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WHAT CHINA MAY LEARN FROM RUSSIAN ERRORS IN UKRAINE

PLA is all eyes and ears when it comes to scooping up lessons to be learned from ‘battle lab’ Ukraine

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WHAT CHINA MAY LEARN FROM RUSSIAN ERRORS IN UKRAINE
Many were shocked by Russia’s invasion of Ukraine on February 24 this year, but not so by government and military officials in China and the US. Indeed, more than six months on from President Vladimir Putin’s greatest – and riskiest – gambit, China’s military has had plenty of time to digest lessons on how not to conduct an invasion of a neighbouring country.

This is critical because China has nefarious intentions for Taiwan, and what it learns from the Ukrainian “battle lab” could help it succeed where Russia has failed. Senior Colonel Wu Qian, a Chinese Ministry of National Defence spokesman, said back in March that “Taiwan is not Ukraine” and that the underpinnings are quite different.

This is because, “Taiwan is an inalienable part of China’s territory, and the Taiwan question is purely Chin’s internal affair with zero-tolerance of external interference,” he claimed.

However, Ian Easton, a research fellow at ‘Project 2049 Institute’ in US, correctly pointed out that, instead, “Taiwan is an independent and sovereign country that has never been part of the territory ruled by the People’s Republic of China.”

Nevertheless, the People’s Liberation Army (PLA) officer Wu insisted, “The two sides across the Taiwan Strait must be and will be reunified. It is the trend of history that can never be stopped by anyone or any force.”

Easton responded by saying, “Peaceful unification’ is a Chinese Communist Party (CCP) euphemism that refers to the subversion and coerced annexation of Taiwan’s government. It’s a seemingly benign phrase that, in reality, describes the destruction of a nation-state that is ranked among the top ten democracies in the world.”

Wu further stated: “It is perfectly justified for China to safeguard its national sovereignty and territorial integrity, and allow no external interference… The Chinese PLA stands ready to take all necessary measures to resolutely respond to any provocative actions that endanger China’s core interests or undermine the peace and stability across the Taiwan Strait.”

Unfortunately, Beijing’s arrogant claim to all of Taiwan, and its global isolation and ostracism of the peace-loving democracy, are backed up by a willingness to use both covert and overt measures to change the status quo and take control of Taiwan.

Alarmingly, Easton warned, “The PRC is engaged in the largest peacetime military build-up undertaken by any country in over a century. Chinese military officers writing in authoritative documents describe the United States as their main enemy and portray the conquest of Taiwan as their number one mission.”

Naturally, the PLA is all eyes and ears when it comes to scooping up lessons to be learned from Ukraine. Until now, it is mostly how not to conduct a war, as the Russian assault has turned into a debacle of the highest order.

Currently, the front in northeast Ukraine has crumbled, and Russian troops have fled in panic. The latest reports state that Ukrainian troops had driven all the way to the border with Russia in Kharkiv Oblast. After being forced to retreat from Kyiv early on in the conflict, Russian troops have also fled in disarray from places like Izyum in the northeast. This spectacular failure of Russia’s “special military operation” will provide lessons for years to come.

Dr Joel Wuthnow, a Senior Research Fellow at Centre for the Study of Chinese Military Affairs, at the Institute for National Strategic Studies of the National Defence University in Washington DC, has explored lessons that China and PLA might pick up as it contemplates a future invasion of Taiwan.

In a report entitled “Rightsizing Chinese Military lessons from Ukraine”, Wuthnow noted that PLA writings and research have been almost non-existent on the topic so far. Of course, the PLA must distance itself from the mistakes that Russia made, and come up with solutions to the strategy, tactics and weapons that Ukraine is employing. Wuthnow made three assumptions. The first is that PLA decision-makers are teachable.

This might be true, as seen in the force’s reaction after the USA and allies decimated Iraq in the 1990-91 Gulf War. However, today’s PLA commanders might be less flexible or open to change than their predecessors. Wuthnow proffered several arguments for this possibility, such as the Ukraine scenario being very different to a Taiwan one.

