O P I N I O N S

Guest Column
After long, a halt in inflation
The lower trade or current account deficit will be positive for the exchange rate of the Indian rupee. A relatively stronger rupee will help the government and RBI fight inflation.
Devendra Kumar Pant
India is a net commodity importer (imports are more than exports), making it susceptible to the movement of global commodity prices and exchange rate fluctuations. Our import basket is dominated by raw material and intermediate goods which are used in the production of goods for Indian consumers. During high inflation, one often heard from policy makers that Indian economy was importing inflation; this is a reference to the impact of high commodity prices. A decline in global commodity prices leads to a decline in the input cost of Indian manufacturers, which leads to a decline in the price of finished goods.

Fifty Fifty
When will things change for the woman in India?
We should examine families that are becoming increasingly dysfunctional, with the systematic elimination of women from our society — both physically as well as figuratively.
Kishwar Desai
Following the launch of my new novel, The Sea of Innocence, which deals with unsolved rape cases in India, I feel like I am living through a continuous process of writing and thinking about sexual violence. I had written the book last August, angry and upset that so many women and children continued to be raped without receiving any support from either society or the government, and certainly not the police.

ground zero
The new Chinese puzzle
India must make the right moves on the Chinese intrusion, for its actions on this incident would set the tone for its dealings with the new Chinese leadership over the next decade. And it has to assert its national interests.
Raj Chengappa
Daulat Beg Oldie — the name has a curious origin. Located far north in the cold desert region of Ladakh, abutting the forbidding but strategic Karakoram range, the place reportedly gets its name from a 16th century Yarkandi merchant, who died there while traversing the Silk Route.

Guest Column
After long, a halt in inflation
The lower trade or current account deficit will be positive for the exchange rate of the Indian rupee. A relatively stronger rupee will help the government and RBI fight inflation.
Devendra Kumar Pant

India is a net commodity importer (imports are more than exports), making it susceptible to the movement of global commodity prices and exchange rate fluctuations. Our import basket is dominated by raw material and intermediate goods which are used in the production of goods for Indian consumers. During high inflation, one often heard from policy makers that Indian economy was importing inflation; this is a reference to the impact of high commodity prices. A decline in global commodity prices leads to a decline in the input cost of Indian manufacturers, which leads to a decline in the price of finished goods.

Petrol prices are expected to decline further by April-end.

Another repetitive term used by policy makers and economists is twin deficit - fiscal and current account deficits. While fiscal deficit is the end result of the government's revenue and expenditure, the current account deficit is that of the country's external transactions (goods and services). Commodity prices affect these deficits directly. India's dependence on crude oil for its domestic fuel requirements is nearly 80 per cent. Crude oil prices in the last few years remained very high and in order to insulate consumers from high global crude prices, the government reduced duties on crude and petroleum products affecting its revenue. At the same time, the government gave subsidy on petroleum products. While there is no subsidy on petrol, the prices of diesel, kerosene and LPG are still subsidised.

Subsidy in general and petroleum in particular exert pressure on government finances. A larger deficit crowds out private investment (government and corporate sector borrow in domestic market and government borrowing reduces quantum of money available for corporate borrowing) and increases the interest rate. A fall in crude prices augurs well for inflation control. The price on Indian crude basket (average price of imported crude oil) declined to $98.66 per barrel on April 22 from $106.86 a barrel during the first fortnight of March. Between March 16 and April 16, it resulted in the retail selling price of petrol in Delhi declining by Rs 4.60 a litre and is expected to decline further by April-end. Between the second fortnight of March 2013 and April 16, the under recovery on diesel, kerosene and LPG declined by 25.7 per cent, 8.8 per cent and 1 per cent, respectively.

In 2011-12, crude oil and gold accounted for more than 43 per cent of Indian imports. While India imports crude oil and gold, it exports refined petroleum products and jewellery. Its trade deficit increased to $189.8 billion in 2011-12 from $118.2 billion in 2009-10. The net import of petroleum products (import of crude net of exports of petroleum products) increased to $99.3 billion in 2011-12 from $58.7 billion in 2009-10. The net import of gold increased to $49.2 billion in 2011-12 from $24.3 billion in 2009-10. The combined increase in the net import of crude and gold between 2009-10 and 2011-12 was more than 91 per cent of increase in trade deficit.

The increase in trade deficit or current account deficit should not be seen in isolation. It must be viewed along with the mode of financing of the current account deficit. While the capital flow largely depends on the attractiveness of the Indian economy as an investment destination, it also depends on global growth and the liquidity situation. India attracted significant capital flows during 2003-04 to 2008-09, a period characterised by high growth and reform phase of the Indian economy and easy global liquidity.

India is one of the biggest consumers of gold, which now comprises nearly 10 per cent of imports. As per a report of the Reserve Bank of India on gold, the current account deficit in 2011-12, which was 4.2 per cent of the GDP, would have been closer to 2.1 per cent, excluding gold. Globally, gold is used as a preferred mode of investment and its attractiveness increases during the high-inflation phase.

