Railway Minister Dinesh Trivedi is on a sticky wicket and admitted as much to some reporters last week. &ldquo;I don&rsquo;t know how long I will continue to be the railway minister,&rdquo; he said. The admission comes two months before the Rail Budget is presented to Parliament. Trivedi is finding it difficult to push the idea of a hike in passenger fare &mdash; desperately needed by the ministry to get its Budget in order &mdash; as his party chief Mamta Banerjee has strictly ordered against an increase in fare. Adding salt to his wounds, Trivedi was told in a Cabinet meeting last week by a senior minister: &ldquo;We don&rsquo;t rule out the possibility of Trinamool Congress withdrawing support from the UPA just to prevent you from presenting the Rail Budget.

Between devil and deep blue sea

Business Standard

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?

Several pieces of news out of Europe last week pointed to the fact that a resolution of the euro crisis remains distant. The most attention-catching was the announcement on Friday by the credit rating agency Standard &amp; Poor&rsquo;s that it was downgrading nine European economies. In some ways, the new ratings merely reflect fundamentals that were already transparently visible to market participants &mdash; and thus it could be argued that they had, to an extent, been priced in. However, their impact on the ability to raise funds and roll over debt is considerable. Heavily indebted Italy now has a rating of BBB+; its sovereign paper is now just three notches away from losing investment-grade status. France and Austria have lost their AAA ratings. Some funds require AAA-equivalent ratings for their investments, so the effect on borrowing capabilities should not be ignored.

Downgrade sounds the alert 

Air India has a longish list of dissatisfied customers but not all of them get an opportunity to complain &ndash; in person &ndash; to the highest level in the airline management. This customer, however, got an opportunity to do so when he became civil aviation minister.

Privileged customer

Many Indians consider a cat crossing their path a bad omen, but the mandarins of the finance ministry appear to think otherwise. Visitors to North Block will find it impossible to avoid these cats because their presence isn&rsquo;t accidental. Plagued by rats chewing up important files, finance ministry officials decided to draft cats into service to catch them &mdash; at least till the Budget is presented. Some years ago, it was truant monkeys that bothered the Budget-makers. It&rsquo;s almost as though Indian Budgets unleash animal spirits.

North Block's fat cats

At any rate, the annual retreat for senior officials of the department of economic affairs unleashed some unexpected dramatic talent. Several directors put on a skit that took good-natured digs at their bosses. Their senior officers took it in the right spirit, but the directors, being smart bureaucrats, made sure that none of them played the part of his reporting boss.

Role model

I have not come across many articles as forthright as Barun Roy&rsquo;s &ldquo;Arrogance before the fall?&rdquo; (Asia file, January 12). Our politicians amply displayed their contempt for public opinion and Anna Hazare inside and outside Parliament. In fact, it was not just the political class, but also the intelligentsia and commentators that accused Hazare of destabilising democracy, challenging the authority of Parliament and degrading the elected representatives. These people forgot that Hazare&rsquo;s movement did not come out of the blue. The anti-corruption agitation took place against a background of wide public discontent. Thus, Hazare&rsquo;s movement was only a medium through which people could vent their wrath against politicians and the corruption in systems ruled by them.

Letters: A medium for the masses

Your edit &ldquo;Who&rsquo;s the company?&rdquo; (January 11) raised many interesting questions on Mahindra Satyam&rsquo;s decision to sue the company&rsquo;s former directors and auditors. It will be interesting to see how this issue unfolds. One wonders, however, at the slow progress of criminal proceedings against fraudsters in India, especially when compared with countries like the US. Unless prosecuting agencies work hard at collecting evidence during investigations and establishing guilt, corporate moguls&rsquo; lack of ethics will continue to damage our nation. Satyam-like episodes expose retail shareholders and lower rung employees to risks that are beyond their capacity to bear. So we need to address the issue of bringing high-profile economic offenders to justice and rewarding genuine investors to put our economy on the fast track.

Letters: Slow justice

Apropos the report &ldquo;Valuing good taxes&rdquo; (January 12), there is a serious flaw in the definition of &ldquo;luxury&rdquo; goods. Mobiles were termed a luxury as one of the six conditions for the mandatory filing of income tax return. By this standard, almost the entire Indian population would come in the &ldquo;elite&rdquo; category. On the other hand, water, the most basic necessity, is also a luxury, depending on when, how and in what quantity it is used. The basic concept of indirect taxes is counter-productive because it allows the government to first take from the poor and then pay back in the form of subsidies. Both these processes promote corruption and graft. We are obsessed with the faulty notion that direct taxes are taxes on &ldquo;income or profit&rdquo;. This view does not distinguish the productive use of money from wasteful or lavish expenditure.

