26.02.2011

Politics & the Nation

• Rail budget is centred on West Bengal polls
• Railway Minister Mamata Banerjee showered goodies on her native land, promising new trains and projects ahead of assembly elections, but the cost of her populism is bleeding the finances of the network that is the country’s biggest employer.
• The firebrand politician from West Bengal said the government would introduce a new super-AC class of travel, consider running trains at speeds of 200 km an hour and launch a series of new trains, projects and collaborations, many in her home state.
• But the Railways has not raised fares for the 22 million passengers that use its over 7,000 stations or freight rates for the 2.5 million tonnes of goods it carries every day.
• The populist agenda, along with the heavy burden of higher wages because of the Sixth Pay Commission, meant that staff costs accounted for 42% of its expenditure. Its costs as a percentage of revenue, called the operating ratio, has risen to 92%, which analysts say is alarming.
• The railway budget for 2011-12 also announced plans to purchase 18,000 wagons, surpassing the current fiscal year’s record procurement of 16,500 wagons. She also said that work on dedicated freight corridors would be completed on schedule.

• Take a look at this op-ed which criticises the budget with considerable finesse.  A must read.

• How should India conduct itself in the context of rising Arab revolutions?
• This is very well answered by this op-ed in today's ET.  Worth a read.  But some excerpts:
• The first obligation of the government of India is to play its historic role as champion of emerging democracies in Arab societies. India has a bitter experience of tin-pot dictators from this region who always took pro-Pakistan and anti-India positions in the meetings of the Organisation of Islamic Countries.
• The government of India and every major political party should clearly understand that people are making their own history and India is expected to actively support the movement for democracy in the Arab world and not miss this opportunity, like in Myanmar where democrats were left alone to fight for themselves. The government and its foreign policymakers, in the name of the vulgar ‘Realist Theory of International Relations’ have followed a policy of engaging with any government of any country, even if that government is antipeople. This approach based on passivity has to be abandoned because India cannot afford to lose a great opportunity of engaging with the new leadership which would emerge after the dust has been settled.
• Further, India’s foreign relations with new democratic state systems should be guided strictly on the basis of an independent non-aligned approach.  India now has a tendency to toe the line of US imperialists while dealing with Arab countries without realising that American interests in that region are absolutely different from India’s. Our approach towards the new democratic wave of Arab societies has to be fundamentally different from that of the western countries. India should be prepared to respond to the Palestinian-Israeli dispute, which is going to become very hot after the tinpot dictators have been kicked out. The Manmohan Singh government should follow the Nehru-Indira Gandhi approach of an independent nonalignment policy while dealing with the changed situation in these societies.

• NALCO head arrested on bribery charges
• The Central Bureau of Investigation (CBI) on Friday arrested Abhay Kumar Srivastava, chairman and managing director of Nalco, his wife and two others on charges of accepting bribes from an unidentified person.
• The CBI raided the residences of Srivastava in Delhi and Bhubaneswar and seized unaccounted cash from lockers allegedly operated by him. Bhushan Lal Bajaj and his wife Anita are the other two people who have been arrested.
• The investigators, who had prior information about the transaction, laid a trap for Srivastava and his wife and arrested them at Maharashtra Bhawan in Delhi when they were receiving 10 kg gold and 29 lakh on Friday afternoon.

• Supreme Court rules that a case should not be decided by courts if the accused has no lawyer
• Judiciary cannot decide a case if an accused is not represented by a counsel, the Supreme Court has ruled in an important judgement.
• There have been instances when lawyers have been branded for taking up cases, like during Kasab’s trial and Jessica Lal case. The bar council in Srinagar too prevented its members from representing those accused in a sex racket case, not long ago.
• The Supreme Court asked courts across the country to appoint amicus curiae to provide legal assistance to accused persons before deciding criminal cases.
• The bench set aside the order of the Guwahati High Court, which had upheld the conviction of an accused without hearing the plea of his counsel.

