The finance minister has understandably used the first quarterly economic review, presented last week to a distracted Parliament, to underline all the positive elements in the current economic

Bless the rain

Business Standard

A few weeks ago the Congress party emerged from its Shimla conclave with a proposal to introduce job reservations in the private sector. 



Reservations about reservations

In a month from now, India will be back in the scrum that international trade negotiations have become. 



Recognising the difference

Given how widely and deeply the rains affect the national mood, it is surely right that Independence Day falls right in the middle of the monsoon. 



Monsoon magic

Instead of paving the way for sorting out contentious issues ahead of the crucial World Trade Organisation (WTO) ministerial meeting to be held at Cancun three weeks from now, the farm trade deal

Tasks ahead of Cancun

The Supreme Court has cleared some of the doubts over its verdict last year in the TMA Pai Foundation case, which had prompted privately owned, privately funded engineering and medical colleges to

State rule still

The recently legislated Electricity Act is a landmark in the development of the power sector in India in many ways. There are complaints that it does not go far enough, but reform realists will accept

The power of competition

Government schemes often fail to take off or achieve the desired results for being impractical or ill-conceived. That fate seems to be in store for the truly massive programme for producing bio-fuels

Lousy idea

When the two economic superpowers decide to join hands instead of negotiating from opposite sides of a table, the repercussions are bound to be far reaching for everyone else around the same

New Cancun groupings

The collapse of the BSP-BJP coalition government in Uttar Pradesh, though sudden, was not unexpected. It remains to be seen what course the Governor will adopt. 



Mayawati again

The technology for a bomb blast is so basic, and the terror networks so entrenched, that it takes relatively little money and mobilisation to attack soft targets in public places and create a sense of

Terror's real target

When taking stock of the economy these days, it is both easy and tempting to focus on the positives. On the macro-economic front, the monsoons have been good, if not great. 



Rational exuberance

The Securities and Exchange Board of India&rsquo;s (Sebi&rsquo;s) decision to accept most of the recommendations of the Takeover Regulations Advisory Committee (TRAC), almost a year after the report was submitted, has come as a breath of fresh air on the policy-making front. Several of TRAC&rsquo;s recommendations amounted to a bold departure from the existing takeover regulations, with industry and merchant bankers lobbying strongly against some of them.

Sebi's pragmatism

Despite her charm and wit, Pakistan&rsquo;s Foreign Minister Hina Rabbani Khar clearly does not have a face that could have launched a thousand megawatts! Mistrust between India and Pakistan is alive and well, fleeting moments of bonhomie notwithstanding. Pakistan&rsquo;s recent decision to decline India&rsquo;s offer to supply electricity is unfortunate. Even more disturbing is the logic on which this decision was based.

Photo-op diplomacy

The United States of America has revealed all its weaknesses and vulnerability in the past month of political bargaining and brinkmanship on a national plan for government debt reduction. While the deal at the eleventh hour between the Republican and Democratic parties may have brought the markets around the world relief, sending even Indian stock market indices up and softening the prices of gold and other commodities, these immediate responses hide enduring concerns, both within the US and globally, about the resilience of the US economy, the sagacity of its political leadership and the quality of its economic management. The $2.4-trillion spending cuts, spread over a ten-year period, to which US President Barack Obama has agreed would deflate an already faltering recovery. In a classic pre-Keynesian act, President Obama has surrendered to the domestic Ayatollahs of supply-side economics, now reincarnated as Tea Party enthusiasts in the land of coffee drinkers.

The price of brinkmanship

Foreign direct investment (FDI) inflows into India fell by almost a third, from $36 billion in 2009 to $25 billion in 2010. In the process, India&rsquo;s global ranking as a destination for FDI fell from eight to 14, according to the World Investment Report, 2011. During the corresponding period, inflows into the United States, the world&rsquo;s top FDI recipient, increased from $153 billion to $225 billion, while the numbers for China were $95 billion and $105 billion, respectively. Several other countries like Belgium ($62 billion), Brazil ($48 billion) and Germany ($46 billion) attracted significantly more FDI than India did during the year. What accounts for the fall in FDI to India? There is no clear-cut answer. On the various predictors of FDI identified empirically, India fares well on market size (measured by GDP) and potential for market expansion (GDP growth rate).

More than just the green dollar

First, it was with the media. Now, it is with India Inc. Finance Minister Pranab Mukherjee&rsquo;s engagements in the last few weeks have had a common goal. With the media, Mr Mukherjee tried to explain how the government was not suffering from policy paralysis. As far as communication exercises go, the attempt met with little success. Outlining specific action already taken or unveiling plans to initiate new measures would have been more convincing than asserting that there was no policy stasis in the government. In his interaction with industry leaders on Monday, however, Mr Mukherjee handled himself better. He invited industry to suggest specific areas where the government needed to initiate policy action. What&rsquo;s more, he set a time frame &mdash; one for receiving suggestions and the other for finding a way to address those concerns.

Meetings only a start

Jairam Ramesh has moved quickly at his new perch, as the minister for rural development. His proposals with regard to a new law on land acquisition, aimed at giving the original owners of land a fair due, and paying additional compensation in cases of forcible acquisition through the provision of a solatium, are mostly along the right lines. In essence, he has moved away from the present situation in which the government can forcibly acquire land and hand it over to private interests &mdash; the issue that is at the heart of the protests in Noida, neighbouring Delhi. In doing so, the minister has defined more narrowly the principle of eminent domain &mdash; as this newspaper had recommended a while ago. Private industry keen on acquiring land will be required to buy it directly in the market, except in cases where there is a demonstrable public interest involved, in which case the government can step in. In short, the new draft Bill has moved in the right direction.

Mostly fits the bill

The progress of the south-west monsoon, which has run halfway through its four-month course, has been by and large satisfactory. However, uncertainties persist &mdash; mainly because, after a promising start in June that saw surplus rainfall, precipitation has been 14 per cent short of the normal in July. In addition, the met office has predicted that rainfall in the remaining months of August and September will be 10 per cent below the normal. The cumulative, area-weighted rainfall in June and July has been five per cent below the long-term average; for the monsoon as a whole, the shortfall could range between five per cent and 10 per cent. Technically, this would be deemed to be below normal.

So far so good

Among the many initiatives and innovations being considered to improve returns to farming, the creation of producers&rsquo; companies deserves closer policy attention than has been the case so far. A farmers&rsquo; company, registered as a corporate entity with the registrar of companies, under the Companies Act, can help farm producers come together and derive economies of scope and scale. A group of farmers in Andhra Pradesh has reportedly taken the initiative to do precisely this. It may be recalled that the Companies Act was amended in 2002 to facilitate the formation of such companies by farmers and small producers of handicrafts and other products. The potential benefits of such enterprises go beyond acquiring greater bargaining power while procuring inputs and selling produce in bulk. They allow farmers to venture into newer fields, seek the latest technology and know-how, and add value to their produce and thereby boost returns.

Company of farmers

The Supreme Court decision banning both mining and movement of ore in Bellary district in Karnataka, following the Lok Ayukta report, is excessive. The blanket ban penalises even those who did nothing wrong. While the outrage over the illegal profiteering of over Rs 12,000 crore by a politician-operator-bureaucrat combine is understandable, applying the brakes on all mining and related activity in the district is an undifferentiated response.

Too sweeping a ruling

Incisive columns and editorial comment by top opinion leaders

Page 390 - Editorial Comment