India-awake

The Mess in Agriculture

noreply@blogger.com (india-awake) — Fri, 28 Aug 2009 05:41:00 +0000

The one who fiddles...

After the recent events coupled with experience of the last few years on the food front, the question in people’s minds is : For how long should the country suffer the continuance of a person who does not have any credibility left nor seems to be capable of meeting the challenges on the agriculture front, as the Agriculture Minister?

Over a year ago, India-awake highlighted in two articles, the inept handling of the Agriculture portfolio by Sharad Pawar, wannabe Prime Minister, and the resulting grim scenario as far as the food security of the nation is concerned. See articles here and here which bear reading. It was clearly visualized even then that due to lack of adequate attention and absence of purposeful policies for long term and sustainable improvements essential to keep feeding a growing population, the country was on its way to food scarcity and recurring cycles of imports as in the distant past. Even as the Minister kept on boasting about record production, Rs. 71000 crores had to be spent to bring succor to suffering farmers and a Government corporation imported under some scandalous transactions rotten wheat bringing back memories of PL-480 days of the distant past. Both had to be paid for with the taxes collected from the aam admi.

Last year when the country was reeling under high inflation, the all-knowing Finance Minister Chidambaram cited the “food crisis” as one of the reasons for the difficulties and the Congress Party was forced to issue a press statement calling for “better agricultural policies”. And yet towards the end of the previous Government’s tenure in April 2009, the clever Pawar managed to get Prime Minister Manmohan Singh to praise him with the latter saying that the agricultural growth rate during Pawar’s term had gone up to 3.5% from 1.8% during the NDA regime.

Sadly Pawar has managed to secure the same portfolio in the second term, ensuring continuing suffering for the people. Once again, the food scarcity, high prices and the lame excuses for the disastrous situation are being faced by the people in an uncanny repetition of what happened just last year. Going through the media reports of that time and now, only the dates and the statistics have changed. Qualitatively, the situation is far worse now. Till last year, only the producers i.e. the farmers were forced to commit suicide. This year, perhaps, even the consumers, the aam admi, may have to take the path if they cannot get their daily bread.

All that the Minister seems to have been doing all along is to claim credit for the high support prices the Government paid to the farmers and loan write-offs to the farmers which was essentially a burden on the people arising from government neglect. He thinks of everything only in terms of money and high support prices, subsidies and doles are his panacea. And, whenever there are problems related to availability or high prices of food articles, this master of sophistry is never short of clichéd excuses and song and dance blaming increase in consumption, failure of rains, unfavorable weather conditions, logistics problems, wastage of food grains, market intermediaries, hoarding, failure of the States, shortage of storage etc. many of which are the result of Government inaction. He even lamented that there was a huge wastage due to damages in government warehouses, implying that it was somehow not his responsibility. One gem on the cause of price rise: “prices had risen as the purchasing power of poor people had increased due to welfare schemes such as NREGA and, therefore, the demand had gone up tremendously.” He has also been inventing “new factors” like increase in income, climate change, high energy prices, globalization and urbanization! His latest googly in the Lok Sabha on 7th Aug. 2009 was: “There have been changes in the world, which are having an impact on India too.” With so many excuses available, it is so easy for him to use them in various combinations to explain even if people die of hunger.

When these factors work together to conspire against his efforts, what is the poor man to do other than focus on cricket or other such money-spinning ventures?

The Minister for Agriculture of the country is not there just to give out weather reports, reel out statistics to boast about record production and procurement, higher support prices and subsidies and feed misleading statements in place of food to the people while in the same breath, try to explain away shortages and rising prices.

In the last one month, the people are being fed with different projections of rains and production, none of which are reflected in the ground reality which is that the people are suffering even before the effect of the failing monsoon on the crops. On July 11, 2009 Pawar said: “there was nothing to worry about the availability of food grains in the country even though the monsoon situation was not normal.” Even later, on August 4, he informed Lok Sabha that the Centre had raised the food grains target to 238.12 million tonnes for the current year against 233.88 million tonnes in previous year. Everything positive that has been said about record production and procurement by Pawar is simply not matched by the prices which have been literally shooting up in a short time. He has also declared that the country has enough stocks of wheat and rice to last for 13 (or 30?) months. But after conveying a false sense of security on the food front for a long time, now he says that there is a problem and the people should expect high prices, directly stoking the high price fire. It is no use blaming hoarders or the monsoon.

The cases of two essential items of daily needs, namely, Tur Dal and Sugar, provide a clear insight into how the matters are being mishandled.

Tur Dal

In the case of Tur dal, the Government awoke from its slumber (self induced?) when practically overnight, the price mysteriously shot up to an unthinkable Rs. 100 per kg rising by 40% in one month, bringing untold miseries to the people. There is a fear that it may reach even Rs. 140 per kg. Indications about shortfall in production were available as early as January 2009 and in important growing areas like Karnataka, the production was expected to fall by as much as 40%. With rising demand for pulses where the country has been required to resort to regular imports even to meet normal demand, no serious efforts have been made to increase the production while the focus has been to increase the production of cereals and other grains. While talking about the situation Pawar, adept in sidetracking real issues gave in the Parliament the usual spiel known to everyone about domestic production being short, consumption growing, the country having to import, only a few countries having surplus in pulses, making efforts to produce more in the country etc. none of which could actually explain the specific question about the huge price increase in less than two months. And when the media reported about lakhs of tons of pulses lying at the ports even as the prices shot up, the Minister made a deliberate carefully drafted statement in the Parliament, that whatever quantity was procured by the government agencies was “not rotting” and also got the Pulse Importers Association to issue a denial which actually confirmed that “an estimated 3.7 lakh tonnes of pulses were currently lying at various ports and at port-towns and are in the process of being distributed to end-users in the hinterland”. Huge stocks lying at the ports were supposedly “in the process of being distributed” which ‘process’ can take an indefinite period of time. The seriousness of the situation was confirmed when the Government recently gave a belated ultimatum to the importers to lift the stocks in a certain time. According to one report, the price of Tur dal was Rs. 34 at the time of elections and has only since been rising continuously to touch the level of Rs. 102 in less than two months. There are many who think that the timing of the price rise tells its own story. It is also significant that the price increased even before the real situation of the monsoon was visualized.

The people, left to their own devices could respond in the only way possible: they have been forced to reduce their intake of this essential source of proteins. Some State governments are talking of distributing tur dal through PDS shops in a limited way but the people-at-large have no option but to pay the high price. The helpless Agriculture Minister, apart from talking of augmenting imports after the prices have reached these levels, is twiddling his thumbs allowing vested interests to rake in huge profits.

Sugar

The bitter case of sugar is more mystifying, and needs to be looked at, keeping in mind the fact that Pawar has long standing involvement with the sugar industry and as such there is prima facie a conflict of interest.

The economics and politics of sugar are determined by a complex web of government policies including import, export, MSP mechanism, levy and release mechanism, futures trading etc. which determine the prices that the consumer pays. Any wrong or untimely decision, deliberate or unintended, can result in the people having to pay dearly.

During 2007-2008 the sugarcane crop was 348 million tons creating a sugar surplus situation. In December 2007, Pawar himself asked the industry to reduce its heavy reliance on sugarcane cultivation owing to severe constraints on land, asking the industry to turn to alternative crops such as wheat, rice, cereals and oilseeds especially when the country would have to import them (all of these) in future. On 7th August, he told Lok Sabha: “Last year, when this Government had announced Rs. 1080 per quintal price for wheat, a sizeable section of the farming community, particularly in Uttar Pradesh, shifted from sugarcane to wheat.” (Lok sabha debates 7.8.2009). He is complaining now about what happened as a result of his own actions and advice! How did he handle the MSP mechanism? The table below is revealing.

Product	MSP 05-06	MSP 08-09
Paddy	570	850
Wheat	650	1080
Tur	1400	2000
Sugarcane	79.50	81.18

Note that the MSP for wheat has gone up by 66% whereas sugarcane is practically negligible. Was it not logical and anticipated that with such MSP changes acreage might move from one product to another and create shortage of one product and surplus of another? Surely, this could not have been an oversight. What may be the logic? Increase the MSP of other products first. This will inevitably result in acreage diversion from sugarcane and create shortages and panic. It may then be easier to bring about changes in sugarcane MSP as also overall sugar policy without appearing to show any favors and without questions being raised.

During 2007-2008, there was a surplus in sugar for a second year in succession. Unmindful of the cyclic nature of sugar cane production which could see a fall in production in the next year, he allowed sugar exports even by giving subsidies on exports after denying earlier that there would be subsidies. He was also pushing for allowing production of ethanol also from sugar cane juice apart from molasses and in favor of increasing the mandatory limit of ethanol blending in fuel from 5% to 10% ensuring either a rise in the sugar price or reduced availability.

Export and import policies are also being tinkered with, which somehow by accident seem to benefit the producers and traders. In Sept. 2008 he rejected an industry demand to allow duty free sugar imports saying there will not be requirement for imports.

When seen together with the prodding by Pawar to shift the land use and other actions like pursuing the higher-ethanol-from-sugar argument and rejecting import demand in Sept. 2008, allowing exports, do all these not look like pieces of a jigsaw puzzle created by a master?

On 31st July 2009, he made a statement in the Parliament, about the expected shortfall in sugar production shockingly stating at the same time that the lower production “has put pressure on sugar prices”. He could not be blamed for taking the Parliament in confidence on the situation. At the same time, it was an unmistakable cue for prices to shoot up locally as well as even internationally as he very well knows that India being a huge consumer, any such official pronouncement would have a big impact. The following chart shows what happened to international price of raw sugar in two weeks following 31st July (Friday).

The price of white sugar also went up from $ 492 (31.7.09) to $ 577 (13.8.09). They have since reached a 28 year high. It is not difficult to guess that those in the know would have covered up good quantities of sugar from international markets just before the announcement, to make huge profits in a short time. And when the prices rose, the Minister started blaming speculators for spreading rumors. The following chart shows the actual sugar balance situation.

Another intriguing aspect of the situation is the response of the Indian Sugar Mills Association (ISMA). The website of ISMA was carrying a press statement in effect saying that the sugar supply was comfortable. In June 2009 too, they had made a statement to this effect.

Yet, suddenly, within just a few days after Pawar’s statement, the press statement was withdrawn completely from the website. Does this not tell a story?

He has been also less than transparent in letting the people know of the real situation. As late as 19th August, 2009, he merely said “Some shortfall in production of oilseeds and sugarcane is also expected” .

Earlier, on 31st July 2009 while listing various steps he told the Lok Sabha: “With these decisions, domestic availability of sugar will get augmented and sugar prices in the country will remain reasonable” A lay person is left wondering as to whether Government was not aware of the shortage which is claimed now, much before July 2009 as it was based on the crop from the earlier monsoon. Even a senior Congress functionary has blamed him for misrepresenting the sugar situation.

Now, to show that efforts are being made to augment the supply of sugar, he has entered into discussions with the sugar producers. He has proposed increase in the levy sugar target from 10% to 25% to augment availability with the Government. Several rounds of discussions have taken place and what is emerging is that the sugar industry not only wants a higher price for the levy sugar but at the same time also wants the government determined release mechanism for the non-levy quantity to be removed. The idea is clearly one: to get a higher price for levy portion and substantially free the controls on sugar whereby the industry can take maximum advantage in the open market. This actually seems to be the plan and the timing of the discussion is such that due to the approaching festive season, the Government will feel pressured to take a favorable decision just to avoid public ire.

Many people believe that the repeated meetings taking place with the sugar industry appear to be a scripted charade just for effect, with the objective of achieving substantial decontrol, a decision on which was deferred by the Cabinet earlier. Pawar has already revealed his mind as just last year he had called for abolition of levy system despite the cabinet deferring a decision to decontrol the sugar sector at that time. He had also said at that time: “We have got good stocks of about 11 million tonne as carry-over and we expect a good production. So this is the proper time when there is ample stock of sugar, one should take that decision,” Should such a major policy decision be taken considering just one-two years' supply balances? All the surplus somehow appears to have disappeared. It is just as well that the Government did not take a decision based on such short term considerations.

As rightly speculated by some in the Congress party, such a policy decision would leave the people at the mercy of sugar producers in times of such shortages. It is for the people to be aware of and guard against such perfidious plans.

The Prime Minister has already put the nation on notice that hard times can be expected while assuring that no one will go hungry. In whichever form the Government comes forward to help, it is the people who will pay for it and it is no credit to the Government.

crisis calling

One thing is clear. This would-be* Prime Minister Pawar either does not know exactly what is going on or, more likely, knows exactly what he is doing. In either case, he hardly has the credibility left to handle such a crucial Ministry. It is now for the Prime Minister to oversee and monitor the decisions and actions of this Ministry closely to stop the Government being discredited further.

For the profiteers - happy days ... sona, hire-moti

While Sharad Pawar has done poorly in the Agriculture Ministry, his man Friday and coadjutant in the Civil Aviation, Praful Patel has done worse. But that is another tale.

* Would-be: Unfulfilled or frustrated in realizing an ambition

Update: 19th Sept. 2009

The latest news article about rotting imported essentials in the ports puts paid to Sharad Pawar's bluff. ( see here)

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Help yourself, it is public money

noreply@blogger.com (india-awake) — Sat, 18 Jul 2009 12:32:00 +0000

The U.P. Chief Minister Mayawati has been on a spending spree using public funds amounting to several thousand crores of rupees, to create parks, memorials and statues in the State. The Congress party as also her other political rivals have rightly condemned such a huge misuse and wastage of public funds.

Digvijay Singh of Congress Party said: “Public money is being wasted. They will not forgive her”. Chidambaram termed the statues ˜shameful”. He said that in a state like UP which is reeling under power shortage and lack of health facilities, this amount could have been used for development. “She is spending Rs 1000 crore on establishing statues of elephants and herself. Can there be something more shameful than this in Indian politics.” Well yes, there are more shameful things indulged in by his own party in such matters over the years. It is a case of pot calling the kettle black.

Public assets, plans, projects, schemes, institutions...

Whose money is it anyway?

Over the years, the Congress Party has usurped the credit for hundreds of Central and State projects and programs funded with public money, by naming them after its own leaders from a particular family to secure their place in history and in the people’s minds. According to Mayawati’s party, at least 125 national institutes named after just Rajiv Gandhi are run with public funds, not Party funds. The latest instance is the move to name the Sea Link in Mumbai, costing Rs. 1650 crores, just four times more than the original estimate, after Rajiv Gandhi. Ironically, while criticizing Mayawati’s project to create statues of just over 50 elephants, the Congress Party wants to have the privilege of naming the Sea Link, said to weigh the equivalent of 50,000 elephants, after a member of the family which the Party holds in awe. Although Mayawati’s abuse of position and misuse of public funds particularly for personal idolatory is wrong, she is right in pointing fingers at the Congress party for doing exactly the same thing all this time. The Congress party is habituated to unabashedly venerating its party leaders at the cost of public money.

