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Smash terrorism Buying arms |
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Sense and sensex
Tiff over BHEL
Ascending order
The forgotten elders Slippery old
‘oil tax’ Health
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Smash terrorism THE Hawara affair is getting murkier and murkier. The more the police digs, the more roots of this terrorist network emerge. The extent and the reach of the web that the Babbar Khalsa International militants had managed to weave takes one’s breath away. It was almost as functional and secretive as was the case during the peak of terrorism. And to think that the terrorists and their sympathisers were everywhere when the “red-alert” police was supposed to be sniffing for them intently! Perhaps the alleged killers of former Chief Minister Beant Singh were absolutely certain that the men in khaki could not see beyond their nose and it was absolutely safe for them to move about freely without so much as altering their appearance. The alacrity now being displayed in unravelling the network would have been worthwhile had it been shown immediately after Hawara and his colleagues had escaped from the Burail jail. Ironically, if a goofup had not taken place Beant Singh might not have been assassinated. The police had ferreted out all details in a matter of days, but only AFTER the gory deed had been done. It is surprising that the militants have been moving about undetected in Punjab and Delhi for over a year after the sensational jailbreak. Public misgivings whether Punjab is now actually free from terrorism must be allayed. The details that the new Director-General of Police, who himself has fought against terrorism, has given should shake the state government, the administration down the line and even political parties out of complacency that seems to have set in. Perhaps some of the networks of terrorist groups are still functioning. The police will have to look for them with a fine toothcomb to rule out any possibility of revival of terrorism. Even the slightest complacency will be suicidal. Punjab cannot be allowed to slip back into the dark period it went through in the 1980s and 1990s. |
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Buying arms IN a bid to tackle allegations of corruption in defence deals, the Defence Ministry has made it mandatory for foreign arms companies to sign an `integrity pact’ wherein they declare that they would not employ unfair or unethical means in winning defence contracts. The move, articulated in the new defence procurement procedure released recently, can act as a disincentive to companies in the murky world of defence deals where the route for an ostensibly legitimate commission can be used to channel a kickback or bribe. At best, however, it is an admission of the difficulty that the system has had in ensuring probity in procuring defence equipment. It also remains to be seen how effectively such a pact can be enforced. India will have to continue to rely heavily on imports to meet the needs of our armed forces, and it is imperative that a system is put in place to optimise the procurement process. The new manual however, though well meant, falls well short of the mark. Among other things, the call for a review of procedures every two years is a clear indication that the ministry has again shied away from a comprehensive overhaul of the system. The move to make qualitative requirements more broad-based to avoid a single vendor situation might help matters, but it sidesteps the need to first streamline the procedures. Under these circumstances, the mere setting of a deadline of two to three years for a major acquisition is unlikely to have an effect. The two-decade-long process for the advanced jet trainer acquisition is still fresh in memory, and the Navy will be praying that something similar does not happen to the submarine deal which has now been put on hold. While the right concern is reflected in Dr Manmohan Singh’s statement that investigations into irregularities should not compromise decisions on procurement, there is every sign that the modernisation process for the armed forces will continue to suffer. A display of will is needed at the highest level to put things right and buy the needed military hardware without delay. |
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Sense and sensex THAT stock markets follow no logic is clear once again. The BSE sensex crossed the 7000 psychological barrier, first on Monday and again on Tuesday. The immediate trigger was the business settlement reached between the Ambani brothers. Anil Ambani has already announced a Rs 3,000 crore investment in Reliance Energy and Reliance Capital. Though speculators may lap up Reliance group shares of companies of one brother or the other, some seasoned analysts would rather wait for details of the agreement. But the Reliance behemoth’s influence on the stock market, even if it has split into two, should be a lesson to other business groups who have aspired for a larger share of money power than they have been able to garner. Stock markets are quite often driven by sentiments and tend to ignore even the obvious. The current rally, which lacks breadth and is marked by low volumes, has not taken into