An analysis of annual reports of listed companies shows several companies continue to reappoint auditors for decades together. While there is no express bar under the present law on this practice, investor advisories and activists have begun to rake up this issue as a possible grey area, following allegations of auditors' involvement in the multi-billion rupee Satyam Computers scam.

Too close for comfort

Business Standard

This refers to the front-page report &ldquo;Advisory company says vote against reappointment of Infosys auditor&rdquo; (June 9). In principle, rotation of statutory auditors is a desirable proposition. If a company continues to reappoint an individual or a firm as a statutory auditor for a long time, an auditor&rsquo;s independence may be at risk. But, in practice, there is little guarantee that the appointment of a new firm of auditors can improve the quality of audit or that the new auditor would function with more autonomy.

Letters: Auditing the auditors 

The latest attempts to relax the rules for Special Economic Zones (SEZs) are a good example of all that is wrong with India&rsquo;s economic policy. SEZs were conceived in 2005 as a means of providing exporters with China-style tax-free enclaves outside the purview of the country&rsquo;s restrictive labour laws, the idea being to stoke exports and employment. It is an open secret that far from achieving these objectives, SEZs have degenerated into real estate plays, or means for infotech companies to extend tax breaks they lost under the Software Technology Parks of India (STPI) scheme (a large proportion of approved SEZs are in the IT sector). By Commerce Minister Anand Sharma&rsquo;s own admission to Parliament, only about a fourth (154) of the 587 SEZs that the government approved under the 2005 Act are operational. That&rsquo;s less than half the 380 that have been notified.

Admission of failure

Close on the heels of recent needless interventions and rollbacks on cotton exports, from which exporters and farmers are yet to fully recover, the government has now come out with a draft cotton trade regulation Bill to further hassle the sector.

Spinning disaster

This is a good move but the overall success of the proposition will depend on the way the whole complaint redressal mechanism is enacted. The problems will certainly be exposed but again they need to be acted upon to impart transparency.

Student's corner

The Trinamool Congress (TMC), which was founded by current West Bengal Chief Minister Mamata Banerjee in 1997, has been a great political success story. It swept to power in West Bengal after 34 years of uninterrupted Left rule within 14 years of its birth. TMC&rsquo;s rise to power is undoubtedly a case study for political scientists. The first to realise its importance, however, has been the University of Calcutta in Banerjee&rsquo;s Bengal. In an examination recently, the university&rsquo;s political science department asked its students to write on the &ldquo;Rise of TMC&rdquo;.

TMC's teachable moments

S R Jindal, chairman and managing director of Jindal Aluminium, speaking at the inauguration of the Global Investors&rsquo; Meet 2012 in Bangalore appeared so awed by the occasion that he mixed up the names of important dignitaries. What must have irked the BJP, the ruling party in the state, was his reference to Chief Minister D V Sadananda Gowda as D V Sadananda Deve Gowda. That&rsquo;s a huge faux pas, since he was confusing the chief minister with former Prime Minister and leader of rival party Janata Dal (S) H D Deve Gowda. Indeed, the shared surname has been a bane for the present chief minister, because whenever someone speaks of a Gowda, people associate the name with Deve Gowda even now.

Which Gowda is it, anyway?

The correlation between bad monsoons and farm output may be a direct one, but there is also a link with Krishi Bhavan, headquarters of the agriculture ministry. During the last big drought that India faced in 2009 &ndash; the worst in three decades &ndash; P K Basu, then an additional secretary in the ministry, headed a crucial panel on drought management. His work on managing the drought played a big role in pulling agricultural growth into positive territory that year. Basu was soon elevated to the rank of agriculture secretary and occupied the post until he retired last month. Now, the new agriculture secretary Ashish Bahuguna has taken charge of the ministry just as the clouds of drought are hovering over the country. Naturally, everyone is wondering whether the new incumbent can follow his predecessor&rsquo;s achievements.

Drought, Act II?

The edit &ldquo;Competing exemptions&rdquo; (June 12) rightly questions the need for bringing telecommunications and banking within the ambit of the Competition Commission of India (CII). The need for coordination between organisations arises from the degree of interdependence of their functions. Such a situation does not seem to exist here. If one of the regulators falters in its responsibility, the remedy is to improve its working rather than a check by another entity. Moreover, regulators in these two sectors &ndash; the Telecom Regulatory Authority of India and the Reserve bank of India (RBI) &ndash; have very able people running them. So, the idea of putting these sectors under CCI seems to be a camouflage to monitor and control them rather than coordinate their activities. Moreover, the assignment of resolving conflicts between sector regulators and CCI to a Cabinet committee would add layers to the decision-making process that is already fraught with delays.

Letters: Coordination or control? 

This refers to the report &ldquo;PSBs told to get tough on defaulters&rdquo; (June 11). It is amply clear that bad loans eat away banks&rsquo; profits. Yet the expenses and losses incurred to maintain and write off bad loans are not given due consideration and even rating agencies do not discuss this aspect. Banks alone can solve the problem of rising non-performing loans. So, the current approach of the government and banks to provide additional capital and make adequate provisioning &ndash; which includes the latest concept of dynamic provisioning &ndash; does not seem logical. The basic reason for bad loans is &ldquo;borrower indiscipline&rdquo; and this can be fixed with appropriate rating, appraisal standards and supervision and follow up. It is time we discipline borrowers.

