|
|
|
|
|
The fall on Friday Political
appeasement |
|
|
Queen of Hills?
Challenges before
RBI
Of rats, cats and
owls
The West must
finally see Egypt as it is
|
|
Political appeasement Is
democracy antagonistic to meritocracy? The way political appeasement is interfering with every step taken towards creating a modern society - based on merit and equality — it may seem so. Political parties of all shades, which do not see eye-to-eye on many issues, came together to demand a Constitution amendment against the Supreme Court's order to stop caste-based reservations in faculty posts for specialty and super-specialty courses in the AIIMS ( All India Institute of Medical Sciences) on Wednesday. Last month, a five-judge Constitution bench, headed by the then Chief Justice Altamas Kabir, had passed the order against caste-based reservations. Law Minister Kapil Sibal, who as Education Minister tried to modernise the education system, and Parliamentary Affairs Minister Kamal Nath assured the members across party lines that the government would bring a Constitution amendment Bill and within hours the government filed a review petition in the Supreme Court against the judgment. Such alacrity is rarely displayed by the government. If caste is going to remain the sole criterion for achieving meritorious positions in our society, then we may be repeating the history condemned as inhuman and unjust by standards of modernity. The only difference is: the implementation of this unjust system is sought the democratic way this time. Political interference in institutions of excellence has brought the country to a situation where none of the 600 Indian universities feature among the top 100 global universities. Though the review petition is an easy option, the real problem for the government would be to justify the amendment to the Constitution, since the Supreme Court has relied on a previous judgment by a nine-judge Constitution Bench in the famous Indira Sawhney case of 1992, wherein the court had said that caste is the only factor to determine backward classes, at the same time it had referred to the removal of the creamy layer. If political interference is not stopped at the super-speciality level in medical courses, the $2 billion worth of projected medical tourism industry, expected to grow at 30 per cent annually, will be in jeopardy.
|
|
|
Queen of Hills? The
Queen of Hills is no longer the picturesque, idyllic place it used to be. Marred by unprecedented development and traffic chaos, Shimla initially meant for a population of 25,000 persons today stands choked. Traffic congestion is without doubt one of the many woes. The state government has sought funds from the 14th Finance Commission to decongest the hill town by constructing a tunnel and shifting a dental and nursing college to the outskirts of the town. The money sought, one hopes, would be used for the purpose for which it is meant. Rapid urbanisation has brought in its wake a host of development issues. Among the many challenges that the planners face, the paramount concern is of tackling traffic congestion. The problem is further compounded when the city happens to have a peculiar topography and an old infrastructure. Without a doubt Shimla, whose vehicular traffic has grown manifold from 16,450 vehicles in 1995 to 48,000 in 2011, needs to do all it can to ensure a smooth flow of traffic. On the surface, successive state governments have made the right kinds of noises. More recently, a Rs 250-crore aerial ropeway project connecting Shimla's inter-state bus terminus at Tutikandi with the Mall, to be built through public-private partnership, has been announced. Not long ago, a Rs 5,000-crore comprehensive mobility plan (CMP) was drawn. The plan envisages aerial ropeways, escalators and an elevated rapid transport system The crucial question, however, is whether the proposed projects would ever see the light of the day. The Congress government initially talked of a monorail project; now it is toying with personal rapid transport pods on the lines of those functional at Heathrow airport. Whatever may be the way forward, be it the construction of tunnels right now being given topmost priority or development of satellite towns around Shimla, the hill city must breathe again.