Another is that the PLA may be more arrogant now and more confident in its capabilities. A third is “cognitive dissonance”, where the PLA’s approach over the past three decades may have inadvertently produced intellectual blinders that harm its ability to adapt.

The Central Military Commission’s make-up will change after the 20th National Party Congress later this year, and it is likely to have members that have no combat experience whatsoever.

The second assumption that Wuthnow made is that the PLA possesses a rational strategic planning process. This will determine whether any lessons drawn from the Ukraine conflict will actually alter how the PLA trains or operates. PLA is highly hierarchal and resistant to change, which is why Chairman Xi Jinping had to take it by the scruff of the neck and enforce structural changes.

There is a danger that each PLA service will simply focus on lessons that reinforce what it already believes. The PLA Air Force, for example, might argue that it needs more funding to suppress enemy air defences, or the ground forces might demand more troops after Xi cut numbers by 3,00,000. The third assumption is that adaptation will influence China’s decision-making calculus.

This is connected to the CCP’s appetite for risk. Even if the PLA modifies its doctrine or force posture, would China’s leaders still be keen to attack Taiwan?

In the short term, Xi might take fewer risks until the lessons of Ukraine are fully understood. In the longer term, he might be more confident if the PLA shows itself to have absorbed vital lessons. China knows that conflict will greatly impact its economy, even as it struggles with social and economic issues at home.

China shows no sign of backing off, however. In the wake of US House Speaker Nancy Pelosi’s visit to Taiwan, China has normalized military aircraft crossings over the Taiwan Strait median line. That tacit demarcation had served as a buffer against provocation or accident for decades, but now China has deliberately abandoned it.

With the CCP remaining so opaque, Wuthnow rightly warned: “In sum, while the PLA is observing Russian operations in Ukraine, its ability to distil and act on lessons from that conflict depends on internal variables such as perceptions, processes and leadership priorities. Analysts should thus be careful about making predictions, even if the lessons seem logical for China, and look for signs that their assumptions are correct.”

Specific lessons that China is learning from Russia’s murderous escapade may be divided into two broad categories of reinforcing lessons and pivotal lessons, according to Wuthnow. The former confirms what the PLA is already doing and planning, while the latter is items that may require the PLA to move in a new direction.

As for reinforcing lessons, the most common takeaway that foreign experts highlight as being important for the PLA is perfecting joint operations. The PLA knows their importance, as typified by the move to five joint theatre commands in 2015, even if it has a long way to go and it is very difficult to achieve on a contested battlefield.

Furthermore, it is expected that China will conduct nuclear signalling (e.g. perform launch exercises, and raise alert levels) to prevent the USA from intervening in any PLA assault on Taiwan. Moscow prevented the USA from putting troops on the ground in Ukraine, but regardless the USA has provided copious amounts of equipment.

China also wishes to achieve the “three dominances”, superiority in the information, air and sea domains, before beginning amphibious landings. Russia was using unencrypted communications, failed to electronically degrade Ukrainian command and control, and inadequate missile stockpiles, and the PLA looks poorly on such a lack of professionalism.

Nor could Russia silence President Volodymyr Zelenskyy in Ukraine, so Beijing will want to decapitate and remove Taiwan’s leadership at the outset of its war. This would also help reduce foreign aid. China already has a mock-up of Taipei’s presidential palace for PLA training.

Morale is critical too. Russian soldiers, many of them conscripts, simply do not want to fight in Ukraine. The CCP will therefore redouble political work to indoctrinate PLA soldiers into the necessity of conquering Taiwan. Unlike Russia, China will surely be more successful in controlling social media and any anti-war sentiments too.