Finance & Economy

• Survey sees India back on 9% growth path in FY 2012
• The annual Economic Survey is gung ho about GDP growth rising to 9% next year, and staying there in the medium term. Services (which now have a 57.3% share in GDP) will be the main locomotive of the economy. This, plus the coming demographic dividend, will offset many policy flaws and sustain fast growth. The Survey cites a new Index of Government Economic Power, showing India is now the fifth-biggest global economic power after the US, China, Japan and Germany, and is well ahead of Britain or France. Analysts may worry about fiscal deficit, but the Survey declares India is galloping down the road to fiscal virtue. Fiscal deficit in the first three quarters of this year was just 44.8% of the level in the previous year. The Survey says the ratio of consolidated government debt to GDP, which touched 79.3% of GDP in 2004-05, will fall to 68.7% by 2013-14 and 65% by 2014-15. The recent revision of GDP data shows we have underestimated true GDP for many years, and hence have overestimated fiscal deficit. This, plus high inflation this year (nominal GDP will rise 20.3% against the expected 12.5%), means the budget estimate of fiscal deficit at 5.5% of GDP now translates into just 4.8%.
• This in short is a summary of what the survey says.  Take a look at this graphic which presents the same in a more succinct form.  And if you have got the patience and time (you should have both) do take a look at the survey in full by downloading it from here.
• The Survey recognizes that growth depends more on skill development and innovation. It says patent applications are up from 17,466 to 36,812, and patents granted up from 1,911 to 16,061 between 2004-05 and 2008-09.

• The Economic Survey charts a welcome new course of informed discussion
• The 2010-11 edition of the Economic Survey gives up the document’s normal pretence of offering an insight into prospective government policy. It plumps for a discussion of the economy’s problems and possible policy options.
• Three things about the Survey stand out. One is the elaborate enumeration of assorted ills of the Indian economy -- some structural and some contingent on the recent crisis
• The second feature is integration of globalisation into the analysis of the domestic economy, instead of consigning it to the section on the external sector.
• The third remarkable feature is the clearheaded insistence that it is possible to design markets to serve the goals of poverty removal and inclusive growth.

• India Fifth in Global Economic Power
• In an interesting first, the Economic Survey 2010-11 measures the government’s ‘economic power’ or the ability of the government to project itself in the international sphere. The index is composed of four variables: government revenues, foreign currency reserves, export of goods and services and human capital and has been developed by the Finance Ministry for 112 countries over a 10 year span 2000-2009. It shows India in good light at number five in 2009 (up from number 10 in 2000), behind the US, China, Japan and Germany. The four variables capture the government’s ability to raise resources, its credit-worthiness and credibility in international financial markets, its influence on global economic activity and its representational strength or how much of the global economy, including its global manpower, it can claim to represent and includes a normative element .

• Captive port policy; what is it?
• The government is reportedly going to come out with a captive port policy.  What does it exactly mean?
• Through the policy, the government is likely to allot captive berths at major ports to private companies, which will enable them to utilise the given facilities exclusively for their own goods.
• The government is forced to think of this policy as the average turnaround time (the time ships have to wait before they get space to stop) in our major ports a 3.87 days in 2008-09 as against 10 hours in Hong Kong and two days in Adani Group promoted Mundra Port.

International

• West weighs action as Gaddafi digs in
• Muammar Gaddafi tried to tighten his grip on Tripoli as French President Nicolas Sarkozy called on him to resign amid reports that worshippers were being shot as they left mosques after Friday prayers.
• The prospect of civil war in North Africa’s biggest oil producer has pushed crude prices to a 2 1/2-year high, and led to calls for intervention to stop the worst violence yet seen in two months of spreading unrest across the Middle East and North Africa.

Language Lessons

• parlous: Adjective
• Fraught with danger
• eg: Given the cross connections and miscommunications that have dogged political discourse in that state and the parlous condition of the national postal and landbased telecommunications services in general, ...