Minister for Law and Company Affairs Salman Khurshid has justly been criticised for what was seen as a direct attack on the authority of the Election Commission (EC). Mr Khurshid was warned by the EC that he was violating the model code of conduct when he promised that, if voted in, the Congress would increase the sub-quota for Muslims within the larger category of reservations for Other Backward Classes, or OBCs, from 4.5 per cent to nine per cent.

Code breaker

Business Standard

The latest edition of the &ldquo;India State of Forest Report&rdquo;, or ISFR, which is compiled biennially, is worrisome. The report claims that 367 square kilometres of forest have been lost in the past two years; and that the total forest and tree cover actually shrank, to 23.81 per cent of the country&rsquo;s total area. These are a reversal of the trends that had been claimed earlier.

Green cover-up

National shame&rdquo; is how most people, including some senior government functionaries, often refer to the pervasive practice of open defecation. Yet, the Total Sanitation Campaign (TSC), launched in 1991 with the noble objective of providing access to hygienic toilets for all by 2012, receives only scant attention from the government. The latest assessment indicates that as many as 22 states will miss the deadline for eliminating open defecation.

An open shame

That the civil aviation ministry has lifted the restrictions it placed on the overseas expansion of domestic private airlines is good news. Those restrictions, which were brought into force in March 2011 in order to protect state-owned Air India from competition, were misguided. Air India, which carries only a fifth of the country&rsquo;s international passengers, was always unable to take full advantage of the bilateral routes that were reserved for it.

Clearing the runways

The government&rsquo;s announcement of its new telecom policy should be welcomed as a move forward after the missteps and uncertainty that have dogged the sector in the past months. Although it retains elements that appear to contradict other parts of the policy &ndash; as well as some recommendations of the sector regulator &ndash; it at least shows the government&rsquo;s intent to clean up telecom.

Telecom's fresh start

The market regulator, the Securities and Exchange Board of India, or Sebi, is considering a change in disclosure norms to ensure that price-sensitive information is released to the stock exchanges before being disseminated to other bodies such as industry associations. On the face of it, the immediate impact of this would be merely cosmetic. However, it may have positive or negative long-term implications. The underlying logic seems impeccable.

The price of data 

In the past few weeks, Bangalore has reportedly seen over 150 instances of money being fraudulently withdrawn from automated teller machines or ATMs. The fraudulent transactions have been carefully timed at the cusp of midnight, to bypass daily withdrawal limits. The modus operandi is otherwise unclear; footage from surveillance cameras has not been helpful. The criminals may have cloned cards by copying data off magnetic strips. They may have hacked the software that validates transactions. Or perhaps, the chips in specific ATMs have been compromised. Bangalore has a large population possessing the requisite skills. The Reserve Bank of India and the banking/financial services industry will now have to brainstorm to identify and plug the specific hole, or holes.

The future of hacks

As many as seven chief ministers have joined a chorus of disapproval against the National Counter-Terrorism Centre (NCTC), which the Union government notified earlier this month. The United Progressive Alliance, or UPA, has argued that the action flows from powers already in the existing unlawful activities statute.

Federal fears

In December last year, the push to try and complete the Doha round of trade talks ended in failure at the World Trade Organisation&rsquo;s headquarters in Geneva. The Doha round had begun 10 years earlier, in 2001, but has run into several stumbling blocks; disagreement over agricultural subsidies and controls, in particular, has consistently held up progress. Meanwhile, new issues have arisen in the past decade, such as the rise of informal barriers to trade like differing labelling standards. Unsurprisingly, many countries have moved forward on bilateral trade deals. Such agreements are frequently less than ideal &ndash; they can divert, rather than increase, trade &ndash; but given the Doha deadlock, there are few alternatives. India&rsquo;s landmark trade agreement with the Association of Southeast Asian Nations, or Asean, is coming into force in stages.

Distant second best

The recent attack on an Israeli diplomat&rsquo;s car, in what is supposedly the most secure part of New Delhi, has raised questions as to whether India&rsquo;s West Asia policy is sustainable. That policy has been fairly clear-cut till now. Israel is a major defence partner, and it co-operates closely with Indian security in counter-terrorism and technological matters.

A false choice

Just as Air India was receiving a debt recast plan that defies all financial prudence, or indeed logic, the newspapers were filled with splashy advertisements commemorating the centenary of civil aviation in India.

Flying unfree 

The Supreme Court judgment cancelling 122 2G licences plunged the telecom industry into crisis. It is now incumbent on the government to utilise that crisis as an opportunity for reform. It must act sensibly, transparently and with due speed to restore institutional credibility to a sector suffering from a severe deficit on that front. While the release of the new telecom policy was a step forward, recent reports that the government has consulted its lawyers on the legality of licences issued prior to 2008 are worrying. This is not the time to play politics or shirk responsibility. After all, a post-judgment road map exists: delink spectrum from licences. Charge a relatively nominal amount for licences, (while imposing technical qualification norms). Auction off spectrum, allowing the market to price this resource.

Calling the future

Vice-President Xi Jinping of the People&rsquo;s Republic of China visited the United States last week, in a trip that bore all the characteristics of a state visit. The pomp underlined the fact that Mr Xi is widely expected to take over as China&rsquo;s leader soon.

