Saturday, 15 November 2014

Modi effect, not RBI, tames food inflation (Sunday Guardian)

MADHAV NALAPAT  New Delhi | 15th Nov 2014
Senior officials say that food inflation has been moderated not by the high interest rate policy of the Reserve Bank of India (which in practice has boosted inflation and slowed growth), but by changes in policy carried out by Prime Minister Narendra Modi.
These include changes in procurement policy, as well as in the harnessing of technology for empowerment of genuine producers rather than financial and other middlemen. Even as RBI Governor Raghuram Rajan continued to effectively downsize the manufacturing base of India by a policy of super-high interest rates, Prime Minister Modi quietly used the interregnum between his Washington meeting with President Barack Obama and the G-20 summit in Australia to implement reforms in food procurement designed to reduce waste and increase market supplies, thereby lowering consumer prices. It was because of these reforms, officials say, that it was possible for India to agree to the WTO Trade Facilitation Agreement without any threat to the interests of genuine farmers, as distinct from food commodity speculators who are estimated to have collectively made windfall profits of $8 billion during just the second term of the UPA. The ten years when Manmohan Singh was Prime Minister, have been days of darkness for the common man, but "bahut acche din" for speculators and the international financial institutions assisting them. It needs repeating that where the UK and the US have collectively imposed fines of nearly $20 billion on such institutions for doing precisely the sort of trades and transactions commonplace in India, thus far the only response of the RBI has been to give such entities privileged access to its highest levels.
Modi has restricted MSP increases for wheat and paddy to an economically bearable Rs 50/qtl, which is a third lower than the UPA's 10-year average of Rs 75/qtl. He has also restricted the powers of state governments to announce bonuses for MSP, a step which has affected BJP-ruled states as well. Chhattisgarh, for example, added Rs 300/qtl for paddy, as did Kerala, while Rajasthan and Madhya Pradesh added Rs 150/qtl as bonus for wheat, all during the 2013-14 season. All this when these states had no need of the excess procurement, and "succeeded" only in driving up market prices for food grains because of reduced availability, even while buffer grain stocks rose to 49 million tonnes in FY 2014-15, or 133% higher than the required stock of 21 million tonnes. The wastage this has led to is regarded by a senior official as "criminal and incalculable".
Prime Minister Modi went further, by ignoring pressure from powerful agriculture mafias comprising commodity speculators and "mock" farmers (i.e. those who stay in the city, but operate giant agricultural operations for profit and for tax purposes). He limited the levy ratio on rice mills to 25%, thereby freeing more grain for the market. These steps have damaged the ability of hoarders and speculators to boost prices, and have led to a cooling off of rice and wheat prices in the market, which has nothing to do with the RBI's textbook reliance on monetary policy as a dampener to inflation, despite overwhelming empirical evidence to the contrary.
Senior officials say that there is "great chemistry" between Prime Minister Modi and US President Barack Obama, and that work on reconciling the positions of the US and India on the WTO standoff began immediately after the PM's meeting with Obama, subsequent to India's refusing to ratify the Trade Facilitation Agreement without ensuring food security safeguards for its poor. Officials said that "backroom negotiations in Geneva took place between the two sides", and that "Obama finally asked his team to agree to Prime Minister Modi's request for a permanent waiver rather than just a 4-year peace clause". This request had been conveyed by Modi to Obama in their September meeting in the White House. These officials say that the PM is keen to ensure that "other anomalies" get corrected, such as "outdated reference prices used to calculate subsidies". These prices have been arbitrarily fixed at 1986-87 levels that bear no relation to the speculator-boosted prices prevalent since Bill Clinton re-opened the doors to financial fraud in the 1990s that had been shut by President Franklin Roosevelt in the 1930s.
Senior officials say that they have been "energised by the innovative approach of Prime Minister Modi", which they compare to the "Can't Do Much" approach of his predecessor, and look towards success in other negotiations, such as crafting a stable and mutually beneficial relationship with China and winning India a permanent seat in the UN Security Council. They say that "Prime Minister Modi is looking at ways to ensure that India makes a significant contribution towards reducing climate damage, even while avoiding any damage to the country's growth prospects". The WTO deal, made possible by both the reforms initiated by Prime Minister Modi as well as the chemistry he shares with Barack Obama, is clearly only a first step in what these officials say will be "the long road to Middle Income status" for the people of India.

