Behind LIC's plan to pull IDBI out of a banking mess

Written by George Mathew | Mumbai | Updated: June 30 2018 7:11:33 am LIC had also invested between 10-14 per cent in most public sector banks equity two years ago just before the pile of bad loans surfaced and bank valuations took a beating on the stock exchanges. (Illustration: C R Sasikumar/File) The Life Insurance Corporation of India (LIC) is set to gain control over the state-owned IDBI Bank with the Insurance Regulatory and Development Authority of India (IRDAI) approving its plan to buy up to 51 per cent stake in the debt-laden bank amid concerns relating to the use of policyholders funds for bailing out a bank. The IRDAI board meet in Hyderabad Friday cleared the proposal as an insurance company cannot hold more than 15 per cent stake in a company under the IRDAI norms. The regulator had earlier allowed LIC which has over Rs 27 lakh crore of assets under management to hold more than 15 per cent stake in several companies under a special dispensation under the Insurance Act. While an official claimed that with this purchase LIC will enter the banking sector and diversify its business some of its key rivals have their own banks others question the move to buy a loss-making bank riddled with huge bad loans. Also Read | Rot in IDBI: Losses up and up NPA mountain Said a former IRDAI official who preferred anonymity: LIC is using policyholders money to buy a loss-making bank. These are cheap funds and the government is using special provisions in the Act to facilitate the takeover with policyholders money. Under Section 21 of the Act the government can give special directions to the Corporation. Under Section 43 LIC has been granted some exemptions which are not available to other insurance companies. In fact the government has used LIC s cash pile on several occasions in the past to bail out sputtering initial public offers (IPOs) of public sector firms. For example when IPOs of Coal India and ONGC evoked a poor response LIC stepped in with bulk purchases. LIC had also invested between 10-14 per cent in most public sector banks equity two years ago just before the pile of bad loans surfaced and bank valuations took a beating on the stock exchanges. Also read | Should an insurer be using policyholders money to buy a controlling stake in a troubled bank? While the Government holds about 80.96 per cent stake in IDBI Bank LIC has 10.8 per cent as on March 31 2018. When asked about the LIC takeover of IDBI Bank a government official had said in Mumbai earlier this week Both IDBI Bank and LIC are independent organisations. We have left all decisions to bank boards and we are not going to micromanage them. While the Government holds about 80.96 per cent stake in IDBI Bank LIC has 10.8 per cent as on March 31 2018. But after the government s capital infusion of Rs 7 881 crore in May its stake went up to 85.96 per cent in IDBI Bank. Unlike in other public sector banks the government can pare its stake below 50 per cent in IDBI Bank as the lender is not governed by the Bank Nationalization Act. The LIC s move to buy IDBI Bank has come at a time when the insurance major was seen as aggressively reducing its stake in 11 public sector banks (PSBs) which are under the RBI s Prompt Corrective Action (PCA) framework. These include Dena Bank Corporation Bank Oriental Bank of Commerce (OBC) and Bank of Maharashtra. For all the latest Business News download Indian Express App Tags: Irdai LIC MUMBAI: The Insurance Regulatory and Development Authority of India (IRDAI) has agreed to the Life Insurance Corporation (LIC) of India s proposal to hike its stake to 51 per cent in IDBI Bank from 10.8 per cent at present. The permission is subject to the corporation bringing down its holding to 15 per cent in future. The IRDAI board which met in Hyderabad on Friday cleared the proposal put forward by the LIC. It will now have to be cleared by the state-owned insurer s board. According to sources the corporation believes that having a bank within the group will help increase its share of business through the bancassurance route. An official said Private life insurers with a bank within the group generate nearly half their business through the bancassurance channel. In the case of LIC it is less than 3 per cent. LIC with assets under management of over Rs 30 lakh crore has been priding itself as the largest financial institution in the country. The insurer had first made a pitch for a banking licence over 16 years ago when SBI got its life insurance licence. Subsequently its housing finance arm LIC HFL had put in an unsuccessful application for a bank licence. The corporation was a founding investor in