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India at 62nd Position on World Economic Forum’s Inclusive Development Index

India ranks 62nd among emerging economies on the Inclusive Development Index, falling from its last year’s ranking of 60th, according to a report released on Jan. 22 by the Geneva-based World Economic Forum. The rank is also much below that of its neighbors, with China taking the 26th spot while Pakistan is at 47th place.

The index was released ahead of the annual WEF meeting in Davos, which will be attended by several world leaders, including Indian Prime Minister Narendra Modi and U.S. President Donald Trump.

Last year, India was ranked 60th among 79 developing economies while China and Pakistan occupied the 15th rank and 52nd position, respectively.

The index looks at the “living standards, environmental sustainability and protection of future generations from further indebtedness,” according to the WEF. The organization asked the leaders to urgently move to a new model of inclusive growth and development as relying on GDP as a measure of economic achievement is fueling short-termism and inequality, PTI reported.

The 2018 index takes into account the progress of 103 economies on three individual pillars — growth and development; inclusion; and inter-generational equity. The report has been divided into two parts — part one covering 29 advanced economies and the second one including 74 emerging economies. In the three pillars of the index, India ranked 72nd for inclusion, 66th for growth and development and 44th for inter-generational equity.

The index has also classified the countries into five sub-categories in terms of the five-year trend of their overall Inclusive Development Growth score: receding, slowly receding, stable, slowly advancing and advancing. While India has a low overall score, the country is among the 10 emerging economies with ‘advancing’ trend.

Norway is once again the world’s most inclusive advanced economy while Lithuania tops the list of emerging economies. In advanced economies, Ireland comes close on the heels of Norway, followed by Luxembourg, Switzerland and Denmark making up the top five. Small European economies make up rest of the top 10, with the only non-European country on the list being Australia at the 9th rank.

Of the G7 economies, Germany (12) ranks the highest. It is followed by Canada (17), France (18), the United Kingdom (21), the United States (23), Japan (24) and Italy (27). Among emerging economies, the top five are Lithuania, Hungary, Azerbaijan, Latvia and Poland.

The report points out that while China ranks first among emerging economies in GDP per capita growth (6.8 per cent) and labor productivity growth (6.7 per cent) since 2012, its overall score is brought down by lackluster performance on inclusion. Decades of prioritizing economic growth over social equity has led to historically high levels of wealth and income inequality and caused governments to miss out on a virtuous circle in which growth is strengthened by being shared more widely and generated without unduly straining the environment or burdening future generations, the WEF observed.

Excessive reliance by economists and policy-makers on Gross Domestic Product as the primary metric of national economic performance is part of the problem, it added.

Richest 1% People Own 73% Wealth in India: Oxfam

The richest 1 per cent people in India owned 73 per cent of the wealth generated in 2017 in India, according to Oxfam’s latest report on rising income inequality. In 2016, India’s 1 per cent population owned 58 per cent of the wealth generated that year.

Globally, the richest 1 per cent of the world’s population generated 82 per cent of the wealth in 2017 while 3.7 billion people saw no increase in their wealth.

People in India, the United States and the United Kingdom think that CEOs should take a 60 per cent pay cut. In India, it is believed that the ratio of top pay to ordinary workers’ salary is 63 and it should be 14. However, the actual ratio is 483.

The increase in CEO pay is linked to share-based incentive systems, which focus on maximizing shareholder value. With executives and managers having stock options, their investment also increases. Moreover, the share of wages accrued by top 10 per cent is high and growing in developing economies like Brazil, India and South Africa, the report said.

The poorest half of the country, 67 crore people, saw only 1 per cent increase in their income whereas the wealth of the richest 1 per cent grew by over Rs. 20.90 lakh crore during 2017, which is almost equal to the total budget of the central government in 2017-18, Oxfam India said.

The report, titled ‘Reward Work, Not Wealth’, published ahead of the World Economic Forum meet in Davos, Switzerland, said, “2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days. Billionaire wealth has risen by an average of 13 per cent a year since 2010 — six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 per cent.”

The multinational non-profit organization called on the Indian government to ensure that the income of the bottom 40 per cent population grows faster than that of the top 10 per cent. Oxfam suggests that if the government encourages labor-intensive sectors, invests in agriculture, and effectively implements the social protection schemes that exist the income divide can be bridged.

