The government&rsquo;s sale of about five per cent of its shareholdings in ONGC last week, through an open auction on the trading platforms of the two stock exchanges, raises several questions, which the government and its advisers would do well to reflect upon. For a successful auction of the ONGC shares on offer, two basic criteria needed to be fulfilled: a realistic assessment of the demand based on the prevailing market conditions and an attractive pricing for the investors. The government needed to receive appropriate advice on these matters. It is not quite apparent from the way the offer was managed if the government received such advice or whether it chose to ignore it. For instance, pricing the shares close to the market-traded price hardly made it attractive for the investors since they could buy them at around that price from the market. Moreover, an offer for sale that cannot be advertised publicly needs effective marketing and close monitoring by the owner-promoter.

The ONGC miracle

Business Standard

This refers to your edit &ldquo;Lining up to vote&rdquo; (March 6). The high voter turnout in the recent state elections is certainly a boost to our democracy. However, this is just the first stage of the three stages that make a mature democracy. The second stage is one in which voters rise above petty considerations and vote for the right candidate, keeping real issues in mind. And the third stage is one in which political parties are compelled to work for the larger good of society, shunning divisive ways and wrong practices. Till there is such voter awakening and change in the political culture, it makes little difference which party or alliance comes to power since it is unlikely to bring any significant change.

Letters: A numbers show

Apropos the edit &ldquo;Get out of the kitchen&rdquo; (March 5), the petroleum ministry&rsquo;s concept of &ldquo;single kitchen&rdquo; can be easily gamed, given the arbitrariness of the definition, the process of voluntary declaration and the low-impact penalties. Since the value chain of domestic LPG is fraught with diversion and manipulation, the objective of social justice through energy subsidies can hardly be served. Growing income and purchasing power differentials make uniform subsidies wasteful. Also, the policy on a shared utility like domestic LPG must take a household-income approach instead of an individual-income approach. If scrapping the LPG subsidy is not feasible, then the government could consider measures like progressive reduction of subsidy with each additional cylinder refilled, followed by market-pricing beyond a certain cap.

Letters: Wasteful subsidy

Apropos the edit &ldquo;Lining up to vote&rdquo; (March 6), all credit must go to the electorate and the Election Commission for the high turnout in the recently-concluded Assembly elections. The Election Commission has not only ensured free and fair elections, but it has also contributed immensely by creating awareness and helping voters exercise their democratic rights. Though an increased voting percentage is a clear sign that our democracy is healthy and sound, we need to take note of a few things. Women voters still outnumber men. Efforts should be made to reduce this anomaly and ensure equal participation. Also the Election Commission, on its part, needs to ensure that there is not much gap between elections if they are taking place in many states since this hinders development work.

Letters: ... and the way ahead

The agriculture ministry&rsquo;s reported decision to tie the state-wise allocation of funds from the National Agriculture Development Plan (NADP) to the states&rsquo; progress on agri-marketing reforms seems likely to benefit both farmers and consumers. Yet the gains from releasing central assistance only conditionally could be substantially augmented.

The tying of farm aid

In the article &ldquo;Lovers leap into film&rdquo; (March 4), Debaleena Sengupta asserts that Sesher Kabita has not been adapted into a film until now and that there was a TV version of it in 2010. But the novel was, in fact, made into a film in the late fifties. The film was directed by Madhu Bose, Amit&rsquo;s role was enacted by Nirmal Kumar and Labanya&rsquo;s by Dipti Roy. But such vintage information is available only with septuagenarians and octogenarians. It was a hit film for us at that time.

Letters: Old memory

Not till we are confident that inflation will stay under control but there is a need to manage the growth-inflation balance too
Madan Sabnavis 
Chief Economist, CARE Ratings
&ldquo;While inflation is less of a worry than it was in, say, October 2011, monetary policy should take a futuristic view of expected inflation before releasing the pressure&rdquo;
The present economic environment has a proclivity towards the penumbra of the economic canvas with the latest GDP and index of industrial

Is it time to cut interest rates?