More shameful ...

Not content with naming public assets after its leaders, the Congress party has progressed into systematically promoting its leaders through huge advertisement campaigns in media. This is done not with Party funds and in the name of the Party but misusing public funds and also misusing the name of the Government of India. Chidambaram, the custodian of the public exchequer till not long ago, must be fully aware how his party, through the Ministers, has been helping itself with funds under his custody, to promote its leaders. Taking a cue from his Party, other parties have been doing the same in a free for all.

In the last year, particularly during some months before the elections, an estimated around Rs. 400 crore which could have been used to prevent farmer suicides or for development was diverted for wasteful advertising by Government Ministries, other public authorities as well as PSUs. Rainbow colored full page advertisements were splashed in print media all over the country day after day ad nauseam, to further political interests in the garb of informing the people of the plans or achievements of the Government. Many newspapers carried four or more of such full page advertisements on a single day. Ministries concerned with the so called aam admi oriented programs spent more recklessly by having two full color pages in a newspaper on one day.

These advertisements carried pictures of the Prime Minister, Ministers and a motley assortment of politicians in various permutations, some showing as many as 20 faces. Above all, the advertisements prominently displayed the picture of the Congress Party’s Sonia Gandhi. Taking advantage of the Congress Party’s urge to misuse public funds in this manner other parties did the same. Laloo Yadav used advertisements by the Railways to show pictures of Rabri Devi and others from his party. Sharad Pawar got ICAR under his Ministry to release advertisements from its meager budget to project pictures of himself, his daughter and other senior members of his party. His man Praful Patel, made the Airports Authority and the ailing Air India along with a few private players contribute for a massive 20 crore plus campaign on civil aviation, featuring his picture (see here). A. Raja asked BSNL, a PSU under his Ministry, to show in its advertisement the picture of the DMK mentor Karunanidhi who holds no office in Central Government. Other ministers also participated in this “Help Yourself” project to show images of themselves and their favored ones through their Ministry advertisements.

But the prime objective of the entire campaign by the Government of India (even some Congress ruled State Governments) was to glorify the Congress President Sonia Gandhi, who does not hold any office in the Government or any of its organs whose advertisements carried her picture. A clever subterfuge was used to mislead the people by describing her as “Chairperson of UPA” as if it is a position in the Government although it is not. The advertisements were supposedly meant to inform about various government schemes, projects, policies and plans. If that were really so, it could well be done economically and effectively by the Press Information Bureau without using full color full page advertisements. Even if recourse was taken to advertisements, there was no need or justification to show pictures of even any Ministers in advertisements meant only “to inform” the people. These pictures were intentionally placed and purposive where the official "information" was incidental. The Government went even farther by showing pictures of persons having no connection with the Government at all.

It is evident that the campaigns were not released in the ordinary course of Government’s activities. They were just an artifice to idolize the Congress Party President at public expense. By linking her picture in advertisements of the Ministries and other authorities, it was sought to be conveyed that effectively she is the one to be credited for the work done by the Government even while being outside of it!

It is worth understanding how the Government is being used to systematically create her image with campaigns obviously conceptualized by the Party’s spin doctors. Consider just one campaign entitled “Nuke-Pact”, a set of five advertisements released nationally in December 2008- January 2009. There is a very clever use of the advertising technique known as association principle. All these advertisements have a common tagline “A step even time salutes”. It is an obvious attempt to create by means of association a favorable image of the present President of the Congress Party by virtually putting her on the same pedestal as Mahatma Gandhi and for that matter Nehru and Indira Gandhi, although no one would say that she can hold a candle to any of these illustrious leaders. Notice, that the campaign shows four personalities including three Prime Ministers from a single family. It is meant to suggest that no other Prime Minister made any worthwhile contribution and to strengthen the "brand-image" of one family that the "time salutes" and "shall salute". Why is Manmohan Singh appearing? He is there, being the present Prime Minister and Nuclear Deal is acknowledged by his Party and even its President to be solely his baby and he has been given the entire credit. Why then is the picture of Sonia Gandhi there? It is there to snatch some credit for the deal (as for everything else) for her and the entire campaign is to build her image. Why is Mahatma Gandhi there? He is there only to avoid the campaign from appearing as a "family affair" and to more effectively use “association” by linking the common surnames of the present Gandhis with the great Mahatma Gandhi. Clearly, it is a most scandalous example of official Government sponsored image building of an individual and a family.

Serious Issues

The abuse of official machinery and public funds to apotheosize their own leader by the Congress Party is utterly reprehensible although it may be justifiable in its own book of morality and ethics. What Mayawati is doing by putting up her own statues is being done also by the Congress party by placing pictures of Sonia Gandhi in advertisements for the same purpose. The big difference is that whereas Mayawati holds an official position and spends public money through budget provisions, Sonia Gandhi being not in Government, has to inspire her minions in Government to use public funds by abusing their authority. Qualitatively too, expenditure on media advertisements is utterly wasteful as it does not create any value. The amount of money spent by either is just a matter of degree and the net effect is the same viz. diverting resources away from essential purposes as the need of resources for development is equally acute for the States as well as the Centre.

What is the difference?

But in the case of advertisements for Sonia Gandhi’s image building, there are more disturbing issues. The first serious question is whether a Government can undertake such promotional activities to blatantly glorify anyone and that too someone who is nobody in Government? Advertisement space paid for by the Government belongs to Government and if it is used even indirectly for private purposes under the cloak of some official purpose the expenditure is illegal. The second issue relates to the bureaucrats who really provide continuity to Government and who are expected to protect the System against improprieties by transient political superiors. They cannot escape their accountability and culpability if such illegal expenditure is incurred under their charge.

However, there is another issue of a fundamental nature at a higher level. When official advertisements consistently show the picture of a person who is not part of the Government, the role of the person in Government functioning is implicit and gets a certain legitimacy in people’s minds over a period. In the present case, the Prime Minister who heads the Government, by merely allowing such advertisements, accepts the de facto role of Sonia Gandhi in his Government, clearly lowering the authority of the High Office and the Cabinet. See also an article here in another but related context. It is not a personal issue, it concerns a Government Office. The most serious aspect is the fact that the advertisements are released in the name of the Government of India. It means that the Government itself accepts the existence of an extra-constitutional authority and is effectively sanctifying such a position. In a democracy having clearly defined structure of the Government and other constitutional authorities, such legitimization of something which the Constitution does not envisage, can have a deleterious effect on the polity not only at the Centre but also in the States.

This aspect needs to be carefully pondered over by constitutional experts, opinion makers and even the general public. It is futile to expect the present day politicians in power to be concerned about such "technicalities" that could restrict them from misusing their authority at will.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Time for Testimonials

noreply@blogger.com (india-awake) — Tue, 21 Apr 2009 11:32:00 +0000

Every General Election in the country brings in its wake personal attacks, mud-slinging, name-calling, accusations and allegations of all kinds amongst and against political parties and individual candidates standing for the elections. In the surcharged atmosphere where the fate of 500 plus representatives of the people as well as members of several State Assemblies hangs in balance and the stakes are high, such events are almost unavoidable as the campaigning reaches a crescendo. The people have also come to cynically accept even a fair share of violent incidents and acts of intimidation as if they are as inevitable as the Elections.

The present General Elections 2009 for the 15th Lok Sabha have, however, brought new lows in no holds barred campaigning where the fault lines and weaknesses of the opposing parties and candidates have been ruthlessly highlighted before the electorate.

One such issue that has become a high point of campaigning during the on-going Elections is the highlighting of Sardar Manmohan Singh as a weak Prime Minister. The main Opposition Party BJP has made it a particular point to constantly hammer at this aspect throughout its campaign as a weighty argument against Congress Party and a Government led by that Party.

Sincere and honest that he undoubtedly is and capable that he is reputed to be, the fact that Manmohan Singh is weak in the position of Prime Minister does not need to be proved. His actions or inactions in key matters of the State Policy such as internal security and terrorism, his benign approach towards some incompetent, corrupt or otherwise wayward colleagues (which may be partly but not in all cases due to the compulsions of coalition politics) and his apparently servile attitude towards his Party Chief and her son in full conformity with the Party norm of sycophancy, leave hardly any doubt on this score. As far as internal security is concerned, it is amply clear that the ambivalent, almost non-existent, policy of the Government led by him with regard to dealing with terrorism did nothing to curb it but in fact emboldened the terrorists to strike at will during the last few years. No one needs to give a certificate about the abject failure of the Government led by him to deal with terrorism which is so very evident. The weak-kneed approach could have been due to his own unwilligness to take a firm view in the matter. Or, he could have been prevented by others against his own better judgment from doing what should have been done. In either case, in the net result it clearly shows his own weakness. Apart from issues of governance, to cap it all, he has not thought it necessary to face the people by standing for the Lok Sabha although Mr. Rahul G. apparently with his poor understanding of the electoral situation claimed that Manmohan Singh could be elected from any seat if he stood!! (see this article too)

As far as his attitude towards the Party Chief and her family is concerned, Manmohan Singh does not let go of any opportunity to affirm that he is beholden to them personally for the opportunity to be the Prime Minister.

Read this:

When asked who between him and Rahul Gandhi would be the next PM, Singh said, "You have heard the Congress President and you have heard Rahul Gandhi. I think the answer is quite clear." (Times of India, 20th Apr. 2009)

Unfortunately for the Congress Party, regardless of whether Opposition parties highlight this point or not, the public perception about Manmohan Singh being weak as Prime Minister is too strong. So pervasive is this perception that even political allies by their actions show that they too concur with the people.

Even for his own Party; this particular issue has been giving cause for serious concern to the extent that even the Congress Party President has been going to great lengths to repeatedly make it a point to spring to his defense. Since the last couple of weeks, strenuous efforts are being made by the Party and in particular its President and "her family" to emphasize that he is not a weak Prime Minister.

The views of the Household members at 10, Janpath

To thwart such attacks on Manmohan Singh, the Party also went to the extent of twisting the matter by saying that an insult to the Prime Minister was an insult to the country, forgetting completely that not the Prime Minister but the person who would still like to occupy that chair was being referred to. His mentor also blamed L.K.Advani of BJP of being a slave to RSS(why accuse only Singh of being a slave?). It was nothing short of a tacit admission of the reality of Manmohan Singh's position.

On his part, Manmohan Singh himself has been trying to assert that he is not a weak Prime Minister.

He has also been suitably showing his admiration for his mentors as a member of this Mutual Admiration society.

Mutual Admiration Society

His latest unabashed quote: “Rahul has all the qualities to be a good prime minister”.

Their combined efforts have so far failed to impress the people in spite of reaching almost farcical proportions.

Whatever testimonials these actors on the electoral stage manage to exchange amongst themselves, it must be hoped that the people will see the realities and vote responsibly without getting carried away.

On the Campaign Trail of Rahul's fiefdom.......

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Coping with uncertainties and tough times

noreply@blogger.com (india-awake) — Sat, 11 Oct 2008 14:46:00 +0000

Finally, even the normally gullible Indian people who believe everything that the Government say, are finding out to their distress and disappointment the hollowness of the wonderful stories of economic growth dished out by Chidambaram from the time he became the Finance Minister. He showcased the growth story mainly touting the rising Stock Markets which grew to such high levels as could not be justified by the realities on the ground.

Then slowly, the reality hit the aam admi as well as the not so aam admi in the form of back breaking inflation for which this man acting as Finance Minister kept on blaming global situation and everything and everyone but his own mismanagement. This was followed by the crash in the Stock Exchanges and finally by the huge reduction in Industrial Production reflected in the IIP.

Even now, this man Chidambaram is in the denial mode and keeps on spinning fictional stories to calm the common man. It is doubtful if he on his own can come out with any worthwhile action plan to provide succor to the suffering millions. More likely it is that under the garb of reviving the slump in activity, he may just focus on giving steroids to his favorite housing sector so that they can sustain their price levels which are crashing now. He will also do his best to ensure that the Stock Exchange Indices rise, once again giving everyone a false sense of euphoria that the country is making progress.

Hard times are coming and the people themselves will have to find ways to deal with the developing situation as the Government that has lost all credibility cannot be relied upon any more.

Some practical thoughts on some ways to handle the present situation which is becoming more difficult are given below.

These suggestions are not for:

Those who are blessed with means far more than what they need
Those who know what is best for them
Those who think they know what is best for them

Investing money

1. Keep away from the stock markets. Do not buy shares in a bear market for the present. The prices of shares are a complex result of many factors:
a. The actual situation of a company
b. The actual situation of a specific sector and the entire economy
c. The expectations for the future with regard to the company, the sector and the overall economy
d. The sentiment of the investors which also takes into account global factors
e. The activity of FII (foreign institutional investors), which is a key factor influencing price movements. The FIIs may park their funds temporarily in the Indian sock markets or may be ‘hit and run’ players out to make a quick buck or may invest for speculative purposes. Some FIIs who might have invested for medium-to-long term may suddenly exit for any number of reasons including exchange rate changes, their own distressed conditions or more profitable avenues in other countries.
f. Domestic speculators and market players who may work with specific objectives and influence price movements even during a particular day.

The chart below shows the huge price movements on a single day in Sensex.

Do you have the wherewithal to track the market fluctuations every hour, every day and sustain variations of 1000 points in a single day?

If you are still adventurous enough to take your chances for any rise in prices in the short run, be also prepared to lose close to everything and bring distress to yourself and your family in case the present slide continues. Also note that what is important is what happens to the price of shares you buy and not the Sensex. Prices of certain shares like Realty have lost 75%- 90% in a short time. The uncertainty and risk are simply too high at the present time and to avoid losses and earn even a moderate return you may have to wait for two years. Pure gambling may be another option!

2. If you have money to invest, place the same in a Fixed Deposit in a nationalized bank after comparing the rates offered by a few banks as well as the penalty or loss of interest in case of early withdrawals. Investing in Gold would be the second option. Do not go under any circumstances for Multi Level Marketing Schemes which promise fancy returns for making certain members and carrying forward the chain.

