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As the Prime Minister enters the Finance Ministry operation theatre, The Tribune studies the economy case file to find out where the first cuts, and stitches, need
to be made to get it back on its feet
Voices of dissent within ruling alliance too |
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Industry wish list for PM
This above all
TOUCHSTONE
On the spot in Corbett, to save the stripes
PROFILE:
Kannan Soundarajan
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As the Prime Minister enters the Finance Ministry operation theatre, The Tribune studies the economy case file to find out where the first cuts, and stitches, need to be made to get it back on its feet Sanjeev Sharma As part of his agenda for the economy, the Prime Minister has identified reviving investor sentiment, both domestic and international, as top priority. Following his intervention on providing clarity on tax issues, the Finance Ministry has come out with draft regulations on the General Anti-Avoidance Rules (GAAR), which led to the stock markets shooting up 400 points to a two-month high and the rupee also — which was well beyond 57 — dropping below the 56 mark to the US dollar. The last three years have been lacklustre, with an economic policy under Pranab Mukherjee reminiscent of the ’80s. Markets, investors and corporate India have high expectations that decisions will now be taken to kickstart the economy. A survey done by the industry body Assocham has found that India Inc’s confidence has witnessed a definite turnaround with Dr Manmohan Singh assuming charge of the Finance Ministry. There is talk about lack of new reforms, but that is not the sole reason for the slowdown. After all, India was growing at around 8 per cent for many years even without these reforms. Though the reforms are desirable, the main factor behind the standstill is that investments are not happening. And the reason for that is business is nervous over an unstable policy regime, overturning of decisions and contracts, and the negative publicity over scams in various sectors such as telecom, coal, mining and land acquisitions. Indian business houses have started investing overseas, where policies are in black and white with clear rules and regulations. Says public policy expert Ramesh Adige, “First, there is no need to re-invent the wheel. A study of all subjects handled by GOMs and eGOMs must be undertaken immediately, and efforts made to reach conclusions so that policies are announced. This itself would yield positive results.”
Reforms Needed to REVIVE the economy
Fast track large projects
Cut subsidies
Open multi-brand retail |
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Voices of dissent within ruling alliance too
Are political naysayers preventing the government from moving ahead on the path of reforms? There is a perception that for the past two years, the Manmohan Singh government has tied itself in knots over crucial economic reforms. While corporate czars have labelled it as “policy paralysis”, ruling coalition leaders explain it away as “compulsions of coalition” politics. The question of allowing Foreign Direct Investment (FDI) in retail trade and raising the FDI cap in insurance, pension, civil aviation and even defence are some of the issues that remain unaddressed. The government made bold by announcing a 51 per cent FDI in multi-brand retail, but went back under attack from allies and supporting parties. Critical comments by respected entrepreneurs such as Aziz Premji and Naryana Murthy led to a sharp attack from Union Minister Vayalar Ravi, while his colleague M. Veerappa Moily joined issue after rating agencies like Standard and Poor’s and Fitch downgraded India’s credit outlook. On his part, Ravi holds the view that the corporate world is more concerned about making profits and is pushing the government to invest in areas that would benefit the industry while not hesitating in seeking and collecting tax concessions worth several crores of rupees. However, the industry sentiment runs dry when the government that has social sector spending at its core allocates money for its flagship programmes. Arguing against allowing FDI in multi-brand retail that would open the gates to Walmart of the US or the French Carrefour, opponents feel that it would not benefit those at the start of the supply chain unless products are sourced in India. “Purchases for India must benefit Indians,” Ravi says. Besides, there is a need to locate stores in cities based on population. Credit credibility Moily feels the agencies that prepare credit ratings should judge against economic rather than political parameters. Reacting to the downgrading of credit outlook, the minister says felt that just because economic growth in the last two quarters was slow, it does not mean the country is facing an “economy tsunami”. While Defence Minister A.K. Antony has maintained a low profile, many hold him responsible for not allowing raising of the 26 per cent cap in defence production that American and European companies favour. Among the allies, Mamata Banerjee’s Trinamool Congress has taken the opposition space by objecting to key reforms and creating a role for her party just as the Left did while supporting UPA-1 from the outside between 2004 and 2008. The Samajwadi Party may have opposed FDI in retail the last time, but there are indications its resistance is now coming down. Yet, these voices of disagreement are only articulation of the view of the poor and marginalised sections of society, leading to a debate, an essential ingredient in a liberal democracy. |