“Seal the leaking wealth bucket by taking stringent measures against tax evasion and avoidance; taxing the super-rich by re-introducing inheritance tax, increasing wealth tax, reducing and eventually do away with corporate tax breaks; creating a more equal opportunity country by increasing public expenditure on health and education,” Oxfam India said in a statement.

India added 17 new billionaires last year, raising the number to 101 billionaires. Indian billionaires’ wealth increased by Rs. 4,891 billion — from Rs. 15,778 billion to over Rs. 20,676 billion.

India’s Garment Sector

In India and the Philippines, at least one in every two workers in the garment sector is paid below the minimum wage. During 2011-12, as much as 50.70 per cent workers in the garment sector in India were paid below the minimum wage. During the same period, among those earning less than minimum wage, 74 per cent were women while 45.3 per cent were men.

On average, it takes a CEO from the top five garment companies a little more than four days to earn what an ordinary Bangladeshi woman garment worker earns in her whole lifetime.

The report also said that more women are employed in the informal sector and receive the lowest of wages. In India’s garment sector, the workers are mostly women and teenage girls who are modern day slaves, according to a separate report. “Across the world, women consistently earn less than men and are concentrated in the lowest paid and least secure forms of work,” the report said.

Chicken Tycoon Criticized for Sending Gifts to UK MPs

British businessman Ranjit Singh Boparan was recently chided by UK parliamentarians for sending them gift boxes while they investigate his company about a hygiene scandal.

The owner of poultry company 2Sisters, also known as UK’s Chicken King, sent boxes of biscuits to MPs part of the House of Commons’ Environment, Food and Rural Affairs Committee. They responded to him saying it was an “inappropriate gesture.”

Neil Parish, the chairman of the committee, said the gifts to several MPs were an “unwarranted attempt to impugn the Committee’s impartiality.” The unsolicited gifts were either returned or given to food banks.

“I would be grateful if you would respect the integrity and independence of the committee and avoid similar gestures in future,” he said in a letter to Ranjit Boparan.

Half of the MPs on the committee received food hampers worth around £100 carrying Viennese biscuits and chocolate cookies manufactured by Boparan-owned Fox biscuits, Paul Flynn, Labour MP for Newport West, told The Daily Telegraph.

“It was approximately eight packets of Fox’s and Own Brand Biscuits which we send every year to a number of external stakeholders as a goodwill gesture at Christmas. We have responded formally to Parish explaining this,” a 2 Sisters Group spokesperson said, according to the Press Trust of India.

In 2017, an undercover investigation by the Guardian and ITV news revealed that staff were changing the dates of products to extend its shelf life and products that had fallen on the ground were also being packed for consumption. Departmental stores like Aldi, Lidl, and Marks and Spencer had suspended purchases from 2Sisters after the revelation.

“We absolutely apologize for the doubt this has caused to our customers, consumers and employees,” Boparan told MPs of the parliamentary committee on Oct. 25. “These four weeks have been very difficult for a lot of people. Mistakes happen but what we try to do is learn from the mistakes and put them right,” he had said.


Trump Towers Pitches Donald Trump Jr. Meeting, Raising Ethics Concerns

Prospective buyers of luxury apartments in the new Trump Towers project outside India’s capital are being lured with an unusual promise: If you buy a flat, we’ll fly you to the United States to meet the president’s son, Donald Trump Jr.

The developers of the 600-foot high-rises unveiled a sleek sales office in the New Delhi suburb of Gurgaon last week, claiming they racked up $23 million in sales – more than 20 units – in the first day.

The sweetener?

One of the developers, Pankaj Bansal, told the Press Trust of India that “Donald Trump Jr. will host” the first 100 buyers in the United States.

Bansal, the director of M3M India, one of the partners on the project, declined to comment for this story. But a spokesperson, Arun Mittal, confirmed Bansal’s remarks and added that the specifics of the buyers’ trip – where they would be flown and under what circumstances they would meet Trump Jr. – were still being worked out.

“It has been communicated to the media, but the structure and the travel of the stay is still to be planned out,” Mittal said. Trump Jr. and the Trump Organization in New York did not respond to emails or telephone calls requesting specifics on their Indian partners’ plan.

The launch of the new towers comes amid rising concerns that President Donald Trump’s children – including Trump Jr. and Eric, who are running their father’s business while he serves as president – are using their names to profit from their father’s presidency, and that foreign governments and others may stay in Trump hotels or buy Trump properties in attempts to curry favor or gain special access to the first family.

