Apropos &ldquo;Railway modernisation needs to get on track (March 12), it is unfortunate that the Indian Railways continues to draw attention in the business news media for just two reasons &mdash; the non-revision of passenger fares over the last several years and the inordinate delay in awarding the public-private partnership (PPP) projects for manufacturing locomotives. This singular, short-sighted approach overshadows the immense capacity and resilience shown by this large public sector behemoth in meeting the enormous demands imposed on it by the nation. The Indian Railways has managed to increase freight loading by 200 million tonnes in a short span of three years despite the slowdown. The gross earnings show an annual incremental growth rate of 10 per cent with the freight loading projected at 990 million tonnes for the current fiscal ending in March.

Letters: Beast of burden

Business Standard

How much does it cost to acquire a customer? According to a buyer, a website sold him a phone for Rs 26,000. The original value of the phone was Rs 32,000. The surprise, however, came when in the packing the buyer realised that the phone was bought by the website from another website for Rs 30,000. For the new generation of businessmen, many of whom come from the Indian Institutes of Management, stretching business fundamentals can be viable strategy too!

Buying the customer

This refers to the debate &ldquo;Should rail passenger fares be raised?&rdquo; (March 14). It is imperative that the Railways increases revenues by way of raising freight fares or passenger fares, or indeed both. It would serve us well to remember that passenger fares have not been increased for years because of populist Railway Budgets. But this cannot go on forever. The time has come to stick to some hard decisions and if that will mean a drain on our pockets, then so be it. It must also be ensured that funds and resources available with the Railways are utilised judiciously. And, as R Sivadasan suggests, the Railways should not increase fares for unreserved or general coaches, but for reserved, AC-coaches.

Letters: Right time to raise fares

Apart from inter-linking rivers in the country, it is time the government makes a serious effort to protect rivers that are on the verge of dying. Despite the government declaring the Ganga India&rsquo;s national river, its ecology remains imperilled owing to lack of serious political will and public apathy. The river Ganga is a symbol of faith and sanctity for millions of Indians and, thus, protecting it from pollution and the pressing demands of modernisation and industrialisation becomes all the more important. The government had appointed a high-powered committee to clean up and protect the Ganga &mdash; incidentally, it has failed in yielding any fruitful result till date.

Letters: ...and save them too

On a day when minister Dinesh Trivedi presented his first railway budget, the railways went for an upward revision in the haulage charges for containers through a notification late in the evening.

Freight revenue expected to rise 30.2%

In an interview with Business Standard, Railway Minister Dinesh Trivedi says if there is no rise in fares, the Indian Railways would come to a grinding halt.

Indian Railways was headed for the ICU, I pulled it out: Dinesh Trivedi

The railways&rsquo; passenger earnings are set to rise a whopping 25.2 per cent, owing to fare increases announced in the Railway Budget on Wednesday. Of the projected increase of Rs 7,273 crore in the next financial year, about 85 per cent would be met through the rise in passenger fares, while the remaining would be accounted for through the rise in passenger numbers, expected to be about 5.4 per cent.

Trivedi bites the bullet to bring rlys on track

Industry representatives may be bitterly critical of the lack of progress on economic reform but curiously reticent when it comes to plain speaking about the government's non-performance. Responding to a question on why Indian companies are investing in assets abroad, a senior official of an industry lobby said, &quot;It's better to be a second citizen in another country where our demands and requirements are respected than a first citizen in our own country.&quot; Great quotable quote for journalists but when his outrage subsided, the official immediately requested the statement be &quot;off the record&quot;.

Unquoted fears

State-owned firms have been targets of minority investors, who have alleged lack of board independence, mismanagement and being used as cash cow to fund government's populist policies.

PSUs face minority flak

It's not only the government that senior business and financial professionals are wary of upsetting but the central bank as well. During a recent photo shoot, the chairman of a non-banking finance company agreed to smile for the camera only after some hesitation. &quot;I do not want to smile a lot. If the RBI sees this, it will not cut interest rates,&quot; he said. Obviously, he was being facetious &mdash; but only just.

Cut the smile

I plan to sell off my current house for about Rs 35 lakh and buy a new one worth Rs 55 lakh. My wife and I are planning to take a joint home loan to fund the purchase. Which should be the better policy &mdash; use the entire Rs 35 lakh and fund the deficit through a loan or try and get the maximum loan amount and invest the rest? Our monthly earning is Rs 1.1 lakh. We neither have liabilities nor dependants.

Financial Planning: Malhar Majumder

For years, it has been regular practice for school buildings in rural India to double as granaries during harvest time to tide over the chronic shortage of storage facilities with state agencies. Even so, senior officials from the agriculture ministry were surprised when, during a visit to one of the main rice-producing regions, they found two rooms in a primary school building being used to store grain. Their surprise had nothing to do with the use to which the rooms were put but the fact that they were named after Jawaharlal Nehru and Madan Mohan Malviya, who were, no doubt, expected to have been a source of inspiration for the children.

Grains of memory

The fact that many of the banal press releases issued by government departments on the Press Information Bureau (PIB) website do not get covered by the media has long been a source of dissatisfaction. Now, a PIB official in charge of a major ministry thinks he has found the answer. Instead of simply uploading the release on the website, he has told his bosses that department officials should share the information with him first.

