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

Business Standard

Just as Air India was receiving a debt recast plan that defies all financial prudence, or indeed logic, the newspapers were filled with splashy advertisements commemorating the centenary of civil aviation in India.

Flying unfree 

The Supreme Court judgment cancelling 122 2G licences plunged the telecom industry into crisis. It is now incumbent on the government to utilise that crisis as an opportunity for reform. It must act sensibly, transparently and with due speed to restore institutional credibility to a sector suffering from a severe deficit on that front. While the release of the new telecom policy was a step forward, recent reports that the government has consulted its lawyers on the legality of licences issued prior to 2008 are worrying. This is not the time to play politics or shirk responsibility. After all, a post-judgment road map exists: delink spectrum from licences. Charge a relatively nominal amount for licences, (while imposing technical qualification norms). Auction off spectrum, allowing the market to price this resource.

Calling the future

Vice-President Xi Jinping of the People&rsquo;s Republic of China visited the United States last week, in a trip that bore all the characteristics of a state visit. The pomp underlined the fact that Mr Xi is widely expected to take over as China&rsquo;s leader soon.

A princeling's progress

Is the government being duplicitous about its stand on the increasingly distressed Kingfisher Airlines? There have been several statements from various members of the government and State Bank of India (SBI) that no bailout is planned. These reflect sound economic logic. Government bailouts should be restricted to entities that have grown &ldquo;too big to fail&rdquo;, which have made, in the course of their growth, connections so complex and so extensive across sectors that their sudden collapse will gravely affect the real economy. Kingfisher Airlines has a fraction of the civil aviation market &mdash; which itself is restricted to serving the creamiest layer of Indians. By no means, therefore, is it too big to fail. If the market decides it should fail, it should be allowed to. No pressure must be applied on state-owned banks to step in to provide additional guarantees and working capital loans to help the airline hobble on.

Let it fail

Some global weather watchers have warned that India will likely see below-normal rainfall during this coming monsoon &mdash; and that should be taken seriously, regardless of whether it turns out to be true or not. This scenario has been repeatedly predicted by the Japan Agency for Marine-Earth Science and Technology and has been endorsed by the International Research Institute for Climate and Society at Columbia University.

Guessing the monsoon

The latest report of the Economic Advisory Council, or EAC, to the Prime Minister is a wake-up call, because it presents the macroeconomic quandary more clearly than has been done in the past. While headline attention in the media has focused on the expectation of faster economic growth next year (between 7.5 per cent and eight per cent), that is the relatively unimportant part of the Council&rsquo;s report &mdash; not least because the Council has been consistently behind the curve in anticipating and tracking the slowdown. The meat of the report is in what it says on the trade deficit and the fiscal deficit. For the first time in an official document, the dangers on the external front are spelt out clearly, without pressing panic buttons. The current account deficit, at 3.6 per cent of GDP, is unsustainable and should ideally be capped at two per cent. With oil prices rising, and export markets sluggish, a correction to that extent is unlikely.

Wake-up call

Many sensible recommendations have been made by the high-level safety review committee set up recently in the wake of several accidents on Indian Railways. The report says that if the committee were to make only one recommendation, it would be to monitor and implement what is already known &mdash; but has been languishing at various stages of consideration or execution.

Tracks to safety

The manner in which a leading scientist recently obtained vital information on global warming from the Heartland Institute, a Chicago-based think tank, may seem incredible to someone unaware about the climate change wars. What started as an arcane policy debate has long since degenerated into a series of acrimonious ideological battles. The Heartland Institute is among what have come to be called climate-change deniers, those who wage political battles against the overwhelming scientific evidence for human-made global warming. It is a prominent campaigner against green legislation. On the other side is the well-known hydroclimatologist Peter Gleick, a member of the US National Academy of Sciences and a MacArthur &ldquo;Genius&rdquo; Fellow.

