Economy expands at a nine-year low of 6.5% in 2011-12, as high interest rates and global factors impact the manufacturing sector.

Country on the downturn 

Business Standard

Now that the India Meteorological Department (IMD) has endorsed the fears expressed earlier by foreign weather bureaux about the emergence of the monsoon-unfriendly El Nino in the second half of the season, the government should begin preparing right away for mitigating its adverse impacts on agriculture, water reservoirs and other areas.

El Nino's looming shadow

Your edit &ldquo;Spectacle of itself&rdquo; (May 30) reminded me of Commodus &ndash; the Caesar presiding over the decadent and declining Roman Empire &ndash; who, when faced with street riots over food, is famously believed to have said: &ldquo;Give them entertainment!&rdquo; And obliging senators promptly ensured 200 days of gladiatorial shows. The same is true for the Indian Premiere League (IPL) &mdash; the so-called biggest Indian sporting brand.

Letters: The great IPL drama...

The IPL presents a fresh cricket format and should be appreciated for its entertainment value. The 20-20 tournament leaves no chance for cricket fans to get bored. Besides, such a fast-paced format can also provide players with the opportunity to better their game and learn new techniques. It is silly to create a hue and cry over such non-issues as cheerleaders. Cheerleading is just another profession and we should leave it at that.

Letters: Cheer up

The figures for India&rsquo;s gross domestic product (GDP) growth in the fourth quarter of 2011-12, which were released on Thursday, show that the economy is in crisis. Between January and March this year, GDP grew at 5.3 per cent &mdash; the lowest growth for nine years, since the same quarter in 2003. Even for the full financial year of 2011-12, growth declined to 6.5 per cent, again a nine-year low. Never in the United Progressive Alliance&rsquo;s (UPA&rsquo;s) entire tenure has growth decelerated to such a level. The crisis is visible across sectors &mdash; even services, normally the engine of growth, clocking near double-digit figures even if agriculture and industry are anaemic, grew at only 7.9 per cent. Agriculture grew at a worryingly low 1.7 per cent, which has grave implications for rural demand and farmer distress. But the real kicker was industrial growth, which was only 1.9 per cent in this quarter. India&rsquo;s manufacturing sector is in trouble.

Numbers of crisis

IPL was conceived as business wrapped in entertainment. So, it is not surprising to see monetary and ethical transgressions mar what was originally a great idea. The time has come for the Board of Control for Cricket in India (BCCI) to step in and tackle the deviations that have cropped in this sporting event. If the IPL is to graduate to a higher plane and sustain enviable standards, the BCCI has to be ruthlessly professional and even-handed and, more importantly, it should appear to be so.

Letters: And why BCCI must step in

Apropos your edit &ldquo;A burden beyond bearing&rdquo; (May 29), Petroleum Minister Jaipal Reddy has said the government is proposing a one-time additional excise duty of Rs 80,000 on diesel cars. This measure should have been announced earlier in the Budget itself. Also, what is the government going to do about the conversion of petrol cars into diesel ones? Will it reduce the cost difference between the two fuels? The government must review its tax policy and, of course, compensate oil companies.

Letters: Government's fuel fix

Finance Minister Pranab Mukherjee appears to have taken note of India Inc&rsquo;s howls of protest at the aggressive tax regime that was announced in his latest Budget via retrospective amendments to law and stringent General Anti-Avoidance Rules. Inaugurating the Income Tax Department&rsquo;s new building in New Delhi this week, he chose to advise his officers on tax collection techniques by quoting two noted philosophers. Asking taxmen to focus on increasing tax collections without harassing taxpayers, he said, Niccolo Machiavelli had noted that men forget the death of their father more quickly than the loss of their patrimony. Quoting Chanakya, Mukherjee said taxmen should collect taxes like a bee collects honey: without disturbing the flower.

Taxing philosophy

Private equity (PE)/venture capital (VC) funds have infused $804.29 million between 2006 and 2012 in education.

Private equity in education

Within a week of announcing a rise of about 12% in petrol prices, IndianOil, HPCL and BPCL announced huge increases in their fourth-quarter profits, though on an annualised basis, the profits look paltry. The Centre&rsquo;s direct subsidy, coupled with burden sharing by ONGC, OIL and GAIL, pulled them out of the red.

Oil marketing companies in red without subsidy

The current scenario of higher education in India has become a mere game of money. Inviting business houses will worsen the situation, for they will look forward to money making for which again seats will be sold.

Student's corner

Should the government ban file-sharing websites?