account negative developments like a sharp hike in oil prices, a possible delay in the monsoon, over-valuation of Indian stocks, worries of a slowdown in corporate earnings and hardening of interest rates. The same is happening elsewhere. European economies are in stagnation, but the share prices are at almost a three-year high. The same irrational exuberance is evident in Asian markets too. It all depends on how one views the emerging economic situation. Foreign mutual funds want to park their surplus funds in the emerging markets. This is despite the US announcing a series of interest rate increases. India and China are worldwide seen as growth stories and attract heavy institutional fund inflows. Of the $60 million pumped in Asian equity funds, excluding Japan, in the week to June 15, India-centric equity funds have received $45 million. Thus the present rally has been fuelled by a lot of foreign money. Small investors would be wondering whether they should stay away from the market at the moment or park their savings at this time. When the sensex scales a record high, it is time to sell. That is plain common sense. |
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True wit is Nature to advantage dressed,/What oft was thought, but never so well expressed. — Alexander Pope |
Tiff over BHEL IN the coming months, tension between the Congress and the communist parties is expected to exacerbate, especially on issues of economic policy. While these tussles are unlikely to destabilise the UPA government, simply because the Left and the Congress hate the BJP more than they dislike each other, the pulls and pressures of coalition politics are expected to slow down the pace of economic decision-making in at least three contentious areas. These areas are often clubbed under the acronym LPG (not liquefied petroleum gas, but) liberalisation, privatisation and globalisation. At one level, relations between the communists and representatives of the Congress are going to become more acrimonious because they would be engaged in electoral battles in West Bengal and Kerala. Assembly elections are scheduled in both states around April-May 2006. More importantly, a large section within the Left seems convinced that there is nothing to distinguish between the “right-wing” economic policies followed by the BJP and the Congress. Hence, these Marxists have become even more determined to play the role of the “opposition within” the ruling coalition and its allies. Though these communists are relatively more comfortable with Congress President Sonia Gandhi, they are uneasy with the economic ideology of Prime Minister Manmohan Singh and downright suspicious of Finance Minister P. Chidambaram, who is perceived as a gung-ho liberaliser. Take the case of the reaction of the Left to the May 26 decision of the Cabinet to sell 10 per cent of the Union Government’s 67.72 per cent equity stake in the navaratna public sector undertaking (PSU), Bharat Heavy Electricals Limited (BHEL). Now BHEL is no ordinary PSU. It is not just highly profitable but also the country’s leading manufacturer of power generation and transmission equipment. In fact, it is a matter of pride for all Indians that a company like BHEL has in recent years been able to effectively compete with much larger multinational corporations like ABB and Siemens in global markets. The May 27, 2004, common minimum programme of the UPA and its allies had stated that all privatisation moves would be “considered on a transparent and consultative case-by-case basis”. It was further stated that the Central Government would retain managerial control over the navaratnas while allowing these profit-making PSUs to raise funds from the capital market and offer new investment avenues to retail investors. Interestingly, the Congress party’s own pre-election manifesto stated that privatisation would be approached in a selective manner and divestment would not be resorted to merely to raise revenue but to increase competition and consumer welfare. The manifesto also argued in favour of using divestment revenues for designated social development programmes, a move that has already been initiated with the establishment of a National Investment Fund that will become the repository of funds obtained through sales of the government’s equity capital in PSUs. This money would be used to rehabilitate PSUs, for health-care, education and so on. Two points need to be noted in this context. First, even after the proposed 10 per cent divestment in BHEL, the Central Government will still hold 57.72 per cent of the company’s shares. In other words, this is not a case of privatisation but merely one of divestment. Moreover, the effect of divestment would not be very different from BHEL issuing new shares to the public. What was done in the case of the National Thermal Power Corporation (NTPC) in October 2004 was a combination of both moves - divestment of government equity together with new shares being issued in equal proportion. The second point is more important. BHEL’s equity is being sought to be divested merely to raise revenue and not to either enhance competition or for the welfare of consumers. The government’s position is that small investors would stand to gain by investing in BHEL shares (the general public