Deniers polarise 

There are many things that are significant about the report of the task force studying a unified payment infrastructure that uses the Unique ID, or Aadhaar, but perhaps the most notable is its timing. It has been presented to Finance Minister Pranab Mukherjee just as the Budget season is at its height. This is indicative of the direction in which Mr Mukherjee must go in order to control the United Progressive Alliance&rsquo;s (UPA&rsquo;s) politically sensitive but fiscally damaging welfare spending. Cost savings must come from somewhere, and improvements in the efficiency of transfers are the best long-term method to save costs. The report, which was drafted by a committee headed by Nandan Nilekani, chairman of the Unique Identification Authority of India (UIDAI), was meant to study possible methods to route payments under various government schemes to beneficiaries through direct cash transfers.

Transforming transfers

The new investment policy for urea that has been cleared by an empowered group of ministers has a few welcome features. Its success, though, measured in terms of enticing fresh resources to the sector, will depend critically on three things: the availability of natural gas, a stable fertiliser policy regime, and the overall progress of sector-wide reform. The new policy reportedly seeks to ensure a minimum 12 per cent post-tax return on the capital, which should make prospective investors happy. So should the proposal to fix separate bands of floor and ceiling cost for urea produced by the new plants (greenfield projects), the expansion of existing plants (brownfield projects) and a more efficient calculation of subsidy support, based on the concept of import parity price for gas.

Urea needs decontrol

Finance Minister Pranab Mukherjee&rsquo;s task in drafting this coming Budget is unenviable. He has to balance growth-enhancing measures with a move back to fiscal sustainability. While there are differences about details, there is a surprising degree of consensus among observers on the broad features of the approach he should take. He will have to transform India&rsquo;s creaking, leaking, overreaching subsidy regime; he will have to push for more reform across sectors; and he will have to broaden the tax net and roll back the tax cuts introduced after the global financial crisis in 2008. Yet not everybody in India Inc seems to agree to this approach. Or that, at least, seems to be the thrust of recent statements from industry organisations. The pre-Budget memorandum from the Confederation of Indian Industry (CII), for example, agrees that fiscal space is limited. Yet it goes on to demand exemptions for industry from this agenda.

Time for good sense

A recent report of the Global Wind Energy Council exposes India&rsquo;s modest performance vis-&agrave;-vis more green energy-conscious nations in using wind as a renewable source of power. The fresh addition to wind energy capacity in India in 2011 was merely 3,000 megawatts (Mw), which compares very poorly indeed with China&rsquo;s 18,000 Mw &mdash; and is just a fraction of the 41,000 Mw capacity created globally.

In the shade

Prime Minister Manmohan Singh is among the most discreet of politicians. So, when he makes a controversial remark, it can be assumed that it is the product of measured judgement rather than hot-headed indiscretion.

No-Go Organisations?

As Infosys Technologies celebrates 25 years of its glorious journey, it is useful to take stock of what this unique enterprise has come to symbolise, so as to learn from its achievements and also

Glorious 25 years

The data released by the ministry of commerce and industry last week indicate a high degree of buoyancy on the trade front. For the period April-July 2006, merchandise exports grew by over 34 per cent

Export exuberance

Special Economic Zones (SEZs) have been viewed by many people, not least the Ministry of Commerce and Industry, as the best solution to a host of constraints and irritants that dog the investment

Not special enough

Several factors have contributed to the Indian Railways showing all-round improvement in the current year. The indications are that the national carrier will end 2005-06 with not just a decent rise in

On the fast track

The country can expect to see another round of reductions in long-distance telecom tariffs, following the One India tariff announcement, though it's unlikely that rural India will join in the party

Who`ll foot the bill?

The worst fears about the dreaded bird flu striking India have come true. As was apprehended, the infection has arrived with migratory birds. Fortunately, neither the government nor the poultry

Preventing a pandemic

Any finance minister should be asking himself, as he prepares his Budget, what it should be remembered for. Ten years after first rising to his feet on Budget day, Mr Chidambaram is about to become

A fifth Budget

Incisive columns and editorial comment by top opinion leaders

Page 388 - Editorial Comment