A study released this week by the watchdog group Citizens for Responsibility and Ethics in Washington (CREW) found that the price of the popular “Ivanka Suite” in the Trump International Hotel in Washington, for example, increased from $914 a night last year to $2,134 a night in 2018.

Norman Eisen, the co-chairman of CREW and a former Obama ethics adviser, called the Indian developers’ offer “outrageous.”

“They are auctioning off access to the first family in a foreign land. What is to stop a foreign national with interests before the U.S. government from purchasing a flat, or tagging along with someone who did, simply to ask Don Junior to raise some issue or concern with his father?” Eisen said.

The Trump Organization has more business entities in India than any other foreign country, financial filings show, with licensing bringing in estimated payments of between $1.6 million and $11 million total since 2014.

As with most of its overseas deals, the Trump family has lent its name, technical assistance and advice but has not invested directly in any of its five projects here.

Along with the Trump Towers Delhi NCR (National Capital Region) in Gurgaon, which is expected to be completed in 2023, the projects include two residential towers in the low-key city of Pune, a tower with a glittering gold facade in Mumbai, a planned office tower in Gurgaon and another residential project in the eastern city of Kolkata.

Some of Trump’s partners have been the subject of tax or money laundering investigations, and at least three have connections to prominent Indian politicians, a scenario that the Center for American Progress called in a report “a breathtaking array of conflicts.”

M3M, for example, was embroiled in a long-running tax investigation that the company said was resolved in its favor. Kalpesh Mehta, the head of Tribeca Developers, the co-partner on this project, was one of three Indian developers who visited Trump shortly after his election in November whose pictures with the president-elect on social media set off a firestorm of controversy.

The luxury real estate market in India is sluggish at the moment, but the Trump Organization says that sales of its more moderately prices units in Kolkata have done well – with the building more than 65 percent sold after a “soft launch” last year.

Last week, employees from Mumbai-based Tribeca Developers gathered outside the new Trump sales office in the Oberoi Gurgaon – a luxury hotel in a suburb that’s both home to multinational corporations and small farming villages where cattle still meander along dusty lanes. (It recently changed its name from Gurgaon to Gurugram.)

They did not allow a reporter to speak to any prospective buyers, who were ushered in one by one to see a model of the two towers emblazoned with the Trump name. The apartment homes in the project – with private elevators and access to a nine-hole golf course – range in price from about $780,000 to $1.6 million.

A man in business attire who was on hand to see a sales presentation asked a sales representative what the “discounts” were.

She laughed and said that sales have been so good that “we’re not even thinking about discounts at this point.”

FCC Chairman Ajit Pai Increases Security at Home Following Threats

U.S. Federal Communications Commission (FCC) Chairman Ajit Pai, who has been facing backlash and death threats online and otherwise for repealing net neutrality laws, has now installed CCTV cameras around his home and got a security detail for himself and his family.

Pai has been on the receiving end of hate mail and threats to his life since repealing the Obama-era Net Neutrality policy. Earlier this month, he cancelled his scheduled appearance at the Consumer Electronics Show (CES) 2018 reportedly after receiving death threats.

As an explanation for the cancellation he said it was at an inconvenient time.

Prior to this, there was a bomb scare on the day of the vote of repealing Net Neutrality, which led to evacuation of the premises briefly.

The vitriol also plagued his family earlier as protesters had gathered outside his home with signs “Is this really the world you want [your children] to inherit?” and “They will come to know the truth. Dad murdered democracy in cold blood” with his children’s names on it. Pai had said in November that it “crosses a line with me.” During his appearance on Fox and Friends he said that “it was a little nerve-racking, especially for my wife.” He later issued a statement asking the protesters to leave his family out of this and “focus on debating the merits of the issue.”

Meanwhile, 50 Senators have endorsed a resolution to withdraw the repeal, which deregulated internet providers. The resolution requires one more lawmaker to pass the Senate resolution of disapproval. The resolution seeks to overturn the current deregulation, which Republicans said was restrictive for the industry, and stops FCC from going through with such measures again.

Democrats have opposed repealing of FCC as it provided protection to the consumers.

“With full caucus support it’s clear that Democrats are committed to fighting to keep the Internet from becoming the Wild West where ISPs are free to offer premium service to only the wealthiest customers while average consumers are left with far inferior options,” said Senate Minority Leader Charles Schumer, D-N.Y., the Denver Post reported. However, Democrats are in minority in the Senate and it remains to be seen if the resolution is actualized.

