Dr Ashwani Mahajan
The effort to raise cap on FDI in defence from 26 percent, which started during UPA regime in 2010 and was put off after strong opposition from the then defence minister A.K. Antony, is once again being pushed vehemently after new government under Narendra Modi has come to power at the centre. It is notable that permission for FDI to the extent of 26 percent was first granted during the previous NDA Government under the stewardship of Atal Bihari Vajpayee. According to Press Note-4 in the year 2001, this policy was first announced, whereby Indian companies were allowed 100 percent and foreign entities 26 percent in defence sector.
After Narendra Modi’s swearing in as Prime Minister on May 26, 2014, talks have started to raise the cap on FDI in defence beyond 26 percent. According to the talks in Government circles a cabinet note to this effect has already been sent to the concerned ministries. Government says that today 70 percent of our defence equipment needs are being met by imports and hardly 30 percent by domestic production. Our ordinance factories use primitive techniques and therefore quality of our defence products is not up to the mark. The major problem about the defence equipments being imported into India is that suppliers are not in position to provide sufficient maintenance facilities. Therefore, these equipment are not very reliable during war. Therefore, in the interest of modernisation of our defence industry, its further exposure to FDI may prove to be a boon.
However, critiques argue that by allowing FDI in defence, our dependence on foreigners will increase. It is feared that our dependence on some countries and their blocs may amplify in the future. They also argue that during war time foreign companies, while trying to serve the strategic interests of their countries of origin, may even block the supplies at the time we require them most. This is also possible that they produce arms and ammunition in India and supply to our enemy nations or even terrorist organisations.
Why does Government want FDI in Defence?
It is believed that at present foreign companies are reluctant to transfer their technology with the present cap on FDI at 26 percent; as they want greater share in the business. If we raise the limit beyond 26 percent, they may be willing to transfer technology related expertise to India. Not only that this would improve technological base for defence industry, other sectors would also be benefited due to improvement in technology. Defence goods could be produced with in the country and therefore it would help us in saving valuable foreign exchange. Liberalisation of FDI in this sector may also help us in increasing our exports of defence goods. Today India exports hardly 2 percent of its defence production, whereas other countries including China, Israel, South Africa etc. export much more than India.
Truth of Technology Transfer
Those in favour of FDI in defence, give the argument that with this measure nation will get hold of latest technology in defence and nation would progress in the field of defence production. But this is an open secret that technology denial regime is at work in advanced nations, and USA in particular, who is known to possess advance technology in the field of defence production. Example of cryogenic engine is well known to all in which case USA not only refused to supply cryogenic engine for our PSLV programme itself, they even forced other nations also, not to give the same. US law does not permit its companies to make their technologies available to other countries, even if they are carrying out production activities in these countries. Therefore, if we open our doors for FDI in defence even further, technology transfer is not guaranteed.
What is Good for the Nation
It is known to all that today India is excessively dependent on other countries for supply of defence equipments, arms and ammunition fighter, aircrafts etc. Not only that it causes a big drain on our valuable foreign exchange, we are also forced to pay much higher prices through our nose. After the disintegration of USSR, today India is purchasing defence goods on a large scale from USA, Western Europe and host of other countries. Therefore theoretically the nation can benefit by inviting global players, as they may produce these defence goods with their latest technology and may serve our needs. However giving them managerial control in this strategic sector may not be good for the strategic interest of our country. Segments in which private or public sector companies are working efficiently; inviting foreign players may not be good. There are number of success stories of domestic producers.
Major worry with regard to foreign investment is that of mindset of the policy makers, who feel that foreign investment is the solution to every problem. The basis for deciding whether or not country should go in for FDI in defence should not be how much investment is attracted by this act, rather it should be based on the fact that how much help it would provide for self reliance in the field of defence, technological upgradation and strategic preparedness.
Reality remains that after independence, there have been major efforts in the field of defence production; however they were generally concentrated in the public sector. Further, there were insufficient efforts towards research and development. Where ever Government made efforts, we could achieve excellence. For instance, development of Agni missiles, nuclear deterrent, PSLV, satellite launching; have been astounding the world. Therefore it is imperative that Government takes up pro-active approach towards research and development activities for technological excellence based on Indian genius. At present there is no provision with regards to isolating Chinese investment, while going ahead with foreign investment, government has to adopt cautious approach.
