C# to Article III GATT

Right to Food and Drought in India

noreply@blogger.com (Rahul) — Thu, 20 Aug 2009 02:59:00 +0000

The biggest drought/rain shortfall is looming over India since Independence. Current government estimates put the shortfall at 29% till now. If the moonsoons dont recover in these last days this number can get worse. Below is a compilation of articles on Right to food act in India and the drought situation.

It’s time for a New Deal for rural India - Himanshu

http://www.livemint.com/2009/08/18234120/It8217s-time-for-a-New-Deal.html

Drought of justice, flood of funds - P. Sainath
http://www.thehindu.com/2009/08/15/stories/2009081555920800.htm

Drought management for rural livelihood security - M.S.Swaminathan
http://www.thehindu.com/2009/08/17/stories/2009081752310800.htm

[Documenting the distress sale of cattle - a form of coping mechanism from droughts]
Till the cows no longer come home P. Sainath

When a week is a long time P. Sainath

Food for all - Jayati Ghosh (talks about making PDS and other food schemes universal rather than targeted)
http://www.flonnet.com/stories/20090828261713100.htm

The Food Economy: How will the government reach food to the target families? (Bhaskar Dutta, The Telegraph, 30 July 2009)
http://www.telegraphindia.com/1090730/jsp/opinion/story_11293380.jsp

Sen on RTF
http://www.righttofoodindia.org/data/amartya_sen_on_right_to_food_act_8aug09.pdf

Drought of policymaking vision

Biraj Patnaik

Indian voters deliver a stunner

noreply@blogger.com (Rahul) — Sat, 16 May 2009 16:38:00 +0000

As big as the 2004 BJP upset, Indians chose to give Congress another and firmer chance to run the government. Just some initial observations:

* Everyone got it wrong. Predicting a hung and fractured verdict, India actually gave a firmer verdict for the UPA.
* Left were the major losers in West Bengal (they keep winning losing in Kerala but its a first in WB). Nobody can say the exact reasons but Nandigram-Singur obviously paid a major role. (Lesson to congress, seriously consider land rehabilitation and SEZ land acquisition problem. In some ways SEZ's due to economy are declining so not an immediate issue overall)
* BSP didnt live to its expectations and thats a shocker to me at least. Lalu lost big and there is a decline in regional parties (they are not completely out though).
* BJP, on itself, did better only in Gujarat & Karnatka. It was average or far below in other states. Modi who was portrayed as next to Advani couldnt win votes outside Gujarat. Overall, without allies, they dont even exist in many major states in India so not really a national party in some sense. Generalizations across India that Hindutva lost are not true if you look at Gujarat and Karnataka and also Hindutva was not a major issue.
* Congress won big overall. They to some extent acknowledge that NREGA, Farmer Loan waiver and social sector reforms. But now given they dont need many allies and especially the Left the urge to push economic reforms will increase. I think though that within Congress some form of Left will develop which will slow down reforms (for the good) but it might be faster than before. Lack of financial sector reforms protected India during this crisis (Kamal Nath acknowledges this) so hopefully they take this into account. Lets see how it plays out.
* Chidambaram has lost!. But sadly will come as minister again.

* Personally, Manmohan Singh shouldnt be the PM. Rahul Gandhi or Sonia or some other politican should be ideally the PM. Politicans should do their jobs and be in Political positions. But it wont be that case at least for the next year or two I think.

This might be a new twist historically in Indian politics, time will tell. Indian voters delivered a stunner and its fascinating to disceet what was the intention. It easy to generalize but in every state there are multiple different things working.

Treasury Secretary

noreply@blogger.com (Rahul) — Fri, 24 Oct 2008 02:36:00 +0000

So how did Hank Paulson do as Treasury secretary?. D

-- Former CEO of Goldman Sachs till 2006 and then Treasury Secretary he completely failed to see the crisis.
Even the once revered Greenspan today admitted his ideology of self regulation was wrong and he made mistakes. He literally said in so many words that his whole world view formed over last 40 years has changed due to the crisis. Atleast credit should be given for that given for around 20 years he was GOD of the financial industry.

-- He let Lehman Brothers fail which is considered now to be biggest reason for escalation of the crisis worldwide. Given that in retrospective one can blame him but even today he doesnt agree that it was mistake. With constantly changing stances of why he didnt save Lehman it is surely fishy.

-- Bailout Bill - The first version of the bill he presented would have given him unlimited authority and pratically a blank check. He rejected all other ideas of capital injection into banks which Charles Schumer (Democratic Senator) and others had given at that time. Later after 2 weeks of playing around when Europe did capital injections he followed still not admitting he had done anything wrong.

-- Sweet Deal to WallStreet - A man from Wall Street he got the banks a sweet deal. Each of 9 big banks got $25 billion at 5% with very limited restrictions and small possibility of upside when the stock markets recover. He did not insist on cutting dividends which Europe has done. Out of $125 billion, $25 billion will go to investors as dividend next year. IS this a bailout when banks are giving money?. 5% interest rate is far lower than what Warren Buffet got for exactly similar deal it did with Goldman Sachs. He has stated clearly that he does not want to be punitive to the banks. I dont understand WHY?. Banks are in this mess because of their own misdeeds so shouldnt they be punished.

-- Implementation of the Bailout - As expected he has hired people from Goldman Sachs to mange the bailout details. Isnt there a clear conflict of interest?. How will government price securities which it buys from Goldman Sachs. The people who will runt he bailout are the same people who were part of creating the crisis and still beleive in the same ideologies which seriously failed.

Markets still throwing a tantrum

noreply@blogger.com (Rahul) — Sun, 05 Oct 2008 16:16:00 +0000

Just like a tennager who doesnt get his/her way and starts throwing tantrum - the stock markets fell 777 points the day the bill failed in Congress. Most of media said it was indication that market needed the bailout bill and how important it is for the economy or what would happen. Some others have compared this to a person pointing a gun to its head and saying if you dont do it then I will kill myself.

Now the bill was passed under pressure for the markets and the media. Whats the result?. The teenager is still not happy with what it got and wants to throw more tantrum. The markets fell 159 points after the bill was passed .... ya after it was PASSED. So will Congress to calm the teenager put in more money and meet the markets new demands. The market want accounting rules changed, tax benefits and much more till Congress is ready to satisfy it.

A sad day ....

Different bailout plan

noreply@blogger.com (Rahul) — Thu, 02 Oct 2008 01:11:00 +0000

The more important concern in this crisis should be for people who have houses foreclosed. Foreclosure is a truamtic event - whole families being kicked out of houses/communities where you have stayed for multiple years and have memories, which are sort of tough to recover. If govt is spending so much money why not force banks to stop any foreclosures - govt can pay them also for doing that. Forecloursers from pure economic sense also are great losses. A typical foreclosed home is very tough to sell as most of the house is vandalized when people leave as they are angry and these houses sell for pittance even compared to prevalanet market prices of the area. Foreclosed house also reduces the value in the area.

The second concern should be that people have access to credit to do day-to-day stuff like buy houses, run small businesses etc. This means a way so that economy does not suffer a severe recession. Other concerns include avoid job losses, save taxpayer's money etc.

Saving banks/other institutions should be a side product of these concerns. If a failing bank/institution does not materially impact the above two goals I would let it go down.

Once we have the priorities of concerns finalized lets think about how a plan might look like.

Govt can hold on to foreclosed houses and let family stay for a few years, renegotiate the mortgages from ARM to fixed over a longer duration, make banks share in the loss of value of houses by reducing mortgage amount, give govt guarantees for part of the amount. Bank lobbies are strongly opposed to that and so this has not come up as serious option at all. In the bailout package currently being considered banks are hoping that government will buy the mortgage securities at higher prices than they can be sold in the market and hence their balance sheets will improve. In short , banks hope that through current bailout they will transfer the losses to government which they might not be able to in the foreclosure case. Secondly republicans are strongly opposed to any foreclosure sort of plan as that would be socialism. I think US is going from so called "capitalism" to wrong type of "socialism" where its socialism for corporations/banks and capitalism for home owners/individuals (BTW this always existed but not as pronounced and in the face).