|
|
|
A woman drove me to drink and I didn't even have the decency to thank her. — W. C. Fields
|
Challenges before RBI The
newly appointed RBI Governor, Dr. Raghuram Rajan, has said that there is no magic wand that will make India's current economic problems disappear. Indeed, however competent and brilliant he may be, he may not be able to stop either the rupee's fall or bring the economy back on track overnight. The truth is that the economy has a very small window of opportunity for economic recovery and it has to be seen whether Mr. Raghuram Rajan can seize this opportunity. It would be a fallacy to think of India as 'too big to sink' because it is in dangerous waters like never before. Even the Finance Minister has taken note of the perilous situation and has announced a number of measures to shore up foreign exchange inflows because they are just enough to cover seven months' imports. Although the Forex reserves are at $279 billion, India's corporate sector has huge debt obligations which it would have to pay off soon. The corporate sector borrowed merrily from Western countries at low interest rates in the past and this resulted in a short-term debt of $172 billion that would be maturing within a year. In 2014, India's short-term debt would amount to 60 per cent of India's Forex reserves. Also External Commercial Borrowings (ECBs) were a boon for companies in the past but now they amount to 31 per cent of India's total external debt of $390 billion. The corporate sector's weak performance combined with higher interest rates due to the weak rupee is going to make the debt servicing obligations of these companies difficult. It would also weaken their prospects of recovery. Now the FM has increased the ECB limits further to enable companies to access dollars but the prudent amongst them will not go for big loans. In the past, India had a safe situation of having more long-term debts and a small proportion of short-term debt. Today the proportion of short-term debt in India's total external debt has gone up three folds since 2008 and is at 44 per cent. The Current Account Deficit (CAD) is another problem which will put pressure on the Forex reserves. Imports have been exceeded exports, especially gold and oil. But perhaps due to the rupee's fall, export growth rose 11 per cent in July. Imports have also declined and the government has raised import duties on gold and silver by 10 per cent and it may also curb imports of non-essential luxury items in a bid to shrink the CAD to $70 billion. The CAD is around 4.8 per cent of the GDP currently which means it would require around $88 billion to meet the deficit. The newly unfurled game plan of the FM will be able to garner $11 billion more in foreign exchange inflows. The sliding rupee could trigger capital flight. Several Indian industrialists are trying to take their money out of the country. The government has clamped down on overseas investment by Indians from $200,000 to $75,000 per year. This has shaken the confidence of the investors and the rupee fell to Rs 62 to a dollar. The lack of full convertibility of the rupee, however, would help in stemming capital flight. Thus bringing back confidence in the policies of the government will be a serious challenge for the new RBI Governor. Turning to the fiscal side of the economy which is not directly under the RBI but is closely connected to its monetary policy, there would also be a problem if tax collections fall. Mr. Chidambaram recently announced that the 2012-13 fiscal deficit had been contained at 4.9 per cent of the GDP instead of the revised estimate of 5.2 per cent. This is good news though in the future, the government has to watch out against tax evasion, especially in times of inflation and falling profits. Instead of becoming a cashless economy, India is becoming more reliant on cash payments because hordes of people want to avoid paying taxes. Widening the tax net and implementing a system of efficient tax collection would require good governance. According to some economists, the political timing of the Food Security Bill cannot be questioned but its impact on the widening of the fiscal deficit by at least 0.2 per cent is certain. A rise in diesel prices because of higher oil prices on account of the falling rupee is imminent and will also push up food prices. Already the consumer price index (CPI) is at 9.6 per cent and food inflation is at 12.4 per cent. Any increase in the fiscal deficit will be inflationary. Inflation control will remain the primary challenge for the RBI Governor. The choice before the new Governor would be: whether to control inflation or to promote growth. The previous Governor did not cut the repo rate (the rate at which banks borrow funds from the RBI) which is high at 7.25 per cent because he wanted to target inflation. High repo rates lead to high lending rates and this have already stifled fresh investments. Rajan will have to weigh the pros and cons of reducing the repo rates. If he reduces them, he would give a stimulus to industry and attract fresh investments without which there would be a further fall in industrial growth. Industrial growth declined by 2.2 per cent in June and what is worse, capital goods industry growth is shrinking by 6.6 per cent. This will impact productivity growth which is deteriorating. If the RBI lowers the interest rates it might trigger a further slide in the rupee because moreFIIs are likely to withdraw from the bond market. He would have to restore the confidence of foreign investors in the economy's growth potential. Foreign investments are needed for infrastructure and industry. FDI norms were relaxed further by Chidambaram recently. The Governor will also have to attract more FIIs. Already $11.3 billion of FIIs have left India for more secure climes with the promise of higher interest rates in Western countries when Chairman of the US Federal Reserve Ben Bernanke announced that he would be winding up the 'quantitative easing' (the Fed buys $85 billion worth of Treasury Bonds every month) to revive the economy. In the past, FIIs flocked to the emerging markets and looked for higher returns. But as soon as growth prospects in India looked dimmer, they headed home. Recently their mass exodus resulted in the stock market's fall by 769 points. If the GDP growth rate picks up, they would stage a comeback. Unfortunately, investment rating agencies, the IMF and the ADB are predicting 4.5 to 5 per cent growth for India. Tough work ahead for the new Governor as he will have to bring back investor confidence, reduce CAD, stop the rupee's slide, control inflation and promote
growth!
