The Tribune, Chandigarh, India

US-Pak secret deal
A dangerous precedent

DRONE attacks by the US on Pakistan’s tribal areas are likely to be discussed intensely during the election campaigns in Pakistan in the days to come. The latest cause for this is the Western media highlighting the fact that the killings by CIA-operated unmanned aerial vehicles were possible because of a secret deal between the US and Pakistan. According to New York Times, the deal had it that the CIA drones would not touch the areas where Pakistani nuclear plants are located and the sites in occupied Kashmir where training camps were run for terrorists for targeting India. Since the secret deal was entered into in 2004, when Gen Pervez Musharraf was the President of Pakistan, the former army chief, trying his luck in the elections, will have all the explaining to do in this regard.

The serious questions that arise are: Why did the US keep quiet when it knew that PoK had terrorist training camps as secretly admitted by the Pakistani authorities? The deal exposes the hollowness of the US-led drive against global terrorism which led to massive displacement in Afghanistan and Pakistan’s tribal areas. It clearly establishes that Washington DC is not bothered about the activities of the terrorist groups whose targets do not include the US. This also shows that the US looks at the problem of terrorism from a narrow angle of safeguarding only American interests.

The US-Pakistan secret agreement on drone attacks needs to be debated thoroughly in India too in the interest of peace and stability in South Asia. The US must be told to bring to light all the details in this regard so that this kind of a dangerous deal is never clinched again. The US can say that the subject was of a very sensitive nature and, therefore, it had to be a secret arrangement. But that will not help Washington DC save its skin. So far as the then Pakistan government is concerned, it is bound to be condemned as being anti-people. The Pakistani masses’ faith in their rulers will get further shaken with the revelations about the shameful deal.

Callous indifference
Punish the guilty at the hospital

A woman rushes to a hospital. She is in labour. The hospital refuses to perform her delivery. She delivers a child outside the very institution she had come to for help during the medical emergency. What is shocking about the incident that took place in Fatehabad, Haryana, recently is the manner in which the conduct of the doctors is being sought to be justified by resorting to bureaucratic arguments. This approach shows a callous indifference towards the patient. They also shed light on the malice that afflicts the hospital system and various other institutions.

No matter what, a hospital with doctors, nurses, equipment and facilities is a better place to deliver a child than an open parking area outside, which is where this woman delivered her child. Surely, the doctors could have known the state of the woman who had gone to them for help. They should have realised that she was in no state to go anywhere else, and provided her with the best care they could, even if they did not have any specialists.

While this case has hit the spotlight, most women who suffer and even die during pregnancy, delivery or from post-partum complications do not get any attention. Indeed, India has the highest number of maternal deaths in the world, even as there has been some improvement in recent years. It is estimated that as many as 80,000 women die each year from preventable causes like haemorrhage, eclampsia, sepsis and anaemia. In such a scenario, the role of hospitals and paramedical healthgivers, including midwives, is crucial. The callous indifference displayed in Fatehabad is yet another reminder of how perilous the state of the pregnant Indian woman is. The state government should take immediate action to find out how a patient in such an advanced state of pregnancy was not admitted to the hospital and take disciplinary action against the guilty. It should ensure that in future all hospitals must provide proper care for patients, especially those who are facing medical emergencies.

Thought for the Day

Follow your bliss and the universe will open doors where there were only walls.

— Joseph Campbell

ARTICLE

Don’t depend on ‘hot money’
Time to focus on exports
by Jayshree Sengupta

FOR some time the Prime Minister and his economic advisors have shown much concern about the widening of the current account deficit (CAD). It reached an all-time high of 6.7 per cent of the GDP in the third quarter of this fiscal year. The CAD is the sum of the trade deficit (exports minus imports) and the net invisibles such as accruals from software exports.

The rise in the current account deficit has been due to a bigger trade deficit of $59.6 billion in the third quarter (ending December 2012). This is because exports rose only by .5 per cent whereas imports went up by 9.4 per cent during this period. Higher imports signify that the appetite for gold remains unabated though it has declined from the previous quarter, and oil imports remain high. The deterioration in the trade deficit has also been due to the fall in ‘invisibles’ led by stagnation in the income from software exports and lower private remittances.

No doubt, the slack demand in the western markets is the reason behind slower software exports. Though the situation seems alarming, it is being financed by ‘hot money’ or short term FIIs coming to India. But even with so much ‘hot money’ coming in, the danger to the rupee persists because, on the whole, foreign exchange earnings are much less than the outflows. A weaker rupee could mean more demand for gold as a hedge against further depreciation.

