As the Indian economy continues to struggle against the crippling financial impact of the Coronavirus pandemic, Nirmala Sitharaman, India’s first full-time Finance Minister announced the Union Budget 2021. For the first time, the voluminous Union Budget documents were not printed and the budget was announced in a paperless format. Sitharaman presented the Union Budget through a tab, instead of the traditional “bahi khata”.
The Finance Minister said the budget proposals for 2021-22 rest on 6 pillars of Atmanirbhar Bharat. These include health and wellbeing, physical and financial capital, infrastructure, aspirational India, reinvigorating human capital, innovation, and minimum government and maximum governance. The budget focused on bringing back growth to the Indian economy as it continues to reel from the impact of the Coronavirus pandemic, while also laying huge emphasis on privatisation measures. Sitharaman had promised prior to the announcement of the budget, that the budget for the year would be like never before. Given the financial impact of the Coronavirus crisis on all industries, the contraction of spending in both urban and rural areas, and job losses, all eyes and expectations were on the 2021 budget to revive the economy. So did Sitharaman’s third budget live up to expectations? Let us have a look at the highlights of the budget, measures taken to combat the financial impact of the Coronavirus pandemic and which groups were disappointed.
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ANOTHER CLIMATE CHANGE INDICATOR: WHAT IS THE WAY FORWARD?
On February 7th, a sudden massive flood completely devastated a Himalayan valley in the state of Uttarakhand, tearing through two hydroelectric dams, killing at least 56 people while more than 150 are still missing. As a result of the flood, there has been massive flooding in Chamoli district- the Rishiganga river, the Dhauliganga river, and in turn the Alaknanda. As rescue efforts are still underway, the loved ones of those who are missing and watching the disaster unfold on national and international news are looking for explanations. Millions worldwide watching the humanitarian cost of the disaster have questions: how did this happen and more importantly, could we have known this beforehand? Let us stifle through all the media coverage and speculation about the cause of the devastation and find out what are the scientific explanations behind the outburst, the previous indicators of such a disaster, and whether of not Indian authorities are equipped to provide assistance to those in need in such a scenario.
WHAT HAPPENED IN UTTARAKHAND?
As per the Uttarakhand police, a flood hit the region at around 11:00 am IST on February 7th. The torrential fast-moving water, ice and debris first destroyed the Rishiganga hydroelectric project, and then continued along the Dhauliganga river where it hit the larger Tapovan Vishnugad hydro power construction project. Hundreds of construction workers had been working on the projects, many of whom are still missing. In the deluge of the flooding, bridges, roads, homes and hundreds of cattle were also swept away. For many who were watching the incident unfold on television, this was a tragic reminiscence of the floods that rocked Uttarakhand in 2013, when several days of heavy rainfall destroyed villages, killing almost 1,000 people. Unofficial estimates suggest this figure could be as high as 5,000.
WHAT IS THE CAUSE OF THE FLOODING?
In the aftermath of the flooding, many reports and scientific studies suggested that the cause of the flooding was the outburst of a glacial lake. Glacial lakes are described as lakes that form behind national dams which are created by debris which accumulates in front of glaciers. As glacial fronts retreat, these are left behind. Due to rising temperatures which are melting glaciers around the world, thousands of such lakes are expanding rapidly. Glacial lakes can cause catastrophic floods if the natural dam breaks.
While many scientists believe that the flooding was a result of a GLOF or Glacial Lake Outburst Flood. This refers to the flooding caused downstream due to any form of breach in a glacial lake. While GLOFs are not unusual, their severity and impact would depend on various factors, including the size of the lake, burst and location. Similarly, the cause of the breach can also vary, and in this case, it could have been an avalanche in the region reported some days ago.
However, a few days after the event as more satellite imagery came to light, some scientists reported that the incident could have been caused by a breach in a temporary pool or lake formed by obstructions due to landslides or snow avalanches. This is referred to as a Landslide Lake Outburst Flood (LLOF). While many teams of scientists and experts have reached the area to study the actual cause, a definitive answer for the same isn’t clear yet.
Photograph by Press Information Bureau, India
IS CLIMATE CHANGE BEHIND THIS TRAGEDY?
