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The Governor of India’s central bank, Urjit Patel, resigned abruptly Monday after a months-long tussle over policy with the government that has raised concerns about the bank’s independence as a national election nears.
Government officials have been pressuring the Reserve Bank of India to allow some bad-debt-laden public sector banks to lend more easily, and pushed for it to hand over some of its surplus reserves to help fund the fiscal deficit.
Prime Minister Narendra Modi’s ruling Hindu nationalist Bharatiya Janata Party (BJP), which must call national polls by May, faces anger in rural communities because of slumping farm incomes, and broader concerns about a lack of jobs growth in small businesses that are finding it hard to get banks to lend them money.
Getting control of the reserves would give the government more flexibility in spending on welfare policies and farm support schemes.
Patel cited “personal reasons” for his decision to immediately step down.
His resignation came four days before an RBI board meeting, and at a sensitive time for the government.
On Tuesday, votes in key state elections are due to be counted, with exit polls suggesting the BJP could suffer some major defeats at the hands of the opposition Congress party.
That scenario, and Patel’s resignation, are expected to roil Indian markets. On Monday, forward contracts tracking the rupee against the dollar outside of market hours posted their biggest fall in more than five years.
That added to earlier losses caused largely by concerns — triggered by the state exit polls — that next year’s election might end with a defeat for the pro-business Modi and a weak coalition government, leading to policy uncertainty.
Investors will want to know quickly who Patel’s replacement will be, and how that will affect the direction of financial and monetary policy, analysts said. There was no clear front-runner, but one name being mentioned was former Finance Secretary Hasmukh Adhia who retired at the end of November.
While not commenting directly on Patel’s exit, Moody’s Investors Service said on Monday any signs the government was attempting to curtail the RBI’s independence would be a credit negative.
“We currently assume that the RBI will continue to pursue price and financial stability and implement policies towards these goals,” the agency said in an emailed statement.
Patel announced his departure in a short statement on the RBI’s website in which he said that “on account of personal reasons, I have decided to step down from my current position effective immediately.”
Modi suggested he had not wanted Patel to leave. On Twitter, the Indian leader praised Patel as a “thorough professional with impeccable integrity.”
“He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability,” Modi tweeted. “He leaves behind a great legacy. We will miss him immensely.”
Building for months
Even before Patel’s announcement, the 10-year benchmark Indian government bond yield rose the most since September, and stocks posted their worst close in four weeks, with the broad NSE index losing 1.9 percent.
The pressure on him had been building for some months.
The government has made clear it was not happy with the RBI’s policies and stacked its board with pro-BJP representatives.
Former RBI Governor Raghuram Rajan, who did not take an extension after his term ended in September 2016, said Indians should be concerned about what was happening.
“We should go into the details on why there was an impasse which forced (Patel) to take this ultimate decision,” Rajan told the ET NOW television channel. “The strength of our institution is really important.”
Within the RBI there was a combination of anxiety and relief at the announcement.
“It was very shocking. … Morale of employees is very down,” said one RBI official who has been with the central bank for more than a decade. “This is very sad moment.”
But another official said Patel was often inaccessible to key financial market players and had stifled discussion within the RBI, and that now it might be possible to open up more.
“Finally things will come to peace. I can talk more openly,” this official said.
The officials asked not to be named due to the sensitivity of the matter.
The rift between the government and the central bank became very public in late October when RBI Deputy Governor Viral Acharya warned in a speech that undermining a central bank’s autonomy could be “catastrophic.”
He referred to a meltdown in Argentina’s financial markets in 2010 after a struggle between the government and the central bank over who controlled the bank’s reserves.
Last week, Patel declined to answer reporters’ questions about the rift with the government, which former government officials and analysts said they were convinced was a major factor in his decision to quit.
There was speculation a month ago that Patel might quit over the government pressure, but the rumors eased after the two sides reached an uneasy truce ahead of last month’s RBI board meeting.