There should be a completely different bill, bailing out individuals/families directly rather than banks/corporations. If banks/corporations need to be bailed out then it should be highly punitive. First even now banks are giving out dividends to equity holders. I dont know how govt can talk about bailout when banks are giving money to shareholders. The bailout will give banks money but it seems they have money to give out!!!.

In a punitive bailout plan, equity and bond holders should be wiped out. Govt should take over as was done in case of Washington Mutual and auction off things to private parties. If there are none then nationalize the entities. Otherwise do as Warren Buffett did, give loans at high interest rates with option to buy shares later at pre-fixed low prices (he did this for Goldman Sachs & now GE). Stop all dividends, fire any CEO/management who made the risky bets, create separate authority not the treasury which will doing the bailing out as was done in 1987/1930, bailout only in cases where absoutly necessary and after two years put a tax on profits of financial firms which benefited from bailout to recover costs).

To protect from effects of job losses increase unemployment insurance duration, introduce infrastructure projects to raise employment. Finally someone has to pay for all this so increase taxes on the super rich and wall street also has to pay higher taxes in a year or so when it recovers to pay for all this and more.

A note on costs of current bill: what media doesnt mention is that costs are not just losses which might be incurred by govt but also opportunity cost of putting the $700 billion. Clearly, even though candidates dont say it, many of the programs will have to be scaled back or not introduced at all which has huge social costs. Because this $700 billion will be stuck for years to come govt will have to scale back funding health insurance programs, alternative energy, ...whole bunch of stuff. The costs of not acting on other issues like global warming, health insurance is as serious or higher than not acting on this bailout. Global warming is almost exactly like this issue there is unpredictability on how soon things can go bad and how bad and hence one can argue action is needed NOW (even if u agree with republican argument that global warming is not caused by humans they admit there is unpredictability in that which I can argue is with not acting on bailout of whether its necessary). Infact global warming would actually wipe human race from Earth unlike the financial crisis.

Relief on failure of bailout package

noreply@blogger.com (Rahul) — Tue, 30 Sep 2008 21:55:00 +0000

I know that people claim the failure of the bailout package resulted in sharp losses in stocks, made it difficult to get loans for busineeses and indiviuals, reduced 401(K) portfolio of so many people ....might lead to some more institutions failing, recession, depression,...... the sky feel off, moved human race closer to extension and so on.......

There will be another package which the US Congress will pass in few days similar to the one failed, maybe even worse in some respects but even then it feels good for now that it failed atleast once. Why?

First and foremost even in the US, even now there is influence of the voters, constituents, of the person on the main street. The bill failed because many in congress got emails, letters, calls from constituents that they were angry at the package at bailing out wall street. And more than 2/3rd of representatives who are up for relection in close races voted against the bill. They were listening because they wanted votes. The media has potrayed this as negative but I find this a GREAT positive. Representatives who voted against were liberals, conservatives but that doesnt matter what matters is voter sentiments had a role to play in this.

Secondly, strong wall streest lobbyists lost out against the voice of voters atleast for now. In media there are articles filled with how banking association lobbyists lobbied hard to get the provisions they wanted. For example: all provisions of exceutive compensation, equity stakes in banks, taxing the financial industry for any losses after five years are highly diluted in the bill to the point that they are as good as not there. So its good that bill didnt pass in its form.

The urgency, the excessive executive authority to treasury, the non-transparency of the bill (what prices will govt pay) made it a bad bill. The urgency shown by treasury, media, president was huge. I understand that there are severe repurcussions for not acting but there were no serious alternatives considered. Why not follow the Swiss model in which Swiss govt. bought stakes in banks and shared in the upside, or the good bank model - instead of buying bad assests buy the good ones. The man leading all this is a former Goldman Sachs CEO who would be given unprecedented powers. AIG was saved by a loan to $85 billion and current CEO of Goldman Sachs was present in the meetings because it would have caused Goldman huge losses had AIG collapsed. This raises questions like did Paulson bailout AIG because of Goldman connection and not Lehman which didnt have that much impact on Goldman. Who would he hire to manage the $700 billion, people he knows in the industry which created the problem.

Lastly the claims that $1 trillion in market valuation was lost in the stock markets yesterday such a big number. Does that really matter?. See today more than $750 billion of that $1 trillion has being regained. Market valuation changes are not losses to be taken seriously, these are market fluctuations which come and go. Retirment or 401(K) accounts are not lost, markets regain value.

Lastly business media claimed yesterday that by falling the market was giving an indication to politicans that they matter and should be taken seriously. I would advise against these fluctuations being of significant import. $700 billion is a huge amount and if govt is spending it on bailing out then it should be thought through carefully. Who is bailed out? What are the costs? How it is done? What are the alternatives? Does everybody deserve a bailout?

An alternative view to save the financial market

noreply@blogger.com (Rahul) — Sun, 28 Sep 2008 01:59:00 +0000

NY times article: This describes the plan very nicely and provides a "good bank" alternative

http://executivesuite.blogs.nytimes.com/2008/09/27/and-now-for-something-completely-different/

Some Tidbits on the crisis

noreply@blogger.com (Rahul) — Wed, 24 Sep 2008 00:07:00 +0000

Some observations.... read the previous post about crisis and frustration in general to get better understanding of where I am coming from.

Man in Charge is Part of creating the crisis:

Treasury Secretary Hank Paulson who will manage the $700 billion, atleast for next few months, was just about 2 years back CEO of Goldman Sachs and was involved on the corporation side in creating thecrisis. It sounds odd to me that a person with strong connections with people who created this crisis (and was part of them) be given full authority to buy stuff from them and fix it. Rarely has this being mentioned in any media reporting.

Unprecedented executive authority:

In the current bill Paulson's decision are not subject to question by any court of law and he gets overpowering authority to spend $700 billion. He decides how to price the securities he is buying (there is no market which decides on prices for these securities so nobody knows whats the price), who he buys the securities from (there are far more than $700 billion of securities ready to be sold) and other details. He only provides semi-annual reports to Congress and nothing else. Thats tooo much power. How can you trust a guy who was part of creating the crisis be able to make judgements which value things fairly?.

$700 billion number can go far higher:

The wording of the bill is tricky. Its says at any one time government can hold $700 billion of securities. So they can keep buying and selling and in aggregate buy fr more than $700 billion. This doesnt put a lid on the losses.

Short Sellers:

Short selling is a term used to describe a transaction when you sell something which you dont own on the hope that you can buy it later at cheaper price. So I dont own any microsoft stock and think that it will go down. I then just sell the stock today and if it goes down in some time buy it at lower price. Many have said that many financial companies like Bear Sterns, Lehman were brought down because many people at the same time short sold the stock and since there was selling by many stock started falling and then this fall became a cycle and eventually the companies collapsed. But traders, hedge funds, economists have always praised short sellers because its a way for markets to tell you in advance that something is wrong with a asset. Its claimed that its part of the "price discovery" process in the markets. Now though suddenly many of the same people have turned against it because it was their own companies which were being short sold - Merill Lynch, Goldman Sachs, Morgan Stanley and lobbied the government to impose a ban on short selling. Why is short selling at fault now when it was not earlier?

Greed: Capitalism is based on self-interest and greed is one of the self interest. According to Adam Smith the magic of capitalism is that everyone acts in their self interest and the system works for everyone. But now suddenly in the crisis "greed" is a bad word. From Mccain to business channels everybody seems to be greed was reason for the crisis. Why has self-interest turned bad suddenly?. By that definition everyone should be against the markets and capitalism.

Speed: Its a testament to Governments ability that it responded so quickly to the crisis. Clearly shows if government wants it can act faster than corporations and swiftly. But now Bush government, in same way as it did with Iraq war, is pushing Congress to approve the $700 billion fast. There are no details and Bush wants Congress to act fast - otherwise it says it would be BAD. I dont think that much urgency is needed. A week or so in deliberating the details is fair enough.

