The richest one percent holds 58 percent of India’s total wealth

Aug 8, 2017 0

By Amit Kapoor

The data released by the Bloomberg Billionaire Index reveals some shocking statistics about the rise of inequality in India. It showed that the top 20 industrialists in India added a staggering $50 billion to their combined wealth in the first seven months this year, taking their total valuation to $200 billion — roughly 10 percent of India’s $2 trillion economy.

Similarly, an Oxfam report released this year revealed that 57 billionaires in India own as much as the bottom 70 percent of the population and, more broadly, the richest one percent holds 58 percent of the country’s total wealth — higher than the global average of 50 percent. Therefore, inequality is no longer a first-world phenomenon. It is very much at our shores, but the moot question remains if the trend is undesirable at all.

Amit Kapoor

The general contention is that inequality is inimical to societal development and should be minimised to the fullest extent possible, preferably through redistributive means. However, there is a strong case to make that with rapid growth, rising relative inequalities, more often than not, lead to advancing distributional equity in society. This argument can be rationalised on the basis of insights put forward by US economists Simon Kuznets, Tibor Scitovsky and Albert O. Hirschman.

Kuznets argued that when economic growth takes place, at the disaggregated micro-level, individual economic agents move along the real income scale — a process which he termed as “income mobility”. Now, income mobility can either be upward or downward but it is observed that during phases of rapid economic growth, opportunities for upward mobility far outweigh those for unchanged or downward mobility. Also, in the presence of income mobility, the identity of individuals at different levels of the income scale changes rapidly over time.

In such a scenario, average inequality indicators cannot reflect the true picture on the ground and can, therefore, prove to be misleading predictors of the adverse social outcomes of growing inequality. The tolerance level of inequality for the society in times of rapid economic growth may be much higher than what is reflected in inequality statistics as it fails to take income mobility into account.

Another problem with only looking at inequality statistics is the perception of a simplistic one-to-one correspondence between movements in income inequality and equity. Scitovsky’s views offer an interesting take on the matter. He suggested three criteria for social acceptability of rising inequality: Those inequalities arising out of people’s merit and contribution to society, those arising in an environment of equality of opportunities, and those that lead to improvement in well-being of individuals at the bottom of the ladder.

In all of these three cases, rising inequality cannot be equated to a one-on-one fall in equity. Therefore, more focus should be kept on the wealth accruing to the people at the bottom of the ladder to understand the real implications of rising inequality. Scitovsky proposed that an egalitarian society should be defined as one where there is equal or near-equal distribution of the necessities of life.

Finally, as Hirschman points out, inequality data fail to take into account the public perception of rising inequality. He pointed out that a stagnant economy leads to a zero-sum game where economic advancement of others provokes a negative signalling effect of a possible deterioration of one’s own economic position. However, in times of rapid economic growth, there arises a positive-sum game where economic improvement of others signals an environment where there is hope for a rise in one’s own prosperity in the future. Such an exceptional calculus begets gratification which overcomes envy and discontent.

This scenario would make society’s tolerance for rising disparities quite substantial. Such an eventuality can be sustained in a society as long as the economic and social barriers to income mobility are broken down through government policy or rapid growth and prosperity is attributed to hard work and chance. Discord arises in societies where such prosperity arises out of corruption and deception like the one seen in the Occupy Wall Street protests.

Thus, it needs to be understood that contrary to the common perception among individuals and policymakers, rising inequality is not necessarily inequitable, if and when it arises out of rapid economic growth. The startling figures of inequality in India that have been brought about of late, therefore, offer an incomplete picture. Moreover, use of these figures to argue that Indian economic development has had adverse distributional consequences offers the incorrect diagnosis and skews policymaking.

The focus on wealth accruing at the top needs to be supplemented with the income mobility achieved by those at the bottom of the pyramid and with a focus on elimination the social and economic barriers that they face in achieving upward mobility. A skewed focus on the top hardly serves any purpose other than providing shock value.

(Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal.)

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Rupee’s high external value hurting exporters: Assocham

Aug 6, 2017 0

New Delhi–The external value of the Indian rupee currently supersedes its internal strength and the resulting mismatch is hurting exporters, whose competitive edge gets hit with the declining value of the dollar vis-a-vis the rupee, industry lobby Assocham said on Sunday.