Indian Railways (IR) seems to be caught in a time warp, kept there by successive ministers who have played to the gallery by announcing more and more new passenger trains without caring what this will do to the congestion in the network and the efficient carriage of revenue-earning freight traffic. There is no dedicated freight network in sight, which in turn slows down passenger traffic. At the very least, long-distance passenger travel should be separated, operationally and administratively, from freight and commuter travel. Also, there has been no new effort to raise passenger fares. This lack of modernisation, combined with stagnating revenue, is a recipe for disaster. Thus, the report of the committee headed by Sam Pitroda, which has cogently argued for rapid catch-up modernisation and set out a road map for it, will be widely welcomed.

Railways must modernise

The just-concluded Assembly elections in five states had one particularly noteworthy characteristic, obvious even before the votes are counted: the high turnout. In four out of the five states having elections &ndash; Uttar Pradesh (UP), Uttarakhand, Punjab and Goa &ndash; the proportion of registered voters who exercised their franchise was at an all-time high. The fifth state is Manipur; India&rsquo;s north-east has always had a high turnout. Punjab registered a 77 per cent turnout, up from 70 per cent in the Lok Sabha elections of 2009. Goa had 81 per cent of its electorate trek to voting booths, a similar record. Uttarakhand saw 70 per cent; in 2009 it was just 54 per cent. In UP, women voters in particular came out in numbers not hitherto seen.

Lining up to vote

I read the insurance regulator wants policies to be sold based on the customer's need.

Life Insurance: V Philip

The petroleum ministry&rsquo;s &ldquo;single kitchen&rdquo; concept for new consumers of liquefied petroleum gas, or LPG, is a classic case of using a flawed solution to compensate for policy distortions in the pricing of petroleum products. The norm of allowing one LPG connection per household with one kitchen may look good on paper but it is hardly a foolproof mechanism to curb the misuse of the highly subsidised fuel. New consumers are required to give an undertaking that neither she nor any family member has a gas connection in the single-kitchen house (the penalty for violation is hardly draconian: the consumer forfeits her security deposit, which is a couple of thousand rupees).

Get out of the kitchen

In the past, personal aircraft of a top Union minister from Madhya Pradesh used to be requisitioned by the Congress party routinely when elections were on &mdash; the understanding being that the aircraft would be given at &lsquo;friendly rates&rsquo;. But, during this round of polls, Congress treasurer Motilal Vora found the rates had become distinctly &lsquo;unfriendly&rsquo;. In fact, the price demanded was slightly higher than the commercial rates. As a result, the minister&rsquo;s aircraft has been in the hangar all these months, as the Congress party found it cheaper to hire a commercial aircraft.

'Unfriendly' airfare

Should journalists believe their own stories? Not according to BP India Country Head Sashi Mukundan. He told them recently that the partnership with Reliance Industries in several hydrocarbon exploration blocks has been going well after the government approved the deal six months ago. Mukundan must have been aware that this statement was at odds with reports of problems and delays that the BP-Reliance tie-up faced, because he quickly added that reporters should not believe &ldquo;everything that they hear or read in the media&rdquo;.

A question of self-belief

Apart from a staff crunch and the decrepit condition of coaches, Kolkata Metro has earned a bad name for another reason. Metro stations have become the preferred spot for committing suicide. According to official records, there were 24 suicide attempts in 2011 and seven so far in the current year. Director of the upcoming Bollywood thriller Kahaani, Sujoy Ghosh might be aware of this statistic since one of the promotional clips of his movie has the lead character (played by Vidya Balan) pushed in front of a speeding train in a Kolkata metro station. This has not gone down well with the Kolkata Metro authorities, who wrote to the film director objecting that the scene was damaging the image of the country&rsquo;s first metro. So the clip has been finally taken off air but the scene will remain in the movie.

