The government&rsquo;s decision last week to sell its equity stake in the loss-making Scooters India represents a significant policy shift. In the seven years of the United Progressive Alliance (UPA), the government has sold equity in several public sector undertakings, mobilising Rs 54,800 crore. Much of that has happened in the last two years, since UPA-II does not need Left support, but none of the divestments has been a strategic sale. Now, the government seems ready to go beyond merely augmenting the flow of disinvestment proceeds; in short, it is willing to try its hand at full-scale privatisation.

Get the land value right

Business Standard

With his penchant for grabbing attention, Jairam Ramesh has set off a furious debate over the quality of teaching and faculty at the country&rsquo;s elite professional institutes, for technology and management. Some would say that the minister for environment has merely spoken some obvious home-truths, when he says that the students at these institutes are of a higher order than the faculty. No Indian institute or university ranks among the top 30 in Asia, and the highest rank for an Indian university (Delhi) is 77. In contrast, their alumni feature in the rankings of world leaders in the corporate, financial and associated worlds. QED, it would seem.

Not their fault

Privacy issues are coming into focus as a result of a variety of government initiatives. The Aadhar programme, for issuing unique identity numbers, raises obvious questions of privacy as personal data are compiled in a central database. Then there is the proposed National Grid, designed as a network of 21 available databases across government and private agencies, and meant to help flag potential terrorist threats. On top of these, there is the discussion paper issued by the department of information technology on a national cyber security policy, which says the government wants a law that goes beyond what is there in the amended Information Technology Act.

National security and privacy

When Amit Mitra took charge as secretary-general of the Federation of Indian Chambers of Commerce and Industry (Ficci) close to two decades ago, this grand old organisation of Indian business had lost much of its elan and standing. The new kid on the block, Tarun Das&rsquo; newly christened Confederation of Indian Industry (CII), had by then emerged as the voice of a new Indian business leadership.

From lobbying to guiding

Land acquisition for non-agricultural purposes is one of the oldest policy challenges that modern governments have faced. It is, therefore, not surprising that it has become a major political issue in India as urbanisation spreads, new industries grow and major infrastructure development takes place. To imagine that complex political challenges faced in widely varying agrarian, social and economic contexts can be suitably addressed by one common national law is a flight of fancy of which both policy makers and social activists at the all-India level seem to be equally guilty. Merely because a colonial government had enacted a countrywide law in 1894 does not mean that a &ldquo;central&rdquo; government in a federal democracy can arrogate to itself the right to impose a nationwide policy without factoring in regional variations in the political, social and economic situation.

The land question

Prime Minister Manmohan Singh&rsquo;s African safari has helped raise the region&rsquo;s profile in India. However, the government&rsquo;s initiative of offering a $5 billion line of credit over the next three years will amount to something only if private enterprise steps in to do its bit. Even the initiative to offer an additional $700 million to establish new institutions and training programmes will require private sector engagement to make an impact.

Manmohan's African safari

Now that the United Progressive Alliance has trounced the Left Front in Kolkata and the Union government is back to work, Finance Minister Pranab Mukherjee must devote his energies to improving fiscal management if his budgetary arithmetic has to be prevented from going awry. The danger signals are all up. His ministry has now acknowledged the Reserve Bank of India&rsquo;s earlier warning that economic growth in fiscal 2011-12 is likely to be lower than budgeted originally. A sharp deceleration in the denominator will mean a sharp increase in the fiscal deficit-to-gross domestic product (GDP) ratio. The timely arrival of the monsoon augurs well for the economy, which may surprise the markets and policy makers. But this cannot be taken for granted. Moreover, reports of investment deceleration suggest that some kind of a crowding-out of private investment may already be happening as a result of persistently high government borrowing.

Mr Mukherjee's homework

The news that the south-west monsoon has hit the Kerala coast on time augurs well for the management of inflationary expectations. However, the monsoon alone cannot douse inflationary fires. Apart from much-needed fiscal stabilisation, mentioned above, the government needs urgent policy reform. The task at hand has to be handled by both the central and state governments, as correctly emphasised by the Reserve Bank of India in its meeting with state finance secretaries. Till 2008 state governments were on track for fiscal correction, and were, in fact, doing better than the Centre. However, the recent trend towards populism in many states &ndash; made worse by the pre-election promises of chief ministers Jayalalithaa and Mamata Banerjee &ndash; and the likelihood of such populism in states that go to the polls in early 2012, including Punjab and Uttar Pradesh, do not bode well for fiscal correction and inflation management.