|
|||||||
Of rats, cats and owls Many
of us have read or heard the story of "Who will Bell the Cat?" With due apologies to the original writer of the story and to the Professor who narrated it during a refresher course in the context of policymaking and its implementation, I here take the liberty to further modify it. The rats (common people) were being subjected to great atrocities by the cats (men with muscle power, political power, money power, bureaucratic power etc. etc). Mind you, here there are many cats, not one, pouncing on the poor rats. With the resilient patience which only the rats could have, they did bear the atrocities for quite a long time. Then their patience wore out and they decided that now enough was enough! They all gathered courage to get together to find some solution to the menace of the cats. But even after hours of brainstorming sessions, they could find no solution to combat the cats. "An idea sirs," a rat shouted. "Why not go to the wise owls (policymakers) sitting there on the numerous branches of the great Banyan tree. (The tree is the country with its numerous ministries and departments.) The owls are all very wise and they will definitely have some solution," the rat told them, excited by his own idea. "Not a bad idea", the other rats said and they all went to the great banyan tree where all the grave and wise-looking owls were seated. The owls were quite surprised to see the rats daring to come to them and asked them why they all had come to them. The rats narrated their tale of woes and the numerous atrocities being committed on them by the cats and requested the wise owls for a solution. "Well the solution is so simple, just bell the cats and you would be forewarned of their coming. You can then hide and thus save yourself," said one of them. The rats jumped with joy and some of them thought as to why they could not think of this simple solution. But then an old rat stood up and said, "Hail, you wise owls, but who will bell the cats? Will you?" A gloomy silence fell on the rats and the owls like a huge dark cloud suddenly over-shadowing the bright sun on a cold winter day. The owls got angry. In one chorus they said, "Well, look here! We are policymakers, we only make policies. If you have problems implementing them, it is none of our business". Thus, the problem still remained, so much so for policy formulation and its implementation at the grassroots level. Well countrymen, we have excellent policies, but at the implementation stage all fall flat and it is the poor rats that have to bear the consequences. Public policies are implemented by the administration with public money. It is the common man who has the biggest stake in them. But in this great country governance is not of the people, by the people and for the people in true letter and spirit. If the present situation is what we call democracy, then wake up countrymen to find
solutions.
|
|||||||
The West must finally see Egypt as it is
One of the early mistakes the West made was not to anticipate the end of Hosni Mubarak’s rule, long before his departure was forced. The Western world cannot afford an Egypt mired in protracted disorder
So
what, contemplating the carnage in Egypt, does the Western world do now? It is not hard to imagine the scurrying going on in capitals, where presidents, prime ministers, ambassadors and strategists are all far away from their desks. International calamities have a habit of erupting during the holidays of high summer or deep midwinter, making it all the more likely that one ill-judged response will follow another. But how the United States and Europe address a crisis that combines the indiscriminate brutality of Tiananmen Square with the enduring volatility of this neighbourhood demands more careful consideration than there is strictly time for. Above all, the scale of what has happened must not be underestimated. The military assault on the Muslim Brotherhood's protest encampments cost, at the latest official assessment, more than 500 lives. Ruthlessness, ineptitude, naivety and an acceptance of martyrdom may have played a part in increasing the death toll. But that is no excuse. This was a ferocious military crackdown, causing casualties all over the country, from Suez and Alexandria in the north, to Aswan in the south. For all the ferocity, though, and the cordons and the curfews, it is not obvious that the army will be able to keep order nationwide. We may be looking at chaos rather than incipient civil
war.