“External value of rupee is far stronger than its internal strength despite lower inflation with the resultant mismatch, and the continuing trend is hurting exporters whose competitive edge gets directly hit with declining value of dollar against the domestic currency,” Assocham said, citing its report on the subject.

Declining by close to six per cent over the past one year, the rupee is currently trading at 63.63-70, against 66.93 to a dollar in August 2016, Assocham said.

“So, clearly the external value of rupee has strengthened quite,” it added.

The Associated Chambers of Commerce and Industry of India said that, on the other hand, the rupee has weakened at least in reverse proportion to the Consumer Price Index (CPI), or retail inflation, that is inching up all the same.

“Yes, inflation is down; but it is still inflation and not disinflation or deceleration in prices. That means rupee is able to purchase less of commodities (to the extent of 1.58 per cent at least), but when it comes to its value measured against dollar, it has gained by about six per cent,” the Assocham report said.

Owing to this situation, there has been a falling pace of growth exports.

While exports have been growing for the last nine months ending June 2017, the Reserve Bank of India (RBI) observed that the export growth weakened in May and June from the April peak as the value of shipments across commodity groups either slowed or declined.

“Exports have shown growth of 4.39 per cent to $23.56 billion in June 2017, as compared to $22.57 billion a year ago. But this growth had peaked to 20 per cent in April this fiscal,” the statement said.

Moreover, thanks to declining value of dollar in rupee terms, during June 2017 exports showed a negative growth of 0.04 per cent, it added.

“It clearly translates into erosion in margins between six to seven per cent only on account of currency appreciation and the trend is likely to continue on the back of robust inflows in the stock market,” Assocham Secretary General D.S. Rawat said.

The inflows of the dollar, taking the country’s foreign exchange reserves to a record level of $392 billion, “are a result of global liquidity flush finding ways into the financial markets of the emerging economies,” he added. (IANS)

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India’s gold demand up by 37 percent in Q2 of 2017: World Gold Council

Aug 3, 2017 0

New Delhi–Demand for gold in India for the second quarter (April-June) of 2017-18 was at 167.4 tonnes, up by 37 per cent compared to overall Q2 demand of 122.1 tonnes for 2016, World Gold Council data showed here on Thursday.

“India’s gold demand in Q2 2017 stood at 167.4 tonnes, a robust quarter, as seasonal demand and improved rural sentiment contributed to a 37 per cent year-on-year increase. Both jewellery and investment demand saw a healthy rise of 41 per cent and 26 per cent respectively, albeit on a low base of Q2 2016,” said Somasundaram PR, Managing Director, India, World Gold Council.

The gold demand value for the second quarter of 2017 was at Rs 43,600 crore, up by 32 per cent in comparison to Q2 2016 (Rs 33,090 crore).

The total Jewellery demand in India for Q2 2017 was up by 41 per cent at 126.7 tonnes as compared to Q2 2016 (89.8 tonne). The value of jewellery demand was Rs 33,000 crore, up by 36 per cent from Q2 2016 (Rs. 24,350 crore).

“Though underlying concerns about GST and other transparency measures continue, predictably, positive sentiment returned with continued remonetisation and an expectation of good monsoons. This was evident in the sales momentum during Akshaya Tritiya supported by a relatively higher number of auspicious wedding days during the quarter,” said Somasundaram.

“Looking ahead, in second half of year, as consumers and trade adapt to the new tax and compliance regime, growth will remain range bound even with good monsoons. Our full year demand estimate remains between 650 and 750 tonnes, the higher end of the range being more likely,” he added. (IANS)

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Rupee strengthens to a new two-year high

Aug 2, 2017 0

Mumbai–The RBI’s decision to lower key lending rates and healthy inflows of foreign funds in capital markets pushed the Indian rupee to close at a new two-year high level of Rs 63.70 to a US dollar on Wednesday.

Besides, a smooth GST roll-out, expectations of subdued inflation and stable political environment buoyed the demand for the Indian currency.

The rupee closed at 63.70-71 against a US dollar from its previous close of Rs 64.07. The rupee last traded around the 63.70-mark in July 2015.