The other motive of Bush is to avoid any other bailouts to homeowners which Democracts are pushing through. Clearly depicting that wall street deserves bailout but homeowners dont. Bush said "to move quickly and to resist the temptation to add provisions that, he said, "would undermine the effectiveness of the plan." Media is blaming politicians (Congress) on acting slowly.... really?. Its as if market asked govt to write a $700 billion check and government should respond otherwise suffer the guilt of killing the market.

Regulation:

Goldman Sachs and Morgan Stanley, two of "renowned" investment banks, who until now lobbied hard and succeded to avoid government regulation. Today they both begged to come under government regulation as that would give them better legitimacy and also access to government funds. This is what they have to say "We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources". So they want regulation when it is clearly helpful.

Job Losses:

Two unrelated events happened on the same day. Lehman Brothers went bankrupt and 25,000 jobs were put in question (though most wont lose jobs). Heweltt Packard (HP) merged with EDS and declared that it would cut 10,000 jobs. The reaction to these news events was quite different. Media was sympathetic to the workers at Lehman with press outside interviewing and feeling sad for these guys, but as far as HP goes it was praised for cost cutting and its share price rose. There was no repeated mention of HP job losses or sympthay shown for them. Why the difference?.

Crisis, Bailout and the Frustration

noreply@blogger.com (Rahul) — Wed, 24 Sep 2008 00:05:00 +0000

I am feeling very frustrated and angry over the last two days as the events have unfolded in the financial world and the government response to it. No the frustration is not due to any sort of financial losses or sadness over the failing financial institutions (though many would lose jobs and thats sad. Hope everyone ends up getting new ones soon). A lot has happened in this last two weeks and overall in the last few months in the financial world. The sub-prime started unfolding at a rapid rate since Summer last year. Financial institutions, banks and others, made bad loans to home owners at depressed interest rates, maintained by the "Oracle" of economics Alan Greenspan. Then they sold those loans off to Fannie & Freddie Mac and other institutions around the world. This was a miracle of modern day finance - you spread the risk of the loan among everyone, so that no one would suffer. Financial world came up with new "innovative" products like securiatization, auction-rate securities, credit-default swaps (dont even try to understand what these things mean, because nobody on wall street really does). These new markets were touted as safe instruments which would help in spreading the risk and were completely unregulated. Federal Reserve chariman Alan Greenspan and the government ignored calls to regulate any of these markets and de-regulation was the mantra. Investment banks, insurance companies, hedge funds which are all very big players in the market were not federally regulated and even the regulation which were present were not enforced. This is not the fault of Bush administration alone, the Clinton administration had started the whole process. There was also a extraordinarily large amount of leverage in the system - banks and other institutions investing with borrowed money - one of the results of absent regulation. These bad loans started to fail in large numbers last year. Millions of homes are in foreclosure and millions of families will be thrown out of their homes. This has being clear since last year and happening every month. There was a stimuls package by the government to help the economy and only minor help to homeowners. The Bush Administration refused on grounds of moral hazard to bailout the homeowners who were behind in paying their loans. These last two weeks as the crisis deepend it became clearer that many financial institutions would fail. Fannie Mae and Freddie Mac, two institutions which were designed so that government bore the burden of losses while private sector enjoyed all the profits, were completely nationalized by the government. Then Lehman Brothers, one of the stalwarts of Wall Street, went bankrupt - government this time allowed it to fail. Then AIG, the worldest largest insurance company, which is not regulated by the Federal government was nationalized and saved by the government by giving a bridge loan of $85 billion. The Federal Reserve has pumped hunderds of billions into the market to stablize it.

Until all this happened it was ok but now there is a plan to create a big fund by government which would buy all bad loans from everyone and virtually bail everyone on wall street out at estimated cost of $800-$1 trillion with other countries Russia, China, UK and others coming out with their own mini-bailouts. There were reports in the Indian Press that Indian governement a few weeks back was planning a bailout for the airlines industry in India which has being hurt by the high petrol prices. This is really frustrating and angers me. Why?. Because I am a pure free market guy and dont like the intervention by the government. NO (Milton Friedman might fall in this category). Because government is spending tax payers dollars wastefully putting the money at risk. NO (I am not that concerned about this). Then Why?. I applaud and appreciate the work done by people within the government over this. Look at the efficiency, within a week government officials have chalked out a detailed plan on how to save the economy and the world in a infinitely complex financial universe. Who says government cant be efficient. The frustration lies in the injustice. Why does Wall Street deserve a bailout, created as a result of their risk taking and mistakes, but people in New Orleans dont. Government today announced that it will retroactively insure all money-market funds. This means that all money invested in these funds is safe, no matter how bad the managers of the fund have screwed up. Why didnt the government retroactively provide flood insurance to all houses in New Orleans after Katrina. That would surely have saved a lot of pain.

Why do millions suffering from the food crisis world wide dont deserve a bailout while Wall Street does?. Since 2003 cereal prices have increased more than 250% resulting in widespread hunger across the world. Millions are on the verge of famine in Eastern Africa according to a recent UN report. The reason of the crisis are multiple - increasing meat consumption in China and the developed world, ethanol policy in US and Europe, drought in places, weak dollar, increasing oil prices, neglect of agriculture, unfair trade policies, decreasing purchasing power of the poor and the increasing inequality around the world. None of the reasons are due to mistakes/risk taking on part of the poor - who are the worst sufferers - as is the case in Wall Street crisis. But what has the response of the world to this being. There were calls for increased aid, big conferences were organized by World Bank and the UN and a paltry sum of $700 million raised in emergency food aid by the World Food Programme. Today UN issued an emergency appeal for $700 million more to avert famine in East Africa. But who is listening with the media screaming wall street ...

How is bailing out wall street institutions ok, while bailout of farmers in India lead to calls that India was being populist (as if that is bad) and moving away from the path of reform (Economist). How is bailing out Wall Street ok, when during the Asian crisis IMF (which follows US policies) gave loans to Korea only after it got assurances from the government that it wont bailout Korean banks. How is bailing out Wall Street and spending hundreds of billions ok, when US, World Bank and IMF have criticized developing country governments for giving food subsidies.

How is this free market capitalism, which is dead against government intervention when times are good and everybody is making money and all for government bailout when times turn bad due to risks and mistakes which capitalist made. Explain to me how? ........

I am not against government bailouts in all cases, there are cases and this crisis might be one where they are completely justified but there have being others equally or more deserving crisis - Katrina, World Food Crisis, Indiviual homeowners in the US ......Why not them?.

Criticism/comments/clarification welcome!

The Economic Lives of the Poor

noreply@blogger.com (Rahul) — Mon, 23 Jun 2008 21:36:00 +0000

The Economic Lives of the Poor
Abhijit V. Banerjee and Esther Duflo
October 2006

An interesting paper with data showing what do the poor do in economic lifes - where they spend their money, where their earn their money from, whats the infrastructure and assests they have. It also tries to postulate some reasons for the patterns see. They do this for 13 countries through analysis of survey data. For India they did a survey in udaipur whose results are presented:

In udaipur poor (defined as below $2 a day - in the paper they seperate this into two categories below $1 and $1-$2) spend around 60% on food and 14% on festivals, in UP/Bihar expenditure on food is around 75-80%. An analysis of food expenditure shows that for every extra income only between 1/4th to 2/3rd is spent on food - saying that increasing income by $1 doesnt mean that all additional money goes to food. Even among the type of food more expensive and less calorie food is preferred ( preference for wheat/rice which are expensive over millets).On average there is 5% expenses on tobacco/alcohol, 5-6% on health and 1% on education. Expenses on education are 5% in Hyderabad among the poor. Majority of the poor are involved in multiple occupations - agriculture, labor, enterprenial work. All occupations lack scale and poor dont generally gain skills as they move from one job to next. There is temporary migration - but usually poor dont migrate for long. Access to credit, insurance are almost absent. Savings are also absent. In explaining lack of savings the paper postulates - even in cases where poor have money to save - lack of resistance to temptation to spend is one reason (temptation to spend on that extra sweet which the child wants, which might be taken for granted for us but not for the poor) and also
"one senses a reluctance of poor people to commit themselves psychologically to a project of making more money. Perhaps at some level this avoidance is emotionally wise: Thinking about the economic problems of life must make it harder to avoid confronting the sheer inadequacy of the standard of living faced by the extremely poor."

