MAHARASHTRA POLLS: BJP MAKES HANDSOME GAINS, CONGRESS RECEIVES A DRUBBING

As predicted by opinion polls Maharashtra’s state Assembly Polls have thrown up a hung verdict. The Bharatiya Janata Party (BJP) has emerged as the single largest party but is still a little shy of the half-way mark. At 123 seats its the party’s best performance in Maharashtra so far. It’s one-time ally Shiv Sena has emerged as the second major party in the results declared on Sunday. The result has put an end to 15 years of uninterrupted regime of the Congress-NCP rule in the state.

Immediately after the results were announced the Nationalist Congress Party (NCP) jumped into the fray & offered unconditional support to BJP in order to form a Government. The surprise move stunned not only the Shiv Sena but also the BJP. Remember just before the polls the 25-year-old alliance between Shiv Sena & BJP collapsed since the former insisted on the Chief Minister’s post in the new Government. The NCP had called of its alliance with Congress over seat-sharing differences, thus making the polls a 5-way contest with the Maharashtra Navnirman Sena (MNS) as the fifth player.

Meanwhile a humbled Shiv Sena which was expecting a call from BJP to form Government decided to give in with party chief Uddhav Thackeray calling upon Prime Minister Narendra Modi & his top aide Amit Shah. Reports suggest that Thackeray hinted at burying the past & moving forward. With Rajnath Singh postponing his visit to Mumbai Thackeray sent two of his trusted aides to hold negotiations over Government negotiations in Delhi.

Sources indicate with the BJP having an upper hand, it is in no mood to bargain with the Sena. This means the Sena is unlikely to get the Deputy Chief Minister’s post or any heavy-duty portfolios in the State cabinet. In all likelihood the Sena will offer unconditional support to the BJP. It would be difficult for the party to watch itself overruled by a party which was its ally for 25 years. Hence a certain section of the party felt its better to ally with its erstwhile ideological partner.

A potential storm over the Chief Minister’s post between Nitin Gadkari & Devendra Fadnavis seems to have calmed down. Union Minister Gadkari has ruled out his return to state politics, thus paving the way for Fadnavis. Fadnavis is the Chief of BJP’s Maharashtra unit & a legislator of Nagpur. In one of his rallies Narendra Modi described Fadnavis as ‘Nagpur’s gift for Maharashtra’ thus giving credence to speculations that he is the top pick for the coveted post.

For the Congress after the Lok Sabha debacle where it managed to win only 44 seats, this was another black day in its history. Despite the huge loss outgoing Chief Minister Prithviraj Chavan accepted moral responsibility for the defeat. The current leadership led by Sonia & Rahul Gandhi has proved to be incompetent. The Chief of the Maharashtra unit Manikarao Thakre has quit from his post. A massive overhaul in the party’s state structure is expected.

After the defeats in Haryana & Maharashtra the Congress is no longer even a regional party & is presently ruling only 9 states, which together account for a mere 78 Lok Sabha seats. Afraid that the blame might fall on Sonia & Rahul Gandhi the state leadership took the onus of defeat upon themselves. Instead of learning from its past mistakes the party is busy criticizing Modi’s election campaign.

Meanwhile the MNS fortunes in the state continue to dwindle & it managed to win only seat in the polls. Inconsistencies in Raj Thackeray’s ideologies & lack of strong organisation skills are being blamed for the party’s poor performance.

The new Government has it’s task cut out. The immediate priority would be fixing the infrastructure & pushing reforms in the business capital of Mumbai.

INDIA GETS A NEW ECONOMIC ADVISOR; TRADE DEFICIT WIDENS

After ending months of speculation the NDA-led (National Democratic Alliance) Indian Government has appointed Arvind Subramanian as the CEA (Chief Economic Advisor). Subramanian is currently serving as a senior fellow with the Peterson Institute for International Economics, Washington.

The post has been vacant since a year when Raghuram Rajan quit the Ministry to join the RBI (Reserve Bank of India) as a Governor. When the NDA came to power in late May it lost no time in filling up top posts in the PMO (Prime Minister’s Office). However the CEA’s post continued to remain vacant.

