Showing posts with label Badrinath. Show all posts
Showing posts with label Badrinath. Show all posts

Thursday, July 13, 2023

Between (Head)lines

It seems like billions of gallons of water have flown down the Ganga since the first page of a newspaper made some gratifying headlines. It’s mostly the same disappointing narrative every morning. The positive news, if any, comes mostly in the form of government claims, which I find hard to accept on their face value.

Yesterday (Tuesday, 12 July 2023) was apparently one of the usual days. The newspapers were full of disappointing news relating to accidents, crimes, disasters, and platitudes. However, I found five headlines which appeared particularly alarming. These headlines highlight apathy, inconsistency, and incompetence of policymakers. While it may not be a revelation to anyone; what amazes me is the steadfast refusal of a majority of newspaper readers to question the otherwise claims of the government.

As an investor, I find it critical to take note of these headlines, because these underline the risks to the India Story, which is gaining currency again.

Hill states devastated again

The hill states of Uttarakhand and Himachal Pradesh have suffered tremendously from rather frequent episodes of cloud bursts, floods, and landslides etc., in the past one decade. Despite several objections from the environmentalists, local residents, and geology experts the governments have continued with mindless deforestation and construction. The authorities have ignored strong warnings from Mother Nature on multiple occasions. The Kedarnath (2013) Uttarkashi (2019), Vishnu Prayag (2021), Joshimath (2023) flash floods/landslides being the most (in)famous ones.

I have also been frequently highlighting the unsustainability of the development efforts in hill states and apathy, and incompetence of the implementing agencies. (For example see Save the Dev Bhoomi, for God sake and Exploring India )

The destruction of the ecology of Himalayas could have a devastating impact on the Indian economy in the coming decades. The total failure of conducting a comprehensive impact analysis of the infrastructure projects in hill states and even poor execution of the ill-conceived projects highlights the incompetence of respective authorities.

We all need to appreciate that images and videos of these frequent disasters are not like usual Social Media reels. These will soon come to haunt every citizen of this country in the form of water scarcity, unusual hot and cold weathers, and erratic rainfall patterns.

Highways

A school bus, speeding on “wrong side” in “broad daylight” on “Delhi Merrut Expressway'' hit an SUV killing at least six passengers travelling in that car. The school bus was apparently taken off the school duty a while back and deployed to ferry staff of a garment factory; but it was still bearing school color (yellow) and carrying school name on it.

This is yet another episode that highlights the poor highway planning and management; total regard for traffic discipline; criminal apathy towards fellow co-travelers on highways; total lack of training and orientation for highway users and lack of oversight on highways.

I have been frequently highlighting the problems in the highway development program of India for the past many years. For example see This highway - my way and A road trip to Western UP and Uttaranchal and Highways Security and safety

Recently, the government claimed that India has surpassed China to become the second longest highway length in the world. What it did not mention was the sharp rise in the number of fatal accidents on our highways. The issue of poor quality of highways also did not find any mention.

The government also does not acknowledge that over 60k kilometers of highways need a dedicated highway police to ensure safety of travelers and prompt action on repairing needs.

28% GST on gaming

The GST council in its meeting on 11h July 2023 recommended imposition of 28% GST on full value of online gaming, hors racing and casinos with no distinction between games of skill and chance.

Roland Landers, CEO of All India Gaming Federation (AIGF), termed this decision of the GST Council “unconstitutional, irrational, and egregious”. He said, “the decision ignores over 60 years of settled legal jurisprudence and lumps online gaming with gambling activities".

Without going into the morality issues concerning online gaming, casinos and other forms of betting and gambling, I would like to highlight the inconsistency and arrogance of policy making, especially the taxation policies.

In the past one decade, the government has knowingly allowed numerous gaming startups to flourish. All these startups have been eligible for various startup incentive schemes of the government. The government has also allowed casino licenses. Now when the industry has reached the take off stage, it has made this debilitating policy announcement.

