Citizens' Issues
India likely to directly buy 63 Rafale combat jets
The Indian government has more or less decided to scrap the medium-multi role combat aircraft (MMRCA) selection process in favour of direct purchase of 63 Rafale aircraft from France in a government-to-government deal, says India Strategic magazine.
 
Authoritative sources told the journal that a MoU would be formally signed in Paris during the summit meeting between Prime Minister Narendra Modi and his host, President Francois Hollande. 
 
The number of aircraft is half that the 126 jets the Indian Air Force (IAF) had tendered for, 18 of which were to be acquired direct. The rest will be made by Hindustan Aeronautics Ltd (HAL) in India.
 
There have been serious differences over responsibility for the quality of aircraft to be made by HAL and the overall pricing. 
 
Dassault, which produces the Rafale, had said it would do the transfer of technology and invest 50 percent in India as part of the 50 percent offsets clause stipulated in the tender but would not be responsible for what comes out of the HAL production lines.
 
Although Dassault had won the tender on the basis of technical evaluation and its "lowest" bid, the costing after accounting for periodic escalations during the life of the programme was touching $24 billion.
 
This made the ministry of defence uncomfortable. As negotiations with Dassault were not leading anywhere, Defence Minister Manohar Parikkar observed that the deal could not go through if Dassault continued to ask for way too much. 
 
Defence ministry sources said it had "bitter experience" with French firm DCNS in the past over pricing while negotiating the Scorpene submarine deal and a decision was becoming difficult.
 
It appears that there were frantic discussions between the defence ministry and the IAF, which has been keen for the induction of new aircraft. 
 
The ministry then put up some options before the defence minister for a political decision - and the option to buy 63 aircraft through the government-to-government route was found the most acceptable.
 
Indications are that the Rafale deal will be part of a composite agreement including nuclear cooperation, some technology sharing and more bilateral investments.
 
India had purchased about 50 Mirage 2000 from Dassault in 1985 (and a few more later). Although they were not under any government-to-government deal, that acquisition would be a model to follow. 
 
The aircraft are under upgrades by Dassault and Thales - the electronic warfare and other systems provider - and HAL. 
 
Defence analyst Amit Cowshish, a former top defence ministry officer responsible for military acquisitions, observed that if the decision to go in for a direct purchase of 63 aircraft had indeed been taken, "then this shows great out-of-the box thinking" on the part of the ministry.
 
"It should make everyone happy, particularly the IAF, which needs the aircraft urgently, and Dassault and its associates for the way out," he said.
 
He added that it also opens more options for IAF to catch up with its requirements. 
 
The tender, or Request for Proposal (RfP) for the 126 MMRCA was floated in 2007. Rafale was declared the winner in 2012. 
 
Others in the competition were European Eurofighter Typhoon, Swedish Saab Gripen, US Boeing's F/A-18 Super Hornet and Lockheed Martin F-16 and the Russian MiG-35.
 
The number of IAF combat squadrons is much less than the sanctioned 42, hovering around 32 or 34. 
 
The Mirage 2000 and MiG 29s, both acquired in the 1980s, are under upgrades to extend their lives by another 10 to 15 years.

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COMMENTS

vishal

2 years ago

what really matters for Government is both production in India at a later stage and cost plus engine. The French will not help India to develop Engine and HAL is only a assembly center. Why we need so urgently this fighter Air craft? The question is not answered properly. Neither Pakistan or China will engage us in a Air war. Our DRDO, ISRO,GTRI & HAL are capable of sending rockets to Mars but are not capable enough to make a engine since Independence. If the same has been entrusted with a private company by now we would have had the capacity to produce a Aircraft like this. Our public sector Units are great but not great enough to meet challenges like this.

Passenger car sales up 4.99 percent in 2014-15: SIAM
Domestic passenger car sales increased by 4.99 percent in 2014-15 and stood at 1,876,017 units from an off-take of 1,786,826 units in 2013-14, industry data showed Friday.
 
This is the first time in three years that passenger vehicle sales have recorded positive growth. High fuel and interest costs coupled with slowdown in economic activity had dented automobile sales.
 
According to data furnished by Society of Indian Automobile Manufacturers (SIAM), total passenger vehicle sales, which include cars, utility vehicles and vans, went up by 3.90 percent at 2,601,111 units from 2,503,509 units sold in the corresponding fiscal.
 