When Rajan quit to join the RBI, P Chidambaram, who was the Finance Minister in the UPA (United Progressive Alliance) Government had an Advisor to consult on fiscal matters. For macro issues the Finance Minister relied on the Planning Commission & Prime Minister’s Economic Advisory Council (PMEAC). The current Finance Minister Arun Jaitley hasn’t appointed an Advisor yet & both the Planning Commission & PMEAC have been disbanded.

Subramanian’s appointment was on expected lines since his name has been floating among the PMO’s list of the probable candidates from quite sometime. The appointment will also beef up Modi’s lean cabinet & also mark the appointment of another high-profile international expert in the crucial Finance Ministry after Rajan. Subramanian is an alumnus of the prestigious IIM-Ahmedabad (Indian Institute of Management). He has also served positions in the IMF (International Monetary Fund) before taking up academic positions at Harvard & John Hopkins Universities, United States of America.

As a Development Economist Subramanian has worked closely with Rajan during their tenure at the IMF which was also one of the factors that worked in his favour. Remember Rajan had famously predicted the 2008 global meltdown way back in 2005. Rajan is currently on leave from his teaching stint at the University of Chicago, Booth School of Business.

Jaitley also took a medical leave of absence following infection from a surgery he underwent the last month. Due to his absence many key policy initiatives like the crucial Goods & Services Tax (GST) are pending. The appointment of a full-time CEA comes at a time when the Government is preparing for the Budget to be presented in February. Traditionally the Chief Economic Adviser is responsible for the annual Economic Survey which is used to draft the Budget.

In the recent past Subramanian has been extremely critical of the Indian Government’s move to block multilateral trade facilitation agreement at the recently held WTO (World Trade Organisation) meet. He had also criticized Modi’s maiden Budget in July & commented that it represented continuity of the previous Government’s policies & didn’t present anything new.

His appointment comes at a time when India’s trade deficit has widened to an 18-month high of $14.2 bn. Meanwhile exports continued to record a single digit growth. A rising import bill will hurt India’s growth prospects.

Unless the Government takes concrete steps in the form of removing regulatory bottlenecks & greater reforms the trade deficit will spiral out of control. This in turn will destabilize the Rupee & the entire Indian economy.

VETTEL TO QUIT RED BULL; LIKELY TO JOIN FERRARI

In a surprising move 4-time Formula One world champion Sebastian Vettel has announced he is quitting the Red Bull Racing team at the end of the season. Team Principal Christian Horner has hinted that Vettel is likely moving to Ferrari though there has been no official confirmation on the same until now.

The announcement was made couple of weeks back on the eve of the Japanese Grand Prix. Vettel’s contract with Red Bull was until next year but his agreement provided the option for an early exit. The German joined Red Bull in 2009 where he won four straight championships between 2010 & 2013. However he is yet to win a race in 2014 with his own teammate Daniel Ricciardo outperforming him & the Mercedes duo of Lewis Hamilton & Nico Rosberg dominating the championship.

The lure of Ferrari – Formula One’s premier team & brand has been irresistible for almost any driver even though the team’s current performance is a far cry from its glory days. Not only this is the first year since 1993 that the team hasn’t registered any win but it is also facing a top-level management shuffle. Luca di Montezemolo has quit as the team’s Chairman due to the team’s dismal performance & differences with his would-be successor Sergio Marchionne.

Vettel was getting increasingly frustrated with his performance this season & playing second fiddle to his rookie team-mate Ricciardo; something he wasn’t used to. Vettel has also expressed displeasure over the performance of his tyres & car design this year. The German admitted that the exit decision wasn’t an easy one to make but the urge to do something bigger & different was greater.

Red Bull have confirmed Ricciardo will be the main driver & Russian driver Daniil Kvyat will replace Vettel. Kvyat drives for Red Bull’s feeder team Torro Roso. Reports suggest that under Ferrari’s contract Vettel is likely to earn a whopping $80 mn per year, making him the world’s highest paid sportsperson. This figure is exclusive of endorsements & sponsorship deals. In joining Ferrari Vettel would emulate his childhood idol & Formula One legend Michael Schumacher, who won 5 titles for Ferrari.

