The euro zone&rsquo;s central problems continue to worry the markets. Greece had both a debt-to-GDP and a deficit-to-GDP ratio that were too high. But, as Table 1 shows, Spain&rsquo;s deficit is quite large; and, as Table 2 demonstrates, Italy&rsquo;s debt is considerably above the Euro zone average.

StatsGuru-04-June-12

Business Standard

Bihar has become the fastest growing state, albeit on a lower base. The state's growth is being led by secondary and tertiary activities like construction and services like communication (CAGR 27.23% between 2004-05 and 2010-11), trade and hotels (20.22%), banking &amp; insurance (16%).

What's driving Bihar's growth

When the dismal GDP data for the fourth quarter and the full financial year were released, everybody &ndash; corporate heads, economists and industry chambers &ndash; had an opinion to air. But curiously, the press release sent in the evening by the Indian Chambers of Commerce and Industry (ICCI) carried comments by Secretary General R P Swami parts of which were an exact copy of the Federation of Indian Chambers of Commerce and Industry&rsquo;s (Ficci&rsquo;s) Secretary General Rajiv Kumar.

Same difference

The fourth-quarter and full-year GDP figures released last week were expected to be disappointing and provide a chance for industry chambers to call strongly for reforms. Sure enough, the two leading chambers of commerce were off the mark. The Federation of Indian Chambers of Commerce and Industry sent invitations for a press conference on Monday on the Indian economy a week ahead of the GDP data release. Then the Confederation of Indian Industry sprang into action and announced a press conference on the same theme but a day after the data was released. The timing may have reflected chamber rivalry but the content of both conferences were the same.

Competitive chambers of India

Old habits die hard. Industrialists and businessmen may have become more vocal about the lack of economic reform but they are still ultra-wary of making statements that could rub politicians the wrong way. At a press meet, the chairman of an industry chamber and the head of one its committees declined to answer a politically-sensitive question on the private sector&rsquo;s demands to open up the defence sector to private and foreign players in view of the corruption allegations in the BEML-Tatra deal. Instead he batted it back to the secretary general. The latter was caught off guard and declined to help out, saying he did not understand why he was being asked to answer the question. It was left to the committee chairman, who happens to be a senior official of a major heavy industries company, to mumble out a politically-correct answer.

Right side up

This refers to the front-page news item &ldquo;Govt backs banks&rsquo; entry into commodity futures trading&rdquo; (June 4). Under the Banking Regulation Act, 1949, banks are not allowed to trade in commodities and amending the law to allow them to do so may not work well. As it is, banks have their own problems with increasing non-performing advances; lack of adequate skilled human resource to meet the challenges of modern banking that involves trading in derivatives, currencies, investments and gold; and finding adequate capital to meet the requirements of Basel-III. In the absence of an autonomous and independent regulator for commodity trading, involving banks will weaken their functioning and the Reserve Bank of India will have to bear the brunt in case something goes wrong with an otherwise sound banking system. Even the selling of gold by banks needs to be reviewed or even stopped to reduce the import of gold coins and save valuable foreign exchange.

Letters: Banking on commodities?

This refers to &ldquo;Trash talk&rdquo; (Worm&rsquo;s Eye View, June 2). The use of Key Performance Indicators (KPIs) to measure human performance reduces an employee&rsquo;s role to a device such as a car or mobile that promises certain key deliverables. And yet human resources, or HR, professionals swear by KPIs and metrics. To compound this travesty, we have surveys to measure employee happiness and well-being that are conducted after the company does away with disgruntled workers.

Letters: The HR charade

Apropos &ldquo;Ramdev and Hazare hold fast&rdquo; (June 3), Anna Hazare&rsquo;s anti-corruption movement seems to have lost its cohesiveness and focus. Team Anna members appear to be pursuing their own agendas, instead of getting the Lok Pal Bill passed. Moreover, the move to share the dais with Ramdev &ndash; who has his own political agenda &ndash; has done little for Hazare&rsquo;s apolitical image. Launching a diatribe against the prime minister and other members of parliament only puts the movement in a negative light. The low turnout at Hazare&rsquo;s day-long fast in Delhi on Sunday proves the public&rsquo;s waning sympathy for the movement.

Letters: Losing steam

The ruling United Progressive Alliance, or UPA, is justly castigated for its policy paralysis. Yet the only thing more farcical than its inability to take a decision is what happens when it, for a moment, ceases to be paralysed. Indeed, UPA-II&rsquo;s policy activity is, in some ways, more worrying for the economy than its paralysis &mdash; for it reveals that this government does not understand the scale of what is needed, nor does it possess the follow-through required for good policy-making.

From policy to farce

The insurance regulator&rsquo;s draft guidelines on health insurance were necessary, given the segment has been plagued with high loss ratios, low penetration and persistent customer complaints. The draft, which proposes changes in every facet &ndash; product structure, renewability and claims settlement &ndash; is a thoroughly pro-customer document and seeks to plug the various loopholes that have been used to make life difficult for policyholders, resulting in extremely low penetration. Although the Indian healthcare industry is worth Rs 3.30 lakh crore, the health insurance industry is only Rs 17,000 crore of that. One of the most important recommendations is setting an entry limit for health insurance policies at 65 years and doing away with the exit age, which basically means that insurers will have to renew policies without a break. It&rsquo;s a well-known fact that insurers have been denying insurance to people above 55 years due to higher underwriting risks.