“The timing just before this week’s board meeting suggests that there’s still a huge gap between the government and RBI positions on key issues,” said A. Prasanna, head of research at ICICI Securities Primary Dealership in Mumbai. “Markets will now hope that the government has a plan of action ready so as to restore calm.” (VOA)
By Venkatachari Jagannathan
Officials of the Indian space sector, both serving and retired, are of the view that the space sector's organisational structure is expected to mirror that of India's atomic energy sector.
They also said that senior officials of the Indian space agency should address the employees on what is happening in the sector and how it will pan out so that uncertainty and confusion are addressed.
In the Indian atomic energy sector, the Department of Atomic Energy (DAE) is at the top, the Atomic Energy Regulatory Board (AERB) is the sectoral regulator while the Nuclear Power Corporation of India (NPCIL), the Bharatiya Nabhikiya Vidyut Nigam Ltd (both power companies), the Uranium Corporation of India Ltd, the Electronics Corporation of India Ltd, and IREL (India) Ltd are public sector units (PSU).
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The Bhabha Atomic Energy Centre (BARC), Indira Gandhi Centre for Atomic Research (IGCAR) are the premier research and development (R&D) organizations and there are several DAE-aided organizations.
While the DAE is headed by a Secretary (normally from the R&D units) who is also the head of the Atomic Energy Commission (AEC), the R&D centres and PSUs are headed by different persons.
Similarly, the government that has started the space sector reforms seems to be replicating the atomic energy model, several officials told IANS.
"The Central government's moves in the space sector seems to replicate the atomic energy model," an official told IANS.
Currently, the Department of Space (DOS) is at the top and below that, comes the private sector space regulator Indian National Space Promotion and Authorization Centre (IN-SPACe), the Indian Space Research Organization (ISRO) with various R&D-cum-production (rockets, satellites and others) units.
The sector has two PSUs - Antrix Corporation Ltd and NewSpace India Ltd.
Unlike the atomic energy sector, the Secretary of the DOS and Chairman of the Space Commission is also the Chairman of the ISRO.
As part of the space sector reform measures, the government has set up IN-SPACe as a regulator for the private sector players.
"Ultimately there will be only one sectoral regulator. There cannot be two regulators - one for the private sector and other for the public sector. Who will be the regulator if there is a company that is floated in public-private partnership," an official asked.
"It is good that there is a separate sectoral regulator outside of the DOS and the ISRO," an official said.
The recently-formed PSU NewSpace India has been mandated to build, own satellites, rockets and also provide space based services and transfer ISRO-developed technologies to others.
ISRO Chairman and Secretary DOS K.Sivan has been saying that ISRO will focus on high end research.
As a result, the positions of Secretary, DOS and Chairman, ISRO may not be held by the same person.
"Looking forward, there are possibilities of the government coming out with a voluntary retirement scheme for ISRO officials and merging its various production centres with NewSpace to synergise its operations," a former senior official of ISRO told IANS.
"But there is one issue in this proposition. For ISRO, the production centres are also its R&D centre. Both production and R&D are interwoven. One has to see how both will be separated to be housed under ISRO and NewSpace India."
Meanwhile, the minds of ISRO officials are filled with uncertainty and confusion about their future which is linked to that of their organization.
ISRO Staff Association General Secretary G.R.Pramod had told IANS that there is "uncertainty all around about the future of about 17,300 employees of ISRO".
"The ISRO top management that includes the Chairman and the Heads of various centres should come out openly and address the employee concerns at the earliest," an official added.
Space sector reforms are a much-needed move on the part of the government. | Unsplash
Also read: ISO: Achievements and History
According to officials, the uncertainty in the minds of ISRO officials is due to the communication from the government to freeze all recruitment as sectoral reforms are underway - allowing the private sector players in making and launching of satellites and rockets.
The ISRO officials also told IANS that promotions for several categories were kept on hold for the past two years. The promotion exercise for some has been carried out recently.