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Industry wish list for PM As Prime Minister Manmohan Singh slips on his old Finance Ministry boots, the industry is closely watching his first steps. Even as the Indian economy cannot be seen in isolation from events around the world, the industry believes a lot needs to be done, and undone, at home too. The Prime Minister has initiated steps to reverse the climate of pessimism and revive investor sentiment with a series of meetings with Planning Commission Deputy Chairman Montek Singh Ahluwalia, PMEAC Chairman C. Rangarajan and top Finance Ministry officials. Here’s a look at the expectations industry leaders have: Improve liquidity CII president Adi Godrej, while suggesting a 10-point agenda for economic revival, said as a first step, Repo rate and the CRR should be cut by 100 basis points each to reduce interest rates and improve liquidity. He wanted the government should announce the setting up of 50 large projects in the next 30 days to revive investor interest, besides allowing 25 per cent accelerated depreciation for investments in plant and machinery. While a clear and quick plan for fiscal consolidation should be announced to create a growth momentum, the falling rupee and deteriorating current account deficit would not only need stronger intervention by the Reserve Bank India (RBI) in the foreign exchange markets but there was also a need to attract private transfers from NRIs and PIOs by issuing bonds like Resurgent India Bonds. Godrej said the RBI should also allow direct access to importers of items which have inelastic demand, such as oil, for their foreign exchange requirements and create an “Export Development Fund” to support small exporters. Energy security The chairman of a public sector enterprise, who did not wish to be identified, said the slowing GDP growth rate, falling rupee, subdued investments and the much-hyped policy paralysis are a few among hundreds of reasons weakening the sentiment on economy. He said that there was a need to pump up both foreign and domestic investment in infrastructure. India needed more factories to generate employment. So there was a need to revive the concept of SEZs and promote them with incentives, besides having a nation-wide policy on achieving energy security. With adequate energy and electricity, factories and the services-based economy would not take off. Access to affordable energy was critical for industry as well as agriculture, he said. Build supply side PHDCCI secretary general Susmita Shekhar was also of the view that economic slowdown has been mainly driven by industrial deceleration, which has taken a toll on the overall growth. There have been severe roadblocks stemming from poor performance of the manufacturing and capital goods segments. At this juncture, effective policy interventions and reform to kickstart the growth in these sectors are needed. While investor friendly policies would nudge entrepreneurs to invest, rapid infrastructure development could put the economy on a sustained growth path. Shekhar said it was an opportune time to reassure investors with promises to open more avenues for projects and partnerships. She said a well articulated logistics strategy was a must. Progress in this sector could help the economy overcome several supply side bottlenecks, which hinder development and create inflationary scenarios. The government should incentivise private participation in development of the supply chain, she added. Sugar it Abinash Verma, Director General of the Indian Sugar Mills Association, pointed out that the sugar industry was the only one that had not benefited from the reforms of the ’90s. The government now had to ensure that this industry too was given the basic freedom to grow and achieve its potential. |
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This above all
The first time I met him was in London’s Albert Hall. It was packed to overflowing with his Indian and Pakistani admirers. He was told that Maharani Gayatri Devi of Jaipur was in the audience. He came down from the stage and touched her feet before he started his programme. He was a Jaipuria. His rendering of “Ranjish he sahee” remains the top favourite for most ghazal lovers to this day. Once he told me of the danger of mixing ragas. He had done it once and on his way home from the recording studio the bus he was travelling in collided with another, and he was severely injured. He could be very naïve. Though ghazals were his forte, he was equally adept in singing classical ragas and thumris. His rendering of “Nadia kinarey mera gaaon” is a most soothing piece of music. I was disappointed with the lack of coverage given to him by the AIR Urdu programme. The lady on the mike spoke at length of Dr Sun Yat Sen of China. AGE OF AUSTERITY Full page pictures of Ambedkar and Rajiv Gandhi/ On their birth and death anniversary/ Costing crores to the country/ Are indeed an example of austerity/ Which in this dire economic scenario/ Is a crying necessity/ Six thousand guests at a marriage reception/ Of the son of a businessman or a politician/ And piles of food rotting in the morning/ Showcase the warfooting/ On which we are practicing frugality!