For some time, the fuel prices have been skyrocketing in India. To counter this, the government cut central and state excise duties. However, this is unlikely to solve the burning issue.
If you drive past a petrol pump nowadays, you will notice something strange; many of the towers outside the pumps, that displayed the prices of the fuel, are being changed. Because while prices of regular 87-Octane petrol are yet to cross the three-digit mark, prices of premium fuel used in sports-cars have breached the 100-Rupee mark even in Delhi. The small cut in central and state excise duties along with asking the oil marketing companies to absorb a one rupee hit, changes very little. As the Reserve Bank of India did not raise rates, the Indian Rupee touched new lows against the US Dollar and will almost certainly go past the 75 Rupees to a Dollar mark by next week. The impact of American sanctions on Iran have made life tougher for India as well as spooking global crude prices back towards the 100-dollar a barrel mark.
India is stuck between two very difficult places, and there are few solutions in sight. Of course, curbing India’s insatiable appetite for petroleum products is impossible if India’s economy has to grow. At best, the Government can only control it by taking some critical actions. The first is to encourage more domestic discoveries of oil and natural gas and do so by stopping silly arbitration cases against private oil drillers. The priority now is not how much people owe in tax but to exploit India’s own reserves. The second is to encourage vehicle manufacturers to go down the path of hybrid vehicles, and by giving incentives such as tax breaks to do so. Even in a ‘Mild Hybrid’ where the battery does not power the wheels, real-world fuel economy is at least 30-40 per cent greater than normal cars. This will not only lead to fuel savings for consumers but also less vehicular emissions, a win-win situation.
This Government is acutely aware of the horrible optics of rising fuel prices and the rapidly declining rupee but with consumer and industrial demand down, rising imports even of manufactured goods particularly from China their hands are tied. So for the time being at least, until the end of the year expect the rupee to keep falling, maybe close in at the 80 rupees to a Dollar mark, expect petrol prices to touch 100 Rupees a litre sooner rather than later and the markets to keep correcting. The only bright side in all this, at least year Diwali will be a bit more subdued and pollution levels lower.
Writer: Pioneer
Courtesy: The Pioneer
On the completion of 150 years of Mahatma Gandhi’s birth anniversary, the Global Embassy of Activists for Peace (GEAP) in Latin America has decided to create a zone of peace on the Asian continent and come together to follow up of the Asian Relations Conference.
A remarkable initiative organized annually in Latin America by the Global Embassy of Activists for Peace (GEAP) is a conference entitled, ‘The Peace Integration Summit’ with the acronym of CUMIPAZ. Earlier this week, the 2018 Summit was held in Guatemala at which this writer delivered the keynote address. What is particularly significant about the GEAP is the fact that this body consists largely of academics and intellectuals, with a remarkable thinker Dr. William Soto Santiago, as the prime mover. The GEAP has very lofty objectives: “Work towards the improvement, welfare, happiness and peace of the human family and Mother Earth, promoting a global formation of the integral human being and the formation of activists for peace in the framework of universal values and principles, for the defense of Human Rights and the Rights of Mother Earth, through the development of programmes, projects and campaigns aimed at different areas in which humans operate and interact.”
Significantly, we have no initiative of a similar profile in Asia, which fortunately does not have conflicts such as those in several other parts of the world. But tensions are on the increase in the region, as manifested by the recent near collision between the US and Chinese naval ships in the South China Sea. Since Asia now has a growing nuclear arsenal, it is extremely important that we serve the future of humanity by creating an atmosphere and philosophy of peace that guides relations in this region. It was in recognition of this challenge, which Mahatma Gandhi foresaw, that India hosted the Asian Relations Conference during March-April 1947, with leaders from all across Asia as participants.
Pandit Jawaharlal Nehru, then the interim Prime Minister of undivided India, stated on that occasion, “Asia is again finding herself … one of the notable consequences of the European domination of Asia has been the isolation of the countries of Asia from one another…Today this isolation is breaking down because of many reasons, political and otherwise…This Conference is significant as an expression of that deeper urge of the mind and spirit of Asia which has persisted. In this Conference and in this work there are no leaders and no followers. All countries of Asia have to meet together in a common task.” The Asian Relations Conference was clearly a visionary initiative, which for several reasons has not been followed up in substance by the nations in Asia.
Perhaps a greater focus on the Asian identity and creating a region of mutual trust, connected by common concerns and objectives, is now extremely important. It would also be useful to recall that 40 years later in 1987, the Government of India held the Asian Relations Commemorative Conference, which also drew participants from all across Asia. One of the major outcomes of that conference was a consensus to coordinate energy policies across the continent. As a result, with the initiative of a remarkable Foreign Secretary, Muchkund Dubey, the Asian Energy Institute was established under the leadership of Dr. Ali Shams Ardekani, later the Deputy Foreign Minister of Iran, and this writer.