Axis Bank in the 90s and had also picked up a 28 per cent strategic stake in Corporation Bank. However none of these investments served the desired purpose. HDFC Life ICICI Pru Life and SBI Life are among the private insurers that get a sizeable portion of their business through bancassurance. While LIC will be allowed to take control of the bank the regulator is not changing its rules and requires the insurer to bring down its holding to 15 per cent. The board has not specified the time frame. The Reserve Bank of India s (RBI s) norms too require that promoters of private banks bring down their shareholding to 15 per cent. However the RBI also does not have fixed deadlines. An additional 40.2 per cent stake for IDBI Bank will cost LIC Rs 9 229 crore at the current share price of nearly Rs 55. However the investment by the corporation will be higher as part of it would go into fresh equity. Earlier LIC had picked up a 28 per cent strategic stake in Corporation Bank which is now currently down to 13 per cent. Although this is in the nature of a strategic investment the money will come from policyholders funds. LIC has a paid-up capital of only Rs 100 crore. What seems to have swung the decision in favour of IDBI Bank is that there are no major legal changes required for its acquisition. On the other hand the government cannot bring down its stake below 51 per cent in nationalised banks without amending the Bank Nationalisation Act. As compared to IDBI Bank some other public sector lenders have better distribution reach and a larger customer base. For instance Punjab National Bank (PNB) with 6 900 branches has a market cap of Rs 21 000 crore compared to the Rs 23 000-crore valuation for IDBI Bank with 1 916 branches. Also IDBI has 1.14 crore debit card holders as against 6.23 crore cardholders that PNB has which gives an indication of the savings account base. The rise in petrol and diesel prices has burnt a hole in the pocket of the common citizen. In the month of May due to global oil prices touching 80 a barrel petrol and diesel prices skyrocketed to as high as over Rs 86.24 and Rs 73.79 in select cities. Because of this retail inflation surged to a four-month high of 4.87 per cent in May. Oil marketing companies revise petrol and diesel rates every day on the basis of global crude oil prices. GST roll-out finishes a year on July 1. If petrol and diesel are also brought under the GST regime this year can it help provide relief to consumers?Experts call for bringing the two fuels under GST. Petroleum products have to come under the GST regime for sure very soon. Today there is lot of tax cascading faced by the petroleum sector. This cascading effect will come down once these products are included within the GST regime. The government has an endeavour to reduce the price on the essential petroleum products and there is high hope that the benefit of reduced tax rates would be passed on to the consumers said Abhishek A Rastogi Partner Khaitan & Co.(Also Read: One Year Of GST: How The Major Tax Reform Has Impacted You)Currently both central and state governments levy taxes on petrol and diesel i.e. excise duty and VAT or value added tax. The excise duty on petrol is approximately 19.48 per litre and 15.33 per litre and VAT is charged in different states at rates ranging from 15 per cent to 40 per cent on petrol and at 10 per cent to 28.5 per cent on diesel. Thus petrol and diesel invite more than 50 per cent tax say experts. That is why consumers have to pay more taxes on petrol and diesel. If GST is imposed on petrol and diesel it will lead to a fall in the prices of petrol and diesel. Even if these items are taxed at a higher rate of 28 per cent and cess of 15 per cent it will lead to reduction in prices said Vishal Raheja DGM GST Taxmann.(Also Read: 6.86 Crore Income Tax Returns Filed In Fiscal Year 2018 Says Arun Jaitley)Petrol and diesel help in transportation of goods. As of now businesses using petrol and diesel as inputs are unable to claim input tax credit on the taxes paid on purchase of petrol and diesel. Input tax credit on GST helps manufacturers save on tax that they pay on their output because they have already paid the same on their purchases. So while paying tax on output they can claim credit for the tax they paid on inputs. Input tax credit helps increase margins for small businesses.If both fuels are brought under GST it will automatically lead to a reduction in taxes that you pay on them and thus lead to a fall in their prices.