While scientists are working to figure out the exact cause of the disaster, it can be said that this was not entirely a “natural” disaster. Uttarakhand in general and Chamoli specifically have always been a vulnerable and geologically unstable region. Increasing population and construction activities in the region have undoubtedly made it more vulnerable. Similar disasters have rocked the reigion in the past few decades. A massive earthquake which was attributed to the Tehri Dam killed 100 people in 1999. In 2004, a hydro-meteorological disaster caused a landslide, killing 16 people. Another similar incident in Chamoli killed 11. In addition to this, everyone also remembers the tragedy of the 2013 Uttarakhand floods which killed hundreds. So this begs the question: did we know something like this would happen again in Uttarakhand?
In June 2019, a study published in the journal Science Advances spanning 40 years of satellite observations across China, India, Nepal and Bhutan indicated that climate change is eating away at Himalayan glaciers. The study revealed that the glaciers have been losing more than 1.5 vertical feet every year since 2000. This is double the amount of melting that took place in 25 years before that (1975-2000). The study also indicated that the melting is consistent in time and space with rising temperatures recorded as a direct result of climate change and subsequent global warming. While the study shows that temperatures vary from place to place, they have averaged out to be one degree Celcius higher than those from 1975 to 2000. While Uttarakhand has seen such events in the past too, there is a definite possibility that this disaster also has a stamp of climate change, with regard to the origin of the flooding.
IS INDIA PREPARED FOR SUCH DISASTERS?
As per an inventory of glacial lakes by the National Remote Sensing Centre conducted 6 years ago, there was about 3 lakh such glacial lakes in the Indus, Ganga and Brahmaputra basins. Formation of glacial lakes in the Himalayan region is bound to increase due to the melting of glaciers. The immediate step required would be to identify such water bodies and put structural measures in place. The construction of a safe outlet passage or infrastructure to pump out excess water from the lakes would also be required. While India conducts remote sensing activities to identify such lakes, no such structural measures have been taken.
Constantly monitoring such lakes and placing early warning systems are essential. Although different players such as the Geological Survey of India (GSI), Environment Ministry, India Meteorological Department, National Remote Sensing Agency carry stakes in the process, India still lacks in that regard. As glaciologist Anil V.Kulkarni states, the first step would be to keep track of indicators such as water level, measures of rainfall in the catchment areas. There has to be a community-driven mechanism where the people residing in downstream areas are warned immediately and damage avoidance and control measures are put in place.
Similarly, many believe that the construction of structures in the vicinity of disaster-prone areas tends to increase the possibility of landslides. Formation of fragile and weak habitations in downstream areas and building of structures such as dams without proper Environmental Impact Assessment are some of the factors that increase the impact of GLOF. India has lagged behind in enforcing strict regulations and standards towards constructing homes and other structures.
Due to the remoteness of the area, and lack of research and development funding, the Himalayan region continues to be one of the least monitored regions in the country. Many experts have called for an increased need for government funding to ensure better monitoring of this incredibly vulnerable region. This would be the only way to ensure that more is known about what goes on in the area, which would, in turn, help governmental agencies, enforcement authorities and people to develop better adaption practices.
Contributing Reports by Damini Mehta, Junior Research Associate at Polstrat
WHEN NATURE STRIKES: THE FURIOUS CASE OF UTTARAKHAND FLOODS
As security personnel and rescue teams continue research operations in the flood-stricken state of Uttarakhand, people across the country are distraught watching the tragedy unfold on their television screens. As per official estimates, 56 people have already been reported dead, while the search for over 150 missing continues. Undoubtedly for those watching the tragedy unfold, the flooding gave flashbacks of the 2013 floods that devastated the state, where 1000 died. Experts and scientists have already been deployed on the ground to try and answer the question: how did this happen? While many speculate the flooding was caused by the outburst of a glacier, many are attributing the disaster to the ecological impact of climate change and extensive construction and human activities in the geologically unstable region.
