Suspension of talks by Pakistan- with reason or out of fear?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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With the opposition parties in Parliament jumping into the well each time Pakistan suspends talks with our government, has led to serious questions whether such suspensions can be attributed to the failure of the government or is it the myopic vision of the opposition parties who fail or at least manage to fail to see the real cause behind such recurrence of events.

Putting some meat to our ideas and some reasons behind our thoughts, let’s try to have a retrospective approach to analyze the problem at hand. The recent remarks at a press conference by the Pakistani government. During the visit of the JIT all inputs including details of entry points, phone numbers, mobile communication and Pakistan manufactured equipment and food items obtained from the slain terrorists were shown and shared. Thus clearly the fact that they had come from Pakistan was established. Their identities too had been obtained. No queries were raised, nor doubts brought up when they viewed the entire evidence. Further, call records even proved the involvement of Jaish-e-Mohammed (JeM) as the group behind the attack, responsibility of which was claimed by the United Jihad Council. The panic only started when the team returned with all inputs.

The world is well aware that both the JeM and the LeT (Lashkar-e-Taiba) are organizations created and supported by the ISI for operations against India. With the NIA demanding access to their leaders when they visit on a reciprocal basis, the military establishment of Pakistan realised that with sufficient proof available, the questioning could be professional which may open doors of ISI involvement. This led to panic as the inputs could be internationally shared and would be damaging, especially when US Presidential elections are underway and both possible contenders have an anti-Pakistan stance. It was Pakistan which first approached India for the JIT visit and not vice-versa. When India agreed for the visit, it was on the condition of a reciprocal visit by the NIA based on UN resolution 1373. Therefore, this change in stance was not stated by their foreign office but their High Commissioner, who was never in the loop in the entire process.

The Pakistan military establishment controls all foreign policy towards India. Therefore, their High Commissioner acts on behalf of their army chief. Suspension of talks is always issued as a statement by a foreign ministry spokesperson. In this case, the statement made in Delhi, and soon refuted, indicates that the elected government had not issued it. It had possibly been kept in the dark or ignored. It is more of a statement in haste, issued on the directions of a worried army and ISI, aimed at creating an environment thereby preventing the NIA from visiting and discovering the truth.

The ongoing clash between the civil and the military in Pakistan, especially concerning relations with India is well known. The statement by ‘unnamed sources within the JIT’ of India not proving Pakistan nationals’ involvement in the Pathankot attack in Pakistan media was a leak which was countered by their government. However, in India the opposition and media, as predicted, went into an overdrive. The amended statement stated that the team was not given access to serving military personnel involved in the encounter, thereby not enabling complete investigation was a fact which had already been conveyed to their government even before the visit.

In reality it is India which is hesitant about progressing with the dialogue process. The government is aware that till there is sufficient evidence of a serious Pakistan desire for peace, monitoring of which is possible, nothing would be achieved by moving forward. Therefore, India has been stalling and delaying the commencement of talks. The difference between the two nations is that India has never stated suspension of talks, but only delayed commencement till it is convinced of Pakistan’s intentions.

Thus, we as a nation should be proud of the depth of investigation by the NIA as it has managed to ruffle the feathers of the Pakistan military to the extent that they have been forced to project their true colours as also openly display their fear of Indian efficiency. By changing reciprocity to cooperation, they have indicated their fear about the snakes in their backyard being exposed. The delay in talks by us has strategic benefits and should be supported. Finally, Indian politicians need to be strategy-savvy and not act as loose cannons by jumping to criticize the government every time Pakistan makes an irresponsible statement.

 

Reference:

The Hindu

The Times of India

The Statesman

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Secretive Tax Havens- boon for some, curse for many

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Though popular Indian imagination always relates tax havens with Switzerland and its numbered bank accounts, tax havens have now become numerous, grown in number and importance  and are routes through which half of the international trade now takes place.

Apart from high-net-worth individuals, tax havens are liberally used by multinationals and their army of accountants and lawyers for tax planning and transfer pricing. They are also wonderful places for money launderers.

Tax havens come in all shapes and sizes. Each has its own comparative advantage, whether in terms of cost or time taken to set up structures, discretion used, or links to particular countries. Nevertheless, they have some common characteristics such as ease of setting up companies/trusts/foundations, minimal disclosure requirements, the possibility to hide beneficial ownership, and low or no effective taxation on income or wealth.

Panama fits the bill perfectly. In Panama, there are firms that can help set up a company within 48 hours and provide nominee directors/shareholders. Many international banks operate from Panama, and banking confidentiality is guaranteed. Panama follows a strict territorial system of taxation. Consequently, all foreign incomes of non-residents are not taxable. Further, Panama has no official central bank and no exchange control.

