01 FEB 2016 (Indo-France relation,CORAL,Priority Sector)

Deepening the French connection:-

Background :-President François Hollande’s visit is the fifth such by a French leader to have been honoured as the chief guest at the Republic Day, more so than any other country. Equally significant, this was his second state visit (the first was in 2013), a trend that was started by his predecessor, Nicolas Sarkozy, who was chief guest at the 2008 Republic Day and returned for another state visit in 2010. With corresponding visits by Indian Prime Ministers, this annual summitry highlights the expanding areas of cooperation and convergence between the two countries.

Details :-

In recent years, India has entered into more than three dozen “strategic partnerships”, but France remains the original one. President Jacques Chirac had a long-standing interest in India and undertook three visits to India, in 1976, 1998 and 2006, the only leader to have been chief guest at the Republic Day twice, first as Prime Minister in 1976 and then as President in 1998

The second visit saw the establishment of the “strategic partnership” which was tested months later in May when India conducted a series of nuclear weapon tests. France was the first major power to open a dialogue with India. Within weeks, Brajesh Mishra (accompanied by the writer) was in Paris as Special Envoy of Prime Minister Atal Bihar Vajpayee. We were received by Mr. Chirac, who not only gave us a patient hearing, but also responded with a keen appreciation of India’s security predicament arising from the unbridled nuclear proliferation that had taken place in our neighbourhood.

Robust strategic partnership:-

This is the strategic dialogue that became institutionalised at the level of the National Security Advisers. The agenda has also expanded to include counter-terrorism, intelligence sharing and cyber-security issues, in addition to the original nuclear, space and defence related matters. The 57-paragraph-long Joint Statement covers these and also a wide range of other areas of cooperation — climate change and sustainable development, economic cooperation, urban development, human resource development, heritage preservation and cultural cooperation.

The terrorist attacks last year, on the Charlie Hebdo office in January and at multiple locations in Paris in November, have changed the way France looks at global terrorism. There is a realisation of vulnerability on account of the alienation in the French Muslim community. Radicalisation and the growing appeal of the ideology of global jihad is a real threat. This resulted in a standalone Joint Statement on counter-terrorism which seeks to do away with the caste system in terror strikes.

If New York, London and Paris were horrific, so must Mumbai, Beirut and Nairobi be, and the statement makes that point effectively. It underlines the need for a comprehensive approach, removes any distinction between al-Qaeda and the terrorist groups targeting India like Lashkar-e-Toiba, Jaish-e-Mohammed and Hizbul Mujahideen, calls on Pakistan to bring to justice the perpetrators of the Mumbai attacks and calls for a dismantling of sanctuaries and safe havens in Pakistan’s border areas that can destabilise Afghanistan.

A push has been given to the Jaitapur nuclear plant negotiations by seeking to conclude these by the end of 2016, coupled with the affirmation that there will be six European pressurised reactors which should help in bringing the cost to below $5 billion for each reactor. To mark 50 years of India-France space cooperation, new projects for cooperation between the Indian Space Research Organisation and the French government space agency, Centre national d’études spatiales (CNES) have been announced, dealing with environment and weather monitoring, mapping of water resources and a joint Thermal Infrared Earth observation mission.

The implementation of the announcement made during Prime Minister of India’s visit to Paris last April about the decision to purchase 36 Rafale combat aircraft in a flyaway condition, has been taken forward by signing a memorandum of understanding (MoU) which freezes the technical parameters, weapon payloads and lifetime servicing and spares needed. It is expected that the negotiations of the financial terms will be concluded in coming months. More significant are the joint ventures (JV) proposed to be set up between private sector entities in both countries that can provide a much needed boost to “Make in India” in defence. This should give greater content to the Agreement on Defence Cooperation, originally signed in 2006 and now extended till 2026, providing a framework for cooperation in defence production, research and development and procurement of defence materials.

Among the emerging areas of cooperation are homeland security, cyber security, special forces like the National Security Guard and its French counterpart GIGN, and intelligence sharing to tackle the common threats of terrorism and global criminal networks. Closely linked are concerns about Internet governance, surveillance by external powers and the dominance of U.S. companies in this field.

Maritime security in the Indian Ocean region is another sector ripe for greater cooperation, given French presence by virtue of its territories (the Reunion Islands) for maintaining safety of sea lanes, tackling piracy and enhancing maritime domain awareness.