(Also Read: What India Inc Thinks About GST After One Year Of New Regime) If petrol/diesel is brought within the ambit of GST the industry will be able to claim the said credit and reduce their manufacturing cost. Currently petrol and diesel are major revenue generators for state and central governments. The common man will immensely benefit from the reduced price of petrol/diesel said Parag Mehta Partner N.A. Shah Associates LLP. In December last year former finance minister Arun Jaitley had told the Rajya Sabha that the Central government was in favour of bringing petroleum products under the ambit of GST after building a consensus with states. Oil Minister Dharmendra Pradhan has also backed the call to bring the two fuels under GST.However Niti Aayog vice chairman Rajiv Kumar said that bringing petroleum products under GST is impractical. It (oil) can t be brought under GST. That s because the total state and central taxes on petrol put together are around 90 per cent right now he had said according to a report by news agency Indo-Asian News Service. Touted as the biggest economic reform since independence the Goods and Services Tax (GST) completes one year of its implementation on July 1. In a major initiative to ease the tax system of the country the government launched GST on July 1 2017. Under the GST regime a regulated tax system was introduced in the country. With the introduction of this one nation one tax regime the country s business landscape saw a widespread makeover. The roll-out of GST was accompanied with frequent changes in rules which was welcomed by few and deemed complex by others. The launch of GST stirred a lot of hubbub in the corporate sector. India Inc gave a mixed response to this indirect tax system.On completion of one year here s what India Inc says about the hits and misses of GST:Ankur Dhawan Chief Investment Officer PropTiger.com GST is a revolutionary tax reform rolled out by the government of India. One of the key benefits for the real estate sector under the GST regime is input tax credit which developers can now avail for taxes paid on construction material and services. This benefit was not available in earlier service tax regime. GST has streamlined tax administration of real estate sector. However the initial few months of the implementation were full of confusion for developers as well as customers. On one side developers were not sure how much benefit they can get out of input tax credit and new raw material prices while on the other end customers were protesting a significant increase in taxation. While by the end of 2017 things became clearer most of the developers started passing 4 -6 per cent discount to customers. In the long-run the GST reform is expected to streamline the sector more that will further strengthen consumer sentiments rekindling hopes of a revival for the sector. Aditya Kedia Managing Director Transcon Developers GST still aims at making the country a unified market in order to reduce the burden caused by interstate transfers and facilitate solicitation of materials at the lowest possible cost for the real estate sector. With a single non-complex flat tax rate and the elimination of state-based taxes levied on procurement such as custom duty taxes and octroi there has been a considerable rise in the available credit. The overlapping of the two primary taxes like service and VAT (Value Added Tax) has led to varied practices being followed in the sector. Under the GST regime these issues have been put to rest bringing uniformity in the realty segment. The main aim of GST was to replace multiple indirect taxes with one single tax. It has streamlined tax compliance and diminished the room for double taxation. This measure has surely added a significant boost to the economy. This welcome reform has also safeguarded a smooth flow of credit in the economy. It is further expected to condense the construction cost in the hands of the developer thus aiding in upholding the existing pricing level in the real estate zone. (Also Read: How Has GST Impacted You?)Rushank Shah Director Sales Hubtown Limited GST to an extent has streamlined the real estate sector and brought increased transparency in the field. However GST should be restructured a bit so that it can be also helpful at places where land costs are higher. That may benefit the buyers. KK Maheshwari Officiating Registrar JK Lakshmipat University The major point of argument with regards to GST in higher education is the lack of exemptions of auxiliary education services from the ambit of GST. Even though education as a service charges no GST at all which is a relief for students as tuition and academic fees are not considered under GST students availing other services including hostels food laundry etc. which are outsourced by higher education institutions are considered taxable under GST adding to