/ Fleets of Cars choking the city/ And ten-acre farmhouses hosting late night parties/ Mirror not only the economic situation in the country/ But also establish an identity/ With the vast majority living in poverty!/ And finally, business executives with ten crores of annual salary/ Have of necessity to practice frugality,/ While with their sandals and jewellery respectively/ Two shining examples of austerity/ Are Jayalalitha and Mayawati (Courtesy: Kuldip Salil, Delhi) NECKLACE FISHED OUT “I wanted to show Wang Xue how much I love her,” Xaio Li told reporters in Qingdao, Shangdong province, “and I thought it would be a good joke too. I bought a gold necklace for my girlfriend, and baked it inside a special muffin for her birthday party, so it would be a nice surprise. But when I gave her the muffin, before I could say anything, she had swallowed it whole, all in one bite. And I had to tell her the truth about what I’d done on the way to hospital”. A hospital spokesman explained that “after X-raying Xue, surgeons decided to operate to remove the necklace. She underwent endoscopic surgery, where a probe was put down her throat into her stomach to fish out the necklace”. Xiao added that “she got her necklace back eventually, but I’m not sure she will ever feel comfortable wearing it, even though I spent hours cleaning it for her”. (Courtesy: Private Eye, London) HOMOSEXUAL Santa: “Preeto, main homosexual haan”. Preeto: “Kistrah pata chalyia? (How did you find out?)” Santa: Main sirf home wich hi sex karda haan (I have sex only at home)”. Preeto (his wife): “Shukr hai rab da, main homosexual nahin haan. (Thank God, I am not homosexual.” (Contributed by Amrinder Bajaj, Delhi) PUNJABI LEEWAY A Punjabi Minister of Higher Education visited a university. He was duly introduced to all important functionaries. When the introduction ceremony ended, he asked to everybody’s surprise, “but you haven’t introduced me to Ms Syndicate. Where is she?” STRIDHAN Guess what terminology a Ladies Tailor had devised to refer to a lady’ bosom, waist and hips? Ans: Uttar Pradesh, Madhya Pradesh and Andhra Pradesh. (Contributed by KJS Ahluwalia, Amritsar) |
TOUCHSTONE IRA PANDE
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few years ago, when Shashi Tharoor - then a highly sought after public speaker - gave a lecture at the India International Centre on the importance of cultural diplomacy, he spoke of the potential of 'soft power', a term coined to describe a clever tool in international relations that is wielded to subtly mould public opinion in foreign lands in favour of your country.
The British and American governments have reaped a rich harvest from the British Council and American Centres they set up throughout India almost five decades ago for this purpose. Through books, cinema, lecture tours and visiting art and theatre events, they brought sceptic Indians closer to an understanding of the full range of their country's cultural profile. Today, New Delhi is dotted with the cultural centres of almost every major European country as well as some from the Middle East. They offer language courses, scholarship programmes and regularly hold cultural events to bring the latest cultural offerings to Indians who may not get a chance to view these. This is what has made Alliance Françoise, along with the Spanish and Italian Cultural Centres, almost as popular among the young as Germany's Max Mueller Bhawan was some decades ago. Granted that many go there to drink the wine and eat the cheese and delicious snacks that are offered on opening nights, I have seen young university students make regular trips to keep themselves abreast of these events. Some of the best film festivals, music concerts, lectures and art exhibitions are hosted by these centres that are open to all. Currently, Spain's Instituto Cervantes has a dazzling exhibition of the late Mario Miranda's cartoons and sketches, done after a visit to Spain. Earlier, they had an equally stunning Pablo Picasso exhibition that people visited over and over again. Alliance Françoise, with its stylish glass and chrome building, opens its doors to book launches, jazz evenings and its café is always full of young, arty students. Films are a major draw and now with the gradual retreat of the film society movement in India, these cultural centres are an invaluable asset in accessing the best of world cinema. What is more, the people who head them are known Indophiles, carefully selected for their knowledge of Indian languages and art. Instituo Cervantes, for example, has as its director Oscar Pujol, a formidable Sanskrit scholar who has been associated with a Spanish-Sanskrit Dictionary project and spent several years in Banaras studying under Sanskrit pundits. Once, when I confessed my own ignorance of classical texts, he offered to give me free lessons in basic Sanskrit! Our own government has several Nehru Centres across the world, but many merely function as extensions of the diplomatic missions and are run unimaginatively. Visiting scholars are seldom tracked and invited for interaction, nor are the right people identified to head the centres. As with so much else, cronyism has defeated the possibility of great cultural diplomacy. I am told some hold exhibitions of salwar-kameez suits and have been taken over by the local ethnic Indian groups to hold Punjabi Day or Sindhi Day kind of 'cultural