It is not as if the threats posed by tax havens are not known to regulatory authorities. The Organisation for Economic Cooperation and Development never tires of proclaiming that due to its revised standard for exchange of information, the days of secrecy are over. Indian politicians and administrators say the same. As the current leaks show, the utility of such agreements in discouraging tax havens from offering their services, or for foreign clients from using their services, is rather limited.

OECD’s initial project on harmful tax practices, including the use of sanctions, came unstuck due to American opposition. While there has been improvement in the monitoring mechanism over time with a peer review process, jurisdictions carry on with business as usual even after declaring their intention to comply with OECD standards. OECD’s initial list of non-cooperative jurisdictions has been empty since 2009. Of course, following the U.S. Foreign Account Tax Compliance Act, OECD has come up with an automatic exchange of information and apparently only four jurisdictions have not committed to its standards — Bahrain, Nauru, Panama and Vanuatu. But does that mean that there are no worries about other tax havens such as the Channel Islands, the British Virgin Islands and the Cayman Islands? As the Panama papers show, the truth is far removed. ‘Don’t ask, don’t tell’ is the policy followed by many tax havens.

While examining the history of tax havens, Gabriel Zucman in his book The Hidden Wealth of Nations: The Scourge of Tax Havens has shown that action against them works only if there are credible sanctions, which he proposes in the form of trade tariffs. Considering the storm created by the Panama papers throughout the world, his proposals, including that of a global finance register of all financial securities in circulation, are worth considering at the international level.

There are some apologists who believe that tax havens serve some important functions. Mauritius is often mentioned in this connection as being one of the largest foreign investors for India. Any action against the tiny nation is stonewalled. The Panama papers show that tax havens are used overwhelmingly for secrecy and dissimulation, putting distance between assets and owners thereof. Corporate structures help such dissimulation. Therefore, countries and jurisdictions that help in such efforts of tax planners, avoiders and evaders need to be put on alert. In the Indian scene, much of the alleged foreign investment apparently comes from Mauritius through Global Business Companies-1 that Mauritus allows non-residents to set up. If we are serious about tackling tax evasion and avoidance, there needs to be a rethink about the way these companies are allowed to be operated. There are many Mossack Fonsecas that specialise in offering their services for setting up such structures, including supply of directors and shareholders for routing investments through Mauritus (and others) and for availing of its treaty benefits. Panama is a tax haven, but Mauritius is a tax haven with which we have a comprehensive double tax treaty. That complicates the matter even more by allowing rampant ‘treaty shopping’, double non-taxation, and erosion of India’s tax base. It is therefore time to bury the Azadi Bachao theory of treaty shopping being good for developing countries. Nobody should believe in that theory.

Since 2011, we have a provision in the Income Tax Act in Section 94A to deal with jurisdictions that do not effectively exchange information. So far, only Cyprus has been notified. There are reports that perhaps Panama will also be put on that list. But considering that in almost all collusive international deals at least one tax haven is involved, there needs to be a review of all tax havens and the provision used effectively. Otherwise, the promise of bringing back black money stashed abroad will remain a chimera. We are smug about the relative lack of political names from India being disclosed in the Panama papers. But had the leak occurred elsewhere, things might have been different. We should not wait for another leak to break out, but need to take proactive actions both internationally and domestically.

Reference:

The Times of India

The Hindu

NITI AAYOG AIMS AT STRUCTURAL REFORMS TO IMPROVE PRODUCTIVE CAPACITY AND ENHANCE LONG TERM GROWTH

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Think tank of Indian government is planning yet another radical change in its structural framework and it’s working on a sector-based medium-term planning framework. It may replace the Five-Year Plan system with a medium-term fiscal framework that will project revenue and expenditure allocations for the next three years beginning 2017-18.

The current financial year, 2016-17, is the last year of the 12th five-year plan. With the Planning Commission scrapped, the process for formulating a 13th five-year plan government has not been initiated, as a consequence of which the era of five-year plans is set to end in India this year.

Experts feel that while medium-term growth is dependent on past performance, long-term growth, on the other hand, can only be enhanced by structural reforms and improving the productive capacity of the economy.

For the new format, the primary units of appropriation at both central and state levels are being revisited to create a clear distinction between revenue and capital items of expenditure so that accounts can be prepared in a bottoms-up manner.