Another lesson for China is the importance of skilled military leaders in the enlisted ranks and officer corps. Also important is ensuring logistics and maintenance support. This will be far more challenging for the PLA than for Russia, as it must support troops fighting up to 180 km away across the Taiwan Strait. The second aforementioned category for the PLA to learn from Ukraine is pivotal lessons. Wuthnow suggests three potential lessons here, “A re-examination of whether the ground forces’ brigade and battalion model is suitable for high-intensity conflict against a committed adversary; Chinese attempts to learn from Russia’s failure to mask preparations for conflict and therefore degrade foreign indications and warnings; and the re-examination of assumptions that a regional conflict, especially over Taiwan, could be limited in duration and scale, and thus potentially necessitate preparation for protracted conflict.”

The PLA has already streamlined its ground forces, with combined-arms brigades replacing divisions. Russia relies on battalion tactical groups, very similar to Chinese combined-arms battalions, but these have been found wanting. Problems in these smaller manoeuvre units such as overwhelmed commanders, insufficient specialist staff, inadequate air defence coordination and limited logistics all reared their heads in Ukraine.

Russia gathered its troops along Ukraine’s borders under the pretext of an exercise, but China will have to execute far better than that if it is to disguise an invasion of Taiwan. It will be more difficult for China given the amount of aircraft and ships needed.

Deception is important, and the PLA would also have to decide how long an extended missile bombardment is needed to sufficiently degrade the enemy, or whether a barrage would be simultaneous with an ongoing “exercise” to delay political decisions in Taipei and Washington DC. Although it had numerical and material superiority, Russia failed to achieve a swift victory.

China would always hope for a rapid conquest of Taiwan so as to reduce military and economic costs, and to prevent a coalition of support from forming. Yet Taiwan is a mountainous country and the PLA would find it difficult to conquer the ground. The PLA might have to rethink things in light of Ukraine’s robust defence as people fight for their homeland.

Politically, China might also have to rethink its belief that European and Asian countries would remain neutral. Ukraine has shown that this might not be the case.

Wuthnow concluded, “…In at least a few areas, there is a chance that China will learn pivotal lessons that will allow it to avoid Russia’s mistakes. These would include ground force reforms to reduce the vulnerability of combined-arms battalions to withering strikes, sophisticated deception plans integrated into a landing campaign, and different assumptions and planning for a conflict that neither ends in a short timeframe nor involves only a minimal number of opponents.”

“Such lessons could improve China’s capabilities as well as its confidence and complicate some of the tools that were available to the defence in countering Russian operations in Ukraine, such as effective use of Javelins…, declassification of intelligence for use in information operations, and efforts to expand the conflict beyond the aggressor’s capacity and comfort level.

“PLA adaptation, if it does occur, will take time, thus offering the United States, its allies and Taiwan an opportunity to make improvements to retain advantages for the defence that existed in Ukraine,” he added. •ANI

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Rupee fell 11% in 2022, its worst since 2013