evenings'. Time was when eminent cultural figures such as Gopalkrishna Gandhi and Girish Karnad were invited to head London's Nehru Centre. They made an impact that is still remembered by Indians there. Hopefully, someone will try and revive these with good people. Madeleine magic Given the weather conditions, no one seems to be inclined to step out. However, there are some occasions when one rouses oneself from the heat-induced stupor for a special event. The India International Centre recently hosted an evening with Madeleine Albright, former US Secretary of State. Once a familiar figure on the world stage, this dimunitive power-woman was President Clinton's favourite trouble-shooter when she was part of his government. Her energy would shame someone half her age and Albright continues to zip across the world when most women her age would be content to bake cookies for their grandchildren. Like her flamboyant former President, Albright (who has a penchant for teaming her zany short dresses with a signature brooch) is a dazzling speaker. In conversation with journalist Shankkar Aiyar, Albright held her audience captive for almost an hour and a half, holding forth on a range of issues from world politics to her 'pin-messages'. Listening to her clear answers and her courage in taking on some nasty questions head on, one realised that an intelligent career diplomat makes an impression that no waffling politician can. Highly educated and brought up in a diplomat's home in London, this Czech-born woman is by now a world citizen and at home in Europe, the Middle East and Asia. She is fluent in English, French, Russian, and Czech, and she speaks and reads Polish and Serbo-Croatian as well. Had our own Foreign Affairs Minister been fluent in even two of the above languages, I doubt if he would have read the wrong speech at the UN. When, at the end of her interaction, Albright told her Delhi audience, "I must love India very much to visit it in June!", she immediately struck a chord with all of us there. This is what soft power is all about: using your charm to win friends abroad. As she spoke that evening, she won America several friends. |
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On the spot in Corbett, to save the stripes
Way back in 1982, Brijendra Singh arrested at gunpoint the entire top brass of the district administration while poaching in the heart of the Corbett National Park, of which he has been Honorary Wildlife Warden for more than three decades now. The Corbett Park has the highest tiger density in Asia. That Brijendra is an authority on wildlife conservation is beyond doubt, being member of the National Tiger Conservation Authority (NTCA) and one of the longest serving members of the National Board of Wildlife. He spoke to The Tribune on the challenges faced in tiger conservation. The NTCA had termed Corbett National Park in Uttarakhand a hotspot of tiger poaching. What steps are needed to strength tiger conservation in Corbett? Corbett is like a bank with open gates. There is lack of manpower; 50 per cent of its forest guard posts are vacant. The daily-wagers there also don’t get paid every month. Realisation must dawn upon the Uttarakhand Government to take urgent steps, as any poacher can hit Corbett, which is a national asset due to its thriving tiger population. NGOs too have been raising the issue of the park’s vulnerability to poaching. They have blamed the Uttarakhand forest authorities for doing little to check poaching. NGOs are certainly a help in furthering the cause of tiger conservation at Corbett, but then they should play a more of constructive role. Just accusing the Forest Department won’t do, and the NGOs must provide credible information. Man-animal conflict is a big challenge for forest areas. What is the situation at Corbett? Elephants could prove to be a serious challenge, as their population is rising steadily, and coming in conflict with habitations, particularly in Uttarakhand. The only solution lies in restoration of elephant corridors. In Uttarakhand, Corbett National Park and Rajaji National Park need to be linked. Also, proper trenching, raising walls and plant species that serve as food for the pachyderms are some of the steps needed to be undertaken. And all this must happen urgently. Rehabilitation of forest-dwelling communities living inside tiger parks across the country has been a major issue. These communities need to be rehabilitated urgently. In the case of Corbett, the issue of 191 Gujjar families living in Kalagarh division is yet to be resolved. A committee has been set up by the state government for the purpose, but rehabilitation seems to be nowhere in sight. Resorts have come up in the close vicinity of Corbett. The issue has been raised time and again, even by the Union Environment and Forestry Ministry. But the number continues to grow. These resorts are the result of a nexus between politicians and rich people. Successive governments in Uttarakhand have failed to check the mushrooming of these resorts, which are proving disastrous for wildlife. The government does not have a clear policy for land use, and rampant construction is going on all along the Kosi river. What are the NTCA’s new initiatives on tiger conservation? The NTCA plans to install high-tech surveillance systems in tiger reserves across the country, and a beginning has been made with Corbett, where camera towers have