3. Do not purchase a house at the present time when the market is crashing. Defer purchase. Consider the fact that the prices have gone up in the last three years by 350-400% which can not be justified on any grounds at all. The prices have been propped up just as the Sensex. (read article here for a background). The Realty Sector is facing hard times with buyers having disappeared. The Rentals in large cities are also dropping fast as the demand for rental places from domestic or international companies particularly in financial services and other service sectors is drying up. Many major builders are facing financial distress and are unable to meet their commitments. The shares of major Realty Companies have dropped between 75 to 90% since January, which shows the realities. Considering all these factors, it is advisable to KEEP AWAY from buying a house for the time being but keep a watch on the market to buy in case the market begins to rise due to Government policies that have enabled the builders to raise the prices artificially in the past. Buyers’ resistance is necessary to bring the prices down to a realistic level which is broadly 50% of the current levels.

4. DO NOT take a loan to buy a house even if the interest rate goes down. Your loan is what actually fuels the rise and helps the builders to increase their prices artificially. A Housing Loan creates a demand at a price which is not justifiable. Remember that what is really important for the person who takes a loan is not primarily the interest rate but the principal sum that is borrowed. It makes little sense to gain a small advantage in interest rate if the sum borrowed is too large to service. The borrower ends up paying higher interest in absolute terms, the interest saving is gone and more amount is borrowed to finance the unwarranted profits of the builder. This is only one aspect relating to taking a House Loan. The second and more important aspect that affects you for the entire life of the loan is servicing of the loan and interest i.e. EMI. Housing Loans have to be normally repaid over a period of 20-30 years. The borrower has to have a perspective of the entire period of the loan. The longer the period, the greater the uncertainties. Consider that a young professional couple engaged in a service industry and earning a very decent combined income takes a loan. Typically, most of the income of one partner is utilized for paying the EMI to the bank. For successfully servicing the loan, it is necessary that the same comfortable income situation continues for a period of 20 years or more. Most housing loan borrowers taking an optimistic view of the future assume that in normal conditions, they would continue to service the loan over this long period. Is it possible to predict the future over such long time horizon? Is it safe to assume that the conditions would be normal throughout? Will there be no business cycles? Everyone must have become aware that surviving in the fiercely competitive globalised world is becoming an increasingly demanding task. Job security cannot be taken for granted. Whether it is the general economic conditions or the situation of a particular employer or the ability of the employee to perform better or worse relative to others, the uncertainties have grown as much as opportunities. While the decision to take a housing loan should not be influenced by pessimism, but certainly, optimism needs to be balanced by practical considerations, prudence and caution. In our typical case, if for some unfortunate reason one partner loses the job or is required to look after family responsibilities, how would the loan be serviced? In the anxiety to get a house, many borrowers would take a view “we shall see” or “we will manage”. If that happens, all to the good. If the situation cannot be managed and if there are loan defaults and distress when children are at a critical stage in their own career development, how would the situation be resolved? Extensions in EMI installments could be obtained only at a heavy cost, further aggravating the problems. It must also be remembered that in case of defaults in loan servicing, there can be a voluntary repossession or forced repossession. In either case, the consequences can be unpleasant. While the house is repossessed, the liability for the loan still remains. Everyone has seen the disastrous effects of an economic downturn. In USA, many owners who could not make the payments simply abandoned their houses and left. The genesis of the sub- prime crisis in the USA that has had reverberations all over the world and has virtually brought the entire developed world on its knees lies in defaults in repayment of loans taken by individual borrowers. It would be unwise to ignore what is happening before our eyes and which is greatly affecting everyone at this point in time.

Weigh the factors carefully

Normal Expendiure

1. Do not use credit cards to buy things unless you have money in the account. Do not buy with credit cards to spend tomorrow’s income today. Credit cards are convenient as they enable you to make cashless purchase and avoid hassles with handling cash. This must be taken as their limited purpose. Going on a shopping spree on the strength of merely a Credit Card not backed by money in the bank, is financial irresponsibility. To spend today out of future income is to leave that much less for the future. Further, many credit card owners simply pay the minimum amount payable to continue the Card and let the bills pile up. This has a heavy cost in terms of delayed payment charges and penalties collecting of which has become a fine art with the credit card providers. The more the penalties and delayed payment charges, the less money is left for genuine needs. There are many who believe that the more Credit Cards they have, the better off they appear to be in their own esteem and in the eyes of others in front of whom the cards are flashed. This is not true. You need only one good Credit Card or Debit Card to see you through most situations, unless of course, you are defaulting by turns on the many credit cards you collect. Then again, there is a cost to having a credit card which can be easily avoided. Before deciding on the Credit Card to take, it is also advisable to know their charges and penalties policy in advance. Avoid Net Banking unless you are thoroughly familiar with the pitfalls and are able to secure yourself completely against fraud.

2. Do not take any bank or private loans to buy durables, cars, houses, etc. The future is uncertain. Do not buy if you do not have the means to buy today.

3. When buying gadgets, durables or cars, look for the basic functionalities which you require. Any added features that are offered in different models or by different brands need to be compared with the higher price that you may need to pay. Only you can decide whether a particular added feature is actually needed and whether it is worth the price differential. In Metro cities, buy a car only out of necessity, not just for comfort or as luxury or status symbol. The availability of parking places for cars whether in the place of residence or on the roads is woefully stretched and will get worse. There is also an increasing tendency to buy Laptop computers in preference to the Desktop. When you buy a Laptop, you end up paying around 50% more compared to a Desktop, feature-for feature. Buy a Laptop only if you really need it and a Desktop will not do the work. Many branded Laptops have serious servicing issues and the service is oftentimes shoddy and slow. Again, if you are used to traveling with the Laptop and it is stolen or lost, apart from the Laptop itself, you can lose large data created after hundreds of hours of work, unless you routinely back it up on a Desktop.

4. Avoid posh hotels and restaurants where you end up paying atrocious prices just for the ambience and for the pleasure of being seen in such places. Go to more moderately priced restaurants serving quality food at the same time. Try to discover the pleasures of cooking more often at home.

5. Mobile Mania: As in the case of other gadgets, pay only for the features you actually need. Do not be lured into frequently buying new models when your existing mobile exactly does what you need it to do. Avoid getting tempted to go in for various schemes which the service providers constantly keep on pushing through telemarketing at all hours. Remember, for any scheme that they propose as a favour to you, the idea is simply to fix your bill amount at a certain level so that it generates a regular minimum income to them from you. Avoid using the SMS service to send various comments to TV channels over their 5xxxx numbers. Do they care for what you say? It is simply a revenue sharing arrangement between the provider and the TV channel as these SMS are charged at a higher rate. Avoid SMS quizes to win huge prizes for answering simple questions. They are just meant to increase the revenues of the service providers. The more you SMS, the more you spend. Even if the mobile is handy, do not be tempted to talk or call someone or the other unless you really NEED to.

6. Gift Mania: Use your discretion about giving gifts. Do not indulge in needless gift culture by giving gifts indiscriminately. Avoid celebrating Husband’s, Wife’s, Father’s, Mother’s, Brother’s, Sister’s, Teacher’s, Lover’s, Hater’s or Friend’s Days. These are just meant to generate sales for vendors of gifts and cards. The sentiments towards your near and dear ones can be expressed at every opportunity and having a particular day to celebrate for the same is unnecessary.

7. Mall Mania: Malls are pleasant places to shop and pass time with your family on holidays. However, when going to a Mall, take a shopping list with you and buy only what you need and what is there in your shopping list. The shops in the Malls are very adept at using scientific techniques of merchandising and display. The primary intention is to lure and tempt you into impulse buying and somehow make the visitors spend more and more. Do not buy simply based on impulse when you see an article which you do not need. Go home, think, decide whether that article is worth buying and then buy it the next time.

8. Avoid Multiplexes. There is little need to pay 100% higher prices when you can see the same movie in a normal cinema hall which also is quite modern.

9. In general, look to get VALUE FOR MONEY whatever you buy, whether products or services.

10. Take up jobs in your own town or other town where you have a place to stay on a permanent basis. At any rate, avoid Metro cities tempted by somewhat higher salaries. The poor level of infrastructure in these cities makes for harsh living conditions apart from the physical traveling distances and lack of permanent accommodation.

While most of those who read these suggestions may find them mundane or unnecessary, they are given in the hope that a small minority may find them useful. These suggestions do not call for any real 'sacrifice', just for sensible use of what you have. In any case at the end of the day, it is for the people to think deeply and use discretion based on common sense and their own prudent thinking and in the light of their own realities.

If the article is useful, forward to others.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Home Ministry - A Farce Carried Too Far

noreply@blogger.com (india-awake) — Fri, 19 Sep 2008 14:27:00 +0000

Delhi, the Capital of India - Safe and Secure

Blasts in Delhi 13th Sept. 2008

Expendable Human Lives

After the event .... The Soap Opera

12th Glorius Episode

"The ROAR of a Purring Cat"

Prelude

Meetings...ACT I

More Meetings....ACT II

Grand Finale...... The End Result

In the last five months, India-awake has been highlighting the miserable and pathetic performance of the Home Minister.

The first article was written on May 20, a week after the blasts in Jaipur but much before the three terrible blasts in Bangalore, Ahmedabad and Delhi.

The following lines described the performance of Shivraj Patil:
"The Home Minister seems to be all at sea and has so far succeeded only in enhancing the doubts and fears of the people. On the other hand, he continues to fumble when cornered by media with difficult and awkward questions like the delay in giving a recommendation to the President on the petition by Afzal Guru. Under his leadership, the Ministry even does not have an assessment of the extent of infiltration that is taking place from across the borders, especially Bangladesh. By no means is the task of the Home Minister of India is easy. But the task has to be done and cannot be left to someone who does not have a strong personality and a clear mind. The kind of wishy-washy image that Shivraj Patil has, could certainly be a factor that will embolden the terrorists to do worse than what they have done already." (see here)

True to the foreboding, the terrorists struck on 25th July in Bangalore and on 26th July in Ahmedabad.

Once again, on 28th July, two days after the blasts in Ahmedabad, India-awake said:
"Shivraj Patil, who…, has developed the subtle art of putting the blame on the States, continues to dole out meaningless comments on how terrorism will not be allowed to succeed, where facts suggest a completely different picture.Shivraj’s lack luster performance has brought the country the trauma of experiencing loss of lives and property at the time and place of choosing by the anti national forces." (see here) Also see related article here.

True to anticipation, the strike force of the terrorists and anti-national elements has reached the very doorstep of the seat of power.

And yet, not only the Home Minister, whose apathetic ways are known to the entire country, but even the slothful Government continues to prevaricate and procrastinate a week after the event.

Such is the tragedy of the people of the country that as of now, the Government does not exist as far as their safety and security are concerned.

Deeply angered and frustrated and yet utterly helpless in changing the Government at least for now, the people are left to fend for themselves and pray.

This is what comes from trusting an uncaring, incompetent and impotent Government.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Cash - for - Votes Tapes, At Last in the Open

noreply@blogger.com (india-awake) — Tue, 12 Aug 2008 13:24:00 +0000

The TV Channel that participated in the sting operation to expose the murky goings on in the political arena to ensure a victory for the UPA Government in Lok Sabha Trust Vote, finally decided to show the tapes on all its channels on 11th August, 2008। (see the details here)

The Channel, in its wisdom had decided not to show the tapes immediately after the Trust Vote. The political party concerned, BJP, whose MPs had in the first place suggested to IBN7, a sister channel of CNN-IBN to participate in the operation, was obviously upset at the Channel’s decision.

Those who watched the CNN-IBN channel in the afternoon of 22nd July, 2008, where Rajdeep Sardesai strenuously argued with his colleague Ashutosh from IBN7 about why the tapes could not be shown at that time, were surprised at the reasoning put forward by Rajdeep who, amongst other things, said that the channel did not want to appear to be taking sides with any political party. Considering that the tapes were about politics where several political parties were involved, it is strange to suggest that the channel did not wish to take sides because obviously the tapes were bound to show one or more parties in unfavorable light. The viewers also saw him on the screen leaving the studio saying that he was rushing to the Parliament straightaway to hand over the tapes to the Speaker. The Channel also claimed that the tapes were the property of the Lok Sabha and hence it would be improper to telecast them. As it happened, the tapes were inexplicably not handed over on the same day but this was done on the next day. The channel also claimed that the operation was a part of a wider investigation started by it much earlier on its own initiative when rumors about horse trading started floating around. It is a different matter that its own investigation, other than the sting, apparently did not yield anything at all.

Amongst the arguments advanced by the Channel, it said that they could not show the tapes as their investigations were incomplete and that they needed to verify more. Even to lay people such a facile argument did not cut ice because after the Trust Vote, there was hardly any further possibility to continue the investigation and whatever the channel managed to tape till that time was all that it could hope to get. The Channel also claimed that it could not work on a time table of a political party but had to take its own decision on the timing. That is essentially correct but for a news media nothing is more important than bringing the news, particularly on larger issues, to the people in time. It is a hall mark of good news journalism to bring the news as it happens, ‘hot from the oven’ and fresh. So even for the Channel itself, it would be logical to telecast the tapes around the event rather than delay it.

The arguments and logic appeared so weak that people just did not believe that the Channel's decision was genuine. To buttress its stand, the Channel even got a former Solicitor General to give a written opinion in the matter, which basically was more of a subjective view and not strictly a legal opinion.

The Channel, respected for its high credibility and programming quality, and its Chief Rajdeep Sardesai have been roundly criticized by the people. The stand of this major Television channel has brought out important issues on the media’s freedom and its responsibility in the context of the public's right to know. Surprisingly and sadly, the other channels and media in general did not appear to seriously debate the issue of the Channel's stand on a matter of great public importance. It is indeed strange for a channel to say that it wanted a complete investigation before presenting it to the people. The media is certainly not an investigating authority. Sting operations have been done in the past and have been telecast too, but there was no claim that the operations presented a fool proof story. A recent case which comes to mind is that of the sting in the R.K.Anand-Kulkarni episode in the Nanda case.

It is true that media has the right to publish or not to publish a news item and the timing when to publish a news item. However, the freedom and the right has to be exercised considering what is in the larger public interest. As in the instant case, it could hardly be used based on whether the channel will be seen to be favoring one or another political party. The Channel’s decision not to publish (show, in this case) a news of topical and great public interest was also in stark contrast to the media’s actions (particularly Television) in the Aarushi murder case. That matter was very sensitive for the persons concerned but the media did not think twice before hounding the family that was in grief over the loss of their daughter. Not only did they persist in hounding the traumatized family, most of the TV channels gave an almost daily dose of their sick and speculative theories based on their own "investigation" including IBN7 pointing fingers at the family being involved in some way. On a TV current affairs programme, most of the media persons present including Ashutosh of IBN7 vehemently and vociferously justified and defended their actions in the Aarushi murder case, claiming that the people’s right to know was paramount and that they virtually had a legitimate right to invade people’s privacy to the extent that it made normal life practically impossible for them. No one can deny that the media has more than one standard and is fully prepared to defend its actions, howsoever indefensible they be. The Fifth Estate appears to believe that it is always acting responsibly.

