150 militants waiting near LoC in PoK to infiltrate: Army. . .

About 150 militants are waiting near the Line of Control (LoC) in Pakistan-occupied Kashmir (PoK) to sneak into the Valley, a top Army official said today with an assertion that the attempts would be foiled.

Lt Gen J.S. Sandhu, Commander of Srinagar-based 15 Corps which is responsible for security of the Kashmir valley, said there would be more militants at the launching pads in PoK in the areas facing Poonch and Rajouri in Jammu province.

“According to an estimate, in our area — 15 Corps — there are about 150 militants at present. There would be some more near Poonch-Rajouri areas (in Jammu region) as well,” he said.

He was speaking to the reporters at the end of a two-day youth festival ‘Jashn-e-Baramulla,’ organized by the Army in the north Kashmir town.

The Army commander said the infiltration from PoK across the LoC has been low this year compared to the last year.

“Last year, the infiltration from across was high. This year, till now, we have been able to stop them (infiltrators). Snow has also helped us as more snow this year has made it difficult for them to infiltrate. We will continue to stop them so that there is no increase in the militancy,” he said.

He said the Army was “fully geared to stop infiltration” on the LoC.

Investors stay put to drive a historic rally in the Indian bourses. . . .

The major Indian stock indices have rallied strongly despite lingering concerns over their historically rich valuations. Both the BSE Sensex and NSE Nifty reached all-time highs on Wednesday, up about 13% and 14%, respectively, since the beginning of 2017 and well above the performance of developed markets. The Sensex surpassed its previous high to end the day at 30,133 while the Nifty settled on a record closing high of 9,351. Investors have attributed the rally to the better-than-expected earnings results of blue-chip companies (like Reliance Industries Limited that posted record earnings this week), strong fund inflows from foreign institutional investors (FIIs) and the strengthening of the rupee. Waning concerns over the election results in France, U.S. President Donald Trump’s anticipated tax reforms, and the allaying of concerns about the long-term impact of demonetisation may have also helped fuel the rally. FIIs have been at the centre of action over the past few months, turning into bullish buyers after the temporary slump in their investments after the demonetisation exercise. In the first three months of 2017, FIIs have poured $6.75 billion into equities, up from inflows of just $3.19 billion and $3.18 billion in 2015 and 2016, respectively. Adding strength to the rally, domestic investors have been net buyers of equities, investing almost ₹16,000 crore since the beginning of 2017.

Going forward, despite the willingness of foreign buyers to pay higher multiples, there remains the substantial risk of a downside attached to this rally. The market capitalisation of Indian stocks, according to a report by Motilal Oswal Securities published in March before the rally, rose 40% over the last year compared to a 21% increase in the overall world market cap. This increased India’s share of world market cap to 2.5%, marginally above the historical average of 2.4%. Yet corporate earnings, which determine equity returns in the long run, have been lacklustre despite showing early signs of recovery from the demonetisation shock. While the current earnings season has been modestly positive, overall, reasons to justify the high multiples remain elusive. The implementation of the Goods and Services Tax is expected to dampen earnings in the near term, and the absence of recovery in capital expenditure by India Inc. offers little hope to expect an earnings boost. The impact of the strengthening rupee on corporate earnings is another concern. Investors, especially foreigners who benefit from an appreciating rupee, have taken the strong rupee as a vote of confidence in the economy. But its likely impact on the earnings remains ignored. According to UBS, a 1% appreciation in the rupee could reduce the Nifty’s earnings by some 0.6%. All that said, the bears in the Indian markets have been proven wrong for long. It would not be surprising if investors stretch themselves further to support the rally. 

The SC verdict reinstating a DGP limits the political executive’s discretion in transfers. . .

 2006, the Supreme Court ruled in the Prakash Singh case that the chief of a State police force should have a fixed tenure of at least two years. Despite this, State governments have failed to protect Directors General of Police from arbitrary transfers. In the event of a regime change following an election, new political dispensations assume they have an unfettered right to reshuffle officers in the civil and police services. Rarely has this assumption been challenged. The Supreme Court’s ruling reinstating T.P. Senkumar, who was replaced as head of the Kerala police soon after the Left Democratic Front assumed office last year, reinforces its 2006 judgment. It limits significantly the discretion enjoyed by the political executive in effecting transfers at whim. Expanding on the import of thePrakash Singh verdict, in which the court had given directions to insulate the police from external pressure and political influence, a two-judge Bench has delineated the limits of the State government’s subjective satisfaction in removing the DGP. No longer is it valid for the government to justify a DGP’s removal on the vague ground that it has reached a prima facie conclusion that the public is unhappy with the efficiency of the force. The government’s ‘subjective satisfaction’ about the state of affairs must be based on “cogent and rational material”, the court has ruled. On going through the record, the Bench found there was no material adverse to Mr. Senkumar, except some opinions and views