currently holds less than 1 per cent of the company’s equity capital) as they did when shares of companies like Maruti Udyog and Oil & Natural Gas Corporation, besides NTPC, were divested. A section of the Left does not buy this line of reasoning. This section argues that divestment would be the “first step” in the process of privatisation of BHEL. Further, it is contended that if the government wishes to raise revenue, there are many other ways of achieving this goal rather than by selling shares “belonging to the people of India” in a navaratna PSU like BHEL. It is unlikely that the conflicting views on divesting BHEL’s shares would be easily resolved. Despite the opposition from the Left, the government may go ahead with its plans - on June 16, advertisements were issued inviting expressions of intent from investment bankers for the BHEL divestment - as it did in the case of increasing the cap on foreign direct investment for telecommunications companies from 49 per cent to 74 per cent, which was opposed by the Marxists. There is a group in the UPA government that is in favour of “calling the bluff of the Left”. This group claims the CPM speaks with a forked tongue on economic issues — what the party says in Kolkata is quite different from the positions it adopts in New Delhi. At the same time, the Congress-led coalition realises that it cannot push the communists too hard. If the 60-odd MPs belonging to the Left withdraw their support to the UPA in the Lok Sabha, the government would collapse. Both sides would, therefore, blow hot and cold while adopting political postures. Witness, for instance, the fact that there has been a long delay in the government allowing oil companies to hike the prices of diesel and petrol in spite of the international prices of crude oil remaining at high levels. Dr Manmohan Singh had to bow to the wishes of the communists in maintaining the interest rate on deposits with the Employees Provident Fund Organisation at 9.5 per cent - although Mr Chidambaram’s ministry adamantly opposed the decision. The Prime Minister also had to tell his confidante Montek Singh Ahluwalia, who heads the Planning Commission, not to appoint the advisers who were associated with international organisations. On the other hand, the CPI is still complaining about the government’s decision to scrap Press Note 18 - which provided protection to domestic industry by disallowing foreign partners of joint ventures in the country from setting up their own ventures without the prior permission of their existing partners. The move to scrap Press Note 18 on the ground that it was anachronistic, had outlived its utility and was discouraging foreign investors was announced by the Prime Minister in the presence of the West Bengal’s Communist Chief Minister Buddhadeb Bhattacharjee. A section of the government wants to open retailing to foreign capital but this is being opposed by the Left. The war of words is certain to
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Ascending order MY little poppet, all of five years, is a no nonsense person when it comes to “school”. Everything told by her kindergarten teacher is non-negotiable, to be followed by me in letter and spirit. Sometimes, I wonder at her innocent sincerity in carrying all instructions to perfection, and almost always I do all her bidding — whatever it takes. So, you find me covering all books exactly the way “ma’am” wants — some in brown covers, some in transparent ones so that the bright yellow “Kidzee Periwinkle School, Rupnagar” stands out. Sometimes I am sitting amidst crayons and putting together a chart. Sometimes I look up old magazines to find pictures of the Prime Minister and President, while the little one looks on in uninterrupted amazement, with her constant chatting away as music to my ears for accompaniment. Even as a working mother, I may burn the midnight oil once in a while to accomplish the assignments — but can never ever risk facing my precious next morning and seeing her close to tears, the tiny brow all creased up due to having to go to school with an unfinished task. With all this pampering, my little one and “maths” are poles apart. When the school introduced the system of written tests every month, just to prod the kids to formal writing, she would come home and demand — “school diary dekho”. Thus began my daily trysts with the Diary and its instructions. Once, when the maths test was to be held the next day, I tried all tricks to make her understand how to put double-digit numbers in ascending order out of a jumbled up list of numbers. So 34, 41, 26, 13 and their orders confused her no end, and drew a blank. At last, I told her to arrange Ritika, Mamma, Daddy and Chhoti in an ascending order and pat came the reply — Choti, Ritika, Mamma, Daddy (small to big). The battle of numbers was won! I heaved a sign of relief. One would think I had made sense out of double-digit inflation! The next afternoon, I was greeted by an excited beaming Chhoti: “Mamma, I got full marks. All through the test I was remembering you.” This simple gesture coming from an innocent heart made my day and made all the effort worthwhile. I said a silent prayer — I hope you continue to feel my presence in this manner always and may this continue to give you
strength.