Thus, while foreign direct investment has slowed down considerably, equity investments by FIIs has gone up substantially. The corporate sector has also been borrowing much more from foreign sources through the ECB route which has been relaxed. Short-term debt as a result has risen to 24 per cent of the total external debt in December 2012 from 23.3 per cent last year. The total external debt was at $376.3 billion at the end of December compared with $345.5 billion at the end of March last year. Higher external debt means higher interest payments -- which could lead to worsening of the current account deficit further in the fourth quarter.

Luckily, the government has not dipped into its foreign exchange reserves so far (at $ 292.3 billion) and has financed the CAD with short-term capital inflows which rose to $8.6 billion from $1.8 billion a year ago. But in case there is a change in the world scene and there is a drought of capital worldwide (as predicted by some investment rating agencies), then India is going to face a very challenging and difficult situation.

As is well known, it is not safe to rely on ‘hot money’ to finance the CAD because of its volatility and its capacity to withdraw from the host country at short notice. The best alternative would be to spur export growth but it seems to be a difficult task right now with the developed countries’ markets facing a recession and the EU once again in turmoil. Besides, there has to be an improvement in our export competitiveness by reducing transaction costs. Indian exports have not picked up despite the significant depreciation of the rupee in the last one year.

To woo hot money with a lower GDP forecast would also prove to be difficult for India because there are other destinations in the world which promise higher returns on capital and the economies are growing relatively faster. Though the last Union Budget was successful in averting a downgrade by the international investment rating agencies, there has not been a big rise in FDI. The government has also weathered controversy and successfully opened up multi-brand retail but so far not much FDI in retail has come in. Thus, dependence on ‘hot money’ and external commercial borrowings (ECBs) has increased making the situation unsustainable. Any sudden withdrawal of FIIs can bring about a currency crisis.

The way out is to improve investment sentiments and not give an impression of political instability. Most foreign investors seem to be waiting and watching till the next general elections. Domestic demand is another problem and from all reports, it seems to be flagging. Investors are always looking for a flourishing and expanding market and low inflation. In India, due to Herculean efforts by the Reserve Bank of India, WPI has been brought down but food inflation and consumer price inflation for industrial workers seem to remain elevated. Food inflation is at 14.98 per cent and CPI at 12 per cent. As a result, most middle class people are cutting down on their consumption expenditure and the lower middle classes (industrial and agricultural workers) are reducing even essential expenditure on health and education.

In the one year that remains before the elections, important economic reforms should be introduced; especially the Land Acquisition Bill needs to be passed. There is much instability and uncertainty in the crucial industrial and mining belt due to problems of land acquisition. Maoist insurgency has to be controlled to improve the investment climate. To make India more attractive for FDI, there has to be political stability and economic reforms in place and an improvement in India’s ranking of countries according to the index of ‘ease of doing business’ in the world (India is at the 132nd rank out of 185 countries).

People are in a despondent mood also because they are seeing a rise in corruption, continuation of high inflation and rising inequality. The governance deficit is serious and omnipresent and people want a strong government which will bring back efficient delivery, law and order and eradicate corruption. They would like to see people with black money punished and brought to book. There is also need for much better infrastructure, sanitation, improvement in the quality of public education and health care and a better housing and more action on the environmental front.

While the domestic economic situation needs various corrective steps to bring back an increase in private investment, which has been the main cause for flagging industrial growth, the external situation needs to be addressed with right export-boosting policies. Raising export growth seems to be the only alternative in the face of a situation when India’s imports will continue to remain high because of energy requirements and the rising price of oil and gold can only lose its sheen if the rupee is stable and inflation lower. Otherwise, dependence on ‘hot money’ will continue and to make India an attractive destination, expenditure cuts will have to be undertaken by the government to reduce the fiscal deficit further. Will it be good for development to have such a volatile situation when the dependence on short-term external finance becomes deeper and stronger?

MIDDLE

St Francis of Chandigarh
by Amrita Nakai

I met St Francis the other day, or at least his representative. A humble man you would not give a second glance to in a street.

I was driving to work, contemplating what the day held for me, when from the corner of my eye I saw this tiny black speck running down the road, ignoring all dangers zipping past! I was aghast at the perilous journey this little puppy had undertaken, as I saw him nearly get run over. But he sped on, chasing someone, or something. He must have been five or six weeks old.

Stopping my car, I looked at the watch, realised I was running late, but then decided the world could wait, I couldn’t ignore this tiny black ball of life!