http://econ-www.mit.edu/files/530

India shining, Bharat Drowning

noreply@blogger.com (Rahul) — Fri, 13 Jun 2008 19:47:00 +0000

Summary: This paper uses student answers to publicly released questions from an international testing agency together with statistical methods from Item Response Theory to place secondary students from two Indian states -Orissa and Rajasthan -on a worldwide distribution of mathematics achievement. These two states fall below 43 of the 51 countries for which data exist. The bottom 5 percent of children rank higher than the bottom 5 percent in only three countries-South Africa, Ghana and Saudi Arabia. But not all students test poorly. Inequality in the test-score distribution for both states is next only to South Africa in the worldwide ranking exercise. Consequently, and to the extent that these two states can represent India, the two statements "for every ten top performers in the United States there are four in India" and "for every ten low performers in the United States there are two hundred in India" are both consistent with the data. The combination of India's size and large variance in achievement give both the perceptions that India is shining even as Bharat, the vernacular for India, is drowning. Comparable estimates of inequalities in learning are the building blocks for substantive research on the correlates of earnings inequality in India and other low-income countries; the methods proposed here allow for independent testing exercises to build up such data by linking scores to internationally comparable tests.

http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/06/06/000158349_20080606082618/Rendered/PDF/wps4644.pdf

Underweight Prevalence Across States in India

noreply@blogger.com (Rahul) — Thu, 17 Jan 2008 15:01:00 +0000

Using GIS maps and data from National Family Health Survey-III (2005-06) I put this map together. (Click on it to get a bigger view) On average 46% of Indian children are malnourished. Imagine that - One in two children in India are malnourished. The map shows % of malnutrition prevalence across states in India. There are some patterns. Obvious ones are that northern belt the BIMARU states have high prevalence of malnutrition. But not so obvious ones are the extent of malnutrition in Gujrat and Maharastra - two of the most industrialized and richest states in India.

Cost of Capital Inflows into India

noreply@blogger.com (Rahul) — Wed, 09 Jan 2008 17:00:00 +0000

Large capital inflows in last few years have posed extraordinary challenges for the conduct of monetary policy for the Reserve Bank of India (RBI). Appreciating rupee, increasing sterilization cost, overheated asset markets, increased potential of crisis are some of the direct consequences of these flows.

Capital inflows into India have skyrocketed in the last year. Portfolio flows have picked up strongly on account of Foreign Institutional Investors (FIIs), amounting to Rs.70940 crore during 2007 as compared to an inflow of Rs.31289 crore in 2006. During the period of April-July 2007 FDI inflows were placed at US $ 6.6 billion as compared with US $ 3.7 billion in 2006. Also, there has been a 63 per cent increase in external commercial borrowings made by Indian companies during the first seven months of fiscal year 2007-08. Though large proportion of inflows are non-debt creating they are dominated by Portfolio flows which tend to be volatile and short term.

Exchange Rate

One of the most visible impacts of the flows has been rupee appreciation. The Indian Rupee has appreciated 16% since July 2006 against the US dollar (from 46.85 to 39.33 per US dollar). The 36-currency NEER and REER of the Indian rupee, on an average basis, appreciated by 12% and 12.86%, respectively, between July 2006 and September 2007. This indicates that Rupee has appreciated not only against the dollar, which has depreciated against almost all major currencies, but also against currencies of many of India's trading partners.

Export Competitiveness

Exchange rate appreciation is affecting the export competitiveness of Indian Industry as Indian exports become expensive in foreign markets while imports get cheaper. Some initial indications of the slowdown are reduced growth rates of exports (18.2% in 2007 vs. 27.1% last period) and increased growth rates of imports (non-oil increasing 44% in 2007 vs. 10.9% last period). The Mid-Year Review presented by the Finance Ministry shows that sectors such as textiles, handicrafts and leather, that have low import intensity, have experienced low export growth. The current account which saw a surplus from 2001-04 is predicted to face a deficit of 2.1% in 2007 and 2.6% in 2008 as per the IMF World Economic Outlook, 2007.

Reserves

The biggest challenges in the management of capital flows are the attendant implications for liquidity and overall economic stability. In order to limit the rupee appreciation due to the inflows RBI has been mopping up dollars in the foreign exchange market through interventions. In 2007, the Indian Foreign Currency Reserve accumulation was more than US $100 billion, making India's reserves fourth largest in the world at $266 billion after Japan, China and Russia.

In order to control inflation caused by the increased liquidity RBI uses several monetary instruments. These include issuing bonds under the Market Stabilization Scheme (MSS), absorbing liquidity through net reverse repos under the Liquidity Adjustment Facility (LAF) and increasing Cash Reserve Ratio (CRR). The total amount of issuances under the MSS has gone up by 159 per cent over the March 2007 level. In addition, liquidity absorbed in the form of net reverse repos under the LAF in 2007 was five times the amount in the corresponding period of 2006. The Cash Reserve Ratio (CRR) was raised by 150 basis points during April 2007-October 2007 to 7.5% over and above the cumulative increase of 100 basis points during December 2006-March 2007.

All these instruments have both direct and indirect costs; either as direct fiscal costs due to interest payments on the bonds or as indirect costs due to inefficiencies they introduce in the banking system. The interest rate paid on the MSS bonds is far higher than one received on the foreign currency reserves, which are mostly invested in US treasury bonds. This interest rate differential is a rough estimate of the cost borne due to MSS. As per Mid-Year Review 2007-08 estimates, the fiscal cost of sterilization would be around Rs. 8200 crore for fiscal year 2007-08.

Equity Markets
FII investments in equity markets have lead to a whooping increase of more than 200% in the BSE sensex since January 2005. Last year also saw the highest-ever mobilization of Rs.45,137 crore through public equity issues, comprising both IPOs and FPOs, according to Prithvi Haldea,CMD of PRIME, the premier database on the primary capital market. This is 83 per cent higher than the previous year. Though markets have sky-rocketed, the volatility in markets has increased.

Source: Security and Exchange Board of India (SEBI)

As seen in the corresponding graph, FII investments fell abruptly in Feb 2007 along with the collapse of global markets caused by drops in the Chinese markets. The end of summer and late December FII flows turned negative due to renewed concerns about the US financial crisis. Although there was no fundamental change in or related to the Indian economy, each of the aforementioned occasions have resulted in a nose-dive drop in the Indian stock markets. A shock in an unrelated emerging market economy or shocks in developed countries, that makes investors reassess risk and flee to safety, can cause inflows in India to dry up. Given the prolonged rally in the Indian markets and financial crises in developed countries, such risks have increased exponentially. Such a halt in inflows can lead to higher exchange rate fluctuation (even a significant depreciation of the Indian currency), stock market collapse, current account imbalance and affect India's long term growth prospects.

In the 1990’s East Asian countries like Malaysia, Thailand, Indonesia experienced high growth rates and huge capital inflows. Despite a lack of significant or fundamental change in the economies of these countries in 1997 the inflows suddenly stopped and even reversed, resulting in severe recessions in these countries. Several Latin American countries have witnessed similar episodes of sudden discontinuation of inflows and recession. There is no evidence suggesting that India is immune to similar events. To avoid such economic depressions and tribulations, India needs to manage its flows carefully.

The Reserve Bank of India and the Government of India have tried unsuccessfully to reduce capital inflows. In its Annual Policy Statement for 2007-08 and Mid-term Review of Annual Policy, RBI announced a host of measures to liberalize overseas investments such as; enhancement of the overseas investment limit for Indian companies to 400 per cent of their net worth from the existing limit of 200 per cent; increase in aggregate ceiling on overseas investment by mutual funds to US $ 5 billion from US $ 3 billion; enhancement of the limit for individuals for any permitted current or capital account transaction from US $ 50,000 to US $ 200,000 per year. In August, 2007 RBI also put end use restrictions on External Commercial Borrowings (ECB's), which required borrowers raising more than USD 20 million to park the ECB proceeds overseas for use as foreign currency expenditure. However, none of the measures have helped. Outflows remain a small fraction of the inflows and ECB's continue to rise.