The Asian Energy Institute, which was a network of energy institutions across Asia, took up as its first challenge the development of a plan for a pipeline to transport the enormous quantity of surplus natural gas from Iran to Pakistan, India and later Nepal as well. This was an extremely attractive option because Iran had found large reserves of natural gas, and the Iranian Government was willing to provide attractive terms and low prices to Pakistan, India, and Nepal for gas supply over a long period. Unfortunately, this visionary initiative was blocked by mutual suspicions and mistrust. Had it been pursued Iran’s place in the global community would have been different and relations between India, Pakistan and Nepal would have been much healthier.
Now that we are in the year of Mahatma Gandhi’s birth anniversary, India has a unique opportunity to give substance to the memory of that world apostle of peace. It would be relevant to create a zone of peace on the Asian continent and convene a follow up of the Asian Relations Conference during its diamond jubilee year in 2022. There are, undoubtedly, growing tensions which must be contained and will need to be channeled in the direction of peace, good neighborly conduct, and friendship. It would be extremely valuable to take the example of CUMIPAZ and draw on the academic community, forward-looking thinkers and activists in Asia and elsewhere who believe that human society in the 21st century must relentlessly pursue peace in this century.
Preparations should be taken in hand on Gandhiji’s birth anniversary in 2019 by the Indian Government with political leaders, captains of business, academics and think-tanks across Asia to organize a major event that must have an impact on the thinking and actions of societies across Asia so that we become a region of stable peace. In order to ensure that such an event is not merely a talk shop but results in crucial understanding in critical areas of human endeavor across the world and certainly in Asia, it will be useful to structure the diamond jubilee of the Asian Relations Conference into a set of very concrete areas of cooperation.
This means that the next four years have to be spent in an adequate preparation by which we not only ensure clarity in defining the areas where cooperation and constructive engagement would be essential but also involve major Asian leaders such as the presidents of Indonesia, South Korea and Kazakhstan, the prime ministers of Japan, Malaysia and Singapore and others in joining hands with India as partners in the conference.
Perhaps the best way to get started with this would be for a compact but diverse committee to be set up which may be given the responsibility of coming up with a clear plan of action to be debated and discussed by all the stakeholders. Once a plan is in place then action can be initiated perhaps by the middle of next year, which will allow three full years for an initiative of this nature, placing India at the center of peace in Asia. Also, this will be held as a fitting tribute to Gandhiji’s vision and commitment, which has even greater significance and relevance today.
(The writer is former chairman, Intergovernmental Panel on Climate Change, 2002-15)
Writer: RK Pachauri
Courtesy: The Pioneer
A multimedia exhibition on Mahatma Gandhi with a 3D video wall and an interactive timeline depicting the life of the father of the nation opened here on the occasion of his 150th birth anniversary.
Organised by the Bureau of Outreach Communication, the exhibition was inaugurated by the Union Minister of State for Information and Broadcasting and Sports and Youth Affairs, Col Rajyavardhan Rathore (Retd) in the august presence of the Secretary of Information and Broadcasting, Amit Khare, the Director General of Bureau of Outreach Communication, Satyendra Prakash and the Director General of Publications Division, Dr Sadhana Rout among other senior officials of the ministry.
Addressing the audience, Col Rathore said, “New technologies used in this exhibition have brought the life of Mahatma Gandhi much closer to the people. This multimedia exhibition is more interactive and engaging.” He expressed that this multimedia exhibition should be conducted in various cities across the country to take the idea to a much larger audience. “The life of Gandhi is an example for all. He is a global citizen and the pride of every citizen. He dedicated his life for swachhata seva. The Prime Minister Narendra Modi has taken this as a challenge and now change is visible through Jan Andolan,” added Rathore.
The exhibition showcased many engaging features like a quiz on the life of the Mahatma, interactive timeline depicting his life, a photo booth with various backgrounds to choose from, a 3D video wall and so on. On this occasion, Col Rathore released 11 books by various authors on the life of Mahatma Gandhi which has been brought out by the Publications Division. He also released three short films on Mahatma Gandhi, produced by the Bureau of Outreach Communications, Doordarshan and the Films Division respectively. A magazine titled—‘Jan Connect’ with the theme of the development of farmer’s livelihood was also released during the event.
Writer: Team Viva
Courtesy: The Pioneer
At least 43,000 people have been displaced after a 6.5 magnitude earthquake hit the Indonesian province earlier this week. Nearly a hundred people were killed and thousands of buildings damaged.
The earthquake and subsequent tsunami that struck the Indonesian island of Sulawesi last week was remarkable for the tragic scale of devastation it caused. The death toll has crossed the 1,200-mark and casualty numbers are expected to rise as many bodies remain trapped and voices of people crying for help can still be heard from the rubble of collapsed buildings. More than two million people have been affected and more than 40,000 have been displaced. The damage caused to the island’s infrastructure is massive. The quake, of a magnitude of 7.5 on the Richter Scale, sent waves rising as high as six meters and the tsunami’s giant waves crashed into the shore they swept along with them all that was in their way. Sulawesi is a major island of the Indonesian archipelago and the damage caused by the earthquake and tsunami will hit the country’s economy hard. For many, the tsunami brought back to mind memories of the 2004 tsunami in the Indian Ocean region which followed a 9.0 magnitude quake took a toll of 227,898 lives. While the current situation has not reached the apocalyptic levels of 2004, and the damage is limited to one country, the fact is that Indonesia is reeling under its destructive impact. Even as rescue workers are battling against time, massive looting of food and other emergency provisions has been reported. International help, it must be pointed out, has been slow in coming and it is the Indonesian Government which is trying but not always succeeding in ensuring relief and rescue measures are in place and help is reaching those who need it most. Tales of individual courage — like that of the ATC operator who lost his life because he stayed at his post to ensure a passenger aircraft took off without incident when the quake struck — abound but are no substitute for coordinated disaster management.