I noticed another car had stopped ahead of me, and the gentleman inside was intently staring in his rear-view mirror at the road behind. At the time I wasn't sure if it was the puppy that had drawn his attention. I walked against the traffic towards the puppy, and saw that an old milkman with cans strapped to his bicycle had also stopped. By now the little puppy too had flopped down in a heap on the road, exhausted from the exertion. Coming closer, I noticed how tiny yet endearing this little creature was — and what a will to live against all odds he possessed!

I asked the milkman if the puppy belonged to him, and he vigorously shook his head in denial. Then why he was following it, I asked. As if in response, he asked back, “Why don’t you adopt him?” And I found myself thinking I might just have to do that, and risk having to deal with a third dog, but it would be a beautiful addition to my menagerie!

The gentleman from the car, in the meantime, caught up with us, and said to the milkman, “You must have given him milk, that’s why he is following you.” The wrinkled old man sheepishly nodded his head in admission, and turned to the man from the car with the same question as he had asked me, “Why don’t you adopt him?”

The car guy turned to me and exclaimed, “My God, Madam, did you see the way he was running? Did you see his tenacity?” He bent down to pick up the little ball of fur and said: “Of course, I will take him, I have plenty of space for him.” By now tears were running unhindered down my face. He put the puppy gently on the seat next to him in his small unassuming car.

The puppy didn’t protest, as I stood by watching, crying unabashedly! I was compelled to tell the man what an amazing human being he was, and that I wished there were more people like him in this world.

He thanked me for the compliment, and sped off, the life of the tenacious little mite altered forever in a second! I stood there staring after them, thanking God and Saint Francis of Assisi for appearing in a street of Chandigarh.

OPED — GOVERNANCE

Losing the race with slow decisions
The existing system of laws and governance locks up our decisiveness in checks and balances created by the British. It hampers efforts of young Indians running in the fast lane to achieve their goals with an intensity never seen before
Surinder Singla

Long wait for justice: Lawyers often take unnecessary adjournments and judges cave in to such requests. Tribune photo: Manoj Mahajan

THE Union Cabinet has approved a Bill to promote transparency and accountability in the government delivery system so that people get entitled to receive, say passports, birth/death certificates, ration cards and driving licences, within a stipulated period. This realisation has dawned upon the political establishment after decades of people's suffering at the hands of the government. The BJP, in its immediate reaction, has expressed the fear that it will take away powers of the states. One would have thought if political parties are keenly interested in providing government services to citizens quickly and without any hassle, they would have welcomed a long-awaited initiative even if states surrender their power for the benefit of the people.

Delayed decision-making

"Procrastination -- a thief of time" is quite an appropriate quote to describe our government machinery; barring some exceptions of course. One such notable exception that comes with a whiff of fresh air happens to be the recent announcement by India's Environment Minister that she is fast-tracking decisions on the clearance of infrastructure projects. Not within the charter of her Ministry, she is, in fact, going beyond the call of her duty and obliging us by taking an extra load of work and trying her bit to turn around the culture of "sleeping over or shirking away".

While delaying decision-making has become a norm of our public life, fast-tracking of such decisions in the present scenario did come about after a long wrangling at one of the Cabinet committees. An idea of the Cabinet Committee on Investment was challenged on the basis that it was usurping away the power of the Ministry when the responsibility to respond to Parliament is the rostrum duty of the Minister concerned.

On the other hand, it also meant that the Cabinet potentially had no jurisdiction on the core functioning of the Ministry and the entire turf of the Ministry cannot be interfered with. Letters to the Prime Minister were addressed, including one by the former Minister for Environment, and the overall result was a delay in the formation of the Cabinet committee.

Conceptually, the speed and alacrity with which a decision needs to be taken in public interest is paramount to its effectiveness. If that be so, is it not a fact that every decision has to be as quick as possible to be effective in the circumstances? Do we lack the will to take prompt decisions? Is it true that we Indians lack the vital instinct to take quick decisions? In other words, do we lack a racing genre of some kind or is it something else?

Policy paralysis

The crisis behind the formation of the Cabinet committee speaks volumes of policy paralysis that Indian people have been clamouring about and rightly so. The acute state of inertia exists with almost every decision-maker and at every level. Of course, there may be notable exceptions here and there. However, it has spread like venom in our public systems and processes.