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Monetary policy tightening by various central banks to contain inflation, the war in Ukraine leading to price rise for crude oil and subsequent realignment in the global energy supply chain, and strengthening of the US dollar index kept the Indian currency under pressure in 2022. The Indian Rupee has been in the news cycle for a considerable part of 2022 for its steady depreciation. In 2022, the Rupee depreciated over 11 per cent on a cumulative basis, its poorest performance since 2013 and the worst drubbing among Asian currencies — as the US Federal Reserve’s aggressive monetary policy propelled the greenback. data showed. It breached the 83-mark against the US dollar in mid-October, to hit an all-time low. It has, however, performed better than most Asian peer currencies, including the Chinese Renminbi, Indonesian Rupiah, Philippine Peso, South Korean Won, and Taiwanese Dollar during the current financial year. The US Federal Reserve policy rate is now at a target of 4.25- 4.50 per cent, the highest level in 15 years, which was near zero in the early part of 2022. An increase in policy rates in the US and other advanced economies typically leads to a depreciation of the emerging markets currency such as the Rupee. “Indian Rupee has had a mixed year in 2022, as far as relative performance is concerned. During the first three months it was an underperformer due to higher oil prices. However, it came back strongly during the mid of this year, due to fall in the energy prices and aggressive intervention from the RBI. But since October, we have seen Rupee underperform its peers once again, but this time due to larger than usual demand from oil importers,” said Shrikant Chouhan, Head Equity Research at Kotak Securities. Chouhan added 2023 can be a year of two halves. In explanation, he said “the seeds of a global economic slowdown could germinate” in the first half due to tightening monetary policies and fiscal policies and the alarming situation from Covid in China. “During the second half, we expect (US) Fed and other central bankers take notice of dramatic fall in inflation and growth and lower interest rates. Interest rate cut from Fed can boost inflows into emerging markets during the second half of 2023,” Chouhan of Kotak Securities said, adding that he sees Rupee versus the US dollar in a broad range of 80.00- 85.00/8.50 in 2023. However, everything is not gloom and doom for the Rupee fundamentals as the US Dollar index has fallen from the peak of 114 to around 105 currently. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The Dollar will stabilize and start weakening when the (US) Fed pauses by Q2 of 2023. RBI has done a good job in intervening in the forex market to stabilize the rupee and manage the forex reserves.” Typically, the RBI from time to time intervenes in the markets through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee. At the start of 2022, the overall forex reserves were at USD 633.61 billion, which is currently at USD 563.499 billion. Much of the decline can be attributed to RBI’s intervention and a rise in the cost of imported goods. “The RBI intervention in forex spot market will curb any upside momentum in USD/INR rates. This will help to stabilize exchange rates around 83 – 87 in 2023,” said Sumeet Bagaria, Executive Director at Choice Broking, adding that it would be interesting to see how the RBI tackles the situation. Going ahead, much of the Rupee’s movement will also depend on the monetary policy action by the US Federal Reserve. “If we look ahead to 2023, the first half will still be unpredictable because the USA’s terminal rate is still unknown, and the RussiaUkraine war has not yet ended. As a result, the first half of 2023 may see some additional weakness, but the second half may be better for the rupee because US interest rates may reach their peak,” said Santosh Meena, Head of Research at Swastika Investmart. For 2023, Meena sees Rupee in a tight range of 80.0-83.5.

Another breather may come from the decline in international crude oil prices, which currently is trading at about USD 78-80 per barrel. It touched as high as around USD 130 per barrel earlier this year. “We expect rupee to trade on a negative note moving between 84 to even hit as low as 85 mark against the US dollar as deteriorating global risk sentiments may put downside pressure on rupee. The rupee is currently around 82.8 against the US currency. Weak global markets may lead safe haven flows towards US dollar. However, sharp fall in crude oil prices may prevent sharp downside in rupee,” said Mohit Nigam, Fund Manager and Head – PMS, Hem Securities. A depreciation in Rupee too has its own share of advantages as it typically raises exporters’ earnings. What is India doing to reduce the over-dependence of the US Dollar and subsequent internationalization of the Rupee? The RBI had announced various measures recently to diversify and expand the sources of forex funding to mitigate exchange rate volatility and dampen global spillovers. Of them, the major one is that the RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in Indian currency in mid-July, 2022. If the mechanism fructifies then it may go a long way in internationalizing the Indian currency rupee in the long run. Talks between India and UAE are already on for a RupeeDirham-denominated bilateral trade.

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RBI: Global spillovers, financial market, general risks increased

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The Reserve Bank of India’s latest Systemic Risk Survey (SRS) showed that global spillovers, financial market and general risks have increased, while macroeconomic risks have moderated. The survey also showed respondents’ confidence in the Indian financial system further improved with 93.6 per cent of them remaining fairly or highly confident of the stability of the Indian financial system. No change is perceived in institutional risks. Monetary tightening in advanced economies, tightening of financial conditions, geopolitical risks, global growth uncertainty and growing risks from private cryptocurrencies and climate change are cited as the major contributors to the rise in the global, financial market and general risks.

