When Time magazine started naming its &lsquo;Man of the Year&rsquo;, called &lsquo;Person of the Year&rsquo; in these gender-neutral times, it made it clear that the person chosen was one who had dominated the year&rsquo;s news &lsquo;for good or bad&rsquo;. In other words, unlike most of the year-end heroes normally honoured by the media in India, Time&rsquo;s Man/Person of the Year was not necessarily a force for good. Many villains have made it to the slot too. So, both the admirers and the critics of Mark Zuckerberg, the originator of the social networking internet site Facebook, can continue to stick to their view of the man, despite Time naming him &lsquo;Person of the Year 2010&rsquo;. Mr Zuckerberg&rsquo;s fans will cheer him as their hero, and his critics will continue to jeer him as the anti-hero, if not a villain.

Of heroes and anti-heroes

Business Standard

With the inability of the Cancun climate summit to move towards a new and binding treaty on climate change that would replace the Kyoto Protocol, the world is left with only an agenda for mitigation and adaptation as safeguards against global warming. The troubling prospect of things getting much worse before they can get any better looms large. The United Nations&rsquo; Framework Convention on Climate Change (UNCCC) had earlier cautioned that carbon emissions will peak by 2015. Maybe it is time to revisit that forecast, given that the world risks a weakening of commitment to action and the immediate prospect that commitments already made under the Kyoto Protocol may not be kept as the world awaits the death of the Kyoto accord in 2012. The writing on the wall, therefore, is clear. Climate extremes and natural disasters like intense heat and cold waves, droughts and floods are set to become more frequent. New and unpredictable hazards may emerge, posing new challenges.

The climate for change

The global commercial air travel industry has just had a good year after two bad ones. The International Air Transport Association (IATA), the industry body, has just raised its profit estimate for the current year (2010) by 70 per cent to $15.1 billion. This is a big turnaround from the combined loss of $26 billion over calendar 2008-09 but there is no rainbow at the end of which the industry will land on a pot of gold. The revised forecast represents a woefully inadequate net margin of 2.7 per cent and worse, the next year, 2011, is going to see a setback &mdash; not back into the red but an even thinner net margin of 1.5 per cent. This is because developed world recovery is likely to be halting, with near total uncertainty over prospects in Europe, and oil prices expected to go up, from an average $79 per barrel to $84. European belt tightening, reflected in air travel taxes imposed by several countries, is also likely to do its bit to dampen prospects of demand revival.

Fly east, Indian!

Both Congress party president Sonia Gandhi and Prime Minister Manmohan Singh spoke well at the plenary session of the All India Congress Committee, convened to mark the 125th anniversary of the Indian National Congress. Historians and political analysts may lament the great distance the Congress party has travelled in the second half of its 125-year-old existence from the ideals of the first half. But, Ms Gandhi and her son Rahul must be complimented for reviving the electoral fortunes of the party, even if they have done little to restore the party&rsquo;s elan, and Dr Singh has done well to ensure that the first Congress-led coalition not only survived a full term, but also returned to power. While there is much to celebrate for the Congress, the party&rsquo;s faithful gathered in the shadow of the biggest crisis the party has faced since the days of the infamous &ldquo;Jain hawala diary&rdquo; and the Bofors case.

Now walk the talk

Recent reports that meat of cloned cattle had been sold in stores in Britain, and the news of the &ldquo;resurrection&rdquo; of the world&rsquo;s first cloned sheep &ldquo;Dolly&rdquo; seven years after its death, have renewed concerns about the scientific and ethical dimensions of cloning. The four new Dollies are said to have been created from the deep-frozen section of the same sample of cells from which the original Dolly was produced in 1996 and are, therefore, the exact genetic replicas of the first Dolly. This virtually means that Dolly is not yet dead and may never be; and, if the man wishes, the world&rsquo;s entire sheep population may one day comprise only of Dollies. The same can, theoretically, be true of human beings, if cloned. The international debate on the ethics and science of cloning has acquired an Indian dimension with scientists in India producing three cloned calves of a buffalo, a dual purpose milk-cum-meat animal.