The verdict is undoubtedly a political setback to Kerala’s LDF government, which is already battling controversies caused by the words and deeds of a few ministers. The Pinarayi Vijayan government had defended its transfer of Mr. Senkumar by citing dissatisfaction among the public about the efficiency of the police following the Puttingal fireworks tragedy in Kollam and the murder of a Dalit woman named Jisha in April 2016. However, the court noted that these issues had “suddenly resurfaced” more than a month after the incidents — that is, after the present regime assumed office. In a telling indictment, the court has observed: “This might perhaps be a coincidence, but it might also be politically motivated…” The LDF government must immediately abide by the order to reinstate Mr. Senkumar, whose original two-year tenure was to have ended on May 21, 2017, and who is due to retire in June. However, the legal import of the verdict is not confined to Kerala. State governments would do well to implement the measures outlined in Prakash Singh, the message of which was that the police must be answerable to the rule of law and not to political masters. In particular, every State should set up a State Security Commission — Kerala has one — to both guide the police and decide on top police appointments and transfers.

NITI Aayog’s shift away from five-year plans requires more substance. . . .

Narendra Modi is not the first Chief Minister to have gone on to become Prime Minister. But given his well-known disdain for the erstwhile Planning Commission’s control-and-command approach towards States and his oft-repeated emphasis on ‘cooperative federalism’, there were great expectations from the successor organisation, the NITI Aayog. The Five Year Plans — the last one ended on March 31 — were relegated to history, to be replaced by a three-year action plan. This was to be part of a seven-year strategy that would in turn help realise a 15-year long-term vision. When the Aayog’s Governing Council that includes the Prime Minister and all Chief Ministers met, it was hoped that the fine print as well as the big picture of the new planning approach had been worked out. However, all that was handed out was a draft action agenda for the three years till 2019-20, with 300 specific action points. This agenda is meant to be the first step towards attaining the envisioned outcomes by 2031-32. This ‘New India’, as NITI Aayog Vice Chairman Arvind Panagariya put it, will ensure housing for all, with toilets, LPG, power and digital connections; access to a personal vehicle, air conditioner and white goods for ‘nearly all’; and a fully literate population with universal health care.

Assuming that the economy grows at 8% annually hereon, the Aayog has presented estimates about the size of the economy and per capita incomes by 2031-32, though juxtaposing these with China’s performance in the last 15 years is a bit odd. India’s GDP will rise by ₹332 lakh crore in the next 15 years, the Aayog reckons. The bare details of the 15-year vision that have been shared seem like motherhood statements with some optimistic numerical guesswork. But even that is more than we know about the seven-year strategy. Without the larger strategy and vision in place, the three-year action plan is likely to be more of an abstract wish list that Chief Ministers will now evaluate and revert on. Effectively, till it is ratified by the Council, there is a vacuum in India’s policy framework — similar to the delayed starts of past Five Year Plans. It is not yet apparent if the 12th Plan’s innovation of painting alternative scenarios (of actions and outcomes) — a more useful tool for longer-term planning — has been adopted. Meanwhile, the PM’s message to States to speed up capital expenditure and infrastructure development is important as pump-priming the economy is not only the Centre’s task. All the same, asking the States to take the initiative on switching India’s financial year to match the calendar year is unusual as it requires the Centre to take the lead by making public the report of the committee that has recommended this. To make cooperative federalism truly effective, the Council, or Team India as Mr. Modi calls it, must meet more often — a nearly two-year gap in doing so is a recipe for communication breakdown.

Murder at noon: On Maoists attack in Chhattisgarh's Sukma . . .

