Making political pawns of ‘reform’ and ‘aam aadmi’

Discussion in 'Politics & Society' started by Ray, Sep 30, 2012.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    Making political pawns of ‘reform’ and ‘aam aadmi’

    The frenetic overuse of words like ‘reform’ and ‘aam admi’ has stripped them of any worthwhile meaning. In their present denuded form, they are made to stand in for so much that they represent almost nothing.

    Let’s take, for instance, ‘reform’. A historical overview shows reform wasn’t originally supposed to stand only for economic liberalization or restructuring of the economy. Its dictionary meaning has a much wider reference ambit, relating to the ‘improvement or amendment of what is wrong, corrupt, unsatisfactory etc’. That, logically, would extend beyond the economy to political, social and cultural relationships.

    The present debate around ‘reform’ has attributed each and every ill that has befallen this country to a single source: an outdated economy. From the arguments it would seem that the panacea to every economic malaise is the same: reforming all sectors of the economy. This uncomplicated assumption is hardly any different from the vulgar Marxist tenet which holds that reforming the base — that is the economy —automatically creates a vibrant superstructure on which rests a country’s cultural and social edifice. Implicit in this ‘economic fundamentalism’ is the belief that all other relations in society —gender, caste or region— are secondary to economic ones, or can be transcended by them.

    This tendency to suggest that a gamut of different problems has only one main solution has pushed to the margins interventions that were once believed to be crucial for an energetic renewal of society. How did the word reform enter popular consciousness in the first place? One of its early uses was in the 18th century, during Christopher Wyvill’s Association movement, which believed in the importance of ‘parliamentary reform’. An English cleric and landowner, Wyvill’s moderate movement for reforms is believed to have had an influence on the 19th century Great Reform Act, Penal Reform League and the Chartist movement. Being a ‘reformer’ in 19th century England meant being part of a certain political group, campaigning for enfranchisement, liberty and better social conditions.

    India’s own history of reform movements is rich and varied. The movement led by Jyotirao Phule in 19th century Maharashtra impacted every aspect of life – from caste, education and agriculture to widow empowerment. In Bengal, Ram Mohun Roy’s diverse contribution to social reform — from founding the Brahmo Samaj to efforts to abolish sati— earned him a place among pioneering social reformers. There were countless others scattered across the country, who defined reform in all its diversity, separating it from ‘revolution’, which meant a fundamental rupture with the existing system. During the high-point of Nehruvian India, Hindi cinema too had a reformist, vision, often addressing themes of national integration, social justice, equality and universal rights. Raj Kapoor’s cinema was exemplary in this regard.

    Over the decades however, and since 1992 in particular, there’s been a shift away from this more inclusive definition of reform. A logical culmination of this shift can be perceived in the response of many to someone like Narendra Modi. His pro-reform stance seems to have neutralized his controversial role in the 2002 Gujarat riots, to the extent that he is now even being talked about as one of BJP’s prime ministerial candidates in the 2014 general elections. This shift is, in part, a logical product of economic determinism.

    If reform has been reduced to less than a fragment of its original meaning, so has been the word ‘aam aadmi’. Every move for and against a policy is executed in the name of ‘the people’, who appear to have no identifiable markers of their own. The aam aadmi is just a statistic. So, if the Prime Minister pushes for FDI in retail in the name of the aam aadmi, Mamata Banerjee opposes it for exactly the same reason. This phenomenon isn’t new. In the past revolutionaries have used the terms ‘the people’ or ‘the nation’ to denote a general mass in whose name they work.

    But this idea of ‘reform’ is also changing; especially since the financial system collapsed in 2008, which still has the world bleeding from its devastating impact. In recent times, in a wealthy country like Germany, a study sponsored by Bertelsmann Stiftung revealed that eight out of ten Germans are in favour of a new economic order, with more importance being placed on social indicators. Clearly, the consensus on ‘reforms’ and what is good for ‘the people’ has broken down in the countries where it originated in the first place.

    In India however, we seem to be reluctant even to begin an informed debate which draws our attention to rising inequalities, the continued impoverishment of weaker sections of society, or the destruction of the environment. For that to happen we need to reclaim the other meanings of words like ‘reform’ and desist from using the aam admi like an inert pawn in our grand scheme of things.

