The recent visit of the Prime Minister of Bhutan in West Bengal
was in itself a significant development in bilateral relations, most
particularly in terms of the equation within South Asian Association for
Regional Cooperation. If we reflect closely, Bhutan is one of the very few
friends that India has in the neighbourhood. Additionally, the visit of
the Prime Minister of Bhutan has reinforced the friendly relations
between India and Bhutan. Having said that, the primary facet of this
development was the reopening of all four border gates that Bhutan had
closed for the past three years on account of100
the Coronavirus pandemic. The resumption of people’s movement will now be
restored in a bilateral move that is concordant with120 the fundamental spirit of the South
Asian Association for Regional Cooperation. The grandstanding over the
reopening of the border gates140
would suggest that the tiny Himalayan nation feels secure about the pandemic.
Ever since March 2020, when Coronavirus160
was at its peak, Bhutan had stopped the movement of people through the land
routes. The country boasts four transit points which open towards India. The
Prime Minister of Bhutan was cheered by hundreds of Indians who had queued up200 to enter the kingdom in salubrious
weather. The local merchants’ association celebrated this occasion
by flying balloons and distributing sweets to people who walked to India from
Bhutan. But it is one thing to buttress the camaraderie, and quite
another240 to be impervious
to illegal influx. The Prime Minister of Bhutan was emphatic on
the point that people of both India and Bhutan will have to carry their voter
ID cards or passports for registration. Life had virtually come280 to a standstill in this region
during the past 30 months. Let us hope that interpersonal
relationships will be revived300
with this landmark development.
The Centre appears to be closing in on a solution to the Naga issue,
which emanates320 from the
longest-running separatist movement in independent India. The optimism
of the Central Government is based on the likely breakthrough in negotiations
with the primary Naga insurgent group, NSCN. The NSCN had ceased hostilities360 after a ceasefire agreement with
the Government of India well over two decades ago and there have been
several rounds of talks between the NSCN and the Government since then, but there
are no tangible results to400
show. That seems all set to change. There are two core issues on which
negotiations have floundered in the past.420 One is the NSCN’s demand for a state Constitution for
Nagaland, and a separate flag for the Nagas. The Centre’s position has been that
there is no provision for a state having a separate Constitution or flag in
the Constitution under the aegis of which the Naga issue needs to be
resolved. In fact, successive Governments have480 refused to make any such concessions
which may lead to similar demands from other states. The current
dispensation is at500 even
more of a disadvantage given its firm line on mainstreaming the regions
and populations of the Indian Union’s periphery, as was exhibited in its
decision to abrogate Articles 370 and 35(A) that conferred special status on
the former state of Jammu and Kashmir. But a way out of this impasse may
have been found. Interlocutors from560
both sides have apparently agreed that incorporating the salient features of
the proposed Naga Constitution in the Indian Constitution through a Bill passed
by Parliament would do the trick. These features include recognition of a
distinct identity, customary laws, and600
autonomy for the Nagas to manage their own affairs. The Home Ministry
said that some of these features are already covered by Article 371(A) of the
Indian Constitution which pertains to Nagaland. Additional protection for the
cultural,640 social and other
customary rights of the Naga people can be incorporated in this Article or
through a new Bill. On the separate flag issue, the Centre is believed to be
willing to concede the use of the Naga flag in social and cultural functions
while the tricolour will fly atop Government establishments and at official
functions. The Greater Nagaland700
issue is also more or less settled. The Government has all along
maintained that the integration of Naga areas of720 Assam, Manipur, and Arunachal Pradesh with Nagaland demanded
by the NSCN is a non-starter though the Centre will have no objection if
the neighbouring states voluntarily cede their Naga territories to Nagaland.
It is well known that Italy is one of the European Union’s largest
economies. It appears that Italy will turn decisively to the
right in its politics. While the exact final results are yet to be
determined, all indications are that a right-wing alliance will win the
general elections in Italy with more than 40 per cent of the votes cast. The
coalition will likely800 be
led by a new right-wing party known as the Brothers of Italy, led by a
controversial politician, who has in the past expressed admiration for the
country’s past Fascist leader, Mussolini. The Brothers of Italy, which
received less840 than 5 per
cent of the votes in the last general elections, has surged to dominate
the Italian right with an expected quarter of the total vote. It has largely
replaced its coalition partner, the former Northern League, which was tarnished
by association with past unpopular governments. The Northern League will
receive far less than 10 per cent of the900
votes. Italy is not alone. Across Europe, within and outside the European
Union, the pressure of an uneven recovery from the pandemic and price rises
caused by the Ukraine war have led to a renaissance of the right. In Sweden,
the recent elections saw the far-right Sweden Democrats make great gains and
achieve influence over the Government for the first960 time in that country’s history.
In the United Kingdom, a change of guard in the ruling Conservative
Party has caused980 the
country’s economic management to move sharper to the right than at any
point since Margaret Thatcher. Yet the Italian1000 Government will have a far greater
influence on the future of Europe than the Swedish or the British Government.
There is a real concern that Italy may adopt an approach that is sceptical
of European Union at a time when co-ordinated action by the European Union is more
important than ever. But it will no doubt discover that it is in Italy’s
interest to not rock the European boat other than rhetorically. The fact
is that Italy is by far1080
the largest recipient of common European recovery funds, and anything
that jeopardizes that flow of cash will make it much harder for
the country.
The Chairman of the Securities and Exchange Board of India has
announced that the market regulator1120
is considering extending the concept of ASBA to the secondary market. This announcement
has interesting implications. It could smooth out trading for retail investors
and enable individuals to earn interest while maintaining market exposure. But it
could also result in a massive competitive advantage for banks, which do
also offer securities broking services and hurt standalone brokers.
The ASBA as it stands has proved to be a boon for retail investors in the
primary1200 markets. It allows
an investor to subscribe to an IPO while placing a lien on the exact funding
necessary. In case the investor receives full or partial allotment, the exact
amount required is debited, and the requisite number of shares
transferred. If allotment does not happen in the case of high oversubscription,
or an incorrect application, the lien1260
is removed. Either way, the money remains in the investor’s bank account and
continues to generate interest. This is a1280
relatively easy process in the case of an IPO. An IPO is a static
process with few entities involved. There is only one security involved,
only one agency handling the allotment, and only two agencies handling demat
accounts. Reconciling IPO accounts is not that difficult. Secondary-market
operations are far more dynamic, and involve more stakeholders. When an
investor bids to buy a share, that individual is operating through a broker.
The bid order is sent to the exchange, or to both exchanges in the case
of a smart order routing. It is matched against sell orders and if it is
executed, the funds and shares are transferred, which means the involvement of
the exchange, 1400 another
brokerage, and the depositories. It is currently the norm for
standalone brokers to ask for funds to be transferred before they execute a
trade. While the brokerage account may be interest-bearing, it can also be
the case that brokers1440
misuse funds and shares which they hold on behalf of clients, and delays and
default do occur. Banks that possess their own trading arms have an advantage
in that they can already institute a version of ASBA by tapping directly into
the client’s bank accounts. The standalone brokers compensate for this in a
highly competitive market by charging lower fees and offering more flexibility
in terms of margins, and more in the way of advisory support. If an ASBA is
mandated without thought, that existing advantage will tilt more sharply in
favour of banks. Standalone brokers may also have to invest large sums
in creating infrastructure or offer high interest rates on cash deposited with
them to support ASBA. While this is a good initiative in theory and will help
retail investors, the details need to be worked out carefully. It can be
introduced in a phased manner with feedback from stakeholders.1600