The West Bengal government&rsquo;s farcical celebrations of the victory of the Kolkata Knight Riders (KKR) in the Indian Premier League (IPL), and the &ldquo;mild&rdquo; lathi-charge that followed, capped a league season that hit the headlines for all the wrong reasons. Earlier, the Delhi police smashed an illegal betting ring. A spot-fixing sting operation led to five players being suspended. Shah Rukh Khan, KKR&rsquo;s owner, was banned from Wankhede Stadium. Luke Pomersbach of Royal Challengers Bangalore was arrested on molestation charges. Taken together, these incidents, and the airtime they received, may have had a negative impact on the league&rsquo;s image. Brand IPL is now generally estimated to have fallen in value. However, the weakest link in terms of perception, according to marketing experts, is the non-transparent and arbitrary governance standards set by the Board of Control for Cricket in India (BCCI), rather than a focus on the scandals.

Spectacle of itself 

On May 27, a special court of the Central Bureau of Investigation (CBI) remanded Y S Jaganmohan Reddy, the leader of the breakaway Congress faction in Andhra Pradesh, into judicial custody for 14 days. The CBI says it believes that a case can be built up against Mr Reddy for disproportionate assets arising from bribery, as well as for violations of various money laundering statutes.

Arrested independence 

The petrol price increase has become such a contentious issue countrywide that Opposition politicians leverage it to turn even good news into bad news. In her Budget speech earlier this week, Delhi Chief Minister Sheila Dikshit announced that the state&rsquo;s GSDP (gross state domestic product) grew 11.3 per cent in 2011-12, a decent figure given the circumstances. Before the ruling party could applaud, opposition MLAs shouted, &ldquo;GSDP stands for GaS, Diesel and Petrol.

What GSDP really means

As someone who is against romanticising the Naxal menace, I read Breakfast with BS with Binayak Sen (&ldquo;The doctor in his labyrinth,&rdquo; May 28) with a sense of dawning realisation. The piece brings out the hazy connections that such people as Dr Sen, who are working tirelessly at the grassroots, may come to develop with people supporting or undertaking Naxal operations. The entire truth about Dr Sen&rsquo;s connections with Naxalites remains unclear. But it cannot be denied that this is a complex problem and the government, instead of taking coercive steps against activists like Dr Sen, needs to find a via media to accommodate the concerns, and maybe even the politics, of those who are willing to give up material comforts to serve their countrymen in extremely trying circumstances.

Letters: The state must engage

Lower net profit is always hard to explain and the managing director of an education services company was struggling to do just this at a press conference announcing its results. Eventually, he resorted to a street food analogy to make his point. His business, he said, was like the vada pav business. In spite of the presence of numerous vada pav stalls, demand was so high that many more were set up on a regular basis. In the same way, he went on, demand for education services was growing so fast that his company was building many more centres to meet this additional demand, which increased expenditure in the short run and, therefore, lowered profits. That, he added, was the difference with the vada pav business &mdash; the costs of expansion would reflect in his Profit &amp; Loss account whereas the low-cost vada pav business could get away with it.

Teaching street cred

Apropos the edit &ldquo;A burden beyond bearing&rdquo; (May 30), the government should have first increased diesel and LPG prices &ndash; which come under the subsidy regime &ndash; before raising petrol prices. The steep increase in the price of petroleum products has sparked nationwide protests because of which it will be impossible for the government to affect an immediate increase in diesel and LPG prices without political ramifications. Unfortunately, the government has been consistently making the right policy decisions at the wrong time &mdash; and, so far, its only clear strategy seems to be to drift somehow till the general elections.

Letters: Right policy, wrong timing...

Apropos the report &ldquo;PM offers to resign if corruption charges against him proved&rdquo; (May 30), it is sad that the country&rsquo;s head has had to make such a statement. Though the PM may have a clean record, what should the nation make of his long silence on the 2G scam and various other governance issues? What is even more surprising is that the Congress party leader Sonia Gandhi and her heir apparent Rahul Gandhi have not said a word on the 2G and Commonwealth Games scams. As key Congress leaders, they are answerable to the nation for their party&rsquo;s failure to check corruption.

Letters: Silence of the leadership

The government is indeed facing a complex problem. On the one hand there are economic compulsions to increase prices, particularly of diesel and LPG, on the other, state leaders in the Congress party and its allies are opposed to such increases. On top of that, the Bharatiya Janata Party and other Opposition parties are ever ready to provoke the ire of the people on the issue of price increases to serve their own political agendas. But, as your edit suggests, the government must make a convincing case for increasing prices and go ahead with the decision despite the possible electoral risks.

Letters: But the UPA must not bend

The United Progressive Alliance&rsquo;s uber-enthusiasm for collective responsibility appears to have rubbed off on the bureaucracy. How else does one explain the Telecom Commission&rsquo;s decision to leave it to the empowered group of ministers (EGoM) to decide the reserve price of telecom spectrum in the upcoming auctions? The 23-year-old body, set up by an administrative notification, was given a sweeping mandate over the telecom industry; policy formulation is one of its critical functions. And, given the controversies convulsing the issue right now, there is little doubt that pricing telecom spectrum is a critical component of policy-making.

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