NEW DELHI // The chief minister of Andhra Pradesh resigned yesterday after the lower house of parliament passed a bill that will split the state in two.
Kiran Kumar Reddy said he was stepping down “with a heavy heart” to protest against the division of Andhra Pradesh into Telangana and Seemandhra.
He also quit his party, the Congress, which aims to get the bill ratified by parliament’s upper house by tomorrow.
Amid vociferous opposition and an unprecedented cut of parliament’s live TV feed, the ruling Congress party on Tuesday cobbled together the votes in the Lok Sabha, the lower house, to pass the bill.
Yesterday, fights broke out in the Rajya Sabha, parliament’s upper house, which adjourned without voting on the bill.
Should the Rajya Sabha pass the bill intact, it will go to India’s president for his signature. However, if amendments are made, the Lok Sabha must approve them before sending the bill to the president.
Among other amendments, the opposition Bharatiya Janata Party (BJP) is asking for a common governor to be custodian of both states for 10 years.
Once the legislation is signed into law, Telangana will become India’s 29th state. The Congress has until tomorrow, the last parliament session ahead of May elections, to pass the bill.
In Telangana, a region that has demanded statehood for more than 40 years, celebrations began on Tuesday. University students held victory rallies and local pro-bifurcation political party workers gathered jubilantly in their offices.
Telangana’s political parties have claimed that their region lacks representation and is neglected by the Andhra Pradesh legislature.
But in Seemandhra, the coastal rump of Andhra Pradesh, protests and demonstrations broke out against the bill. Seemandhra and many of its local political parties are opposed to the formation of Telangana.
The fate of Hyderabad, Andhra Pradesh’s capital and an economic centre, is contentious. The legislation in parliament puts Hyderabad geographically within Telangana. The bill stipulates that Hyderabad will serve as a shared capital for a decade before reverting to Telangana.
Protests are likely to continue. Seemandhra’s political parties have announced plans to shut public services in the region.
Buses, schools and some shops were forced to close yesterday.
“Paramilitary and state police forces have been deployed at different locations, including public places and central government offices, as a precautionary measure,” said R Umapathi, a senior police officer in Visakhapatnam, told the Press Trust of India, a town in Seemandhra.
There has been widespread criticism over how the bill was passed as there was little debate in the halls of the Lok Sabha.
Mr Reddy called it undemocratic and disgraceful.
“The majority of Andhra Pradesh was against [the formation of] Telangana,” he said.
Kamal Nath, the minister for parliamentary affairs, said yesterday that the bill “was passed absolutely according to rules”.
The creation of Telangana may also reignite other demands for statehood around the country – in the region of Vidarbha in Maharashtra, for example, or in Gorkhaland in east India.
K Nageshwar, a political analyst in Hyderabad, called the Congress strategy “quite diabolical”.
“It’s clear they’ve reserved this decision until the very end of the government’s tenure,” he said. “They want to capitalise on all this emotion when Telangana goes to vote.”
ssubramanian@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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