Only when core inflation eases but the negative gap between growth and inflation must be bridged by not allowing growth to slip.

Should RBI cut interest rates?

Business Standard

Wikipedia, the internet-based encyclopaedia, was supposed to go offline on Wednesday to protest anti-piracy legislation being discussed in the US Congress. Heated internal debate on whether that was a decision logged 90,000 words just in the 24 hours before the website went dark. Once it was decided that the most dramatic of the various protests would be the one undertaken, the website&rsquo;s programmers arranged it so that all visitors to site were presented with a dark screen that asked them to &ldquo;imagine a world without free knowledge&rdquo;. Unfortunately, Wikipedia being user-designed, nothing quite works as intended. Visitors to the website soon discovered that by pressing the &ldquo;escape&rdquo; key for five seconds, the dark screen disappeared. As always, on the internet, life went on.

Wiki leak

I had put some money in one of the initial public offerings (IPO) currently under investigation by the Securities and Exchange Board of India (Sebi). The share price of the company has fallen a lot since its listing. What should I do with my investment? I want to exit, but if I do so now, I will be incurring a huge loss.

Investing: Rishi Nathany

Big business has owned media companies before. The undivided Birlas had Hindustan Times in Delhi and Searchlight in Patna; the Dalmia-Sahu Jain combine (which later split) had Bennett, Coleman (publishers of, among other titles, The Times of India and The Economic Times); and the Tatas had a connection with The Statesman in what was then Calcutta.

Media ownership and independence

The Rashtriya Swayamsevak Sangh may rail against trade between China and BJP-ruled states, but Madhya Pradesh&rsquo;s chief ministers seem to find the Middle Kingdom very attractive. After a recent visit by Chief Minister Shivraj Singh Chouhan (pictured) to China, government officials are readying a red carpet welcome to Chinese investors. Chouhan&rsquo;s predecessor Babulal Gaur also visited China. &ldquo;Everyone has failed to discover what exactly it is that chief ministers explore in China and why they are inviting the Chinese to Madhya Pradesh,&rdquo; said an industrialist who had accompanied Gaur. &ldquo;The Chinese set up shop where cheap labour is available while Madhya Pradesh has the highest wage rates in India,&rdquo; he added. Meanwhile, two office-bearers of the BJP state unit are also in China to explore business opportunities.

Madhya Pradesh's China syndrome

Apropos Vinayak Chatterjee&rsquo;s timely column &ldquo;The high road to efficiency&rdquo; (Infratalk, January 16), the attitude of the government and the National Highway Authority of India (NHAI) seems to be that people should be happy that they&rsquo;re getting a four-lane highway at least. Build-operate-transfer (BOT) concessionaires also try to sneak in things (I believe with full tacit support from certain government functionaries) illegally to maximise profit. For example, the toll booths that mysteriously came up on NH4 before the ramp to the Bangalore International Airport were meant to extract money from the airport traveller as well as other users of the highway. The issue, however, did not go uncontested and the booths are now being dismantled and being located after the ramp.

Letters: India's highway blues

The Patni brothers backtracked from selling Patni Computers many times after putting it on the block and before iGate finally bought it. If it were not for this, the company might have had another, bigger buyer in Larsen &amp; Toubro, which has been looking out for IT companies for acquisitions (recall its Satyam bid). &ldquo;We wanted to bid. But whenever we did, they changed their plans to sell out. So when they did actually come out to sell, we did not think they were serious. So, we did not bid,&rdquo; a senior company official said.

Hit and miss

A review of the book The Greatest Trades of All Time (January 11) erroneously suggests that the financier and philanthropist Michael Milken was guilty of insider trading. He was not. Unlike Ivan Boesky, who was guilty of insider trading and was incarcerated for it, the resolution of Milken&rsquo;s case involved only what The Wall Street Journal described as &ldquo;technical reporting violations.&rdquo; These five violations occurred during a brief period in a 20-year Wall Street career that financed the growth of 3,200 companies and created millions of jobs. Also unlike Boesky, Milken has devoted more than four decades to advancing medical research. In fact, a cover story in Fortune magazine called him &ldquo;The Man Who Changed Medicine.&rdquo; He has worked tirelessly toward this goal, meeting with health officials in more than 35 nations, including India, to accelerate medical solutions that save lives.