Photograph by Creative Commons
HIGHLIGHTS OF BUDGET 2021
The 2021 budget emphasises growth and development, in an attempt to lift India out of a growth slump while also ensuring the government has resources available to combat the Coronavirus pandemic. Sitharaman introduced several changes to the taxation process, including the scrapping of income tax for senior citizens and removal of double taxation for NRIs, amongst other measures. While a new Agriculture, Infrastructure and Development Cess was announced on numerous items such as gold, silver, alcoholic beverages, palm oil, apples, petrol, and diesel, the final consumer price of the goods will remain unchanged. This is because the corresponding customs and excise duties on the same products have been reduced. Other important features of the budget include the setting up of seven mega textile farms and an increase in Foregin Direct Investment (FDI) from 49% to 74%.
The Finance Minister in her budget speech also announced that two public sector companies and one insurance company would be subjected to strategic divestment. In the sectors classified as strategic there will be a lesser number of Public Sector Enterprises (PSEs). The government has budgeted Rs. 1.75 Lakh crore via stake sale in PSEs and financial institutions. The divestment target for fiscal year 2021-22 has been revised from the previous year’s target of Rs.2.10 Lakh crore. Central Public Sector Enterprises (CPSEs) in all sectors apart from some in atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services will be privatised. In 2021-22, Bharat Petroleum Corp Ltd, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, Bharat Earth Movers Ltd, and Pawan Hans will be privatised. Additionally, apart from IDBI there will be privatisation of two more Public Sector Banks (PSBs) and one General Insurance company. Such a move would require legislative amendments and it is expected that legislative amendments to execute the above and to launch the Initial Public Offering (IPO) of Life Insurance Corporation(LIC) would take place in the ongoing session of the Parliament. This current divestment strategy is aimed at creating an investment ecosystem for the private sector by minimising the presence of CPSEs.
As a relief to the startup ecosystem, the Finance Minister has announced that the Capital Gains exemption for investments would be exempted for one more year till 31st March, 2022. This comes at a time when most of the startups have been struggling to survive amidst the pandemic. This measure is aimed not only at incentivising the startups but also at encouraging the setting up of new ones.
As the border stand-off with China continues in Eastern Ladakh, the Finance Minister announced a roughly 19% increase in the capital budget for the forces in 2021-22. However, the overall defence budget only increased by 1.5% from Rs 4.71 lakh crore in 2020-21 to Rs 4.78 lakh crore in 2021-22. China’s official defence budget in comparison, stands at $179 billion, roughly three times that of India’s (around 1.15% of its GDP).
Furthermore, the Department of Space has been allocated Rs. 13,949 crore out of which Rs. 700 crore has been earmarked for the New Space India Limited (NSIL).
The NSIL is set to execute the PSLV-CS51 launch carrying Brazil’s Amazonia satellite along with other smaller Indian satellites.
Another important highlight from Monday’s announcement was that all states that have upcoming Assembly elections- Kerala, Tamil Nadu, West Bengal and Assam have received a massive infrastructure boost in the form of spending on highway road expansion. The construction of Madurai-Kollam corridor and Chittor-Thatchur corridor is set to begin in 2022.
About 675 km of highway work in West Bengal has been planned at a cost of Rs 25,000 crore including the upgrading of existing roads in Kolkata and Siliguri.
Apart from an infrastructure boost, the Finance Minister also announced a programme to promote seaweed farming in Tamil Nadu, and a special welfare scheme for tea workers in both Assam and West Bengal. The government also announced an allocation of Rs. 3,726 crores for the first digital census.
WILL BUDGET 2021 EASE THE FINANCIAL BURDEN OF COVID-19?
Despite the Finance Minister announcing that one of the six pillars of Atmanirbhar Bharat is health and wellness, the actual increase in money being allocated to the Ministry of Health and Family Welfare is a modest 7 per cent. As the country is dealing with the financial ramifications of the Coronavirus pandemic, and access to healthcare is needed more than ever before, the provision for Ayushman Bharat Yojna or the Pradhan Mantri Jan Arogya Yojana, remains unchanged at Rs 6,400 crore. However, the allocation for the Ministry of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy) has been increased by 39%.
Additionally, Sitharam also announced the allocation of Rs. 35,000 crore for the COVID-19 vaccination programme, which would cover around 68.6 crore people (Rs. 255 per dose) in the financial year 2021-22. Under the pillar of Health and Wellness, the Finance Minister also announced a new centrally sponsored scheme- the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana- to strengthen the healthcare system in the country. This will include the setting up of urban health and wellness centres, setting up integrated public health labs in all districts, among other measures. Roughly Rs. 64,180 crores has been allocated under the scheme for the upcoming six years (around Rs. 10,000 crore yearly), however, no timeline for when this money will be allocated has yet been shared.
