Lift me up....

Indian economy, it appears, is recovering from the grueling financial crisis witnessed by the whole world prodding the government of the day to defuse the mayhem and chaos that accompanied it. The outcome has yielded results and has fuelled the debate about withdrawal of stimulus package. For, many economists feel its time for fiscal consolidation- an euphemism to warn ourselves of the ballooning fiscal deficit which touched a 15-year high last year. One measure that is suggested is to curtail our huge subsidy bill which no doubt fills the ballot boxes in favor of the government,

Well, when it comes to subsidy the first thing that comes to my mind is fuel subsidy though it is only a off-budget item and does not reflect in the revenue or fiscal deficit of the government. Fuel subsidy – everybody gets it. From the fuel- guzzling SUV owners, millionaire owners of the luxury cars to a moped owner who has no idea what to do with that moped that has 30km/h top speed. The point in case is the recent recommendations made by the Kirith Parekh committee on fuel pricing. Among all other things, the committee has recommended the free pricing of petrol and diesel. And not to be forgotten that the same measure has been recommended by committees formed previously.

But this time government is seriously mulling over it. Though, it definitely has kicked up a lot of smoke in the air. If this is implemented it would be an audacious reform that would make India get closer to being a truly free market economy. One reason this is hugely protested is for the apprehension that this might throw the Fuel price vulnerable to fluctuations in global fuel price. This fear of inflation has been the restraint so far. In my opinion, this is only an ill-informed conclusion. Its only the existing system of subsidy will lead to generalized price rise. As government has to bear the loss of Oil marketing companies by way of borrowing it has the impact on borrowing cost for the manufacturing sector which will pass on the cost only to the consumer. But by having a free pricing RBI can have a better control over controlling inflation through its monetary measure.

And as such the free pricing would not have great impact on the spending pattern of the vehicle owners. But one thing is for sure if this is implemented fuel pricing can no more be a political decision in the future to come. Rest assured for ruling party that opposition parties would have one ammo less in the artillery.

Of course, the decision of decontrolling fuel pricing takes lot of political will and takes lot of work convincing the people of its long term benefits. Till then its just wait and watch.


Here’s good write-up on the issue by Kirit.S.parikh
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=CAP/2010/02/18&PageLabel=14&EntityId=Ar01400&ViewMode=HTML&GZ=T

Lesson for Democracy….

Who said the scourge of corruption is rampant only in public sector and mostly amongst politicians? Here’s is a case in the corporate world that shocked thousands of investors in the capital market. Satyam Computer Services Ltd , fourth largest software services company promoted by B.Ramalinga Raju, is said to have breached the trust of its investors by making a decision to invest whooping amount of Rs.6000 crores in a company in which the promoter and his family members jointly own a major stake. This is much like taking a huge sum kept under public trust and enriching the pockets of the promoters and his kith and kin. The Board of Directors of the company approved the investment decision without considering other available options. One wonders if this had been done with best of intentions. No matter how sound the decision is this was a big blow to the investor’s confidence.

Here I would like to draw to attention to the reaction that it kicked amidst investors and the analysts. Just after the controversial decision was approved by the Board and made public the investors of American Depositary Receipts (ADRs) floated by the company in USA smelt the smoke in the air,. The prices of ADRs dropped owing to this very reason. Back home in India investor did not react very sharply though. But analysts and experts were outraged and up in arms against the logic of the decision. A report by Mumbai’s Dolat Capital Market Pvt Ltd called this “Satyam’s Daylight robbery”. Following this the same mood was caught on like fire by investors. As a result the Management of the company had to revert its decision. This proves that shareholder activism is alive and kicking and nothing can go wrong in a vigilant society.

This further reinforced the need for transparency in the corporate affairs and strict measures of corporate governance. Here there is a lesson that needs to be learnt and it has to be deeply pondered over.

Have we ever seen such a quick reaction to any allegations of any scams and kickback cases involving government and politicians that has very much been in our daily newspapers? Or is the functioning of the government not transparent enough? Transparency, accountability and good governance is the philosophies of every country that believes in democracy and its deep rooted values. But these are hard to come by. Not unless people of our country raise their voice in unison against wrongdoings by the government of the day. And not unless government makes its day to day affairs transparent. And not unless people realize that the money spent by government is their money too and theirs only. What we need is Citizens Activism. Their rights as citizens do not terminate in the polling booths. In fact it is only a beginning. Only this beginning would be the true beginning of the rule of the people.

Stop Bleeding Us...