Monday’s ambush of a Central Reserve Police Force battalion in Chhattisgarh’s Sukma district is a tragic reminder of the failure of the Indian state to effectively address the security challenge the Maoists continue to pose. At least 25 CRPF personnel were killed near the Burkapal camp in south Sukma while out on duty to provide protection for road construction on the Dornapal-Jagargunda belt when the Maoists struck. This is the deadliest such attack in the past seven years. In April 2010, in neighbouring Dantewada district in the same Bastar division of the State, 76 CRPF personnel had been killed in a Maoist strike. Besides confirming the strong Maoist hold in the region, Monday’s attack also raises questions about the Standard Operating Procedures and precautions adopted by the CRPF. Around 300 armed insurgents swooped down on the battalion around 1 p.m., when the soldiers were taking a break for lunch and their guard was presumed to have been down. According to initial estimates and eyewitness accounts, the Maoists used automatic weapons that they had stolen a month ago when they ambushed and killed a dozen CRPF men not very far from this encounter site. The site of the attack too carried a message. The road under construction will provide easy access to the backward region, where Maoists have for long held sway. It has been a long-held strategy of the Maoists to blow up infrastructure that enables connectivity, such as roads and bridges, or establishes the presence of the state, such as schools.

The response must be to double down to extend the presence of the administration in Bastar, to break the isolation and reach social services to the people. There is also a need to boost the morale of the security and police forces. The recent spate of attacks and ambushes indicates a breakdown in intelligence-gathering, possibly on account of a lack of effective coordination between the State police and paramilitary forces. It may have had no bearing on the attack, or the probability of averting it, but the fact that the post of the Director General of the CRPF continues to be vacant is a lapse amplified by the tragedy. The inadequacies are more grave than this administrative oversight. The State police forces in Maoist-affected areas have more or less abdicated their duties of law and order, leaving the job almost entirely to the paramilitary forces. The Centre needs to urgently put in place, in mission mode, measures to strengthen, expand and arm the State police, most of all in Chhattisgarh. This needs the State governments to show far more political will to persuade local communities than they currently do. The Maoists long ago lost the argument with their murderous ways; but the political and civil establishment is yet to win that argument by addressing the people’s security and welfare needs, and their concerns about extractive state policies.

Investors stay put to drive a historic rally in the Indian bourses. , . . .

Going forward, despite the willingness of foreign buyers to pay higher multiples, there remains the substantial risk of a downside attached to this rally. The market capitalisation of Indian stocks, according to a report by Motilal Oswal Securities published in March before the rally, rose 40% over the last year compared to a 21% increase in the overall world market cap. This increased India’s share of world market cap to 2.5%, marginally above the historical average of 2.4%. Yet corporate earnings, which determine equity returns in the long run, have been lacklustre despite showing early signs of recovery from the demonetisation shock. While the current earnings season has been modestly positive, overall, reasons to justify the high multiples remain elusive. The implementation of the Goods and Services Tax is expected to dampen earnings in the near term, and the absence of recovery in capital expenditure by India Inc. offers little hope to expect an earnings boost. The impact of the strengthening rupee on corporate earnings is another concern. Investors, especially foreigners who benefit from an appreciating rupee, have taken the strong rupee as a vote of confidence in the economy. But its likely impact on the earnings remains ignored. According to UBS, a 1% appreciation in the rupee could reduce the Nifty’s earnings by some 0.6%. All that said, the bears in the Indian markets have been proven wrong for long. It would not be surprising if investors stretch themselves further to support the rally.

Investors stay put to drive a historic rally in the Indian bourses. . . .

e major Indian stock indices have rallied strongly despite lingering concerns over their historically rich valuations. Both the BSE Sensex and NSE Nifty reached all-time highs on Wednesday, up about 13% and 14%, respectively, since the beginning of 2017 and well above the performance of developed markets. The Sensex surpassed its previous high to end the day at 30,133 while the Nifty settled on a record closing high of 9,351. Investors have attributed the rally to the better-than-expected earnings results of blue-chip companies (like Reliance Industries Limited that posted record earnings this week), strong fund inflows from foreign institutional investors (FIIs) and the strengthening of the rupee. Waning concerns over the election results in France, U.S. President Donald Trump’s anticipated tax reforms, and the allaying of concerns about the long-term impact of demonetisation may have also helped fuel the rally. FIIs have been at the centre of action over the past few months, turning into bullish buyers after the temporary slump in their investments after the demonetisation exercise. In the first three months of 2017, FIIs have poured $6.75 billion into equities, up from inflows of just $3.19 billion and $3.18 billion in 2015 and 2016, respectively. Adding strength to the rally, domestic investors have been net buyers of equities, investing almost ₹16,000 crore since the beginning of 2017.