Suicide watch

A strike is always a holiday in Bengal, no matter who calls it. So there was no surprise that people responded with enthusiasm to the Left-sponsored industrial strike. But ahead of it, Chief Minister Mamata Banerjee had warned state government employees of dire consequences if they didn&rsquo;t show up for work. Now, Banerjee has asked her administration to compile a list of absentees on that day to take action against them. But there&rsquo;s a problem: the attendance sheet for February 28 has mysteriously gone missing in some departments. Perhaps Banerjee will realise that in challenging the Left-sponsored general strike, she has ended up challenging the work-shy nature of her employees.

Strike out

This refers to T N Ninan&rsquo;s column &ldquo;Penance time&rdquo; (Weekend ruminations, March 3). The president of Luxembourg had once said all national leaders know exactly what is needed to be done; but they don&rsquo;t know how to get re-elected if they do it! The situation is no different in India. All the right prescriptions to all that ails the country have been given time and again. But the elected government simply does not go for medication because of its perceived electoral &ldquo;side-effect&rdquo;. Coalition compulsions and a badly fractured polity only add to the problem.

Letters: Govt's prescription charge

This refers to Anindita Dey&rsquo;s article &ldquo;National agriculture insurance scheme to be modified for farmers&rsquo; protection&rdquo; (March 1). Mahatma Gandhi said if India really wants to grow, then, first, its villages must grow. Today, the agricultural insurance market is on the threshold of spectacular growth. Support measures proposed by the government in the horticulture sector; the potential of organic farming; the growing importance of aromatic and medicinal plants; bio-diesel plants; contract farming; corporate farming and integrated insurance and so on are likely to put agricultural insurance on the right track. Agricultural insurance, though, is likely to be demand driven in future. The government&rsquo;s efforts to support and finance insurance products and/or facilitate a congenial environment for meaningful risk management would enhance the potential and credibility of agricultural insurance.

Letters: Insuring growth

This refers to the edit &ldquo;The insider&rsquo;s complaint&rdquo; (March 2). The United Progressive Alliance (UPA) government is currently saddled with many problems and is worried about losing the 2014 general elections. Trade unions have, therefore, correctly assessed this is as the right time to put pressure on the government and get some of their demands heard. However, it would be detrimental to India&rsquo;s economic interest if the government succumbs to trade unions&rsquo; pressure, especially at a time when manufacturing needs to be given a big push. India missed a couple of opportunities earlier to get into manufacturing in a big way. The first time was after the industrial revolution. And the second time was over the last few decades of the 20th century when most south-east Asian countries made big strides in industrial growth. The reason for these missed opportunities was possibly the political turmoil that India was going through.

Letters: Don't succumb to pressure

This Monday, in StatsGuru (which will now be a weekly feature), we look at whether the headline numbers for the three largest states in which governments are facing re-election &ndash; Punjab, Uttarakhand and Uttar Pradesh &ndash; allow observers to determine whether good governance, or populism, can actually be factors in voters&rsquo; decisions.

StatsGuru-05-March-12

The demographic trends in Indian internet usage and the ways in which Indian e-commerce is developing suggest that it is on the cusp of an explosion that could, in the next three years, turn it into one of the largest markets in the world. India has already become a test market for e-commerce because it exhibits unusual patterns that could be replicated elsewhere. India&rsquo;s netizens are young, highly social, unafraid to shop online and comfortable with mobile access.

Counting the clicks

At a Group of Ministers&rsquo; meeting headed by Finance Minister Pranab Mukherjee, a minister of an important economic portfolio was asked to make a presentation. He started with an impressive introduction &mdash; launching upon an analysis of the global slowdown and its impact on India&rsquo;s trade. He had barely spoken for three minutes when the finance minister stopped him. &ldquo;We know all this,&rdquo; said Mukherjee tetchily, &ldquo;Come to the point.&rdquo; The minister sat down and asked his secretary to resume the presentation.

Business Standard

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