I am not sure about the common narrative of the existential crisis for the industry that may imperil thousands of jobs and millions of dollars of investment. My concerns are two-fold:

1.    This sends a strong signal to the global investing community about the tentativeness and volatility of the policy environment in India, discouraging them to invest in India. Remember, it has come at a time when the foreign investors are already witnessing massive write-downs in their investments in entities like Byjus, Pharmeasy etc.

2.    The move is prima facie unsustainable legally. It may lead to avoidable litigation that could protract for years, keeping the entire industry on tenterhooks.

To a common man, chips in a casino are bearer instruments like currency notes. These could be converted into currency notes "on demand". Merely converting cash into chips does not constitute buying a "Good" or "Service". Taxing the conversion of cash into casino chips @28% is, as Roland Landers said, “unconstitutional, irrational, and egregious”, liable to be set aside by a court of law.

Corporate governance

The Taiwanese electronic giant Foxconn reportedly called off the joint venture to set up a US$20bn semiconductor fabrication (fab) unit in the state of Gujarat, announced a few months ago. The joint venture was widely hailed as a watershed in the manufacturing history of India. The JV was formed in pursuance of $10 billion government-backed financial incentive scheme (PLI).

Post the announcement of termination of JV, Rajeev Chandrasekhar, minister of state for electronics and information technology, tweeted that it was well-known that both companies had no prior experience or technology and were expected to source fab technology from a technology partner.

Reportedly, Foxconn has separately announced that it will pursue the plan to set up five Fabs in India, on its own or with other partners.

On 7 July 2023, Vedanta Limited had informed the stock exchanges in a filing that “that the Board of Directors at their meeting held today, July 7, 2023, have considered and approved the acquisition of 100% of Vedanta Foxconn Semiconductors Private Limited (“VFSPL”) and Vedanta Displays Limited (“VDL”), wholly owned subsidiaries of Twin Star Technologies Limited (“TSTL”) via share transfer at face value. TSTL is a wholly owned subsidiary of Volcan Investments Limited, the ultimate holding company of Vedanta Limited.”

On 11 July 2023, the stock exchanges sought clarification from Vedanta Limited about the newspaper item titled "Foxconn Withdraws from Rs 1.5 Lakh Crore Vedanta Chip Plan In India". The company had not replied to the BSE communication till evening of 12 July 2023.

This development raises three serious questions:

1.    How did the government approve and celebrate the US$20bn proposal of two totally inexperienced players in a highly advanced and mission critical technology project? This raises questions on the entire PLI scheme, which has seen a much below par execution so far.

2.    Why did Vedanta not inform stock exchanges and shareholders about termination of plans a week ago?

3.    Why Foxconn and Vedanta are not obliged to inform the government and public what led to the termination of their JV? Was it some corporate governance issues at Vedanta or Foxconn?

7th Cheetah dies at Kuno national park

Not long ago eight Cheetah, imported from Namibia, were introduced in the Kuno national park, Madhya Pradesh, with much fanfare. The event led by the prime minister himself was made into a national celebration, with the entire union cabinet joining in congratulatory messages. Yesterday, seventh of the eight imported Cheetahs has reportedly died. Earlier, four Cheetah imported from Singapore in Gujarat, had also met the same fate. Apparently, nothing was learnt from the past experience.

The point is that the government has been repeatedly using frivolous issues to distract the citizens. Absolutely mundane events like introduction of an animal to a zoo; starting a new train or boat cruise etc., are turned into a massive show of nationalism and celebrated as a massive achievement with no follow up or consequence. 

Tuesday, January 10, 2023

Save the Dev Bhoomi, for God sake

Joshimath is an important town in the Chamoli district of Uttarakhand, in the Garhwal Himalayas. It is the entry door to the sacred temple of Shri Badrinath; and also winter abode for the deity. It hosts the northern monastery (one of the four sacred Hindu monasteries established by Sri Adi Shankracharya); and a critical cantonment for the Army establishment posted to protect the northern borders with China (Tibet). It is also the gateway to famous winter sport venue Auli and several other Himalayan trekking destinations.

Over the past three decades it has evolved from a sleepy mountain village that would witness some life during the six months Char Dham pilgrimage; into a busy town bustling with activity all-round the year.