    Rough Edges : Monobina Gupta's blog-The Times Of India
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Infrastructure crisis endangers future growth

    Without infrastructure, an economy cannot grow. Industry and services cannot expand without highways, electricity, ports and airports, rail links and pipelines. The 12th Plan (2012-17) projects infrastructure investment of a trillion dollars.

    Alas, infrastructure has hit a wall, and been knocked semi-conscious. This has seriously undercut India's future growth potential. No remedy is in sight.

    The government claims India is a global leader in public-private partnerships in infrastructure. The private sector financed 36% of infrastructure in the 11th Plan (2007-12), and is expected to finance fully 50% in the 12th Plan. This is now a pie in the sky. Corporations that charged into this sector have suffered heavy losses. They expected a gold mine, but found only quicksand. They have been hit by financially disastrous time and cost overruns.

    Infrastructure was historically funded almost entirely by the government. Cost overruns were endemic, averaging a phenomenal 61% back in 1991. These were financed by grabbing more taxes from the public or by printing money.

    However, these options are not available to corporations. Infrastructure requires heavy loans, often twice as much as equity. Such loans have a fixed repayment schedule. If a project is completed on time, revenue from the project will finance the repayments. But if there are delays of months or years, the project is squeezed badly. It's even worse if projects are unable to operate (such as 30,000 MW of power projects stranded without fuel) or suffer from sudden changes in environmental regulations (as in Hindustan Construction's Lavasa township) or from outright cancellations (as in the scam-ridden 2G telecom case).

    Five years ago, investors were pouring money into infrastructure companies, and their share prices skyrocketed. Everybody thought these companies were entering a golden period. This included politicians, who demanded huge kickbacks (the 2G scam is only the tip of the iceberg). The companies paid up, confident that their returns would justify kickbacks.

    Today they are in financial straits, and their stock market prices have crashed. GMR InfrastructureBSE 2.48 % (which runs Delhi and Hyderabad airports, apart from many power plants) is down from a peak price of Rs 131 to just Rs 24. It lost Rs 94 crore in the April-June quarter. The CAG believes that GMR has been gifted enormous sums by a sweetheart deal for the Delhi Airport, but there is no sign of this in its accounts.

    GVK Projects and Infrastructure (also in airports and power plants) is down from a peak price of Rs 85 to Rs 14 today. It lost Rs 64 crore in the last quarter, and has now lost money five quarters in a row.

    Lanco InfratechBSE 2.03 % lost a phenomenal Rs 441 crore in the last quarter and cannot repay its loans. Its share price is down from Rs 84 to Rs 14. Another group company, Lanco Industries, has lost money in three of the last four quarters. Hindustan Construction's price has crashed from Rs 132 to Rs 17. It suffered a staggering loss of Rs 222 crore in 2011-12.

    Reliance PowerBSE 0.10 % is down from Rs 500 at the time of flotation to Rs 97; Reliance Infratech is down from a peak of Rs 2,584 to Rs 545; and Reliance Communications is down from Rs 820 to Rs 65. Other telecom companies have also suffered: Idea Cellular is down from a peak of Rs 157 to Rs 85.

    Infrastructure crisis endangers future growth - The Economic Times
     
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  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    Freedom from free power

    The favourite avocation of many a politician is to loot the treasury and indulge in giveaways, like there is no tomorrow. The favourite tool for doing so is free power. Keshubhai Patel seduces farmers with free power in perpetuity, which will wipe away the handsome gains made by Gujarat through exemplary power sector reforms via the "Jyotigram" program; Ashok Gehlot has promised a freeze in power tariffs for five years; YSR's first act after assuming power was to give away power free, thereby wiping off the decade-long gains, made through prudent reforms by Chandrababu Naidu.

    Mexico, faced with a similar economic circumstance, undertook the first variant of this reform. All tube-wells were metered using smart meters, and farmers are charged 70-80% of the market price for power. In Gujarat, 55% of tube-wells are metered and farmers pay Rs 0.50 to 0.70 per unit vs Rs 6 per unit market rate -- another variant.