The natural disaster, savage as it is, is not new to the island nation. Surrounded by volcanoes and prone to earthquakes/tsunamis, Indonesia remains like some other countries in the region woefully unprepared for a powerful earthquake. The country’s national meteorological and geophysics agency BMKG had detected subterranean tectonic movement and issued an earthquake alert but it failed to gauge its intensity. The tsunami warning too, many complained, came too late. To top it all, the country did not have adequate equipment and technological tools to conduct quick and effective rescue operations. Of course, accurate detection of impending natural disasters is next to impossible; even Japan, for instance, which is known to have one of the best systems to respond to such calamities, could not do much in 2011 when a 9.1 earthquake and tsunami struck its coastal region that left nearly 19,000 dead. The only solution, therefore, is to be better prepared. The disaster in Indonesia holds lessons in preparedness for all, including India.
Writer: Pioneer
Courtesy: The Pioneer
Following industrial norms, accounting procedures, and discipline, is important for all enterprises, whether private or public. But the main objective of any business is to main profits.
There are any number of citizens who feel ‘just as well that Air India has not been sold, it’s akin to selling the family jewels.’ To put the corporation on sale, wait for several weeks and then fail to get even one offer, however low, was a lesson for the Government to learn. In fact, for a perceiving observer, the Maharajah story is a compendium of what not to do with a national asset. In principle, the Modi Government was right when it stated ‘jis desh ki sarkar vyapari, wo desh bhikari’ (in a country whose Government is a trader, that nation will be a beggar).
The objective conditions in India are such as to require a relook at the Government’s policy of privatization as well as future industrialisation. The following is a bad example but nevertheless it is not an uncommon one; ur else, the bank NPAs would not have been so enormous:
Quite some years ago, an acquaintance of the writer wanted a project manager who would later be suitable for taking over as chief executive. The gentleman asked the writer to look out for anyone he knew who could fit the bill. To explain, he said what he was about. It was a mini steel plant; its project cost estimate was Rs 20 crore. The machinery, the costing of which he could take liberty with, was worth about Rs 10 crore and he proposed to jack that figure up to Rs 15 crore. Financial institutions would lend at least two-thirds of the Rs 15 crore which meant Rs 10 crore. The capital was to be a total of Rs 10 crore to be divided into — half by promoters and half by so-called public subscription. The first half was to be shared between the acquaintance and the State government, two and a half crore each since the steel mill was a joint sector unit. If all went well, he would get five crore from the machinery supplier and invest only half of that in shares. In short, the project would for him make a profit of two-and-a-half crore rupees much before any steel was produced! This is only an illustration of how the worst entrepreneurs think. The writer’s reaction to the acquaintance was: Why start siphoning before the project starts? He laughed and said: “You are too innocent.”
There is a widespread impression that privatization of industry will deliver the goods which the public sector has failed to do. We need to look at this belief afresh. Has the community of entrepreneurs delivered the goods in setting up industrial units of its own choice? Yes and no, it is a mixed picture. There are a few outstanding performances, some successful enterprises but there are innumerable cases of failures and closures. Quite a few industrial estates for small and medium units look like industrial graveyards. The quality of managers is not greatly different between the private and public sectors though the opportunity to be a committed professional who works hard at his job is greater in the private sector.
The prevalence of ill-conceived project choices has existed in both sectors. For instance, the Government has promoted some quite weird schemes like a fruit export corporation or a photo film company. At the same time, some private promoters who were essentially traders did not graduate to an industrial culture and failed. Corruption was and remains a common factor; the odd entrepreneur drew out cash as some corporations were favorite cash cows of the Government, like the State Trading Corporation in its heyday. In skills, ideas and integrity, overall there has been no significant difference.
Kingfisher Airlines and Air India are a useful illustration of the failure of integrity in the two respective sectors; in the former case by a private player and in the latter by ministers and bureaucrats. To add to the public sector’s woes came the sick and closed units from private sector failures. The Textile Corporation is one example.
Neither sector is likely to deliver India’s national goods as are necessary to take its industrial economy into the super league. Until recently, there was an imaginary hope that private entrepreneurs would help to take over some PSUs and then proceed to set up large units. No one, however, had the time to look at the priorities of private industrialists. They are either fully invested with no financial surpluses large enough to takeover more industries or themselves sick and have huge NPAs and/or are trapped in insolvency. Moreover, not many of even the viable business houses have managed to inspire the faith that can attract unlimited public investment. The people at large have plenty of spare money to invest; in fact, there is a shortage of investment opportunities. Foreign industrial giants may not be in a hurry to set up industrial units with only their money plus the expectation of public subscriptions. The Central Government has to step in and play a financial or investment role. If that were possible without scope of Government interference, foreigners could be attracted.