Letters: Discipline borrowers

Experts often say, installing security devices helps cut auto premiums.

General Insurance: Gaurav Garg

This refers to Barun Roy&rsquo;s column &ldquo;Welcome to Java City&rdquo; (Asia File, June 13). Jonathan Glance&rsquo;s book Modern World Architecture describes well how European and American planners are trying to contain the excesses of urban sprawl. However, I feel city planners in Asia should give importance to local needs, environment, sustainability and traditional wisdom instead of aping the West, especially since Asia&rsquo;s climate and social fabric differs widely from that of the West.

Letters: Plan local

This refers to the report &ldquo;Army assures order for DRDO Howitzers&rdquo; (June 10). The Defence Research and Development Organisation (DRDO) had been clamouring to develop Howitzers for the Indian army for almost two decades, even as the all-powerful import lobby tried to source these guns from across the globe, including South Africa and Singapore. Not only DRDO, but also senior members at the Institute of Defence Scientists and Technologists made presentations &ndash; even to the Parliamentary Standing Committee on Defence &ndash; to indicate the feasibility as well as the urgency of developing the 155-mm gun system with the available indigenous technologies. With decades of experience in gun development, it would be expedient to assign a greater leadership role to the Armament Research and Development Establishment to steer the indigenous weapons development work that is now fragmented across various agencies.

Letters: Arms and the country

This refers to the report &ldquo;India may be the first fallen BRIC angel: S&amp;P&rdquo; (June 13). The government of India should heed the grim warning contained in Standard and Poor&rsquo;s report. The ruling party has plunged the country into crisis with a series of scams, scandals and corruption cases. The leading Opposition party, the BJP, is also mired in controversy and a leadership struggle.

Letters: Heed S&P's warning

Apropos &ldquo;Monetary policy isn&rsquo;t a popularity contest&rdquo; (June 13), rate cuts alone are not a remedy for slowing growth. Growth is a function of an effective and a proactive policy mix &mdash; monetary as well as fiscal. It is erroneous to hold high interest rates responsible for the slowing growth rate. In the absence of investments and productivity-led fiscal initiatives by the Centre, monetary manoeuvres of the Reserve Bank of India (RBI) will remain ineffective.

Letters: Rate cuts won't help

The policy paralysis was bad enough. But UPA&rsquo;s handling of the Presidential election has made it worse. With political uncertainty reaching a new high, India Inc gets more anxious.

India Inc not amused with Presidential election drama

Stock-market participants are understandably exasperated by the negative publicity that India is receiving but some appear to think the depression in the markets is caused by the media rather than poor economic policy. Emerging from a meeting with finance ministry officials on the new norms for attracting investment from qualified foreign investors (QFIs), an official from depository participant tersely told a reporter that negative stories on the economic and political scenario were becoming a major dampener in promoting India to prospective investors. When the reporter replied that his job was to report the facts rather than suppress them, the official offered no reply.

Fact and friction

A recently-opened road underpass in south Bangalore was named after the former cricketing great G R Vishwanath, popularly known as &ldquo;Vishy&rdquo; to fans. In no time after it opened it started deteriorating. Road users began cursing the underpass and, worse, they would invoke Vishy&rsquo;s name when they did so. Now, it turned out that the cricketer, too, was a regular user of the road so naturally he was unhappy at being cursed on a regular basis - even if it wasn&rsquo;t personal. So he approached the corporation and asked it to withdraw his name, which was done promptly. Now the corporation commissioner has a solution to problems cropping up from such shoddy work. &ldquo;Name the infrastructure work after the corporator of the area concerned.&rdquo; Perhaps that would shame them into action and ensure better work, he reasoned.

Vishy's cut

Now that Pranab Mukherjee is most likely to go to Rashtrapati Bhavan, this story can be told. Mukherjee and former Prime Minister P V Narasimha Rao were not the best of friends, although Mukherjee was deputy chairman, Planning Commission when Rao was PM as well as commerce minister. But he had returned to the Congress after a long spell of being out of it. So, once a group of jealous senior leaders gave Rao a long deposition to the effect that he should immediately make Mukherjee the governor of Uttar Pradesh, which would more or less have ended the Bengal leader&rsquo;s political career. Rao heard them with patience. Then he gave his verdict: &ldquo;Already, most of our voters have fled to Mulayam Singh Yadav. If Pranab becomes the governor, hearing his Hindi accent, the rest will also run away.

Language barrier

Oil Minister S Jaipal Reddy has proposed an additional excise duty of Rs 1.7 lakh on small diesel cars and Rs 2.55 lakh on bigger diesel cars. Diesel costs almost Rs 30 a litre less than petrol.

Business Standard

Business Standard

Page 878 - Business Standard

Too close for comfort

Letters: Auditing the auditors

Admission of failure

Spinning disaster

Student's corner

TMC's teachable moments

Which Gowda is it, anyway?

Drought, Act II?

Letters: Coordination or control?

Letters: Discipline borrowers

General Insurance: Gaurav Garg

Letters: Plan local

Letters: Arms and the country

Letters: Heed S&P's warning

Letters: Rate cuts won't help

India Inc not amused with Presidential election drama

Fact and friction

Vishy's cut

Language barrier

Tinkering with dual pricing