indirect cost increase to students. These outsourced services are considered at par with education services for secondary education institutions in pre and post GST era and are therefore exempted from GST. I believe that higher education institutions should be extended the same exemptions as the government wants more private universities to be set up requiring crores to be invested in academic infrastructure. These are auxiliary education services which are part and parcel of education only. The discrimination between school education and higher education should be removed. Further no set-off is available to the university for this. Chet Jain CEO and Founder Crowdera an online crowdfunding platform GST as a single taxation system is important. The Indian government is investing enough money to improve the infrastructure and support the financial ecosystem of the country. However the categorisation of services which fall under the GST bracket have yet not been well-defined. There is definitely scope for clarification in that area. Also there should be something to show that GST has evolved for the past year. There should be incentives in place for foreign companies to come to India build infrastructure and expand their operations here. However I don t see any incentives. But because of GST such companies are avoiding Indian markets and this is something which needs attention. (Also Read: One Year of GST: What Finance Minister Arun Jaitley Has To Say)Harsh Dhand Founder and CEO Rentsher an online product rental marketplace GST has been quite beneficial for us as over 80 per cent of vendors have adopted the same and are able to provide input credit. Hence we are paying tax only on net revenues a dream for a startup. GST for essential electronics like laptops projectors TVs especially on rent can still be reduced to 12-15 per cent. I believe that rentals should be segregated from procurement price of GST if the government is serious about promoting this sector and reducing imports .Vinay Singhal CEO WittyFeed an online viral content company With the concept of one nation one market one tax Indian government introduced GST on July 1 2018. Since then GST has played a pivotal role in removing the cascading effect of taxes on goods and services. The implementation of GST proved to be a game-changer for the economy and logistics. With its advent every state dismantled the border check-posts which saved much time in transportation. In the digitalisation process the online facilities for filing the monthly returns payment of tax and majorly tax-refund application became easy and fast. Bijender Goel Managing Director Terra Techcom Pvt Ltd GST is good for the country but it s implementation should be made more simple. Filing of four returns quarterly is a burden for a person having turnover of less than Rs 1.5 crore. Petrol and diesel should also be brought under GST to give benefit to the common people. Jigar Doshi Partner - Indirect Taxes SKP Business Consulting LLP The impact of GST India s biggest indirect tax reform has been nothing short of transformational. In the past year there have been problems in the implementation as expected...It has been a challenge to keep pace with the rapid evolution of GST and frequent changes introduced. This has been compounded with export refunds being stuck problems being faced in adapting to e-way bills and departmental officers being under-prepared to resolve issues at the ground level. Despite this the benefits far outweigh the negatives. India is now free of multiple and complex indirect taxes and as GST stabilizes going forward it will undoubtedly encourage investments and remove blockages further boosting the GDP (gross domestic product). New Delhi: Highlights It is a fantastic fabulous and an outstanding film said Alia Bhatt I am really big fan of Rajkumar Hirani Alia added Alia Bhatt is rumoured to be dating Ranbir KapoorRanbir Kapoor s rumoured beau Alia Bhatt can t stop praising her Brahmastra co-star after watching Sanju. The actress who was spotted attending the screening of the film with Ranbir on Thursday said that the film is outstanding news agency IANS reported. I really liked it. It is a fantastic fabulous and an outstanding film. I think in my top 10 best film list Sanju is high up there. Ranbir is outstanding in it IANS quoted Alia Bhatt saying. Alia Bhatt s comment come at a time when the duo have been trending on and off for their reported romance. Sanju is the biopic based on the life of Sanjay Dutt which has been directed by Rajkumar Hirani and Ranbir Kapoor plays the protagonist in the film.Alia also couldn t stop saying all things nice about the Sanju director as well and said