The move casts a doubt over Fernando Alonso’s racing career. While it hasn’t been made official Alonso & Ferrari have terminated their agreement after strained relations between the two. Alonso is contemplating between a move to McLaren or taking a sabbatical in 2015. McLaren insists no official agreement has been signed but reports suggest that the Spaniard is mulling a multi-year agreement from the team. The move also casts doubt over the future of current Mercedes drivers Jenson Button & Kevin Magnussen. Alonso is also exploring the possibility of joining Mercedes in 2016.

At 27, Vettel has the time to build an award-winning partnership with Ferrari. Red Bull’s competitive struggle this season forced him to consider winning the World Championship again with another team. Amid this game of musical chairs next year’s F1 drivers’ line-up promises to be an interesting line-up.

EBOLA CRISIS DEEPENS; FIRST PATIENT DIES IN THE U.S.

In a dramatic turn of events Thomas Eric Duncan the first patient to be diagnosed with Ebola outside of Africa died in Dallas, Texas, U.S. Last month the Liberian became the first person in the U.S. to be diagnosed with the deadly disease which has killed almost 4,000 people.

As a cargo driver by profession the Liberian happened to offer a lift to an Ebola-affected family in the capital city of Monrovia where he apparently contracted the virus. Later Duncan travelled to the U.S. where he soon fell sick.

Before travelling to the U.S., Duncan failed to declare he had been in contact with Ebola in the mandatory pre-flight questionnaire. This move has prompted the Obama administration to tighten & expand Ebola screening at 5 major U.S. Airports. The check will extend to travelers coming in from Sierra Leone, Liberia & Guinea; worst-affected by Ebola. Incoming travelers will be screened with high-tech thermometers which don’t touch the skin.

After falling ill Duncan approached a hospital where he was turned away only to be admitted two days later after his condition worsened. Duncan was being treated with an experimental drug in an isolation ward in the Texas Health Presbyterian Hospital.

Duncan’s body will be cremated according to guidelines laid down by the Centers for Disease Control & Prevention (C.D.C). Ten other people who came in close contact with Duncan including health care workers & close family members haven’t been quarantined yet. These special cases are staying at their respective homes & are closely being monitored for Ebola symptoms.

Duncan’s death has shifted the spotlight on the hospital’s role in handling the case. Five days after he arrived in Dallas, the Liberian went to the hospital’s emergency room. After an initial treatment he was discharged by the hospital which failed to recognize him as a potential Ebola patient. Three days after his condition worsened Duncan was admitted to the hospital. Lack of care at the right time could have cost the victim his life.

Meanwhile Spain reported its first case of Ebola; a sign that Europe too is not immune from Ebola. A Spanish nurse, Teresa Romero Ramos who treated two Spanish missionaries who flew back from Africa has become the latest victim of the deadly virus. Ebola spreads though bodily contact of fluids of an infected person. The nurse claims to have touched her face with a gloved hand while removing hear protective clothing after treating an Ebola patient.

Like in Duncan’s case the nurse was first told to take an aspirin to treat her fever & reportedly didn’t exhibit Ebola-like symptoms. However just a week later she tested positive for the virus. During this one week Romero went on a short holiday, sat for a civil service exam with 20,000 other people & even used public transportation. Many in Madrid are anxiously waiting to see if they also exhibit any Ebola-like symptoms.

With an increasing number of patients coming in to Europe from West Africa for Ebola treatment the World Health Organisation (WHO) hasn’t ruled out the possibility of an outbreak. More than 50 people who were in close contact with her before she was isolated are being closely monitored now for the virus. Spanish media reports suggest that the nurse had to beg for an Ebola screening test. She was reportedly made to wait in the hospital’s crowded waiting room for hours without any protective gear, thus increasing the exposure of the virus.

Isolation is the first form of defense against the disease which was not followed in both cases. Currently the nurse is being treated with antibodies of Ebola survivors; the only known successful treatment for the virus so far. However Duncan’s family claims he wasn’t administered these antibodies thus denying him a fair treatment.

It is baffling that developed economies like the U.S. & Europe have been so slack in responding to Ebola compared to poor African nations struggling with limited resources. The Spanish hospital did not provide nurses with bio-hazard suits confirming to WHO norms & nurses were given rushed training on treating Ebola patients. Human waste of Ebola patients was transported through the hospital’s same elevator used by unprotected staff.

