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Contract Farming: A welcome reform

Several studies conducted on the process of contract farming in various countries show that contract farmers earn considerably more than non-contract farmers.

Pinky Anand

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The Covid-19 crisis has woken us up to several realities, one of which is the importance of our food chains and elevating the agrarian sector to newer, loftier heights. India, mainly relies on its villages for its food production, with the growing population and lessening of the available farm lands, it has become imperative to employ, newer, faster and efficient technology for growing our food.

The need of the hour was a shift from the traditional methods of farming, and we have done that with our shift to contract farming! Ever since we went to school, there has been a phrase we were constantly taught, “India is an agrarian economy”! What that means is that India, lives in its villages, and is supported by village farm activities.

Even today, in the age of globalisation, around 60-70% of the Indian population depends on the agricultural sector whether directly or indirectly contributing roughly around 16-17% of the GDP. We are a country of 135.26 crore today; and with the decline in farming, we are looking at a bigger pandemic than the Covid-19, the hunger pandemic.

At the time of Independence, the agrarians’ share to the GDP of India was around 50%. Today it has declined to 16- 17%, which means that India is utilising its resources in aspects other than growing food, which will lead to a definite food shortage in a vastly growing population. Farming, has been practiced in India successfully for thousands of years, from father to son as a popular enterprise, but today, its decline indicates such systemic failures of the past regimes which if not remedied can lead us towards collapse.

A sector once considered the backbone of our economy has been plagued with issues like non-performing assets, bad loans and, most heartbreakingly, farmer suicides. The plight of farmers, one of the most essential backbones of our nation, has taken on an almost anecdotal face, with their miseries being immortalised in plays and movies. The saddest part is, that it is not their failures, it is a systemic failure that has made, our food growers and providers, our poorest and weakest members.

Today, the debate of essential service has been raised like in no other time in human history, and one of the biggest lessons we have learnt is how the scarcity of resources affect our workforce. It is today that we need to strengthen our supply chains and empower the root of those supply chains, the farmer, so we may as a country ensure food security. India’s farmers live in villages and use traditional farming methods, we still see the farmer dhoti clad, in the burning sun, tending to his crops with his hands or with old, traditional tools.

That is one of the biggest systemic failures that we are in urgent need to address. We need the farmers and the farms to grow more, to produce more and we, as a country, need to be able to feed our populace. Our farmers need machines and newer technologies and manpower and finance, unfortunately, they don’t either have the resources or the knowledge to acquire that. Our mandis have grain, sometimes in shortage, sometimes rotting in the rain, but the farmer is not able to sell that.

We, as a country, need to bring in immediate policies to remedy that. With this priority, our Prime Minister announced a major economic package for all sectors of approximately Rs 20 lakh crore (estimated at about 10% of the GDP), of which a significant portion will help address the lack of infrastructure in the agrarian sector. It is clear that only by strengthening our basic infrastructure we can reach the dream of self-reliance and resilience.

The Union Finance Minister, Nirmala Sitaraman, has in her third tranche of the economic stimulus package on 15 May, 2020 announced tripartite reforms, to significantly change the face of Indian agriculture. These reforms include contract farming, amendments to the Essential Commodities Act, 1955 and a central law facilitating farmers to sell their produce anywhere in the country, without paying any heed to local licensed buyers in designated mandis. One of the major reforms of the century is “contract farming”.

Contract farming is a system, where a buyer contracts the farm to grow what he needs. It is the buyer who will, under these agreements, provide the necessary infrastructure. One of the biggest reliefs that it will give our farmers is that it will reduce the amount of economic pressure or the investment to be made by farms on growing these crops. Today, our farmers, put in the investments, which when not recovered due to various factors translate into bad loans, or financial ruin, in many cases leading to depression and suicide.

Several experts, well known in the field of agricultural economics have appreciated and hailed this reform, Ashok Gulati (Infosys Chair Professor for Agriculture at ICRIER, former Chairman CACP, GoI) through a recent column for a reputed newspaper stated that this reform in the agro-marketing system will go a long way in building an efficient value chain, ensuring better returns for farmers. He even highlighted that consumers will also receive better products without an inkling of any burden on their pockets.

A major advantage of this system is that it makes small-scale farming competitive with advanced access to input, information, pre- and post-harvest infrastructure and services, technology, credit, and marketing channels. As per the Census of 2011, the average size of landholdings in India was only 1.1 hectares, which presumably today would have reduced even further due to the prevailing laws of inheritance and steadily increasing population.

Thus, leading to many handkerchief-size farms with operational inefficiencies, keeping farmers poor with a meagre source of income. But sooner, with encouragement of the practice of contract farming, everything would change as agriculture would combine itself with corporate efficiency, ensuring greater rights and market freedom to farmers concerned.

This boom will also boost better wages for farm labourers. Several studies conducted on the process of contract farming in various countries show that contract farmers earn considerably more than non-contract farmers. The Government’s intention of promoting farmers rights through contract farming was reflected well in advance, in the budget of 2017-18, where a drafting committee was constituted for the same.

Soon, a Draft Model Act was created as a soft law for regulatory and policy framework. The guiding factor in formulating this law has been to protect and promote the interests of the farmers in general, and small and marginal farmers in particular. Based on the Draft Model Act, it was left open for legislature of each State to enact their separate law on contract farming. Earlier, contract farming required registration with the Agricultural Produce Marketing Committee (APMC), independently regulated by each state.

Market fees and levies were to be paid to APMCs to undertake contract farming. With the coming of the NITI Aayog, it was observed that market fees and other levies being paid to APMCs for contractual farming were of no use as no market facilities and infrastructure were being provided by them. The Draft Model Act, 2018, removed contract farming from the purview of the APMC, and puts the power to contract directly in the hands of the contracting parties.

The Draft Model Act, 2018 lays emphasis on protection and interests of farmers, considering them weaker of the two parties entering into a contract. No rights, title, ownership and possession are allowed to be transferred or alienated or vested in the buyer at any point of time in the contract. Today, with the advent of this new law, we are looking at reforms in the agrarian sector, at the scale of the Green Revolution.

Bad policies, fluctuating markets, climate change, have all wreaked havoc on our extremely delicate and ancient farming methods. Contract farming will take away this burden from their lives; they will no longer have to inject finance or infrastructure into their farms and then wait for it to be returned, which frequently doesn’t happen. The dire need of the hour was to remove the obstacles and to remove maximum loopholes and ensure greater productivity and prosperity for farmers and farm labourers.

One thing for sure, that this fundamental change will completely transform the approach and outlook towards the agricultural sector, creating many job opportunities for the young and the poor. With this vision, we aspire for the transformation of the agrarian sector to a new glory.

Senior advocate Pinky Anand is the Additional Solicitor General of India.

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Opinion

Poverty not a curse, sterling efforts needed to be wealthy

Mukesh Ambani has added a feather to India’s cap by figuring among the richest in the world.

Vijay Darda

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Let me tell you a story of Mukesh Ambani’s vision. Reliance Group has a huge petroleum refinery in Jamnagar, Gujarat. A large area was lying barren around it. Mukesh Ambani felt that if trees and plants are planted on this land, the pollution of the refinery can be absorbed. When Mukesh Ambani decided to plant mango orchard on 600 acres of barren land, people harboured serious reservations about the success of his project.