"Further the number of rocket launches this year from India came down drastically to just two from six or seven per year at an average. Out of two one critical mission for the country had failed," an official said.
However, the unanimous view is that the space sector reforms are a much-needed move on the part of the government so that the resources are used economically.
"For a long time, satellite utilization was an issue. Perhaps the satellites will be launched based on the demand from now onwards. The days of launching a satellite to utilize the rockets and then, searching for customers should be over," an official remarked.
Curiously, officials said all these years, ISRO had not approached its commercial arm Antrix to find out what the market needs so that it can build and launch such satellites.(IANS/PR)
Keywords: Atomic Energy, Satellite, ISRO, Department of Atomic Energy (DAE), DOS
Twitter has announced to ban sharing of private media, such as photos and videos, without permission from the individuals that are shown in those images.
The micro-blogging platform already covers explicit instances of abusive behaviour under its policies, the expansion of the policy will allow the platform to take action on media that is shared without any explicit abusive content, provided it's posted without the consent of the person depicted.
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"Sharing personal media, such as images or videos, can potentially violate a person's privacy, and may lead to emotional or physical harm," Twitter said in a blog post late on Tuesday.
"The misuse of private media can affect everyone, but can have a disproportionate effect on women, activists, dissidents, and members of minority communities. When we receive a report that a Tweet contains unauthorised private media, we will now take action in line with our range of enforcement options," the company informed.
Under the existing policy, publishing other people's private information, such as phone numbers, addresses, and IDs, is already not allowed on Twitter.
This includes threatening to expose private information or incentivising others to do so.
"There are growing concerns about the misuse of media and information that is not available elsewhere online as a tool to harass, intimidate, and reveal the identities of individuals," Twitter said.
When Twitter is notified by individuals depicted, or by an authorised representative, that they did not consent to having their private image or video shared, it removes it.
Twitter founder and CEO Jack Dorsey announced his resignation | Unsplash
Also read: Twitter to label Accounts of Government
This policy is not applicable to media featuring public figures or individuals when media and accompanying Tweet text are shared in the public interest or add value to public discourse.
The expansion of the policy came after Twitter founder and CEO Jack Dorsey announced his resignation, with Indian-origin CTO Parag Agrawal taking over the position.
Twitter in September rolled out a feature called Safety Mode that temporarily blocks certain accounts for seven days if they are found insulting users or repeatedly sending hateful remarks.
Keywords: Twitter, Feature, Private media, Permission
Driven by a surge in digital transformation owing to the pandemic, the IT spending in India is forecast to total $101.8 billion in 2022, an increase of 7 per cent from 2021, global market research firm Gartner said on Wednesday.
In 2022, all segments of IT spending in India are expected to grow, with software emerging as the highest growing segment.
Spending on software is forecast to total $10.5 billion in 2022, up 14.4 per cent from 2021.
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While experiencing a slower growth rate than 2021, spending on software in 2022 is forecast to be nearly double of what it was pre-pandemic.
"India has experienced one of the fastest recoveries despite being one of the worst hit regions in the second wave of the pandemic in early 2021," said Arup Roy, research vice president at Gartner.
As hybrid work adoption increases in the country, there will be an uptick in spending on devices in 2022, reaching $44 billion, an increase of 7.5 per cent from 2021.
The growth in devices is a combination of two componentsUnsplash
Also read: Eight Growing Job Sectors in the US
"The growth in devices is a combination of two components – hybrid work and pent-up demand from 2020 for device upgrades," said Roy. "Spending on devices will make up 43 per cent of total IT spending next year."
Next year, Indian CIOs are prioritizing a move away from rigid and monolithic ways of doing business to a more composable business and IT architecture where they will be able to better respond to disruptions.
"In 2022, CIOs in India will build on renewed interest in technology from the business to gain funding for new IT projects," said Roy.(IANS/PR)
(Keywords: IT sector, Pandemic, Highest growth, Digital Transformation)