World
China shuts down, relocates 583 chemical works from blast site

A total of 85 enterprises working with hazardous chemicals in the area were closed or relocated after safety checks concluded

 

A total of 583 chemical works were tallied during district security check in Binhai new area of China's Tianjin municipality which will be closed or relocated.
 
These include 430 hazardous chemical factories, 89 companies transporting dangerous materials, 61 companies dealing with dangerous cargo at Tianjin Port and three firework warehouses, Xinhua reported.
 
A total of 85 enterprises working with hazardous chemicals in the area were closed or relocated after safety checks concluded.
 
Among the 85 enterprises on the "red" list, nine were corrected, 10 have worked out plans for relocation and the remaining 66 have signed a deal with the government to restructure, Xinhua reported.
 
On August 12, two explosions ripped through residences and a warehouse storing hazardous chemicals at Tianjin Port.
 
The blast left 173 people dead which included 104 fire-fighters.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

 

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Will the RBI Governor’s letter make a difference?
RBI governor’s New Year missive to RBI staff promises radical change, but the odds seem to be stacked against him
 
“It has often been said that India is a weak State. Not only are we accused of not having the administrative capacity of ferreting out wrongdoing, we do not punish the wrongdoer, unless he is small and weak,” said Reserve Bank of India (RBI) governor, Dr Raghuram Rajan, in a New Year email to bank officers. Excerpts of the email have been published by The Economic Times and other media. 
 
The governor goes on to say, “This belief feeds on itself. No one wants to go after the rich and well-connected wrongdoer which means they get away with even more. If we are to have strong sustainable growth, this culture of impunity should stop. Importantly, this does not mean being against riches or business, as some would like to portray, but being against wrongdoing.” As always, Dr Rajan’s words, and their expression, have a way of gladdening our hearts. The email reveals that in just over two years, the governor has, correctly, identified all the shortcomings or a sense of hubris that seems to envelop regulatory bodies in India. Here are some other issues highlighted by Dr Rajan, but paraphrased by me: lack of clarity in regulations; many ill-informed, complacent and self-styled officials who have no desire to improve themselves; extraordinarily slow and bureaucratic responses (a serious issue); and not adhering to timelines.
 
The letter also highlights the governor’s keen understanding of how the media works. He asks for better communication that highlights specific achievements or regulations rather than ‘starting with irrelevant history’. He wants press releases sent out by 5.30pm in order to show up in the press the next day. These observations are extremely interesting, because access to RBI’s top brass—and its external communication—has been under the iron grip one individual for 25 years. Criticism of RBI led to a denial of access to journalists and internal vilification, while amplification of its point of view ensured interviews, exclusives and tip-offs about press statements issued after newspaper deadlines. We are extremely keen to see whether this will change in the rest of Dr Rajan’s current tenure which ends in September 2016. 
 
However, the issue of larger national importance is whether RBI, or the banks and financial institutions that it regulates, will dare to punish or act against powerful and mighty borrowers whose loans continue to be restructured with impunity through multiple corporate debt restructuring (CDR) schemes and under RBI’s 5:25 scheme (five-year moratorium on payments and a 25-year loan tenure), which has even been described as ‘The Great Indian Banking Ponzi Scheme’! 
 
Significantly, the governor’s New Year email follows a landmark order of the Supreme Court of India (SC) which demolished the central bank’s frequent denial of information on the grounds of having been received from regulated entities in a ‘fiduciary capacity’. The apex court reminded RBI of “its statutory duty to uphold public interest and not the interest of individual banks” and also expressed surprise that RBI, as a ‘watchdog’, was not “more dedicated towards disclosing information to the general public” under the RTI (Right to Information) Act. Some of the apex court’s observations are a serious indictment of how RBI functions. For instance, the order said, “We have surmised that many financial institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny. It is the responsibility of the RBI to take rigid action against those banks which have been practising disreputable business practices.” 
 