Hello Dolly

The economic resolution adopted by the All India Congress Committee at the Burari session is a reiteration of the party&rsquo;s last two election manifestos. It combines a commitment to rapid economic growth with that to redistributive policies that would help make the growth process socially inclusive. There is a helpful explanation of the three sources of inflation &mdash; excess demand, improved prices to farmers and global commodity price inflation &mdash; that can help party members explain inflation rather than merely attack it. There is understandable concern about slow development of infrastructure that must be seized upon by the prime minister to improve ministerial leadership in infrastructure ministries.

Congress and economy

After losing the final of the 1983 World Cup to India in June, West Indies came visiting four months later. They won the first Test by an innings and 83 runs, drew the second, won the third by 138 runs, drew the fourth, won the fifth by an innings and 46 runs, and drew the sixth. It was a comprehensive drubbing handed out to the new world champions. Clive Lloyd&rsquo;s marauders had had their wish in what was termed the &ldquo;revenge series&rdquo;. The average Indian cricket fan seems to have very little recollection of that drubbing. They do remember the series, but for the two centuries Sunil Gavaskar scored in two drawn matches. They discuss in detail Gavaskar&rsquo;s century in the second Test, his 29th, an uncharacteristically breezy one off just 94 balls, which brought him on a par with Donald Bradman. In the last Test, batting at number four, as opposed to the opening slot he occupied for most of his career, Gavaskar scored 236 not out.

Learning to be No 1

The rising price of onions and Chandrababu Naidu&rsquo;s fast have once again brought into public focus concerns relating to farm output and farmers&rsquo; welfare. Ironically, it was Mr Naidu&rsquo;s famed neglect of the agrarian sector that helped the Congress party return to power in Andhra Pradesh and at the Centre, and it is the United Progressive Alliance&rsquo;s determination to shift the terms of trade in favour of agriculture that has fuelled food price inflation in recent years. Even though farmers&rsquo; welfare and farm productivity have been high on the central government&rsquo;s agenda, there is still no long-term strategy in place to take Indian agriculture to the next level of productivity, production and welfare. It is against this background that a high-profile chief ministers&rsquo; panel on agricultural production was constituted to suggest measures for boosting farm productivity and reforming agricultural marketing.

Time for farm reform

What a tangled web the global financial markets weave! Just as investors and policymakers were getting set for a sustained decline in the US dollar, the gritty greenback seems to be staging a comeback. Dollar strength by definition means weakness in non-dollar asset markets. Thus, if current trends continue, 2011 could see sentiment towards emerging markets like India ebb a little and bullishness on the US and the dollar surge. A number of things seem to drive this reversal in the dollar&rsquo;s path. For one, the US economy seems to be on a faster track to recovery than was anticipated earlier and may grow at 3.2-3.3 per cent this year and 3.5 per cent or even more in 2011, helped by the Obama administration&rsquo;s recent fiscal measures.

Dollar redux

It is a sign of the times that the visit of a head of state or government is increasingly viewed in terms of the billions of dollars of business it generates. So, not surprisingly, even reports on the visit of Russian President Dmitry Medvedev have focused on the $10-billion business generated by it. The number stands in contrast to the abysmally low bilateral trade of $5 billion. Understandably, much of the existing and new business is still between state entities in both countries, with a focus on defence and energy cooperation. Despite considerable diversification by India in sourcing defence supplies over the past decade, Russia remains the largest supplier of advanced weaponry to the Indian armed forces. Continuing delays in delivery of contracted defence equipment, sudden price escalations and unreliable supply of spares have begun to raise new questions about Russia as a defence equipment supplier.