The reason why many a PSU has failed and others did not succeed was that we did not distinguish between administration and management or between the importance of disciplined procedure and of generating profit. The IAS officer knew the former and generally enforced it effectively but profit-making was not part of the ethos he grew up in. In fact, in Nehruvian India, profit was a dirty word. For many years Jawaharlal Nehru considered many a profiteer as deserving to being hanged on a lamp post. And often the new IAS batch began its career with a speech by Prime Minister Nehru. Moreover, the joint secretary seldom learnt the tricks of keeping out the fingers of his pecky minister. And yet he acted the role of a member of the owner family and tried to drive fear in the heart of the PSU unit’s managing director. Adherence to procedure and accurate accounting as well as discipline are important for all enterprises, whether public or private. But objective number one of any business has to be profit, no doubt keeping in mind fair and legal practice. When it comes to large-scale finance, a resort to the Government treasury is virtually indispensable. The question now is how to reconcile depending on the State and, at the same time, ensuring its non-interference.
The answer would lie in a synthesis of management excellence supported by State finance while ensuring the protection of every stakeholder. This is possible and it is best illustrated by quoting a live example and then describing a proposed model. Larsen & Toubro was for many years well managed by its two founder gentlemen and later their successors. Few common observers realized that 54 per cent of the company’s shares were owned by Government financial institutions. The company was not considered public sector because the President of India i.e. the Government directly did have shares in it. The Reliance Group later came into Larsen & Toubro and the shareholding profile changed. Then they sold out; the company was demerged to split it into two, the profile changed further.
Now for a model for the future, the Government should confine its industrial investment to lending money at a reasonable rate of interest to its financial institutions like LIC, GIC and its subsidiaries as well as banks. Suppose a European corporation of repute wants to come to India in order to manufacture its line of products. It needs the economy of scale in production; at the same time, it may be reluctant to invest large enough sums to be able to control a majority shareholding. Hence one must enable the European company to have only 26 per cent holding and yet with a guarantee by at least 25 percent of institutional holders to vote with the company for a certain number of years. The rest of the shares can be offered to the public; if individuals do not subscribe to the full balance 49 per cent, the institutions should be willing to step in. The European firm would bring with it its style of management, its technology, its brand equity, all for 26 per cent holding. It should therefore be entitled to a royalty on turnover of product sale. Such a scheme should be open to reputable Indian corporates too.
If this model were to succeed to attract industrial growth, the present PSUs could also be dealt with on similar lines. Incidentally, provided the management of greenfield companies proves to be efficient and cuts down on their gestation time substantially, the State could be well placed to find funds on a large scale through deficit financing. Delays in the completion of projects are criminal; they cause inflation and perhaps render the product outdated. This could lead to the unit go sick before it takes off.
(The writer is a well-known columnist and an author)
Writer: Prafull Goradia
Courtesy: The Pioneer
The army holds a privileged position in the heart of any nation. This is especially so in a country like India, where a vast majority sees it as the only bulwark against existential threats posed by external enemies.
The unquestioned call of duty by a soldier is respected by the Modi Government. Keeping in mind the same, Modi government has Putting soldiers’ welfare at the forefront and declared that is now a matter of policy now and not a mere slogan.
On the second anniversary of surgical strikes conducted by the Indian Army that dealt with terrorism on Indian soil with an iron hand, ‘Parakram Parv’, an exhibition to showcase the contribution in Indian Army in nation-building, is being observed all across the country. The manner in which India answered its enemy with an attack, laced with strategic precision and political will, took the world by surprise.
Ever since the Narendra Modi Government came to power, there has been minimal political constraints on the Indian forces dealing with conflict situations. This has instilled a great deal of confidence not only in the top leadership of the Armed Forces, in formulating retaliatory measures against enemy designs, but also in the soldier who protects the borders while putting his life on the line. In the aftermath of the Uri attack, the Army acted with precision to take down terror targets on the other side of the border with full backing of the Government. It demonstrated exemplary military prowess of the Indian forces when provided with a bold political leadership that reposes full faith in their capabilities.
The Prime Minister has, time and again, articulated his unflinching support to the Indian forces through his actions that speak volumes about his intent. Take for instance, One Rank One Pension (OROP), a long-standing demand of the Army personnel, that saw little traction in the Government ranks since the past 43 years. The previous UPA Government came up with a frivolous amount of Rs 500 crore to be set aside for the implementation of OROP.
Prime Minister Modi embraced the onerous task of ensuring justice to the Army servicemen and delivered on his promise with utmost urgency. After conducting a thorough budgeting exercise, the Modi Government allocated one lakh crore rupees in the Budget 2016-17 towards payment of defence pensions. The resolve with which the Government acted showed that the dispensation at the Centre is sensitive to the struggles of the Army personnel and their families. It was an expression of Indian citizens’ reverence and gratitude for the Armed Forces, and a sincere acknowledgment of their sacrifices.