The Indian currency gained over 1.70 per cent to an intra-day high of Rs 63.60 to a US dollar.

However, likely market intervention by the RBI which bought US dollar through state-run public lenders is said to have stabilised the Indian rupee around the Rs 63.70-mark.

The RBI is seen comfortable with the rupee ranging anywhere between Rs 63-65 . Anything beyond or below this limit provokes the central bank to intervene by either buying or selling the greenback.

“Indian rupee has the fundamentals which a carry trader would kill for. We continue to remain bullish on the rupee and expect 63-63.30 on USD/INR spot over the next three to four weeks,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.

“Risk to the view remains from equity markets. In case Indian equity markets, along with global equities, come under sustained selling pressure, Indian rupee can then see a temporary sell-off.”

According to Hariprasad MP, Senior Vice President and Head Treasury at Centrum Direct, US dollar sales by a MNC bank and monetary policy review were the major contributory factors for rupee appreciation

“The announcement of 25 bps… as opposed to 50 bps as expected, the rupee depreciated initially, but then bounced back to 63.70 levels again,” Hariprasad said.

“Since, it has breached such crucial levels, we can even expect for the rupee to reach 63.50 in the near-to-short term period. “

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Ocular to Lay Off 19 Percent of its Personnel; Antony Mattessich Appointed CEO and Amar Sawhney Transitions to Executive Chairman of the Board

Aug 2, 2017 0

BEDFORD, MA– Ocular Therapeutix announced that in line with the company’s strategic plan, Antony Mattessich has assumed the role of Chief Executive Officer, effective immediately. Former CEO Amar Sawhney has transitioned to Executive Chairman of the Board and will continue to devote substantial business time to the Company.

“In addition, Ocular Therapeutix announced that it expects to realize savings in operating expenses, including personnel costs, as result of streamlining headcount by approximately 19 percent, as part of an initiative to enhance operations and reduce expenses,” Ocular said in a statement.

In conjunction with this initiative, Andy Hurley, Chief Commercial Officer, will be leaving the Company.

Amar Sawhney

“With these anticipated cost savings and based on the Company’s current plans and forecasted expenses, the Company believes that existing cash and cash equivalents and marketable securities will fund operating expenses, debt service obligations and capital expenditure requirements through the third quarter of 2018,” the statement said.

Mattessich as CEO brings a wealth of experience to Ocular Therapeutix, having most recently served as CEO of Mundipharma International, a developer and commercializer of products in pain, inflammation, cancer, and respiratory diseases for patients around the world. He also held leadership roles at a number of global pharmaceutical companies across the US, Europe and Asia, including at Novartis, Bristol Meyers Squibb and Merck & Co.

“I am excited to begin my role as CEO of Ocular Therapeutix at such an important juncture for the Company,” said Mattessich. “As I begin my tenure, I would like to reiterate that we remain committed to DEXTENZA, while we also focus our efforts on the development of the entire breadth of innovative drug product solutions that the team has built under Amar’s guidance.”

“We remain excited about the opportunities for our diversified pipeline programs, which we believe have the potential to improve the standard of care across a multitude of ophthalmic indications,” said Sawhney. “We are very pleased to welcome Antony as CEO and are confident in his proven abilities to build, manage and grow pharmaceutical organizations into successful companies and brands. As Executive Chairman of the Board, I will continue to provide Ocular Therapeutix with my time and expertise to facilitate the transition as the Company executes on its business plan. In addition, the Board and I would like to express our sincere thanks to Andy for his strategic leadership and operational acumen over the past year. We wish him the best of luck in his future endeavors.”

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Criminal proceedings in Panama Papers cases, those claiming NRI status: Jaitley

Aug 1, 2017 0

New Delhi– Finance Minister Arun Jaitley on Tuesday said in the Lok Sabha that criminal proceedings will be carried out in cases arising out of the Panama Papers disclosures, and the tax department will go into claims about people claiming NRI status to avoid scrutiny.

“I want properties from 1988 to be covered under the Benami Act. The money in foreign countries was reported from four sources, including HSBC, International Consortium of Journalists and Panama Papers. These details need documents. Otherwise there is no proof.