In these circumstances, can we hope that the governor’s brutally frank New Year missive promises a radical change in the central bank’s regulation, supervision and communication? Dr Rajan, with his formidable reputation and global standing, is certainly capable of reshaping RBI. But consider the odds. 
Having just read the memoirs of DN Ghosh, a highly regarded bureaucrat and former chairman of State Bank of India, the task seems gigantic, if not impossible. The centrepiece of Mr Ghosh’s book, No Regrets, is a ringside account and superb narration of the three extraordinary days that forever changed the face of Indian banking with the nationalisation of 14 banks in 1969. 
 
However, the most dramatic part, to me, is his candid account of his short tenure as the chairman of Larsen & Toubro, when he reversed a dramatic coup of the blue-chip engineering firm by Dhirubhai Ambani’s Reliance group in the late 1980s. 
 
Mr Ghosh, who took charge of L&T at the instance of prime minister VP Singh, ensured that L&T remained an independent, professionally-run company, but not without being singed by Reliance’s machinations. For those who are too young to remember, the chapter on this sordid saga illustrates how powerful corporate houses control the government more effectively than the hundreds of leaked conversations of lobbyist Niira Radia with the movers and shakers of India. 
 
Reliance acquired control L&T by getting Premjit Singh, the then chairman of Bank of Baroda, to accumulate a substantial shareholding from public sector entities (through a subsidiary called BOB Fiscal which was shut down) and transfer it to three Ambani entities. The venal heads of our powerful public sector financial institutions and the Controller of Capital Issues were a willing party to the coup, but did a swift about-turn to save their skins when VP Singh chose to halt the brazen takeover. They changed sides again as soon as Mr Singh’s government collapsed. 
 
Mr Ghosh has done well to expose the brazen complicity of the top guns in government and their dubious tactics to get him to resign from L&T. The lures he was offered included an ambassadorial assignment (offered through the brother of Congress politician ML Fotedar) and the chance to give shape to an international bank (offered by S Venkitaramanan, the then RBI governor, who joined the Reliance board after his retirement). IDBI chairman, SS Nadkarni and N Vaghul, who headed ICICI, turned brusque in their attitude towards him. The LIC chairman, AS Gupta, not-so-subtly warned him of rough times and controversies. There was even a suggestion that his family could be harmed. The powerful West Bengal chief minister, Jyoti Basu, was also co-opted to convey Reliance’s view that he was being ‘obstructive’. 
 
If that weren’t enough, members of L&T’s management committee began to receive investigation notices from the income-tax department. When Mr Ghosh approached the revenue secretary about it, he did not even bother with a denial. It later turned out that the secretary owned 50,000 shares of Reliance Industries. The bulk of the media was hostile, but a leading newspaper’s editor went so far as to have his correspondents ask for a meeting with Mr Ghosh, at which the latter asked if the editor was acting at the behest of S Gurumurthy (who had led The Indian Express campaign against Reliance for its owner Ramnath Goenka). Finally, finance minister Yashwant Sinha called for Mr Ghosh and told him, “Whichever post you have held, you have shown remarkable dignity and finesse. Sometimes circumstances become unfavourable and it is better not to allow it to tarnish your reputation.” DN Ghosh quit the next day, but his letter made it clear that he was leaving at the ‘request of the government’. 
 
Nothing has changed in the past 25 years. If anything, the collusion between business and politics reached a new high under the United Progressive Alliance and even their roles had become inter-changeable as they worked to corner national resources such as coal, steel and telecom spectrum. It will require a lot more than a blunt email from the RBI governor to change the system. Does he have a game plan? Or is the missive a nice way of distancing himself from the mess that he is presiding over? 
 

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COMMENTS

B. Yerram Raju

1 year ago

Purely from the angle of ethics in administration and management, it would have been prudent for the Governor to retain his communication to the staff an internal one and not a matter of public debate.