In the end, when CNN-IBN finally telecast the tapes, it once again gave unconvincing excuses and in essence said that now that a reasonable time had elapsed after the event, they had decided to show the tapes. It also said that they were not passing any judgment and it was left to the people to come to their own conclusions. THAT, IN ANY CASE WOULD HAVE BEEN SO WHETHER THEY DECIDED TO SHOW THE TAPES ON THE FIRST DAY OR AFTER AN ETERNITY. Rajdeep Sardesai certainly did not have to get the illustrious Soli Sorabjee, Fali Nariman, B.G. Verghese and Harish Salve essentially saying the same thing, to add weight and respectability to his decision. The situation would not have been different even if the tapes were telecast on the 22nd or 23rd of July 2008. Even if they were telecast then, the people would have had to draw their own conclusions.

Dealing with politicians all the time, Rajdeep also appears to see merit in using a bit of politics by defending his position vis-à-vis BJP’s displeasure. However, where he has lost his credibility is in the eyes of the people. Whether or not he gets a reward either in the form of a nomination for the Rajya Sabha or in some other manner for his timely exercise of the media's discretion, remains to be seen.

Incidentally, by a coincidence, possibly to demonstrate CNN-IBN's independence, IBN7 telecast on the 10th Augusut 2008, a programme (see details here and here) giving details of some apparently dubious dealings concerning a senior UPA Minister, Lalu Yadav. CNN-IBN can only hope that its dented credibility will be restored eventually.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Another Home for Home Minister?

noreply@blogger.com (india-awake) — Tue, 05 Aug 2008 18:44:00 +0000

The internal security situation of the country is continuing to deteriorate.

aiming in the dark - at no one

Apart from the rising incidents of blasts in various cities across the country, the J&K situation also continues to boil due to a completely insensitive approach and the absence of any serious attempt on the part of the Govt. to bring peace to the troubled State where conditions are going from bad to worse.

One of the clear options before the Prime Minister, if at all he is half as serious about the internal security as about the Nuclear Deal, is to find another home for the present Home Minister. He is one of the three Ministers for whom the Prime Minister needs to find suitable positions urgently as suggested earlier.

This single action by the Prime Minister will show to the country that he is indeed serious about preventing a further downhill slide.

And incidentally, it will also show that he is capable of taking action in respect of a Minister who happens to be in the good books of his party boss.

Postscript:

The ruling of the Tribunal of the Delhi High Court on 5th August 2008, in the SIMI matter that the Govt. had failed to provide sufficient evidence to justify the continued curbs on this known fundamentalist group is yet another indication that the Ministry of Home Affairs cannot be relied upon to ensure the safety and security of the people of the country and that anti-national elements will continue to have a free run to do what they please to tear the fabric of the country apart.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

BJP on a pernicious path

noreply@blogger.com (india-awake) — Mon, 28 Jul 2008 17:31:00 +0000

The blasts that happened in quick succession over two days, 26th and 27th July, 2008, have shaken the confidence of the people in the Govt., whether Central or State, being able to protect their lives and thwart the evil designs of the anti-national elements.

This is a time for serious reflection and deep thinking to decide what can be done to eliminate the scourge of terrorism.

In this background, the statement made by Sushma Swaraj of the BJP in a press conference that "The blasts are a conspiracy to divert attention from the cash-for-votes scandal” as they have taken place in the BJP ruled States within a few days of the Trust Vote, is a pernicious attempt to bring crass politics into a serious issue. All right thinking persons will justifiably feel that these politicians are trying to stir up trouble by bringing up such far fetched and incredible theories. If at all Swaraj had any proof or was hoping that the ‘truth will out’ as stated by her, she should have waited for that to happen rather than making such a wild statement. Although Arun Jaitley softened the statement by saying that he saw it as a much wider conspiracy unrelated to any political party, this does not detract from BJP’s effort to sensationalize the issue without basis.

To be fair to the Govt. and the Congress in particular, this time round, they had behaved in a restrained and responsible manner fully recognizing the sensitivity of the matter. Apart from giving out subtle hints about the State Govt.’s responsibility, they had scrupulously avoided saying anything that would divert attention and bring the issue on the political football field.

Swaraj’s baseless and irresponsible statement, therefore, needs to be condemned and the BJP’s blatant effort to politicize the issue, for which there is no need, is bound to be viewed by the people with contempt.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Home Ministry - Hum nahin sudharenge

noreply@blogger.com (india-awake) — Mon, 28 Jul 2008 08:26:00 +0000

The motto of the Home Ministry seems to be:
“Hum nahin sudharenge”.

Blast after blast after blast after blast, the Ministry comes up only with meetings and conferences within the Ministry and the States. Because the Ministry is bereft of any ideas on tackling terrorism and naxalism, the meetings and conferences always come to naught. The participants in this farcical drama, whether the officials of the Ministry, the intelligence agencies or the police as well as the State officials go back ever more frustrated and not knowing whether the Govt. has any notion or concept of fighting terrorists and naxals.

Shivraj Patil, who aided by the spokesperson of the UPA, has developed the subtle art of putting the blame on the States, continues to dole out meaningless comments on how terrorism will not be allowed to succeed, where facts suggest a completely different picture.

Shivraj’s lack luster performance has brought the country the trauma of experiencing loss of lives and property at the time and place of choosing by the anti national forces. This has already been discussed earlier in an article here just two months back before the present series of blasts.

It is high time those in power show the spine, if not to face terrorism, at least to replace Shivraj with someone else. Possible contenders for the position from the Congress stable would be Pawar(nominally NCP), Chidambaram and Arjun Singh. Even if they do not succeed in improving the situation significantly, at least this change will keep one of them away from the present Ministry where none of them have performed.

The dark horse (who also helped Govt. win the Trust Vote sweepstakes) , of course, could be Mulayam Singh, who has at least been the Defense Minister of the country earlier and a Chief Minister too.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

A blot on the UPA

noreply@blogger.com (india-awake) — Thu, 24 Jul 2008 10:37:00 +0000

waiting to be led

The entire country is utterly disgusted at the way in which the ruling UPA has managed to secure a majority in the Lok Sabha.

The people have understood the Govt. for what it is. The UPA allies may celebrate to their heart's content and pat each other on the back but the Aam Admi has seen it all. There is no need for the Govt. to say anything in its defence.

Counting the gains

Behind the scenes, ensuring success

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Speaker of the Lok Sabha as Party Member

noreply@blogger.com (india-awake) — Wed, 23 Jul 2008 17:27:00 +0000

Lok Sabha and the Speaker, Mr. Somnath Chatterjee

The Communist Party of India (Marxist) has taken the extreme decision of expelling Mr. Somnath Chatterjee from the primary membership of the party.

Mr. Prakash Karat, General Secretary, CPIM

The decision has understandably led to strong reactions from various sections of the polity. with many political parties expressing strong feelings against the expulsion citing his good work as the Speaker of the Lok Sabha.

While most people view his expulsion in the light of his position as Speaker, it must be recognised that Mr. Chatterjee is actually wearing two hats and there is a clear distinction between his position as the Speaker and his position as a member of the political party to which he belongs.

Mr. Chatterjee is a duly elected to the constitutional position of Speaker of the Lok Sabha. Clearly, therefore, regardless of his party affiliation, the party cannot remove him as the Speaker, for that depends upon either him or the body of parliamentarians that elected him.

Mr. Chatterjee is a veteran and highly respected Parliamentarian with a distinguished record of over 40 years standing. During his tenure as the Speaker , many believe that he has enhanced the dignity of the Chair of the Speaker. It is a different matter that despite trying very hard, he has not succeeded in bringing the weight of his seniority and authority to bear on the MPs of the present Lok Sabha who have made it a habit to show their unruly and undisciplined side at every opportunity. In any case, there is a strong consensus in favor of his continuing as the Speaker.

A political party can, however, ask a member to cease to hold any office occupied by the member if it decides that it is justified in doing so. When the party decided to withdraw support to the Govt., it took the view, rightly or not, that Mr. Chatterjee being first and foremost a member of the political party should also quit as Speaker. It is true that the Speaker is above political affiliation when performing his Constitutional duties. Moreover, the position relates to the Legislative Body which is distinct from the Executive. That in itself was a good enough reason for the Party to let him continue as the Speaker. The withdrawal of support of the Party was against the Govt. and the party ought to have distinguished that withdrawal from the fulfilment of the obligations of the Office of the Speaker of a Legislative body by one of its members.

However, the party took a view also considering the value of his vote in any upcoming Trust Vote and mounted pressure on him to resign as Speaker. Mr. Chatterjee, whose ego was already hurt because the Party did not show him the courtesy of consulting him before including his name in the list submitted to the President, did not oblige. On the other hand, he gave a rather frivolous reasoning for not resigning, namely, that he did not want to be seen voting together with the BJP. To say the least, this stand completely lacks in logic and it is surprising that such a senior and seasoned politician and parliamentarian even thought it fit to advance such a reason. Did he mean to say, that just because the Left parties see themselves as sworn enemies of BJP, they should give up fundamental positions on political issues because BJP also happens to have the same position for its own reasons? Taking this argument to the extreme, suppose that the Centre places West Bengal (perhaps along with a BJP ruled State) under President's Rule under Article 356 and if the BJP decides to bring a no-confidence motion in Parliament, would his Party have to oppose such a motion just because BJP is supporting it? It is quite absurd to propose such a flimsy excuse for not resigning. He also suggested that he was elected as Speaker unanimously. However, once he is elected as Speaker by the House, the fact that he also happened to be elected unanimously does not lend any more weight to his position as Speaker or to his decision not to resign. Such explanations, even in the eyes of objective observers were seen as reflecting his desire to simply stick on to the high position. Coupled with the fact that he refused to bow to the party’s express wishes on a crtitical issue, the eventual failure to defeat the UPA in the Trust Vote clearly seem to have led to his expulsion.

In so far as the action taken by the Party is in accordance with the constitution of the Party to which a member is bound, the expulsion is purely an internal affair of the party and the party would surely know all the implications of its actions. Many have tried to ascribe it to the personal egos of some, but really speaking in a Party with so much emphasis on party solidarity and unquestioned submission to the party discipline, such actions are not ruled out. While many feel that such harsh action should not have been taken against such a senior member, there is another side to the coin too. After all, being one of the senior most members of the Party, Somnath Chatterjee more than anyone else, ought to have known and anticipated the results of his failure to follow the Party's express wishes, also considering the surrounding circumstances.

On the other hand, despite the action taken by his Party, at this stage he would do well not to give up his position as the Speaker nor is it even necessary or desirable to do so. As seen during the Trust Vote on the 22nd July 2008, it is essential to have a person of his stature as the Speaker to give the proceedings in the House at least a semblance of credibility and a modicum of discipline to maintain the dignity of this august Institution, which has taken a severe beating in the last few years.

UPA -Boosting a sagging morale

noreply@blogger.com (india-awake) — Sun, 20 Jul 2008 09:15:00 +0000

IN FAIRNESS TO THE PEOPLE OF THE COUNTRY, THIS GOVT. NEEDS TO GO AND ELECTIONS NEED TO BE CALLED IMMEDIATELY.

This is simply an attempt to boost the sagging morale of the UPA two days prior to the Trust Vote in Lok Sabha on 22nd July, 2008 and keep them in good humor.

(without responsibility)

Last minute appeal by Uncle Sam

All parties are keeping their fingers crossed, not knowing whether they will be able to use them to make the "V" sign or left twiddling their thumbs.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Sorry state of agriculture and food security

noreply@blogger.com (india-awake) — Sat, 19 Jul 2008 14:21:00 +0000

In the last few years, agriculture has suffered seriously due to a combination of apathy, indifference and lack of adequate attention by the Govt. This is largely seen as a personal failure of the Agriculture Minister, Sharad Pawar. (see related article)

Chidambaram has cited this as one of the reasons for the Govt.’s failure to manage the situation(see here) and even the Congress party by a resolution called for “better agricultural policies”. As a result of the situation which has aggravated in the last few years, the Govt. has been obliged to commit from the public treasury, over Rs. 700 billion towards writing off loans given to farmers.

The country had to import large huge quantities of sub-standard wheat due to inadequate procurement but ostensibly to create a so-called strategic reserve. On the other hand, the situation within the country remains uncertain. A famine-like situation prevails once again in key states such Maharashtra. There are protests in various parts of the country over non-availability of fertilizers and seeds.

Here are some pictures which highlight the present situation.

Results of the earlier famine

Waiting for the rain Gods - year after year

Food and Fertilizer warehouses

Finally...

Chef not responsible for price, quality, contamination, or anything else

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा

Words of Wisdom from Finance Minister

noreply@blogger.com (india-awake) — Sat, 19 Jul 2008 08:05:00 +0000

It is not surprising that even after the Govt.’s many failures, especially on the Inflation front, Chidambaram, instead of focusing on doing what he is supposed to do, keeps dishing out at the slightest opportunity his glib talk trying to justify the situation.

Of the many ministers in the Cabinet, this popinjay is the only one who cannot stop talking about how he has achieved so much despite the whole world virtually conspiring to frustrate his good work.

Some of his remarks and homilies in a recent statement are worth noting, if only because they highlight how he is trying to perfect the art of blaming others and of self-approbation.

The common thread in his statement, as usual has been one of woes brought about by global factors:”India has been hit by the global financial, food and fuel crises and anybody who thought the country would not be affected by the global turbulence would be "naive".”

Sure, India would be affected by global factors but if the economy is managed well, timely actions are taken instead of basking in false glory and the Govt. policies are judicious enough, the effects would be far less than what the country is facing now. It is no use saying that other countries are even worse off than India. If that argument is stretched to absurdity, our pompous Finance Minister could even say “Look at Zimbabwe… we are much better off”.

In his statement, he has highlighted world food crisis, saying “the world food prices have increased by over 100 per cent but India is the only country where the food rates are relatively stable.” This point hardly needs mention as a factor in our present plight because the country is not so much reliant on imports as some other countries. This point is made only to add to his arsenal to mislead the people.