Letters: Milken is no Boesky

No fresh cases of polio have been reported in India in the past year, but any celebration of that fact is premature. There are few guarantees that the disease is gone; several critical diseases, once near eradication, have come back with even greater virulence. Just this month, India was formally declared free of the avian influenza virus &mdash; and barely three days later, it resurfaced in Orissa. Several times earlier, the government mistakenly pronounced the &ldquo;bird flu&rdquo; virus gone. Consider also leprosy: in January 2006, the government claimed it was eliminated nationally, but World Health Organisation data still record India as having the world&rsquo;s highest number of leprosy cases every year. Similarly, malaria was once more or less controlled. But it came back, and brought along with it several other forms of mosquito-borne diseases, such as dengue and chikungunya, earlier unheard-of.

More than one year

It is sad that India ranks among the lowest in terms of maths, science and reading abilities (&ldquo;Learning disability,&rdquo; January 17). Apart from the poor physical infrastructure, the biggest hurdle is the psychological fear created in children&rsquo;s mind, often by their parents, that maths and pure sciences are dull and difficult subjects. Rote teaching does little to demolish this mental barrier. The stress is on learning theory instead of relating it with practice. A new student-friendly method of teaching these topics needs to be developed and those already being applied need to be popularised. Also the system of doing away with examinations in primary classes needs to be reconsidered since the output (100-per cent pass) does not lead to the desired outcome.

Letters: Subjects of concern

What&rsquo;s in a date? Well, lots of luck. It was, therefore, not surprising to see most of the business groups signing their agreements with the Andhra Pradesh government during the two-day Partnership Summit on January 12. Of the 240-odd MoUs lined up during the summit, only some big names signed agreements on the traditionally-unlucky Friday, January 13. &ldquo;We know many industrialists wanted to avoid signing MoUs on the 13th day of the month. So, several companies approached us to advance the date for signing stating that their bosses had to leave the city or perhaps the country for another, prescheduled meeting,&rdquo; a senior official said. So there was everything is official about this superstition.

The power of 13

Pakistan&rsquo;s government is under siege. The federal administration, led by the Pakistan Peoples Party, is facing a series of challenges from a motley set of adversaries, and its troubles seem to be about to boil over. Even so, there are signs of hope: the successive crises could be read as showing how both the government and its challenges seem to be evolving towards a more mature manner of dealing with frictions within Pakistan&rsquo;s delicately balanced establishment. Prime Minister Yousuf Raza Gilani declared on Sunday that what mattered was that the democratically-elected National Assembly &mdash; in which the PPP-led alliance enjoys a comfortable majority &mdash; should complete its term and not be forced out, regardless of the fate of the prime minister or the current government. Negotiations are on with the main opposition Pakistan Muslim League-Nawaz, or PML-N, to pass a parliamentary resolution reiterating the country&rsquo;s commitment to democracy.

No tanks this time?

A public sector bank, recently cut its base rate and said interest rate cuts would be passed on to customers soon. Does this signal rate cycle reversal? I plan to take a home loan.

Banking: Prashant Joshi

The volatility in the Index of Industrial Production (IIP) figures each month has become so common that it surprises nobody. But it has certainly attracted its share of humour. Asked to comment on the latest numbers, an economist with a foreign bank said he had labelled the IIP a &ldquo;Random Number Generator&rdquo; and any change between -7 and +7 per cent was acceptable.

IIP: random matrix

Sushil Modi, chairman of the empowered committee of state finance ministers, showed that he knows how to adapt the message to the medium. Addressing reporters in Bhopal on the negative list for taxation of services recently, he realised the local media was not fully cognisant of the intricacies of the issue. He, therefore, took time out to explain it and later promised a detailed handout for the print media. For the electronic media, though, he declined to take such pains, saying the four or five lines he spoke on camera would suffice.