D.N. Ghosh, a doyen among bankers next in stature to R.K. Talwar knows pretty well that each central bank in the world has its internal learning processes and failings.
Dr. Raghuram Rajan would have done well to hold a series of round tables among his staff at different tiers, and to develop an iterative process for taking home to them the need for widening and deepening their knowledge and attitudes among the staff. There are tools for continuous monitoring and as IIM (A) alumni of international repute he should be well aware to adopt them. An internationally reputed icon among central bank governors and contemporary economists, should have engineered the processes internally far better than now, for he has to take the team with him.

REPLY

MG Warrier

In Reply to B. Yerram Raju 1 year ago

BYR, you have made a very valid point. But, each individual, when given 'charge' behaves differently. In Rajan's case, his background, the respect he has been able to command after arrival at Mint Road, the short-term nature of his tenure at RBI, even if he gets-he will get-an extension of another 3 years makes him think aloud. At different points of time, changes have happened in processes and procedures within RBI. From Cadre Review Committee to appointment of Prachi Mishra after Dr Rajan's arrival there have been changes in approach to HR-related issues. There is a semi-transparent system of appraisal at various levels. May be, there is lot of scope for improvement. Media and analysts, instead of picking and chosing clauses and paragraphs from Dr Rajan's message, could have accepted it as the views of a brilliant individual about the state of affairs in government and public sector organisations and made further suggestions for improvement in systems and procedures.

B. Yerram Raju

In Reply to MG Warrier 1 year ago

I fully agree. When Dr Bimal Jalan was the Governor, during my tenure as Dean of Studies at ASCI, for the first time he asked ASCI to conduct a training programme for the CGMs of the RBI. Then I and Dr. Mathew Manimala, now at IIM(B) agreed to design the programme after going through the HR Practices and the appraisal formats of RBI of all senior positions and designed a one-week programme that got a repeat offer to cover those that missed out in the first thirty lot. The programme focused on change management and HR initiatives needed. The year being 1998, it was the period when the regulatory changes were substantial. Change is constant and everything else is transient. I am sure the matured thinking in RBI will fall in line with the progressive and dynamic Governor of the day and demonstrate their adaptability to the changing regulatory landscape proactively.But it need not be a matter of public debate.

B. Yerram Raju

In Reply to MG Warrier 1 year ago

I fully agree. When Dr Bimal Jalan was the Governor, during my tenure as Dean of Studies at ASCI, for the first time he asked ASCI to conduct a training programme for the CGMs of the RBI. Then I and Dr. Mathew Manimala, now at IIM(B) agreed to design the programme after going through the HR Practices and the appraisal formats of RBI of all senior positions and designed a one-week programme that got a repeat offer to cover those that missed out in the first thirty lot. The programme focused on change management and HR initiatives needed. The year being 1998, it was the period when the regulatory changes were substantial. Change is constant and everything else is transient. I am sure the matured thinking in RBI will fall in line with the progressive and dynamic Governor of the day and demonstrate their adaptability to the changing regulatory landscape proactively.But it need not be a matter of public debate.

MG Warrier

In Reply to B. Yerram Raju 1 year ago

Thanks. Public debate on issues like this cannot be avoided, and in a way useful. The problem is the debates are yet to mature into 'informed exchanges of views'. What is happening now-let us hope this is a transition phase- individuals join the debates midway, totally ignorant of the stage at which the debate is! We are an evolving democracy. Things will change for the better. Let us thank Moneylife again for giving space for discussions on such subjects.

Parameshwar

1 year ago

There was also the shameful conduct of Justice Kotwal in the Bombay High Court, when a case was filed. He declared that L&T is not a Reliance Company, DESPITE Reliance moving into L&T premises at Ballard Estate, and advertising L&T as a Reliance Company.

Dhoot Usha

1 year ago

I fully agree with Dr. Raghuram Rajan that we do not punish the wrong- doer unless he is small and weak…...... cracking down on rule breakers was important in order to prevent greater catastrophe down the line.