“In cases of which we are receiving details, we send notices, assess their income tax details and raise tax demand. According to the law, criminal proceedings are also carried out. In HSBC and now in Panama Papers, the proceedings will be carried out. In some cases details are received, in some it is not. Lot of people claim NRI status, we will see if it is valid or not. It is now a disincentive and a risky business,” he said.

The Finance Minister was replying to a debate on the Supplementary Demand for Grants for 2017-18 and the relevant Appropriation Bill.

He was replying to a query by an Opposition member about what the government was doing in the case of Panama Papers disclosures.

After the Minister’s reply, the House approved the first batch of Supplementary Demand for Grants for 2017-18, for an additional expenditure of Rs 11,166 crore, and three appropriations.

Arun Jaitley

On the Goods and Services Tax (GST) which has completed one month of implementation, Jaitley said the incidence of tax will be lower than the previous indirect tax regime once the input tax credit is availed and the prices will come down.

“The methodology of taxation has changed, in medium and long term it will bring prices down because of input chain that is created. Currently cascading effect of taxation is there.

“After input tax credit, the weighted average of tax incidence is less than what it was till June 30. My estimate is that states’ will not run into losses under GST and if they do we will compensate them,” he said.

The Finance Minister said that the GST Council will meet on August 5 to finalise the details of the anti-profiteering mechanism.

“We were a non-tax compliant society. The trend is being broken. We are meeting on August 5. We will finalise the entire mechanism of anti-profiteering soon. We need to make a few examples and everyone will fall in line,” he said.

“The Council will meet once a month. We did rate revisions when required. More the revenues, the more the states will get. States know this. More revenue for states means, more money for infrastructure, education, health, etc.,” he added.

He said the switch-over to GST was smooth overall and minor glitches are rectifiable.

Jaitley also dismissed the contention by some members that GST would lead to payment of more tax by consumers.

Referring to apprehensions by Congress member from Kerala who said that the state was dependant on tourism for its economy and the houseboat industry would be affected, Jaitley said that any levy of tax would be passed on to the consumer and the houseboat owner would not pay it. If somebody can afford to stay at Rs 10,000, he can as well pay Rs 1,000-2,000 more.

“It is the consumer who pays the tax. Up to Rs 20 lakh turnover, there is no tax. If turnover is up to Rs 75 lakh, and if you are a trader then you have to pay 1 per cent under composition scheme. Manufacturers will have to pay 2 per cent, restaurants will have to pay 5 per cent. There is no tax on prasad and langar,” he said.

Touching upon the economy, Jaitley said that this is the first year in which the world economy is showing signs of slight improvement.

He said that exports have improved in India.

“Fiscal deficit has reached 3.2 per cent. Going ahead we will bring it to 3 per cent,” he said.

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Wipro sets up innovation center in Silicon Valley

Aug 1, 2017 0

Bengaluru– Global software major Wipro Ltd on Tuesday said it had opened an innovation center in the Silicon Valley to develop and showcase next-generation technologies and solutions for enterprises.

“Our Silicon Valley innovation centre at Mountain View in California will demonstrate enterprise applications based on disruptive technologies such as Artificial Intelligence, Virtual Reality, Hyper Spectral Imaging, Machine Vision and Collaborative Robotics & Automation,” said the IT major in a statement.

Wipro said it has been investing in emerging technologies to make its clients future-ready in the digital era and solve real-world business challenges faced by enterprises.

The centre will also serve as a value creator for start-ups, small and medium enterprises and entrepreneurs, enabling them to integrate their capabilities with that of the company and participate in the larger innovation ecosystem.

The centre has incubated a ‘Digital Pod’ and features a a Rapid Proto Lab’. The pod is built for the company’s digital strategy, design and engineering teams to work in a collaborative and adaptive workspace with clients.

The tech giant has 14 digital and design pods the world over, including in Bengaluru, Copenhagen, London, Madrid, Munich, New York, Oslo, Stockholm, Tel Aviv and Tokyo. “Clients will have access to immersive experiences and ability to experiment with futuristic technologies in the ‘aRapid Proto Lab’,” said Wipro.

The company hopes to enter into research partnerships with universities across the US during this fiscal.