In Kashmir, which is deliberately being kept on boil by anti-India outfits, the Army has been given enough room to take decisions depending upon the war-like situation at hand. This has come as a great relief to the soldier who is faced with terrorists firing bullets or with volatile crowd pelting stones at him. However, victories are as much about keeping morale of the soldiers high as it is about ammunition and strategy. Given India’s tricky neighbourhood and myriad external threats, the Indian Army faces ‘war-like’ conditions ever so often.
India’s rise as a flourishing economic power is a well-stated fact now. In the last four years, there has been a significant shift in global perception in view of stabilising economic parameters and an inviting atmosphere for businesses and capital to park. However, India’s military power had been reeling from lack of modernisation.
Considering the onerous task of defence procurement, the Modi Government formulated the Defence Procurement Procedure (DPP) 2016, that focused on “institutionalising, streamlining and simplifying defence procurement procedure to give a boost to ‘Make in India’ initiative of the Government, by promoting indigenous design, development and manufacturing of defence equipment, platforms, systems and subsystems.” The new policy gives weightage to Indian defence manufacturers with a view to promote innovation and self-reliance. The Government has taken several steps to implement the policy on the ground:
i) In a recent move (June 2018), the Defence Acquisition Council approved procurement of equipment and armaments for the Defence Forces, including Rs 9,100 crore worth Akash missile systems.
ii) India signed 182 defence contracts in the last three years, including the current year, displaying urgency in its actions.
iii) The purchases are being done to procure technologically superior radar systems for the Indian Air Force as well as equipment for the Indian Coast Guard and the Indian Army.
iv) A $100 million contract for the purchase of 1.58 lakh bullet-proof helmets has been done with an Indian facility in Kanpur.
v) Advanced indigenous weapons like BrahMos supersonic cruise missile and Astra beyond-visual range (BVR) missile has been indigenously integrated and fired from aircraft.
vi) Expenditure on purchase of defence equipment from Indian vendors for the three services during the last three years is steadily increasing.
Under Prime Minister Narendra Modi, modernisation of the Armed Forces has been fast-tracked and critical defence deficiencies in weapons and infrastructure are being met through fast processing of defence procurement agreements while creating a robust climate for defence set up under the ‘Make in India’ initiatives.
The unquestioned call of duty entrenched in a soldier’s psyche reflects a relationship of trust between him and his Government — that no matter what, he has the backing of his people. With the advent of the Narendra Modi Government, issues faced by the Army have become a major focus area. Putting soldiers’ welfare at the forefront is now a matter of policy and not a mere slogan.
(The writer, a BJP MLA, is leader of Opposition in Delhi Assembly)
Writer: Vijender Gupta
Courtesy: The Pioneer
The government is replacing the Medical Council of India with another body to restore the standards of medical education in the country.
The state of medical education in India is rotten to the core. This is a truism that many in the medical profession have known for quite a while. With the Government now replacing the executive of the Medical Council of India (MCI) with a new governing board through an ordinance, it has taken the first step towards restoring some amount of sanctity to medical training going forward.
While the MCI’s stand on the Government’s ill-advised idea of allowing Ayurvedic and Homeopathic practitioners to dispense western medicine was correct, its refusal to cooperate with the Government and the Supreme Court-appointed oversight committee on improvements to medical education, such as a new syllabus and increasing class size, was becoming a huge problem. There were also loud rumours of alleged corruption in the MCI when it came to admissions and approvals granted to colleges.
With Prime Minister Modi recently launching his latest social scheme, the Jan Arogya Mission, a few days ago, this move became inevitable and with the Supreme Court likely to welcome this decision, along with most members of the medical fraternity, it appears that other than the now-dissolved executive body of the MCI, nobody is really complaining. In fact, this decision has been wholeheartedly welcomed by all and sundry, even by critics of the Government.
To ensure that the Opposition does not ask too many questions about the decision, the new governing body is loaded with medical professionals who are highly regarded. One accusation thrown about the failure to pass the National medical Council Bill in Parliament was that there was a ‘Gujarat Lobby’ at work in the Government, but this decision has put those allegations to rest. However, the new body has its task cut out.
First, it will have to prevent overreach by the Government, such as allowing non-certified practitioners to dispense medication. At the same, it will have to take urgent steps to ensure that India produces millions of new doctors needed to ensure adequate healthcare for all and ensure that these new doctors receive adequate training. The fact is that India’s healthcare sector is still massively skewed towards large urban centres like Delhi and Mumbai. This needs to change, which cannot happen overnight. But to ensure a healthy India and unhealthy MCI needed to go.
Writer: Pioneer
Courtesy: The Pioneer
Giving in to the criticism of his party leaders, All India Majlis-e-Ittehadul Muslimeen (AIMIM) MLA Waris Pathan finally apologised for his “Ganpati Bappa Morya” chant on Tuesday. He had taken the name of the Hindu god at an event in his constituency.
In a video message uploaded on his Twitter handle, Pathan said: “A few days ago I inadvertently uttered a chant (of Lord Ganesh). I bow before Allah and say that I made a mistake, God willing, I will not make such a mistake in future. After all I am also a human being. Every human being commits mistakes. I am admitting my mistake. I urge Allah to forgive me for my mistake. I urge everyone to pray for me”.