Reference:

dnaindia

The Hindu

Let’s try to remember the primary purpose, was it reservation or was it upliftment?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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The Mandal Commission was established in India in 1979 by the Janata Party government under Prime Minister Morarji Desai with a mandate to “identify the socially or educationally backward” classes in the country. Though the commission emphasizes on the words ‘socially or educationally backward’, yet some intellectual administrators recognising the fact that our country has a substantial section of the population who have been at the helm of wealth and luxury, at least when compared to the middle class Indian,  but have been perceived to be educationally backward, was wise enough in laying out eleven criteria for the classes to qualify as eligible benefactors of the Mandal Commission. Among these criteria, there are four criteria which emphasize on the economic condition of the classes and they promptly state

Castes/classes where the average value of family assets is at least 25 per cent below the state average.

Yet, many of our nationalist leaders, in the urge to score brownie political points have forgotten the above criteria and have fuelled agitations initiated by economically affluent classes demanding reservation on the pretext of being educationally backward classes. The recurrence of violent protests led by relatively well-off communities demanding reservation, be it Patidars in Gujarat last year or Jats in Haryana this year, is perplexing. The Jats are a relatively prosperous land-owning community in Haryana and are regarded as being high on the “social ladder” in the region. Their political and social might is even more evident in the influence they wield in rural areas and in the leadership of the dominant political parties in the State. The National Commission for Backward Classes had in the past come out with specific reasons against the inclusion of the Jats in Haryana in the Other Backward Classes (OBCs) list. This was overruled by the Congress-led United Progressive Alliance government at the Centre through a notification in March 2014, promising a special quota for Jats over and beyond the 27 per cent reservation for OBCs in jobs and higher education. It was left to the Supreme Court in March 2015 to reiterate the reality and to quash the decision of the UPA to include Jats in nine States among OBCs, stating that “caste” alone could not be the criterion for determining socio-economic backwardness. Clearly, even if the demands do not make any constitutional or legal sense, the bipartisan consensus over extending reservations has emboldened protestors among the Jat community. After all, the Bharatiya Janata Party in power too had voiced support for the implementation of the March 2014 notification.

Let’s recognise the fact that we are moving light years away from the purpose with which such commission was established or with which reservations had been laid out for dalits and adivasis. By including economically well off classes under backward classes, we would not just be a boulder in the road for so called ‘lucky, educated and well-off’ section of the society but also an impediment to millions of Indians who actually need reservation.It’s high time that we should open our eyes to such issues with a pragmatic vision.

Reference:

 

The Times of India

The Hindu

Where is free speech and dissent, where are we heading?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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The recent attack on Aam Aadmi party leader Soni Suri has cast yet another dark shadow on the prevailing obstructive situation to free speech and dissent we are facing. An Adivasi school teacher turned political leader in Sameli village of Dantewada in south Bastar, Chhattisgarh, India, has not been facing obstruction to freedom of speech and expression for the first time. On February 20, 2016, she was attacked by motorcycle-borne assailants in Chhattisgarh. They threw an acid-like substance on her, which left her in deep pain, and her face swollen with chemical burns. This was not the first physical attack on Ms. Sori. As international human rights watchdogs have reported, Ms. Sori was also allegedly tortured and sexually assaulted by the Chhattisgarh police while in their custody in October 2011. The latest attack on her comes in the wake of a series of developments that suggests a government-endorsed clampdown on free speech and dissent in the State. Earlier this month, Malini Subramaniam, a journalist associated with the news portal Scroll, and Jagdalpur Legal Aid, a group of human rights lawyers working with Adivasis, were allegedly forced out of the State for highlighting police atrocities against the tribal population. Both the journalist and the lawyers have claimed that their landlords were intimidated by the police into issuing eviction notices on them. It is worth noting that Ms. Sori had been trying to lodge an First Information Report against the Inspector General of Police, Bastar Range. She has been leading a powerful Adivasi movement that has sought to hold the State administration accountable for the killing of Adivasis in fake encounters, arbitrary arrests, and alleged sexual assault and torture of Adivasi women by the police and security forces. She had planned to highlight these issues through a 200-km march from Bijapur, set to end in Jagdalpur on International Women’s Day, March 8, before she became a target of the latest attack.