Given the increasing cost of inflows indicated by lower export competitiveness, rising fiscal costs due to sterilization and increased risk of crisis, the Finance Ministry and RBI should take more concrete measures to manage India's inflows. In the Mid-Year Review and various public statements, the Finance Minister has acknowledged the costs and risks to growth due to the inflows. However, the Ministry has been reluctant to impose any form of capital controls or limits on inflows. RBI Governor Y.V. Reddy has hinted that he would be ready to take a more flexible approach and even consider some controls.

While some Latin American countries that have faced similar patterns in capital inflows have experienced recessions in the past due to sudden stops, others have found better ways to deal with such inflows. For example, various economists, including Nobel Prize winner Joseph Stiglitz have praised the Chilean government for managing its flows by using reserve requirements. Chile's strategy of has been succesful at discouraging short term flows, with no affect on long term flows. Chile accomplished this by placing reserve requirements on all inflows for a short time period (a percent of inflows were deposited with the central bank, with no yield or returns to the investors). The reserve requirements’ then were changed depending upon the amount of flows.

India should learn about the cost of its capital inflows, from other countries that have witnessed similar patterns of growth and the unforeseen decline that tends to follow. At the least, India should learn from countries like Chile and figure out ways to manage its inflows in order to avoid similar economic catastrophes.

Malnutrition Deaths in Indian Tea Farms

noreply@blogger.com (Rahul) — Thu, 04 Oct 2007 13:17:00 +0000

India has among the worst malnutrition rates in the world - 47% for children under 5. One in every two children in India is malnourished and this is not due to lack of food in India or lack of money (sub-saharan africa is far poorer but only 33% malnutrition). And the rates and starvation deaths for citizens above age of 5 is not known neither is it highlighted by the media. But the numbers are shocking ... See this particular story on BBC

http://news.bbc.co.uk/2/hi/south_asia/7022794.stm

t's just after dawn on the Ramjhora estate in northern Bengal. In this remote region, not far from India's border with Bhutan, tea has been the bedrock of the local economy for more than 150 years.

But five years ago this estate was shut down when the owner packed up abruptly leaving unpaid salaries and no alternative employment.

Weeds are now infesting the tea bushes, buildings are abandoned, and estate workers say that they have been slowly dying because they are not eating enough food.

Exact numbers are hard to pin down. But one study released recently estimates that more than 700 people have died in this region in little more than a year from malnutrition.

Starvation/Cholera Deaths

noreply@blogger.com (Rahul) — Thu, 06 Sep 2007 15:44:00 +0000

In many rural, especially tribal parts, starvation deaths have been increasing for the last few years. Very few ever get reported as these areas are remote and more importantly corporate media does not care. This story is from Orissa tribals. A very disheartening story.

People were eating leaves for several months. Imagine .....

http://news.bbc.co.uk/2/hi/south_asia/6981548.stm

Are children are left behind by design?

noreply@blogger.com (Rahul) — Tue, 28 Aug 2007 15:08:00 +0000

Focus on test scores and evaluating schools and teachers based on these criteria alone has caused poorly performing and highly performing students to be left behind. No child left behind seems to work only for those students who are near proficiency levels as per this article.

Grading test-scores: Are children are left behind by design? | vox - Research-based policy analysis and commentary from Europe's leading economists: "Many U.S. Children are Left Behind by Design"

Toy Recall Story

noreply@blogger.com (Rahul) — Mon, 20 Aug 2007 15:13:00 +0000

There have been two big toy recalls for toys made in China - both by Mattel (the company which sells them under its brand). And guess what who is to blame (as per the US media) - its the Chinese sub-contractor. Not Mattel which according to me would be the party responsible as its the one which is selling the thing under its brand - so bears responsibility of testing and manufacturing. But no one is blaming Mattel. It doesnt matter how much Mattel pushed the contractors on lower pricing, how lax it was on testing & standards, no questions asked on these aspects. The media is buying into what Mattel says which said "It provided the lead-free paint but subcontractor sold it and used other one" - so media repeats the same. Anything new?

Just change this case. If the same toys were sold but not in authorized store and royalties didnt go to Mattel but its name was used as Brand. Who would be to blame?. The Chinese sellers who copied Mattel's design and used its brand and sold it.

So Mattel earns most of the profit but no blame and enjoys. So welcome to the world of globalized manufacturing where the brand earns the money but no blame. What do u think?

Independence from What?

noreply@blogger.com (Rahul) — Wed, 15 Aug 2007 14:05:00 +0000

On the 60th Anniversary of Independence of India & Pakistan, I have this question:

Independence from what ?

Malnutriution: Both countries have among the highest malnutrituion rates in the world (even beating poor sub-saharan Africa). 50%. Just imagine 1 in 2 children in India are malnourished. At young age their oppurtunity to acheive anything is life is almost taken away ...

Women's Discrimination: South Asia has the worst record in the world on this account. It has among the lowest (less than 50%) female literacy rate, difference in number of school years between boys and girls is highest among the world, women's health is absymal, job opportunities are worse (most of the unorganized sector is composed of women).

Dalit Discrimination: Middle class has a tendency of saying that India does not discriminate now and reservations are all wrong. In a recent survey of discrimination in rural India it was found that

"Almost
27.6 per cent dalits are prevented from entering
police stations and 25.7 from ration shops; 33 per cent
public health workers refuse to visit dalit homes, and
23.5 per cent dalits still do not get letters delivered
to their homes. Segregated seating for dalits was found
in 30.8 per cent self-help groups and cooperatives, and
29.6 per cent panchayat offices. In 14.4 per cent
villages, dalits were not permitted to enter the
panchayat building. They were denied access to polling
booths, or forced to form separate lines in 12 per cent
of the villages surveyed." (Refer to article below for more details)

I can go on and on .... There are so many aspects we are unfree. Its a shame ....

Agreed that India's GDP growth is more than 8% for past two years, poverty has reduced (though who knows how much), we have the highest number of millionaries/billionaries in Asia (Economic times report), we are knowledge centers of world and what not. But does this all matter and hold infront of these other facts above. To me thats a definate NO.

What do you think?

===================
Attaching an excellent article by Harsh mander:

Cry Freedom!

Harsh Mander

In a dilapidated slum shanty near the banks of the Ganga
in Patna is settled a group of families whose profession
is to clean dry toilets with their bare hands, and to
carry human waste on their heads to throw into the
forgiving waters of the mighty river. I found that not a
single child studied in the government school, which, as
it happened, was located literally just across the road
from the scavenger colony. It took a while to coax from
the guardians the reason for their steady resolve to
keep their children away from school. It transpired that
they had indeed sent their children to the school
initially. It is a custom in many government schools for
the teacher to send children on errands. The upper-caste
children were assigned tasks such as to fetch tea. The
children from the scavenger colony were asked to wash
the toilets, or to clean up after a dog had soiled the
school premises. The children could not bear the shame,
and refused to return to the school.

Of the many forms of untouchability that persist in
modern India, unarguably the most unconscionable is the
wide prevalence of discrimination against dalit children
within schools. Children in rural India, and even parts
of the cities, learn early the rules of caste, which
survive unremittingly through their lifetimes, even as
their country races into the 21st century. A survey of
practices of untouchability undertaken in 565 villages
in 11 major states of India reveals shockingly that in
as many as 38 per cent government schools, dalit
children are made to sit separately while eating. In 20
per cent schools, dalit children are not even permitted
to drink water from the same source.

As the outcome of a major direction of the Supreme Court
of India, millions of children in most government
primary schools in the country are being provided hot,
cooked, mid-day meals everyday. The mid-day meal
programme not only strengthens the nutrition of children
in government schools, many of whom are poor and do not
have access to sufficient and nutritious food in their
homes, it also encourages enrolment into schools,
retention and regular attendance.