she is a huge fan of Mr Hirani. I am really big fan of Rajkumar Hirani so whenever his films come out I cannot wait to see it and every time he manages to hit out of the park. It is one of the best films that we have right now in the past couple of years Alia told IANS.The 25-year-old actress seemed to have been impressed by the supporting cast as well. Vicky Kaushal who was Alia s co-star from her last film Raazi is part of Sanju too. Speaking about her co-star and the cast of Sanju Alia said: Vicky Kaushal and Paresh ji (Rawal) also did a fantastic job. Everyone including Anushka (Sharma) and Sonam (Kapoor) did really good job. It s a full package. Sanju opened at the theatres on Friday and has been well received by the audience - trade analyst Ramesh Bala tweeted the early estimates to be at Rs 32 crores as the first day collections of the movie. Critics and fans have showered Rajkumar Hirani s film with outstanding reviews so far. In his review of NDTV Saibal Chatterjee writes: Director and co-writer Rajkumar Hirani takes liberties with true events for the purpose of bolstering the film s emotional appeal but he does not let Sanju turn into a mere cinematic apologia for a temperamental movie star s many indiscretions. Together with screenwriter Abhijat Joshi he crafts an intelligent script that highlights the upheavals unleashed in Dutt s life by drugs alcohol girls guns and goons. The film is marked by both empathy and surprising bluntness. .Alia Bhatt and Ranbir Kapoor s dating rumours featured in headlines after the duo made a blockbuster entry at Sonam Kapoor and Anand Ahuja s wedding reception last month. Ranbir Kapoor had (sort of) revealed about their romance in his interview to GQ June 2018 issue. It s really new right now and I don t want to over speak. It needs time to breathe and it needs space Ranbir said during the interview.Alia Bhatt also gets along well with Ranbir Kapoor s family. The actress joined Ranbir and Sanjay Dutt for a get-together at Rishi and Neetu Kapoor s home recently. Apart from script reading sessions Alia is also often spotted with Ranbir in and around Mumbai. Neetu Kapoor and Alia Bhatt follow each other closely on Instagram and often comment on each other s posts.Alia Bhatt and Ranbir Kapoor are currently shooting for Ayan Mukerji-directed Brahmastra which also stars Amitabh Bachchan. Brahmastra is a fantasy trilogy which is expected to release on August next year.(With Inputs from IANS) FRANKFURT/DUESSELDORF: Thyssenkrupp s supervisory board on Friday gave the green light for a steel joint venture with Tata Steel paving the way for the European steel sector s biggest shake-up in more than a decade. The largest deal in Europe s steel industry since the takeover of Arcelor by Mittal in 2006 the 50-50 joint venture - to be named Thyssenkrupp Tata Steel - will have about 48 000 workers and about 15 billion euros ( 17.5 billion) in sales. Based in the Netherlands it will be the continent s No 2 steelmaker after ArcelorMittal and forms the core of Thyssenkrupp CEO Heinrich Hiesinger s plan to turn the steel-to-submarines conglomerate into a technology company. Thyssenkrupp workers back JV with Tata SteelThyssenkrupp s powerful labour representatives on Thursday signalled their support for a planned joint venture with Tata Steel effectively guaranteeing that the landmark deal will be approved by the group s supervisory board. The joint venture with Tata Steel is an important milestone for the transformation of Thyssenkrupp to an industrials and service group and will lead to a significant improvement of the financial figures of Thyssenkrupp effective with closing the group said in a statement. The definite agreement would be signed shortly it added. The deal comes as European steel makers face stiff tariffs of 25 per cent on their exports to the United States their biggest market fuelling fears the local market might be forced to absorb more volume as a result. DETAILS Since tariffs were announced in late May shares in European steelmakers ArcelorMittal Thyssenkrupp Salzgitter and Voestalpine have lost 8 to 17 per cent. Hiesinger had faced pressure from activist shareholders Cevian and Elliott to extract more commitments from Tata Steel whose European business performed worse than Thyssen s since the deal was first announced in September thus creating a valuation gap. Thyssenkrupp said that in case of an initial public offering of the joint venture which is widely expected by investors and has been flagged by both companies it would get a bigger share of the proceeds reflecting an economic ratio of 55-45. The German group also said it now expects annual synergies of 400 million to 500 million