Business and educational ties

Cooperation in “strategic” areas is growing and the government-to-government relationship is the principal driver for this. Two areas that have been lagging are economic and trade relations as well as the people-to-people exchanges. The Hollande visit has sought to fix these by announcing a range of new measures. Bilateral trade between the two countries has been languishing at $8 billion, well below potential.

French foreign direct investment has picked up and there are more than 800 French enterprises operating in India. These include industry leaders like Alstom, Airbus, Schneider, Alcatel, Total, BNP Paribas, L’Oréal, Renault, Sanofi Aventis, Veolia, Engie (GDF Suez), Thales, Vinci, etc. Capgemini, an IT major has a large workforce in India.

With a large number of MoUs signed in sectors like urban development, solar energy, sewage and sanitation, urban transport including railways, water supply and entertainment, there appears to be a determined effort to make the business-to-business link more robust. Dovetailing the Smart Cities initiative is a good move in this regard. Nagpur, Chandigarh and Puducherry have been identified as three cities where French technical assistance and funding has also been promised. However, the challenge will be to develop viable public-private partnerships that can generate long-term funding and also make the projects self-sustaining in the long run.

An attempt has also been made to energise the people-to-people relationship by focusing on educational exchanges and skill development which creates a resource pool as Indo-French JVs generate greater employment opportunities. The number of Indian students going to France annually is 2,500 while the number of Chinese students is 10 times larger. Allowing larger number of French youth to intern in enterprises in India and easing visa norms for Indian students to work for two years after completing their education in France are steps in the right direction. Linkages between educational institutions need to be built up as more and more French institutions begin to offer bilingual courses.

Traditionally, the people-to-people relationship has been driven at the elite level of artists, musicians, dancers, writers and film-makers as eminent Indians in these fields have engaged with their French counterparts, but at a popular level, it lacks a buzz. Out of seven million foreign tourists visiting India annually, the number of French tourists is less than 3,00,000! Direct air links between India and France are a fourth of those between India and Germany. An Indo-French Centre for the Promotion of Advanced Research has been in existence for nearly three decades but limited budgetary resources hamper its activities. It needs to be restructured to permit it to raise resources from Indian and French industry; for this, the scope of projects needs to be broadened. Cultural festivals have been a regular feature but events need to be planned outside the metropolises, taking local calendars into account.

The strategic relationship between the two countries has developed over the years generating a sense of comfort between the relevant government agencies. What are needed are initiatives that can strengthen business-to-business linkages and people-to-people contacts which can, in turn, provide a broader underpinning to the overall bilateral relationship. The Hollande visit has rightly sought to focus on these sectors. If these can be effectively implemented, it will help establish a more balanced relationship between the two countries, with overlapping networks of stakeholders from all sections in both societies.

Source- The Hindu

Government may ask central bank to consider roads as a priority sector:-

Background :-One of the main reasons behind the delay in highway projects is shortage of funds. While the road contractors said banks were reluctant to fund projects due to mounting non-performing assets, the government officials said the ‘managerial inefficiencies’ of developers have stalled these projects.

Details:-

The government will soon approach the Reserve Bank of India (RBI) Governor Raghuram Rajan with a proposal to include road projects under the priority sector list for lending purposes and review the non-performing assets norms to revive Rs. 40,000-crore worth of highway projects that have not taken off due to bureaucratic delays and cost overruns.

The banks provide a certain portion of ‘priority sector’ lending in the form of small value loans to farmers for agriculture, micro and small enterprises, poor people for housing, students for education and low income groups and weaker sections.

At present, 40 per cent of loans given by banks should go to priority sectors defined by the RBI. Out of this, 18 per cent should go toward agriculture lending.

What is meant by Priority Sector?

Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

What are the different categories under priority sector?

Priority Sector includes the following categories:

(i) Agriculture
(ii) Micro and Small Enterprises
(iii) Education
(iv) Housing
(v) Export Credit
(vi) Others

Targets and Sub-targets for banks under priority sector:-

Source- The Hindu and RBI

NASA’s airborne survey of coral reefs :-

Background :- Coral reefs are home to a quarter of all ocean fish species.If 33-50 per cent of the world’s coral reefs have already been degraded or lost due to climate change and human impacts, most of the functioning reef ecosystems may well disappear by mid-century, say reef scientists.

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