    A r ecent study by World Bank and International Water Management Institute ( IWMI) led by Mohinder Gulati, Tushar Shah and the author takes this to the next level of reform. The argument is simple yet powerful: upto a preset quota (based on current consumption levels or land holding) the farmer pays nothing. Once he crosses it, and for this every connection needs to be metered, they will pay the market rate. If they consume less than the preset quota, the government will hand them cash as an i ncentive.

    The research exposes the 'vicious cycle' nexus between groundwater and power and shows how to convert it to a virtuous one. Indian agriculture is critically dependent on groundwater irrigation, primarily through electrification of tube-wells. By 2010, tube-well irrigation covered about 35 million hectares. Virtually all agricultural power consumption, comprising 21% of national consumption, is used to extract groundwater. In 2004, 29% of groundwater blocks were in the semi-critical, critical or overexploited categories, and if the current trends continue, 60% of all aquifers in India will be in critical condition by 2025. The alarming condition of groundwater resources is not the only adverse effect of the energy-groundwater nexus: the supply of free or cheap unmetered electricity to agriculture has damaged power utilities' financial performance and severely eroded customer service, infrastructure maintenance and investments required to meet the exploding demand. Sector losses in 2008 were estimated at Rs 27,000 crore per year and cumulative 'real' losses of utilities stand at around Rs 200, 000 crore.

    Consultations with farmers, power sector staff and state officials in Punjab, Karnataka and Andhra Pradesh have converged to a realization that the real game changer would be to deliver subsidy directly to the farmers. Under the proposed scheme, farmers would choose between the old system of limited hours of free supply or the new system of longer, more convenient hours of free but fixed quantity of power supply. The farmer is assured an annual entitlement of electricity in kilowatt-hours linked to the land-holding, groundwater conditions, cropping patterns and other agricultural needs. The proposed scheme has four key elements: First is feeder segregation which quickly improves power supply to the rural consumers to improve the quality of life in villages (household lighting, education, entertainment, small appliance use), and generates opportunities for off-farm and non-farm enterprise. It also allows 'smart' rationing and synchronization of farm power supply with agricultural operations. Feeder segregation would also help make the new scheme optional at feeder level, and increase supply hours on feeders that accept the new scheme.

    Se cond, land-holding-linked power subsidy entitlement assures an annual entitlement of electricity in kilowatt-hours. Electricity requirement estimates for existing agricultural operations would be prepared and finalized. To gain farmers' trust, the entitlement should be purely "optional".

    Third, smart meters with online readability is a well-established mobile network technology and cost-effective for metering and billing. Meters would enable farmers to control their pump-sets and power use remotely using cell phones. Farmers would receive information on the power feeder supply and on their power consumption and billing. With these farmers would control their own subsidy use and savings.

    Lastly, incentives for power utility employees are critical for a sustained implementation of the scheme. The team managing the rural feeder would have their incentive linked to technical losses and bill collection. At the district level, incentives would be paid for reducing technical losses, and improving billing and collection. At the corporate level, incentives would include stock options for all employees, divestment of shares to employees, and listing the discoms on a stock exchange. Economics 101 taught us that there is no such thing as a 'free lunch'. It is high time we educated our rapacious politicians and the gullible 'aam-aadmi' that there is no such thing as free power either. The writer is an IAS officer. Views are personal


    Infrastructure crisis endangers future growth - The Economic Times
     
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  5. Ray

    Ray The Chairman Defence Professionals Moderator

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    The above three posts gives an interesting perspective of how Indian economy is caught in the Gordian Knot from which breaking free is a difficult proposition leading to chaos of being neither here nor there.

    Can this type of a situation help fuel India's aspirations?

    The aspirations being Social, Political and Economical.
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    WHY REFORMS ARE BACK

    - A reforms agenda born of economic conviction has few takers


    [​IMG]

    Purposeless battle
    There is a singularly purposeless battle being fought on television and the pages of the print media which can be given a simple title: ‘remember’. Remember what an approach paper of the erstwhile National Democratic Alliance said about foreign direct investment in retail in 2002? Remember the pronouncement of the Bharatiya Janata Party’s vision document on the same subject in 2004? Remember what the then leader of Opposition, Manmohan Singh, wrote in a letter to a retail trade organization in 2002? Remember what Arun Shourie said in Parliament around the same time? And square it with what he is saying now. Remember the assurance given to Parliament earlier this year by the then finance minister, Pranab Mukherjee, about ‘consultations’ preceding any move to permit foreign capital in retail trade? And so on.