Then why he should not start this from his own house and take action against the SENIORS who are/were involved in wrong/ corrupt practices? Why the mistakes of the seniors are ignored and the juniors working under them are punished (for mistakes of seniors)? How (in order to protect these guilty seniors) the documents are destroyed/ or misplaced/or vanishes from the office records and sometimes never appear? Why – No ACTION for the documents misplaced by the Seniors i.e custodians of the records? Why only the juniors are/ were served with show cause notices.
The officials prefer to threaten the spouse of dire consequences the husband has to face if he continues to expose the misdeeds of seniors through RTI.
So, before advising others Mr. Rajan should clean his house first and set right his house by taking corrective action. Otherwise हाथी के दांत खाने के और तथा दिखाने के और्।

Arjun

1 year ago

Great Work Maam,i believe Mr.Rajan has WILL to change.

I am looking for PM who has Guts to bang Ambani's,that day these brothers can be seen Begging on Chowpathy:)

Ramesh B Mhadlekar

1 year ago

RBI itself is not transparent,it refuses to give details of the Foreign tours of its top officials ,which Madam Sucheta Dalal is aware of,RBI refuses to give the details of the perquisites of its top officials,it refuses to give the details of the petrol purchased for the Bank official cars used by the by top officials and their family members,who have to pay a meager amount of Re 1 Per Km and the same is also not paid by the top officials of RBI. Mr Rajan should clean his house before making comments he should take action against his officials and eradicate corruption from RBI,which he may not like to do. There is a saying there is darkness under a lamp and the same applies to RBI and I have witnessed the corruption in RBI.

REPLY

MG Warrier

In Reply to Ramesh B Mhadlekar 1 year ago

As we are talking about transparency, just for clarity. When you say, “Mr Rajan should clean his house before making comments he should take action against his officials and eradicate corruption from RBI, which he may not like to do”, which comments of Dr Rajan, included in the New Year Message are you referring to? Please quote from the text.

Ramesh B Mhadlekar

In Reply to MG Warrier 1 year ago

Mr. Warrier unless his own house is transparent and clean the officials of RBI will not be able to perform their duties honestly and sincerely, since a corrupt person is always thinking of how to make further money by bogus claims, his time is wasted in diverting his mind and talent to make false claims of bogus financial bills and how to misuse the facilities or the powers that he possesses.

Only clean hands and clean conscious have got moral and legal rights to take action against the erring banks or rich defaulters. You have to understand the intention behind my comment, you may not like my comments, since once upon a time you were part of RBI and may not like to read any comments against the RBI or the present Governor, but one cannot, nor should turn the face from reality. I certainly have the right to expose the corruption prevailing in RBI, the recruitment of class IV employees contrary to SC decisions and Constitution of India for which I have documents under the RTI and thus it can be inferred as recruitment scam having approval of Dr. Raghuram Rajan. Employees who outraged the modesty of woman Police Constable and convicted by criminal court are roaming freely in RBI. He failed to take action against them, though I have given him RTI document received from Police Station of the conviction evidence. He lacks moral or legal courage to take action against such powerful union leaders but easily talks of taking action against powerful defaulters of Banks. He should apply the same formula that was applied to the molesters of issuing cautionary advice to the said three criminal convicts of RBI.
Why is RBI shying to Implement the DOPT guidelines in the matter of foreign tours of its officials on the website, the transfer policies, the expenditure incurred in digitalization of records, may be you will have no answers.
Before cleaning the Banking system and the country, one needs to clean oneself and their own house and then one can think of cleaning the Banking system through its officials. Sermons of Dr. Raghuram Rajan appear to be good on paper and no doubt he is seeming to be honest in his deeds but he is unable to deal or tackle with the system prevailing in RBI under his regime.

chandrashekar

In Reply to Ramesh B Mhadlekar 1 year ago

Dear RBM, Your point is well taken. Like the Governor's hands are tied from cleaning up the deficiencies in RBI, the Government's hands are tied up from taking the NPA issue head long. In the final analysis, it is the loss to the nation.