But an equally important outcome is that since children
of all castes and classes sit together and eat, it
teaches them caste equality. Traditionally, caste and
communal barriers are expressed most in the refusal to
eat together; therefore, people of diversity sitting
together gently can shatter a range of iniquitous social
practices, and what better place for this to happen than
the school?

However, there are disturbing field studies of caste
discrimination within schools. Caste discrimination in
mid-day meals is seen in various ways. The first is
defiance of the Supreme Court orders to appoint cooks
from dalit backgrounds. In states like Tamil Nadu only
14 per cent of the cooks are dalit.

In many places where, although, dalit cooks have been
appointed, upper-caste parents retaliated by not
allowing their children to eat the meal, threatening to
withdraw, putting pressure to replace the cook with an
upper-caste cook and so on.

The other forms of discrimination are where children
are not allowed to sit together and eat. Dalit children
are required to sit apart from the dominant caste
children; sometimes apart within the same space, other
times outside of the school building while the dominant
caste children sit inside, or on a lower level than
their dominant caste peers. Some studies have also
shown that dalit children are required to bring their
own plates and/or are given less quantity of food,
refused a second serving, not allowed to drink water
from the public taps and hand pump at the school and
so on.

The recently released report of perhaps the first
nationwide survey of the continued prevalence of
untouchability, jointly authored by social scientists
Ghanshyam Shah, Sukhadeo Thorat, Satish Deshpande,
Amita Baviskar and myself
(Untouchability in Rural India, Sage), finds such
untouchability in all local state institutions. Almost
27.6 per cent dalits are prevented from entering
police stations and 25.7 from ration shops; 33 per cent
public health workers refuse to visit dalit homes, and
23.5 per cent dalits still do not get letters delivered
to their homes. Segregated seating for dalits was found
in 30.8 per cent self-help groups and cooperatives, and
29.6 per cent panchayat offices. In 14.4 per cent
villages, dalits were not permitted to enter the
panchayat building. They were denied access to polling
booths, or forced to form separate lines in 12 per cent
of the villages surveyed. Despite being charged with a
constitutional mandate to promote social justice, local
institutions of the Indian State facilitate
untouchability.

Dalit settlements are often segregated from the main
village, and these traditions are reproduced even by
the government, when building Indira Awaas housing
colonies for dalits or by NGOs, post-2001 earthquake
reconstruction in Gujarat. In nearly half the surveyed
villages (48.4 per cent), dalits were denied access to
water sources. In over a third (35.8 per cent), dalits
were denied entry into village shops. They had to wait
some distance from the shop, the shopkeepers kept the
goods they bought on the ground, and accepted their
money similarly without direct contact. In teashops, in
about one-third of the villages, dalits were denied
seating and had to use separate cups.

In more than 47 per cent villages, bans operated on
wedding processions on public (arrogated as upper-caste)
roads. In 10 to 20 per cent villages, dalits were not
allowed to wear clean or bright clothes or sunglasses.
They could not ride their bicycles, unfurl their
umbrellas, wear chappals on public roads, smoke or even
stand without head bowed.

We found that restrictions on entry by dalits into Hindu
temples were as high as an average of 64 per cent in 11
states, ranging from 47 per cent in UP to 94 per cent in
Karnataka. Such restrictions endured even after
conversion of dalits to egalitarian faiths. As many as 41
of the 51 villages surveyed in Punjab reported separate
gurudwaras for dalit Sikhs, and even where dalits
worshipped in gurudwaras frequented by upper caste jats,
they were served in separate lines at the langar, and
were not permitted to prepare or serve the sacred food.
In Maharashtra, despite mass conversions of Mahars to
Buddhism, dalits were denied temple entry in 51 per cent
villages. Reports from Kerala and Andhra Pradesh
chronicled divisions in the church between dalit converts
and others, even discrimination against ordained dalit
priests.

Untouchability persists even into death; in half the
villages (48.9 per cent) dalits were debarred from access
to cremation grounds. In Maharashtra, even where dalits
have their segregated cremation grounds, these are
permitted only on the eastern side of the village, so
that upper castes are not polluted by the winds that pass
from west to east.

The study reports discrimination against dalits even in
the labour market. Although normally dalits are coerced
into agricultural labour in unfavourable conditions,
sometimes even of bondage, they are excluded in the lean
agricultural season when work is scarce, and therefore
upper-caste workers are preferred. In 25 per cent of the
villages, dalits were paid lower wages than other workers.
They were subjected to longer working hours, delayed wages,
verbal and physical abuse, not just in 'feudal' states
like Bihar but notably in Punjab. In 37 per cent of the
villages, dalits were paid wages from a distance, to avoid
physical contact. The study found evidence of
discrimination between non-dalit and dalit workers,
evidence of caste surmounting proletarian solidarity.

Although the large majority of dalits are landless, even
in the fewer cases where dalits were landowners, they were
denied access to water for irrigation in more than
one-third of the villages. In 21 per cent villages, they
were denied access to grazing lands and fishing ponds, and
violent upper caste opposition was reported when dalits
were allotted government lands for cultivation or even
housing.

Untouchability extended even to consumer markets with
dalit producers in 35 per cent villages barred from
selling their produce in local markets. They were forced
to sell in the anonymity of distant urban markets where
caste identities blur, but this additional burden of costs
and time reduced their competitiveness. Caste taboos apply
particularly to products like milk, so that in 47 per cent
of the villages with cooperatives, dalits were not allowed
to sell milk to the co-operatives or even private buyers.
In a quarter of the villages, they were prevented from
buying milk from cooperatives. Dalits are not only
disproportionately burdened with poverty to start with,
caste discrimination in labour and consumer markets
condemn them to lower wages with harder work in uncertain
employment, and restrictions on their access to natural
resources as well as markets for their products.

With untouchability persisting unashamedly in State
institutions like schools and police stations, in public
spaces like temples and shops, in farms and markets, and
in homes and hearts, the dalit still lives in India
waiting hopelessly, and sometimes in anger, for the long
betrayed dawn of equality.

The writer is a former civil servant and Convener, Aman Biradari

Book Reviews & Discussion: Economic Development & Policies

noreply@blogger.com (Rahul) — Wed, 08 Aug 2007 20:59:00 +0000

Good Discussion after the review of the books. Chang's response is great.

FT.com / Books / Non-Fiction - The growth of nations

Novartis & Patents

noreply@blogger.com (Rahul) — Tue, 07 Aug 2007 12:54:00 +0000

In a case filed by Novartis in an Indian court in Chennai, it had challenged ruling by a court which had rejected its patent. As per Indian Patent Law, patents are given only for "substantially innovative' new drugs and not for "incremental" improvements in older drugs. This novartis was claiming was against the WTO rules. The Indian court rejected it. Initial reports said that court said it had no juridistion to rule about WTO compliance of the Patent law.

In most of the countries Novartis has obtained patent for the drug in question as Patent rules are different in other countries. The case was of importance because if court had ruled the other way it would have stopped generic drug companies in India producing various drugs for the developing world (especially the AIDS drugs).

The "incremental" patents which drug companies seek are a way to increase the patent life time of the older drugs and maintain monopoly power. In most countries as pharmaceutical industry has huge lobbying power they have being able to get these patents - through chaning laws. But in India, I am guessing mostly due to public protest and Generic drug lobby this was not in the patent law.

