&ldquo;Prompt and timely execution of infrastructure reforms announced earlier should pave the way for long-term growth. Currently, weighted deduction for in-house research and development is available till March 31, 2012. The benefits of this act should be extended until the Direct Taxes Code is enacted.

Expert speak: Abdul Majeed

Business Standard

Pessimism about India&rsquo;s growth may be rife but not for ICICI Bank and Infosys Chairman K V Kamath. He feels India&rsquo;s economy will grow at 10 per cent over the next decade. At a recent seminar he said this growth will have three constituents. &ldquo;The first is the eight to 8.5 per cent estimated by different government agencies based on official data. This is what I call the recorded number. Second, there is a lot of growth that gets lost due to inefficiencies in our data collection mechanism, largely omissions. This is what I call the uncounted number. This could come to around one per cent. Third, there is growth that is not recorded in the system. This is what I call the unaccounted number and this will come to another one per cent,&rdquo; Kamath said, adding, &ldquo;I am a bull on the India story. This decade is ours to lose.

Growing optimism

At a recent seminar, panelist after panelist talked about the importance of the role played by venture capitalists (VCs) in the success of BSE&rsquo;s SME exchange. Dushyant Dave, a venture capitalist took a leaf out of Milan Luthria&rsquo;s iconic The Dirty Picture dialogue. &ldquo;I heard recently that films run because of entertainment, entertainment, entertainment. Similarly, the three important things for VCs are Exit, Exit, Exit. And the SME exchange platform will provide an important exit route for VCs.

Three Es of VC funding

Many senior leaders in the telecom world, including current and retired CEOs and bureaucrats, seem to think that the regulator Trai and the Department of Telecom are not the best people to come out with solutions for 2G spectrum auctions. After all, they reason, these two organisations were very much in the picture when the 2G scam occurred, so how can the job of cleaning up the 2G mess be entrusted to them. But ask these worthies for a solution, and they don&rsquo;t have a clear answer either, vaguely suggesting that a group of independent sectoral experts may be able to draw up a sound roadmap.

2G call drop

Apropos Shreekant Sambrani&rsquo;s article &ldquo;Gujarat&rsquo;s burning train, ten years on&rdquo; (February 27), Narendra Modi has been successful in giving the people of Gujarat good infrastructure and a corruption-free environment. Not for nothing do investors line up at Modi&rsquo;s office, they know that they will not face any bureaucratic hurdle in the state and that things will be done in the right manner. The 2002 communal riots are the only blotch in Modi&rsquo;s tenure as chief minister. Nevertheless, he has not done enough to make peace with the angered Muslim community. He must remember that a mere apology can solve several issues. If he is even a bit serious about becoming prime minister, he must realise that it is arrogance that can mar his chances of going to Delhi.

Letters: Apology before Delhi

Apropos the edit &ldquo;Transforming transfers&rdquo; (February 27), the Aadhaar scheme is the United Progressive Alliance&rsquo;s wonder project and goes beyond providing an identification number to all residents. The primary objective is to ensure that the Rs 300,000 crore worth of subsidies spent every year reach the targeted beneficiaries. The task-force headed by Nandan Nilekani, chairman of the Unique Identification Authority of India, has given many suggestions to meet this objective. Among other things, the creation of a network of 1,000,000 business correspondents, each equipped with a hand-held micro-ATM, is suggested. The timing of the suggestions is important since these come close to next month&rsquo;s Budget announcement. The government must establish its database of beneficiaries under all its welfare schemes and link it to the Aadhaar project so that the scheme works successfully. If the project succeeds, it could transform the Indian economy and society.

Letters: Aadhaar: a wonder project

This refers to two reports: &ldquo;Mallya says no to loan on personal guarantee&rdquo; and &ldquo;Govt may not let Kingfisher to crash&rdquo; (February 23). Vijay Mallya&rsquo;s refusal to offer a personal guarantee to lenders may well be the final straw of the Kingfisher saga. Why is Mallya reluctant to give a personal guarantee? Has he already come to the conclusion that his business is no longer viable and doomed to fail in the long run? Moreover, Mallya has nothing to lose. The public sector and certain private lenders have a total exposure of over Rs 7,000 crore to the airline and he seems to be having the last laugh.

Letters: Why so reluctant, Mr Mallya?

Such a tax is vital to the objective of reducing inequity but it is unlikely to yield significantly higher revenues.

Should there be a super-rich tax?

Prime Minister Manmohan Singh is among the most discreet of politicians. So, when he makes a controversial remark, it can be assumed that it is the product of measured judgement rather than hot-headed indiscretion.

No-Go Organisations?

&ldquo;Automobile companies should be encouraged to establish manufacturing units in the country so that India becomes a manufacturing hub and turns into a net exporting nation. The stimulus offered to small and big cars should be retained. The price of diesel should be deregulated, but target groups should continue to get it at subsidised rates.