MG Warrier

In Reply to Ramesh B Mhadlekar 1 year ago

Mhadlekarji, As regards my RBI connection, you are right. But I took optional retirement in 2003 and I do not have the information you have. I am not pressing, but you have not answered my prayer. From a broader perspective, I have found RBI and Dr Rajan working more professionally.

Jayaram M

1 year ago

In a nutshell, India and its citizens will ONLY benefit from continuing Dr RR's term as Governor of the RBI. The world has acknowledged that his leadership alone has made India strong, financially.
Indian politicians, however, have time and again, exhibited that politics has indeed become a industry by itself and those who are not with "them" are indeed, only, enemies of the state(s).

REPLY

Ramesh B Mhadlekar

In Reply to Jayaram M 1 year ago

There is a class IV recruitment scam during the tenure of Dr. Raghuram Rajan contrary to SC decisions and the Indian Constitution,still do you want him to continue a person who has no faith in the SC decisions or the Indian Constitution.

Ramesh B Mhadlekar

In Reply to Jayaram M 1 year ago

What a joke?

chandrashekar

1 year ago

The write up is informative. Immediately after reading it, I ordered a copy of the book "No Regrets" by DN Ghosh.

Harish Kohli

1 year ago

Very good article. Sucheta, perhaps you are aware of it, your Moneylife article is being circulated on the net, I received one.
Sucheta writes about the L&T take over. For the younger generation there was also the Swaraj Paul attempt to take over Escorts and not to forget the Harshad Mehta Scam (exposed by Sucheta).
I am an optimist and do believe that, notwithstanding attempts by the Congress, the present Government will bring about a change. If they fail it will be because of, as we are witnessing, their own party's irresponsible MPs/MLAs.

Mohan Krishnan

1 year ago

Will make no difference. Changing culture of bureaucracy will require great political will. There are no signs of same. We will muddle along as usual.

Mahesh S Bhatt

1 year ago

Donot worry False fails faster & Truth stands the test of time Longer.

Bhagwat Gita saying.

33% of Fortune Companies change every 3 years statistcally since past 100 years.

Paradox of Money is Wealth gets created to be Destroyed & Gets Destroyed to be created again.

See first generations of Mafatlal's/Singhania's losing wealth in second geenration.

Ambani's third generation shall never understand pain of Dhirubhai filling gas at Eden when the own Gas stations hence the wealth shall destroy.

Sad when Human's donot correct God corrects.

Only Tragedy as per Karmic shastra he loses great opportunity to make world better.

Today we see Tennis scandal.Whole world is staring at degradation of Human Values for Man Made Moentary systems without Values & they shall perish soon.

Amen Mahesh Bhatt

http://www.kirticorp.com

Vijay Agrawal

1 year ago

great article. to the point and full of facts that usually do not come out. I found it educative. THank You Sucheta for writing it

Vijay Agrawal

1 year ago

great article! very informative, to the point and filled with facts that usually never come out - thank you Sucheta for writing it

MG Warrier

1 year ago

I share almost all anxieties expressed here. Let me admit, I have not had the kind of opportunity Sucheta had, to watch businessmen, bureaucrats and men who matter on the Indian political scene in close quarters. Still, as one who has been keeping eyes and ears open for the last 50 years, I am tempted to be a little more optimistic about the wind of change in India during the current decade.
The generation which is now in the age group of 20 to 50, I find, are making their voice heard. I plead guilty of having belonged to a generation which believed that once independence came, political leadership, corporates and bureaucracy will manage the nation’s economy to the country’s advantage. On a personal note, let me also admit that majority among us were misled to believe that ‘politics’ was a forbidden fruit for regular employees.
Back to the subject, until ‘WE THE PEOPLE’ become responsible, no Rajan, Kejriwal or Modi can take us out of the mess. Corrective measures have to begin from the ground level. If people express their desire clearly, governance and regulations will change. I consider the RBI Governor’s New Year Message as loud thoughts of a citizen who has been watching the happenings in the country for the last 30 months or so, with an open mind. As I have already gone on record elsewhere, the document can become the basis for debates on future changes in the system.

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