Ms Irani, India needs German, Chinese and Spanish (Sunday Guardian)

M.D Nalapat is the Editorial Director of The Sunday Guardian.
Union HRD Minister Smriti Irani, with FICCI Senior VP Jyotsna Suri (2R), US’ South Carolina Governor Nikki Haley (R), UK Universities Minister Greg Clark (L), releases a knowledge paper during the FICCI Higher Education Summit in New Delhi on Thursday. PT
When it was announced that Smriti Irani was being elevated to the Union Cabinet and given the Human Resource Development portfolio, to say that such a move was not universally hailed would be an understatement. The weeks ahead saw repeated references to her educational background, the presumption being that only a string of degrees would qualify an individual to be an effective HRD Minister. This despite the fact, that the country is littered with those carrying trainloads of qualifications, who are proving to be less than stellar in their work. Raghuram Rajan is an example. Despite — or perhaps because of — his academic pedigree, the Reserve Bank of India Governor has continued the high interest rate policy of both his predecessors, thereby ensuring that company after company be rendered unable to compete domestically or internationally, with several ending up in the non-performing asset books of public sector banks. There is much buzz about a "Harvard degree", with few pointing out that what is usually needed to acquire such a distinction is not IQ, but parents who have the financial means to spend more than $400,000 on their ward's education in that well-funded institution.
In contrast to the doomsday prophets, this columnist was glad that Smriti Irani was made the Union HRD Minister. Education in India needs to get modernised, and Minister Irani is certainly modern. Hence the expectation that she would bring at least a whiff of the 21st century into what is still a cram-filled 18th century educational process in India, a system that has stamped out excellence so effectively that no university in India comes anywhere near desirable standards of global excellence. A dull uniformity has been imposed across the spectrum of higher education, with almost no discretion given to universities in matters both academic as well as administrative. What is needed is to free higher education from micro-management, and convert the University Grants Commission into an institution, not focusing on control, as on coming up with innovative ideas by ensuring that those wedded to innovation and excellence occupy its highest offices rather than bureaucrats obsessed with detail to the exclusion of the bigger picture. Hopefully, Minister Irani will work on this, so as to fulfil Prime Minister Narendra Modi's agenda of "Minimum Government, Maximum Governance". In such a context, it was a surprise when the HRD Ministry abandoned — in midstream — the teaching of German in around 500 Kendriya Vidyalaya schools across the country, replacing that language with Sanskrit.
Sanskrit certainly needs encouragement, and a good way of doing so would be to set up an academy on the lines of the Goethe Institute, Confucius Centre or the Alliance Francaise, which would be tasked with teaching Sanskrit across the globe. Meanwhile, in India as in other countries, the decision as to what foreign language to learn should be left to the student rather than to the state. Most likely, the Goethe Institute will now look towards private schools (for example, the many run by the Catholic Church or by the Anglo-Indian associations) as alternative vehicles for the teaching of a language, mastery of which would enable tens of thousands of our youth to get jobs in German companies across the globe, thereby depriving the Kendriya Vidyalayas of an advantage. Instead of blocking access to the German language, what the HRD Minister needs to do is to ensure that facilities get created for school students to learn those foreign languages, which would help them get jobs, such as Chinese or Spanish.Additionally, facilities need to get created to teach Portuguese to those looking at migrating to Brazil, a country in need of teachers, nurses, engineers and other skilled manpower. Perhaps Russia could be tapped to ensure the teaching of Russian so as to ensure that more people from this country settle in that vast country of immeasurable potential.
Forcing choices on students by fiat is a style of governance alien to the philosophy of governance of Prime Minister Modi, and as the minister in charge of a portfolio crucial to the future of hundreds of millions of young people, Smriti Irani needs to not only avoid blocking German in schools, but adding to the mix Chinese, Spanish and other foreign languages of value in the job markets of the future, thereby giving students more, rather than less, choices in schools across the country.

