Himachal Politics - A Generational Shift!

After its chief ministerial nominee Prem Kumar Dhumal suffered a shocking defeat in the Himachal Pradesh assembly election, the Bharatiya Janata Party (BJP) announced the name of Jai Ram Thakur as the party’s chief ministerial candidate.

The name of Thakur, a five-time member of legislative assembly (MLA) from the Seraj constituency in Mandi district, was announced after a meeting between the party’s central observers—Union ministers Nirmala Sitharaman and Narinder Singh Tomar—and newly elected members of the legislative assembly (MLAs) and other party leaders in Shimla.

The nomination of 52-year-old Thakur also marks a generational shift in the politics of the hill state as it breaks away from power alternating between the Congress and the BJP under the respective leaderships of Virbhadra Singh and Prem Kumar Dhumal.

The BJP had swept the hill state in the recently concluded state elections, winning 44 of the 68 assembly seats with a vote share of 48.8%, reducing the Congress party to 21 seats. However, Dhumal, whose nomination had proved to be a shot in the arm for the BJP in an otherwise neck-and-neck fight, suffered a shocking defeat, losing the Sujanpur assembly seat.

Political analysts say that it is a well thought out decision where Thakur has been rewarded for helping BJP win nine of 10 seats in the Mandi district to which he belongs.

Thakur was nowhere in the race for the top post when the party launched its poll campaign. It had the anti- incumbency against the Virbhadra Singh Congress government to its advantage along with the tradition of Himachal bringing in alternative forces to power every five years.

But the loss of BJP's chief ministerial face Prem Kumar Dhumal from Sujanpur seat landed him a windfall as he emerged a top contender for the post along with the Union Health Minister Jagat Prakash Nadda even as Dhumal supporters demanded that he be made the CM despite losing his seat.

One needs to understand the factors that worked in favour of Thakur.

Observers say that the very first thing is the political tussle that the state has seen between Rajputs and Brahmins. Thakur, like Dhumal, comes from the former while Nadda represents the latter. There was resentment among the Brahmin support-base of the party this time at the Brahmins not getting a substantial number of tickets.

Second, Nadda carried the baggage of making a lot of noise and delivering little in his earlier avatar as the forest and environment minister in the state.

The most important factor is that with Thakur at the helm, Mandi district is going to emerge as the political nerve- centre of the state and this is an opportunity for the BJP to convert this Congress bastion into its citadel.

Mandi sends 10 MLAs to the state Assembly after Kangra that sends 15 MLAs. This time the BJP won nine of the 10 seats in the district with an independent winning the remaining. Till now the chief ministers in the state have come from Sirmaur, Shimla, Kangra and Hamirpur districts.

In the past, two Congress leaders from Mandi – Karam Singh and Sukh Ram – tried their best to become CM, but their moves were scuttled by Yashwant Singh Parmar and Virbhadra Singh. This time Thakur has been successful, although from the rival party.

He has the experience of being a minister in the Dhumal Cabinet in the past besides being the state unit chief of the BJP who brought it to power on its own in 2007.

Thakur is a soft-spoken man who has worked his way up through his organisational skills while keeping his profile low. He has risen through the ranks from being a leader of the Akhil Bharatiya Vidyarthi Parishad (ABVP) and has the firm backing of the RSS.

He had caught the eye of the party bigwigs very early and because of this, the BJP gave him a chance to contest the 1993 Assembly polls from Chachiot constituency when he was just 28-years-old. He lost by a slender margin but has gone on to win on five successive occasions from the constituency that later became Seraj after the delimitation. In his capacity as the state unit chief, he consolidated the party's support base to ensure a return to power in 2007. In 1998 the BJP formed the government with the support of Himachal Vikas Congress (HVC) led by Sukh Ram who had later parted ways with the BJP. The party had lost the 2003 polls.

Thakur served as rural development and panchayati raj minister in the Dhumal government from 2010 to 2012. He enjoys a good connect with his voters in Seraj where he is credited with getting 56 of 58 panchayats connected by road despite the area having an extremely difficult terrain.

With Thakur as CM, Himachal is set to witness a generational change in state politics as the era of both Virbhadra and Dhumal most likely comes to an end. He will have to deliver right from the word go to establish himself as someone equal in stature to his predecessors. He has an opportunity on his hands to redefine the politics in the state. Whether he is able to do this will be known with the passage of time!

India ranks 5th in list of countries with highest NPA levels

India ranks fifth out of 39 major economies with a pile of bad loans, according to a recent report. At 9.9 per cent, the ratio of non-performing assets (NPA) to the total loans collected by Indian lenders is far higher than that of banks of the United States, United Kingdom, Germany and Japan. In fact, the NPAs of these economies were less than 2 per cent.

India features high up the order and is lower than only Portugal, Italy, Ireland and Greece, the report released by Care Ratings on Dec. 28 revealed. The Insolvency and Bankruptcy Code (IBC) and National Company Law Tribunal (NCLT) have its task cut out to lower these numbers and make the system more robust, it added.

The Insolvency and Bankruptcy Code was a system put in place when the government and RBI flagged the bad loan crisis of the country. It allowed fast resolution of bad loans, and came into effect from December 2016. On Dec. 29, 2017, the Insolvency and Bankruptcy Code (Amendment) Bill, 2017, that debars wilful defaulters and existing promoters from bidding for stressed assets of companies undergoing insolvency proceedings, was passed in the Lok Sabha. The amendment seeks to plug loopholes in the 2016 law.

The countries that had higher NPA ratios (to the total loans) than India were Portugal, Italy, Ireland and Greece, which along with Spain, form the PIIGS countries that have been battling sovereign debt crises for the past few years. Spain has been ranked below India, at 10th. Greece tops the list, with 36.4 NPA ratio while Italy has a corresponding ratio of 16.4 per cent. The corresponding figures for Portugal, Ireland, Russia, and Spain are 15.5, 11.9, 9.7 and 5.3 per cent.

India, unlike the PIIGS countries in the European Union, is a growing economy. It features the highest on the list among the BRICS nations. The study takes information from International Monetary Fund to maintain comparability in concepts used in calculations.

According to the Reserve Bank of India, Gross NPA ratio of banks increased to 10.2 per cent in September 2017 compared to 9.6 per cent in March 2017. The RBI has further projected that gross NPA ratio could be 10.8 per cent by March 2018.

High nonperforming assets (NPAs) and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system, and holding back investment and growth, the International Monetary Fund said in a report on India’s financial system stability assessment that was released on Dec. 21.

The CARE ratings report categorized countries with low, very low, medium, and high level of NPAs. Australia, Canada, Hong Kong, Republic of Korea and the United Kingdom were listed in the first category, with NPA ratio of 1 per cent, while China, Germany, Japan, and the USA — with less than 2 per cent NPA ratio — was listed in the second category. Growing economies like Brazil, Indonesia, South Africa and Turkey were listed in the third category.