The soil of Jamnagar and the moisture there has salinity and the winds blow at a high velocity too. In such a situation, would it be right to plant a mango orchard? This was the question in everyone’s mind, but Mukesh Ambani had decided and insisted that only mango orchard would be planted there. That was in 1997. Today, after 23 years, the salinity of the soil has been controlled, the winds have been taken care of and there are more than 1.5 lakh mango trees of about 200 species. Mangoes from this orchard are being exported all over the world because of its unmatched quality. The name of this mango orchard in Jamnagar is ‘Dhirubhai Ambani Lakhibag Amrayee’. For your information, let me tell you that the word ‘Lakhibag’ was the name of a mango grove developed by Mughal Emperor Akbar near Darbhanga in Bihar.

I told you this story so that you can understand how important it is to have vision, devotion and dedication to your work to become rich. After all, Dhirubhai Ambani started his journey from zero and built a big empire on his own. After that, one of his two sons raised his empire and the other collapsed on the ground. It is clear from this that even if you get a huge wealth by luck, you do not necessarily climb the stairs of success. It takes strength, concentration and balance to climb. Just one mistake is enough to fall! Let’s just think of Tata-Birla, Ambani-Adani, Hinduja, L N Mittal or Sajjan Jindal, Singhania, Anand Mahindra, you will find that their family started from zero. Infosys is an excellent example of our times. Narayan Murthy had laid the foundation of Infosys with a capital of only Rs 10,000. Adani started from the very bottom. Today, their success stories are for all to see. It is obvious that all this does not happen by sheer luck. For this, action and vision are required.

Many people continue to criticise industrial and business groups indiscriminately. Be it Ambani group or Adani group or someone else. People do not miss any chance to say that the government has always been ‘favourable’ to them. To me, these are all stupid and meaningless outpouring. No one can become ‘Kuber’ only with ‘favours’. For that, capacity needs to be increased manifold. Do not discuss what kind of house Ambani lives in, by which aircraft he travels, how many vehicles he has and how the wedding took place in his house. If at all, discuss that Ambani has given work to millions of hands. India has advanced in the world of technology. Do you know that while some people swindled Rs 15 lakh crore of the banks, Mukesh Ambani does not owe a single rupee to any bank! Consider why Mukesh Ambani flourishes in every sector he enters? Be thankful to all these industrialists that they have played and are playing an important role in the country’s progress. When I see the tricolour waving at The Pierre, a Taj Hotel in New York, my chest swells with pride. Isn’t it a matter of pride that Tata bought a global brand like Land Rover?

I have close proximity to almost all the industrialists I am referring to here and I know their lifestyle very closely. Humility, spontaneity and focus are their greatest assets. They have not become rich in a day. They have achieved this position through hard work. Therefore, do not curse poverty. Poverty is not a curse at all. Poverty can be transformed into prosperity by sterling actions and efforts. I know hundreds of such administrative officers who were born in a poor family but are occupying high posts today. Babasaheb Ambedkar was also poor but due to his talent, he is remembered with reverence all over the world today. Our former President APJ Abdul Kalam is the biggest example of this. His father was a fisherman and Kalam used to sell ‘beedis’ as a child. He became the best scientist in the world and also adorned the country’s highest position. Lal Bahadur Shastri rose from poverty to become the Prime Minister of the country. M S Kannamwar who once sold newspapers, became the chief minister of Maharashtra. People like Jeff Bezos, Bill Gates, Elon Musk, Mark Zuckerberg have also risen from the state of extreme poverty to reach the summit. Former presidents of America, Bill Clinton or Barack Obama, hailed from very humble origins. Elsewhere across the world, there have been many prime ministers, presidents, industrialists, great writers and scientists who were born poor, but they overcame their poverty through their ability and reached the top. So don’t accept poverty as a curse, take your steps, develop your potential. Success is waiting for you! The need of the hour is dedication, out-of-the-box thinking and perseverance… So what are you waiting for!

The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha. vijaydarda@lokmat.com

I congratulate Mukesh Bhai that he has not only joined the select list of wealthiest persons in the world with his devotion, dedication and vision but also made the country proud. True, if the capabilities are utilised to the full, one can scale the summit. Mukesh Bhai has proved his mettle and ability in every field.

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Opinion

Making it happen: Mission Kayakalp

Crackdowns and raids on illicit liquor makers and sellers in UP’s Barabanki district revealed some bitter truths. Many of those being arrested would go right back to their ‘trade’ after release. And, most of those involved were stuck in this trade due to lack of alternative sources of income.

Anil Swarup

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Illicit liquor is a massive social, economic and law enforcement nightmare across India. It has been known to destroy innumerable lives by death, criminal conviction, disability and addiction apart from ruining livelihoods, families and health. The brunt of this evil is most intensely felt by the poor and illiterate classes.

In January this year Dr Aravind Chaturvedi was posted as the Superintendent of Police of Barabanki, a district of UP adjoining its capital city Lucknow. Barabanki is a prosperous district but it has some great challenges. It is notorious for narcotics and illicit liquor. Hence, the first priority for Aravind on being posted there was to curb these criminal activities. 

Crackdowns and raids on illicit liquor makers and sellers across the district, revealed some bitter truths. Many of those being arrested would go right back to their ‘trade’ after release. And, most of those involved were stuck in this trade due to lack of alternative sources of income. Ironically, a few villages had almost all residents involved in illicit liquor making. The issues were discussed were discussed at length with colleagues. On ascertaining the details, they were able to spot a few villages which were worst affected. One of the places with highest concentration of such cases was a small village of Chaynpurwa in Ramnagar tehsil of the district. This became the centre of the initiative.

Chaynpurwa is a remote village, cut-off from the nearby suburbs on account of being surrounded by the expansive Bhagahar Lake on three sides. The people here had lost a lot to the illicit liquor trade. Out of the 94 families of this village, 32 women were widows. Only 6 men in the entire village were in a condition to work. The others were in jail, handicapped or heavily addicted. Most children didn’t go to school and those who did, faced economic hurdles and social stigmas. It was a painful sight.

Uplifting a village out of poverty is a difficult task, but lifting one out of the grip of crime and poverty is a much bigger challenge. Rehabilitation that was not considered a part of Police’s regular duty was initiated. It was initially frowned upon. However, soon the thought behind it and the prospect of improving the lives of people of an entire village came to be appreciated. The initiative soon got wholehearted support.

The first step was to organise a “Police Chaupal”, a gathering of all residents of Chaynpurwa and nearby villages, hosted by the local Police and attended by Aravind himself and Circle Officer, Ramnagar along with Inspector, Ramnagar. Villagers were given opportunity to speak about their problems, compulsion towards illicit liquor trade and socio-economic challenges. The stories that came out of the meeting were painful and heart-wrenching. “Mission Kayakalp” started taking shape consequent to this meeting

A survey of the village was conducted in Chaynpurwa village to obtain basic data about the village and its residents. This survey provided critical insights into the state of the village and its people. With the exception of 4 families which had at least one employed member, 90 of the village’s 94 families needed immediate assistance if they were to be emancipated from illicit liquor trade.