Atleast for now drug companies lose. But who knows what techniques they come up with to subvert these rules .....

http://www.nytimes.com/2007/08/07/business/worldbusiness/07drug.html?hp

Bottled Water: PepsiCo to come clean on Aquafina water source

noreply@blogger.com (Rahul) — Fri, 27 Jul 2007 20:31:00 +0000

Finally at least Pepsi will state that water is bottles is coming from a public tap (which you can use for free and is enviornment friendly). BTW New York City tap water is supposed to be the cleanest you will find in the country and exceeds highest quality standard.

reportonbusiness.com: PepsiCo to come clean on Aquafina water source

Generics, Non-profits & Corporations

noreply@blogger.com (Rahul) — Tue, 24 Jul 2007 15:29:00 +0000

An excellent article which indicates how drug companies have used non-profit organizations as front to lobby for legislation in various states to stop generic drugs (epilepsy drugs in this example) on the grounds that generics can be harmful/not effective as compared to branded drugs, even though pro-industry FDA has denied any such claims and they have no proof. If you read through you will understand the various intricacies corporations go through and how blatantly it all takes place. Mind you this is from the pro-corporation Wall Street Journal, so tough to deny even for mainstream folks saying its hog-posh. Teaches you one clear lesson, dont buy what non-profits say without going into depth into their funding sources.
This is not first time non-profits are being used. Walmart funds some non-profits which have praised the "good" qualities of walmart and fought in lobbying for walmart. Exxon funds non-profits and uses them for different purposes. Corporate funding of non-profits ....
Just one of the several examples of corporations "work" ...

PILL PUSH
Industry Fights Switch
To Generics for Epilepsy
Big Drug Makers Help
Patient Groups Lobby;
More Attention to States
By SARAH RUBENSTEIN
July 13, 2007; Page A1

In state legislatures across the country, the Epilepsy Foundation has been campaigning for bills that would make it harder for pharmacists to switch patients to inexpensive generic epilepsy pills. The effort is getting behind-the-scenes support from drug companies -- a sign of how the industry, long a potent lobbying force in Washington, is increasingly looking to states to achieve its goals.

The foundation, a nonprofit group supported by the drug industry, says switching to generics could cause dangerous seizures. The Food and Drug Administration says it hasn't seen persuasive evidence for that, and it believes each generic is equivalent to the brand-name drug it copies.

Four major brand-name drugs used for epilepsy are expected to lose patent protection and face generic competition between next year and 2010. Those four drugs generated $5 billion in U.S. sales last year, according to IMS Health, meaning the state legislation could have a significant bottom-line impact. Some of the $5 billion figure reflects sales of the drugs for other ailments.

Generic drugs are the centerpiece of efforts to tame growth in America's prescription-drug bill, which topped $270 billion in 2006. When a doctor writes a prescription for a brand-name drug, pharmacists are usually permitted in most states to make an automatic switch to a generic judged equivalent by the FDA.

The epilepsy legislation would carve out an exception to that rule, with many of the bills requiring that doctors explicitly approve such a switch. Tennessee has passed a weaker version that requires doctor notification but not consent. Around 25 other states have considered some form of restriction in the past year.
ON THE TABLE

[model legislation]
Model legislation the national Epilepsy Foundation has provided to state affiliates to address concerns about epilepsy-drug substitution:
A pharmacist may not interchange an anti-epileptic drug or formulation of an anti-epileptic drug, brand or generic, for the treatment of seizures (epilepsy) without prior notification of and the signed informed consent of such interchange from the prescribing physician and patient, or patient's parent, legal guardian or spouse of such person.
Source: Epilepsy Foundation

It isn't the only health issue where states have been the central battleground. Earlier this year, Merck & Co. drew fire for lobbying states to require that preteen girls receive its cervical-cancer vaccine to attend school. Merck stopped its direct lobbying in February, but a group of female state legislators that has received funding from the drug maker continue to push for the laws.

States often move faster than Congress, says Jan Faiks, who runs state policy for the Pharmaceutical Research and Manufacturers of America, or PhRMA, the drug industry's trade group. State legislation can move "from idea, to passage, to governor's signature in 90 days, sometimes faster than that," she says. "So the action is in the states."

Campaign contributions to state candidates by pharmaceutical manufacturers and their employees rose to about $8.8 million for 2006 from about $4.6 million for 2000, according to the National Institute on Money in State Politics. Drug makers spent more than $44 million on state lobbying in 2003 and 2004, the last years for which figures are available, according to the Center for Public Integrity.

In state legislatures, as in Congress, the drug industry often enlists nonprofit health and patient-advocacy groups to advance its agenda. In the epilepsy case, the Epilepsy Foundation's state affiliates, rather than the companies, are taking the most prominent part in the lobbying.

The foundation and its state affiliates receive funding from the epilepsy-drug makers. GlaxoSmithKline PLC and UCB SA donated $500,000 to $999,999 each in fiscal 2006 to the national foundation, according to its annual report. Abbott Laboratories and a Johnson & Johnson unit each contributed $100,000 to $499,999. Representatives of four drug companies sit on the foundation's board, as does PhRMA chief Billy Tauzin.
[Top Treatments]

The foundation and its affiliates had about $77 million in revenue in 2005, about $48 million of which came from state and federal grants.

The foundation says its diverse funding base shields it from undue drug-company influence, and the industry executives on its board didn't participate in discussions of the drug-switching issue. Foundation leaders note that the state bills would generally require doctor permission for several kinds of switches, including when a patient goes from a generic to a brand.

"These are people's lives that we're talking about -- nothing about stock options and stock value and how this would affect [companies'] bottom line. That would be insulting to us to have discussions like that," says Sindi Rosales, the head of a foundation affiliate in Texas, one of the states that weighed legislation this year. She says pharmaceutical companies are "fabulous partners" and their help in several areas "has been amazingly tremendous," but the companies leave it to the foundation to call the shots.

For their part, company executives describe their lobbying role as limited and say the bills were primarily an initiative of the foundation, although they acknowledge in certain cases that company officials have gotten directly involved. Executives say the aim of these activities is to protect the health of patients. "Our issue is not selfish toward our individual product," says Richard Denness, a vice president at Belgium-based UCB. "It's a real concern in the minds of prescribers.... All it takes in the scheme of things are one or two patients to have a tragic event."

In the late 1990s, the national Epilepsy Foundation, based in Landover, Md., raised concerns about anecdotal reports that some patients experienced seizures and side effects after switching epilepsy drugs. Some of the episodes involved patients who had been switched to a generic from a branded drug. The foundation also worried about cases in which patients were switched from one generic version of a drug to another generic version of the same drug.

When the FDA approves generics, it requires manufacturers to show in human studies that their copycat pills deliver a similar amount of active ingredient to the bloodstream as the brand-name original. However, the agency doesn't require exact equivalence. That would be an impossible bar to clear, because there is always a slight variation in the way people absorb drugs.

The foundation theorized that some generic pills had a meaningful difference from the brands. This difference, it postulated, meant patients were getting more or less of the drug in their blood, causing some of them to have seizures or side effects. Foundation officials floated the idea in a 1999 meeting with the FDA.

The FDA's response: "Show us the data," recalls Sandy Finucane, who oversees state and federal policy for the foundation. The agency, unpersuaded by what it saw, stood firm in its long-held position that the difference was too small to have a tangible impact on patients.
[chart]

Coming up with the kind of evidence the FDA sought would have required a major clinical trial to demonstrate that the seizures were a direct result of the switches, Ms. Finucane says. The foundation thought it would be difficult to enroll patients for such a trial, and the costs were prohibitive, she says. For years the foundation didn't push the matter, beyond developing policy statements and encouraging patients and doctors to report problems to the FDA.

In early 2006, the issue re-emerged as legislation requiring doctor permission for switches was proposed in Illinois. That's the home state of Abbott Laboratories, which makes Depakote, a leading epilepsy pill that is expected to face generic competition next year. The bill passed, but in watered-down form. An Epilepsy Foundation official in Illinois says Abbott helped fund lobbying for stronger provisions that were considered this year but didn't pass. Abbott said it supports some foundation initiatives but declined to give specifics.

In May 2006, the national Epilepsy Foundation convened a committee of medical experts to examine the question. The committee found a lack of authoritative studies showing that such drug switches cause problems, says its chairman, Steven Schachter, a Harvard Medical School neurologist. Nonetheless, it recommended that doctors give explicit approval for switches, citing anecdotal reports of seizures and noting that such attacks can be serious.

Last fall, the American Academy of Neurology issued a statement making a similar recommendation. The academy says it receives funding from drug makers for educational programs but not for developing medical guidelines.