Abidali Z. Neemuchwala

“The centre will support our collaboration with start-ups in the Bay Area through our strategic investment arm Wipro Ventures, a $100-million fund that focuses on investing in early-to mid-stage start-ups,” said the statement.

Wipro Chief Executive Abidali Neemuchwala said that the centre was imbued with the culture, spirit and energy of the Valley, which is the cradle of technological innovation.

“The centre will design and deliver solutions for our clients. We are committed to work with start-ups, academia and tech firms in the Bay area to help our clients achieve digital transformation outcomes,” he said.

Wipro, which has invested $2 billion to set up 40 facilities in 23 US states over the last decade, has been creating jobs in the US.

“We have about 14,000 employees in the US, including 1,600 hired in the first six months of this year, with majority of them being locals. We will continue to recruit from top universities and hire laterals locally,” it added. (IANS)

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Tech Mahindra re-appoints Gurnani as MD & CEO

Aug 1, 2017 0

Mumbai–C. P Gurnani was Tuesday re-appointed as the Managing Director & CEO of Tech Mahindra for a period of five years.

The company informed the Bombay Stock Exchange and the National Stock Exchange that the board meeting held on Tuesday approved re-appointment of Gurnani as Managing Director & CEO with effect from August 10, 2017.

C.P. Gurnani

Appointed as Managing Director of Tech Mahindra in 2012, Gurnani was in June 2009 appointed CEO of Mahindra Satyam, succeeding A.S. Murthy who was appointed by the government board after the multi-crore rupee scam broke out in the then Satyam Computer Services.

Popular as CP in his peer group, he played a key role in the transformation of Mahindra Satyam and its eventual merger with Tech Mahindra.

Previously, he headed Tech Mahindra’s global operations, sales and marketing functions, and led the development of the company’s competency and solution units.

An alumnus of National Institute of Technology (NIT), Rourkela, he has held several leading positions with HCL Hewlett Packard Limited, Perot Systems (India) Limited and HCL Corporation Ltd in his career.

Gurnani served as Nasscom’s chairman for 2016-17. (IANS)

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International Chef Devanand Chinta Joins Dharani Group of Restaurants as a Partner and as Chief Executive Chef

Aug 1, 2017 0

WESTBROUGH, MA– International chef Devanand Chinta has joined the fast-growing Dharani group of restaurants as a partner and as its Chief Executive Chef.

“We are very excited to have Deva join our management team and lead the growth of Dharani restaurants in targeted markets across the country,” said Bhaskar Rednam, founder and Chief Executive Officer of Altamount Restaurant Group, the parent company of Dharani. “We are looking forward to working him and taking our restaurants to the next level of service and authentic Indian cuisine.”

Devanand Chinta

The group already has been operating several Dharani restaurants in Massachusetts:  Westborough, Woburn and Franklin. By end of this year, Altamount is opening Dharani Galaxy, an Indian food court in Westborough that will have four Indian restaurants with different flavors and a gathering place with a podium and stage. In addition, Altamount has Dharani restaurants in North and South Carolina, Connecticut, New York and Texas.

“It is one of the best decisions I have made to join the Altamount Restaurant Group.  It balanced my work and family life,” Chinta told INDIA New England News. “Professionally, it has helped me get involved in the community and embrace the cuisine with pride. My career in hotels and large organizations taught me discipline and love for the job, which I have received from this company. There is a great leadership from Mr. Bhakar Rednam as our mentor.”

A native of Hyderabad, India, Chinta is no stranger on the international cuisine scene, especially in New England. He started his culinary career more than 18 years ago and has worked in Oberoi Hotel in Hyderabad,  Les Quatre Saisons Hôtel in Paris, Waterside Inn in London, Carnival Cruise Line in Miami, InterContinental Boston. Most recent ly, Chinta served  as executive chef for  Marriott Hotels  and worked at Harvard Business School as one of their chefs.

What is his role and responsibilities are going to be at Dharani?

“I am responsible for day-to-day operation of restaurants and product development with procurement of right product,” Chinta said. “I overlook sanitation procedures and well-being of all the staff by doing trainings across the restaurant group.”

He said that Indian restaurant market in New England and across the country has changed dramatically in recent years.