    Consistency being the virtue of little minds, the only discernible winners in the ‘Remember’ game happens to be communists, Mamata Banerjee and functionaries of the Rashtriya Swayamsevak Sangh who have kept away from electoral politics. Apart from them, almost every mainstream party, be it the Congress or the BJP, stands guilty of inconsistency or, as the breaking news scroll on TV would have us believe, ‘doublespeak’.

    ‘There is no inconsistency,’ those charged with the offence will doubtless argue, ‘there was a context to the earlier stand.’ That is stating the obvious. Every position and every political move always has a ‘context’. When the BJP cosied up to FDI during the NDA years, it did so because it imagined the timing was right: India was on a high and the prime minister, Atal Bihari Vajpayee, was dreaming of a sustained 10 per cent growth that would keep the alliance in power for the foreseeable future. When the Congress opposed the 2002 initiative, it did so because it believed it would expose the saffron party’s swadeshi pretensions and highlight its elitist orientation. Today, the Congress wants a rash of FDI initiatives because it seeks to reassure global investors that India hasn’t lost the plot. And the BJP is back to its swadeshi ways because it is convinced that ‘reforms’ are just a ploy to divert attention from the Congress’s record of corruption and fiscal mismanagement. Additionally, there is the BJP’s loyal base of small traders in the Hindi heartland to cater to.

    There is one overriding message that flows from the transition from correctness to correctness: political parties (with some dishonourable exceptions) are not committed to non-negotiable economic philosophies. This by itself is not such a bad thing. India’s experiences with economic experiments based on ideologies that have ostensibly been adapted to Indian conditions have not been encouraging. The socialistic path, for example, had run out of steam by the late 1960s when India became a third-rate, shortage economy that lived a ‘ship-to-mouth’ existence. Yet, the formal recognition that it was time to change course didn’t happen till 1991, although Rajiv Gandhi did make tentative moves in that direction.

    Was September 2012 another 1991 moment, as the prime minister hinted in his bland address to the nation? The Confederation of Indian Industry and some other industry bodies seem to believe so, and they have extended enthusiastic support to the ‘reforms’ agenda. Unfortunately, the evidence isn’t so conclusive.

    For a start, it is pertinent to ask why the United Progressive Alliance government slept over much-needed reforms for a full eight years? Manmohan Singh inherited an economy that was well poised to benefit from the business-friendly measures and the structural reforms, including fiscal consolidation, initiated by the Vajpayee government. For nearly four years, the UPA-1 regime wallowed in the positive fallout of these steps. It shifted the government’s priority from the creation of infrastructure to the creation of a welfare net for the aam aadmi. The total quantum of subsidies, for example, rose from Rs 57,125 crore in 2006-07 to Rs 2,16,297 crore in 2011-12. The fiscal deficit rose from 3.3 per cent of the gross domestic product to 5.8 per cent in the same period. At the same time, the UPA halted and indeed reversed the NDA bid to roll back the frontiers of the State. Most important, the NDA government’s attempt to facilitate entrepreneurship and make life easier for business was abandoned. The term ‘reforms’ disappeared from the official vocabulary and was replaced by a new word — ‘entitlements’.

    The shift in the strategic thrust of government was given a resounding thumbs-up by the electorate in 2009. A post-mortem of that election suggests that many of the UPA’s populist measures, notably the introduction of the National Rural Employment Guarantee Act, the generous waiver of loans to farmers and the freeze on prices of petroleum products helped the Congress upstage a disoriented BJP which, in any case, had dialled a wrong number on the nuclear accord between India and the United States of America.

    The UPA’s re-election in 2009 also led to a strange consensus among the entire political class. While it was acknowledged that India had changed unrecognizably since the liberalization process began in 1991, the political class arrived at the simultaneous conclusion that reforms and market-friendly policies do not and cannot win elections. The lessons of the NDA’s failure to secure re-election in 2004 through its ‘India Shining’ theme were imbibed by all parties, as were the implications of the UPA’s victory in 2009 on a populist plank.

