So the Cricket Association of Bengal (or CAB) has lost the right to host the India-England match at the Eden Gardens. Work on the stadium, under virtually complete re-construction, is hopelessly incomplete; the ground itself is covered with rubble; and anyone who sees the mess comes to the immediate conclusion that the stadium and ground will not be ready in time for the World Cup. So it may not be just the India-England match, the hallowed Eden Gardens might lose all four World Cup matches.

Not just cricket!

Business Standard

The late Rajiv Gandhi famously, or infamously, once claimed that only 15 per cent of the funds allocated to welfare programmes ever reached the intended beneficiaries. The rest leaked enroute, entering the pockets of an assortment of intermediaries.

Accountability in spending

The European Commission&rsquo;s decision to exclude two key ozone-depleting gases from the purview of carbon trading from 2013 would have negative implications for global warming. The two industrial emissions marked for this purpose are Hydrofluorocarbon-23 (HFC-23), essentially trifluoromethane, and nitrous oxide.

EU and carbon trading

One year ago, this newspaper titled its pre-Budget editorial comment &ldquo;Last call for Mr Mukherjee&rdquo;. The suggestion was that if Union Finance Minister Pranab Mukherjee wished to leave a lasting policy legacy behind, the Budget for 2010-11 was the opportunity to be used. In the event, he crafted a rather pedestrian Budget in policy terms, with a lot of 1970s-type exemptions and exceptions in tax policy. Few can now recall what Budget 2010 was all about.

Last and final call

The decade-old struggle to breathe life into the moribund corporate bond market in India continues. The policy, apparently being considered by the Union finance ministry, to allow banks to offer bank guarantees for domestic debt issues, seems eminently sensible in theory. Bank guarantees help improve the risk profile of a company and enable it to access the market at cheaper rates. However, this is not the first time that the government has tried to kick-start the corporate debt market. The aggregate limit for foreign investors, to take an example, was raised by $5 billion to $10 billion in November. Yet, if the track record of these earlier initiatives is anything to go by, there appears to be little reason to be too optimistic about the efficacy of another attempt to expand this market.

Budget and bond market

As the Aero India show gets under way in Bengaluru today, two facts are worth dwelling on. India is &mdash; and has been for three years &mdash; the world&rsquo;s largest importer of defence hardware. Also, in a list of the 15 largest exporters of defence hardware, India simply does not figure. No other country with a serious defence budget has such a skewed import-export picture. Only one conclusion is possible: something has gone seriously wrong with the indigenisation effort, and with the building of a competitive defence hardware industry.

Defence without industry?

In the $9.6 billion Cairn-Vedanta deal, former Union petroleum minister Murli Deora has left his successor Jaipal Reddy with a significant issue to resolve: can a government use its sovereign power to alter commercial contracts? The world is watching how India will answer that question. On the face of it, Cairn Energy&rsquo;s offer to sell a controlling stake in Cairn India to Anil Agarwal&rsquo;s Vedanta group amounts to a change of corporate ownership that requires shareholder approval, which both have already received. For Cairn India, an open offer should suffice. But as with any deal that involves what politicians are wont to call &ldquo;national resources&rdquo; &mdash; in this case oilfields &mdash; the issue has become a lot more complicated. It is by no means obvious that the government&rsquo;s insistence on permission and conditionalities for the deal is entirely warranted.

You Cairn't do it?

With global commodity prices rising again and expected to remain high, given the revival of global growth, it is entirely understandable that Indian firms have been aggressively scouting around for acquiring equity in commodities and fossil fuels, ranging from high-grade coal, iron ore, oil and gas to several non-ferrous metals like copper and nickel.

The rush for commodities

A recent proposal of the National Advisory Council (NAC) that deserves policy attention relates to the supply of millet and other coarse cereals through the public distribution system (PDS). It is an idea whose time has come for many reasons. Apart from being nutritious, millet can also bridge the food gap likely to be created by the implementation of a food security law.

The importance of millet

A technology advisory group headed by Nandan Nilekani has recommended that national information utilities be set up to handle several large e-governance projects ranging from goods and services tax to the new pension scheme. The country is lucky to have come as far as it has through the successful functioning of the large IT backbones of key operations like the National Stock Exchange and the National Securities Depository.

IT as utility

An election, even a free one, is not the most important test of democracy. Getting voted into power is not the most important sign of real democracy. Ensuring that governments can get voted out of power, and that transitions are peaceful and orderly, is far more important. Thus, India passed its first true test of democracy only in 1977 when the Jawaharlal Nehru-Indira Gandhi era came to an end and a new political formation came to power in New Delhi.

Democracy and pluralism

There are two ways of looking at the Telecom Regulatory Authority of India&rsquo;s (Trai&rsquo;s) recommendation of a hefty six-fold-plus increase in spectrum prices for operators offering 2G services. One, that it is recognising the scarcity value of a resource that incumbent operators have so far enjoyed at significantly lower costs.

Crossed connections

The $315 million AOL-Huffington Post deal follows about half a dozen others, including Newsweek-Daily Beast and AOL-TechCrunch deals, in 2010. All of them indicate two happy things. One, mainstream media&rsquo;s hopes from the Internet are still alive. Newsweek&rsquo;s owner Sidney Harman bought the beleaguered magazine for a token $1 from The Washington Post Co. He reckons that being in a 50:50 joint venture with Tina Brown&rsquo;s Daily Beast, a popular news site, will revive its fortunes.