euros from the transaction having previously communicated a maximum of 600 million. Markus Grolms vice chairman of Thyssenkrupp s supervisory board also said that Tata Steel would continue to remain liable for environmental risks in Britain where its Port Talbot factory the least profitable of the joint venture is based. He also said that Tata Steel s Dutch unit would be part of the joint venture s cash-pooling mechanism which had been a key demand for German workers concerned that Tata would give its own workers better conditions in the new company. Yes we do want to protect people. But we also want a company with better chances and less risks Grolms said. ALSO READ Deal or no deal? Thyssenkrupp s CEO faces crunch Tata Steel talks US steel tariffs hit European firms; top firms say will have limited impact Steel secretary says new policy saved Rs 50 bn forex spiked crude capacity JSW Steel posts record crude steel output at 4.11 MT in Sept-Dec period span.p-content div id = div-gpt line-height:0;font-size:0 Germany s Thyssenkrupp and India s Tata Steel signed a final agreement on Saturday to establish a long-expected steel joint venture the European steel industry s biggest shake-up in more than a decade. The final agreement comes after months of negotiations since an initial agreement was announced in September. Both companies hope it will help them respond to challenges in the volatile steel industry including overcapacity. The largest deal in Europe s steel industry since the takeover of Arcelor by Mittal in 2006 the 50-50 joint venture - to be named Thyssenkrupp Tata Steel - will have about 48 000 workers and about 17 billion euros ( 19.9 billion) in sales. Based in the Netherlands it will be the continent s second-largest steelmaker after ArcelorMittal. It forms the core of Thyssenkrupp CEO Heinrich Hiesinger s plan to turn his steel-to-submarines conglomerate into a technology company. The joint venture not only addresses the challenges of the European steel industry Hiesinger said. It is the only solution to create significant additional value of around 5 billion euros for both Thyssenkrupp and Tata Steel due to joint synergies which cannot be realized in a stand-alone scenario. Tata Steel Chairman Natarajan Chandrasekaran in a separate statement said the joint venture will create a strong pan- European steel company that is structurally robust and competitive . The deal comes as European steel makers face tariffs of 25 per cent on their exports to the United States their biggest market. That might force local market to absorb more volume as a result. Since the tariffs were announced in late May shares in European steelmakers ArcelorMittal Thyssenkrupp Salzgitter and Voestalpine have lost 8 to 17 per cent. FRESH TERMS Hiesinger had faced pressure from activist shareholders Cevian and Elliott to extract more commitments from Tata Steel whose European business has performed worse than Thyssen s since the agreement was first announced creating a valuation gap. Thyssenkrupp said the deal included proper compensation for the gap which it said was in the mid-triple-digit million- euro range: if the joint venture makes a widely expected initial public offering it would get a bigger share of the proceeds. Thyssenkrupp said it also secured the right to decide when a listing might take place adding the joint venture was aiming for a dividend payout in the low-to-mid-triple-digit million- euro range. The German group also said it now expects annual synergies of 400 million to 500 million euros from the transaction. It said additional synergies were possible through managing capital expenditure and optimising working capital. Tata Steel will remain liable for environmental risks in Britain where its Port Talbot factory the least profitable of the joint venture is based said Markus Grolms vice chairman of Thyssenkrupp s supervisory board. He also said that Tata Steel s Dutch unit would be part of the joint venture s cash-pooling mechanism. That had been a key demand for German workers concerned that Tata would give its own workers better conditions in the new company. Yes we do want to protect people. But we also want a company with better chances and less risks Grolms said. Thyssenkrupp s management will present a refined strategy to its supervisory board in the second week of July. Sources said that may include a sale of its Materials Services unit and further cost cuts. Bharatiya Janata Party (BJP) president Amit Shah was in West Bengal for a two-day visit on Thursday and Friday during which he delivered the Bankim Chandra Chattopadhyay Memorial Lecture organised by the Syama Prasad Mookerjee Research Foundation. Apart from that