For some time now, free speech and dissent have been on the retreat in Chhattisgarh. The official excuse for this has been the ongoing civil conflict between the state and Maoist insurgents. But the fact that individuals who have no connection with the conflict are being forced out, suggests a larger anti-democratic agenda at work. And this is in keeping with the pattern across the world where so-called underdeveloped but mineral-rich regions have fallen prey to fierce corporate plunder of natural resources at the expense of the local population. The Bastar region is rich in minerals as also Adivasi settlements, and the people are loathe to giving up their land for resource-extraction. It is their resistance to being forcibly evicted from their land — best exemplified in the figure of Ms. Sori — that is the trigger for the crackdown on democratic rights in Chhattisgarh. Given the current political scene where a perverse form of nationalism is threatening to shut down free speech, the attack on Ms. Sori represents another front in the battle against the criminalisation of dissent. The kind of spotlight that has been illuminating the absurd charges of sedition against the JNU students needs to also be focussed on the likes of Ms. Sori who have been waging such battles for a long time.

Reference:

The Hindu

The Hindustan Times

Service fliers, not flying machines..

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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The reported slugfest between newer airlines and incumbents over proposed reforms and opening up is unfortunate. Sure, there can be no civil aviation without healthy airlines, but the primary goal of civil aviation policy must be to service the needs of Indian fliers as the Indian economy develops, not to protect airlines. Incumbents have every right to demand a level playing field with newcomers but cannot block policy innovation to serve the nation’s need better.

New airlines would like to see the back of the existing 5/20 rule, which requires Indian carriers to have domestic operations for five years and 20 aircraft before flying overseas. Incumbents worry that removing the 5/20 rule without, in tandem, reforming the Route Dispersal Guidelines (RDG), would give newcomers an unfair advantage. The worry is not baseless.

RDG require airlines to deploy on Category II routes, comprising the northeast, Jammu & Kashmir and the island territories, 10 per cent of their carrying capacity on routes connecting metros (Category I) and 50 per cent of Category I capacity on category III routes, comprising all other routes. The new draft policy seeks to address this concern, by making accumulation of a minimum number of domestic flying credits mandatory before flying abroad. Could added weightage for Category III connectivity be built into the credits required to fly abroad?

Older carriers like Jet, IndiGo, SpiceJet and GoAir understandably want greater scope for route rationalisation. The Centre needs to be much more forthcoming and speedily assign unused bilateral air traffic rights so that Indian carriers can offer more flights overseas. It makes no sense to keep the bilaterals unused indefinitely even as there are committed Indian players waiting in the wings.

However, incumbents would merely be cutting off the nose to spite the face if they continue to demand extensive domestic play for the newer carriers. It would surely bring down margins for the more domestic-focused older carriers, and may, particularly in the short-to-medium run, actually make several routes quite unviable.

Reference:

The Economic Times

Why the Steadfast stands steady at the Siachen?

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Recent deaths of a number of soldiers at the Siachen glacier have once again raised the question, whether we actually need to keep a constant vigilant eye at one of the most dreaded places on the Himalayan Borders.

Earlier avalanches resulted in the death of over 140 Pakistani soldiers in their Gayari Sector in April and six Indian soldiers in December of 2012. Post the present incident there have been media debates on whether there is a requirement to continue deploying troops on the glacier.

Each strategic expert, depending on his knowledge and perception, projects the importance or lack of it as it concerns the Siachen Glacier, thereby supporting his argument for continued occupation or vacation. Both arguments have merit; however since both India and Pakistan desire to control it, there has to be some reason and the only reason apparently is strategic importance.

From 1984 to 1986 Pakistan occupied the Saltoro ridge and established a post which dominated Indian posts as also its movement on the glacier. It never planned to vacate the post, even though it was on the most inhabitable ridge line. It lost this domination way back in June 1987, when the Indian army captured this strategic ‘Quaid’ post (subsequently renamed Bana Top), as part of Operation Rajiv. The operation was named after Lieutenant Rajiv Pande who led an earlier attempt to capture the post, but failed. The final assault was led by Naib Subedar Bana Singh, subsequently awarded the Param Vir Chakra, hence the name Bana Top. Since then, Pakistan has been asking for demilitarization of the glacier.

I do not wish to debate the aspect of the strategic importance of the glacier. I would rather highlight issues which tend to be glossed over whenever the glacier is discussed.

First is the fact that it is our territory. It is a part and parcel of the state of Jammu and Kashmir and hence clearly Indian. Therefore, inhospitable or not, it would have to be defended and protected from any force which desires to lay claim to it. In reality, we are in our own area, which therefore requires no justification. Pakistan occupied a part of it and we took it back; hence the aspect of converting it into no-man’s land does not arise, unless they recognize the Indian deployment, thereby recognizing that it is Indian Territory. This is unacceptable to them.