'Exclusive' news

Apropos the edit &ldquo;RBI waits for FM&rdquo; (March 12), the central bank&rsquo; move to cut the cash reserve ratio by 0.75 percentage point a week ahead of its policy review was quite unexpected. This indicates that the Reserve Bank of India (RBI) recognises the liquidity tightness in the market because of large borrowings by banks. The present liquidity crunch is partly owing to banks&rsquo; inefficient management of assets and liabilities. The slowdown has affected banks&rsquo; credit portfolio since there is no credit expansion or repayment of loans. With high non-performing assets (NPAs), it is only natural to be more impacted by the liquidity crunch because of lack of recycling of funds. More NPAs mean less profit since there is no repayment of interest. Given the high inflation rate, banks raised interest rates on short-term deposits and deployed resources in long-term government securities and long-term advances.

Letters: In their own mess

Railway fares should be raised. Not because Railways incur losses on passenger operations.

Should rail passenger fares be raised?

Like a cancer patient in remission, Greece now greets every little victory with disproportionate joy, in the knowledge that it has only postponed the inevitable. Thus, the financial mavens in Brussels and Athens may be celebrating the fact that Greece managed to avert a default and obtain agreement from over 80 per cent of its bondholders on a debt swap as a precondition for a second bailout worth euro 130 billion. This is certainly a major achievement, since it means bondholders have taken a haircut of 53.5 per cent on the euro 206-billion debt that they hold. But a reprieve is not the same thing as survival; and, despite the weekend deal, the larger question of the Greek economy&rsquo;s ability to recover remains unanswered. A bond-swap agreement may look great when it reduces Greek&rsquo;s debt burden by euro 100 billion. It looks less impressive when seen as a percentage of gross domestic product (GDP).

Greece's exit option

There is little doubt that India&rsquo;s public health spending is disgracefully low, at just over one per cent of gross domestic product. Given that a large number of Indians are positioned unstably just above or just below the poverty line, the consequence of catastrophic health failure and high healthcare costs is that entire families are frequently sent back, highly indebted, to subsistence levels of consumption. Like education, accessible quality healthcare is indeed an essential ingredient of a stable, decent society with built-in social mobility. As India grows, it is essential to put into place a sensible universal healthcare provision, which should avoid the traps revealed by both European welfare states and American laissez-faire. Yet, as India prepares for a 2012-13 Budget that must prioritise the control and reform of government spending, sensible voices must be raised against creating another badly designed entitlement system.

No more entitlements

A M Naik&rsquo;s commitment to Larsen &amp; Toubro, or L&amp;T, is beyond doubt. He even wants to move to an apartment near the company&rsquo;s Powai factory once he retires so that &ldquo;when I die, I will be facing L&amp;T&rdquo;. That statement, made to this newspaper a couple of years ago, can be interpreted in two ways. One, it shows his devotion to an organisation he has served for almost half a century for 14 hours a day, seven days a week, turning it into India&rsquo;s biggest engineering and construction conglomerate. But the statement can also be seen as reflecting the obsession of a leader who has forgotten how to let go. There is no denying that Mr Naik has been L&amp;T&rsquo;s biggest value driver &mdash; ever since he took over as chairman in 2003, net sales have grown five times and market value 17 times.

Letting go at L&T

The government&rsquo;s sudden move to ban cotton exports &ndash; rolled back in less than a week following anger from cotton farmers and adverse political fallout &mdash; reflects very poorly on its policy management. The commerce ministry clamped down on exports without clear logic; prior consultations with other ministries concerned were also cursory or non-existent. Unsurprisingly, most players in the cotton sector were taken by surprise. The agriculture ministry was out of the loop, and so was the group of ministers that normally deals with key import-export issues involving agri-commodities. This mindless exercise hurt not only farmers, who still have considerable unsold stocks of the fibre, but also exporters, who had entered into supply contracts with foreign buyers after formally registering the exports with the government. Worst hit were those whose consignments were lying at the ports but were stopped from being shipped.

A welcome rollback

Hopes that the Samajwadi Party will become the government&rsquo;s saviour in Parliament to balance the recalcitrant Trinamool Congress are still alive even though the Congress did not win enough seats in the Uttar Pradesh Assembly elections to become a coalition partner in the state. The optimism of pro-reformers in UPA II stems from a strong expectation that UP&rsquo;s youthful chief minister-designate Akhilesh Yadav will think differently. According to a senior South Block official, since the younger Yadav has grown up in a different atmosphere and studied down south and overseas, he is likely to understand the need for tough economic decisions and garner support for them in the Lok Sabha, where his party has 22 seats. No doubt, the possibility of his father getting a ministerial berth might strengthen that resolve.

Here comes the son

Shastri Bhavan, which houses information officers (IOs) for most central government ministries and departments, is in the middle of a transition. There&rsquo;s a suggestion within the government that the IOs should shift permanently to their respective ministry offices in other government buildings so that Shastri Bhavan is left with more space for pressing assignments. At present, the information and broadcasting ministry, which has the Press Information Bureau (PIB) under its wing, is busy working towards the goal of cable TV digitisation target and it says it needs more space to accommodate personnel to ensure that the targets are met. The sunset date for completely digitising the cable TV system in the four major cities is June 2012, while the full country is to be digitised in phases by December 2014. The government had tried this earlier too through the conditional access system and had failed.

Business Standard

Business Standard

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