engagement it s unclear what this visit was intended to achieve. Shah s visit it appears is an early foray to set the stage for the 2019 Lok Sabha election campaign. But from the statements issued by various party leaders it does not appear that political realities are the framework for whatever in camera discussions are being held between Shah and state functionaries. BJP president Amit Shah. Image courtesy @AmitShah Even before Shah fetched up in Kolkata some reports suggested that the party s national president had set the BJP s West Bengal unit a non-negotiable target of winning 22 out of 42 seats next year. Given that the party had won just two seats in the 2014 Lok Sabha elections and two in the 2016 Legislative Assembly elections this target hardly appears to be a serious point of departure. If Shah has set the bar high the leadership in Bengal is exuding even greater optimism. One report says that state leaders believe 26 seats can be won. It would be interesting to see how that could happen. One leader has been quoted as saying that nine seats can be corralled in north Bengal while districts like Bankura and Purulia will yield more seats. It isn t clear what districts like Bankura and Purulia means but assuming it means districts or constituencies with a sizeable proportion of tribal people the numbers just don t add up to 26 or even 22. The plain fact is that of the two constituencies the BJP bagged in 2014 Darjeeling has already gone out of its hands. It was a gift from Bimal Gurung then the undisputed head of the Gorkha Jana Mukti Morcha (GJMM). Now Gurung is out and the new GJMM leadership has made its peace with Chief Minister Mamata Banerjee and her party and government so the BJP would be well advised not to hold its breath in the hills. Union minister of state Babul Supriyo won his seat from Burdwan s Asansol region. In the recently concluded panchayat elections the ruling party hammered the BJP in that area. It would be a stretch to describe that seat as safe for Supriyo -- at present all indications are that he will lose. The only areas where the BJP performed creditably in the panchayat elections which despite everything is a reliable barometer for next year s election results were those with a substantial tribal population. In terms of constituencies these are Alipurduar Bankura Jalpaiguri Jhargram and Purulia. Of these the BJP didn t set pulses racing in Bankura and Jalpaiguri which effectively means that the BJP s challenge is confined to three constituencies Alipurduar Jhargram and Purulia. That doesn t mean however that these three seats are in the saffron bag as yet. What it does mean is that the maximum the BJP can realistically hope to do is win three Lok Sabha seats from Bengal. Not many will be surprised if that number ends up as a zero. Corroborative evidence too suggests a Trinamool Congress sweep. The Bengal unit of the BJP is drastically short of credible heavyweight leaders with a broad public connect. And that holds good whether you are talking about the peasantry the urban poor or the urban middle class. BJP leaders themselves acknowledge that the party is seen as a vehicle for non-Bengalis which doesn t however mean that a majority of the non-Bengalis vote for it. Then there is an organisational problem at the root of which is a numbers crunch. The BJP just does not have the manpower to penetrate the farthest corners of the state. Shah is reported to have been less than impressed by the claim made by state leaders that committees had been formed for 70 percent of the booths during the panchayat elections. As far as he is concerned it s the outcome that matters evidently. And the panchayat results were not indicative of the BJP upstaging the Trinamool Congress. In the absence of what we may call deliverables the BJP is clutching at straws. Thus Shah s exhortations to the Bengal leadership to get on to all social media platforms. As of now this aspect of campaigning is practically non-existent quite apart from the big question over the effectiveness of a campaign based on social media initiatives in rural Bengal. Shah seems therefore to have taken recourse to electoral non sequiturs. Of this order were his comments in Kolkata about Chattopadhyay s Vande Mataram . The BJP president seems to believe that the Congress decision to designate a truncated version as the national song was a grievous mistake; accepting it in full would have destroyed anti-national sentiments and prevented the partition of India. That s putting a pretty heavy counter-factual load on a song any song. And in the bargain to expect it to bring in 22 seats seems categorically to belong in the realms of the poetically surreal.