Priority now was to come up with a suitable, sustainable and circumstantially practical occupation alternative. A series of discussions with District Magistrate of Barabanki Dr Adarsh Singh, a passionate leader and Chief development Officer Medha Roopam, a bright officer brought forth a few options. Out of these, beekeeping seemed an appropriate and practicable choice. The villagers were briefed about this. A training session was arranged for them. Support also came from bank authorities who promised to provide loans. 

Dr Adarsh Singh’s support for Mission Kayakalp and his personal interest and backing to the initiative gave Chaynpurwa Village the attention and resources of 26 Government departments under the district administration. Medha Roopam herself went to the village with officials from various departments to make the residents of Chaynpurwa aware about Government schemes and programmes and provided eligible persons all the benefits.

The above events took place during the period between mid-August and mid-October this year. Bee farming in North India starts only after mid-November. Hence, an idea was mooted to help them generate some interim income through making and selling candles for the upcoming Diwali festival. This initiative was started and sponsored by Barabanki Police but Nimit Singh, an empathetic entrepreneur who owned bee farms, honey processing units and honey export played an important role

Nimit provided the women of Chaynpurwa training and raw-materials to make various types of diyas from bee-wax. The sale of these Diyas soared beyond expectations and close to 5 lakh diyas were sold in the weeks leading to Diwali. With a total amount over Rs 6 lakh earned by the village from these diyas in one month, an average income of Rs 7,000 was received by almost every household in the village. A grand “Deepotsav” was organised in collaboration with Umeed Foundation of Lucknow to honour and recognise the self-awareness and inspirational hard work done by the people of Chaynpurwa. For them it was an ecstatic moment to be the centre of focus of a program at such a scale and in the presence of top authorities.

The plan, alongside setting up bee-farming infrastructure, is to get a Community Hall built in the village so that a common space may be available for conducting training programs and provide an organised working area. Another plan on the anvil is to try and direct the energy of young children of this village in a positive, productive direction by arranging holistic orientations, building an open gym or recreation centre and motivate them to be diligent towards education. On the economic front with a long-term horizon, efforts are being made to attract the schemes of UP Government’s Khadi and Village Industries Board to provide a stable source of income to the village. These will include training them on electric pottery machines known as “Electric Chaak”, developing a stitching unit or a Agarbatti and candle making unit.

Setting up of a ‘trust’ by the name of “Chaynpurwa Kayakalp Foundation”, consisting of motivated private individuals for the welfare of villages like Chaynpurwa is also being planned. The objective is to provide sustainability to the project. Chaynpurwa village is on a path to turn its life around, look to a bright future and produce good law-respecting citizens. 

The initiatives taken by Aravind clearly demonstrate that despite enormous hurdles, if an officer so desires, she/he can make-it-happen.

Anil Swarup has served as the head of the Project Monitoring Group, which is currently under the Prime Minister’s Office. He has also served as Secretary, Ministry of Coal and Secretary, Ministry of School Education.

Uplifting a village out of poverty is a difficult task, but lifting one out of the grip of crime and poverty is a much bigger challenge. Rehabilitation that was not considered a part of police’s regular duty was initiated. It was initially frowned upon. However, soon the thought behind it and the prospect of improving the lives of people of an entire village came to be appreciated. The initiative soon got wholehearted support.

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Opinion

NCLT has no jurisdiction to examine legality of action taken under MPID Act: Bombay HC

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In a fresh and significant development, the Bombay High Court in a latest, landmark and laudable judgment titled The State of Maharashtra Through the Deputy Collector & Competent Authority (NSEL) V/s Anil Kohil in Writ Petition No. 3396 of 2019 With Civil Application No. 29 of 2020 delivered recently on 9 November 2020 has pronounced in most certain terms that the National Company Law Tribunal has no jurisdiction to examine the legality or validity of action taken under Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (MPID Act) and it is only the designated Court constituted under Section 6 of the said Act that will have exclusive jurisdiction to deal with the same. The Division Bench of Justice SC Gupte and Justice Madhav Tamdar quashed and set aside the order dated January 28, 2019 passed by the Member (Judicial), National Company Law Tribunal, Mumbai Bench directing the de-freezing of bank account in the name of Dunar Foods Ltd, which was freezed in relation to the National Spot Exchange Limited (NSEL) payment default crisis. This certainly has to be complied with now.

To start with, it is first and foremost enunciated in para 1 that, “In the present case a very interesting question arises as to whether action taken under the provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (hereinafter referred to as “MPID Act”) against a “Financial Establishment”, as contemplated under the MPID Act, can be challenged not before the Designated Court under the MPID Act but before the National Company Law Tribunal (hereinafter referred to as “NCLT”) by resorting to the remedy provided under the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as “I.B. Code”). On the application of a “Financial Creditor” as contemplated under I.B. Code, an Interim Resolution Professional (hereinafter referred as “IRP”) is appointed by NCLT by exercising power under section 7 of the I.B. Code against the Corporate Debtor as contemplated under I.B. Code, which is also the Financial Establishment under the MPID Act and de-freezing of the corporate Debtor’s account attached in MPID proceedings is ordered. This order is the subject matter of challenge in this petition.”

While setting the background, it is then put forth in para 4 that, “The State of Maharashtra through the Deputy Collector and Competent Authority (NSEL), by the present Writ Petition filed under Article 226 and 227 of the Constitution of India , has approached this Court challenging the legality and validity of the order dated 28/01/2019 passed by the Member (Judicial), National Company Law Tribunal, Mumbai Bench in M.A.No.1372/2018 in CP(IB)-1138(MB)/2017. By the said order, National Company Law Tribunal (NCLT) directed de-freezing of bank account No.1952320006245 in HDFC Bank, Karnal, Haryana, (hereinafter referred to as “said account”) in the name of Dunar Foods Ltd.”

While dealing with factual aspects, it is then laid down in para 5 that, “Some of the factual aspects set out in the petition are as follows :

(i) An FIR being C.R.No.216/2013 was registered against Financial Technologies (India) Ltd. (hereinafter referred to as “FTIL”) now known as “63 Moons Technologies Ltd.”, the National Spot Exchange Ltd. (hereinafter referred as “NSEL”), the Directors and key management persons of FTIL and NSEL, 25 borrowers/trading members of NSEL, some brokers of NSEL, and others, under sections 120B, 409, 465, 467, 468, 471, 474, 477(A) of the Indian Penal Code, by the M.R.A. Marg police station on 30/09/2013. In the said FIR, the first informant had alleged that NSEL had caused wrongful loss of about Rs.2.2 crores to himself, and wrongful loss of approximately Rs.5600 crores to more than 13000 investors. On the same day, i.e. on 30/09/2013, the investigation into the said case was transferred to Economic Offence Wing, Mumbai (hereinafter referred to as “EOW”), who registered EOW C.R. No.89 of 2013. The EOW applied the provisions of the MPID Act to the said C.R. in October 2013.