Apart from this he has mentioned in one breadth, the global financial crisis, the fuel crisis and other global turbulence. He has blamed the sub-prime crisis in the USA as having affected India, although exactly in what manner and to what extent, remains uinclear. The country, he added, could have "weathered even that storm as it did in the second half of 2007-08. But then beginning March there was a food crisis and fuel crisis, adding to financial sector crisis.” By the "food crisis" he is referring to the domestic crisis due to the Agriculture ministry's mishandling.

"Rising Sensex is the be all and end all of economic development." - By a present day genius.

The rest of his statement as already mentioned above, is meant to show that all the progress that the country may have made is implicitly due to him. He also said that if the country achieves 8% growth, it is like getting a silver medal at the Olympics.

His next homily was “We will have some good years, we will have some difficult years. We must learn to manage our economy through good times and not-so good times." That's quite a revelation Mr. Finance Minister, we never knew! Finally he made one more profound statement: "Growth would slow down this year, inflation will be more than the tolerable level and that is why we are going through difficult times”. He seems to be last person in this country upon whom this realization has dawned.

In spite of whatever he might keep saying, he has lost credibility of himself and the Govt. of which he is part, amongst the people. Anything more or less he says will not change the ground realities either. It will help if the Prime Minister told him to just shut up before he becomes more of an embarrassment. People are getting fed up with his boasts and words of wisdom.

Democracy in Action - A Case Study

noreply@blogger.com (india-awake) — Tue, 15 Jul 2008 12:14:00 +0000

The debate on the Nuclear Deal has brought into the open and in sharp focus, the dark and ugly side of Indian Politics.

The debate which started ever since the proposal for the deal first came on the table in 2005 steadily turned to hardening positions on both sides and neither side can be faulted for holding onto the respective positions. The irreconcilable differences within the country on the subject have finally culminated from an issue based fight to a fight which threatens the survival of the Govt.

The machinations of the Political parties in the last couple of weeks have heightened the disgust which the people feel for those whom they made the mistake of choosing to be their representatives. The disgust and alienation of the people at large in not just confined to one or two political parties but across the entire spectrum.

The entire episode, when it finishes, will surely become a Case Study for students of Politics especially, the would-be deal makers of the future.

What follows is a part of the sordid spectacle that is unfolding which, the people of the country are watching now. The real show to be seen on the 21st and 22nd of July, 2008, may well be remembered as the REAL REALITY SHOW.

And for the politicians who have made this happen, there will be neither shame nor remorse.

Think before you enter this area....

And the prized Horse is....

No prizes for guessing...

For Mehbooba..a special Reward for bringing down J&K Govt.

We are waiting for the bids...

The stray ones waiting for their chance...

Apologies to those whose pictures did not find place in the above Gallery of the Politicians' Page Three.

Lollipops for those who cannot make a deal

Update:

It is understood that many Congress Ministers at the Centre , including Deora, Chidambaram and other non-performing Ministers (of whom there is no shortage), are jittery at the prospect of being eased out to accommodate some of those who are going to vote in favor of the Govt. Several sitting Congress MPs and MLAs in states are also having sleepless nights for fear of their claims for tickets in the next elections being ignored to accommodate the understanding with other parties.

The tensions have eased somewhat with a White Knight's assurances on the 15th, of support of some Dark Horses in the trust vote.

Nuke Deal and Political Scene - Update

noreply@blogger.com (india-awake) — Fri, 04 Jul 2008 07:14:00 +0000

See previous here and here

The Nuclear Deal impasse seems to be leading to some bizzare consequences on the Politics of the Country. While the utlimate result cannot be predicted with certainty, what is clear is that the Indian polity is achieving new lows.

A perspective in pictures...........

Left - UPA Coordination Committee
Going round and round

One that got away...
The Left Parties...

No U turn permitted

A slippery Road

The New Kids on the block

Meanwhile in the Stock Markets...

The New Mantra for the Politicians

Building a new road for DEMOCRACY

Nuke Deal and Inflation - Brief Status Report in Pictures

noreply@blogger.com (india-awake) — Mon, 30 Jun 2008 03:55:00 +0000

The Indo - U.S. civilian nuclear agreement and Inflation, the two issues, which have become potatoes too hot to handle in the last few months, may push the country towards elections before time.

Here is a brief perspective on the present status. Pictures speak louder than words, they say.

The Nuke Deal Impasse

Left Parties

Congress President and PM

(will he quit?..)

Mulayam Yadav :"Support Congress?" "mmblmmblnotenemymmbljmblpoliciesmblmmbl3rdJuly"

Inflation

Stuck on the Inflation Highway

Einstein teaching Economics of Chidambaram

From Chidambaram's own Class Primer

TRPs of UPA falling rapidly

noreply@blogger.com (india-awake) — Wed, 25 Jun 2008 14:49:00 +0000

The UPA Govt. has been clearly tripping on several issues lately.

Consequently, the TRP ratings of the Serial-cum-Reality Show of the UPA Jamboree Productions are coming down rather too quickly. Also, the Reality Show side and the Serial side are becoming so much entangled that it is difficult to understand whether the motley cast of characters are part of the one or the other.

On the Reality Show side, the Quizmaster Chidambaram himself is faltering and does not have any more answers on the Inflation figures. He and the contesting team of which he is part, all appear set to fail in the Paanchvi Class before the 5th year. In the channel running the UPA Serial where he has been seen as the good guy and semi-Hero all along, Chidambaram has suddenly become a villain and has been getting booed for failing to tame the demon called Inflation. Several story writers were asked to write reasons why the Inflation demon suddenly descended on the scene though not in the original script, but none could invent a good enough explanation. Incidentally, the only person whose performance is being applauded even now is the person who plays the Vidushak - comedian - in the Serial. The Head of the Family in the Serial is made to helplessly watch the drama going completely off-script.

The Left Parties playing the character roles of benign villains in the garb of benefactors of the country continue to be disliked by the good guys who are feeling helpless at not being able to push the Nuke deal through. Different script writers have tried to give new dialgoues to the spoil-sports but they seem to be in a mood to say only the lines which they have written themselves.

It seems that because of below-expectation performance and the fall in popularity, the Serial and the Reality Show may be ended even before their time, much like “Paanchvi Pass”, but with hopes of making a come-back some time in the future. The new Serial is likely to be named “KKab aur Kaise” and the Reality Show, “KKya Sirf Ek Hi Chance?”.

Fueling Inflation in Housing Prices - who cares?

noreply@blogger.com (india-awake) — Sat, 14 Jun 2008 22:51:00 +0000

P. Chidambaram, India’s Finance Minister, a finance wizard in his own mind, has so far cleverly tried to create an impression that whatever economic growth the country has seen in the last few years has been achieved mainly through his own genius.

Goodies in my bag

But the Aam Admi is experiencing the harsh realities of inflation unleashed alongside the much hyped growth policies of the Govt. The general inflation running at above 8% and affecting day-to-day costs of living has been the main issue in focus at the present time. However, much more ominous and alarming is the vicious rise in cost of HOUSING that has shattered the dream of the common man to have a decent roof over his head. Those in power are merrily oblivious to the plight of those needing a roof and even the political parties in opposition do not seem to have grasped the implications of the serious situation.

350%-400% increases in last three years
The relentlessly rising Housing prices, have indeed reached unprecedented levels over the last three years, which cannot be justified by any yardstick of economic development. The prices in urban areas such as Mumbai and Pune in Maharashtra, by way of examples, have risen to nearly 350%-400% of what they were just three years back! The prices in other cities too have been showing huge increases. A rise of such magnitude can by no means be explained away merely by citing figures of general inflation, GDP growth, creation of new jobs, growth in individual earnings, influx of rich people in the cities, the stock market boom or any such factors. Our finance whiz sitting in Delhi may simply dismiss it as a global phenomenon. Sadly for him the prices in global markets led by USA are collapsing. He may even like to claim that due to the prosperity brought about by his policies, India has become the favorite destination of foreigners who are leaving their own countries and flocking to Mumbai and other locations in India. In one swoop, he would account for the rising prices here and falling prices elsewhere.

Pipe dreams of the Aam Admi

Mumbai – the most expensive housing in the world?
When Chidambaram is justifying the inflation in India by relating it to the inflation that is taking place in other parts of the world, why does he not cite the Housing prices in other countries to justify the high prices in India?

Here is why -

Housing prices in India today, exemplified by Mumbai, are the third highest in Asia after Hongkong and Japan and even higher than in Singapore which is in the fourth place. The prices in Mumbai today are way higher than in Shanghai, the favorite city that our politicians from the Prime Minister downwards always talk of emulating. The price of an apartment in South Mumbai is more than four times higher than in Shanghai. Compared with $ 2,697 per sq. mtr. in Shanghai, the price in South Mumbai is $ 11,413 per sq. mtr. On a Purchasing Power Parity basis, Mumbai today could well be the most expensive city in the world for residential accommodation, rented or owned. At the rate at which Realty prices are rising, more Indian cities will find their way into the Guinness Book of Records. As far as pricing trends are concerned, once again taking the example of Shanghai, where the prices increased by 35% in 2007 over 2006, presently the developers there are offering increasing discounts. Not so in Mumbai!

A 100 sq. mtrs. apartment in the Northern most suburb of Mumbai that would have cost less than Rs. 2.5 million three years back, costs close to Rs. 10 million today. An apartment of that size in South Mumbai costs 4 times as much. Considering the normal trade practice by which the helpless buyer is taken for a ride, for the 100 sq. mtrs. that he pays for, he gets just 70 sq. mtrs. of carpet area. Mumbai is the bellwether and what happens in Mumbai has to happen sooner rather than later in other urban areas as well.

In spite of such high cost of housing, what does Mumbai (or any of the cities in India) offer in terms of quality of living? In Health and Sanitation, Mumbai ranks 209, much lower than Colombo at 131, Shanghai at 134, Karachi at 164 and war-torn Baghdad at 208. In overall quality of living, it ranks at 154 compared with Colombo at 136 and Shanghai at 100.

Who is responsible?
How can such outrageous levels of housing prices be accounted for and who is accountable? Are these the fall-out of the much touted growth story? In reality, it is a massive failure to manage and control the situation much like the failure to control the general inflation. The failure is largely deliberate.

While it is tempting to attribute the high prices to the general shortage of housing, this is not the reason for the massive increases in recent times. Housing has been in short supply in Mumbai for decades and prices have been rising over the years. However, the increases have never been as alarming as in the last three years. Not surprisingly, even some builders and developers admit that the present levels of prices have no real justification.

The real blame for the sordid state of affairs and for the manner in which the Builders and Realty Developers have been enabled to exploit the situation to earn huge profits falls squarely on the Government and the political parties that are party to the Govt. Those in power have been acting recklessly, disregarding the interests of the people at large.

At the State level,
Vilasrao Deshmukh and party have been making a mess of the Housing situation by continuous manipulation of the relevant rules. The DC Rules, land and plot reservations, SRA, FSI, TDR, CRZ, ULC and a host of other administrative rules intended to ensure orderly development for the benefit of the people, have been used, bent and misused as devices to ultimately benefit only the builders and developers and their benefactors. The complex maze of rules and ways in which they are bent are even difficult to comprehend. Not just confined to this, politicians from many parties have also developed vested interests in the goose that lays the golden egg by becoming builders and developers themselves through proxies. When the representatives of the people running the State themselves partake in such mischief, the bureaucrats in the State Govt. and the Municipalities cannot be left behind in benefiting from the prevailing situation. Eventually, it is the hapless people who always end up paying the cost one way or the other, never the builders or the politicians.

The Centre…
While the actions of the State Govt. have been historically affecting the prices of land and Housing due to its authority in these matters, the impact of the actions of the Central Govt. in the last few years is not readily apparent. In particular, it is worthwhile analyzing the role and contribution of Chidambaram in giving a strong boost to the vested interests of the Realty sector.

In a recent interview Chidambaram had said: “behind every concession there is a strong lobby”, an admission that is quite appropriate considering how the builder lobby seems to have been receiving favorable treatment for the last few years as seen from some of his actions.

Housing Loan Interest
One area where Chidambaram has persistently focused his attention is that of interest on housing loans. He is seen repeatedly advising, directing, and even threatening banks either to maintain housing loan interest when interest rates are rising or to reduce housing loan interest when interest rates are stable. Whenever the real estate market turns even slightly stable, he is seen taking it upon himself to tell the banks to reduce interest on housing loans. The idea seems to be to ensure that the property market rise is sustained. Even now, when the RBI has signaled a rise in interest to contain inflationary expectations, our man in Delhi continues to pitch for lower housing loan interest at every opportunity.

In August 2006 he virtually threatened public sector banks to rollback interest rate increases even after RBI had clearly signaled a rise. He said, "It is necessary for the banks to consult their boards before revising lending rates as there are a number of aspects that need to be looked into after the central bank raised its benchmark rate last month... All that we have done is advise banks to place before their boards any decision on [lending] rates. [The] Government is a majority shareholder and there is a government nominee on the boards of the public sector banks.” When asked whether this would be interfering in the functioning of the banks, he said with his hallmark arrogance, “What is wrong in it?” At the same time, trying to cover his tracks and putting the onus on the banks, he also said that it was up to the banks to decide. If that were so, why did he resort to such arm twisting? Earlier in Nov. 2005 too he had said that he did not visualize rates going up for home loans in the near future. Again in Feb. 2007 he asked the public sector banks not to raise interest rates on housing loans though the property market was showing signs of overheating. He publicly disclosed "I am glad all public sector banks have agreed to hold interest rate on home loans at the current rate.” In Feb. 2008, he again urged the public sector banks to lend more to housing borrowers, saying that the banks should offer loans at affordable interest rates ‘to thwart a negative impact on the economy’ due to a slowdown in the credit growth. While clarifying that the govt. does not give directions to banks, he said that the centre was only trying to “sensitize banks to the demands of the consuming public and the prevailing situation”. (As if the banks are living in an outer world oblivious to what is happening). He offered a new alibi by stating in a conference in early March 2008 that ”I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered.” He talked of ‘incentivising borrowers’. ‘Public demand for lower rate’ was the new argument when just a few days earlier he had talked of ‘negative impact on the economy’. Again covering his tracks, he said “it is for the Reserve Bank of India (RBI) to take a call, for the banks to take a call”. Since then, he has called upon the banks to lower home loan rates three times in as many months. Trying to influence decisions by banks, he said in early May that public sector banks were unlikely to raise rates after the RBI hike in CRR and that “bankers were particularly happy that there has been some change in policy regarding housing loans... So, this means that the housing sector can expect higher credit flow without impacting the interest rates.”