    The BJP responded by shifting tack from aspirational politics to espousing ‘good governance’ which covered a multitude of approaches. These ranged from Narendra Modi’s relentless quest for higher growth through entrepreneurship and infrastructure-building to Shivraj Singh Chauhan’s perusal of efficient Keynesianism. An invitee to a recent conference of BJP chief ministers was struck by how difficult it was to achieve a measure of consensus on national economic priorities.

    On its part, the Congress, which always carried the inheritance of an over-burdened State, thought of economic restructuring in two ways. First, it was justified as a measure of expediency to stave off a crisis. Alternatively, for the more cynical, a measure of extra space to the private sector was perceived in terms of cronyism. Just as the public sector had also served as a means of patronage and a nest egg for loyalists, the private sector and, indeed, foreign capital, began to be seen as a milch cow. The commodities boom and the sharp rise in the value of real estate fuelled these tendencies and turned growth into greed, as did the maze of clearances an entrepreneur had to negotiate.

    Over the past two years, industry bodies, India-watchers overseas and the ratings agencies made ‘policy paralysis’ and the absence of reforms the focal point of their dissatisfaction with UPA-2. However, in spite of the prognosis of a crisis of monumental proportions, it is significant that ‘reforms’ had slipped away from the lexicon of the political class. Its abrupt reappearance a fortnight ago had much to do with a fear of the fiscal deficit running riot, the rupee sliding further and corruption becoming a battering ram against the government. The government needed a short-term agenda to talk up the market and pool resources to fund a food security bill and a possible universal healthcare scheme in next year’s budget. A reforms agenda born of economic conviction has few takers.

    This, indeed, is the problem the UPA-2 has to confront. It needs to talk reforms to instil confidence among investors and the creamy layer of the middle classes. Yet, its understanding of politics indicates that only sops, hand-outs and populism are electorally viable. Unless the mind of India undergoes a miraculous transformation, Manmohan Singh has only the smallest window of opportunity before his reformism is subsumed by political common sense.

    The Telegraph - Archives
     
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  7. Ray

    Ray The Chairman Defence Professionals Moderator

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    The posts before this are all connected with the sad state of affairs of our country, basically because of the maladministration and total lack of economic vision.

    Whatever be the reforms, it somehow does not instill confidence that the Govt will be capable of delivering.

    There is no doubt that tough economic measures have to be taken, but come nearer the election time, populist sops will be thrown in, in abundance.

    Already, the Cabinet has approved the Food for Security and will table it in the Winter Session. It will be another cockananny scheme and as badly thought through as all Bills this Govt has tabled leading to total chaos.

    From where will the money come and how will it be implemented?

    There is the PDS already which is a cock and bull affair.

    Where will this Food Security fit in with the PDS which is riddled with corrupt practices?

    Too much of half cocked populism or the other extreme of being draconian is the signature of this Govt.

    There are a whole lot of things going on which are basically economic issues.

    But what happens is that when under 'Economy', the economy aspect is discussed with little of the social or political fallout.

    The economy is in a mess and there is no doubt there are ways how it can be resuscitated.

    However, worse that the economy of the country, it is the rudderless meanderings with knee jerk reactions which is being made political capital of, by not only the domestic political players, but international as well.

    It is dangerous times politically and socially and we are not debating this issue.

    That is why I wanted to emphasise this issue of political will and social responsibility to seek what the future holds for us.

    What will 2014 hold up for India's future?
     
  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    Fatcat obsession: We need reform for India Uninc, not India Inc

    by R Vaidyanathan

    Prime Minister Manmohan Singh, in his address to the nation on 21 September, has clearly enunciated the need for reforms to achieve the desired economic growth and not go back to the situation obtaining in the early nineties. Unfortunately, his focus is on reforms which are dictated by US business interests and supported by local crony capitalists. The latter occupy a small space in our economy but their voice is loud since they control all major media and have effective lobbies in Delhi.