At a meeting last September, the national foundation told its local affiliates that if they wanted to push for legislation regulating switches, the foundation would provide model legislation and support, Ms. Finucane says. It also told them to "maintain independence from any company that's going to be interested in this issue," she adds. The 50-plus affiliates operate largely autonomously.

The sponsor of a bill in Georgia, state Rep. Charlice Byrd, says a UCB official was the first person to raise the epilepsy-drug switching issue with her. The Belgian company makes the epilepsy drug Keppra. Ms. Byrd says she was sympathetic because her late mother had epilepsy.

Charlotte Thompson, who joined the foundation's Georgia affiliate as executive director last September, says she became aware of the bill after hearing about it from UCB. "When we realized [Rep. Byrd] was introducing this and looked at it and studied what it was, then we jumped on the bandwagon," Ms. Thompson says. Six lobbyists for three companies joined a committee created by the Epilepsy Foundation to work on the legislative process, she says.

Ms. Byrd says several pharmaceutical-company lobbyists offered their support. Abbott lobbyist Guy Mosier "was extremely helpful working with legislators to help them understand the importance and that this piece of legislation was strictly for patient protection," Ms. Byrd says. Mr. Mosier declined to comment.

Ms. Byrd introduced the bill in the Georgia House in January of this year. At a Feb. 7 hearing of the House's health committee, Lasa Joiner, executive director of the Georgia Psychiatric Physicians Association, testified in support. Ms. Joiner was at the time also a Glaxo lobbyist, which she didn't mention at the hearing. In an interview, she said she didn't raise her tie to Glaxo because the company hadn't asked her to lobby for the bill.

Two days later, epilepsy patients and parents of patients visited lawmakers' offices to ask them to support the bill. The Epilepsy Foundation's Ms. Thompson says drug-company lobbyists accompanied the visitors.

Kimberly Oviedo says her 6-year-old daughter had seizures last year after being switched to a generic version of the epilepsy drug Zonegran. She says she supported the bill because she wouldn't "want any other person to have to go through what we've been through with our kids." Ms. Oviedo also has a son who suffers from epilepsy.

The bill passed the Georgia House in a 161-0 vote on Feb. 28, but it stalled in the Senate after groups representing pharmacists and generic-drug makers mounted heftier opposition to it in that chamber. Pharmacies often earn bigger profit margins on generics than on branded drugs.

Ms. Thompson says the foundation plans to meet with the Georgia Senate leadership this summer to try to gather its support for next year.

In Texas, two local Epilepsy Foundation affiliates decided to approach an Abbott official after they resolved to push for a bill, says Ms. Rosales, the head of one of the affiliates. Abbott and other drug makers helped fund the foundation's Texas lobbying, she says.

Ms. Rosales, whose daughter used to have seizures, says she felt deeply about the bill but worried about being perceived as a "mouthpiece for the pharmaceutical industry." She nonetheless hired Santos Alliances, a firm that also represents PhRMA, as her affiliate's lobbyist. Ms. Rosales says it's difficult to find a health-care lobbyist with no drug-maker clients. Frank Santos, head of the lobbying firm, says PhRMA was "absolutely 100% not involved" with the bill.

At a March hearing in the Texas Senate, Ron Hartmann, a lobbyist for a generic-drug maker owned by Novartis AG of Switzerland, testified against the bill. He said he suspected the bill was "less focused on the citizens of Texas than on protecting the market share of a few brand-name drugs that are scheduled to go off-patent in the next few years."

State Sen. Kyle Janek, the bill's sponsor, responded that Mr. Hartmann had "impugned my motivations," and added that, if Mr. Hartmann would "abstain from doing that," then he would abstain from calling Mr. Hartmann a "high-priced shill." Mr. Hartmann apologized. In 2006, Sen. Janek received about $19,000 in campaign contributions from drug makers. He says he sponsored the bill because it was in the best interests of patients.

The bill passed the state Senate in April, but failed to come up to a vote in the House after debate in that chamber's health committee. Three of the committee's members said in interviews later that they were skeptical of the bill because they thought it was being pushed by drug companies. Generic-drug makers and pharmacists lobbied heavily against the bill.

Meanwhile, some doctors are pushing harder for a study that would settle the matter. Michel Berg, a neurologist who is chairman of an American Epilepsy Society task force examining the switching issue, has opened discussions with the FDA about what kind of trial would be necessary.

For now, Gary Buehler, the director of the FDA's office of generic drugs, says the agency is skeptical that the drug switches cause seizures. "The only way you can somehow pin this down is to do a good study," says Mr. Buehler.

"Relief" Packages - Farmers / Exporters

noreply@blogger.com (Rahul) — Fri, 13 Jul 2007 13:36:00 +0000

Do you remmember the Vidharba Farmer's relief package (well to be honest it was not a worthwhile package to give any "relief")?. Well it came after several years of farmer suicides numbering thousands and was withdrawn after one year by Maharastra govt. Actually it gave money mostly to banks who didnt implement most of the package.

But Exporters within six months of Ruppee Appreciating by 10% got a "relief Package". Its a pretty big package & comparable in sheer size to farmer relief package.

Just compare: the suffering - loss in profits for expoerters to loss in lives for farmers, the swiftness with which this package was passed vs years of inaction by PM on farmer suicide package, the media demand for the export package (there have been many front page articles by mainstream media demanding export package and finance/commerce/PM have had several meetings with exporters on this vs. very few articles for relief packages demand for farmers and well virtually no attention until the end given by any ministry - not even the agricultural ministry headed by Sharad Pawar who hails from Maharastra.

And will I see any mainstream economists raising their voices against this clearly anti-market government intervention (atleast in their opinion). I doubt it. All this exporters relief just to maintain our export numbers, is it worth it?. Obviously not. But the comparison with farmer's package really disgusts me.

Exporters get Rs 1400 cr compensation package
http://www.business-standard.com/common/storypage_c_online.php?leftnm=11&bKeyFlag=IN&autono=25359

Rewriting American Law to Pro-corporations

noreply@blogger.com (Rahul) — Thu, 28 Jun 2007 16:42:00 +0000

Contiuning in its ruling the conservative majority Supreme court today overturned two lon-standing decisions made by older Supreme courts. In its current session Supreme court has ruled on four anti-trust cases where it has sided with defening party (corporations). So now as a result of these rulings its very difficult to sue a bank/investment bank for fraud when they sell IPO's, its far tougher for investors to sue corporate management for alleged fraud, its not illegal if corporations join together and set minimum prices for products (basically nobody can sell below those prices so "competition"). Its difficult to sue corporations for wage discrimination (you have to sue within 180 days after you receive the pay, no matter that you come to know of discrimination years later)

Further it opened a big loophole in campaign finance law by which interest groups can advertise on behalf of candidates even just before elections, schools cant increase diversity in schools (Seattle school case) by taking race as a factor.

Most decisions set aside previously given decisions by Supreme Court, overruling earlier rulings. Most of them are blantantly unfair and biased, you dont need to be a law student/lawyer to understand that in these decisions. These decisions were not a matter of technicality but clearly ideologically lead.

Media Reaction: Well as far as New York times goes it has reported on the cases but if you look carefully in opinion pieces very few (almost none) of the pro-corporate decisions have being given lot of coverage or criticism. they have criticised te campaign finance thing and some other but nothing in which investment banks were left free even if they commit fraud. Not surprising given the state of the media. Also Wall Street Journal obviously hasnt criticised pro-corporation decisions. I havent looked in detail to other mainstream media outlets but expect similar reaction.

This Supreme court on domestic issues can rewrite US laws and it has a long term (given most conservative judges are young and they server till they die usually).

http://www.nytimes.com/aponline/us/AP-Scotus-Schools-Race.html?hp
http://www.nytimes.com/aponline/business/AP-Scotus-Kays-Kloset.html?hp

Rewriting American Law to Pro-corporations

noreply@blogger.com (Rahul) — Thu, 28 Jun 2007 16:42:00 +0000