Everyone called the macabre of 26th November as India’s 9/11. May be. But subsequent to 9/11 USA proved to its people that it can protect its citizens at any cost. Indeed people of Afghanistan and Iraq had to pay the heavy price. But likewise can India play USA to Pakistan? There are indications that finally the UPA government is shaken our of its slumbers. Home Minister Shivraj patil whom media and people blamed for his inefficient functioning following bomb blast at various place finally put in his papers holding himself morally responsible for the attack on Mumbai. External Affairs minister Pranab Mukherjee, following the terror attack, announced that all options including military option against Pakistan are open proves that government is committed to put an end to this scourge of terrorism. Everyone is acting and talking, at last.

Mumbaikars who always showed their resilience after any disaster-both natural and manmade have come out of their homes and protested against the politicians for their divisive tactics and to unshackle them out of their complacency. Columnist Ramesh Ramanathan in Mint calls it a political awakening. Never have the citizens of our country whipped the politicians like this in public. And this is good for democracy as it reinforces the principle of accountability. But contrary to this one of the BJP leaders criticized the coming together of people as attack on democracy inflicted by ladies who wear lipstick and powder. What a death blow to gender equality and women empowerment. But I must say Politicians have show their true colors at a time like this.

Here is another instance coming from none other than Chief Minister of a State who is expected to inspire and act as role model to his council of Ministers. He remarked that if it was not Sandeep’s ( an officer in NSG who sacrificed his life while fighting terrorist) house not a dog would have visited. He was obviously infuriated by slain officer’s Father’s unwillingness to let him express his condolence by visiting the house. But such a remark is not expected of a public figure. He should not have taken it personally. Nonetheless no lid can be put upon the boiling emotions of general public. This was evident too amidst people who had gathered in Gateway of India to show their solidarity against terrorism. One of the protestors, a lady, showed a placard that read “ I would prefer a dog visiting my house than a politician”. This is indeed a political awakening.

But I wonder if all the politicians read the newspapers. If only they had been receptive to public criticism and corrected their ways India would not be made to bleed by outside forces like what we just witnessed now.

Its not about cigars!!

Who said it’s a globalised world? Apart from people still surviving on less than a dollar a day yet be part of the country which claims to have embraced globalization there are many countries which are embittered by seclusion, in varying degrees. Cuba is one such nation not quite far but just 90 miles from USA, the solo superpower of this world. Cuba’s tussle with USA dates back to some decades back and it has remained relentlessly without acquiescing to US hegemony despite economic embargo for 47 years. It’s a different story that this pride of Cubans is at the terrible cost of their sufferings, sorrow and deprivation.

This enormous power of a tiny island nation against the mammoth comes from its charismatic leader Fidel Castro, a revolutionary who led a 9000 strong guerilla army to eject out Fulgencio Batista, the military ruler in 1959. Since then his rule over the nation for 49 years has been invincible. This 81 years old ailing leader brought the world’s eye suddenly on Cuba when he announced on Tuesday that he has stepped aside as Cuba’s president. This is clearly a victory for the octogenarian against the US which had orchestrated many assassination plots on him with the aid of CIA. Some as unimaginable as fixing bombs in cigars and under the shells of turtles when Castro was out scuba diving. This news of descent of the staunch socialist brought cheer amongst the exiled Cubans, living in Miami, waiting to return and take control of their seized properties. And many American Investors in Florida are waiting with millions of money to rebuild Cuba.

The travails of life of Cubans may or may not undergo transformation. However, the leader of the socialist nation assured its people that the revolution can still count on cadres from the old guard and others who are very young in the early stage of process. What remains to be seen is would USA be able to instill a transitional government which it has been trying hard by supplying aid to the Cuban dissidents ever since the rise of Mr. Castro. But the pride Cubans, to whom the socialist regime had offered free education and health care, may not let Cuba turn into just another colony of USA.

The drug debacle

It took ten years of time for India to prepare itself for the current mayhem that has surfaced in the pharmaceutical industry. They call it the IPR regime. This regime promises protection to patent holders, copyright holders and curbs piracy. But all of them comes at a cost. There is fear across the world among many NGOs and poor people themselves. It’s the fear of being deprived of the fruits of technological advancement, as they have to pay exorbitant prices which would include royalty to the patent holders. The case in point is the Novartis AG’s claim to have the patent for its drug “Gleevac”, registered in India and its determination to fight it in the court at the stake of its own reputation. Can you imagine a life saving drugs company infuriating the masses and bringing them onto the road?

Novartis AG’s act of obstinacy stems from the flexibility that TRIPS agreement provides to its members. And this what actually has cast the world’s eyes on India. As the TRIPS agreement did not provide for a firm definition of what is patentable, India restricted its right only to drugs invented after 1995, the year in which WTO regime was kick started, and new and “ more efficacious” version of older drugs. Backing on its legislation it rejected the patent application of Novartis AG which had filed a law suit against India contending that its patent laws violate WTO rules.