In Sierra Leone, burial teams responsible for collecting Ebola victim corpses have resumed work after striking over delay in payment of dues. Around 600 workers working in teams of 12 receive an extra $100 per week over their regular pay for doing the hazardous work. Unclaimed bodies increase the risk of the virus spreading. While Britain & the U.S. are sending in troops, aircraft with supplies & medicines the Ebola-hit nations are struggling with shortage of trained medical personnel.

Panicked doctors are fleeing away in Ebola-hit West Africa thus leaving patients to fend for themselves. Most of these nations are so poor that they lack basic infrastructure like clean drinking water, soaps & hand sanitizer. A few healthcare workers haven’t been paid for months but are still treating Ebola patients without surgical or rubber gloves. Some clinics do not have electricity & are plagued with poor internet & mobile phone network.

In one of the Ebola-hit nations thousands of boxes of medical supplies & protective gear are sitting idle due to a dispute between the Government & the shipping company. Bureaucracy & tensions from political rivalries are hampering the disbursement of aid. People on the streets are questioning where the money coming in from donations has disappeared.

Meanwhile a World Bank study has pointed out that the economic costs of Ebola is close to $33 bn over the next two years if the virus spreads to neighbouring countries in West Africa.

African nations have to shake off their bureaucracy first & serve the ailing people first before thinking about their own needs. Only if the virus is contained in West Africa it can be prevented from spreading globally.

THE RISE & FALL OF HEWLETT-PACKARD

On Monday Silicon Valley stalwart Hewlett-Packard announced its splitting itself into half in order to stay competitive. The 75-year-old Palo Alto firm has decided to split its enterprise arm which includes servers & storage equipment from its business selling personal computers & desktops.

The business services company will be called Hewlett-Packard Enterprise & the printer business will be called HP Inc. The breakup comes after a botched attempt at a split in 2011. HP will also be laying off close to 5000 employees in its new & slim avatar.

HP was born in the late 1930’s in a garage in Palo Alto, California. Bill Hewlett & Dave Packard became friends while studying Engineering at Stanford University. The duo formed their own technology company HP, which became a tech giant over the course of time.

Commenting on the split CEO Meg Whitman said the split would make the company more nimble & help make better acquisitions. HP has had it’s fair share of stumbles with acquisitions. In 2010 the firm paid $1.8 bn to buy smartphone pioneer Palm Inc to cash in on consumers switching to smartphones over PCs. However HP couldn’t turn around the technology to spin out smart devices & exactly a year later shut down the business.

HP paid $10 bn for British business software maker Autonomy only to write off a majority of the purchasing price a year later. HP alleged misrepresentation in the true value during negotiations which was vehemently denied by Autonomy.

The firm also had its share of top management level exits. In 2010 CEO Mark Hurd had to step down on sexual harassment allegations. His successor Leo Apotheker was given the boot in less than a year for his disappointing performance.

Commenting further on the split CEO Whitman said the company currently had enough financial resources to brace up for the split. While analysts have welcomed the long-awaited move they have expressed caution over the future. The Enterprise division will need more cash to invest in new technologies which won’t be financed by the printer arm’s steady revenues. The firm may also lose pricing power & clout with suppliers.

Compared to its peers HP has been slow in expanding into cloud computing & mobile technology. The firm is a reputed name to reckon with it in the computer servers segment. However sluggish sales, greater competition & lower margins are hurting the firm.

HP has long been engaged in an unsuccessful ‘asset optimization’ drive in order to sell different parts of its business. With the printer & PC business no longer witnessing double-digit growth the company is on a consolidation mode.

However it remains to be seen whether this new split can save the company. Three years into Whitman’s tenure the firm is yet to witness a concrete turnaround with constant layoffs being more in the news. The future looks tough for HP with consumers flocking to buy more of smartphones & tablets over personal desktops.

The printing business is also stagnation with printing ink sales dipping. People are opting to store photos & view file online on their phone rather than print them. PCs aren’t going off the shelves completely anytime soon since many workplaces still use them but PC sales globally fell by 13% last year & are expected to dip by a further 3% this year according to research firm IDC.

The future lies in 3D Printing & aligning it with smartphones. The firm can also tie-up its printer business with large corporations using desktops.