17.02.2011

Politics & the Nation

• Is right to privacy a constitutional right?
• It is not one which is mentioned in the Constitution explicitly.  But the Supreme Court in a 1993 judgement held that Article 21 of the Constitution of India does include, among other things, the right to privacy.  

• Coalition Dharma is compromise: PM
• Prime Minister Manmohan Singh on Wednesday confessed that coalition compulsions had forced him to make compromises, as he sought to counter the perception of a drift in his government battered by a succession of corruption scandals.
• The government has been on the back foot after A Raja, the telecom minister from coalition ally DMK, was forced to resign and subsequently arrested amid allegations of massive irregularities in allocating airwaves for mobile phones.
• Singh admitted that despite being the prime minister, he did not feel empowered to choose his team of ministers.

Finance & Economy

• How did the small-ticket reform help India?
• It has been a constant refrain among economists that the country's budgets have lacked big-ticket reforms.  So how did the country pull it off with small-ticket reform?  Take a look at this op-ed from one of our favourites -- TT Ram Mohan.
• One area in which ‘small-ticket’ reform has clearly been a blessing for the economy is disinvestment of public sector undertakings (PSUs).  It is contended that the sale of government assets cannot solve fiscal problems of a structural kind, it can only be a palliative. This is indeed true, but the sale of government assets helps manage the fiscal problem until the underlying structural problems are addressed. It spares the government the need to effect drastic adjustments in revenues and expenditure that could be politically unpopular or infeasible.
• The other areas of small-ticket reform and their benefits: The gradual movement towards full convertibility and the cautious approach towards foreign bank expansion helped stave off a banking crisis.
• The phasing out of reduction in import duties over a long period gave Indian firms more time to adjust to competition and reduced the adverse impact on banks.
• The measured reduction in subsidies on petroleum and the reluctance to address other subsidies have ensured that economic progress was not derailed by popular unrest.

• Is the country sitting on humongous resources of shale gas?
• Appears so if the reports are to be believed.  Look at this excerpt from today's ET: India’s first natural gas well targeted at shale has been drilled by ONGC and the whisper numbers are already in. The well was a success and geologists and engineers are already pegging the country’s resources at somewhere between 600 and 2,000 trillion cu ft (tcf) of potential gas. That is equal to about two centuries’ worth of gas at the country’s current consumption rate.
• Unbelievable?  Look at this report.  It's a real mood elevator.

• Coping with $100-a-barrel oil  (Excerpts from an article by RS Pandey, former Petroleum Secretary)
• Brent crude went past $100 per barrel early this month, triggered by uncertainties in the Arab world. The trend towards $100 became clear as demand rose on surer signs of global economic recovery. Further, with Opec firm on holding output level at the current level, prices are going to stay at $100 or beyond for the next year or so.
• This will have severe impacts. The current account deficit will come under more pressure as the country’s oil imports are set to rise from today’s 80% to 92% in 2030 under the current policy framework. Product prices at retail level will spike if they are aligned with the market.  The price hike will hit consumers, over two-third of whom live on less than $2 a day. Conversely, keeping prices in check through subsidy has implications for the fiscal deficit.
• How does one grapple with this situation?  
• Scrap import duties, as was done in 2008, and replace ad-valorem sales tax with specific rates corresponding to a particular level of crude price, say, $60 a barrel.
• Secondly, a transparent and reasonable mechanism of burden-sharing by upstream companies is required. It may be reasonable if upstream PSUs contribute 60% of the incremental realisation when crude prices are above $60 and 80% when crude is above $80. The downstream companies should contribute 50% of the incremental spread — the difference between international crude and product prices —beyond $7 a barrel and the contribution from the oil companies may subsidise diesel. With these stipulations, diesel prices may also be freed. The impact of these measures on petrol and diesel prices will be marginal, if at all. Henceforth, with every $1 rise in international product price, the domestic petrol and diesel prices will go up by only 30-35 paise per litre. The government can adjust excise duty rates to provide relief to consumers if international prices rise sharply.

• An excellent write up on black money
• Look at this.  It is a must read.

Sport

• A scathing attack on our cricketing ambitions
• One cannot help but fall in love with this kind of criticism.  Writing about a game that is so close to millions of Indians, Surendran lampoons all of us in the name of cricket.  An interesting read.

Language Lessons

• avuncular: Adjective
• Resembling a uncle in kindness or indulgence; Being or relating to an uncle
• trundle: Verb
• Move heavily