Thursday, 13 November 2014

Nikki Haley’s India visit strategically important: MD Nalapat (NitiCentral)

NOV 13, 2014
South Carolina’s Governor Nikki Haley is on a 10-day trip to India with plans to boost foreign direct investment, jobs and tourism in her state. Haley and her delegation will be meeting business entities across New Delhi, Amritsar, Mumbai, Hyderabad and Chennai in order to map South Carolina as an investment arena and boost infrastructure.
Prof MD Nalapat says this trip could be an important opportunity for Indian knowledge business and infrastructure to provide for Haley’s investment plans in her state.
He adds that this visit is crucial to reinforce India-US bilateral ties as two business systems like India and US having tremendous synergy with each other, are a natural fit to each other.

Wednesday, 12 November 2014

Baghdadi dead or alive (NitiCentral)

According to news report ISIS Chief Abu Bakr al-Baghdadi is dead. Listen to Prof Nalapat who says the report can be true as no video of Baghdadi has surfaced. Baghdadi, was “critically wounded” in the American-led air strike that targeted the western Iraqi border town of al-Qaim. He feels this will be a big blow to the Islamic State. And on the question of Al-Qaeda and ISIS joining hands is considered, they have always been one. Al-Qaeda provided them with arms and ammunition.

Saturday, 8 November 2014

Barack Obama needs India, and how (Sunday Guardian)

M.D Nalapat is the Editorial Director of The Sunday Guardian.

Obama needs to create a synergy between the US and India in healthcare , in the production of affordable medication, treatment and transcription.
US President Barack Obama hosts a luncheon for bi-partisan Congressional leaders in the Old Family Dining Room at the White House in Washington, on Friday. REUTERS
That Barack Obama is among the most cerebral of US Presidents is a given, and not merely when compared to his predecessor. His books reveal a brilliant mind, but one clearly focused on a single goal: the promotion of the career of the child of a Kenyan father and a US mother. Each paragraph, almost each word, has been chiselled in order to show the current US President in the hues in which he would like the world to regard him, as the idealist who has beaten the odds to bring light where till now there has only been darkness. Tracking Obama in his policy peregrinations and in his statements, it is clear that the only thing he holds dear is his own career. Now that he has won what is still the most coveted responsibility on the globe, his attention needs to get focused on another — albeit related — objective, which is to ensure a legacy which would put him in the top tier of US Presidents, together with (in the view of this columnist) George Washington, Franklin Roosevelt, Abraham Lincoln, Lyndon Johnson and Richard Nixon. Why the latter two? Because the Civil Rights Act would never have been passed without a decade or more of turmoil on the streets without Johnson, although all that he finally did was to replace the agitation for civil rights with that designed to end the war in Vietnam. As for Nixon, he upended global geopolitics by embracing China in order to smother the USSR. While Ronald Reagan is usually given credit for outspending Moscow, the fact is that it was Nixon's use of Beijing against Moscow which terminally weakened the world's other giant communist state.
The Republican Party claim that it was the healthcare which derailed President Obama's popularity, is wrong. The defeat of Democratic candidates for Senator, Governor and House Representative in the just-concluded polls is indicative of the fact that President Obama erred in accepting the nostrums of the financial industry.
This resulted in a swathe of foreclosures of homes in a manner which was nothing less than inhuman. At far less cost that the subsidies meted out to a few banks and financial institutions, most US homeowners could have held on to their homes, for example, if the US government had taken care of interest payments for a few years at mandatorily reduced levels and given breathing time for homeowners to either find the money to pay off their mortgages or to sell their assets at a price which reflected not the distress of 2008 but the recovery of 2011.
By throwing millions of such people to the vultures, who held their mortgages, Obama showed that the concern for the underprivileged that he constantly wore on his sleeve would not last an encounter with Wall Street. It was only towards the end of his first term in office that President Obama retraced his policy of Clinton-era backing for the financial industry, but not by enough to make a substantive difference. The disaster of housing will be followed by another on health, unless Barack Obama accepts that the solution to his legacy (of affordable healthcare for all) vests with India. He needs to stop seeking to drive away from US and other markets the products of the Indian pharmaceutical industry, or to pressurise governments in Delhi into making concessions which would assist pharma giants based in Europe and the US to ensure that thousands of the poor get killed each month, because they cannot afford medicine at the cost offered. If Barack Obama succeeds in killing the generic drugs industry in India and thereby boost prices of medicines substantially, it is his own budget which would be a prime victim. Rather, Obama needs to create synergy between the US and India in healthcare, not simply in the production of affordable medication, but in other steps such as treatment and transcription.
Thus far, he has acted as an agent of pharma giants, the way in which he took the line of financial giants in the past. Only a US-India healthcare alliance can ensure that "affordable and universal" healthcare can be both affordable and universal in the country whose voters have just administered a severe electoral rebuke to Barack Obama and his tango with billionaires, rather than with the millions who stood by him in two presidential elections.

