In his column "Much ado about FDI" (New Delhi Diary, July 24) A K Bhattacharya effectively punctures the disproportionate euphoria created by the Congress party about the recent decisions on foreign direct investment (FDI). The government should be concerned about the lack of FDI in manufacturing in spite of already relaxed caps on investment there. Relaxing investment norms merely creates an interest in potential investors but action follows only after the necessary wherewithal exists to fructify investment as a source of return on capital.  The government has done little in this regard, whether it is sound land acquisition policy, supportive infrastructure (power, water, etc.), skilled manpower development, graft-free administrative procedures and labour laws.Secondly, as the author highlights, between 2000 and now, 30 per cent of total foreign investment has been in the services sector alone. This makes it vulnerable to fluctuations in the global economy as foreign investors desert

Letters: Why FDI policy fails

Business Standard

A small correction is needed to Vivek Mishra's otherwise informative article "Service tax on restaurants and hotels not constitutional". Towards the end of the article Mr Mishra says, "The clause 29A was introduced, as it was felt necessary by the experts to declare those transactions as deemed sale of goods that could otherwise lead to a dilemma in classification between sale of goods and/or services." In fact, the need for the 46th amendment to the Constitution came up because of an apex court judgment in the matter of Northern India Caterers versus Lt Governor of Delhi (decided on September 7, 1978) wherein sale and supply of food in hotels and restaurants were held not as a sale because the basic definition of a sale, i.e. transfer of property, never takes place. In that judgment, English and American law on taxing food supplied by hotels and restaurants was discussed at length and, after doing so, a three-judge Bench declared, "Service of meals to the visitors in the restaurant is

Letters: Sales, service and tax

This refers to the report "I don't want Modi as PM: Amartya Sen" (July 23). Sen may have a visceral dislike for Narendra Modi for the reasons stated in the report. But in a democratic polity like India, the views of one person, however important he may be, carry no value in the electoral arena, where many considerations other than religion also play an influential role. If Modi is able to wrap up a majority in 2014, he can justifiably and legally claim the post of prime minister (PM). As for the reasons Sen has given for not wanting Modi as PM, they too will pale into irrelevance if the numbers go in the latter's favour. George Bush was not a darling of the American people but that did not prevent his second election as president.On Sen's views on the growth parameters evident in the Gujarat story, he clearly disagrees with the manner in which many other economists have appraised and evaluated them; significantly, those evaluations run counter to his oft-repeated theories. There is no

Letters: Sen on Modi

Were the rupee measures a panic reaction?

Opinion:Did RBI panic on the rupee?

Electronic waste is piling up across India

Dead but dangerous

#AditiRestaurant was trending all day on twitter as Gujarat Chief Minister Narendra Modi got in to the act tweeting "Height of intolerance". Aditi restaurant in South Mumbai was allegedly shut down by Congress workers after a picture of its bill, which had comments against the ruling United Progressive Alliance (UPA) government, went viral yesterday. The bill said, "As per UPA govt eating money (2G, coalgate, CWG) is a necessity and eating out in AC restaurant is luxury." It was an apparent protest against the imposition of service tax on air-conditioned restaurants. Congress firefighters got going soon after, putting up links of another restaurant in Gujarat that had faced the ire of the ruling Bharatiya Janata Party (BJP) there for making such statements as "Do we have a right to live and do business in Gujarat, being Muslim?" They also allege it was a stunt by the owner of Aditi, who fancies a career in the BJP.

Jyoti meets Aditi

There are no signs of labour reforms, several labour Bills have been gathering dust and some labour ministry proposals have been turned down by the finance ministry. But despite such frustrations, the lights don't go off at Shram Shakti Bhawan till late at night. Despite an octogenarian minister, Sis Ram Ola, taking charge, there seems to be no respite for the bureaucrats and their staff in the ministry. So much so that Labour Secretary Mrutyunjay Sarangi, who has been pushing some of the proposals for reforms in provident fund and other areas despite a cold response from North Block, even got an ultimatum from his wife. Sarangi who retires in a couple of months, was recently heard joking at a farewell function in the ministry that his wife has warned him of dire consequences for the long hours he's been keeping. He said she told him that after he retired he would have to spend the entire day in the neighbourhood park and would be allowed home only late at night. The officer from Oriss

Laboured pains

Finance Minister P Chidambaram was one of the experts called in to brief selected Congress members on the state of the economy this week at the party's all-India communication workshop. Reeling out facts and figures the astute lawyer said growth was likely to improve in the coming months. He then urged spokespersons to improve communication on the benefits of Central flagship schemes in the run-up to the elections. He summed it up wisely: "The problem is if you do too little, it gets noticed and if you do too much it does not get noticed."

Too much for too little

This refers to Amarjeet Sinha's article "Food for thought in a mid-day meal tragedy" (July 23). Packaged food does not have to be pitched against hot cooked meals. Agreed, hot cooked meals are preferable. But it does make sense to give the school management the option to serve packaged food, at least till the infrastructure and administration machinery are in place to provide hot cooked mid-day meals. Tragedies like the one in a Bihar school are often the result of governmental pressure on schools, if only to meet plan targets to start the scheme before a certain deadline regardless of the institution's readiness.Kishor Kulkarni  MumbaiLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar MargNew Delhi 110 002Fax: (011) 23720201E-mail: letters@bsmail.inAll letters must have a postal address and telephone number