    If we look at the structure of our economy, we find that nearly 20 percent of GDP is contributed by the government and another 18 percent comes from agriculture, which is also in private hands. The corporate sector, which gets a regular audience with the Prime Minister, accounts for just around 15 percent. The rest, which include partnership and proprietorship firms (called non-corporate businesses), constitute more than 45 percent of our GDP. (Source: National Accounts Statistics, CSO-2011).

    In the US, the share of corporate business is more than 75 percent in GDP.

    In India, the share of non-corporate business even in the manufacturing sector is nearly 50 percent.

    As for services, which includes sectors such as construction, trade (wholesale and retail), transport (other than railways), hotels and restaurants, real estate, and other services (professional), the share of the non-corporate sector is more than 70 percent; these activities are the fastest growing activities with more than 8 percent compounded average growth rate in the last decade. These are the drivers of our economic growth.

    In savings, households contribute more than 70 percent of our domestic savings — and domestic savings is the prime driver of our investment and growth. In the case of savings data, households include the non-corporate sector.

    What this means is simple. The main thrust of our reforms should be focused on our non-corporate sector, but this is the sector that faces the twin devils of credit starvation and corruption (the result of unchecked inspector and permit raj). Even though the non-corporate sector is fastest growing, its credit needs are not met by the banking sector but by private moneylenders and their cost of borrowing is as high as 5-6 percent per month — that is, around 70 percent per annum.

    The share of the non-corporate sector in bank credit, which was nearly 60 percent in the early nineties, has come down to 36 percent in 2011, showing a consistent decline. The share of the corporate sector has gone up from around 30 percent to 44 percent and that of the government from 10 percent to 20 percent.

    In other words, the most productive and growing sectors of our economy are starved of bank credit, forcing them to depend on moneylenders and other non-bank sources. The crony capitalists who default on bank loans get a larger share of wasteful lending. The solution to this problem — of credit starvation in the most dynamic sectors — is to create a separate body to monitor the non-bank financial sector and free it from bureaucratic clutches.

    Not only that, the non-corporate sector also pays huge sums as bribes — sometimes as high as 10-15 percent of its gross turnover. So the misery index of small and medium businesses in India is a combination of interest rates and bribe rates — which comes to an annual rate of nearly 80 percent.

    This misery index needs to be tackled and reforms should focus on alleviating this anti-business skew instead of worrying about whether Wal-Mart should enter India or not. Wal-Mart, in its search for new markets, needs us more than we need it.

    For the India Story to rebound, the reforms we really need are in the areas of commercial taxes, road taxes, entertainment tax, excise duty on liquor, urban land ceiling regulations, the Shops and Establishments Act, laws governing educational and medical institutions, money lending regulations, stamp duty, food and adulteration laws (involving municipalities), water and drainage regulation, and the registration and contract laws.

    These regulations pertaining to activities in which the non-corporate sector dominates and are partly in the realm of state governments. There is a need to have an inter-state council meet only to focus on reforms in all the above mentioned areas instead of just being obsessed with FDI and FII and pink paper concerns.

    We do not want to have basic and more path-breaking reforms – in fact, we do not even discuss it – because they are not “sexy” enough and do not appeal to the audiences of the business TV channels and the chambers of commerce. Actually, FII and FDI sources have always contributed less than 10 percent of our investments, which are largely driven by domestic savings. Yet we think giving more incentives to foreign investors will solve all problems. That is not a sign of free market thinking, but a sepoy’s sellout to global capital.

    Until and unless we focus on reforms at the state and lower levels, we are not going to sustain our growth rates. We must come out of our focus on the big corporate sector — the Sensex economy — and focus on the sectors that really create jobs and growth. Our corporate sector is only an “item number” in our economy, full of glamour and oomph, but there is less substance below.

    We as a nation have the uncanny ability to focus on the inconsequential and immaterial and waste lots of time and effort on them. We even have the gall to criticise those who point out these hometruths as Swadeshi loonies or even Luddites.

    Delhi-centric reforms can only benefit fatcats and not the most productive sectors and engines of our economic growth — namely India “Unincorporated”. They are struggling to get adequate credit at reasonable rates of interest and have to deal with corruption at the lower, and less controllable, levels in our system. What India needs is to reform our reform process itself to focus on the real India and not the India which the Yankees and Yankee-minded reformers are imagining!