WHAT DID BUDGET 2021 MISS?
Investments into the Information Technology (IT) sector received almost no attention in the budget. During the pandemic, despite the lay-offs, advancements in the IT sector has helped a fair section of people keep their jobs with the ‘Work From Home’ concept taking over. The IT sector is one of the biggest services export contributors in the country, however, no policies were announced to boost the future of companies in the IT sector.
The income tax structure remains unchanged this year which is bound to irk the salaried middle class of the country. The Covid-19 pandemic and the subsequent salary cut has reduced the spending tendency especially of the salaried middle class. It was expected that the government would offer tax relief so as to increase spending . However, the tax structure remains unchanged. This can be attributed to the fact that the tax collections have drastically reduced in 2021-21 owing to the pandemic and a further cut might create an undesired increase in saving rather than spending.
Additionally, as thousands of farmers continue protesting across the country against the new agriculture laws announced by the central government, no major announcements were made to address the ongoing unrest. While Sitharaman announced an increase in agricultural credit target, no initiatives were announced to boost rural consumption. In fact, the budget estimate for expenditure on the rural jobs scheme was lowered from 1.1 trillion in 2021 to 730 billion in 2022.
BUDGET IN REWIND: MAIN HIGHLIGHTS OF THE 2020 BUDGET
Last year’s budget, highly anticipated by people as well as the economy, was struggling with weak economic growth, a slower tax collection and low business confidence. The budget focused on three major parts: Aspirational India, economic development and caring society. Some of the main relief policies and incentives appreciated by various sectors in the last budget were the complete tax exemption on income from all investments, the new education policy, rental sector and housing reforms, zero budget farming, pension for informal sector workers, new taxation policy and a capital boost for banks. Through the 2020 budget, the government aimed to ease investments and boost infrastructure growth in the country by announcing the creation of many more airports and highways.
Farmers and agricultural groups, however, expressed disappointment from the previous budget as there was no increase in the payouts to farmers under the PM Kisan scheme. Additionally, funds for the Food Corporation of India (FCI) which handles the Public Distribution System (PDS) and fertilizers subsidies were also slashed.
Many analysts and commentators were also disappointed that no specific relief measures were announced to generate jobs which had been a major economic concern in the country.
DMK & AIADMK: WHICH CASTE GROUPS WILL VOTE FOR THEM?
The AIADMK at present banks on its strongholds in districts such as Salem, Coimbatore, Theni, parts of Dharmapuri and Krishnagiri. DMK on the other hand is focusing on its traditional strongholds but also on AIADMK’s strongholds in the state. The DMK launched its campaign from Salem which shows that their primary focus is on the Western belt where the Gounder community dominates political discourse. Chief Minister Edappadi K. Palaniswami, who is a Gounder himself is currently the pride of the community as he is the first ever Gounder Chief Minister. However, this does not mean that the AIADMK will be able to electorally consolidate the entire community. The DMK is trying to win over the section of the Gounder community that the AIADMK is not able to consolidate.
As the Gounders dominate the Western belt, there is another community that cannot be left out: the Vanniyars, which is the largest community in Tamil Nadu. For decades, the regional parties have been trying to appease them. For instance, DMK Chief M.K. Stalin announced that one of his poll promises would be to establish a quota for the Vanniyars within the 20% reservation for Most Backward Communities (MBCs). The Vanniyars constitute 75% of the MBC list. The Pattali Makkal Katchi (PMK) led by Dr. Ramadoss is often termed as a Vanniyar-based political party. However, the previous elections have shown that the vote of the Vanniyar community is not consolidated to one particular party and is split in places such as Dharmapuri and Krishnagiri.
Another important community in Tamil Nadu is the Dalit community, especially the Paraiyars. They are the biggest group within the state’s Scheduled Caste community. Viduthalai Siruthaigal Katchi (VCK) under its Chief Thirumavalavan has become the most prominent pro-Dalit party in the state. They are capable of consolidating a major chunk of Paraiyar votes in North Chennai and certain districts of the Western belt. Having the VCK as an alliance partner has strengthened DMK’s fight for 2021. The Arundhathiyars -a prominent Dalit community- are based mostly in the Western and Nothern belts in the state. The BJP’s State Secretary L. Murugan hails from this community and many political commentators view his appointment as a strategic move from the BJP.