No doubt nation cannot wait indefinitely for encouraging defence production at home, but at the same time, strategic interests too cannot be sacrificed. Therefore a guarded approach is the need of the hour. There is no reason for haste in this matter.
( The author is Associate Professor, PGDAV College, University of Delhi)

Hasib Ahmed
Motherhood is the pious and greatest gift of God. But this gift of god has become fatal for the expectant mothers of Bhadarwah. The health sector of this remote area of the state is completely in shambles. The mother and child care facilities are at the mercy of God. In this Sub-divisional hospital there is not even a single Gynaecologist due to which expectant mothers have to travel 30 KM to reach District Hospital Doda at their own risk during acute pain. These expectant mothers become a casualty due to the non-serious attitude of the State Government. Due to this an expectant mother who is likely to give life another human being is facing herself a constant fear of losing her own life along with her unborn child. Tall claim of the Govt to ensure Right to Health has been exposed by the sorry state of health care at Bhadarwah. Mother’s Day is celebrated merely as a ritual with fervour and gaiety by forgetting its duty towards the motherhood. The celebration of this day has a purpose to remind and educate the people about the role of mothers in the family and society where except this relation every relation is selfish and reciprocal. Lofty ideas are shared in the seminars and debates upon the female related issues but how these hollow slogans and ideas are materialised at the ground level can be seen by the fact that they are denied even those facilities which becomes life threat for aspirant mothers.
This stretch of Doda-Bhadarwah road like the entire National Highway 1B is also vulnerable to landslides whenever a little rainfall takes place and adds agony and pain to the expectant mothers if they are referred to Doda hospital during that time. A newly hospital building with better infrastructure has been constructed but it is without human resource. Patients have to move 60 KM to Kishtwar to get Ultrasound. Poor people find economic hardship when they are forced to move Doda or Jammu for child delivery. This negligence on the part of government has created anger and bitterness among the people. People have highlighted this genuine demand many times but each time we get only patient hearing. It is unfortunate that in this 21st Centuary we are not demanding sophisticated treatment or robot surgery but just a good doctor. We are denied even that. People of this area have to move either Doda or Jammu even for treatment by involving huge money.
Irony is that the state was ranked first in health care facilities and I fail to understand on which basis these ranking are made. They are befooling the people of entire world by showing the misleading picture of health scenario of the state. They should know that merely the papers records do not ensure right to health they should do beyond the riding of paper horses. It has put a question mark upon the veary purpose of encouraging institutional delivery through National Rural Health Mission. Much is talked about NRHM but the ugly face of health sector at this hilly region can’t not be removed by this scheme. There are 37 posts sanctioned in this hospital but only 15 posts have been filled by leaving 22 posts vacant. Two posts of Grade-B Gynaecologists sanctioned are vacant. We have two posts in each of B-Grade Surgeon, B-grade Physician and B-Grade Pathologists but all are vacant. We have sanction of one post each in B-Grade Dental surgeon and B- Grade ENT, B-Grade Opth, B-Grade Radiologist and Assistant Surgeon Blood Bank but all these are vacant. There are two posts of B-Grade Anaesthetic sanctioned but only one filled leaving one vacant. There are 17 posts of Medical Officers sanctioned in this hospital but only 9 have been filled by keeping 8 posts vacant. There are two sanctioned posts of B-Grade Paediatrician both are filled but one has been attached to District Hospital Doda as if there is no need of it at our Bhadarwah. There are only two categories of post where there is no vacancy and these are also available. These are B-Grade Orthopaedic and Dental surgeon.
It is not merely a denial of medical aid to the female but it shows the attitude of our Government towards the female. Hence this Bhadarwah of J&K has become the area where motherhood has become suicidal and is weeping for its due share because to become a mother here is the invitation for death for the aspirant mothers.
(The author is Research Scholar of Economics at University of Jammu)

Kalyani Shankar
The ‘Modi speak’ on tough decisions in the next couple of years to nurse ailing economy has sparked off speculations about what measures he might take.
