Few will be surprised at the headline numbers in the advance estimates of growth in India&rsquo;s gross domestic product (GDP) in 2011-12 released by the Central Statistics Office (CSO) on Tuesday. GDP growth, according to the CSO, will clock in at just 6.9 per cent this year, down from 8.4 per cent in 2010-11. This is not too far from the recent estimate by the Reserve Bank of India, which was revised downwards to seven per cent. The World Bank has projected 6.8 per cent growth in 2011-12. So these numbers are not likely to shock too many observers &mdash; even though they are two whole percentage points below the estimates for this fiscal year made in the Budget and Economic Survey. Even if there is little shock, however, there should be widespread concern. Not since the year of the financial crisis, after Lehman Brothers fell in 2008 and credit seized up, has growth been this low.

Gloomy numbers

Business Standard

The crop output estimates for 2011-12 put out by Krishi Bhawan last week &ndash; even while projecting a record foodgrain output that would cross the 250 million-tonne mark for the first time &ndash; reveal some worrisome inter-commodity imbalances as well. The harvests of wheat and rice &ndash; both of which are facing the prospect of a glut with the official grain coffers brimming over &ndash; are projected to swell further. But those of pulses and oilseeds, which are scarce and need to be imported, are forecast to shrink by five or six per cent, further constraining their supplies. The output of coarse cereals, too, is forecast to decline; they have witnessed a rapid spurt in demand, for food, feed and industrial uses like manufacture of starch and malt. Although the agriculture ministry is attributing the drop in the output of these commodities to uneven monsoon rains and lack of winter showers, the real problem lies elsewhere.

Balanced diet

In the last five weeks, Indian stock markets have seen a spectacular recovery. The indices have swung up over 15 per cent. This rise has been driven by a shift in the attitudes of foreign institutional investors (FIIs), who have, since January 1, 2012, bought a net $3.4 billion of Indian stocks (and put a slightly larger amount into rupee debt). In contrast, domestic institutional investors have been net sellers. The forex inflow has also pushed the rupee up by eight or nine per cent against most hard currencies. There has been little apparent change in geopolitical dynamics or global economic indicators to justify this turnaround. The Greek debt crisis remains a big question mark; worries persist about contagion and larger euro zone nations have seen downgrades. Tensions persist in West Asia and Iran, causing upward pressure on energy prices.

Spring on Dalal Street

Two decisions by a Group of Ministers (GoM) on Tuesday demonstrated the government&rsquo;s continuing inability to come to grips with the problems being faced by the aviation sector. Both are wrong-headed, but in different ways. Allowing airlines to directly import aviation turbine fuel (ATF) may sound at first like a reasonable approach, in that it allows them to avoid paying local taxes that are, in some states, among the highest in the world.

Still delaying take-off

In estimating the chances of a recovery for India&rsquo;s economy in 2012-13, the amount of growth in the rest of the world is a major unknown variable. Europe is stuttering, and the euro zone&rsquo;s problems are far from over; if Greece leaves the single currency in a disorderly manner, the effects will ripple across the world economy, and hit demand for Indian products, as well as the corporate bottomlines of increasingly global India-based companies. The question, therefore, is whether growth in the United States can recover to the degree necessary to compensate for Europe&rsquo;s continuing weakness.

Morning in America?

The rate of growth in India&rsquo;s software and services exports is declining.

IT looks closer to home

There was a time, sometime in December, when it was impossible to walk down the street in an Indian metropolis without hearing a snatch from &lsquo;Kolaveri&rsquo;. The song, recorded by a group of Tamil actors and singers, has now been watched over 42 million times on the internet website YouTube; Sony Music, which owns the copyright, has seen a comparable number of downloads. Its amateurish, relaxed feel served to enhance its popularity. The group&rsquo;s leader, the actor-singer Dhanush &mdash; born Venkatesh Prabhu Kasthuri Raja &mdash; pointed out in the course of a seminar on viral marketing at the Indian Institute of Management, Ahmedabad last week, that the film with which it is associated &mdash; 3 &mdash; received an enormous amount of publicity as a result. The film will now be released not just in Tamil, but also in Telugu and Hindi; and instead of just 400 prints, as originally planned, over 1,000 will be screened. When viral marketing works, it works spectacularly.

The secret of ad energy  

As the Supreme Court judgment on February 2 cancelling the issue of 2G licences in 2008 reiterated, auctions are the preferred method of handing over natural resources to the private sector for exploitation. Properly designed and implemented, they are useful methods to discover the true price of the resource being allocated.

Another 2G, in mining? 

Fault lines have appeared in the primary market. These have been recurring, but recent actions taken by the regulator in some of the initial public offerings (IPOs) helped highlight the issue (see the previous column &ldquo;Fault lines in the Indian IPO market,&rdquo; January 9). A serious reparation effort of these fault lines would involve a careful analysis of the three primary factors that have largely influenced the behaviour of the market, and the pricing of issues, the participation in issues and the processes involved. Interlacing these factors is the behaviour of the investors.