(ii) NSEL is a company registered under the Companies Act, 1956 having its registered office at Chennai, Tamil Nadu. The NSEL provided an electronic platform for spot trading in commodities, and used to operate from 16 States across the country. The NSEL was promoted by FTIL, now known as “63 Moons Technologies Pvt. Ltd.”, which holds 99.99% of the share capital of NSEL. The balance 0.01% of the share capital of the NSEL is held by the National Agricultural Co-operative Marketing Federation of India Ltd. (hereinafter referred as “NAFED”).

(iii) In the petition, a reference has been made to notification dated 05/06/2007 and further notification dated 06/02/2012 issued by the Department of Consumer Affairs, Ministry of Consumer Affairs, Government of India (hereinafter referred as “DCA”) by which exemption was granted to NSEL from the operation of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred as “FCRA”) for all forward contracts of one day duration for sale and purchase of commodities traded on its platform subject to certain conditions.

(iv) In the Writ Petition, the manner in which NSEL was working has been set out in detail.

(v) As per the FIR, during the initial contracts, member companies squared off the contracts on the dates of maturity. However, later on, these companies did not honour their commitments and caused wrongful loss of about Rs.5600 crores to about 13000 investors. The members of the NSEL fraudulently obtained huge funds from the NSEL against non-existent stocks of commodities. There was a semblance of trading, which was actually being done in non-existent goods, by issuing forged warehouse receipts. Further, the warehouses, which were an integral part of the NSEL as the commodities were required to be deposited in the exchange designated and certified warehouses as part of the pay-in obligations, lacked capacity and some of them had no stocks.

(vi) The NSEL vide their circular dated 14/8/2013 announced a settlement schedule. According to this schedule, NSEL had to make payouts of Rs.5,574.31 crores to its members. The settlement calendar announced by NSEL was spread over 30 weeks for pay-out on pro-rata basis to 148 members. The NSEL subsequently defaulted in all the payouts since the announcement of the settlement plan.

(vii) The investigation revealed that the mode of transaction that the NSEL was allowed by the Government of India was not followed by the NSEL, and that the NSEL had promised attractive returns to persons who had traded on the NSEL platform. The NSEL had assured them that if they entered into a contract on T+2, they would get an attractive return of 14% to 16% on the completion of the contract on T+25.”

While elaborating further, it is then set out in para 6 that, “As set out hereinabove, the FIR was registered on 30/09/2013, and after investigation, the EOW filed charge-sheet on 06/01/2014 in EOW. C.R. No.89/2013 in MPID Court, Mumbai. EOW thereafter filed supplementary charge-sheets from time to time including on 04/06/2014, 04/08/2014 and 27/12/2018. It is set out in the petition that as provisions of MPID Act were made applicable, the Government of Maharashtra vide notification dated 28/08/2014 issued under section 4 of the MPID Act attached several properties of several companies including Lotus Refineries Pvt. Ltd., White Walter Foods Pvt. Ltd., Shree Radhey Trading Co., Vimladevi Agrotech Ltd., Mohan India Pvt. Ltd., Tavishi Enterprises Ltd., Brinda Commodity Pvt. Ltd., Ark Import Pvt. Ltd., P..D.Agroprocessors Pvt. Ltd., Aastha Minmet India Pvt and Juggernaut Projects Ltd., White Water Foods Pvt. Ltd., Swastik Overseas, MSR Foods, Loil Continental, Loil Health Foods Ltd., Loil Overseas Foods Ltd., Spin Cot Textiles Pvt. Ltd., NCS Sugars Ltd., Metkore Alloys and Industries Ltd., Yathuri Associates, Namdhari Food Internation Pvt. Ltd., Amdhari Rice and General Mills and of Dunar Foods Ltd. It appears that during investigation, as and when the Investigating Agency got knowledge about properties of various companies/persons to which the provisions of MPID Act in relation to said FIR could be applied, necessary notifications under section 4 were issued by Government of Maharashtra attaching immovable and movable properties. By the notification dated 19/10/2018 various properties belonging to various parties were attached including of M/s.E.D. Agro Procedures Pvt. Ltd. and Dunar Foods Pvt. Ltd. including the said account. In this petition, we are concerned with defreezing of the said account which is subject matter of the impugned order dated 28/01/2019.”

Going forward, it is then put forth in para 7 that, “When the said investigation by EOW was going on and when the authorities were taking action under MPID Act, simultaneously on 27/06/2017, the State Bank of India, a Financial Creditor of M/s. Dunar Foods Ltd., invoked the jurisdiction under section 7 of the I.B. Code for the defaulted financial debt of Rs.758,73,62,546/- outstanding against the Corporate Debtor M/s.Dunar Foods Ltd. In the said proceedings, by the order dated 22/12/2017, the said petition was admitted by the NCLT and Mr. Anil Kohli was appointed as IRP and directed to comply with provisions of sections 13 and 15 onwards of the I.B. Code. It was further directed that as the petition was held fit for “admission”, hence as a consequence Moratorium as prescribed under section 14 of the I.B.Code would commence. It was further directed that on enforcement of Moratorium, certain prohibitions were applicable, such as institution of any Suit before a Court of Law, transferring of any Asset of the Debtor, encumbering any rights over the assets of the Debtor. However, it was also clarified that the supply of essential goods of services to the Corporate Debtor shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan as prescribed under section 31 of the I.B. Code. Accordingly, the said petition stood admitted. The Corporate Insolvency Resolution Process commenced from the date of the order.”

In hindsight, it is then mentioned in para 8 that, “It is significant to note that on 20/02/2018, M.A.No.237/2018 was filed by Dunar Foods Ltd. through IRP under section 9 of MPID Act before the Designated Court under MPID Act, seeking direction to defreeze the bank accounts of Dunar Foods Ltd. attached pursuant to the notifications issued by the Home Department of Government of Maharashtra under the MPID Act from time to time and seeking further direction to the Competent Authority designated under MPID Act to forthwith handover all assets of Dunar Foods Ltd. to the Applicant. By the order dated 28th December, 2018, passed by the learned Special Judge (MPID Act) City Civil and Sessions Court for Greater Bombay passed below Exhibit-1 in Miscellaneous Application No.237 of 2018, the said application was rejected, however, it was clarified that IRP was at liberty to raise objections before the Court under section 7 of the MPID Act.”

Of course, what cannot be ignored is then stated in para 9 that, “In the meanwhile, on 12/11/2018, M.A.No.1372 of 2018 in C.P.No.1138/I & BC/NCLT/MB/MAH/2017 was filed by IRP for Dunar Foods Ltd. under section 60(5), 14(1a) and 74(2) of I.B. Code before the NCLT, seeking direction to de-freeze the said account of the corporate debtor attached pursuant to the notifications issued by the Home Department, Government of Maharashtra under MPID Act from time to time and consequential directions to the Respondent, being the Competent Authority designated under MPID Act, to forthwith handover all assets of Dunar Foods Ltd. to the Applicant. It is further prayed that action be directed to be initiated under section 74(2) of the Code against the concerned officers of the corporate debtor for deliberate and willful violation of section 14 of the Code. A detailed reply dated 15/01/2019 was filed by the Deputy Collector and Competent Authority (NSEL) to M.A.No.1372/2018. By the impugned order dated 28/01/2019, passed by the learned Member (Judicial) NCLT, Mumbai Bench, M.A.No.1372/2018 was partly allowed by directing defreezing of the said account. The said order is challenged by the State of Maharashtra through Deputy Collector and Competent Authority, (NSEL) in the present writ petition.”