SIAM data showed that sales of utility vehicles grew by 5.30 percent at 553,699 units, while the off-take of vans declined by 10.19 percent at 171,395 units.
 
However, the industry data for 2014-15 reported a 2.83 percent decline in the overall commercial vehicles segment sales, which is a key indicator of economic activity.
 
The commercial vehicles segment off-take stood at 614,961 units during 2014-15 from 632,851 units sold in the corresponding 2013-14 fiscal.
 
Three-wheeler sales rose by 10.80 percent in the fiscal under review at 531,927 units from 480,085 units sold in 2013-14.
 
Total two-wheeler sales in the period under review grew by 8.09 percent at 16,004,581 units from 14,806,778 units sold in 2013-14.
 
Scooter sales in the fiscal under review were up 25.06 percent at 4,505,529 units, while motorcycle sales were up by 2.50 percent at 10,743,549 units.
 
Exports for 2014-15 went up by 14.89 percent at 3,573,806 units from 3,110,584 units shipped out during 2013-14.
 
Total vehicle sales during the last financial year grew by 7.22 percent at 19,752,580 units from 18,423,223 units sold in the corresponding period of 2013-14.
 
Data furnished by SIAM showed that passenger car sales in March, 2015 were up 2.64 percent at 176,011 units as against of 171,491 units in the corresponding month of last year.
 
Total passenger vehicle sales in the month under review went up by 2.66 percent at 244,395 units from an off-take of 238,061 units in March, 2014.
 
For last month, SIAM reported a 2.14 percent increase in sales of commercial vehicles which is a key indicator of economic activity.
 
Sales stood at 65,470 units from 64,101 units in the corresponding month of last year.
 
Three-wheeler sales grew by by 2.68 units at 42,383 units from 41,278 units sold in the corresponding month of last year.
 
However, total two-wheeler sales in the month under review marginally declined by 0.84 percent at 1,323,184 units from 1,334,450 units sold in the corresponding month of 2014.
 
Total scooter sales in the month under review grew by 11.14 percent at 395,901 units from 356,233 units sold in the like period of last year.
 
Total motorcycle sales decreased by 5.22 percent at 859,521 units from an off-take of 906,901 units in March last year.
 
Total exports for the month went down by 6.57 percent at 251,225 units from 268,891 units being shipped out.
 
Total vehicle sales in March slipped by 0.15 percent at 1,675,432 units from 1,677,890 units sold in the corresponding month of last year.

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How CEOs inflate their salaries
The researchers were interested in testing the theory that business executives, who have strong networks among their peers, are more likely to inflate their colleagues' pay because they believe it will be reciprocated
 
If you have a strong network of business colleagues who sit on each other's board, your pay can be a lot heftier - but often at the expense of your shareholders, according to a new study by the Ted Rogers School of Management at Ryerson University and the University of Toronto's Rotman School of Management.
 
The researchers were interested in testing the theory that business executives, who have strong networks among their peers, are more likely to inflate their colleagues' pay because they believe it will be reciprocated.
 
"There's a great deal of research trying to understand how a chief executive officer's pay is determined," said study's co-lead author professor Fei Song from the Ryerson University, Toronto.
 
"One school of thought is that their pay is determined by a corporation's board of directors," Song explained.
 
"However, people who make up these boards are often CEOs of other companies themselves and are more likely to receive higher compensation packages because of this exclusive network," Song added.
 
But what happens when CEOs are paid more?
 
"If executives of corporations receive a higher compensation, they may be taking the company's revenue from the shareholders' pockets and paying it to themselves," Song added.
 
Indirectly reciprocal networks are often overlooked and difficult to track, the study said.
 
"Imagine three CEOs from companies A, B, and C where A sits on B's board, B sits on C's board, and C in turn sits on A's board."
 
"In this example, there is no direct conflict of interest because A does not benefit him or herself by inflating B's salary and the same applies to the other two CEOs," said co-author professor Zhong from the University of Toronto.
 
"Nevertheless, our findings suggest that everyone in the network is likely to inflate salary for each other. Now imagine this network consists of hundreds of CEOs," Zhong said.
 
While it is difficult for shareholders to see the circle of reciprocity among CEOs, "as a start, giving shareholders more powers to monitor board meetings would help", the researchers said.

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