to comment. He had been expected to meet US homeland security secretary Michael Chertoff and secretary of state Condoleezza Rice in Washington.
Meanwhile, the report, “Terrorist Attacks in Mumbai, India and Implications for US Interests”, prepared by the Congressional Research Service for circulation among lawmakers, said the Mumbai attacks could complicate the US’ South Asia policy.
“Potential issues for the 111th Congress with regard to India include legislation that would foster greater US-India counterterrorism relations. With regard to Pakistan, Congressional attention has focused and is likely to remain focused on the programming and potential further conditioning of US foreign assistance, including that related to security and counterterrorism,” the report said.
Pratap Bhanu Mehta, president of the Centre for Policy Research, a Delhi-based think tank, said the attacks have “re-hyphenated India and Pakistan in the US foreign policy” and “it would be a fair hypothesis to say that the Mumbai attacks were partly carried out to complicate US foreign policy”.
“I think it is now time that the US does a fundamental rethink on its Pakistan policy rather than its South Asia diplomatic efforts,” Mehta said.
Former national security advisor Brajesh Mishra said, “Much is going to depend on the (Joe) Biden visit. Obama is sending Biden, along with four colleagues, to see for themselves.” US vice-president-elect Joe Biden is scheduled visit to Pakistan this week.
Independently, Ted Osius, minister counsellor for political affairs at the US embassy in India, told a conference organized by the Indo-American Chamber of Commerce on Thursday that the US would want to look at Russia as an alternative to route its supplies and equipment for bases in Afghanistan and thereby reduce reliance on Pakistan.
Ruhi Tewari, Rahul Chandran and Asit Ranjan Mishra and PTI contributed to this story.
liz.m@livemint.com
http://www.livemint.com/Articles/PrintArticle.aspx?artid=BA08F254-DDB1-11DD-A9CC-000B5DABF636
SP blows hot, and then cold, on pullout threat
8 Jan 2009, 0246 hrs IST, TNN
NEW DELHI: A day after the Supreme Court threw a spanner in the Centre's bid to bail out Mulayam Singh Yadav in the DA case, the Samajwadi Party raised the ante with threats of pullout from the UPA, only to suddenly calm down after an audience with Congress chief Sonia Gandhi.
The sudden rise and fall in SP temper, with party general secretary Amar Singh as protagonist, left political circles bewildered as observers linked the flip-flop to the brazen CBI attempt to get SP chief out of the agency's net.
SP linked its anger to the UPA government's refusal to act decisively against Pakistan, and the late-evening U-turn was also argued around terror, but few were ready to buy the argument.
While the Centre has done its part to help Mulayam Singh out of the CBI net, going to the extent of seeking a withdrawal of the case after having sought the SP chief's prosecution, Samajwadis feel that more needs to be done to clinch the issue.
As the drama played out within a day of the apex court's strong remarks on CBI, the terror-Pakistan link to the rise and drop in SP anger had few takers.
Amar Singh told reporters in the afternoon that SP could withdraw support to UPA as the latter had failed to take decisive action against Pakistan for the Mumbai terror attacks.
"During an all-party meeting 40 days ago, the government had promised party chief Mulayam Singh that decisive action against Pakistan will be taken in 15 days...that deadline is over," he said, adding that a decision would be taken at the parliamentary board meeting on Thursday.
As Congress downplayed the outburst, saying it only showed SP's concern over terrorism, Amar Singh drove to 10, Janpath, for a meeting with Sonia Gandhi. He emerged from her residence to say there was no question of a pullout and that he had only expressed the sentiments of his party workers.
After having built a case around terror in the day-long drama, SP leaders may gather on Thursday to raise the pitch even further. It suits Samajwadis to take a belligerent stand on Pakistan, having realised that public mood has turned completely against the politicking as it did during the Batla House encounter.
SP believes that a tough stance on terror would endear it to voters across the board. That rival Mayawati has also taken a strong line on terror only shows how language of UP politics has changed since the Mumbai attacks.
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