The Indian economy in the last few years has been going through a high-inflation phase. In line with hedge funds and big investors, Indian consumers have also started hedging against inflation by investing in gold. While the recent fall in gold prices has eroded the wealth of people who invested in gold through gold ETFs, the demand and physical buying of gold bars and jewellery has increased.

The impact of the falling crude prices on the Indian economy through inflation and trade or current account deficit is favourable. Factoring in exports of petroleum products, a $1 per barrel decline in oil prices would reduce the trade deficit by $900 million. A lower trade or current account deficit will be positive for the exchange rate of the Indian rupee. A relatively stronger rupee will help the government and RBI fight against inflation.

The global energy situation, especially after Shale gas findings, in the US and China is very comfortable. While the US is expected to be energy surplus, most of the Chinese demand is likely to be met from its domestic production. The global oil production and prices will respond to the demand-supply situation. In the absence of any geo-political turmoil, crude prices are expected to remain stable, which is a major positive for the Indian economy.

The writer is chief economist at India Ratings and Research

Fifty Fifty
When will things change for the woman in India?
We should examine families that are becoming increasingly dysfunctional, with the systematic elimination of women from our society — both physically as well as figuratively.
Kishwar Desai

Following the launch of my new novel, The Sea of Innocence, which deals with unsolved rape cases in India, I feel like I am living through a continuous process of writing and thinking about sexual violence. I had written the book last August, angry and upset that so many women and children continued to be raped without receiving any support from either society or the government, and certainly not the police.

Women must come together to fight violence in every sphere of their lives.

It was during the final edit of my book last December that the despicable rape of a promising girl took place in a bus in Delhi. The time line of my book eerily enough was December — and so as the gang rape case unfolded, I began to insert a few details about the case into my narrative.

The main protagonist of my novel, Simran Singh, is investigating the case of a girl who has been allegedly raped and has subsequently disappeared in Goa, when she hears about this terrible incident. As she worries about the victim and her suffering, she is further motivated to find the missing girl. I did not have to change a single word of the book's structure to insert the gang rape details. By putting a few lines about Nirbhaya in my book, I wanted to remember her struggle to better herself and her battle for her life and respect.

There are also far too many similarities between her story and the other victims in their quest for justice: the helplessness of the victim's family, the dread of the media circus, an unsympathetic police force. In Nirbhaya's case hopefully the fast track courts will move fast, but normally the judiciary moves at a snail's pace.

During the launch of my book in Delhi, we had a vigorous discussion about the anti-rape legislation and whether it would bring a real change in the mindset. Among the discussants was Union Law Minister Ashwini Kumar, who confirmed his intent and hope that the Bill would be a deterrent. There were other issues, including my own fear that young children are getting sexualised, or being used by others as sex objects, at a younger and younger age.

The very next day we had another horrible incident of a five-year-old in Delhi being brutally assaulted by two drunken men and once again the conscience of the nation was aroused — becoming aware that the dark reality still gnaws at us — a monster devouring the lives of so many individuals. It also raises the question whether we as a society know how to give the required care and love to these rape survivors?

While we condemn this ghastly form of ‘entertainment’ that some men seem to indulge in, let us remember that gang rape is not new in our society. It has been used for years as a weapon by the upper castes to suppress the lower castes — by violently and publicly assaulting their women. It has also been used during communal violence right from the days of the Partition of each warring community to deliberately hurt the wombs and reproductive organs of women to ensure they would not give birth. And now it seems to have become a means for sexually frustrated men who are marginalised (certainly if they are migrants in urban India) and suffering from an alienation that makes them dangerous because they only have an identity when they are together indulging in a violent act. They feel powerless and impotent alone, but in a group they can establish their supremacy over their prey.

In these columns I have said before that there is an urgent need to understand this behaviour and we should examine families which are becoming increasingly dysfunctional, with the systematic elimination of women from our society, both physically as well as figuratively. The importance of the mother, sister, daughter, wife, girlfriend, lover, worker — all roles that a woman plays within the family and outside, have been attacked by an increasingly patriarchal society. All these relationships need to be rebuilt once more, most particularly within the family. But no changes in policy can take place in a vacuum and there is a genuine lack of information about the real status of women in this country.

There is now a desperate need for an in depth study on it and the findings should be circulated widely. The National Commission for Women needs to be replaced by a more serious, non-partisan body run by both women and men as these matters need to become non-political and taken much more seriously than as shouting matches in television studios. Women can no longer be assured by flaky parliamentarians who have a different rule for 'rapists', but follow a male chauvinist agenda in their real lives.

An overhaul of the system is called for, and for that we need a more intellectual and reasoned space. We cannot be expected to take to the streets every time. We need a second women's liberation movement desperately in the India today. Women need to unite to fight back this menace of violence in every aspect of their lives.

The writer’s new novel The Sea of Innocence has just been published