What is objectionable if he tries to persuade banks? Well, first and foremost, all banks have to work in accordance with the prescriptions of RBI, the country’s monetary authority as well as the regulator and supervisor of the financial system. Second, even public sector banks are all public limited companies answerable to all their shareholders, not just the Govt. of India which is the majority shareholder as of now. They have their own Boards to set broad directions, supervise and control their functioning. The operations are handled by the managements who have to run the banks well keeping in view the competitive and market situation, earn profits and enhance shareholder value. They are responsible for their own working. The Govt.’s views, if any, can be presented by its nominee directors as permitted in the Boards of Directors. He has hardly a justification to short circuit this or ignore or bypass RBI. If the Ministry has a larger viewpoint, the same can be communicated to the RBI who may take it into account if it has merit. He has conveniently forgotten that the command and control system of yesteryears is history. Why then should he micromanage interest on home loans? He should not even be publicly commenting on interest rates, which is the domain of RBI. It is intriguing as to why he is freely making public the gratuitous advice given by him to banks on this specific subject? Perhaps, it is to influence and preempt the decisions of the banks and RBI by putting them under pressure. If he were not regarded as an honest minister, a less charitable explanation would be that the public announcements are an ‘action taken’ signal to those interested in such action being taken.

RBI, with a better view than Chidambaram on areas in its jurisdiction, has been setting policy guidelines including interest rates, sector risk weightages etc. as warranted. In October 2006, for example, RBI tightened its lending norms for banks particularly in the real estate sector where funds were seen to be utilized for speculative deals. This tightening was in a sense offset by easier house loans at lower rates of interest. It is reasonable to assume that these funds eventually ended up being in the hands of the realty developers who were enabled one way or the other to have a steady flow of funds at their disposal. The RBI has also been trying to caution the banking system and indirectly the customer too about the risks of creating a bubble that may burst with overheating. The banks too have their ears to the ground and can do without advice or reminders from the FM on running their business.

Anyhow, one may ask, what is wrong in trying to make housing loans cheaper as it is a just cause and people are happy to get cheaper loans. Two main reasons may be advanced to justify his constant efforts in this direction. Firstly, he claims that housing is a ‘driver of growth’ and so needs to be promoted. Secondly, the common man needs affordable housing and so he should be given cheap loans. Q.E.D.! Even the Left parties may not be able to raise objections on this logic particularly when he talks of reducing interest on loans under Rs. 20 lacs. Our clever lawyer has then two ‘alibis’ to pursue his objective. But let us examine this further.

As to the first justification, no one can dispute that there is a large demand for housing and realty and these activities are profitable. But the country has come a long way in liberalization of the economy and is virtually a market economy where Businesses are free to go into any profitable areas. Those already entrenched in this sector and those who want to venture into it know this and are not lacking in resources. If some of them get out if they find the profits inadequate, others will come in. So, where is the scope and need for the State, much less Chidambaram on his own to ‘promote’ the sector by intervention? Moreover, it is still debatable whether housing can be considered a prime growth driver in India as in USA. Housing plays a very major role in the U.S. economy and may be a true ‘driver of growth’ there. USA is a mature economy and, perhaps, the scope of growth in other areas is not so high. On the other hand, it has a huge resource in Land with a land mass three times that of India and a population that is one fourth of India. So, housing is one sector in USA which impacts the growth of its economy significantly and there is a strong need also to prevent any slow down in Housing. In India, although Housing is very important, at this stage it can hardly be regarded a growth driver as important as in USA because there are many constraints, including infrastructure, to its growth. Many other sectors with fewer constraints may have a higher claim to be considered or promoted as drivers of growth. So, why single out housing for ongoing intervention by the State at the slightest pretext to provide artificial props? Is the country so vulnerable that the entire economy would slow down if the Housing sector even appears about to sneeze? If at all, intervention should happen only to prevent, not to support, exploitation of the customer and unjustifiable price rises. Larger and long term policy issues affecting orderly development of housing should have the attention of the State not micromanagement.

What about the second argument of making it affordable to take a loan? While the idea seems reasonable, it is the working of the entire home loan scene on the ground that needs to be considered. The overheated market with sky high prices has marginalized the average aspirant of a roof over his head. Even a veteran like Deepak Parekh of HDFC who has been cautioning about unrealistic prices, agrees that the average employed person has no chance to buy a house in Mumbai. So, does a cheap loan serve his purpose? At first glance, yes but when one analyses further the situation is different.

My options for Aam Admi

The fundamental point about affordable housing is that the cost of the house itself should be affordable. If the cost is not affordable, talking of reducing interest on home loans is just fooling the people into believing that they are being helped. When the house price itself is unjustifiably high, the customer ends up paying a lot even with lower interest. If the house is affordable, the interest may not even need to be lowered. What the buyer has to pay is not merely the interest but the principal cost too. So the Govt.’s effort should really be to drastically bring down the unconscionable prices rather than talking of relatively piddling interest element which in any case is relevant only for those who need to take and can take a loan.

Easier loans at a lower rate at this point in time in the given circumstances are seriously harming the larger interests of the consumer. The PM had earlier indicated in relation to inflation that there were supply constraints. The entire housing situation is also a supply side issue. First there is a genuine shortage and next, the supply that exists is offered at unjustified prices. There is a large unmet demand but at affordable price. There is resistance only because of the high prices which the builders want. If builders were to offer housing at affordable prices, people would buy. When demand already exists albeit at the right price, where is the question of ‘incentivizing’ borrowers or encouraging demand? Why should demand be fuelled when the problem is of supply? You are only ‘enticing’ a person to borrow and practically thrusting money into his hands to enable him to pay a higher price than warranted. It is to be noted that it makes little difference if the lower rates apply only to loans under Rs. 20 lacs. In many cases, loans are taken in such amounts to ‘top up’ the amount the borrower may have received from sale of his old property. The actual cost of new property may still be very high. In any case, even Rs. 20 lac is not a small amount and can impact the price spiral. So what is the actual impact of the home loan scene on the ground?

Firstly, an easier loan at lower rate acts as a device to break down the price resistance. Intending buyers are enabled to augment their own resources with borrowing to facilitate buying at the high prices. The easy loans actually result in FUELLING demand and that too at the unjustified price levels. Put differently, they provide external sustenance and stimulus to the price levels, not the supply. Facilitating people to take housing loan with lower interest does not help because a large part of the loan amount gets sucked into the artificial, inflated price and results in perpetuating a vicious spiral where purchases facilitated by loans continuously fuel higher price levels. The effect of a lower interest rate is simply to further shore up the already high demand artificially and create more panic amongst buyers, leading to still higher prices. Moreover, the average person cannot take a loan so easily when the housing is priced so high. This means that the ‘new economy’ high earners can preempt available housing, leaving out the average person.

Secondly, in a normal situation, the requirements of funds by producers/suppliers for business purposes have to be met from their own resources or by borrowing directly from the banks at commercial rates with repayment responsibility. Both have a high cost. When low cost funds in large amounts are placed in the hands of customers in a diffused manner, it results in a clever transfer of resources from the banks to the realty sector through the end customer. The builder gets funds virtually free and the customer pays the interest over a period with risks attached to non-repayment.

Thirdly, the larger funds available with the developers due to the unreasonably high prices, enables them to indulge in speculative covering. More importantly, it tremendously increases their holding capacity. The larger developers can almost indefinitely hold out without reducing their prices till they find customers at their price. The same happens with investors/re-sellers who anticipate higher prices by holding out.

Fourthly, the huge and sudden price increases fuelled by easy loans have simply made it possible, even necessary, for builders to increase the cash component in the price of an apartment. The cash component in the total price, an average of 40% is as high as 70% in several cases. The price increases have been so abnormal that the builders do not find it necessary or desirable to reflect the full price in the official transaction. This is the stark reality and Chidambaram's Ministry has been certainly aware of the extent of cash transactions in realty business.

Fifthly, many borrowers who might be able to purchase a house largely from their own resources are tempted to take the loans. Their own resources are then profitably deployed in the stock market or for further purchase of property for speculative purposes. Thus, a huge indirect transfer of bank funds to the stock markets takes place to fuel stock prices.

Sixthly, many investors are also tempted to take loans for speculative buying of houses for future sale, which again reduces the supply for genuine first time buyers, also pushing up prices.

As of 31st March 2007, a sum of Rs. 230,689 crores was deployed by commercial banks for housing loans, to which close to Rs.35,000 crores would have been added by now. Considering what has been stated earlier, relatively large amounts out of the total sum of Rs. 265,000 crores might have found their way indirectly to finance stock exchange or other speculative (including real estate and housing) activities. The net result of this can only be guessed. Even if a large part of the loans have genuinely been confined to the housing sector, they have stimulated the high prices and the extent of windfall profits of the builders and developers can be only imagined. What may be happening is that sectors that need cheap credit to expand productive activities may not get enough, while those who thrive on market manipulation and speculative activities may take advantage of the cheap housing loans availed by their customers to increase their own profits. In this context, it is worth noting that a working group constituted by RBI in 2005 to review priority sector lending norms had suggested removal of housing from the purview of priority sector lending .

Whatever the pundits and armchair advisers may think, the ground reality is that an easy loan regime in the given circumstances may be self-defeating and have the potential of wrecking further havoc on the situation of housing prices. Finally, should some unfortunate circumstances result in a slow down in the 'new economy' sectors and those who have taken loans find themselves unable to meet their repayment obligations, the resultant distress would cause much pain. Most likely, our whiz may not be there to face the situation and the mess would need to be cleaned up by his successor.

An incidental issue that may be raised by some relates to re-development projects. In the case of many re-development projects the developers pay fancy prices to the exisitng owners/occupants. Does that not increase their costs? Well, it does, but that reflects in the prices at which they sell the new development leaving their windfall profits intact as the prices constantly race ahead. On the other hand, the owners who have sold out have a short lived satisfaction of getting a high price compared to their original cost. Short-lived, because a large part of what they get is invested in buying a new house at the prevailing price levels. Considering the existing capital gains tax rules, the high capital gains have to be necessarily invested in housing to save on the tax. Once again, this feeds the fire of rising prices overall.

In the present scenario, nothing less than a sharp jolt will achieve the type of correction that is necessary. Can anyone believe that the Govt. has any commitment and will take any action, let alone apply its mind to this problem? We seem to have a Finance Minister who is unaware of what is happening or chooses to ignore the problems it creates for genuine buyers – the Aam Admi- and closes his eyes to the windfall profits - a kind of unjust enrichment - of the builders and developers. Whether he understands the consequences of his actions or does not, he may well be remebered for his contribution in taking the house prices to the high levels from where a retreat to realistic levels seems well neigh impossible.

Cement Prices
The other area where he has been trying to personally poke his nose bypassing the concerned Ministry is the issue of cement prices. The common man is suffering most due to the rise in cost of his daily necessities. Chidambaram, our maven in Delhi, keeps saying that all steps would be taken to check the inflation. And guess on which area does he personally focus? Out of 435 items that are comprised in the WPI, he picks on two items- CEMENT and Iron & Steel, both being inputs for the builders. Granted that every product group whose prices are rising should receive attention and granted also that the prices of these two items have been rising, what is needed is immediate succor for the common man. Will a reduction in prices of these two items alleviate the immediate suffering of the common man? No! The price index for cement went up between 5.5.2007 and 3.5.2008 from 211.6 to 220.8 i.e. by 4.35%, actually lower than the increase in all commodities index which went up from 212 to 228.6. What is the weightage of Cement in the WPI calculation? It is 1.73105 of 100. So how much has the price increase of cement over the last year impacted the overall WPI AND also the day-to-day cost of living? A little more than a goose egg! Yet, time and again, this is the one item that he has been picking on and leaning on the producers to reduce its prices.

In 2007 after the budget, he had told the cement makers to pressurize them:” We have information how much your sales have increased, how much your PBT has increased, how much your PAT has increased. So you should come forward with some proposals” The cement makers, however, refused to toe his line.

Once again this year, he took it upon himself to single out cement and steel, particularly the former, to focus on and to get the cement producers to reduce the prices. In April this year, he threatened the cement (& steel) makers with tough administrative measures if they did not end their cartel like behavior and exploiting consumers (read builder lobby). He pleaded with apex bodies of chambers of commerce and industry to ask the cement and steel companies to cut prices. He even made the allegation of ‘cartelization’ in Lok Sabha which was promptly denied by the concerned Ministry in the Lok Sabha. Even thereafter, he has persisted with the allegation and threatened actions. Earlier, even in his Budget Speech, he had referred to “oligopolistic tendencies in the cement and steel sectors.” He is now in the stage of ‘persuading’ the industry to cut prices adding that “I have made it very plain, that, if they (cement manufactures) do not voluntarily cut the prices, we are prepared to take administrative measures”. After the cement makers agreed to reduce prices to an extent, he said on 16.5.08 that “there is scope for significant reduction in cement prices.”

The price of cement has been his pet subject which he raked up even as far back as 2000 and 2001. (see here and here) To be fair, no one can deny that price increases in such basic products as cement and steel need to be under check as they would also eventually affect new infrastructure projects. Steel prices also have a cascading effect due to its importance in industrial production as well. This fact is exactly what provides the ‘alibi’ that the clever lawyer needs. No one can, therefore, object to what he is doing because everyone thinks it is a good cause. But the point still remains as to why the Finance Minister of the country is personally so keen on pursuing the subject himself rather than leaving it to the administrative Ministry concerned. Assuming that the swan song of reducing cement prices is out of a noble desire to reduce the burden on the common man; can any reduction in cement prices be expected to lead to lowering the cost of housing? It is difficult to believe. The lower price will simply add to the obscene profits of the realty developers and builders. This is because today’s high prices of housing are decided less by costs of cement or normal laws of economics and more by the greed of the builders and support from the powers that be that enables them to milk the people. It is not denied that the steel and cement makers are hiking prices to exploit the demand-supply gap. But they also know full well the extent of windfall profits being made by their main customers, the builders and developers by fleecing the end users. The exploitation of the market applies with much more force to the prices of housing. If he is indeed concerned for the people at large, should he not focus his crusade rather on the builders and developers to force them to cut prices?

Incidentally, the price history of cement reveals some interesting facts. Over a period of four years between Dec. 2000 and Dec. 2004, the price index actually showed a decline from 151.6 to 149.3. Within a few months of the new Govt. coming to power, in just one month between Jan. 2005 and Feb. 2005 the index spurted by 8% ending with 10% in Dec. 2005. It jumped a whopping 20% from Dec. 2005 to Dec. 2006. Again, it jumped 11% from Dec. 2006 to Dec. 2007. An intriguing question arises is that if he was so much concerned about cement which was one of the five products under special watch, how did he allow the prices to increase for two full years 2005 and 2006 in the first place under his watch as Finance Minister? Was he twiddling his thumb waiting for prices to go up further?