A princeling's progress

Is the government being duplicitous about its stand on the increasingly distressed Kingfisher Airlines? There have been several statements from various members of the government and State Bank of India (SBI) that no bailout is planned. These reflect sound economic logic. Government bailouts should be restricted to entities that have grown &ldquo;too big to fail&rdquo;, which have made, in the course of their growth, connections so complex and so extensive across sectors that their sudden collapse will gravely affect the real economy. Kingfisher Airlines has a fraction of the civil aviation market &mdash; which itself is restricted to serving the creamiest layer of Indians. By no means, therefore, is it too big to fail. If the market decides it should fail, it should be allowed to. No pressure must be applied on state-owned banks to step in to provide additional guarantees and working capital loans to help the airline hobble on.

Let it fail

Some global weather watchers have warned that India will likely see below-normal rainfall during this coming monsoon &mdash; and that should be taken seriously, regardless of whether it turns out to be true or not. This scenario has been repeatedly predicted by the Japan Agency for Marine-Earth Science and Technology and has been endorsed by the International Research Institute for Climate and Society at Columbia University.

Guessing the monsoon

The latest report of the Economic Advisory Council, or EAC, to the Prime Minister is a wake-up call, because it presents the macroeconomic quandary more clearly than has been done in the past. While headline attention in the media has focused on the expectation of faster economic growth next year (between 7.5 per cent and eight per cent), that is the relatively unimportant part of the Council&rsquo;s report &mdash; not least because the Council has been consistently behind the curve in anticipating and tracking the slowdown. The meat of the report is in what it says on the trade deficit and the fiscal deficit. For the first time in an official document, the dangers on the external front are spelt out clearly, without pressing panic buttons. The current account deficit, at 3.6 per cent of GDP, is unsustainable and should ideally be capped at two per cent. With oil prices rising, and export markets sluggish, a correction to that extent is unlikely.

Wake-up call

Many sensible recommendations have been made by the high-level safety review committee set up recently in the wake of several accidents on Indian Railways. The report says that if the committee were to make only one recommendation, it would be to monitor and implement what is already known &mdash; but has been languishing at various stages of consideration or execution.

Tracks to safety

The manner in which a leading scientist recently obtained vital information on global warming from the Heartland Institute, a Chicago-based think tank, may seem incredible to someone unaware about the climate change wars. What started as an arcane policy debate has long since degenerated into a series of acrimonious ideological battles. The Heartland Institute is among what have come to be called climate-change deniers, those who wage political battles against the overwhelming scientific evidence for human-made global warming. It is a prominent campaigner against green legislation. On the other side is the well-known hydroclimatologist Peter Gleick, a member of the US National Academy of Sciences and a MacArthur &ldquo;Genius&rdquo; Fellow.

Deniers polarise 

There are many things that are significant about the report of the task force studying a unified payment infrastructure that uses the Unique ID, or Aadhaar, but perhaps the most notable is its timing. It has been presented to Finance Minister Pranab Mukherjee just as the Budget season is at its height. This is indicative of the direction in which Mr Mukherjee must go in order to control the United Progressive Alliance&rsquo;s (UPA&rsquo;s) politically sensitive but fiscally damaging welfare spending. Cost savings must come from somewhere, and improvements in the efficiency of transfers are the best long-term method to save costs. The report, which was drafted by a committee headed by Nandan Nilekani, chairman of the Unique Identification Authority of India (UIDAI), was meant to study possible methods to route payments under various government schemes to beneficiaries through direct cash transfers.

Transforming transfers

The new investment policy for urea that has been cleared by an empowered group of ministers has a few welcome features. Its success, though, measured in terms of enticing fresh resources to the sector, will depend critically on three things: the availability of natural gas, a stable fertiliser policy regime, and the overall progress of sector-wide reform. The new policy reportedly seeks to ensure a minimum 12 per cent post-tax return on the capital, which should make prospective investors happy. So should the proposal to fix separate bands of floor and ceiling cost for urea produced by the new plants (greenfield projects), the expansion of existing plants (brownfield projects) and a more efficient calculation of subsidy support, based on the concept of import parity price for gas.

Urea needs decontrol

Finance Minister Pranab Mukherjee&rsquo;s task in drafting this coming Budget is unenviable. He has to balance growth-enhancing measures with a move back to fiscal sustainability. While there are differences about details, there is a surprising degree of consensus among observers on the broad features of the approach he should take. He will have to transform India&rsquo;s creaking, leaking, overreaching subsidy regime; he will have to push for more reform across sectors; and he will have to broaden the tax net and roll back the tax cuts introduced after the global financial crisis in 2008. Yet not everybody in India Inc seems to agree to this approach. Or that, at least, seems to be the thrust of recent statements from industry organisations. The pre-Budget memorandum from the Confederation of Indian Industry (CII), for example, agrees that fiscal space is limited. Yet it goes on to demand exemptions for industry from this agenda.

Time for good sense

Incisive columns and editorial comment by top opinion leaders

Page 489 - Editorial Comment