A controversy had broken out within the AIMIM after he chanted “Ganpati Bappa Morya” and prayed to the elephant-headed God to remove obstacles of all people, at an event organised on Sunday in his home constituency of Byculla to celebrate Ganeshotsav, an act his party had not taken kindly to – So much so that his party leaders and workers seeing disrepute to his party through his chant hailing Lord Ganesh.
Meanwhile, the ruling Shiv Sena came to Pathan’s defence for his “Ganpati Bappa Morya” chant. “What wrong has Pathan done? Was it a crime on his part to chant Ganpati Bappa Morya? Why has he apologised for his chant hailing Lord Ganesh? Hindus go to Masjid. The Hindus even go to Ajmer. That being the case, should we draw any inference that those Hindus will switch to Muslim religion. I am surprised as to why Pathan chose to apologise. His apology was unwarranted,” Shiv Sena MP Arvind Sawant said.
Writer: TN Raghunatha
Courtesy: The Pioneer
Some are considering the Government’s interference in subsidising goods and services a bane. Why not replace subsidies with direct cash transfers?
The Modi Government has revolutionised the way subsidies are disbursed to beneficiaries by leveraging technology, especially the use of direct benefit transfer (DBT) on the Jan Dhan-Aadhaar-Mobile platform. This has made a dent on pilferage, and gargantuan resources, thus saved, are being used for development and enhanced funding of welfare schemes for wider and deeper coverage. But large-scale pilferage still continues. This happens in ways that even escape the radar of our ever alert Prime Minister.
At the fundamental level, it can be sourced to the very existence of controls in sectors, such as food, fertilisers, petroleum, oil and lubricants (POL), and power, which continue to guzzle huge amounts despite savings via DBT. Here, a question arises: How do controls lead to pilferage?
Take, for example, food and fertilisers. To make these affordable to the poor, the Government controls their maximum retail price (MRP) at a low level, unrelated to the cost of production and distribution. The differential amount is reimbursed to manufacturers/agencies as subsidy. Whereas, 80 per cent of the population gets food at a subsidised rate, as regards fertilisers, all farmers have access to these at low MRP.
Among POL in the case of LPG, even as oil marketing public sector undertakings (PSUs) sell at full price, beneficiaries receive subsidy in their account. However, kerosene is sold to them at low (subsidised) price. Retail prices of petrol and diesel are de jure decontrolled, but de facto, the Government controls them by issuing diktat (albeit unwritten) to PSUs, which account for over 90 per cent of the sales.
When the Government orders manufacturers/suppliers to sell products at a price lower than what it costs, it is obliged to fully compensate them for the shortfall. This is where the rub lies. Assured of full neutralisation, they won’t have an incentive to cut cost and work efficiently. They are even tempted to claim higher cost or even make fictitious claims.
Under the National Food Security Act (NFSA), wheat is given to the beneficiaries at two rupee per kilogram as against the much higher cost of supplying it at Rs 25 per kg. The latter includes MSP of Rs 17 per kilogram paid to the farmer and eight rupee per kilogram as handling and distribution charges, reimbursed to the handling agencies, such as the Food Corporation of India (FCI). The charges are given on ‘actual’ basis.
These subsume inefficiency and irregularities committed by agencies — this was pointed out by the Comptroller and Auditor General (CAG). The ‘loaders’ getting away with monthly salary in lakhs could easily pass muster under a cost-based mechanism. In 2016, there were reports of disappearance of food stocks in Punjab causing a loss of over Rs 20,000 crore to the exchequer.
In the 2000s, in fertilisers, the UPA Government contracted for import of gas — fuel used in manufacture of urea — at an ‘inflated’ price knowing that the resultant higher cost of making fertilizers would be fully reimbursed under new pricing scheme (NPS). It had also imported urea at high price which went up to an exorbitant Rs 50,000 per tonne (2008-09) against then MRP of only Rs 4,830 per tonne. In a year in the early 90s, payment was made but not even a grain of urea came.
There were irregularities in payment to manufacturers too. Under the retention price scheme (RPS) — earlier incarnation of NPS — some units were allowed inflated retention price. There were even allegations of gold plating — a euphemism for showing capacity lower than actual to get higher RP. Since, the same system continues even today, it is not easy to prevent inflated payments.
There is no rational basis to keep urea MRP at an exceptionally low level — a mere 1/4th to ½ of the production cost. Yet, this was a golden goose available to dubious traders to mint money by selling to chemical factories at high price. True, Prime Minister Narendra Modi has brought in mandatory neem coating of urea and claimed that this has stopped diversion. However, considering that there are 600 million bags to be policed, this seems to be too good to believe.
In petrol and diesel, lack of competition allows oil PSUs viz Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd, to get away with a high price based on import parity principle plus fortuitous benefit of import duty. For LPG and kerosene, they enjoy complete monopoly as private entities are barred from selling subsidised stuff.