Beyond a bear hug

As the European airplane manufacturer Airbus completes 40 years, few will doubt that it will continue to have its regular share of controversy. But, equally, most will agree that this unique experiment in transnational cooperation is an indisputable success. This is important at the current juncture when the whole process of European construction, which had reached a high point with the creation of the common currency euro, is threatened as the future of the currency has become uncertain in the aftermath of the global financial crisis. When storms hit mankind as it journeys on the road of progress, it has to celebrate success so as not to lose heart and keep striving for a conflict-free better world &mdash; the postwar vision behind the creation of the European Union. When Airbus was first formed through an alliance of three European countries &mdash; Germany, France and the UK &mdash; few gave it much chance of survival, not to speak of success.

The Airbus saga

Precisely two weekends ago a new Facebook group was launched &mdash; &lsquo;The best of JNU&rsquo; &mdash; and within a week 200 members joined in. &ldquo;Let us enroll 1800 by 1st January&rdquo;, wrote a hopeful member. Grey-haired middle-aged men and women, many of them grandparents now, are re-discovering old friends and reliving old days. &ldquo;The last I marched in a demonstration was against the Emergency,&rdquo; writes a group member, now an official of the government! Many of the members have not met each other since they left campus more than three decades ago, but they are all equally excited logging onto the internet and socialising with imagined communities. The JNU group is just one of many such internet groups that now help reconnect old friends. High school sweethearts long separated, now grandparents and sitting at home and surfing the net, are establishing contact and meeting long-lost friends and loves. Surely, the global level of happiness must have gone up.

Cyber groups, hidden persuaders

The gist of the reactions from various quarters to the Reserve Bank of India&rsquo;s (RBI&rsquo;s) discussion paper on entry criteria for new banks in the private sector, as published by RBI, shows that most would like RBI to ensure utmost transparency and discretion in the next stage of growth of Indian banking. Merely because India was saved from the ravages of the global financial crisis, on the one hand, and because the government of the day is committed to &ldquo;financial inclusion&rdquo;, on the other, does not warrant reckless liberalism in the criteria adopted for entry of new private sector banks. Utmost care must be taken to ensure that new bank licences are given to credible applicants. A variety of views have been expressed both on the issue of what measures must be put in place to address the objectives of financial inclusion, and on the issue of whether industrial houses should be allowed to set up banks.

Banking for inclusion

The flamboyant and voluble Minister for Commerce and Industry, Anand Sharma, declared war on the poor onion with the words, &ldquo;Not a single onion will be allowed to leave the country!&rdquo; Mr Sharma&rsquo;s bravado and the government&rsquo;s knee-jerk response to rising onion prices seem to have had a salutary effect but that may have been more because some dehoarding may have been done by speculators, because onion exports in April-November 2010 were, in fact, significantly below the

The inflation onion

The empowered group of ministers (eGoM) on fuel pricing is to meet this week to take a view on the price of diesel. Renewed fears about inflation, triggered by the spike in vegetable prices, may exert pressure on the government and force it to delay a decision. Of all the sources of fuel, diesel has the highest weight, of 4.6702 per cent, in the wholesale price index (WPI), which works as India&rsquo;s headline rate of inflation. Petrol comes second with a WPI weight of 1.09015 per cent, followed by LPG with a weight of 0.91468 per cent and kerosene with 0.73619 per cent weight. These weights are dated and would need changing, but there is no doubt that diesel still constitutes an important source of fuel for the economy with an exaggerated potential to impact inflation, given the pass through potential of diesel users in the transport sector. It is a measure of the mood of cynicism today that most observers do not, in fact, expect a decision to come out of the meeting of the eGoM.

The diesel dilemma

Official statistics in India have long been suspected to be no better than &ldquo;guesstimates&rdquo;, and in more recent years, the quality of Indian statistics has, in fact, declined. This despite the fact that the administrative machinery for data collection has been refurbished with the creation of the National Statistical Commission. Several expert committees have been examining the quality of data in different sectors of the economy and recommending improvement. A committee headed by economist and former Planning Commission Member A Vaidyanathan has now mooted a two-pronged strategy to revamp the procedure of compiling agricultural estimates. It involves greater use of satellite-based remote sensing technology and restructuring of the data collection machinery. For implementation of this strategy, the committee has suggested establishment of a wholly new entity &mdash; national crop statistics centre (NCSC).