To put it succinctly, it is then pointed out in para 28 that, “The Respondents have also relied on the judgment of the Designated Court under the MPID Act at Bombay City Civil and Sessions Court, Mumbai in Roofit Industries Limited Vs. The State of Maharashtra in MPID Special Case No. 34 of 2004. A perusal of said order dated 18.08.2017 passed by the Special Judge, MPID Act clearly shows that provisions of I.B. Code were pointed out to the Court and after giving hearing to Competent Authority, depositors, objectors and others, Competent Authority and EOW were directed to hand over certain properties to the Applicant in the said case who claims to be an Interim Resolution Professional appointed by the NCLT for Roofit Industries Ltd. The operative portion of said order dated 18.08.2017 is reproduced herein below:-

“ORDER

1. Application is allowed.

2. Competent Authority and EOW is directed to hand over to applicant/intervener the custody and charge of the immovable properties mentioned at Sr. No. 8,10, 12,16,17,18,19, 20 and 23 of the notification dtd. 06.05.2016 alongwith all documents, record etc., within two weeks from today. They are further directed to handover to applicant office equipment, computers, furnitures and fixture in premises at Sr.5 and 24 of the notification.

3. The Competent Authority and EOW are directed to hand over amount of Rs.40 Lakhs alongwith accrued interest, if any to the applicant, within two weeks from today.

4. The Competent Authority is directed to the represent all depositors/investors before the applicant/intervener and to file the claims on their behalf. CA shall do all acts necessary for safeguarding and protecting the interest of depositors in Roofit Industries.

Date: 18.08.2017 A. S. Kaloti

Special Judge, M.P.I.D. Act & Addl. Sessions Judge,

City Civil & Sessions

Judge At Bombay.

Thus, even the said order, on which reliance is placed by the Respondents, shows that the IRP in that case approached the Designated Court under the MPID Act and after hearing all the parties, an order was passed and certain directions in the interest of depositors as contemplated under the MPID Act were also issued.”

For the sake of clarity, it is then clarified in para 29 that, “The learned counsel for the Petitioner has also relied on the judgment of NCLAT in the case of JSW Steel Ltd.(supra) wherein it has been held that the action of Directorate of Enforcement did not meet the criteria under Section 32-A (1) (b) of I.B. Code. However, in the present case, the Designated Court under MPID Act will examine the said aspect and therefore, the said judgment is not applicable to the present case.”

In the ultimate analysis, the Bench then holds in para 30 that, “Thus, in view of the above discussion, we hold that the NCLT has no jurisdiction to examine legality or validity of action taken under MPID Act and it is only the Designated Court constituted under Section 6 of the MPID Act that will have exclusive jurisdiction to deal with the same. Therefore, the impugned order passed by the NCLT is without jurisdiction and therefore, amenable to a challenge in our writ jurisdiction.”

Quite significantly, it is then held in para 31 that, “Thus, it is clear that the only remedy for Respondent-IRP is to approach the Designated Court under Section 7 of the MPID Act. Therefore, the impugned order passed by NCLT by which the said account was directed to be de-freezed, is without jurisdiction. The learned AGP has rightly relied on the judgments in Whirlpool Corporation (supra), Harbanslal Sahnia (supra), Committee of Management(supra) and Godrej Sara Lee Ltd. (supra) wherein it is consistently held that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus, Mandamus, Prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for “any other purpose”. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions, one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any fundamental right or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged.”

Now coming to the concluding paras. Para 32 states that, “In view of above discussion, we quash and set aside the order dated 28/01/2019 passed by the NCLT in M.A.No.1372/2018 in C.P.No.1138/I & BC/NCLT/MB/MAH/2017 by which the said account was directed to be de-freezed. The Respondents can approach the Designated Court under section 7 of the M.P.I.D. Act seeking appropriate reliefs. We have not dealt with the merits of the case and the contentions in that behalf are expressly kept open. Rule is made absolute in above terms with no order as to costs.” Finally, it is then held in the last para 33 that, “In view of disposal of the Writ Petition, Civil Application No.29 of 2020 does not survive and is disposed of as such.”

Quite rightly, the two Judge Bench of the Bombay High Court comprising of Justice SC Gupte and Justice Madhav Tamdar have substantiated this notable judgment with logical and learned reasons rightly while also noting that the only remedy for the IRP now is to approach the designated court under Section 7 of the MPID Act and set aside the NCLT’s order. It has rightly held that NCLT has no jurisdiction to examine the legality or validity of action taken under MPID Act. It has to be now complied with. There can certainly be no ever denying or disputing it!

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India’s European dilemma as a ‘Vishwa Shishya’: Strategic delusions & idea-centrism issues

Abhivardhan

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The year 2020 marks the shedding of ideological obscuration amidst democracies. Geopolitics and the face of ‘realpolitik’ is undoubtedly at the centre of many problems and avenues that the world accordingly faces. India’s dilemma therefore – is different. In many aspects, India has a fortunate position, unlike EU and the US, which we must never ignore. In terms of constitutionalism, India can learn the social coherency and the urge of credibility towards its institutions from Europe, while in terms of the of the dynamic nature of a democracy and its three sections, it can certainly learn from the US. In terms of strategy and information warfare, India needs to learn from Israel and Russia. In addition, in terms of harnessing the global supply chain and enabling the middle class in India to grow, it can learn, if not inspire from China, Bangladesh and Japan. However, to learn is different from the art, handiness and clarity to adopt or implement. For years, India has been a different ‘Vishwa Shishya’ (term coined by Harsh Gupta, one of the authors of ‘A New Idea of India’), where even the understanding of the term is not as literal as the term even depicts. Vishwa Shishya means someone who can be a ‘disciple’ of the world, in a rigorous, focused and devoted manner. For a constitutional cum civilizational state like India, the internal and exterior annals of learning and relationship towards the world itself have been crispy, confusing and improving. No disciple is perfect, and it is certain that there are strategic, constitutional and economic backlashes that are faced in general. Therefore, even if Europeans or Americans see India differently in a technocratic or Newtonian manner, the depiction itself is not complete, neither absolute.

Even if you see the 6 stages of Indian Foreign Policy as beautifully explained by India’s External Affairs Minister, Dr S Jaishankar in the 4th Ramnath Goenka Lecture, 2019 – then you will find that the 2nd and 3rd phases of vulnerability, recovery and regional assertion flipped India’s earlier ideological connectivity with Nehruvian Socialism (political and economic). The social faction of Nehruvian Socialism met its gradual end in the 4th and 5th phases, when economic growth and balancing ties with the US, China and Russia was important. Despite the fact that in the matters of politics, society and economics, there are still some percolations or strands of degeneracy of India’s civilizational ethos, there is no doubt that a sense of revival is imminent, which will be more or less a struggle, for not a long time. The current stage of energy diplomacy, which India stepped in since 2014, has been adventurous – and is reaching the logical conclusion of its beginning in 2020, which was fast because of the expose of the global conditions due to one pandemic. However, the impact is still not much significant, because rebounding and strategic protectionism will drive countries to become competitive. India and ASEAN countries are at the verge of the same. In fact, towards the likelihood or non-likelihood of Joe Biden winning the US Presidency, India is seeking an outreach towards the Democratic Party with the hope that the US is still bipartisan. Under Joe Biden, this would seem calculatedly true (if he wins), and this therefore must not be ignored. Considering the mess that the US Presidential Elections 2020 have become, and the Democratic Party’s deep divisions within, it is clear that the benefit of doubt over the transformation of the realpolitik conditions of the international community will be now central to two important regions – the Indo-Pacific up to the Far East & continental Europe. The article attempts to declutter India’s dilemma towards Europe over two important issues – strategic delusions and idea-centrism.