Letters: Direct miss

Recently, when senior Bharatiya Janata Party (BJP) leader Uma Bharati decided to take time off from her election rallies in Uttar Pradesh and visit the party headquarters in Delhi, she was asked how she felt to step inside the BJP office after a long break. While trying to avoid a direct reply to this uncomfortable question, Bharati replied, &ldquo;Baat muddat ko dekh ke yun laga, jaise bechain dil ko karaar aa gaya.&rdquo; Bharati was sacked from the party for speaking against seniormost leader L K Advani.

Back to the pavilion

The indomitable Congressman Mani Shankar Aiyar has always had a different take on events. During the peak of the Anna Hazare agitation last year, while Congressmen of every hue were worried and perturbed, Aiyar was heard commenting dryly, &ldquo;I&rsquo;m quite confused.

The art of dying!

West Bengal Finance Minister Amit Mitra generally chooses his words carefully when he speaks in public. So much so that during his address to assembled industrialists at the inauguration of Bengal Leads 2012 in Kolkata, Mitra made a point of coining a word &ldquo;person-power&rdquo; to replace &ldquo;manpower&rdquo;. &ldquo;Please note I do not say manpower. I think women are as strong as men,&rdquo; Mitra explained. Maybe the fact that he was sharing the stage with his leader and Bengal&rsquo;s first woman chief minister had something to do with his choice of words.

Word power

The government finds itself between a rock and a hard place on account of rising deficits and the difficulty in raising new revenues due to the slowdown. Between April and October, the fiscal deficit hit Rs 3,07,009 crore, about 75 per cent of the budgeted Rs 4,12,817 crore for the full year. One new source of revenue (perhaps small initially) could be the black economy. This is variously estimated to be between 30 and 40 per cent of official gross domestic product (GDP). Even a modest contribution from the &ldquo;black&rdquo; could be useful in getting government finances out of the red. Rather than adopt amnesty schemes, which are one-time measures, it would be better to legitimise and regulate a large chunk of the black economy, thus ensuring recurrent revenues. One option would be to legitimise and tax illegal gambling.

Black and red 

Tata Motors is keen to put the small car&rsquo;s past behind.

Will Nano's brand resurrection work?

Tax laws say the premium paid towards insurance in any form is eligible for deduction under Section 80C. So, all pension plans sold and administered under the insurance domain are eligible for tax deduction.

Life Insurance: V Philip

The gains from Bt cotton must be consolidated by introducing new genetically modified varieties.

What's good for GM

The improved IIP figures should not make RBI sit on its hands.

Patchy recovery

The editorial &ldquo;Economists wanted&rdquo; (January 8) rightly laments that economic advisers in various ministries are not up to the mark. For example, even after reducing tax rates from 97 to 30 per cent, why does India still have a black money problem? No noted or unnoted economist has offered a solution. It appears to me that India does not have economists at all. What we have are economists who have studied from books or lectures prepared on the basis of material available in foreign countries. In other words, they are all dependent on borrowed ideas. You have mentioned Kaushik Basu, Chief Economic Advisor, whose successor is to be named in August 2012. His main job till today has been limited to writing an Economic Survey report or forecasting GDP growth rate or delivering speeches. This job can be done by any person who has some working knowledge of economics or written some articles here and there.

Letters: Missing economists

The report &ldquo;UK to have say in executives&rsquo; pay&rdquo; (January 7) reminded me of the formation of the Cadbury Committee on corporate governance in the UK. In the eighties, financial scams were rife in the UK (Robert Maxwell and the Mirror Group, Asil Nadir and Polly Peck, Bank of Credit and Commerce International), and the excessive pay that executive directors gave themselves was one among them. The Cadbury committee recommended that non-executive directors should be involved in fixing these pay packets, which should be commensurate with the responsibility and the performance of these directors. These recommendations were followed up by the Greenbury Committee, all of which brought back some semblance of discipline to executive pay packets there. In India we are now experiencing such disproportionate pay packets after the economy was liberalised in the early nineties.

Letters: Paying for performance

With reference to &ldquo;West Bengal&rsquo;s AMRI lesson&rdquo; (Chinese Whispers, January 12) the West Bengal government has checked fire safety at all major hospitals in Kolkata through inspections by a special fire safety audit committee and some major hospitals are finding it difficult to meet the mandatory requirements &mdash; and may even be shut down.

Letters: AMRI fallout

Drafting reports is something few government officials relish but for those working in the Press Information Bureau (PIB), the problem just got bigger. PIB officials have been asked to submit daily reports instead of weekly work reports that they currently do. This sudden increase in the workload caused one PIB official to complain, &ldquo;Would they like it if we wrote &lsquo;nil&rsquo; in the daily reports? The people at the top really do not understand the problems at the ground level.

Business Standard

Business Standard

Page 946 - Business Standard