Friday, 7 November 2014

Video: NewsX Nation at 9: #DawoodTrail - India loses track of enemy no. 1

Published on Nov 7, 2014
Intelligence Bureau officials have failed to trace Dawood's whereabouts since he was shifted from Karachi to Afghanistan-Pakistan border, if sources are to be believed.

Sources said that Dawood is untraceable ever since he has been shifted to Afghanistan-Pakistan border by the Pakistani intelligence officials. The IB has failed to trace his location at the border.

A source said that intelligence agencies are worried that Pakistan’s intelligence agency ISI has shifted Dawood to a safe haven near Afghnaistan-Pakistan border or outside the country.

India is going to raise the issue of fugitive underworld don at Interpol’s General Assembly which will be held in Monaco. Union Home Minister Rajnath Singh and CBI director Ranjit Sinha will represent the country.

A source in the MHA told that India will seek cooperation with other countries to nab the underworld don. Rajnath has already said that government will put all its effort to bring back country’s most wanted terrorist. 

Amnesty needed to bring back 'black money' (7.11.2014, PO)

Video: NewsX Uttar Pradesh Transport minister’s ‘family junket’ to Brazil?

Published on Nov 7, 2014
Uttar Pradesh transport minister Durga Prasad Yadav has embarked on a week-long ‘study tour’ to Brazil along with his family.
Sponsored by the Association of State Road Transport Undertakings (ASRTU), a body with country’s all state road transport corporations as its members, the tour aimed at studying the Brazil’s transport system had just three slots (from UP State Road Transport Corporation) for the state.

Wednesday, 5 November 2014

PM Modi’s reforms initiatives must for collaborative growth: Prof MD Nalapat (NitiCentral)

The Indian economy has transformed but many social problems remain to be adequately addressed. PM Modi and his Government, has a clear mandate  which is now working towards economic growth that benefits all. But when it comes to public services in the country, identifying and implementing the right solutions is a challenge.
Speaking to Niti Central, Professor MD Nalapat says the most important change that PM Modi has brought in peoples’ minds is that the Government who is not solely responsible for the country’s growth. People of the country need to be involved in the growth story to make a difference.
With possibilities of a makeover of the delivery system of services like education, health, urbanisation, Professor Nalapat adds that the structure of decision-making in India has been cumbersome since long. We need transparency in public services delivery system and procedures must be simplified. The colonial assumption that all wisdom is concentrated in the levers of power and authority, should be shunned. The Government needs to involve civil society to work out solutions, encourage citizens to come forward. A civil society with the right tools will help make India a super power.

Video: NewsX Nation at 9: Violence halts Srinagar

Published on Nov 5, 2014
Anger over the killing of two schoolboys in Army firing on Monday evening spilled over to the streets on Tuesday with stone-throwing protesters clashing with the police, forcing the authorities to clamp curfew in several parts of downtown Srinagar.
In Nowgam, the home of the slain boys, clashes took place through the day.