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The forgotten elders Senior citizens have been singled out for step-motherly treatment in this year’s Budget. The new provisions not only deprived them of the bulk of the advantage they enjoyed earlier but were presented, both in the Finance Minister’s speech, as well as in media reports, as if they were a bonanza for them, thereby rubbing salt into their wounds. The “illusion” was first created by the announcement in the initial proposals that the exemption limit in their case would be Rs. 1.5 lakh as against the general limit of Rs. one lakh; and was further reinforced by its subsequent hike to Rs. 1.85 lakh. The uninformed public was thus led to believe every time that ever-increasing concessions were being accorded to them. This seemed to have been a deliberate ploy that worked, as even the media joined in this chorus, without taking the trouble to understand, much less analyse, financial implications of the so-called “concessions”. The wrong impression in the public mind that the senior citizens are now better off thus persists and needs to be corrected. One does not have to be an expert in tax law or a wizard with figures to see the real picture that emerges from the arithmetic. Even with the enhanced exemption limit of Rs. 1.85 lakh, senior citizens will still be worse off than they were earlier. As against the tax rebate of Rs. 20,000 that has been withdrawn, the tax relief from the additional exemption of Rs. 85,000 will be a mere Rs. 12,000 (Rs. 5,000 on the first Rs. 50,000 @ 10% and Rs. 7,000 on the remaining Rs. 35,000 @ 20%) - amounting to a net loss of Rs. 8,000! The exemption limit should have been raised to Rs. 2.25 lakh merely to bring the relief on a par with the earlier rebate of Rs. 20,000 (Rs. 5,000 on the first Rs. 50,000 and Rs. 15,000 on the remaining Rs. 75,000). Senior citizens, most of whom have to subsist on their meager savings, have been hapless victims of dwindling interest rates and rising inflation, resulting in a substantial erosion of their real incomes. As if this were not enough, there is now a new sword of Damocles dangling on their heads in the form of the impending “EET” (exempt, exempt, tax) system of treating savings. The intention is to exempt the initial savings as well as the accretion thereto, but tax the eventual withdrawal, much like the earlier deferred tax schemes like the National Savings Scheme. If media reports are to be believed, even the one nest egg that hitherto remained outside the tax net - namely the Public Provident Fund (PPF) — is now being brought within its ambit. This would not only impose a harsh burden on senior citizens but also seriously erode their confidence in instruments such as the PPF that have so far been regarded as safe havens. With budget-making increasingly becoming a continuing process, rather than a one-time annual exercise, it is perhaps not untimely to start giving some thought to possible changes in the tax regime for senior citizens even at this stage. The objective that must be kept in mind is to ensure that they are better off than before like everyone else. One possibility is, of course, simply to revert to the earlier regime of a straightforward tax rebate of Rs. 20,000. However, if the government is too far committed to the Kelkar dream of doing away with all rebates, another possible way, as mentioned earlier, is to raise the exemption limit in their case to Rs. 2.25 lakh. A third possibility is to allow a substantial deduction, say of Rs 1 lakh (as indeed used to be the case several years ago) from the aggregate income on the same lines as the deduction for savings under Section 88. There might be other possibilities not beyond the innovative capabilities of our Budget makers. We do not have to wait for possible changes in the tax regime to bring relief to senior citizens. One measure that can be immediately considered is to allow higher interest rates to them on various savings instruments on the same lines as fixed deposits in banks. There is no reason why similar differential margins should not be allowed for other avenues of investment such as RBI bonds. There is even a stronger case for higher interest rates on PPF deposits, which have seen an alarming decline from 12 per cent a few years ago to a mere 8 per cent. In comparison, the EPF Deposits are still earning a hefty 9.5 per cent. There is every justification for same rates to apply to PPF deposits of senior citizens. Consideration can also be given to the reintroduction of tax free bonds for them. In so far as the proposed “EET’ system is concerned, it so happens that its detailed modalities are still being worked out. This is, therefore, the opportune moment to focus attention on its possible repercussions on senior