“Indian market has grown and changed exceptionally. I have been in this career for 18 years and I have seen great changes in the marketplace,” said Chinta, adding that despite changes when it comes to food customers still look back to their culture.

“Their expectations have changed and global trends are entering Indian market scene. Indian weddings are doing a more corporate look and feel and are moving slightly from traditional point,” Chinta said. “There is now a high degree of personalization. People are spending more per guest. They are adding more interesting decor, food and themes. Even destination of weddings and social events are changing in a very exotic way, choosing various locations and venues.”

As with everything else, menus have changed as well.

“There are a lot of traditional and modern aspects playing a role in the Indian wedding market.  We as Dharani Restaurant group and with so much experience are ready to capture this market and deliver the promise with exceptional cuisine in a traditional way and service through modern way.”

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Academia-industry interface body needed

Jul 31, 2017 0

By Sahana Ghosh

Kolkata–With Indian scientific institutions facing flak for failing to translate and commercialise technology from labs to the market, the government has been urged to set up a separate organisation at the academia-industry interface to enable this, says Atomic Energy Commission (AEC) Chairman Sekhar Basu.

“We have recommended there should be a separate organisation at the interface of academia and industry where we (scientific organisations) can go and offer them (the industry) the technology.

“This organisation can work at the interface between the industries who do the production and the scientists who have the technology. There is a commercial aspect to it and some technology aspect as well. That is what we exactly miss,” Basu told IANS in an interview here on the sidelines of an event.

Sekhar Basu

In his address at the event organised by the Indian Institute of Metals, the head of the country’s atomic energy regulator had noted that Indian science was a “big failure” in this regard.

“Currently scientific institutions are under a lot of criticism because of the fact that our things are not going from lab to land. We are a big failure in this.”

Asked to elaborate, Basu, who is also Secretary, Atomic Energy, told IANS that scientific institutions had come together recently at a meeting to float the idea to the Central government.

“We need to do this in a commercial way. The government is doing something about it; so we will probably know and be able to take it forward,” he said.

On the nuclear technology front, Basu said India is looking forward to the operationalisation of the landmark India-Japan civil nuclear deal, which was signed in November 2016 but only came into force earlier this month.

India is the first non-member of the non-proliferation treaty to have signed such a deal with Japan. The deal clears the way for the US and French nuclear firms, which have alliances with Japanese companies, to engage in nuclear commerce with India. The Japanese technology is needed for the US and French firms to start the construction of nuclear reactors for India.

Basu says there are twin benefits of the deal: Good credit terms as well as nuclear technology.

“Japan may not be supplying reactors straight away, but we expect they may supply components to the reactor suppliers. We can get good credit terms… like the very good credit terms that are coming in for the bullet train… not only technology but also credit terms, so both together. In this (deal) we are looking for equipment and credit,” he said.

Japanese firms have major stakes in companies like America’s Westinghouse and French multinational group Areva which plan to build reactors in India. Japan’s Toshiba is a major owner of Westinghouse.

“Areva is going through financial trouble and they are going through restructuring… similarly Westinghouse is in financial trouble. Once they are ready, we will take it and we have some conditions like it should be cheap (commercially viable) and they should have a reference reactor. These two conditions have to be met,” said Basu.

Asked about the controversy over India’s entry into the Nuclear Suppliers Group, Basu said the resistance (from countries like China which argue India is not an NPT signatory) is “not making much of a difference now” due to the waiver granted to it in 2008 by the premier group to access civil nuclear technology.

However, he said, the membership is crucial for India in the long term.

“The reactors that we are buying… only because we had got the waiver. The waiver was required because we do not have uranium, we have not started mining this uranium. Now we have established that we have a lot of uranium but we have to open up those mines and mine opening takes time and there is public resistance, etc.

“All taken together it is taking time, but once we are able to do a good amount of mining… other things are not so complicated.

“If we become part of the NSG, it will help us gain better recognition and open up to the world,” he said.

“That (resistance to enter NSG) will be there. As of now it is not making much of a difference because we have got the waiver, but long term it should be there. Why should we be isolated? We are a responsible country… we have our own pride,” he added. (IANS)

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