What adds more fun to this whole lot of issue is the controversy that R.A. Mashelkar committee is embroiled in. the committee report evoked allegations of “technical inaccuracies and plagiarism”. To throw more light, it was accused of plagiarizing a report, verbatim, made by another institute, Interpat, which is sponsored by a group of MNCs. And Novartis is one of the sponsors. The very agenda of the committee is to examine whether limiting the granting of the patent to “new chemical entity” is in compatibility with the TRIPS obligations. And it is very much the bone of contention between Novartis AG’ and government of India. The committee chairman said he is unaware of this fact. In this case Novartis had just tried to be the judge of its own case.

But all this cannot shake Daniel Vasella, Chief Exective of Novartis. He is poised to continue his action against India. “We don’t want popularity awards. We want to serve our patients and remain competitive” he said at his company’s AGM. There he has made it clear who the company wants to serve and who it does not want to. Bold move, my boy!!!

The drams ,of this sort, of globalization are still to continue….

What lies ahead...

Tamilnadu, apart from its reputation as fast developing states in the country, is known for setting trends when it comes to advancement of its socially and educationally backward class of people. This can be gleaned from the fact that Tamilnadu has 69% of seats under reservation while Supreme Court prescribed a maximum limit of 50%. Well, that makes Tamilnadu no violator of judicial pronouncement. But, rather it ensured safety under the constitutional provisions by placing its legislation under the ninth schedule, thereby insulating it from the judicial scanner. Now, Tamilnadu government has rolled up its sleeves to abolish Common Entrance Test (CET), which is a time-tested mechanism to provide entry into professional courses.

But the abolition of CET is not new and nor is it free from legal complications. This process was set in motion by the former AIADMK government. But later both the High court and Supreme Court put the whole thing to the naught. Here I am surprised to see that DMK led government has not tried to differ on this issue from the previous government. But rather trying to do what AIADMK failed to pull legally. Looks like everyone has an axe to grind on this issue. As far as the legal hitches, Supreme Court has ruled that entrance test is mandatory .In fact on these grounds, among others, AIADMK government was directed to bring the CET back. DMK with this legal complication in mind set up a committee to look in to the technicalities of abolition of CET.

While the government and those in favor of abolition mumble that CET works to the disadvantage of the rural students, there is another set of players who still favor CET. If it is to be abolished, plus two marks would serve as the sole criteria to fill benches in the professional courses. But you remember what we see in the newspapers after the declaration of plus two results? A large number of students with 200/200 in all/one or more major subjects. With abolition of CET it would leave many students at a tie baffling the people who are part of the admission process. Who knows this might even lead to arbitrary rejection of many eligible candidates and would only set the stage for new scourge of confusions. And that’s not all. Is the current system of valuation of answer sheets foolproof? Does the quality of higher secondary education is really the stepping stone for the professional courses?

Answers to these questions are not within the scope of the committee. Abolition is what the government wants. The committee has no authority to look in to the merits of continuing with CET. But its abolition is a mere political choice rather than being backed by solid facts and rational arguments. It is all an effort to win the hearts of a group of people to fill the ballot boxes in their favor rather the voting machines to beep in their favor. Call this vote bank politics. The problems of rural backwardness are not just due to the rural students’ restricted entry to the professional courses but rather it lies deep within.

Rural areas are deprived of many other things apart from the quality education. Blame not the government’s policies for this state of affairs but the delivery system and insensitivity of our politicians. They say our plans and policies are strong enough. But how does that matter if its not implemented with meticulous care and modicum of honesty. By resorting to reservation and abolition of what was considered a fair method government is trying to prove that it is only doing what it failed to do at the ground level. It is a simple ruse for mere survival. Talk about colleges when there are no enough schools in rural areas? And whine about the lack of competitiveness of the rural students when the vacant positions of many teachers are not filled for years?

At the national level, we talk about universal primary education and it’s a fundamental right to every child now. This constitutional amendment has been comfortably passed sitting in the chambers of parliament. But more needs to be done. Get your hands dirty politicians. No, no, I’m not talking about the money tarnished black. Take efforts to build schools at rural areas, fill them with qualified teachers, and good infrastructure (an all inclusive word-water, road, sanitation, etc). And quality education’ eh? After all, you can’t think of relishing on mangoes without planting a mango tree and watering them.

Please, someone try explaining this to our politicians.

Now, back to where I started. Abolition of CET is not the panacea to rural backwardness, though. But helpless we are. What else can we do apart from raising voices and giving out our opinions when the government is obsessed with it. It is time to wait and watch. How is the Tamilnadu government going to pass the law to abolish CET? Would judiciary intervene? Would the government come smelling out roses? What are the logical arguments it is going to put forward to support its action? Fun time ahead.