Second, though it is costly to support deployment on the glacier yet national security is never determined by cost alone. Losing the glacier or a part of it to any adversary would have a prohibitive cost in terms of national prestige and standing. The lessons from Kargil are clear. The cost of lives and equipment to regain what was Indian territory from an adversary was heavy. We had to regain it not only for the strategic reason of it dominating the national highway to Leh and Siachen alone, but more because it was a matter of national pride and prestige.

Third, a position of advantage is always essential during active hostilities. By occupying the glacier, the army holds a position of advantage as compared to Pakistan, and hence would never lose such an advantage. Its domination exists, and would continue to be a reason for it to be held.

Fourth, this terrain is different from the rest of the country. In other areas, where mobility is possible, reserves are readily available for occupation of a base or post, in case of a threat. The same is not feasible in this terrain. Acclimatization is essential at every stage. Movement of troops and stores takes time, even helicopters can carry only limited load. Hence if any force occupies it, evicting them may be near impossible, or prohibitive in human casualties. Therefore it has to be held irrespective of cost. Fifth, terrain or weather has never deterred the military. Avalanches take place in a number of areas in J and K. Kulgam Tangdhar, Banihal, Ganderbal, Bandipora and Kapran districts of J and K are avalanche prone. This has never deterred the local population or the army from carrying out their responsibilities and duties. In fact at most times, it is the army which is at the forefront of rescue, whenever such a calamity strikes. Hence, an avalanche should never alone be a reason to withdraw.

Sixth, while proposals keep coming from Pakistan’s side, can they truly be trusted to keep their word? There have been umpteen examples of India taking the first step to suggesting peace and always being paid back by a terrorist strike or a military action. Therefore can they be trusted to stick to their end of the bargain, in case we even consider any of their proposals on the glacier?  Can we risk vacating Indian territory to be occupied by any other force?

In case the answers to the above are negative, then clearly we do not require any discussion for continuing our defence of the glacier. It is our territory and it would continue to be held. The only condition which could lead to India vacating the glacier would be that it is accepted to be our territory and officially documented as such. All other reasons are basically for argument’s sake and unrealistic.

For all those soldiers, who have proudly served on the glacier, and wear the recognition of service there proudly on their chest, its importance and value have no limit. Casualties in the toughest and highest battlefield in the world are expected and would occur, however, we as a nation need to support and stand by our soldiers as they safeguard our national interests.

Reference:

The Hindustan Times

The Statesman

Start-Up Mission- a Big Bang best not left disturbed

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Start ups in India have long faced an uphill task in opening their chapters in India given India ranking 142 in terms of ‘Ease of doing business’ till the last UPA government, as per World Bank report. But the nights full of darkness and terror are apparently on their way to the graves giving way to brighter business days. Though the above figure has climbed up to 130, as revealed by the October month report from the World Bank, India still has a long path to traverse. But, the brighter side remains that the Government at the centre seems to have taken note of this, given the horde of business friendly measures it has determined to execute.

In its latest stance for creating businesses in India and generating avenues of employment, the government at the centre has promised to provide start-ups a friendlier regulatory regime and easier capital availability. Recently, the government of India has also introduced the bankruptcy bill in Parliament to deal with corporate insolvency. Needless to mention that this will benefit both sides of the investment coin- the investors and the company.

With 4200 start-ups at present, India ranks third globally in terms of number of start-ups in a country. Also, with  $ 9 billion being plummeted into business, year 2015 saw the barrage of investment inflows into start-ups in India. 9 start ups have been valued at more than a billion dollars.

The Start Up India being unveiled today, on the 16th of Jan, 2016, at Vigyan Bhavan in New Delhi, will envisage technology business incubators and research parks. The  top gear speed in start-up vehicle in India has impressed industry experts with  Softbank CEO calling it the beginning of the start-up Big Bang Boom in India.

India has long seen decades of import dependence, but with the prevailing government’s emphasis on ‘Make in India’ and ‘Start up India’, the murky days finally seem to be over and be followed with brighter days. Foreign Investors are showing their faith in India as one of the best places to invest among emerging economies. It’s high time that politicians in India too think in similar lines and lead the way for a ‘Brighter and Better India’ and not  offset this Big Bang.

Reference:

http://economictimes.indiatimes.com/news/economy/indicators/ease-of-doing-business-india-improves-ranking-singapore-tops-the-list-says-world-bank/articleshow/49559515.cms

http://articles.economictimes.indiatimes.com/2015-12-21/news/69212274_1_insolvency-bankruptcy-bill-bankruptcy-law

http://www.thehindu.com/business/narendra-modi-unveils-start-up-india/article8112821.ece

http://www.thehindu.com/business/govt-for-simpler-entry-and-exit-norms-for-startups/article8113771.ece