India and Europe – Moderate & Natural Partners

There is no doubt in asserting that India and Europe are moderate natural partners, in areas such as trade and environment. A report from the European Parliament also suggests that the potential impact of an EU-India trade agreement at between €8 billion and €8.5 billion gains from increased trade for both sides, with a more noteworthy upsurge of trade gains likely towards the Indian side. The study also refers to additional potential gains from enhanced coordination on the provision of global public goods, such as environmental standards. Even in culture, Europe and India are not far, but closer in a reasonable manner. The EU in India organizes cultural fests with the Indian Government and participates in the dialogues and consultations openly. Even Ambassadors from European countries are open to participate with India reasonably. However, the real issue begins when India and Europe, at social levels, clash. This clash is not civilizational, but has both ideological and cultural aspects, which exists, and is not affably even noticed properly by the European community, if is done by the Indian community. The problems, which affect the coherence of cultural-personal relationships between India and Europe are ethnocentrism and Eurocentrism.

There is no doubt to expect that Europe and India do share some common worldviews, which in general is not so close, if can be near to coherency. Whenever we estimate the US’s views on India, we often jump on Hinduphobia and the Kashmir question/affinity towards Pakistan or kindness towards the Muslim Brotherhood, which is merely a limited angle to see the trajectory of Indo-US relations. Similarly, the argument kept that ethnocentrism and Eurocentrism exists as a problem is not merely a monolith of differences over religion and human rights, because the issue of Hinduphobia, like in the US, is more related to the lack of awareness and consciousness in culture policy and diplomacy, which very few Non-Resident Indians reflect in the Americas and Europe, unfortunately. The problems that India as a civilizational state faces, are definitely real, but cannot be overestimated, nor exaggerated. Same applies to those people, who exaggerate Eurocentric world views and act ethnocentric over India and its internal political and social problems – like they intend to do in the case of Africa as well. This exaggeration, has been at peak in the US for long, if not is so much in Europe, where a set of people taint the Indian worldview unreasonably. India’s communication and counter-information strategy has been weak and unfit, which is not completely owed to the Indian Government’s mistakes in dealing with information warfare from the West. In fact, the burden must be shared by the Eurocentric and ethnocentric Western media, which has not been non-partisan for a long time, despite the fact that colonialism and cold war mentality are over. Ideological obscuration, therefore is not the basis of European worldview, in completion, but it also does not mean that Europe cannot suffer from the lasting effects of lack of cultural sensitivity and mobility. The mobile and supportive behaviour of the Central and Eastern European bloc towards India has been a positive act, and will help foster better Indo-EU relations. Inviting center-right and few far-right MEPs to visit the Union Territory of Jammu & Kashmir in 2019 is not an ideological move, because Eurocentrism is not just the disease of those leaders, who are socialists (even libertarians and conservatives have a lack of awareness of India’s cultural sensitivity and mobility) & so, even Christian conservatives, and libertarians could have made mistakes in understanding the Indian state. Fortunately, the feedback was positive enough, which is a significant win for India. Even the uproar over the Citizenship Amendment Act of 2019 was unfounded – because the classification of a particular set of people given for the purpose of citizenship into India, does not bar people from earning citizenship into India through legal means, which is naturalization (for outsiders). Unless the Citizenship Amendment Rules of 2020 or 2021 come, no absoluteness over the same matter can be reckoned by the European side over the constitutionality of the Act, and thus, even this claim is unfounded.

Strategic Delusions and its Percolation

Now, why ethnocentrism and Eurocentrism is not myopic to the Indian Government, but to Europeans? Is awareness the only reason? Perhaps not. Europe is very much open in terms of engagement and diversification, and blaming a set of Far-Left/Far-Right political leaders is just an unreasonable method to deal with the problems India and Europe have had for some time. In this century, the European Union needs a defence arrangement (to end the over-reliance on NATO for good), to reckon a non-defeatist and science-security-centric technology leadership (which is being fought among China, the US, India and ASEAN, to name some) and finally, a relevant global competition policy (which is urgent considering the expansionist designs of China in Eastern Europe and the Scandinavian region). In all 3, the situation is quite not much grown, and the migration crisis has already caused some Central and European States to ignore the EU over migration. Although migration is an issue of zero concern to India, there is no doubt that India is eager enough to be patient to seek a revitalized and transformed Europe, which can balance populism and political correctness, like Emmanuel Macron over Islamist extremism, which Angela Merkel could never be able to do so. India’s arduous support of Macron and his diplomatic and personal dignity is not a populist anti-Muslim move, but a clear indication of what reformed multilateralism looks like.

Also, the US is more damaged as an institutional democracy, which is owed to the 12 years of over-personalization of the sanguine nature of the Presidency it relies on. Frankly, it is a bipartisan failure, of both the Democrats and the Republicans, but considering that the Republican party intends to move forward and not endorse Donald J Trump’s rants, they will never ignore the achievements of the 45th President – but rather capitalize on the same reasonably. The Democrats however, have some really bad years ahead due to their stance over the Critical Race Theory, and the Black Lives Matter campaigning, which in no way helps the minorities. In fact, as per the AP VoteCast survey on the US Presidential Elections 2020, around 35% Muslims voted for Donald J Trump, including a more diverse coalition of women, Latino and black voters. The white vote has plummeted, which is insanely interesting. Also, the House Republicans have gained amassed benefits in their numbers, even if they cannot grab the majority this year, which shows that the end of a Trump Presidency, will undeniably lead to a degeneracy and decay of the democratic socialists and cultural Marxists, who dominated the image of the Democratic Party for long, and destroyed their credibility around the world. The relationship between democratic socialists and cultural Marxists in the US & Europe is also not unfounded. However, considering France and Germany’s unison over resisting political Islam and China, which will be significant in Europe in the coming years, the political disease of eurocentrism is set to be cured better, thus making the European political faction cautious about their worldviews. A reasonable definition of anti-Semitism also has been adopted by the Global Imams Council, which is a reasonable move, not only in the eyes of UAE and Saudi Arabia, but also the European right, which has to stand up reasonably. European secularism will also take a dramatic turn. France’ Macron is a perfect balance between the Far-Left and the Far-Right in Europe, and before Chancellor Merkel leaves world politics, she will never be intending to taint the Christian Democratic Union in Germany, and therefore empowering the Far-Right Alternative for Germany. Thus, the four years of Trump Presidency, even if have been turbulent for Europe and its institutional cum ideological values, have given a sense of learning to Europe to expose itself to a stronger and resilient worldview, which is coherent.