    The author is Professor of Finance, Indian Institute of Management Bangalore. The views are personal and do not reflect that of his organisation.

    Fatcat obsession: We need reform for India Uninc, not India Inc | Firstpost

    ******************************

    Why are we falling victim to the Govt drooling homage to the Corporate sector to salvage us when it is the non corporate sector and savings which is what is driving the economy?

    Could it be because they fund elections of the political parties?
     
    Last edited: Sep 30, 2012
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  9. Zebra

    Zebra Senior Member Senior Member

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    I have had more respect for the UPA if they had started these reforms just a month after when the came in power which we know as UPA 1.

    If not after a month then say after three months when they got in as government.
     
  10. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    What we need here is a smart way to differentiate between farmers. Most farmer subsidies and sops are used equally by rich as well as poor farmers. How can we have the same rules for a peasant with 5 bighas compared to another with 100? In my opinion this is the most serious policy flaw.
     
  11. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    Thanks RAY sir for article but i think problem in not with politicans but we the people . Because people do not demand properly . i mean to say if farmers instead of demanding free electricity they should demand concessional electricity and also should pay for it. Similarly every citizens who pays incomes tax should have right to demands (gov) schemes for which he is entitled . he should not have to bride for it . Everybody in this country should pay income tax however small and then rightly claim its services
     
  12. panduranghari

    panduranghari Senior Member Senior Member

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    Why provide any subsidies at all. Let the market decide how it wants to evolve. It does not mean give Reliance a free hand so that they can exploit all the sectors of economy in collusion with politicians. Let the field be a level playing field. A foreign company which gets ample government funding like Walmart should be allowed in but be taxed punitively thus levelling the play field. A small shop which was started by own capital and is run based on the needs of local population is taxed normally. However, there should be an upper limit to the level of taxation. Taxing 50% is ridiculous. The bigger companies like Reliance uses tax sops and high paid accountants and thus end up paying 10 % tax. Only if Reliance had come up the normal way without support of politicians, the tax it is supposed to pay should be at general level. But it has not come normally the hard way. So the play field should be leveled.

    The government wont do it, the markets will.

    Sensex 30 today is a lot different from 30 years ago. Companies come and go. Only those who get sops keep living in the todays economy. Isn't it ironical that Apple Inc. has more cash reserves than the American Govt. Of course USG prints its short fall and gives some of it to Walmart Inc.
     
  13. maomao

    maomao Veteran Hunter of Maleecha Senior Member

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    Sir, the ruling class (in particular the con-gress) has created a mockery of our democracy. Our democracy has become so unaccountable that none knows what the government is doing behind the curtains and no one gets informed about the actions of the government (even our media houses are bunch of crooks who lick chappals of the their political masters)!

    I feel that we choose our own dictators to power and these arrogant dimwits when asked to prove credibility and aptness of a policy / decision, say - don't question our actions as the people have elected us and if you disagree, then don't elect us in next elections! Which means till the time they are in power they have all the power to loot and rule with an iron fist?

    Another, shamelessness is the VIP culture which makes me ashamed of current situation -- now days any - tom, dick or harry who knows a politician or a babu is like a king in Delhi. No traffic rules and no civic sense is supposed to prevail when these useless characters are around!

    Where are we heading and what will become of the country if we keep on having such looters and shameless politicians, mediamen, babus and businessmen in this country?
     
    Last edited: Sep 30, 2012
  14. Ray

    Ray The Chairman Defence Professionals Moderator

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    India's FDI in retail saga: From Wal-Mart to Agarwal-Mart?

    WASHINGTON: "I actually did vote for the $ 87 billion (war funding) before I voted against it," was a line that destroyed John Kerry's Presidential campaign in 2004. He could never live down the flip-flopper reputation after opponents simplified his statement to "I was for the Iraq War before I was against it." Subtle nuances and elegant explanations, not to speak of a possible change of heart after things went south, were lost in the verbal melee in an atmosphere where you were either "for it or against it."