The majority of the respondents saw further improvement in credit prospects for the Indian economy and remained confident about the stability of the Indian banking sector, according to RBI survey which was released on Thursday. Nearly ninety per cent of the respondents assessed that the prospects of the Indian banking sector are likely to improve or remain unchanged over a one-year horizon. The 23rd round of the RBI’s Systemic Risk Survey was conducted in November 2022 to solicit the perceptions of experts, including market participants and academicians, on major risks faced by the Indian financial system. The survey also captured respondents’ perception on risk to financial stability from external sector developments; segments of the Indian financial system — likely to be impacted by aggressive monetary policy tightening by advanced economies and their views on the likelihood of a global recession in 2023. More than half of the respondents assessed that the prospects of the Indian banking sector over a one-year horizon have improved. According to the survey, confidence in the stability of the global financial system marginally declined during the last six months. In contrast, confidence in the Indian financial system further improved with 93.6 per cent of the respondents remaining fairly or highly confident of the stability of the Indian financial system. Whereas, as much as 52.1 per cent of the respondents expected that the Indian economy will be impacted somewhat/to a limited extent from global spillovers. Despite global headwinds posing risks to domestic macro-financial conditions, the impact of external sector developments remained moderate as 53.2 per cent of the respondents perceived it of medium impact, RBI said in the survey. More than three-fourths of the respondents perceived that the aggressive monetary policy tightening by advanced economies would adversely impact the exchange rate, capital flows, foreign exchange reserves and bond yields.

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At Rs 1.50L cr, December GST kitty 3rd-highest ever

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The gross revenue from goods and services tax (GST) rose 15 per cent year-on-year to Rs 1,49,507 crore in December 2022, according to government data released on Sunday. This was the third-highest monthly collection since the tax was introduced in July 2017. Experts feel with this trend, the government will be able to collect through GST more than budget estimate. The government collected Rs 1,29,780 crore as gross GST revenue in December 2021. Of the total GST collected in December, CGST was Rs 26,711 crore, SGST was Rs 33,357 crore, IGST was Rs 78,434 crore (including Rs 40,263 crore collected on import of goods) and cess was Rs 11,005 crore (including Rs 850 crore collected on import of goods), data revealed. Notably, monthly GST revenues have been more than Rs 1.4 lakh crore for 10 straight months in a row now.In November, gross GST revenue collection was Rs 145,867 crore, an increase of 11 per cent over last year’s corresponding month.

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CENTRE BEGINS GIVING FREE GRAINS TO 81.35 CR PEOPLE

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The Centre launched a new integrated food security scheme on Sunday, which would give 5 kg of free food grain per month to 81.3 crore people nationwide. The scheme will provide free foodgrains beneficiaries under NFSA for the year 2023 and aims to ensure effective and uniform implementation of the National Food Security Act (NFSA). The Cabinet decided to launch a new central sector scheme to fulfil the vision of One Nation-One PriceOne Ration under Prime Minister Narendra Modi. This is a commitment of the government to the most vulnerable 67 per cent of the population which is 81.35 crore people covered under NFSA, according to the ministry’s statement. Under the scheme, the government will provide free foodgrains to all NFSA beneficiaries namely Antyodaya Ann Yojana (AAY) households and Priority Household (PHH) persons for one year through the wide network of 5.33 lakh fair price shops across the country, according to the statement of the ministry of consumer affairs, food and public distribution. The decision will strengthen the provisions of NFSA, 2013, in terms of accessibility, affordability and availability of foodgrains for the poor. T h e n e w i nt e g r at e d scheme will subsume two current food subsidy schemes of the department of food and public distribution (DFPD) namely food subsidy to Food Corporation of India (FCI) for NFSA, and sops for decentralised procurement states, which deal with procurement, allocation and delivery of free foodgrains under NFSA.