The Mukkukathor community, which is primarily based in Theni district has historically supported the AIADMK. This is also the home district of Deputy Chief Minister and AIADMK leader O.Panneerselvam. Andipatty Assembly Constituency in the district has been an AIADMK stronghold, and both former Chief Ministers and AIADMK Supremos
M. G. Ramachandran and J.Jayalalithaa have won from the constituency. However, in 2019 during the by-elections and due to the split in the AIADMK and the formation of the Amma Makkal Munnetra Kazhagam (AMMK), the then incumbent MLA Thangatamizhselvan (formerly from the AIADMK) stepped down to join the AMMK. Currently, Thangatamizhselvan has joined the DMK and is poised to be their strongman in the constituency. The Mukkulathor (Thevar) vote bank may scatter, but will remain a critical one for the AIADMK as they have historically been known to vote en masse.
In a similar manner, the Mudaliyar community has historically been supporting the DMK. They have not been as politically prominent as the Mukkulathors but their presence in Northern districts such as Tiruvallur, Kancheepuram, Thiruvannamalai is critical for the DMK. The National parties have a considerable presence in Tamil Nadu’s southern districts. The Nadar community is prominent in these districts and the BJP and INC both have a sizable support base within the community. BJP’s former Central Minister Pon Radhakrishnan is from Kanyakumari and he commands a huge support base here. However, post the 2019 Lok Sabha elections, his electoral prospects have stayed inactive. Former Member of Legislative Assembly (MLA) and AIADMK member, Nainar Nagendran is currently the face of BJP in Tirunelveli district. The INC also has a sizable support base amongst the Nadar community. The late H. Vasanthakumar who died as an incumbent MP of Kanyakumari commanded great respect amongst both the Hindu Nadars and the Christian Nadars. This paved way for his comprehensive victory in the 2019 General Elections.
In the 2016 assembly elections, the AIADMK was elected to power for a second time, with a slightly reduced majority, winning 134 seats out of the 235. The AIADMK led alliance managed to secure 41% of the votes, while the DMK led alliance secured roughly 40% of the votes and 90 seats. The AIADMK repeated its record of being the only party to be re-elected in the state. In the upcoming elections, parties are leaving no stone unturned to appease voters. While incumbent Chief Minister Edappadi K. Palaniswami has promised concrete houses to voters, M.K. Stalin has promised to waive all farm and jewel loans. On the other hand, Kamal Hassan, in an attempt to attract women voters has promised to pay a salary to housewives.
Historically, Tamil Nadu elections have always been a two-pronged contest between the AIADMK and the DMK, and while many thought the 2021 polls would be different, they have turned out to be the same battle, with different faces. While in the past the AIADMK has successfully overturned an anti-incumbency wave against itself, it remains to be seen whether they will be able to do the same this year as well.
TWO-FACED BATTLE IN DRAVIDIAN HEARTLAND: AIADMK VERSUS DMK
In the past week, dominant regional and national parties have embarked on the campaign trail in Tamil Nadu. The Assembly polls in Tamil Nadu are set to be held in April or May this year, and the Election Commission has released the final electoral rolls for the state already. As per the final electoral rolls released by the Election Commission, there are 6.26 crore voters in the state and there are 10 lakh more women voters than men. In the past, politics in the state has always been dominated by regional parties such as the AIADMK and the DMK.
The political battle in Tamil Nadu is a two-faced contest between the AIADMK led National Democratic Alliance (NDA) and the DMK led United Progressive Alliance (UPA). Incumbent Chief Minister, Edappadi K. Palaniswami of the AIADMK is leading the NDA alliance along with its alliance partners, the BJP, Pattali Makkal Katchi (PMK) and other partners. While on the other hand, DMK supremo M.K. Stalin is leading the UPA along with alliance partners the INC, Indian Union Muslim League (IUML) and others. While voters in Tamil Nadu were eagerly waiting for the emergence of a third front, due to the impending announcement of actor Rajinikanth’s political party, the actor officially announced his decision to not launch a political party last month.