In power sector, inflated tariff charged by independent power producers (IPPs) easily pass muster in the name of subsidised supplies made to the farmers and poor households. There are instances of inflated fuel price (via ‘over-invoicing’ of coal imports) getting accommodated in the tariff, eventually paid by the exchequer. As in fertilizers, here also instances of gold plating have come to light.
This loot of national resources needs to be stopped. But this can’t be done merely through administrative cleaning up. To do this, the Government should go for policy reforms with focus on removing pricing and distribution controls. The control on MRP must go and subsidy to the poor should be given directly. With this, the very basis for entities claiming inflated cost will disappear. Instead, they will be forced to cut cost and increase efficiency to stay afloat. While benefiting all consumers, this will reduce subsidy outgo and help fiscal consolidation. When will Modi crack the whip?
(The writer is a freelance journalist)
Courtesy: The Pioneer
As the crude oil prices rise, it is important for India to opt for a comprehensive strategy that gears the entire transport structure towards lower oil dependence and higher efficiency.
There is much comment and discussion currently on the weakening of the Indian rupee. As is the case with developments of this nature once a state of equilibrium is achieved, underlying causes behind the slide in the rupee’s value will be forgotten, and we will continue with business as usual. There are reasons why the parity between the US dollar and Indian rupee has been disturbed.
Firstly, the US economy is registering a high rate of growth of over four per cent — the fastest in recent years. This is the result of increase in consumer spending and greater investment in the business sector. With strong economic growth, the US has been attracting investments from all over the world, resulting from which the demand for the dollar has gone up, leading to an appreciation in its value. A weak rupee presents several challenges to the public and the Government. One immediate effect would be an increase in inflation, and lower consumer spending and investment which could have a negative effect on the growth of GDP and employment opportunities. But, a weaker rupee also provides opportunities for increasing exports, because in dollar terms the cost of manufacture in India would go down, making products from India competitive in the global market. One major factor contributing to weakening of the rupee is higher crude oil prices, which is leading to inflation in the economy driven by higher transport costs.
India has not learned or taken seriously the benefits of reducing the country’s dependence on oil imports. If one was to focus on an extreme case of harmful impacts of oil price increases, we need to go back to 1974. It was in 1973-74 that the first oil price shock took place, with a quadrupling of global oil prices, which led to an unbearable level of inflation of 30 per cent. This was also a time when the inflationary impact of the 1971 war for liberation of Bangladesh was affecting the Indian economy with an unhealthy deficit as a result, leading to large-scale printing of currency notes, which in turn led to too much money chasing a small quantity of goods. This was also a year when a large part of the country was affected by drought, which not only affected the rural economy, but also created problems of inadequate supply of farm products.
It is obvious that the economic crisis in 1974 led to political unrest. Consequently, Indira Gandhi as Prime Minister imposed the Emergency in June 1975. It would not be right to state that the political problems of that particular period ended once elections took place in 1977, and the Congress Government was replaced by a coalition led by Morarji Desai. The 1973-74 quadrupling of oil prices had a major impact on politics in India, and clearly that impact has not yet played out fully.
Governments have typically paid lip service to reducing our dependence on oil imports, even though periodically the country has suffered from sudden spikes in global oil prices, the effect of which was generally transmitted through the entire Indian economy.
If we look at the response of several national Governments to the 1973-74 oil price shock, a very clear strategy was followed by many. The US with its political clout was able to sell large quantities of capital equipment to major oil exporters like Saudi Arabia, and thereby tilt the balance of payments in its favour. Japan launched an extremely successful and widespread effort to improve its efficiency of energy use, getting rid of energy intensive industries, such as steel production. France moved towards large-scale use of nuclear energy and enhanced capacity of the transport sector by strengthening its railway system and increasing the speed of goods as well as passenger transportation. The TGV innovation in passenger movement within France connecting the cities of that country at speeds exceeding 300 km/hour had a major impact in reducing oil consumption, because the railways moved towards electric traction. Most of Europe followed a similar approach in due course.
What stands out in these country cases is the development of a strategic mission and its implementation within a given period of time.
In India we have used the term “energy security” glibly in every relevant forum and in policy pronouncements, but the reality has run counter to intent. The result is that we get more and more dependent on private vehicles both in intra-city and inter-city transportation. The relative shift from rail to road transportation continues unabated leading to greater demand for petroleum products. The Indian Railways, which at the time of independence were one of the best in the world, have been providing remarkable service over past decades, but they are now woefully behind developments in other countries.
Energy security and reduction in dependence on oil imports would have huge co-benefits if we are able to create efficient public transport options. Within our cities, no doubt, the installation of metro systems would have significant benefits, but there are other options too, which require serious development and implementation such as BRT systems in several cities, dedicated bicycle paths and proper pedestrian facilities. Improved public transport would bring about benefits in the form of improved air quality, lower congestion and lower demand for road space.