citizens. Whatever shape the system eventually takes, there is a very strong case for exempting them from its purview. Otherwise they would be living under the nightmare of having to shoulder an inordinately heavy tax burden at a very late stage of their lives that could far outweigh the advantage of any tax saving at the time of making the deposits. Representations made on behalf of senior citizens have so far fallen on deaf ears — possibly because unlike other weaker sections of society such as agricultural and industrial workers they do not have the necessary political clout, although their plight is no less pitiable and deserving of sympathetic consideration. It, therefore, seems necessary to bring up these issues for public debate so that their concerns can be addressed and pressure generated for urgently needed remedial action. |
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Slippery old ‘oil tax’ Watching the House and Senate quarrel over which favored users and which alternative suppliers will get new subsidies and tax breaks in the energy bill ought to be a hair-tearing experience for anyone with a basic understanding of economics. But at the Bush White House — where they care more for business than for capitalism — the only frustration is that all this is distracting from the important work of enacting new tax breaks for the traditional oil industry. Three years ago, the price of crude oil was about $27 a barrel. On Monday, it was about $58 a barrel. The US imports about 12 million barrels a day. Do the math. A $30-a-barrel price hike adds up to $360 million a day, or $131 billion annually. That’s just the extra amount we’re sending abroad because of recent years’ increases. The administration has no problem in calling this an ``oil tax’’ when it is trying to explain the middling performance of the economy. “Not our fault, folks. Forces beyond our control.” But this is not your ordinary tax, for a couple of reasons. First, the revenue from an ordinary tax goes into the U.S. Treasury, where there is at least a chance that it will be used in ways that benefit millions of Americans. The revenue from this tax goes to the treasury in places such as Saudi Arabia, where it will support the decadent lifestyles of a few hundred princes. Second, the US actually consumes not 12 million but 20 million barrels of oil a day. The other 8 million barrels come from domestic oil extraction. I say extraction rather than production because oil “producers” don’t actually produce any oil. They just pump it from the ground. That can be difficult, costly and even dangerous work, and I don’t mean to demean it. But drilling and extraction are only a small part of the current $57 cost of a barrel of oil. In the case of OPEC members, the cost of extraction is infinitesimal. Yet they can extract $57 a barrel from the rest of the world for other reasons, including some that are definitely not beyond their control. Domestic “producers” have higher costs. But they were profitably pumping away in 2002, when the price was $27 a barrel. Now that oil goes for $57 a barrel, most of the difference must be profit. Eight million barrels a day at $30 a barrel works out to $87billion a year. If the extra $131 billion we pay to foreigners is a tax, so is the extra $87 billion we pay to the domestic oil industry. And if that $87 billion is a tax when collected from consumers, it is in effect a subsidy when pocketed by domestic oil extractors. And the tax and spend doesn’t stop there. When oil prices go up, other forms of energy go up too. This includes alternative energy sources such as windmills, cow exhaust, whatever. They all benefit from a subsidy of $30-a-barrel-equivalent, financed by the “tax” on energy consumers of an equal amount. So it is odd, from an economic point of view (though less so from a political one), that the energy bill debate should be over who will get even more subsidies. What we should want is more energy taxes, not subsidies. — LA Times-Washington Post |
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Women fear dentist more than men
A
new study conducted at the University of Toronto suggests that women are 2.5 times more likely than men to fear a visit to the dentist. The team led by Brian Chanpong and dentistry professors Daniel Haas and David Locker, is the first-ever nationwide Canadian study of fear and anxiety about visiting the dentist. “Women are more likely to be honest about their feelings. The typical male would be less likely to admit to being afraid of the dentist,” chanpong said. 5.5 per cent of the 1,100 Canadians surveyed were very afraid of seeing a dentist, and about half of those had cancelled or avoided a dental appointment as a result, compared with only 5.2 per cent of those people who reported low anxiety.