Message & medium

With Budget preparations underway, North Block has been out of bounds for journalists, just as it is every year. This year, however, the quarantine is also being strictly applied to the headquarters of the government&rsquo;s main policy think-tank, the Planning Commission. Of course, Yojana Bhavan has always officially been out of bounds around Budget time but the embargo was rarely applied with any rigour. Indeed, some Planning Commission members don&rsquo;t see the point. As one of them remarked, the Commission only compiles the main proposals, the main work of preparing the Budget is done in the ministries and thereafter the finance minister &mdash; and the former is never out of bounds for journalists.

Crossing the bar

Barun Roy&rsquo;s column &ldquo;Arrogance before the fall?&rdquo; (Asia file, January 12) made a valid point. Many baseless charges have been levelled against Anna Hazare. First, he was termed an RSS man; then he was dubbed a casteist; and now, he is trying to claim superiority over Parliament. In the midst of all these accusations, however, there are some legitimate concerns. The Jan Lok Pal could create a parallel bureaucracy and managing it would be quite a task. Take the case of the Right to Information Act &mdash; there are so many applicants that swarm government offices to seek information that, in many cases, is unnecessary and frivolous. This adds to the workload of the already-burdened government offices. It may also end up making the process of governance tougher. However, these fears cannot discount the need for a strong anti-corruption Bill. The fact is that we need to make parliamentarians accountable.

Letters: Bill or bane?

This refers to T N Ninan&rsquo;s column &ldquo;Why growth falters&rdquo; (Weekend Ruminations, January 14). Indeed the &ldquo;pursuit of objectives other than growth&rdquo;, apart from a governance deficit, is causing growth to falter in the present Indian context. Political survival seems to be the main objective and reigns supreme over growth. Reforms are merely carried out to show that the ruling party has done some sort of work before it completes its term. The opposition, too, is of no help with its constant obsession to establish that the party in power cannot move forward on the growth path. Of course, corruption and scams, slowing domestic economic growth and inflation has helped it prove this point. Such a scenario only makes it easier for the opposition and other institutions to look askance at most of the government&rsquo;s proposed policies.

Letters: Survival above all

This refers to Ajai Shukla&rsquo;s article &ldquo;All the chief&rsquo;s men&rdquo; (January 14). The British organised the Indian army on the basis of ethnicity to deploy appropriate regiments to quell regional troubles &mdash; for example, Punjab regiment in the south, Madras regiment in the north and Gurkhas elsewhere. On the other hand, these ethnic regiments also served the purpose of ensuring communication between soldiers and their families before the telecom boom. Since most soldiers in a unit belonged to the same village or block, when one went on leave he would carry messages home for the rest of the soldiers. It may now take a generation to remove this ethnic regimental system, but the process could have been hastened by mixing the regiments when senior infantry battalions were being converted into mechanised infantry battalions.

Letters: Regiment change

Only the wilfully self-delusional are likely to be surprised by the findings of OECD&rsquo;s Programme for International Student Assessment (PISA), which has ranked India second last among 73 countries in maths, reading and science abilities, being ahead only of Kyrgyzstan. The findings should be a wake-up call for policy makers who may be congratulating themselves on the higher enrolments achieved under the massive Sarva Shiksha Abhiyan, and the passage of the Right to Education Act. That&rsquo;s because the dismal showing has come from students from Tamil Nadu and Himachal Pradesh, two states hand-picked by the government as showpieces for education and development. Yet 15-year-old students from these states managed to consistently lag on almost every parameter. In reading English texts, for instance, Indian students bested only Kyrgyzstan.

Learning disability

Drafting the Union Budget for 2012-13 will not be easy. It is vital for macroeconomic stability that the central government attempt a return to fiscal prudence. In the 2011-12 Budget, it was estimated that the fiscal deficit would be 4.6 per cent of GDP. It is clear that the actual figure will overshoot this estimate, and settle at 5.5 per cent or more. The finance minister had also said that the deficit would be progressively reduced to 3.5 per cent by 2013-14, which looks like an impossible task. Disinvestment targets have been missed; and there is no equivalent of the 3G auction windfall which made the 2010-11 figures look respectable. It appears that the finance ministry is well aware of the difficulty of its task, and is looking everywhere for solutions. Many of these are of the quick-fix variety &mdash; for example, the endeavour to persuade cash-rich public-sector companies to buy back some of their own shares.

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