In any event, while Chidambaram's zeal on cement prices is not objectionable per se, it does appear that it is the builders who will gain a lot out of any reductions he secures, as these will simply not make any noticeable impact downstream on housing prices.

Other policy areas affecting realty prices
There are other areas of Central Govt. policies like FDI in real estate and capital gains tax provisions that have a bearing on the high prices of real estate and housing but these are better considered in a separate discussion.

In conclusion
The builders and developers have raked in thousands of crores in the last few years due to the spurt in housing prices helped by friendly powers that be. In spite of his rhetoric of reducing inflation, as far as Housing prices are concerned, the FM is unlikely to lift a finger to achieve any significant reduction considering his actions so far. He is generally regarded as an honest minister unlike some others and it would not be right to suggest that his actions are deliberately intended to favor the builders and developers. One thing is sure, however, that his actions are being brought into question and he is fast losing his credibility. If he can do with some gratuitous advice, it is this: Having done enough for his pet subjects he should rather focus on doing whatever he can to actually bring down housing prices. Or quit. Using his own words, “it is for him to take a call”.

And all those who talk of making Mumbai into Shanghai should first focus on reducing housing prices, never mind the cosmetic makeovers.

Ministers from Maharashtra disappoint

noreply@blogger.com (india-awake) — Tue, 20 May 2008 16:32:00 +0000

What is really wrong with the senior Ministers from Maharashtra at the Centre?

It is a well recognized fact that governance in the State of Maharashtra has been at its lowest ebb since the last several years. The State has been suffering in developmental activities on virtually all fronts, protestations of the present Government notwithstanding.

The quality of the administration in the State is generally recognized as having deteriorated steadily. This is due in no small measure to the falling standards of the bureaucracy. The present lot of bureaucrats has been termed by those who are familiar with their workings as lethargic, indifferent or downright incompetent.

Vilasrao Deshmukh

More importantly, it is the performance of the political leadership in the State which has been completely lackluster. The Chief Minister of the State Vilasrao Deshmukh has done practically nothing to ensure that Maharashtra continues to remain in the forefront of development amongst the States and his performance would put to shame even the poor performance of his predecessor, Sushil Kumar Shinde. In fact, Vilasrao has been on the brink of losing his chair for quite some time according to grape vine. He has been holding on to his chair despite stiff opposition from even his own party men. For this, he must thank his luck and a combination of fortuitous developments happening that have delayed his departure. Incidentally, even his other colleagues in the State Cabinet do not seem to have shown any remarkable performance, although they keep targeting Vilasrao openly or obliquely.

If the performance of the State Govt. leader has been so disappointing, the three senior leaders from Maharashtra now in the Union Cabinet do not seem to have done any better.

Sushil Kumar Shinde

The suave and soft spoken Sushil Kumar Shinde has carried on with his file pushing even at the Centre as the Minister for Power. After he was eased out from the State and kicked upwards at the Centre, he has very little to show for his achievements with the Power portfolio that is crucial for the economic development of the country.

Shivraj Patil

Shivraj Patil, his colleague, also suave and soft spoken (a quality apparently liked by their party boss regardless of performance), has been the Home Minister at the Centre. During his tenure, no bold measures have been taken that have actually succeeded in containing terrorism and naxalism. On the contrary, the country has continued to witness escalation on both the fronts. Although law and order is a State subject, terrorism and naxalism are subjects where the Union Home Ministry has a major role to play in evolving a country wide strategy. The Home Ministry has failed to show any vision to tackle these problems in the wider perspective. The Home Minister seems to be all at sea and has so far succeeded only in enhancing the doubts and fears of the people. On the other hand, he continues to fumble when cornered by media with difficult and awkward questions like the delay in giving a recommendation to the President on the petition by Afzal Guru. Under his leadership, the Ministry even does not have an assessment of the extent of inflitration that is taking place from across the borders, especially Bangladesh. By no means is the task of the Home Minister of India is easy. But the task has to be done and cannot be left to someone who does not have a strong personality and a clear mind. The kind of wishy-washy image that Shivraj Patil has, could certainly be a factor that will embolden the terrorists to do worse than what they have done already.

Sharadrao Pawar

The performance of Sharad Pawar, the third Minister at the Centre from Maharashtra, has been the most disappointing and quite unexpectedly so. Sharad Pawar, a stalwart from Maharashtra has so far been regarded as a person with strong administrative capacity coupled with a modicum of foresight. Surprisingly, his stint as the Agriculture Minister has seen agriculture and agriculturists suffering a great deal. Instead of improvements in agriculture and sustainable growth, there have been no improvements worth noting. No long or short term strategy seems to exist and agriculture is largely left to the kindness or otherwise of the rain gods. The situation on the food security front is turning out to be precarious in his reign and the country appears to be on its way to food scarcity and cycles of imports as in the distant past. To add to this sordid state of affairs, there have been loud whispers of a scandal in massive imports of wheat that turned out to be unfit for either humans or animals.

Overall, the performance of Sharadrao Pawar as Agriculture Minister has, perhaps, been worse than that of any of his predecessors. Certainly amongst the three senior Ministers from Maharashtra working at the Centre, his tenure has been the most disappointing, given the fact that he, unlike the others, always gave the impression of a man who knew his business. Alas, the country is finding at a great cost to its food security that the faith in him has been misplaced. It seems that what he might be capable of achieving as a Chief Minister in his own State, he cannot achieve at the Centre.

In sum, all the three Ministers whose names by coincidence begin with “S” have let down the people of Maharashtra.

Arjun Singh's Quota of Woes

noreply@blogger.com (india-awake) — Fri, 19 May 2006 10:40:00 +0000

see previous article

Quota Raj shall prevail

It is sad that in the largest “democracy” in the world, the Government of the country has to resort to playing games in order to deal with those who protest in a democratic manner against its backward looking approaches to resolving serious social issues.

As the legitimate protests against the Government’s proposed policy for special quotas for OBC get more intense, ministers in the Government and the politicians supporting such quotas for their own political ends are using all manner of tricks, subterfuge and other means, to divide, weaken and ultimately crush dissent.

In the last couple of days, the Government has been going through the motions of a mock “dialogue” with the protesting students and resident doctors but it is clear to everyone with a minimum of intellect that the sole purpose of such talks is to somehow see that the protests are subdued and stopped.

The actors in this drama being played by the Government and the political parties are many, but the pride of place at this point of time must surely be given to Arjun Singh.

He has played a pivotal role in the present controversy reaching such serious proportions and the manner in which he has acted ever since early April deserves to be recalled to appreciate the mischief and damage he has managed to do.

On the 5th of April, he let it be known that the Govt. would be announcing its decision on quotas for OBC after the elections as the same could not be announced while the elections were going to take place. Whether he actually said those words and the precise grammatical meaning of what he said is a matter of quibbling, which he has already done with the Election Commission after the latter called for an explanation. But to all those who read the news reports, he was not talking of an intention of his party or the Government but of an impending announcement of a decision. He was effectively making an unofficial announcement and saying that the formality would be completed after the election due to technicalities. That was what was understood. What he said was clearly an attempt to influence the voters (even though a little late in the day). Whether he said this at the behest of his boss or, for some reason of its own, is unclear.

In fact, before Singh spoke, the HRM Draft Bill was already sent back by the Cabinet Secretary in view of the forthcoming elections. This then, was the starting point of the mischief.

Then, when the students started agitations and wanted to meet him, he did not meet them. When he did meet, he took cover under E.C. directive and also talked of speaking to the Prime Minister.

All along in this series of events, he has maintained that the government was duty bound by the Constitution to introduce the quota. This was clearly a deliberate falsehood to mislead not only the agitating students but also the whole country. The Constitutional amendment is only an enabling amendment consequent upon the Supreme Court decision in P.A.Inamdar & Ors. v. State of Maharashtra & Ors., delivered on 12th August 2005. ( see here ). In fact, it is the Supreme Court which has suggested the Union or the State Governments to come out with ‘a detailed well thought out legislation’.

The 93rd Amendment merely states that the Government can make “any special provisions by law for the advancement of socially or economically backward classes” or SC/ST as regards admissions to educational institutions. (see the actual Act). It DOES NOT say that government must make such special provisions nor does it prescribe any time limit. “Special provisions” do not mean only reservations and quotas, except in the mind of a non-thinking Government with no vision. Furthermore, it is clear that in spite of the 93rd Amendment allowing the Govt. to make special provisions, any law that may be made will still be subject to judicial scrutiny in future.

A Union Minister who would complete 50 years of political life next year cannot be so ignorant as to say that government is mandated by the Constitution to introduce the quotas. The conclusion is clear that what is being said by him is to mislead. He actually said in a statement once again on the 18th May, knowing full well that it was not a correct representation :

"the Central Government is aware of all views expressed in this regard and shall take an appropriate decision on this issue without in anyway diluting the commitment arising out of the Constitutional Amendment in Article 15 (5)."

Not satisfied, he used the same point while launching a totally unwarranted and undignified attack on the National Knowledge Commission. With due respect to Arjun Singh’s long political life, it can be said that each of the members of the Knowledge Commission carry a lot of respect and are fully qualified to say what they have said with regard to education. In fact, its Statement on Reservations appears to be a well articulated and at the same time a restrained statement and contains nothing that should anger Arjun Singh, except for the fact that it makes public the views of its members. (read here). Furthermore, the Commission is very well within its rights to have its say on the subject. Its very first Term of Reference is:

Build excellence in the educational system to meet the knowledge challenges of the 21st century and increase India’s competitive advantage in fields of knowledge.

It is the duty and the responsibility of the Human Resource Ministry to respect and give due weight to the views of this body that has been given the task of building excellence in the educational system of India of the 21st Century – a task for which the older generation is simply not well placed to have a concept let alone a vision. Instead, Arjun Singh made various calumnious comments questioning whether they (NKC) were above the Constitution and even mischievously suggesting that they were wanting to thwart the will of the Parliament, that would depict the NKC in a confrontational role.

This tirade by a Senior Government Minister questioning another empowered body of his own Government was absolutely unseemly and deserves to be dismissed with sheer contempt.

Arjun Singh’s latest statements also deserve to be noted to understand how he is consistently tying himself into knots in trying to do a balancing act. He stated in the Parliament that Government was not working with a closed mind but will fulfil its commitment on quotas. Not having a ‘closed mind’ is completely false. This is evident from the fact that the Draft Bill was ready and already forwarded by him to the Cabinet Secretariat perhaps in the end of March 2006 to be placed in the Cabinet for approval. This in itself is evidence of the Government – not he alone – scurrying surreptitiously in a completely non-transparent and non-democratic way to push through its policy as law without allowing a public debate on such a fundamental and sensitive issue. It shows that the Government had indeed closed its mind.

What is more important and shocking is that contrary to the Supreme Court’s exhortation of bringing out a ‘well thought out legislation', not much thought seems to have gone into the proposal. The manner in which the matter has been finalised is an indication that the Government, in particular the HR Ministry, has not done its home work at all. When such a major decision having far reaching implications for the country is to be taken, it would be expected of the government to prepare and present before the public a strong case with full justification, facts and figures, a review of past approaches, actions and results, the vision for the future, the options available and considered and finally a convincing case for the option that is chosen. NOTHING OF THAT SEEMS TO HAVE BEEN DONE. The Government seems not to have even bothered to consult beforehand, the Knowledge Commission, whose terms of reference place a focus on education, and whose inputs would be essential and invaluable in the context of the needs of the 21st Century. The only justification the Ministry and Government seem to have, is political need and expedincy as well as the opportunity arising after the Supreme Court judgement. This brings out an almost scandalous state of affairs prevailing in decision making within the government. Truly a sad commentary on a country preparing for the 21st Century.

Further proof of the closed mind of the Government is the fact that what the other auxiliary corps of ministers like Fernandes, Mukherjee, Ramadoss and Chidambaram are trying, is simply to get the students to end their agitation. Every one of the minsters concerned continues with the quota swansong. Palliatives being offered e.g. to increase seats, to ‘consider’ providing more finance etc. are just an eyewash and worth trash, first because they detract from the basic objections to reservations and second because their objective is simply to coax the students to give up. The democratic government of India thinks nothing of even serving sack notices or blowing lathis on demonstrating medicos (although they are expected to brave these for their cause) whose very careers and future are at stake. They are indeed not fighting only for themselves but also for other youngsters who will have to face the same situation in future.

The government in a co-ordinated effort is also out to discredit the media for ‘blowing things out of proportion’ - an exercise of trying to shoot the messenger. At the same time, a section of the media has reported that the government was trying to "mollify upper classes", an invidious hint to put the colours of a casteist approach on the part of the protestors. In fact, the protestors are doing exactly the opposite by wanting to maintain merit-based criteria. There is also innuendo of some political parties working behind the scenes!

Arjun Singh has led an early charge of the brigade without preparations and without a sound plan except one of ramming through, come what may. Now, with the pressures of vote-bank politics and with other political parties who see themselves as saviors of the OBCs breathing down its neck, the Government, it seems, will stop at nothing to push and rush through its quota policy, howsoever ham-handed it may have to become.

Retail FDI - Lessons in Misleading the People

noreply@blogger.com (india-awake) — Sat, 13 May 2006 04:53:00 +0000

Kamal Nath
Let me think.......

The Government and the Minister of Commerce Mr. Kamal Nath in particular, have become quite adept at creating confusion in order to achieve the objective of pushing and justifying a non-existent case for FDI in Retail sector.

After a short lull, the Government has again started floating the premise that the objection to inviting foreign investment in Retail stems from the opposition to big from the small. It is trying to mislead the people by suggesting that the entire argument against foreign direct investment in this sector is confined to the philosophical question of big vs. small. The apparent strategy is that the moment a few large domestic retailers come up, the government could claim that since large retailers are already co-existing with small retailers, there is no harm in having foreign retailers as well who are large.

The arguments against retail FDI are much stronger and fundamental and the main issue is whether FDI in this sector is essential and justified or not. The unequivocal answer to this is: NO. A policy of allowing FDI in this sector can only benefit the global retailers by giving them a permanent footing to earn billions in potentially the largest market in the world in future. This benefit would be available to them virtually free of cost because any investment they make would be only to create their own assets and run their own operations.