Recently, Joshimath has been in the news for the wrong reasons. About 20000 inhabitants of Joshimath are living in extreme fear as their homes have developed big cracks; and could collapse anytime. Besides, some important temples and other establishments have also become perilous.

Experts have been cautioning the authorities about the fragile ecology of the region for the past many decades. In 1976, the Mishra Committee recommended (i) restrictions be placed on heavy construction work, blasting or digging to remove boulders for road repairs and other construction; (ii) felling of trees; (iii) undertake a massive campaign to plant trees and grass; (iv) avoid agriculture on slopes; (v) construct a pucca drain system for sewage water flow and close soaking pits; (vi) To avoid percolation do not allow water to accumulate, construct drains to carry water to safer area; and (vii) fill all cracks with lime, local soil and sand.

Most of the Committee recommendations seem to have been not only ignored but blatantly violated. To make the matter worse, massive heavy construction work has been undertaken, palpably in the name of developing the area. The hydro power project in the vicinity and widening of road as part of the Char Dham all-weather road project may have inflicted serious damage to the already fragile ecology of the region.

We have seen several disasters in the past few years on the Char Dham route - Kedarnath (2013), Uttarkashi (2019) and Vishnu Prayag (2021) flash floods/landslides being the most (in)famous ones.

This year approximately 4million pilgrims undertook Char Dham Yatra during the six month period between May-November. More than 70% of these 4mn visitors may have visited the holy shrines of Badrinath, Kedarnath, Gangotri and Yamunotri in 4months (May-August), with most visiting Badrinath and Kedarnath only.

As someone who had been regularly visiting these holy shrines since childhood, I know for sure that these places are in no position to handle so many people visiting in a short span of 100 days. The ecology of Haridwar (Base camp for Char Dham Yatra) Uttarkashi (Gangotri and Yamunotri) and Chamoli (Badrinath and Kedarnath) districts has already been damaged severely in the past two decades. Several hydro projects in the area have adversely impacted the already fragile ecology of the area.

There is nothing to suggest that this fight between Nature and human greed will stop any time soon. The development planner need to assimilate that construction of development edifice which is directly in conflict with sustainability and core beliefs has to be rejected out rightly.

Unfortunately, we have not seen any policy drive to this effect despite frequent natural disasters; though many efforts to the contrary have come forth. The major road project in the Garhwal Himalaya to connect the four sacred temples in upper reaches through a wider road network is only one example of the unsustainable development.

The stated objective of the project is to make it more convenient and safer for the pilgrims to visit these sacred temples. This widening of roads has not only caused cutting of numerous trees, but is also resulting in massive increase in vehicular traffic and number of pilgrims visiting the region. This is inarguably resulting in higher pollution, massive piles of human waste & garbage, pressure on infrastructure, and massive construction of room capacities & other conveniences. This will inevitably compromise the sanctity of the place itself; and kill the sacred rivers that originate from there.

The politicians (from all parties) have unfortunately blinded the local populace with the lure of higher income and employment opportunity from rising pilgrim tourism. Unmindful construction and unpardonable exploitation of natural resources has not only endangered the ecology of the region, it has also jeopardized the sustainability of all future generations. For, this region is the source of water to more than 350million Indians.

We ought to be deeply concerned over the unmindful and unsustainable development of the hill state, known as Dev Bhoomi (abode of Gods). I have the following suggestions to offer:

  • Completely ban private vehicles in 50km radius of these sacred temples.
  • Allow only disabled and senior citizens to travel by public buses (electric vehicles) to the temples.
  • Accelerate the construction of ropeway projects to carry the pilgrims to the temples.
  • Develop the traditional pedestrian route to the temples. Encourage youth to trek upto the temples. Provide tented accommodation with bio-toilets along the way.
  • Regulate the number of pilgrims visiting these temples, and make it compulsory for all pilgrims to plant one tree each and pay for its maintenance for one year.
  • Completely ban plastic (including snacks, gutka packets etc.) in the hills.
  • Freeze all commercial construction in the state for 5 years.
  • Implement the recommendations of the Mishra committee and other such committees.
  • Constitute a statutory commission to regulate all the development activities in the state, including roads, power projects, and tourist flow etc.