Additionally, Europeans are now realizing that they need to bridge and change their policies over three significant countries – India, Russia and China. With India, Europe is set for a trade deal any year soon, in clear opposition to the treachery of the values of European liberalism (or libertarianism) committed by the Chinese Communist Party led by Xi Jinping. Taiwan cannot be ignored anymore, as not only the US, but some EU member-states are leaning to endorse the leadership there in a moderate and transforming resistance against the Chinese wolf-warrior diplomacy. With Russia, the range of complexity depends on the state of Central Asia, where if Europe and NATO do not control Turkey (supported by Pakistan), then the US might step in assertively. However, it is in the best interest of Europe to sanction and take action against Reccip Tayyip Erdogan. Eastern Europe and Central Asia are the umbilical cords to the geopolitical transformation of defence partnerships between India and EU member-states. India already is in course for defence partnerships with Kazakhstan under the nose of China, as Eurasian Times reported. Thus, a better vision of multiculturalism – which started from Europe (not the US) in the 1990s can be presented to the international community, which will be welcomed heartily by the Indian Government.

IDEA-CENTRISM AND ITS DIMENSIONS

India shares the values of multiculturalism that Europe concedes to. Secularism and multiculturalism, despite being amazingly different, are essential to India and Europe in general. Indian secularism is not based on Semitic faiths such as Christianity, Islam and Judaism (although several attempts were made in India to impose the same, unfortunately by the Indian National Congress and the Nehruvian socialists for years). Instead, India’s vision of secularism, in full agreement with Rajeev Mantri and Harsh Gupta’s A New Idea of India – is composed of respect and devotion towards the civilizational heritage and diversity of India’s geography and cultures, which cannot be limited to the term called ‘Hindu Nationalism’ & the idea of coherence instead of artificial tolerance towards different Semitic and non-Semitic faiths, frankly. India has always welcomed people of different faiths, and will do, whenever it feels reasonable enough. Also, the dimension of sovereignty in India, is not ideological, but pragmatic, based on (1) a feudal governance model, which is often misinterpreted as ‘quasi-federalism’ under Indian Constitutional Law (since the Government of India Act of 1935 and other colonial adoptions from the British is still present in India) and (2) central to the concept of competence, and not power (which the Western and Indian media represents worse on unfounded claims). Kautilya, the architect of the Mauryan empire always embraced the idea of competence over a micro-managed servility towards power as a corrupt concept. It was Ashoka who destroyed this empire, because of his micro-management of governance and the eulogization of his identity as a King equivalent to that of a God, which never happens commonly in the history of Indic kings. Celebrating the cult and its diversity is not unfounded, neither unreasonable for the Indian people, because of years of mistreatment of the Indian state and the judiciary of the religious, social and cultural institutions of the Indic community. For example, the word Dharma is not equivalent to the word ‘religion’ and ‘Jati’ is not the English word ‘caste’, which unfortunately, has been a colonial misrepresentation of the Indic culture. Thus, the feudal system of constitutionalism from the British had its own reasonability in India, which now can be effectively transformed to a federal but responsible and accountable system of governance. India knows it very well that dominance in the information age is based on decentralization, not over-centralization of the state machinery. This inspiration is not directly American, but European – because if we see the laws (passed and in process to be proposed or passed in the Indian Parliament), many of them on information technology, AI and fintech are directly inspired from Europe. The Personal Data Protection Bill of 2019 is definitely inspired from the General Protection Data Regulation with some Indian modification of course, for example. Therefore, there is no doubt that India is eager to learn from Europe, its old friend. What Europe should do to express gratitude is to transform and revitalize its approach to strategize some limited identitarian European values, which are universal yet pragmatic, which starts with the European Parliament and the European Commission’s leaderships. Center-right, libertarian and Center-left politicians are better than Far-Right and Far-Left parties, and even when we see the current state of the COVID19 pandemic, we will find surveys proving that the Far-Right, for example, is suffering pretty well, especially in Germany and Austria. Center-right parties will have a better stronghold, but if their public health policies are not reasonable, then mere populism or assurance will not help the people. On the other hand, in India, the Culture-conservative and governance-libertarian governments in India (state-level) are doing significantly well in their efforts to curb the COVID-19 virus and its spread. Some socialist governments in India are not doing well, like West Bengal and Kerala, while the Central Government in India is well-prepared in contact tracing, decreasing the number of deaths and even handling the quarantine zones, which no one would have ever expected from a country like India, whose health infrastructure is a serious mess. India has been cooperative and helpful towards ASEAN countries, like what European Union tries to do with the Middle East and even some non-EU member-states as well as the Commission did since March 2020.

Thus, it is clear that the pair of India and Europe can certainly do better in terms of cooperation and transformation of the global economy, global health and environment system & the world of multilateralism, instead of the pair of India and the US. No one should ignore the potential of an Indo-US cooperation – but over relying on a skewed democracy like the US is often risky for the resilience of the Indian democracy. India can adopt and maintain the transformation of QUAD to its logical beginning as of now, as it presides the UN Security Council, the Shanghai Cooperation, G20 and other significant forums along with the Executive Bodies of the World Health Organization and the International Labour Organization. It is however also in the best interest of Europe, like India to have a meaningful and not over-reliant relationship with the US. Instead, Europe can look towards the global south and transform a resilient and meaningful network of partnerships swiftly, in the interest of peace and security, and so, a reasonable model of economic development. The US will be significant in the coming years to combat ideological obscuration and culture wars, which India and Europe would never to intrude much. Thus, one US election cannot decide in absolutism, as to how the state of the world will be – as the impact of the changes made by President Trump will help more, and damage less, the global order. This is therefore the best moment of a charted territory in the relationship between India and Europe to revitalize and protect the liberalism that the rules-based international order is fond of, which is not misused by anyone, whether it is the US, or China or Russia.

About the author: Abhivardhan is the Chief Executive Officer of Internationalism and the Chairperson & Managing Trustee of the Indian Society of Artificial Intelligence and Law.

In terms of strategy and information warfare, India needs to learn from Israel and Russia. In addition, in terms of harnessing the global supply chain and enabling the middle class in India to grow, it can learn from China, Bangladesh and Japan. However, to learn is different from the art, handiness and clarity to adopt or implement. For years, India has been a different ‘Vishwa Shishya’ (term coined by Harsh Gupta, one of the authors of ‘A New Idea of India’), where even the understanding of the term is not as literal as the term even depicts.

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Ensuring a safe future for our children

Between 2005 and 2016, India lifted 270 million people out of poverty, according to a report by the Oxford Poverty and Human Development Initiative in collaboration with the United Nations Development Programme. This is an impressive feat—to put things in perspective, the entire population of the UK is around 67 million.

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According to some estimates nearly 40 percent of the country comprises of children- below 18 years- this is a substantial demographic. This week marks two significant days for children. November 14th is marked as Children’s Day across India to celebrate Nehru’s birthday. November 20th is marked as World Children’s Day internationally to commemorate the Geneva Declaration of the Rights of the Child. It is important to look at issues around child welfare that we as a country and a society must address collectively.