And chaos not just anywhere, but in a country of more than 80 million people, a majority of them under 24 with — in terms of paid employment — nothing like enough to do. The most populous country of the region, Egypt links the Arab and African worlds. To the north are Israel, Gaza and Syria, whose combined potential for disruption needs no further explanation. Nor should it be forgotten that Egypt controls the Suez Canal, still the crucial route for East-West shipping. Or that Egypt has long enjoyed huge international sympathy because of its distinct history and identity. The Western world cannot afford an Egypt mired in protracted disorder. Egypt's relative proximity and the unpredictability of its neighbourhood exclude the treatment the West meted out to China after Tiananmen Square. Beijing was essentially confined to a diplomatic deep freeze. As always, of course, there was more rhetoric than reality, but China and its leaders could be ostracised because trade relations were nothing like as close as they are now and China was far away and self-contained. Nor, realistically, had there been any serious chance of democracy breaking out in China as a result of the protests. The West was always more spectator than actor in an alien land. Egypt is different. The US, in particular, has been deeply engaged there since 1979 as part of the peace treaty with Israel. It is an engagement that was to a large extent military and allied to security guarantees — which may explain why President Obama showed such reluctance to switch sides as the popular challenge to Mubarak's rule mounted and why, when the military ousted the elected Muslim Brotherhood president, Mohamed Morsi, the US (and most of its allies) shilly-shallied so disgracefully in calling it a military coup. Not only would a coup have sounded far worse than "the formation of a military-backed government", it would have obliged the US to suspend military aid — and with it, Obama was clearly persuaded, the last fragments of American leverage. You can understand, if not support, the argument that some leverage is better than none. Yet the belief that the US, or Europe, has been in a position to exercise much, or even any, leverage in Egypt since the overthrow of Mubarak is largely wishful thinking. It was an illusion, and one that has landed us in the predicament we find ourselves in today. Among the early mistakes the West made was not to anticipate the end of Hosni Mubarak's rule long before his departure was forced. It was easier to deal with the old ally, as, by the way, it is easier and more convenient to deal with the Soviet-era potentates in Uzbekistan and Kazakhstan, who are also in the twilight of their years —without paying too much attention to the demographic forces swirling around him. At least Central Asia, unlike Egypt, is not even close to our
backyard.
A second mistake was to exaggerate our power to influence, let alone control, events. Oh yes, we courted the young telegenic protesters on Tahrir Square; our NGOs flooded in to teach the basics of (mostly US-style) democracy; we talked the language of constitutions and conventions and ballot boxes, and we lauded Egypt's growing electoral literacy. We even managed, just about, to avoid the fatal error we made with the Palestinians, to encourage elections, and then reject a result not to our liking. But when President Morsi was deposed by the army, our double standards once again homed into view. A new government, however distasteful, and new elections would give Egypt a second chance to produce a result that we — and our young friends of all those months ago on Tahrir Square — might prefer. No wonder so many governments chose not to call the coup by its proper name. Egyptians, of all persuasions, have every right to question our good faith. Amid the ruins of the West's misfired good intentions stands one lone and tragic figure, Mohamed ElBaradei, who, through no fault of his own, epitomises the way in which we have misread today's Egypt for so long. A distinguished lawyer and diplomat, an accomplished international civil servant who was awarded the Nobel peace prize for his work at the International Atomic Energy Agency, ElBaradei belongs to Egypt's urbane elite. He was the face of Egypt's future we hoped for. We saw him as a transitional successor to Mubarak, then as the ideal first president of a democratic Egypt. But the only leadership post he actually obtained — and that not without dispute — was as acting vice-president for international affairs after the coup. It was a clear sop to Western opinion, designed to make the unacceptable just acceptable enough. ElBaradei lasted just one month, resigning as the army was ordered in to crush the Muslim Brotherhood. How could he not? With him went, or should have gone, any illusions the West still cherished — because Egypt is not a country of urbane ElBaradeis, but a vast, backward country with millions of young and poor, who urgently need training and jobs and some tangible improvement in their daily lives. It is here, in education and the economy, that the West's efforts should have been concentrated from the outset. And perhaps, with our illusions about Egypt and its supposedly benevolent military regime now shattered, this is where a new start can be made. But without civic order, or at least order that enjoys broad popular consent, even such basic assistance will be harder. We are damned if we maintain relations with a regime that has slaughtered so many of its own people, but also damned if we don't. The West needs an Egypt that is calm and secure, an Egypt that settles its internal differences without resort to arms. As of this week, such an Egypt looks very far from reality. But it is an Egypt that most Egyptians, few of whom ever shared the West's illusions, would also want for themselves. — The Independent
|
|
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