Anger wanes with age
Anger seems to fade with age for kids and adults, says British researchers. “Anger continues to blaze through human lives, sometimes bringing trouble. However, anger seems to wane with age, and angry children do not necessarily become angry or unhappy adults,” Webmd quoted Eirini Flouri, PhD, BSc, and colleagues as saying. Their findings appear in “Seven Deadly Sins: A New Look at Society Through an Old Lens,” published by the U.K.’s Economic & Social Research Council. It’s based on British national surveys of about 6,000 households per year. Anger was checked again in the age-groups of 20s and 30s where participants answered for themselves.It revealed that as people tend to grow older, the rate of anger diminishes in them . Also, single people at age 30 are more prone to anger that those with partners.
Eating right fish
helps heart
Eating Tuna or other broiled or baked fish rich in Omega-3 fats reduces the chances of congestive heart- failure among older adults and proves more beneficial for heart- health, according to a recent study published in the Journal of the American College of Cardiology. The study reveals that it is more important to eat the right fish dish rather than eating more fish for heart-health benefits, reports Webmd. According to researcher Dariush Mozaffarian, MD, MPH, FACC, the study also shows that fried fish, particularly lean (nonfatty or white) fish, may not provide the same heart-healthy benefits as fatty or oily fish.
Enzyme key to Alzheimer’s
Researchers at the University of Toronto have discovered an enzyme that might help in treatment for Alzheimer’s disease. “It was previously thought that an enzyme called gamma-secretase contributed to the development of protein deposits in the Alzheimer’s brain. This study shows that this enzyme is more accurately described as a family of enzymes, each with its own specialization,” lead researcher Professor David Westaway said.
— ANI |
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From the pages of Rotten administration THE intelligence that the liberty of the press in the Nizam’s dominions has been taken away by a fiat issued by the Home Secretary will perhaps be regarded as a capital stroke of statesmanship by those who are constantly anxious to close the mouth of the Indian press. The Nizam’ Government have really more courage than the Government of India. We have been, however, so much amused by the unexpected piece of news that such a thing as the liberty of the press was in existence in the Nizam’s territory that we have overlooked the serious import of this serious intelligence. Before saying the liberty of the press in Hyderabad is gone someone should prove that such a thing ever existed. A paper started in Residency limits was not subject to the Nizam’s laws, but all papers in Hyderabad have been mere partisans and some, as in a case recently proved, merely the tools of those in whose pay they were. Such a thing as liberty was unknown. Hyderabad affairs are not such as would long stand the test of fearless criticism or exposure... Any one who knows anything about Hyderabad affairs knows perfectly well that the whole administration is rotten to the core. |
The path of knowledge is very difficult but being impartial towards all, helps one on this path. It means, not having any loved ones or any hated ones. Everyone must be treated equally irrespective of relationships. Sages spend lifetimes searching for this balance. —Book of quotations of Hinduism Some of us do our duty because we have to, like some of us eat merely to live. While some of us do our duty because we know how it will help society. It is like eating both for sustenance and for taste. Which is better? —Book of quotations of Hinduism It is said by the wise men of yore that fortune brings no good to mortals who win by wicked wile. And equally, sorrow and deprivation bring no shame to those who are free from sin and guile. —The Mahabharata The true and faithful wife fear neither jungle nor exile. Her life may be hard but no dangers will bring woe and sorrows to her. Her sinless deeds and holy conduct spread a charmed circle to hold her safe. —The Mahabharata Who has made the earth a couch for you, and the heavens a roof, and who sends water down from the skies, and who brings forth from it fruits for your sustenance. So do not suppose anything to be like God, when you know. —Book of quotations on Islam Pride often makes a king underestimate his foe. The foe may not possess the wealth and forces that the king has. But this should not blind the king to his underlying strengths. —The Mahabharata  |
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