CURRENT POLITICAL CLIMATE IN TAMIL NADU
As Rajinikanth backs out from forming a party, the political contest in Tamil Nadu has continued to remain a two-faced contest between the AIADMK and the DMK. However, unlike before, the 2021 Assembly Elections would be the first one in decades without J. Jayalalithaa and M. Karunanidhi. Due to the same, more emphasis is being given to the leadership capabilities of current Chief Minister and AIADMK top brass Edappadi Palanisamy and DMK Supremo M.K. Stalin.
A number of other parties such as Kamal Hassan’s Makkal Needhi Maiam (MNM), Seeman’s Naam Tamilar Katchi (NTK) may not make an electorally significant difference. At this juncture, the performance of National parties should be viewed more closely given the momentum gained by the BJP and deterioration of the INC in Tamil Nadu. Tamil Nadu has always been a state where National parties piggyback on the stature of regional parties. This time though, the BJP seems to have a slight upper hand in controlling their alliance with the AIADMK whilst the INC is still completely dependent on the DMK.
The AIADMK which was marred by the issue of ‘twin leadership’ seems to have ironed it for now. The incumbent Chief Minister Edappadi K. Palaniswami and Deputy Chief Minister O.Panneerselvam have been at loggerheads about absolute control over the party. The party, however, has officially decided to project Edappadi K. Palaniswami as their Chief Ministerial candidate and there has been a temporary detente between them. Edappadi Palaniswami has come a long way as a leader since his inception as the Chief Minister. He has formed a niche of his own. A farmer himself, Palaniswami has been applauded for his actions such as pushing the Kudimaramath initiative aimed at restoring and rejuvenating water bodies and naming 8 Cauvery Delta districts as Protected Farm Zones amongst others.
The DMK on the other hand has one undisputed leader in M.K.Stalin whose oratory and leadership skills have more often than not been targeted by opposition and people alike. His decision to appoint his son Udhayanidhi Stalin as the head of DMK’s Youth Wing was seen as a dynastic move and irked the party’s own cadre. On the other hand, DMK is currently riding on a 10-year anti-incumbency wave that has been culminated by the AIADMK in the state. Peoples’ positive perception of the BJP in Tamil Nadu is also another optimistic sign for the AIADMK-BJP alliance. These two factors have primarily strengthened DMK’s chances for the upcoming 2021 Assembly Elections. As per an opinion poll released by the ABP Network and Team C-Voter, the DMK led UPA alliance is leading in the state with a 41.1% vote share (158-166 seats) and the AIADMK led NDA alliance is likely to secure 28.7% vote share (60-68 seats).
TAMIL NADU: UNDERSTANDING THE GAME OF VOTE-BANK CONSOLIDATION
As party leaders and political influencers have taken to the streets of Tamil Nadu for the upcoming assembly elections, we have been seeing more aggressive back and forth between the All India Anna Dravida Munnetra Kazhagam (AIADMK) and Dravida Munnetra Kazhagam (DMK) alliances take place. AIADMK’s ‘Vetrinadai Podum Tamilagam’ (Tamil Nadu marches on victoriously) slogan is one that positions the DMK as one that opposes democracy with violence while DMK president MK Stalin has launched a pro-development, 100 day promise which would take petitions from the citizens and solve major problems within 100 days of being voted to power. In support of these efforts, their national alliance parties Bharatiya Janata Party (BJP) and Indian National Congress (INC) have also taken to the streets. As per our last edition, BJP’s former president Amit Shah was to visit Chennai but was replaced by party president J. P. Nadda who visited Pongal celebrations in Chennai at the same time as RSS chief Mohan Bhagwat. On the other hand, INC leader Rahul Gandhi kickstarted the party’s campaign via a three day visit to Tamil Nadu aggressively speaking against the BJP and RSS, speaking in favour of the importance of the state’s youth in the future of Tamil Nadu.
While historically, the primary fight in the state has been between the AIADMK alliance and the DMK alliance, BJP’s aim is to disrupt that and become a primary player in the state. This is in line with their strategy in other states as well as they’ve been leaving behind their allies.
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