It is time that energy security and reducing dependence on oil imports becomes an important goal in national development. Perfunctory pronouncements on increasing the share of electric vehicles or a few high-speed trains here and there are fine, but what one needs is a coherent and comprehensive strategy by which the entire transport structure is transformed towards higher efficiency and lower oil dependence. If we don’t accept this challenge, there will be periods in the future when the Indian economy will be held hostage to unexpected oil price increases. According to the recent BP Energy Outlook India’s energy consumption is expected to register the dubious distinction of growing the fastest among all major economies by 2035. We have the benefit of recent history in understanding the political economy of oil import dependence. If we fail to do so, then we may find ourselves in a situation like what the country faced during 1973-75, and that must be avoided at any cost. Those who don’t learn the lessons of history are doomed to repeat past mistakes.
(The writer is former chairman, Intergovernmental Panel on Climate Change, 2002-15)
Writer: R K Pachauri
Courtesy: The Pioneer
The Russian Government has been making self-defeating and clums actions by asking two poisoning suspects, from Salisbury, to explain their trip to the public. All these things are small indicators of how fr the rot in Putin’s remine the Government has gone.
Salisbury is a nice old English town with a fine cathedral, only an hour and a half from London by train, but it doesn’t see many Russian tourists in wintertime. It’s not as cold as Moscow, but Russians tend to prefer Mediterranean destinations for holiday breaks in early March — unless, of course, they are planning to kill somebody.
The person of interest in Salisbury was Sergei Skripal, a former member of the Russian military intelligence service, who started selling information to the British in the mid-1990s and was caught and jailed by the Russians in 2004. He was pardoned and allowed to go to Britain as part of a spy swap between Western countries and Russia in 2010, and he settled in Salisbury.
On March 4 this year, Skripal and his daughter, who were visiting from Moscow, were found semi-conscious on a bench in the street in Salisbury and taken to a hospital. They spend weeks in intensive care, and it was determined that they had been poisoned by novichok, a Soviet-era nerve agent that falls into the category of banned chemical weapons.
A policeman who went to Skripal’s house was also struck down by the poison, which had been sprayed on the handle of the front door, but he also recovered eventually. Three months later a Nina Ricci perfume bottle that contained leftover, novichok was found in a charity bin in Salisbury, and a woman who sprayed it on her wrists died.
Britain accused Russia of sending assassins to kill Skripal and of using a banned weapon. It had no hard proof beyond the novichok, but Skripal was still helping Western intelligence agencies to understand Russian training and techniques, so Moscow had a motive.
Many people pointed out that it would have been foolish for Moscow to choose such a complicated method and risk exposure. Why wouldn’t it just hire a non-Russian hitman to do the job? But Moscow has done this sort of thing before: Russian agents, exotic substances, the lot.
Alexander Litvinenko, a member of the Federal Security Service, got into trouble after his investigation into links between Russian mafia groups and his own organisation made him unpopular with Vladimir Putin, the FSB’s head. Litvinenko fled Russia for Britain after Putin took over the presidency in 2000.
Litvinenko remained a harsh critic of Putin, and in 2006, Dmitry Kovtun and Andrei Lugovoy, both former FSB agents, were sent to London to kill him. CCTV images showed the killers with Litvinenko at a London hotel where they dosed his tea with a tiny amount of polonium-210, a highly toxic radioactive substance that would not normally be spotted because it does not emit gamma rays.
That was a reasonably competent operation, exposed only by bad luck. The 2018 operation was different. CCTV images, released only last week, showed Ruslan Boshirov and Alexander Petrov, two 30-something Russian ‘fitness trainers’, making a brief trip to Salisbury on March 3, presumably to do a reconnaissance, and back to the town on the 4th to do the dirty deed.
But then it got weird. Putin publicly urged the two men to go on TV, and last week they appeared on RT, a Russian international news channel, to explain their brief trip (which gave them only 54 hours in England).
“Our friends had been suggesting for a long time that we visit this wonderful town,” said Petrov. They especially wanted to see Salisbury Cathedral, said Boshirov: “It’s famous for its 123-metre spire, it’s famous for its clock….” But they looked like heavies from Central Casting, and not at all like clock-tower enthusiasts. ‘Nekulturny’ (uncultured), as the Russians say.
Why did they only spend 30 minutes in Salisbury the first time? “It was cold.” (It was 10 degrees C warmer than Moscow.) Why did they take another train down to Salisbury the next day? “We really wanted to see Old Sarum and the cathedral.” (Old Sarum is an Iron-Age hill fort near Salisbury that was closed on March 4).
And on March 4 one of the CCTV cameras picked them up close to Skripal’s house and far from the cathedral or any other tourist attractions. Is Russia deliberately trolling the British Government to show its contempt? Probably not, because it has tried very hard to distance itself from the crime in other international venues. Did Putin’s regime put those two highly implausible ‘tourists’ on RT because it forgot that different standards of truth prevail elsewhere? Maybe.
But the likeliest answer is that these clumsy and self-defeating actions are indicators of how far the rot in the regime has gone. Elements of the system, like the Armed Forces (which have performed well in Syria), retain their efficiency and discipline, but corruption and incompetence rule elsewhere. The Salisbury debacle would not have happened 18 years ago, when Putin’s reign was new. It suggests that the regime is a lot closer to its end than its beginning.
(The writer is an independent journalist)
Writer: Gwynne Dyer
Courtesy: The Pioneer
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