Pratip Kar: Repairing the IPO market's fault lines

On Monday, Commerce Minister Anand Sharma walked across the Wagah land border between India and Pakistan on his way to attend the closing ceremony of the extremely popular &ldquo;India Show&rdquo;, a trade fair organised to highlight Indian products in Lahore. The agenda for his visit is to move forward on liberalising trade between the two neighbours, following along from negotiations in Islamabad last year. The &ldquo;normalisation&rdquo; of trade has been repeatedly touted by New Delhi as a possible game-changer in bilateral relations. Yet it does not appear that Mr Sharma&rsquo;s visit will pay the dividends that would have been possible had India&rsquo;s bureaucracy capitalised on the gains made last year. Trade relations seem to still be held hostage to a mindset that believes that the only successful outcome is if the other side appears to have given more than you have.

Walking across Wagah 

Now that General V K Singh is on foreign shores for a while, the controversy over whether the commander of the world&rsquo;s second-largest army was born in 1950 or 1951 appears destined for a quiet burial. And now that the Supreme Court has dismissed his petition challenging the government&rsquo;s rejection of his demand for a reconciliation of his birth date, General Singh can be expected to retire in May this year, just as he was supposed to do when he was appointed chief. With that, the uncertainty over his successor has ended, and many believe that, with the Supreme Court having rapped both the government and the general on their knuckles &ndash; indicating that the dispute should never have been brought before it in the first place &ndash; the odds are even.

General in a labyrinth

Minister for Law and Company Affairs Salman Khurshid has justly been criticised for what was seen as a direct attack on the authority of the Election Commission (EC). Mr Khurshid was warned by the EC that he was violating the model code of conduct when he promised that, if voted in, the Congress would increase the sub-quota for Muslims within the larger category of reservations for Other Backward Classes, or OBCs, from 4.5 per cent to nine per cent.

Code breaker

The latest edition of the &ldquo;India State of Forest Report&rdquo;, or ISFR, which is compiled biennially, is worrisome. The report claims that 367 square kilometres of forest have been lost in the past two years; and that the total forest and tree cover actually shrank, to 23.81 per cent of the country&rsquo;s total area. These are a reversal of the trends that had been claimed earlier.

Green cover-up

National shame&rdquo; is how most people, including some senior government functionaries, often refer to the pervasive practice of open defecation. Yet, the Total Sanitation Campaign (TSC), launched in 1991 with the noble objective of providing access to hygienic toilets for all by 2012, receives only scant attention from the government. The latest assessment indicates that as many as 22 states will miss the deadline for eliminating open defecation.

An open shame

That the civil aviation ministry has lifted the restrictions it placed on the overseas expansion of domestic private airlines is good news. Those restrictions, which were brought into force in March 2011 in order to protect state-owned Air India from competition, were misguided. Air India, which carries only a fifth of the country&rsquo;s international passengers, was always unable to take full advantage of the bilateral routes that were reserved for it.

Clearing the runways

The government&rsquo;s announcement of its new telecom policy should be welcomed as a move forward after the missteps and uncertainty that have dogged the sector in the past months. Although it retains elements that appear to contradict other parts of the policy &ndash; as well as some recommendations of the sector regulator &ndash; it at least shows the government&rsquo;s intent to clean up telecom.

Telecom's fresh start

The market regulator, the Securities and Exchange Board of India, or Sebi, is considering a change in disclosure norms to ensure that price-sensitive information is released to the stock exchanges before being disseminated to other bodies such as industry associations. On the face of it, the immediate impact of this would be merely cosmetic. However, it may have positive or negative long-term implications. The underlying logic seems impeccable.

The price of data 

In the past few weeks, Bangalore has reportedly seen over 150 instances of money being fraudulently withdrawn from automated teller machines or ATMs. The fraudulent transactions have been carefully timed at the cusp of midnight, to bypass daily withdrawal limits. The modus operandi is otherwise unclear; footage from surveillance cameras has not been helpful. The criminals may have cloned cards by copying data off magnetic strips. They may have hacked the software that validates transactions. Or perhaps, the chips in specific ATMs have been compromised. Bangalore has a large population possessing the requisite skills. The Reserve Bank of India and the banking/financial services industry will now have to brainstorm to identify and plug the specific hole, or holes.

The future of hacks

As many as seven chief ministers have joined a chorus of disapproval against the National Counter-Terrorism Centre (NCTC), which the Union government notified earlier this month. The United Progressive Alliance, or UPA, has argued that the action flows from powers already in the existing unlawful activities statute.

Federal fears

In December last year, the push to try and complete the Doha round of trade talks ended in failure at the World Trade Organisation&rsquo;s headquarters in Geneva. The Doha round had begun 10 years earlier, in 2001, but has run into several stumbling blocks; disagreement over agricultural subsidies and controls, in particular, has consistently held up progress. Meanwhile, new issues have arisen in the past decade, such as the rise of informal barriers to trade like differing labelling standards. Unsurprisingly, many countries have moved forward on bilateral trade deals. Such agreements are frequently less than ideal &ndash; they can divert, rather than increase, trade &ndash; but given the Doha deadlock, there are few alternatives. India&rsquo;s landmark trade agreement with the Association of Southeast Asian Nations, or Asean, is coming into force in stages.

Distant second best

The recent attack on an Israeli diplomat&rsquo;s car, in what is supposedly the most secure part of New Delhi, has raised questions as to whether India&rsquo;s West Asia policy is sustainable. That policy has been fairly clear-cut till now. Israel is a major defence partner, and it co-operates closely with Indian security in counter-terrorism and technological matters.

A false choice

Incisive columns and editorial comment by top opinion leaders

Page 387 - Editorial Comment