What the doctor ordered

I lost my job recently, but I&rsquo;m sure I would find another in two to three months. I am repaying a home loan I took eight months ago.

Debt counselling: Sanjay Agarwal

The increase in petrol price by Rs 7.50 per litre met with howls of protest from almost all quarters. The Bharat Bandh, on May 31, received spontaneous support from the entire political spectrum, even from a section of the ruling party. But oil marketing companies (OMCs) have sound justification for the price increase and the government of India had to bite the petrol bullet as an inevitable recourse. What was most explosive about the whole issue was its timing.

Letters: Is a fuel price hike inevitable?

The bureaucratic English the government uses may be incomprehensible for some but it appears that the government&rsquo;s communication skills don&rsquo;t improve in Hindi either. At a press conference to announce a committee report on Air India, Hindi-language journalists requested Civil Aviation Minister Ajit Singh to read the announcement in Hindi. Singh duly obliged, reading out the release in full. Then he added, &ldquo;Yeh mujhe samajh nahi aaya.

Understanding officialese

Questions have periodically been raised about the &ldquo;spirit of the merger&rdquo; of Air India and Indian Airlines, but no one has actually defined it. At a conference to announce the change in pay scales in the merged entity, a journalist asked Ajit Singh whether the government was going against the spirit of the merger by cutting employees&rsquo; salaries. The civil aviation minister, only six months in the job and not part of the government when the merger was announced, was perplexed. What was the spirit of the merger, he asked the aviation secretary. Before the secretary could reply, the spirit of the question was dissolved.

Letter and spirit

This refers to the report &ldquo;Army chief slams BEML on Tatra, awards it Rs 1500-cr deal&rdquo; (May 31). Since the liberalisation of the Indian economy, there has been a tendency to import ready-to-use articles and borrow technology, even for their subsequent maintenance. In this respect there is no divide between the public sector and the private sector. This is a major reason for the drain on forex and the resultant impact on the value of the rupee.

Letters: Self-reliance is not bad 

Purno Sangma is certainly entitled to run for the presidency. But he bases his claim on the grounds that he belongs to a scheduled tribe. Is this the only qualification required in our quota-ridden polity? In this context, I remember an episode relating to J Sivashanmukham Pillai, the distinguished Speaker of the then Madras Legislative Assembly when Rajaji was the chief minister in the 1950s. Rajaji was interviewing candidates for the selection of Speaker. When Pillai appeared before him, he asked him as to how he was qualified to hold the post. Rajaji expected Pillai to plead his case on the basis of him belonging to a scheduled caste. But he was surprised when Pillai said he knew the parliamentary procedure well. Rajaji asked him a few questions based on Erskine May&rsquo;s Parliamentary Practice, which is considered the Bible of the subject. Pillai had mastered that book and came out with flying colours. He became Speaker and some of his rulings were classic.

Letters: Learn from Rajaji

The Left in West Bengal slammed Kolkata Knight Riders&rsquo; victory celebrations, calling it inappropriate for a &ldquo;pauper&rdquo; state. Its choice of the word pauper is significant. Karl Marx is known for his theory of pauperisation of the proletariat that states that the labour class under capitalism will get poorer because of the continuous exploitation by the bourgeoisie. However, in West Bengal it&rsquo;s not the capitalists, but the communists that pauperised the state. The theory of pauperisation now has a Bengal version that deserves to find a place in the history of communism.

Letters: Pauperisation of Bengal

The lacklustre stock markets and investor apathy has hit the government hard. But the hardest hit seems to be the department of divestment, whose fortunes are directly linked to the markets. The popular &ldquo;What&rsquo;s new&rdquo; section of the department&rsquo;s website www.divest.nic.in, which once was crowded with a list of Request for Proposals and other documents relating to upcoming divesments is almost empty.

Investors out, termites in 

For the government grappling with the oil subsidy, here is an interesting piece of advice from a senior finance ministry official. The official said one step that might bring down the subsidy the government pays its oil marketing companies could be to allow private companies to access the subsidy window too. Right now, private oil companies stay out of the fuel retailing business owing to the fact that pump prices are set below cost and they cannot access government subsidies like their public sector counterparts. He reckons private companies are likely to demand lower subsidies, plus the step would make the system more transparent.

'Privatised' subsidies 

Guess what the recent acrimonious scenes in the Uttar Pradesh Assembly were all about. Hard to believe but it was the poor quality of food served in the Assembly canteen. Complaining that legislators often went hungry owing to the sub-standard food, Samajwadi Party legislator Anoop Sanda urged the Speaker to ensure that the canteen management was improved. The matter was considered important enough for state food and civil supplies minister Raghuraj Pratap Singh (alias &ldquo;Raja Bhaiyya&rdquo;) to suggest that the canteen be upgraded to serve a &ldquo;full menu&rdquo; to legislators like the Parliament canteen, which served both vegetarian and non-vegetarian dishes. Perhaps the legislators think UP doesn&rsquo;t have more urgent problems worth addressing.

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