Modi is right now on his honeymoon period with the public, which has voted him with great expectations. The budget is the first signal which way the government will go in restoring the economic health of the country and send out cues how the Modi government proposes to deliver its poll promises.
The new Prime Minister knows that time has come to take these hard decisions as they are always taken at the start of the term and not at the fag end. “I am well aware my steps may dent the immense love the country has given me. But when my countrymen realise these steps will result in getting financial health back, I will regain that love,” Modi said to his party workers in Goa over the weekend.
The harsh realities on the economy must have come as a shock to Modi after sitting in the PM’s chair. “I have taken over the reins of the country in circumstances when there is nothing left behind by the previous government. They left everything empty. The country’s financial health has hit the bottom,” Modi said observing about the state of economy he has inherited from his predecessor Dr. Manmohan Singh. This is not new because most prime ministers had made similar charges about their predecessors.
Can Modi really administer the bitter pill? The economy is slipping because of various factors. The first big challenge is the rising prices and inflation. Inflation has hit a five-month high due to rising prices of rice and vegetables. Onions have become scarce. While the contingency plans are well in place the Finance Minister Arun Jaitley has attributed this to withholding of stocks on apprehensions of a weak monsoon. He has asked the state governments to come on board and discourage speculative hoarding. He is also targeting exporters. Release of food supply is also attempted. The public sector undertakings may also step in to intensify purchase of essential commodities to ease the situation.
The second is the rising fuel costs in view of the on going Iraq crisis. While this is a global concern, the price of crude oil per barrel has gone up to $114 dollars recently which will be a huge increase on our oil import bill. Iraq is India’s second-largest oil supplier after Saudi Arabia. High crude prices would mean higher inflation as India imports 75 per cent of its crude oil requirements. It would also upset the government’s plans to cut subsidy and narrow the fiscal subsidy. This is beyond anybody’s control or expectations.
The third is the prediction that there could be a weak monsoon and also deficiency in rainfall. The El Nino effect is another worrying factor. One positive thing is that the Modi government has inherited a large food stock. These could be used to stabilize the food prices front. Contingency plans for food imports like pulses and edible oil are some prudent actions.
Modi is willing to bite the bullet and therefore he should concentrate on policy action to lessen the pain. With a sluggish economy with a 4.7 per cent GDP growth, – 0.7 negative growth in the manufacturing sector, 4.7 per cent in agricultural output, 5.8 per cent in service sector, things are not looking rosy by any standards. Therefore, the bitter pill will have to be administered taking everyone on board including the states. The Government recognizes that for two consecutive years industry and manufacturing sector have registered negative growth. You cannot expect a seven percent GDP if these two sectors are not revived. Therefore incentives should be given to revive these sectors as well as others. This would include some short term as well as long-term measures. Industry has lost confidence as most policy decisions have been put on the back burner. Modi’s task is not just to convince the foreign investors but also to enthuse the domestic investors. While the foreign investors may be looking at the FDI route, the domestic investors would be enthused by incentives in construction and real estate sectors first .The industry expects quick results going by Modi’s election rhetoric. Fuel price reforms would go a long way in restoring the confidence.
Secondly, there is also need to tackle the food subsidy and the PDS. The Food Security bill is going to cost Rs 1.75 lakh crores. The Government should have a relook at this expense.
Labour law reform is yet another crucial step as these have been eluding for the past two decades. Land acquisition is gong to be expensive. Modi might also think of railway fare hike. Increase in taxes, fertilizer subsidy reduction, austerity measures and fiscal consolidation.
The GST is yet another problem. Earlier the BJP Governments were opposing it and now the Congress ruled states might oppose on political grounds. Modi has this unenviable task of brining all the states on board on the GST.
But some of these measures need the approval of the Parliament. While the NDA has a majority in the Lok Sabha, it is in a minority in Rajya Sabha. Perhaps this was the reason he sought the cooperation of the opposition in his maiden speech in Parliament.
Modi has a window of opportunity now to set right the economy if he takes bold decisions and administer the bitter pill which may hit popularity. He has the chance to do things now as he has the mandate and good will. How far he will go is to be seen. (IPA )