    Something similar is happening in the debate in India about foreign direct investment in the retail sector, in which the American superstore Wal-Mart has become the figurehead. You are either for FDI or against FDI; Wal-Mart is all good or pure evil. Look, look...says one distinguished opposition leader now in his twilight years, even Americans (or New Yorkers) are against it. Of course, some Americans are against Wal-Mart; many are for it. Many Americans are also pro-outsourcing. And anti-globalisation. And pro-China. And anti-China. It's never black and white.

    In fact, as the popular Facebook-era metaphor goes: It's complicated. As someone who divides his time between U.S and India, here's my $ 0.02, or Rs 1.06 at the current exchange rate, about the FDI/WalMart debate: I am against Wal-Mart in America, and for Wal-Mart in India. How's that for a $ 2.00 Made-in-India flip-flop — or "double standard" as a colleague put it? I am also mostly vegetarian in the US, but have no problems eating non-vegetarian in India. And there's a connection between the two.

    The simple explanation for all this is the U.S and India are at different stages of market economics, especially in the in production, distribution and marketing of food produce. The US has made some awful mistakes in embracing its current food cycle, the same way it has erred espousing a mindless automobile revolution. So while adopting the "good" that FDI retail/Wal-Mart can offer, there is no compelling reason for India to follow the U.S model to the T; it need not make the same mistakes. Call it retail revolution with Indian characteristics, if that is possible.

    Let's break it down with examples by first looking at the "good" that the proposed retail revolution can bring into India, some of which has been articulated by ardent votaries of FDI. First off, it will improve supply chain logistics, including cold storage, and broadly bring India further in tune with 21st century western style market economy. It will save the 30 per cent wastage of perishables that we have been moaning about for 30 years. Of course there is always the question about whether it is better to eat fresh produce never mind the wastage, or whether to can the waste and eat preserved food. We'll come to that later - the simple answer could be it is better to eat something than nothing at all....

    Initially at least, the so-called FDI revolution in retail will provide better prices and returns to farmers through better yields, productivity, and distribution. It could also offer more choice, better quality, greater uniformity, improved display and packaging. All this is not a given and will not necessarily improve your health or quality of life. In fact, it could be the other way around. Here's how it has panned out in America.

    he corporatization of the food chain has its upside -- and downside. Farmers are coaxed -- or forced -- to improve yields, attain the kind of quality and uniformity that corporate interests demand, and as a result may get more remunerative prices, at least in the beginning. But it also edges out the small and marginal farmer, vastly reduce farm labor (with increased mechanization), and result in mediocre but commercially viable produce.

    In fact, this prospect brings home the very malaise that more "advanced" western societies are starting to realize and wanting to avoid or reverse. This is where you want to continue buying from the neighborhood push-card vendor in India who's bringing in fresh produce to your doorstep from a local grower rather than the retail chain with its stock of mass produce whose provenance and vintage is unknown. This is where more and more westerners, at least those who can afford it, are switching to shopping at farmers market with local produce even though it is much more expensive than supermarkets.

    So why is it produce cheaper (or will eventually become cheaper) in the supermarkets, you ask? Because the economies of scale make big chain produce much cheaper. They also have deeper pockets to suffer initial losses and eliminate competition, as Wal-Mart has demonstrated in many countries.

    What modern retail in the west has done is introduced food produce not just on an industrial scale but on an industrial quality too. And this is where my "prefer vegetarian in U.S but okay with non-veg in India" choice kicks in. That massive ten-pound pack of chicken breast at dirt cheap price...we really have no idea of its origins or vintage. Wait...we do have a rough idea. It was raised in a massive chicken farm owned by a corporate monopoly in methods and circumstances that will make you puke. Chicken (or cattle) that are cooped up in the dark, medicated, and force-fed continuously so that they attain maximum weight in the minimum time with minimum movement and metabolism. That's how corporates maximize profit. In India, you still have to the option of seeking out the healthier free-range or home-grown chicken, fresh locally grown- or sourced vegetables and fruits. You could be saying goodbye to all that (or at least end up paying much much more) with the FDI fiesta.

    India's FDI in retail saga: From Wal-Mart to Agarwal-Mart? - Page 2 - Economic Times
     

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