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INSIGHTS CURRENT EVENTS: 24 October 2014

Nirbhay will be backbone of cold-start

Defence analysts and strategic experts feel that Nirbhay, India’s first long-range subsonic cruise missile, which was test-fired recently, can be a game-changer in India’s strategic calculus.

Capable of flying at a tree-top altitude for over 1,000 km, Nirbhay can carry out surgical strikes and thus back up India’s “cold start” doctrine that envisages limited, precise strikes across the border.

In the event of an Indian offensive, a volley of missiles flying low can effectively take out key command and control centres, blunting the resistance to the advancing armoured columns.

The successful indigenous development of Nirbhay cruise missile will fill a vital gap in the war-fighting capabilities of Indian armed forces. It is felt that Nirbhay will be a force multiplier to the in-waiting “cold start” doctrine, but the doctrine itself is a non-starter as of now for lack of critical assets such as artillery, armour and helicopters.

What is Cold-start Doctrine?

Cold Start is a military doctrine developed by the Indian Armed Forces for use in a possible war with Pakistan. It involves the various branches of India’s military conducting offensive operations as part of unified battle groups. The Cold Start doctrine is intended to allow India’s conventional forces to perform holding attacks in order to prevent a nuclear retaliation from Pakistan in case of a conflict.

Cold start has been put forward as an offensive doctrine by the Indian strategic establishment. Though “officially denied,” its presence is widely acknowledged in strategic circles.

The development of this doctrine represents a significant change in Indian defence planning. Exercises aimed at reducing mobilisation time and improved network-centric warfare capabilities have contributed to the development of the Cold Start doctrine. Despite the advances, this doctrine remains in the experimental stage.

The doctrine deviates from the defence posture that India’s military had employed since independence in 1947. The goal of this limited war doctrine is to establish the capacity to launch a retaliatory conventional strike against Pakistan that would inflict significant harm on the Pakistan Army before the international community could intercede, and at the same time, pursue narrow enough aims to deny Islamabad a justification to escalate the clash to the nuclear level.

Drawing on the experience of the 1967 Arab-Israeli War as well as the Indo-Pakistani war of 1971, Indian defence planners envisioned this doctrine. It would involve limited, rapid armoured thrusts, with infantry and necessary air support.

As per Cold Start promulgation, offensive operations could begin within 48 hours after orders have been issued. Such a limited response time would enable Indian forces to surprise their Pakistani counterparts. Operations would involve armoured spearheads launched from forward positions in Punjab and Rajasthan.

The Cold Start doctrine has invited criticism from Pakistani media and former generals who claim that although the doctrine was designed to punish Pakistan in a limited manner without triggering nuclear retaliation, the Indian Army cannot be sure if Pakistan’s leadership will, in fact, refrain from such a response.

The threat of the Indian Cold Start doctrine and increase in Indian Defence Budget from $24 Billion to $40 Billion between 2007 and 2009 has apparently prompted the Pakistan government to sharply increase its defence budget to 32% of their federal government’s net revenue receipts, further increasing the strain on that country’s already tenuous economy.

Sources: The Hindu, Wiki.

Mobile shopping set to drive e-commerce in India

India is the second largest mobile phone market with more than 930 million customers. According to IDC data, the domestic smartphone market grew 84 per cent in the second quarter of 2014 and is expected to grow rapidly.

The online retailers are taking the smartphones route to tap the market opportunity offered in Tier-II and Tier-III cities. Most leading players expect 90 per cent of their online shopping to come through smartphones and tablets within the next few years.

With the huge market potential offered by smartphones, companies such as Snapdeal, Flipkart, Myntra, among others, have already launched mobile applications.

The growth in internet usage in India, largely on mobile devices, is the key driver for e-commerce growth. Specifically for fashion, the non-availability of the latest brands in Tier-II and Tier-III cities has led to high interest in online shopping.

Another reason for the increase in mobile commerce is the penetration of smartphone into the rural markets. Around 45per cent of the online users in India access internet only through their mobile phones. As per industry experts, out of all shopping queries in India, 30 per cent come from mobile phones, however, presently less than 5per cent of total digital commerce happens through mobile

According to a recent report from IT research and advisory firm Gartner, the eCommerce market is expected to grow 70 per cent and touch $6 billion in 2015.

 

Mobile commerce will help organisation skip the desktop wave with increasing penetration of affordable smart devices with connectivity and a rapidly growing ecosystem to engage customers on mobile.