Accounting crop output

The year 2010 has been good for India in terms of technology and 2011 holds the promise of taking the country one step forward in harnessing technology to make a dent in some of the problems that continue to challenge it. The most obvious sign of the robustness of India&rsquo;s technological capability is the way in which IT-ITeS exports have been able to pick up even though recovery in the developed world remains weak and much of the year has gone by amidst speculation whether there will be a setback through a double-dip depression. In fact, the revival in IT-ITeS exports indicates that businesses, particularly the large ones, in the developed world are using India&rsquo;s technology offerings to retain their competitiveness when they are weighed down by the extremely weak domestic demand.

Technology rolls on

Be it the Ayodhya judgement or the Binayak Sen verdict, or indeed many others around the country, India&rsquo;s lower courts are increasing the work of the higher courts, rather than reduce their burden. The sense of outrage that has greeted the verdict of the Raipur sessions court in Chattisgarh, sentencing Dr Sen, a medical doctor, to life imprisonment on the grounds that he had helped Maoist activists in the state, is a compliment to the health of liberal democracy in India, not a blot on it. A former and distinguished judge of the Supreme Court, Justice Rajinder Sachar, captured the popular response to the myopic and misplaced judgement when he termed it &ldquo;ridiculous and unacceptable&rdquo;. It is entirely possible that a higher court may overturn the decision. Such a reversal must, however, be based on sound judicial grounds rather than in response to popular sentiment.

Judicial populism

When India&rsquo;s first Prime Minister, Jawaharlal Nehru, called Hyderabad the republic&rsquo;s &ldquo;second capital&rdquo;, he had more than one reason for doing so. Of all the major metropolitan centres today, Delhi and Hyderabad are the only ones that were historically &ldquo;pan-Indian&rdquo; even before the arrival of the British. India&rsquo;s politicians who changed Bombay to Mumbai, Calcutta to Kolkata, Madras to Chennai and Bangalore to Bengaluru cannot, however, deny that these great cities were, in fact, built by the British. Delhi in the plains of northern India and Hyderabad in peninsular India were great pre-British urban centres. A second reason why Nehru dubbed post-Independence Hyderabad a second capital, with the president of the republic residing there for several weeks in the year at the city&rsquo;s Rashtrapathi Nilayam, was its cosmopolitanism. The city has always been home to a mix of people from different religions and regions.

State, city and city-state

After last November&rsquo;s disastrous mid-term elections and an unfavourable judgment on his prized health insurance law, US President Barack Obama has at least one reason to savour his annual Hawaiian break. He received an early Christmas present in the form of the ratification of the New Strategic Arms Reduction Treaty (New START) by the Senate on December 22. The implications of this are huge, both for Mr Obama&rsquo;s domestic agenda and global geopolitics. It may still be audaciously hopeful to view a move by both the US and Russia to reduce strategic nuclear weapons from 2,200 to 1,550 in seven years and subject themselves to international inspections &mdash; the broad objectives of New START &mdash; as a precursor to a nuclear weapons-free world.

Eagle's bear hug

India cannot sustain its 9 per cent annual rate of growth over the long term without a larger, wider and deeper industrial base. A bigger manufacturing sector is also required to absorb non-farm, semi-skilled labour and the growing number of first-generation educated high school students coming out of rural areas and small towns. There is no gainsaying that Indian manufacturing is yet to develop the solid foundations that would lead to consistently high growth rates witnessed in East Asia in the 1970s and 1980s and in China since the mid-1990s. While country-specific factors played a role in the spectacular success registered by the manufacturing sectors in those countries, a conceptually sound manufacturing policy is still very much a work in progress in India. The recent revival of industrial growth offers a ray of hope, but far more sunshine is needed for the sector.

Manufacturing policy

Incisive columns and editorial comment by top opinion leaders

Page 403 - Editorial Comment