Letters: Mid-day meal options

This refers to the report "I don't want Modi as PM: Amartya Sen" (July 23). Amartya Sen is going Justice Markandey Katju's way by commenting on unrelated subjects, though, of course, everyone has the right to an opinion on anything under the sun . The reality is that secularism and communalism are issues for the politicians, the intelligentsia, and the media; not for the voters. Voters in the 2014 general elections are likely to cast their vote for a corruption-free system, good governance and affordable cost of living. The Indian voter is reputed for taking his or her own decision and sticking to it. Which way the wind is blowing is clear from recent media surveys that have revealed Narendra Modi as the people's top choice. Sen's opinion may make headlines but is unlikely to change public opinion.M C Joshi  LucknowLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar MargNew Delhi 110 002Fax: (011) 23720201E-mail: letters@bsmail.inA

Letters: Secularism - voters don't care

The recent set of RBI's money market measures was largely unanticipated and, hence, it resulted in extreme volatility in rates market

Unambiguous communication from RBI vital: Shubhada M Rao

Even as Wholesale Price Index-based inflation rose marginally to 4.86 per cent in June from 4.7 per cent in the previous month

Green shoots tracker

Numbers reveal the software leader's strengths

The undersold TCS story

What Shinzo Abe's victory means for India

A stronger partnership

Last week prominent news reports appeared saying the Uttar Pradesh government owed computer major Hewlett-Packard (HP) several thousand crores for the laptops it bought to distribute free to senior school students. Given the habits of state governments, this wasn't a surprise. What was surprising was the company's reaction. Soon after, HP's public relations teams scrambled into action, offering journalists from rival publications a story that the payment had been received and that the original story was a political conspiracy to discredit the Akhilesh Yadav government. Where a simple clarification would have done, why the elaborate effort to defend the state government? Perhaps it is because the company will not want to upset the one government that has awarded it the largest laptop contract ever in the history of the country.

Seller defends buyer

A joint secretary in the ministry of environment and forests found himself rapidly divested of his portfolio. It turned out his error was one of omission, of failing to get advertisements about the achievements of the environment ministry published in Tamil dailies. Tamil Nadu is Environment Minister Jayanthi Natarajan's home state, which she represents in the Rajya Sabha. She was reportedly angry when none of the papers carried the ads. Within days, the bureaucrat concerned had to pay the price with an immediate transfer.

For want of an ad...

The impact of the heavy rain is clearly evident on New Delhi's roads with frequent traffic jams and water-logging, but it seems the rain has somehow managed to clog the functioning of the enquiry counter at the New Delhi Railway Station. Since most trains were late owing to the harsh weather, anxious passengers queued in front of the counter for information on arrivals. The official sitting on the other side of the counter was responding to the queries, but not orally. She held a stick in her hand and kept pointing it towards a makeshift blackboard that had the names of the trains, platform number and their arrival time. So when you asked about a train, the stick moved.

A stick in time

Apropos the report "Disaster management authority a disaster?" (July 21), the name alone is a misnomer since it has no authority and no one listens to it. Not surprising since the prime minister is the chairman and the vice-chairman is another politico whose disaster management experience probably extends only to salvaging his own reputation after every disaster. But he is "learning" - at the cost of other people's lives. If we really want a class National Disaster Management Authority, we have a ready-made force that can be renewed every year to tackle such situations. About 1,500 officers and 30,000 other ranks from the armed forces retire every year at a young age, a policy necessitated by the need to keep the Army fit. Many are from the Corps of Engineers, Army Medical Corps, Signals Corps, Electrical & Mechanical Corps, possessing the very expertise necessary in such situations. All that is required is to mobilise them into a versatile disaster management force that can rush a

Letters: Tapping the Army

This refers to the report "Centre plans more roadshows abroad" (July 21). Unless  the single window clearance mechanism is put in place for all foreign investors, overseas companies will not be interested in dealing with India. Posco has already withdrawn and so has Lakshmi Narayan Mittal.The government has to seriously consider clearing the proposals of foreign investors submitted to agencies such as the Directorate General of Mines Safety, environmental and other regulatory clearance bodies. In fact, the government should announce its policies clearly before organising roadshows abroad.Amar Bhasin  AustraliaLetters can be mailed, faxed or e-mailed to:The Editor, Business StandardNehru House, 4 Bahadur Shah Zafar MargNew Delhi 110 002Fax: (011) 23720201E-mail: letters@bsmail.inAll letters must have a postal address and telephone number

Letters: Clearing proposals

This refers to the editorial "Investigate first" (July 18). It is strange that the health ministry has acted in haste to ban the drug pioglitazone, used in the treatment of diabetes, in response to a letter shot off by a Chennai-based doctor V Mohan, who runs a diabetes treatment centre, to the prime minister. The doctor's view that prolonged use of the drug causes bladder cancer has been blindly accepted by the ministry without eliciting expert opinion and taking the issue to the court of other expert doctors for their opinion. The ban order should be revoked till a decision is taken by the Drug Technical Advisory Board that met on July 19. The ministry has ignored the Advisory Board in enforcing the ban, much to the chagrin of regular users of the drug. It is too early to suspect that Mohan had written the letter to promote the sales of sitaglipitin, which is sold in India under the brand Januvia for the treatment of diabetes by MSD Pharmaceuticals that supports a course in Mohan's A

Letters: Medical mystery

The government's recent emphasis on increasing foreign direct investment (FDI) has led to questions as to how well India has been doing on FDI of late. As Table 1 shows, over the past year, FDI has seen some wild swings. At the time last year when it seemed like the government was getting its reform act together, it surged upwards - only to fall to nearly zero shortly thereafter, as hopes were belied. Since then, it has edged cautiously upward. Overall, as Table 2 shows, since 2000 FDI has largely tracked India's growth performance. It increased sharply in the years after 2004, driving India's economic growth up. But then, after the 2008 financial crisis, it showed a downturn that was only temporarily reversed in the time of extraordinary global liquidity associated with loose monetary policy worldwide. In that time, since 2000, as Table 3 shows, the services sector received by far the largest share of FDI. Knowledge-intensive sectors like pharma, IT, and telecom were also in the top 5

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