come up and are functional. These cameras are heat sensitive and provide information to the base station. How are the tiger protection efforts doing in various states? The NTCA is funded by the Central government. There are a total of 41 tiger reserves in the country, which are ultimately a state subject. Maharashtra had recently given shoot-at-sight orders for poachers, and the state is doing commendable work. Similarly, Assam and the southern states are also doing well. The NTCA entrusts the Wildlife Institute of India (WII) to conduct the tiger census every two years. How satisfied are you with the quality of this exercise? The census has an important role in determining the numerical strength of tigers in the country. The WII with its camera traps has adopted the best possible technology for enumerating wild cats. They identify tigers by their stripes, which is like fingerprinting. No tiger can be counted twice, which makes it a foolproof mechanism for the census. Images of other important wildlife species have also been taken. Interestingly, even poachers have been captured on camera in certain cases. There were at one time plans to include Amangarh tehsil in UP, adjacent to Corbett, in the national park. Along with NTCA Chairman Rajesh Gopal, I plan to meet Uttar Pradesh Chief Minister Akhikesh Yadav, who recently announced introducing a lion safari in the state. An area of 8 sq km of Amangarh tehsil, which was once part of Corbett, is now under the UP Forest Department. It has a good population of tigers. |
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PROFILE:
Kannan Soundarajan Soundarajan says: “The best players can bounce balls off the edges of this table and make them go exactly where they want. That’s because these edges are straight, predictable. Imagine, what happens if these two ends are U-shaped. You bounce a ball off the edge and it could go anywhere. It’s going to be unpredictable, chaotic.” According to him, what is true for a large billiards ball could also be true for the invisible or microscopic world. For example, sound waves in a well-designed hall make sound travel evenly to every corner. But if the hall’s edges are not precise, the sound would get chaotic. “Chaos, unpredictable behaviour — this is an area where physics overlaps mathematics. Physicists wanted to understand how waves are influenced by the geometry of their enclosure. Their equations can predict wave movements to a large extent, but there is still a missing link.” Soundarajan reached back to history and pure mathematics to address that. In 1987, when the birth centenary of legendary mathematician Ramanujan was observed, Soundarajan was in school. His work had been an inspiration for him. In early 1900, Ramanujan, a self-taught clerk at Chennai port, wrote reams of formulae that changed maths forever. Soundarajan, who grew up in Chennai and studied at Padma Sesadri High School, Nungambakkam, showed early inclination towards mathematics. In middle school, his teachers identified the talent and put him in touch with a research institute in Chennai. He employed his mathematical talent to represent India at the 1991 International Math Olympiad, winning a silver medal. Soundarajan is today a Professor of mathematics at Stanford University. Early this year, he was in India to receive the Infosys Award. According to the citation, he has made fundamental contribution to the analytic number theory. He has made breakthroughs in difficult problems, as well as resolution of some longstanding challenges. Many of the analytic tools Soundarajan and his associates developed have become standard for researchers. His recent work brings out the connections between the classical number theory and quantum physics. Soundarajan is in his elements at Stanford’s maths corner, a building housing hundreds of years of mathematical progress. His blackboard quickly fills with equations from the classes he teaches and his research. |
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Provide stable policy environment
FDI in civil aviation
Infrastructure needs a particular boost. The Prime Minister’s Office is streamlining the process for power projects. The Finance Ministry has created a cell for monitoring large projects. Projects in the pipeline need to be expedited so that confidence is built. Problems in clearances on land acquisition, environment, coal linkages, etc, need to be streamlined. Building of infrastructure such as roads, ports, power plants, airports, rail connectivity, and urban development must be taken up on priority. 
While the budget has set a target of reducing subsidies to under 2 per cent of the GDP, this is a tough one. There is immense political opposition to reducing subsidies on diesel, fertilisers and foodgrains, and when inflation is already very high, it will have to be staggered. 
This is a much needed big reform, and can go through without a Parliamentary logjam. The Cabinet has already taken a decision, which is on hold due to opposition from some states. Efforts are now on to push it again by building consensus, at least among some of the non-BJP ruled states. This will kill many birds with one stone — reduce food wastage, bring down food inflation, create supply chains, better prices for farmers, reduce retail prices for consumers, and bring big ticket investments from the likes of Walmart.
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