Sources: The Hindu.

Pre-primary education in tribal language

The Kerala State Commission for Protection of Child Rights (KSCPCR) will implement an educational package for tribal pre-primary children in their own language.

The initiative is aimed at ending the feeling of alienation among tribal children when they get initiated into the world of letters in Malayalam, which is an alien language to them.

The project that will introduce the children to formal education will be implemented as a pilot project in Attappady block in Palakkad district. It will be expanded across the State later.

Titled Early Childhood Curriculum Care and Education (ECCCE), it will be implemented in anganwadis in tribal areas with the active participation of government agencies. Anganwadi teachers will use languages of different tribal ethnic groups to impart pre-primary education.

The curriculum has been prepared, and it includes details of the origin, history, cultural diversity, and social life among different tribal groups. The teachers in anganwadis will be trained with the help of tribal village elders.

When the tribal children begin their education, at the pre-primary stage in the anganwadis near their settlements, they find themselves lost. The language used for instruction and communication here is frighteningly strange. The process flows on to the primary level too. Majority of these children drop out of school as they find it difficult to fully comprehend classroom teaching and the activities, or read the language and understand textbooks.Hence, this concept has been developed on the thought that the use of tribal language in the initial years can go a long way in making them comfortable with the process of education.

Sources: The Hindu.

 

Chinese slowdown

According to International Monetary Fund’s World Economic Outlook, released earlier this month, China is expected to grow 7.4 per cent in the current calendar year, against 7.7 per cent in 2013. The country’s economy is likely to slow down further to 7.1 per cent in 2015 and 6.8 per cent in 2016.

For global commodity producers that were counting on continued rapid growth in Chinese demand, this has come as a rude shock. It helps explain the sharp drop in iron ore and coal prices. It might also be responsible for some of the weakness in oil prices. For many of the individual base metals, however, specific fundamentals are playing a more significant role than generic Chinese growth; for example, Indonesia’s ban on exports of unprocessed raw materials.

These changes are expected to lead to permanently slower Chinese growth, so some commodity markets might have to adjust to a materially different trajectory of demand growth.

A decline in Chinese appetite for commodities would be felt the most by Indian metal producers like Tata Steel, JSW Steel, SAIL, Sesa Sterlite and Hindalco. Lower international prices would hurt realisations and profitability. Integrated players like Tata Steel and SAIL, which have own mines will feel the biggest impact; while those like JSW, which buy coal and iron ore from open market would be the least affected.

On the brighter side, a moderation in commodity prices would provide a relief to user industries like automobiles, auto ancillaries, capital goods, consumer durables, tyres and cement. Companies in these sectors could see an expansion in margins, as raw material costs would decline.

The worrying part for companies is the risk of a spike in low-cost imports, as Chinese manufacturers push their excess production in export markets globally, including India. Tyre and steel makers are already feeling the pressure of a dip in Chinese prices for their respective products.

This has raised some concern about India’s growth prospects. Since the Lehman crisis, China has accounted for nearly a third of incremental growth in world economy and cushions the impact of a recession in the US and euro zone. China’s share in world gross domestic product growth is expected to fall to a fifth by 2016, according to IMF data for 178 countries.

This might have some negative impact on India’s export growth, which has been a key driver of economy and corporate earnings growth in the past three years.

Imports from China, however, remained strong and accounted for 12.1 per cent of India’s total merchandise imports in the June quarter, against 1.3 per cent in the same period a year before and 10.7 per cent in 2008-09.

But economists rule out an immediate impact of China’s slowdown on India’s GDP growth. There is no one-to-one correlation between Chinese expansion and India’s economic growth. China is still a minor export market for us when compared with the US or Europe. If growth in the US economy recovers as expected, the export upside to the US — both for merchandise and IT services — will more than make up for any slack from China.

Others see in the Chinese slowdown a stimulus for the Indian economy, with a decline in prices of crude oil and metals. At the macro level, inflation through imports would tend to come down; that will improve cost structures of companies and help them improve their margins — at the time when the economic conditions are looking up. This reduction in commodity prices has been quite fortuitous for India Inc. At a broader level, this can be the starting point of seriously contemplating a rate cut by the central bank.

The impact of China’s slowdown on India Inc would depend on interplay of lower input prices, higher competition from cheaper imports and a potentially slower global growth.

Sources: http://www.business-standard.com/.