Let me illustrate a few cases that pertain to institutions and projects of paramount importance and their plight as a result of poor decisions at various levels. Let me start with a case of POSCO (a multinational company in steel manufacturing), a celebratory FDI project that was approved nearly a decade ago, but is still struggling to have a piece of land for setting up its plant.

At different points of time, the State Government took initiative to acquire land, however, only to surrender to obstructionists without taking a final call on it. The project seems to be taking off now. However, if one would calculate its multiplier effect had the project been implemented in time, the opportunity cost has been horrendously staggering. The initiation of the project, say six-seven years ago, would have given direct and indirect jobs of thousands and added not only revenue to the State and Central Governments but also provided raw material to a plethora of industries. It would have halted imports and could have even added a percentage point to the GDP.

It may not be out of context to suggest that this unit could potentially have provided a new railway track for having high speed trains as an extension to this project; another dream that we Indians could have aspired for. It is only natural that every achievement or a new milestone does trigger a newer and higher dream to aim for. That's what we call a cycle of achievements. However with such procrastination, such a chain gets broken and the momentum gets lost. On the basis of the project implementation agencies' report last year, delays in core projects' completion in various sectors led to cost overruns of Rs 52,445 crore.

Foreign Universities Bill

Let us look at another institution, our esteemed Parliament. There are numerous Bills that remain pending for clearance for decades and more. The Foreign Universities Bill, which was introduced way back in 1995 and reintroduced in 2010, is still languishing somewhere in its corridors. In every economy, be it the developed or developing, when the population of those countries enjoys good education resources, particularly university graduates, it plays a huge role in the growth of the economy.

Let's compare educational resources at the graduate level between India and China. China is far ahead of us as India is sending only 11 per cent of school pass-outs to universities whereas China is sending 23 per cent of its population of its school-leavers. Opposing foreign universities in India could have, at least, provoked policy-makers to go in for Indian universities to step up the momentum of giving university education. But it did not happen until recently the Government of India took a bold and imaginative decision to open Central universities and IITs in every State. But given the quality of education in some of the best universities in the world, India has denied itself its access as it failed to pass the Foreign Universities Bill. Aspiring Indians who are looking to compete internationally and emerge economically powerful find themselves pessimistic and cliquish.

Look at the institution of judiciary. The Indian judicial system that ensures the rule of law takes a heavy toll on time. It not only delays justice but also slows economic activity in various sectors as a necessary corollary. The reasons range from paucity of judges, resulting in heavy workload, to not enough administrative backups in terms of infrastructure and technology. There is no fixed time limit either for the disposal of cases or differentiated responsibility to settle cases at various levels. Lawyers connive to take unnecessary adjournments and many a time judges are ill-prepared for the case and willingly cave in to such requests.

There are stories of endless delay in decision-making in every human activity in India and they keep repeating with a unique flair and pride with no regard to the opportunity cost. It seems we neither have any value for time nor appreciate the results that a timely decision can bring about. There is no attempt to standardise and automate the processes. Rather the processes that are standardised are not followed.

Bureaucratic delays

Reinventing the wheel is a national passion where every layer of bureaucracy is analysing the case and sending it up without an attempt to take timely decisions at their own level. Before the final decision, there are numerous layers expressing merits and demerits on the decision being taken. It not only slows down the process but also gets seeped into cynicism expressed in green notings of pros and cons. Is there not a need to scrap such multiple and repetitive notings with minimal relevance? These notings leave only a very few top-notch bureaucrats responsible for decisions even if they are the most mundane ones.

Naturally, these are justified and valid everyday happenings that outside world often comment about and describe India as an archaic State and non-functional. They tell us that we don't have a sense of speed. For us tomorrow is everything whereas for the world it is today and there is no tomorrow.

Does that mean we do not have a racing gene that spurs us up for speedy action? Hope not. We may not have invented world scale innovations but, certainly, our new generation of young Indians seems to be running in the fast lane to achieve their goals with an intensity never seen before. Yet, it is the system of laws and governance that locks up our decisiveness in the checks and balances of the administration created by the British. Considering this as the new reality of emerging India, is it not possible to remove such frustrating and inhibiting bottlenecks as described above?

However, to accomplish this gigantic task, what is crucial is the Indian mindset that must acquire a new sense of speed. India is now being seen as a new addition in a leadership role at the world stage and potentially being looked up internationally as a precursor to growth and development. The present Finance Minister has launched a Government initiative to move "faster with confidence", which will only have a substantial meaning if we develop a sense of speed and latent urgency that will propel and accelerate India's growth story in its true sense.

The writer is a former Finance Minister of Punjab