Content is still king

Mubarak: This won't be the best of weekends for Middle Eastern autocrats. The forced departure of Egypt's 30-year president Hosni Mubarak, less than 24 hours after he pledged to stay in power, gives victory to the Tahrir Square protesters. Other dictators will worry about the trend. After all, it was only last month that Tunisian despot Zine El Abidine Ben Ali was forced from office.

Rallying cry

One of the high points of economic and fiscal reform in India in the past two decades has been the progressive moderation of direct tax rates. Thanks to this, the ratio of direct to indirect taxes has risen, a sign of greater progressiveness and equity in India&rsquo;s taxation system. Direct taxes are not easily passed on, as indirect taxes tend to be, and so their incidence is more directly on the individual or firm paying the tax. While this has been a positive trend, the ratio of total tax revenues to national income has, in fact, come down in recent years and remains below 12 per cent. India has a very low tax/GDP ratio by world standards. Apart from widespread tax evasion and avoidance, the complete exemption of certain types of income from taxation, like agricultural income, has made it that much more difficult for the tax authorities to capture all taxable incomes.

Taxing wealth

While the recent sporadic performance of the Indian manufacturing sector has justifiably evoked both concern and comment, another well-documented facet has not received commensurate attention. Organised sector manufacturing in India turned capital intensive in the 1990s and the trend continues inexorably. Research by Business Standard indicates that India Inc added over Rs 13 trillion in fixed assets over the past decade, with over 80 per cent of this accretion since 2005. On the other hand, labour costs using &ldquo;wages and salaries&rdquo; as a percentage of gross sales as a proxy, have remained flat at about 6.5 per cent during the same period. Since wages and salaries have increased across the board, it implies that recruitment in manufacturing firms is either flat or may even have declined slightly. Capital expenditure by the private sector has contributed substantially to both manufacturing sector productivity and by extension overall economic growth for two decades.

Jobless growth again?

The left hand of the Union government does not seem to know what the right hand does! The responses of the department of space, the Indian Space Research Organisation (ISRO), Antrix and the Prime Minister&rsquo;s Office to the observations made by the Comptroller and Auditor General of India (CAG) on the merits of the Antrix-Devas transponder deal have left everyone confused. While different arms of the government have been saying different things, the firm concerned, Devas, has been blowing hot and cold, first saying that the deal had been signed and sealed and averring, though not promising, that it could take legal recourse in case of cancellation and then declaring that it was open to renegotiation. The first point that emerges from this chain of events is that if there is anything worse than doing something wrong, then it is fumbling in response to allegation of wrongdoing. That can create the impression of culpability even when there may have been none.

Spaced out policy

The debate among New Delhi&rsquo;s more mature and non-partisan political journalists after Prime Minister Manmohan Singh concluded his 65-minute interaction with them, televised live, was whether he deserved 5/10 or 6/10 for his performance. This is not a bad outcome given that the Opposition would like to award him even less marks and few in his own party are doing much about defending him. The prime minister did not evade answering any question, nor did he try to spin out unconvincing answers. Even his claim that the alleged &ldquo;revenue loss&rdquo; from telecom spectrum licences was no different from the notional &ldquo;loss&rdquo; to the exchequer on account of a fertiliser or revenue subsidy is a credible argument, even if it was not adequately explained to a lay audience, giving the opposition Bharatiya Janata Party an opportunity to pooh-pooh it.

Mixed messages

The Business Standard (Rupee) billionaires club (BS, 16/2/2011) has 106 new members joining it in 2010, taking the number of &ldquo;super-rich&rdquo; in India to 657. India&rsquo;s dollar billionaires are still in double digits, having increased from 33 to 45 last year (way below the numbers for China and Russia). The total net worth of India&rsquo;s 657 Rupee billionaires was estimated at Rs 16 lakh crore, accounting for a fifth of the collective market value of all listed companies in India.

The rich get richer

A new chairperson takes charge of the Securities and Exchange Board of India (Sebi) today. Mr U K Sinha comes to Sebi in challenging times, when &ldquo;governance deficit&rdquo; is the new buzz word both in corporate India and in the field of regulation. He also collects the baton from a predecessor who has left behind a mixed track record of good governance and avoidable controversy. The world has changed and so has Sebi in the past two decades. Today, Indian markets have matured and are more integrated with world markets. This demands greater alertness to events and trends and increased finesse as well as sensitivity on Sebi&rsquo;s part in dealing with emerging issues. Sebi must be able to display this in its regulatory actions, in its dealings with another regulator and in resolving a dispute between two regulated entities.

The tasks for Mr Sinha

Even as everyone is celebrating the bounce in the economy with a return to 8.5 per cent growth, the jury is out on the accuracy of the agricultural output numbers. The impressive 5.4 per cent agricultural growth rate number is suspect if one looks at recent trends in farm productivity and output. The agriculture ministry anticipates foodgrain output to grow by 6.4 per cent to 232 million tonnes in 2010-11. But this growth rate is over the low figures for 2009-10, when grain output dropped by 6.98 per cent to 218 million tonnes owing to severe drought. In real terms, therefore, the output does not seem to have recovered to the pre-drought level of 234.4 million tonnes in 2008-09. Moreover, though the agriculture ministry has boasted of achieving new highs in the production of crops like wheat, pulses and cotton, in most of these cases, barring cotton, the advances are just marginal over their previous peaks.

A doubtful harvest

Incisive columns and editorial comment by top opinion leaders

Page 495 - Editorial Comment