The second point which the Government, starting from the Prime Minister, have been at pains to highlight at every available opportunity, is that the country needs $ 150 bn. in FDI in the next few years. This argument is cleverly sought to be linked to suggest that FDI in retail is part of this need. This is just a smokescreen. The country does not need this amount in just any random sector. If the Government has done the home-work to arrive at this magic figure, it must have obviously also worked out the desired sector-wise composition of the $ 150 bn. estimate. Logically, this figure would include only critical areas of high priority like infrastructure and industry and certainly not a no-priority area like Retail where in any case the inflows cannot be large and where, in contrast, there is no worthwhile benefit. On the other hand, there is no shortage of domestic capital for this sector.

In fact, the Government has failed to show a single provable benefit from FDI in Retail sector, as already discussed in another article (see here). On the other hand, most of the arguments and assertions of benefits flowing some time in future (including the supposed big benefits to agricultural sector) that have been floated from time to time, have been comprehensively and admirably dealt with and effectively countered in a longish article elsewhere on the web, specifically as they relate to India (see here). Even the Left parties have demolished the Government's arguments in their discussions with the Government and in public.

The Government has now let it be known that the Commerce Ministry, along with the PMO is working out a proposal to permit FDI in specific branded products like sports goods (read "Nike"?). This very proposal gives the lie to the Government's lofty claims of FDI in Retail sector doing wonders for the country. By no stretch of imagination can it be claimed that allowing FDI in selective segments like sports goods or such other insignifcant area can do any good for the country at all. In even considering such a proposal, the government has practically destroyed its case in the main, for it is obvious that the only real beneficiaries will be the retailers that set up base under this proposed policy. In any case, such brand segments can very well make do with the franchise option available to them at present.

The conclusion is unavoidable that the Government's intentions do not indicate any public interest being served. Private interests, perhaps? Who knows.

What about the assurances to Wal-mart and others then, that they would be allowed? Hmmmm.... May be the Commerce Minister and the PMO still have something up their sleeves to spring a last minute surprise.

Quotas - an idea whose time has gone

noreply@blogger.com (india-awake) — Fri, 28 Apr 2006 04:27:00 +0000

Youth power - resisting injustice

Voice of sanity and sense
Kapil Sibal

Making others cry -
Arjun Singh

Mr. Arjun Singh, a life-long practitioner of fake secularism has been lately seeing himself in the role of the self-styled messiah of the minorities and OBCs.

In his desperate attempt to remain in the limelight in the face of an ebbing and lackluster political career and with fear of being consigned to oblivion by his own party, he is trying to play base politics that may well result in ensuring that the country is never rid of caste and religion based thinking and in dividing up the 'generation next' of the country.

In pushing for reservations for OBCs in higher education that will have far reaching repercussions on the country in the years to come, he is trying to fool the people by claiming that the government is duty bound to do so in terms of the mandate of the 93rd Amendment to the Constitution. This is a patently mala fide misrepresentation and a bogus argument. The 93rd Amendment simply makes an enabling provision that allows the Government to make special provisions for socially or economically backward classes of citizens related to admission to educational institutions. To buttress his argument, he is making much of the fact that the amendment was supported by all political parties. Even if that were so, the amendment DOES NOT PLACE ANY COMPULSION on the Government that it must impose the quota raj that is being proposed. For that matter, the amendment does not even say that the special provisions that the government is enabled to make must be in the form of reservations and quotas. (Read the actual Amendment Act).

It must be realised that it is the young generation of this country that is going to build its future. The V.P. Singhs and Arjuns Singhs who try to push for such reservations for petty career gains or politics of the vote bank are not going to be around to be accountable for their acts when the adverse impacts of such divisive policies become evident.

It is indeed heartening to note that the young generation has rightly come out to oppose the proposed reservations policy. From the interviews in the visual media with many of the young students, it is clear that there is strong logic, clarity and the courage of convictions behind their opposition. On the other hand, some of the advocates of such reservations have been seen and heard proposing palpably unintelligent and even laughable arguments. For example, one of the justifications proposed by a lady professor of a university in Delhi on a discussion on TV was to the effect that in any case there were thousands of applicants even with merit whereas the seats were not enough. Ipso facto, reservations would not matter, she seemed to imply. Another advocate for the quota said that there were students who had studied in schools where there was only one teacher. Therefore, such students needed reservations. Can any government that takes decisions influencd by such arguments be considered fit to govern in 21st Century India?

It is unfortunate that students who wanted to meet Arjun Singh and seek his explanations were stopped and manhandled. Arjun Singh, the politician that he is, shed glycerine tears saying "I was pained...that the students were not allowed to see me". Not allowed by whom?? Realising the mood the students, when he did meet them, he deftly took refuge under the Election Commission query to the Government on his earlier announcement and also sought to deflect his own responsibility by saying that he would speak to the Prime Minister!! At the same time, it is reasonably certain that wheels would have been already set in motion to identify the leaders of the struggle and divide or isolate them in ways that the politicians know best. If nothing else, Arjun Singh is a past master in handling opposition and dissent. He knows very well how to take the wind out of opposition and the same fate may await the well intentioned but politically naive students.

On the other hand, Kapil Sibal, who understands the Constitution as well as anyone else, who is the Science & Technology Minister and understands his own reponsibilities, publicly gave words to his thoughts that he does not favour any actions "that would dilute the levels of excellence". The country needs more such politicians who do not simply go by the caste and religion based vote bank games that the old school politicians have been practicing and continue to practice. The people also need to show the door to those politicians whose time has gone, and keep them from doing more harm to the social fabric of the country.

More power to those who speak their mind against divisive policies and more power to the young generation to maintain clarity of their objectives and bring their present struggle to a conclusion that will strengthen the country in the future, not weaken it.

PERHAPS, IT IS AN OPPORTUNE TIME TO BRING ABOUT A CHANGE TO BRING TO AN END EVEN THE EXISTING QUOTA BASED POLICIES IN A TIME BOUND MANNER.

Narmada Bachao "Andolan" sucks in Aamir Khan

noreply@blogger.com (india-awake) — Sat, 15 Apr 2006 06:35:00 +0000

Sardar Sarovar Dam - Symbolising the aspirations of the nation

V.P.Singh and Soz -offering cold water?
Aamir - advisable to stick to "thanda cola"?

It is really a pity that Aamir Khan, generally considered to be a sensible person, got carried away by the false propoganda of the Narmada Bachao Andolan and by being present at their dharna at Delhi, tried to add glamor to an effort to mislead the public and browbeat the Government.

Medha Patkar and her cronies have been assiduously following the Goebbelian principle of telling lies long enough to make people accept it as truth. Unfortunately for the country and its people, they have succeeded in their efforts in making people believe that their 'struggle' is justified.

As Aamir Khan spoke, it was clear that he was not fully aware of the background of issues and had unwittingly walked into controversy by lending his voice to support the cause of the NBA.

For those like him who are not fully aware of how much water has flown under the bridge (or over the dam) in this matter, there are voluminous newsreports and other material available which also show the tactics adopted and half-truths that have been spread by Medha Patkar and her colleagues over a period.

For the uninitiated, an admirable analytical viewpoint on the subject can be read here and a perspecive specifically on Relief & Rehabilitation aspects can be read here.

The Narmada Bachao Andolan has been trying its best to raise their issues repeatedly before the Highest Court in the land, i.e. The Supreme Court.

In its Judgement given in October 2000, the Surpeme Court did not accept various contentiones of NBA and gave several directions to ensure that justice was done to the displaced people and at the same time that the project was completed expeditiously.

Even subsequent to that, various interlocutary applications were made by various affected persons. In one Order dated 9.9.02, the Supreme Court stated:

"Grievance Redressal Authority having been put in place, there is no reason for this Court to interfere.

As far as the dispute raised in this petition is concerned, that is over and final with the earlier decision of this Court. In case an oustee or a person affected by the Project has any grievance, it is open to him to approach the Grievance Redressal Authority.

It is also contended that land for land has not been given. If there is any person so aggrieved or has justifiable grievance, it is open to that person to approach the Grievance Redressal Authority, failing which this Court.

It is made clear that full assistance will be rendered by the Narmada Control Authority as well as the State Governments to the Grievance Redressal Authority in the discharge of their respective functions.

This writ petition is disposed of in the aforesaid terms."

It will be noticed that the Supreme Court had unequivocally stated that it was open to a person to approach the Grievance Redressal Authority, failing which the Supreme Court.

In another Order dated 16.4.04, the Supreme Court stated, inter alia, that:

"I.A.Nos.10 & 11. The prayer in these applications is to direct the respondents not to proceed with further construction of Narmada Dam by raising its height to 110 meters till all affected people are rehabilitated. The main grievance of the applicants is the subject-matter of two I.As.(I.A.Nos.4 & 7).

Having heard learned counsel for the parties at considerable length, we are of the view that for the present, no case has been made out to stop the ongoing construction raising the height of the dam. At the same time, it is necessary to note that the matter relating to rehabilitation of outstees is required to be examined by all concerned and implemented in terms of the award made by the Narmada Water Disputes Tribunal, orders and directions issued by this Court from time to time, the orders and directions of Narmada Control Authority and that of Grievance Redressal Authrorities of the state concerned. Further, it has been brought to our notice by the learned counsel appearing for the applicants that the land in village Matanya, Tehsil Mahaeshwar and some of the other villages being proper cultivable land can be obtained/acquired by the State Governments and given to the oustees as a rehabilitation measure. The applicants may give concrete suggestions in this respect to the respondent-State of Madhya Pradesh. On receipt of such suggestions, the matter shall be expeditiously examined by the State Government. In case, the applicants/oustees are still not satisfied with the decision of the State Government, it would be open to them to approach the Grievance Redressal Authority. The said Authority shall also examine the grievance of the oustees as expeditiously as possible as the matter pertaining to rehabilitation of the oustees cannot be taken up or treated lightly. It may also be noticed that a positive approach has been adopted by the oustees that what they are concerned with is the proper rehabilitation and not the stoppage of the construction of the dam and they have approached this Court seeking stay of construction as they were not satisfied about the proper offer having been made to all affected parties for their rehabilitation and other related aspects of rehabilitation.

For the present having noticed aforesaid issues, we express no opinion."

Another detailed Judgement giving certain directions was also delivered on 15.3.05.

Realising that they were not succeeding in getting the Hon. Court to give Orders to their own liking, the NBA and Medha Patkar have started resorting to pressure tactics and have drawn in the news-hungry television media and publicity-hungry personalities to use them for their own ends. In doing this, they are amply demonstrating their lack of faith in the Judiciary if it does not show inclination to pass orders to suit their own agenda.

The Union Government, which has proved to be weak-kneed and worthless at times in tackling difficult issues, has apparently succumbed to the pressure tactics of Medha Patkar and others and has agreed to "review" the decision to raise the height of the dam.

It is high time the people stop supporting such uselsss 'struggles' when the development and progress of the country are thwarted. It is pertinent to note that the Narmada projects link the economic development of four states in the country viz. Maharashtra, Gujarat, Rajashtan and Madhya Pradesh with a total population of 264.20 million people.

But it is not a question of just these 25% of the country's population. The issue is whether a handful of objectors with their own unclear motivations can stop the progress of the country itself. What they are trying to do is to change the countours of a project that has come so far in the process of implementation during the course of which it has gone through every conceivable test including critical scrutiny of the highest judicial authority. If such agitations, by people who may be misguided or who may have their own motives, are allowed to succeed, it would lead to disastrous consequences not only for the present Narmada projects but also for any future development projects.

As for Aamir Khan, it is hoped that he would see through the game to suck him into needless controversy and, instead of sticking his neck out for the same, stick to his bollywood activities unless he feels that he has no future there.

Another Leaf from the UPA Book of Dirty Politics

noreply@blogger.com (india-awake) — Wed, 08 Mar 2006 03:50:00 +0000

Political Gain by any means ?

When Lalu Yadav, the Minister for Railways, appointed the U.C.Banerjee Committee to look into the so-called technical aspects of fire in the bogie of Sabarmati Express at Godhra, it was clear that the smoke screen of the ‘technical inquiry’ was hiding a sinister objective of impairing, if not altogether sabotaging, the due process of law.

That this was indeed the purpose of the inquiry, was evident because of the fact that when it was set up, investigations were already being conducted by the law enforcing agencies whose job it was to do so in order to establish facts and take actions according to law as warranted. The Railway Administration itself had conducted its own investigations. The Justice Nanavati Commission was already conducting an inquiry into the overall situation of riots in Gujarat and the events leading up to the riots including the fire in Sabarmati Express.

In the light of these, no other conclusion could be reached about the objective of the Inquiry other than that presented before. A case was already filed in the Gujarat High Court questioning the appointment of the Committee and an interim order was passed by the Gujarat High Court at that time in this regard.

However, the U.C.Banerjee Committee proceeded with its work and had earlier made public its interim findings that were contrary to the findings of other investigations conducted in accordance with the due process of law. The timing of the announcement of the interim findings appeared to be politically opportune for the UPA partners.

But what clearly reveals the dirty tricks mind-set of the UPA is the timing of the final findings of the Report of the Banerjee Committee. Mr. Justice Banerjee went on record to say that he was asked to submit the final Report by 7th March, which he did, by submitting the same on 3rd March 2006. The date March 7 is significant as it coincides with the date of the hearing in the Gujarat High Court and is conveniently close to the forthcoming elections in certain States.

The Gujarat High Court rightly showed its displeasure that Mr. Justice Banerjee made the findings public even as the entire matter was being pursued as per legal process. The Gujarat High Court was also right in prohibiting any action on the Report, till the judgment in the matter before it.

It is, perhaps, just as well that Mr. Justice Banerjee chose to make his findings public on the 4th March prior to its tabling in the Parliament by the Railway Minister. Had the Report been tabled in Parliament, events would have taken another course. Perhaps, Mr. Justice Banerjee partly realized this and at the cost of attracting unfavorable comments from the Gujarat High Court, made the findings public, enabling the interim orders from the Court to prevent the tabling of the Report.

The UPA Government has consistently shown a liking for stooping low for cheap and temporary political gains. Unfortunately, the Left parties who are normally cautious, have, in this instance, fallen prey and jumped onto the Lalu wagon by supporting this patently mischievous action to derail the due process of law, for doubtful political gains. History will judge all those who play the politics of appeasement without realizing the consequences. As for Lalu, whatever praise he has earned due to his handling of his Ministry is likely to be lost because of his mindless action in handling of this issue. He is likely to cause his own wagon to derail.