Free foodgrains will concurrently ensure uniform implementation of portability under One Nation One Ration Card (ONORC) across the country and will further strengthen this choice-based platform. This means the ration card could be used anywhere in the country. The Centre will bear the food subsidy of more than Rs 2 lakh crore for 2023. The new scheme is aimed at bringing uniformity and clarity on food security under NFSA at beneficiary level, the ministry statement said. For implementing this scheme, the ministry had said that the secretary of DFPD had taken a meeting with all state food secretaries on December 29, 2022. The issues related to distribution of free foodgrains were discussed including technical resolutions. All states and Union Territories assured to implement the free foodgrain scheme from January 1, 2023, according to the statement. The government had issued an order to all general managers of FCI to visit three ration shops every day in different areas of their jurisdiction mandatorily from January 1 till 7 and submit a report to the DFPD nodal officer on a daily basis, in the given format for review and taking corrective action. In view of free foodgrains, an advisory is issued to the states/UTs on the mechanism to provide dealer’s margin for distributing foodgrains to the beneficiaries, the ministry said.

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Post 370, investment climate brightens in J&K

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Post 370, investment climate brightens in J&K

After witnessing decades of violence, the Union Territory of Jammu and Kashmir has witnessed tremendous changes in economic activities after the abrogation of Article 370.

After Article 370 was repealed, Jammu and Kashmir became subject to 890 central laws, while 250 unfair state legislation were eliminated. Additional 130 state legislation have undergone changes. The elimination of certain hurdles has led to a conducive business atmosphere. Due to the country’s strong leadership and increased stability in the region, foreign businesses are considering investment opportunities here.

The Lulu Group, Apollo, EMAAR, and Jindal are among the few commercial organizations that have investments in Jammu and Kashmir. The UT has inked five more Memorandum of Understandings (MoUs) with Al Maya Group, MATU Investments LLC, GL Employment Brokerage LLC, Century Financial, and Noon E-commerce, respectively. Magna Waves Pvt. Ltd. and Emaar Group, and Lulu International have also signed a single Letter of Intent.

In 2021, the Union Territory attracted investments of USD 2.5 billion, showcasing the region’s vast opportunities and business potential.

Even Indian Prime Minister Narendra Modi met with delegates from the United Arab Emirates seeking business opportunities in Jammu and Kashmir, noting that private investment bids in the Union Territory have topped Rs 38,000 crore.

The government is fully aware that investments play a crucial role in economic development because they lead to the accumulation of public wealth as well as advancements in science and technology. As a result, a framework for increasing the region’s manufacturing viability and economic growth is established.

The Jammu and Kashmir government established a five-person committee on June 23 to communicate with the Minister of External Affairs regarding the G20 meetings. India is starting to get ready for the big event.

In order to promote fresh investment and bring industrial development to the block level, the J&K administration introduced a new industrial development scheme with an outlay of Rs 28,400 crore in January of last year. The new regulation, valid until 2037, also made it possible for more prominent investors to invest in J-K.

Before the repealing of Article 370, there were not many investments in Jammu and Kashmir.

The Indian government is aware that investments play a key role in the economic development of any region. Hence, it is no letting stone unturned to establish a framework for increasing the region’s manufacturing viability and economic growth.

Infrastructure development in the Union Territory got a big push after the abrogation of Article 370.

After the abrogation of Article 370, the execution of new roads, tunnels and other basic Infrastructure has gained momentum to ensure the overall development of J&K.

Noting that roads are now being built at twice the speed as before, the Lt Governor of the Union Territory Manoj Sinha had said there has been a radical change in its progress under Pradhan Mantri Gram Sadak Yojana.

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Raise retirement age of SC, HC judges: BCI

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Raise retirement age of SC, HC judges: BCI

The Bar Council of India (BCI) in a joint meeting that was held last week has unanimously reached a conclusion that there should be an immediate amendment to the Constitution and the retirement age of Judges of Supreme Court and High Courts.

“There should be an immediate amendment in the Constitution and the retirement age of Judges of High Court should be enhanced from 62 to 65 years and the age of superannuation of the Judges of Supreme Court should be enhanced to 67 years,” stated BCI in a press statement. The copy of the resolution was decided to be communicated to the Prime Minister of India and Union Minister for Law and Justice for immediate action on the resolution, stated press statement by BCI.

Moreover, the joint meeting has also resolved to propose to the Parliament to consider to amend the various Statutes so that even the experienced advocates could be appointed as the Chairpersons of various commissions and other Forums.

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