400 Deaths a Day Force India to Take Car Safety Seriously

In India, more than 150,000 people are killed each year in traffic accidents. That’s about 400 fatalities a day and far higher than developed auto markets like the U.S., which in 2016 logged about 40,000.

Now, Prime Minister Narendra Modi’s government is attempting to curb the carnage on Indian roads caused by everything from speeding two-wheelers to cars not equipped with air bags. A bill introduced in August 2016 — proposing harsher penalties for traffic offenses and requiring that automakers add safety features — has passed the lower house of parliament and is expected to go through the upper house in 2018.

The wide-ranging changes are likely to boost manufacturing costs for domestic and foreign carmakers in India. The South Asian country will be the world’s third-largest car market after China and the U.S. by 2020, according to researcher IHS Automotive. The World Health Organization estimates that traffic crashes cost most countries about 3 percent of their gross domestic product.

The U.K.-based non-profit Global NCAP, which studies the quality of vehicles, has over the years assigned a zero star rating to many small vehicles sold in India — an assessment that there could be life threatening injuries in a crash at 40 miles per hour. Past efforts in India to boost road safety haven’t taken off, and the success of this one will depend on how strictly it is implemented.

India “has delayed 20 years in making safety features mandatory,” said Dinesh Mohan, a professor at Noida-based Shiv Nadar University. Globally, manufacturers haven’t usually added such safety elements “until and unless they were forced to do so by mandatory government regulations,” he said.

A spokeswoman at India’s Ministry of Road Transport and Highways declined to give a timing for the new law.

Indian consumers are famously price sensitive when it comes to car purchases. Low-cost and no-frills compact cars have long been sold by companies like Tata Motors, Maruti Suzuki India, a unit of Japan’s Suzuki Motor Corp., Renault and Hyundai.

These budget vehicles are usually priced below 400,000 rupees ($6,300), and the new law is likely to require that their manufacturers add a string of features like airbags, audio speed warnings and anti-lock braking systems.

Costs for Indian automakers will shoot up by 7 or 8 percent after the passage of the new law and will be felt across the small car segment, said Deepesh Rathore, London-based director at consultancy Emerging Markets Automotive Advisors.

Ashwin Patil, an analyst with brokerage LKP Shares and Securities, predicts a short-term impact to the earnings of automakers from the new act and said it could be a death knell for ultra-low-priced cars in India as their cost could go up by as much as 100,000 rupees.

Manufacturers sometimes offer “all safety features for the models that are sold in the international markets where they have to satisfy mandatory safety standards, while they offer minimum features for Indian models,” said Mohan.

In 2015, Renault sold its Kwid in India without a frontal airbag or anti-lock braking system, earning the model a zero rating from Global NCAP at the time. The following year, it got one star for adult occupant protection after some safety features, including an airbag for the driver, were added. The brand in Latin America earned a higher three-star rating last year.

Maruti Suzuki’s popular Alto car and the Tata Nano, which was launched as the world’s cheapest car, are among those that have received a zero rating from the group. The Global NCAP tests are not mandatory for vehicles to be sold in India. All the models meet local safety standards, which are presently far more lenient than global ones. Tata Motors, Renault and Hyundai didn’t respond to requests for comment.

CV Raman, head of research and development at Maruti Suzuki, said car makers are investing in facilities, testing and equipment to build advanced safety features into vehicles, ahead of the deadlines set by the government. For each model, Maruti has test crashed 35 to 40 cars to ensure they meet the advanced standards, he said.

About 75 to 80 percent of Maruti Suzuki’s cars will become compliant with Indian safety norms about a year before they are mandatory, the company said in a statement.

Some companies like Toyota and Volkswagen haven’t made a distinction between their Indian and export versions, and have already exceeded Indian safety norms. Rajan Wadhera, president at the automotive sector of India’s Mahindra & Mahindra, said his company offers the same safety features on both domestic and export models.

In the Indian market, affordability and popularity have the greatest influence on car purchases, Wadhera said. “Finally, it should be noted that it’s the customer’s choice that drives volumes than anything else.”

The bill is expected to require the additional safety features on cars to be manufactured from July 1. Indian road ministry data show that 83 percent of road accident fatalities were in the age group of 18 to 60 years, or mostly the working age population.

The new law will have higher penalties for offenses like drunken driving. Causes of the deaths on India’s roads range from human error to potholed streets and manufacturing defects in vehicles. Speeding caused almost 67 percent of road accidents.

© 2018 Bloomberg