First and foremost perhaps, is the need for poverty alleviation. In some good news, between 2005 and 2016, India lifted 270 million people out of poverty according to a report by the Oxford Poverty and Human Development Initiative (OPHI) in collaboration with the United Nations Development Programme. This is an impressive feat- to put things in perspective, the entire population of the UK is around 67 million.

Having said that, it is no secret that poverty is a huge concern for the country. The covid situation may possibly make it worse. This means that sadly, a huge part of the population is still malnourished- according to some estimates about 40 million children. The state has taken some incredible steps- the mid-day meal scheme for instance is a step in the right direction. Not only does it ensure education for all, it does so whilst also ensuring at least one nutritional meal is afforded each day. Perhaps one of the largest such schemes in the world- more than 12 crore meals are served in our schools daily. This is an excellent initiative- yet a huge number of children are unable to avail this- on account of not being able to go to school.

Second, education is a crucial need for all children. Article 21 A makes education for children between 6 and 14 as compulsory. The Right to Education Act of 2009 furthers this objective by providing free and compulsory education for all. The 83rd Amendment to the Constitution made it a fundamental duty on every parent or guardian to ensure that their child or ward is provided education between the age of 6 and 14. These are all steps in the right direction. However, going forward, the applicability of these provisions must be strictly monitored. The quality of education should similarly be monitored to ensure parity across all schools and quality education that is world class and in line with the world standards. Private schools must accommodate students from all financial backgrounds.

Third, the protection and safety of the children is absolutely non negotiable. It is essential that the health- mental as well as physical health of each child is taken care of. This also includes protection from any harm. The Protection of Children from Sexual Offences (POCSO) Act, 2012 is one such legal instrument. It makes it mandatory to report sexual assaults on children. It also balances out the form of trial and courts have been sensitive to witness protection of children. Similarly family courts continue to adopt practices to limit damage to children. Those who come into conflict with laws are to be dealt with under Juvenile laws. We need a comprehensive study of these laws- to ensure complete protection of our children and ensure that each child is given the best possible opportunity to grow and if appropriate, reform.

Human trafficking continues to be a dreadful threat- leading to abduction and kidnapping of children that further leads to exploitation, including child labour. To truly stop this- not only do enforcement agencies need to be on top of it all- the role of the civil society to report such crimes and the role of the international community to help detect these is also crucial. A concentrated effort of all sections needs to be made to stop this immediately.

Last, it is important that any action we take as a nation- ranging from our education policy to environmental decisions should all be taken keeping the interests of our children and the future generations in mind. Education should be wholesome and practical. Environment degradation needs to be reversed with particular zeal. The pollution, for instance, effects children disproportionately. This needs to become a top priority to ensure healthy children who are able to have a happy childhood.

The great Rabindranath Tagore once remarked ‘Every child comes with the message that God is not yet discouraged of man.’ This children’s day, we must reflect on ensuring that each child has the happiest and safest childhood possible. They should not be bridled, cabined and cribbed by the social evils of child labour, poverty or lack of opportunity. It is them, after all, in whom we invest our futures.

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Indian data centres draw $396 million investment in 2020 so far: Report

The country’s data centre industry has attracted close to $977 million in PE and strategic investments since 2008, of which nearly 40% or approximately $396 million were infused between January and September 2020 alone.

Anuj Puri

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Data centre industry revenue grew 3X in last 6 years – from USD 386 mn in 2014 to USD 1.01 bn in 2019

At least USD 7 bn leveraged capital investment committed or in stages of being deployed

India’s ~126 third-party data centres owned / operated by 53 players, but top 12 players operate ~95% of the total IT Power capacity

Mumbai’s under-sea cable landings currently make it the most popular location for data centres; in the future, Mumbai & Chennai to be the preferred locations.

Analysing under-construction projects and capital invested or committed, an ANAROCK-Mace report titled ‘Navigating the India Data Centre Lifecycle – Trends & Perspectives’ reveals that India will see at least 28 large hyperscale data centres constructed over the next three years. These will span over 16+ mn sq. ft. with at least 1,400+ MW of IT power capacity, equalling nearly 0.6 mn sq. ft. and 50 MW per facility on an average per hyperscale data centre.

The Indian data centre industry has attracted close toUSD 977 mn in PE and strategic investments since 2008, of which nearly 40% or approx. USD 396 mn were infused between Jan-Sept 2020 period alone.

While India has been seeing a massive digital thrust since 2014, the current government’s data localization policy has paved the way for hyperscale data centres to handle the increasing data consumption. Hyperscale facilities have clear advantages over smaller colocation centres as they can cater to the huge domestic data warehousing demand creating operating efficiencies and thus, pass on cost benefits to their customers. Smaller colocation facilities will need to reassess their competitive position and may need to repurpose to ensure survival.”.

Indians’ data consumption increased from 0.3 GB/user/month in 2014 to 10 GB/user/month in 2018; per capita consumption to hit 25GB/month by 2025 – total data traffic in the country likely to touch 21 EB (exabytes) per month.

The report finds that India currently has ~126 third-party data centres (colocation or hyperscale) spanning 7.5+ mn sft, and a cumulative IT Power Capacity of 590+ MW. While 53 players own /operate these 126 third-party data centres, the capacity is highly concentrated among the top 12 players who operate ~95% of the total IT Power capacity in the country.

The report also tracks investments into digital infrastructure for data storage in India from exchange and MCA filings of the top 12 data centre operators, and finds that the last decade saw this industry’s net fixed assets increase 25% p.a. – from USD 115 mn in 2010 to USD 1.1 bn in 2019.

Upcoming supply is expected to be concentrated amongst Mumbai and Chennai, followed by NCR and Hyderabad also getting a fair share of interest. Mumbai and Chennai together will witness ~60% of total future capacity, with NCR and Hyderabad contributing another 33%.

OTHER KEY REPORT HIGHLIGHTS

• Data centres are now the hottest alternative real estate asset – With the focus shifting to large hyperscale developments, the underlying property is becoming more valuable. Approx. USD 9.5 bn of capital is in various stages of being announced, committed or waiting to be committed into Indian data centres.

• Two exciting capital trends emerging – Data centres as alternative real estate assets providing yield income to large infrastructure investors, and the creation of large platforms between operators on one hand and investors / developers on the other.

• State governments providing fiscal and other benefits for setting up data parks – Benefits by Maharashtra, Gujarat, Telangana, Uttar Pradesh and Haryana state govts. range from subsidies on land, power, or other infrastructure and tax or duty waivers to granting of infrastructure / industry status and classification as essential service, and more.

• Need for proximity to customers – Tier 1 cities will see a fair share of data centre developments, especially in light of expected 5G rollout. Data consumption in Tier 2 cities will generate demand for smaller colocation facilities, given the growing data consumption of other urban cities.

While India has been seeing a massive digital thrust since 2014, the current government’s data localization policy has paved the way for hyperscale data centres to handle the increasing data consumption. Hyperscale facilities have clear advantages over smaller colocation centres as they can cater to the huge domestic data warehousing demand creating operating efficiencies and thus, pass on cost benefits to their customers.

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