Chamber speak: D S Rawat

Going by Krishi Bhawan&rsquo;s assessment, it appears that agriculture in eastern India has finally turned the corner, and the region is now food-surplus. The east, despite its enormous potential for agricultural growth, had remained unaffected by the green revolution &mdash; largely due to sustained apathy from the Centre and lack of enterprise on the part of its state governments. There has, however, been a visible change in recent years; the Centre seems to have realised that the second green revolution has to come from the east (Bihar, West Bengal, Orissa, Assam, Chhattisgarh, Jharkhand and east Uttar Pradesh) and the states have got their act together. As a result, rice output in this region surged to over 56.2 million tonnes in 2010-11, which is more than half of the country&rsquo;s total rice harvest of 96 million tonnes. Overall foodgrain production in eastern India, too, grew by around 12 per cent, against an all-India increase of only 2.2 per cent.

The eastern green revolution

I earn Rs 1 lakh a month and have a CIBIL credit score of 600. Still, a public sector bank refused me a home loan.

Debt counselling: Sanjay Agarwal

&ldquo;Providing financial autonomy to higher education institutions and promoting skill development are key to expansion of quality education. To reduce private universities&rsquo; dependence on fees and public institutions&rsquo; on grants, the National Higher Education Finance Corporation needs to be set up. Also, service providers opening skill centres in backward areas should get I-T exemption.

Chamber speak: Shobha Mishra Ghosh

&ldquo;The Budgetary allocation for education should be increased to at least 6% of GDP. There should be tax benefits on study loan repayments for all levels of education. Besides, the education sector should be accorded infra status. Also, institutions/industry/individuals providing certificates and diplomas in professional courses other than those of UGC/AICTE, etc, should get service tax exemption.

Industry speak: Sushma Berlia

Bajaj Electricals (BJE) suffered a setback as R Ramakrishnan, executive director, resigned on February 20, 2012. He spent over 12 years in the company and guided it through restructuring over the past few years, besides several international tie-ups for its consumer business. Shekhar Bajaj, CMD, indicated day-to-day operations will remain unaffected as these are driven by six business unit heads.

Analysts' corner

UP most important among five polling states, given its sheer size. It is hard to tell which party may benefit.

UP polls: Fallout on the Street

&ldquo;We expect greater Budgetary allocation for higher and vocational education, in view of the increasing number of unemployable youth. In addition, a liberal financial environment for private sector participation and increase in use of technology is imperative for capacity expansion and quality improvement.

Expert speak: Dhiraj Mathur

The permission granted by the Forward Markets Commission (FMC) to co-operative societies to trade on the commodity exchanges is a welcome move &mdash; and one that has been demanded since futures trading was resurrected in 2002-03, after a hiatus that lasted over four decades. At that point, one of the reasons for its reintroduction was to enable farmers to hedge their price risk, which was not protected by typical hazard-mitigating instruments like insurance. However, this objective remained unmet. First, farmers could not afford to pay the exchanges&rsquo; membership fees, which were high; the other requirements for access, including the payment of margins, were also onerous. Further, the minimum lot size that was stipulated for trading in the futures market is much larger than the marketable produce of most medium and large farmers. Naturally, small cultivators, who need risk coverage the most, are totally excluded.

Futures imperfect

The estimates of India&rsquo;s gross domestic product (GDP) for the third quarter (Q3), which ended in December 2011, were released by the Central Statistics Office yesterday. They should leave nobody in doubt about the trajectory of the economy&rsquo;s growth in the current financial year. At 6.1 per cent, not only has the growth rate been the lowest in any quarter since 2009, but it also confirms a steady deceleration over the last year; each succeeding quarter has clocked a lower growth rate than that in the previous one. The Q3 GDP numbers are a dampener for another reason. The advance estimates for the annual growth rate for 2011-12, earlier pegged at 6.9 per cent compared to 8.4 per cent in the previous year, may now appear over-optimistic, and the 7.1 per cent projection made by the Prime Minister&rsquo;s Economic Advisory Council even more unrealistic.

Timely warning

A K Bhattacharya in his column &ldquo;PMO and the PM&rdquo; (February 28) seems to suggest that while Pulok Chaterjee is doing an excellent job as principal secretary, the prime minister&rsquo;s performance is not up to scratch. However, this differentiation is not borne out by the instances the author cites.

Letters: Cut the PM some slack

The last four quarters have seen the index correcting by 25 per cent, resulting in an erosion of value of shares pledged for securing loans. In such a scenario, companies that have taken loans against shares have to provide further margin in cash or pledge more securities to maintain the margin requirement. The risks associated with pledging of shares are quite significant, particularly from the promoter&rsquo;s perspective.

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