Let markets work

Anil Ambani knows a thing or two about timing. The $10-billion purchase order that the Anil Dhirubhai Ambani Group (ADAG) has placed with Shanghai Electric Corporation, for 36 coal-fired power generators and more, is not only the biggest such business deal in the power sector in recent times, but it is the biggest ever business deal between an Indian and a Chinese company.

Business with Beijing

The new rabi grain pricing policy seems to have been influenced more by macro-concerns about food inflation management rather than any considerations relating to food production planning. The marginal increase in minimum support prices (MSPs) of most rabi crops, barring pulses, is understandable given the government&rsquo;s focus on inflation reduction and the fact that this marginal increase comes on top of earlier hikes of a decent magnitude.

Mixed signals from MSP

Facilitating medical tourism to India is not on the agenda of issues that will be addressed during US President Barack Obama&rsquo;s visit but it should have been. This is because it can benefit both the countries, a fact often not appreciated in either because of misconceptions. One is that a dollar spent by a US citizen in India means a dollar less of revenue for the US health-care industry. India offering health-care tourism amounts to services exports which is currently politically anathema in the US because it is seen as leading to job losses. But the reality is different as it is not a zero-sum game. American health-care spending in India does not mean less so in the US as a significant section of Americans are currently without health insurance cover as it is unaffordable. President Obama&rsquo;s health-care reform has sought to address precisely this.

Medical tourism's pluses

It was John E D Acton, a historian and moralist widely known as Lord Acton, who made that memorable statement in 1887 about power and corruption &mdash; &ldquo;Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.&rdquo; Many may view that as an extreme statement without moderation. Yet, in Maharashtra, as in so many other states across India, people in positions of power do not any longer seem to need even &ldquo;absolute power&rdquo; to be corrupted absolutely. The Adarsh Cooperative Housing Society scam is precisely the kind of self-serving act of corruption of people in public life that is always waiting to happen and get exposed in India. To be sure, one must not paint everyone associated with this case and all members of the housing society with the same brush. There may well be some genuine innocents among those named as having taken administrative decisions and membership of the society.

A scam waiting to happen

The Reserve Bank of India (RBI) has chosen to err on the side of caution, hiking key policy rates by a quarter of a percentage point each in this week&rsquo;s mid-year monetary policy review. That should please the inflation hawks who have urged the central bank not to end its crusade against rising prices. The central bank acknowledged that food price inflation is no longer essentially a supply-side phenomenon outside the remit of monetary management.

Hawkish talk, dovish walk

The central legislation making warehousing receipts (WRs) negotiable instruments has the potential to transform the business of farming and marketing farm output. The path-breaking Warehousing (Development and Regulation) Act &mdash; first mooted in the 1980s, endorsed by a Reserve Bank-appointed working group in the mid-2000s and even enacted into law by Parliament over three years ago, in September 2007 &mdash; has finally been notified for enforcement. Besides making WRs a legally valid tradable instrument, backed by physically stored commodities, the statute also provides for setting up a Warehouse Development and Regulatory Authority (WDRA) to regulate warehouses and oversee WR-based transactions. The new system can spur investment in commodity storehouses in rural areas. Besides, it will enable financial institutions to disburse agricultural credit against WRs as collateral.

Empowering farmers

Imagine a traffic police officer who does not have the power to fine a motorist who jumps a red light! This is precisely the problem the Telecom Regulatory Authority of India, or Trai, is currently facing. The telecom regulator has the responsibility of framing the regulatory norms that should govern the operations of all telecommunication companies. However, it cannot impose a fine or some other penalty on an errant company. The preposterousness of the situation becomes blatant with the manner in which the government framed the Trai Act, which gave legislative sanction to the powers of the telecom regulator. Trai can frame the rules of the game, but it cannot book an offender. For that, it has to knock on the doors of a separate appellate body, the Telecom Disputes Settlement and Appellate Tribunal, or the courts.

DoT dials wrong number

The Indian National Congress has always lurched to the left and used &ldquo;socialism&rdquo; and &ldquo;secularism&rdquo; as reliable weapons against an assertive Opposition and a public worried about governance, corruption and such like. So, it is not surprising that party President Sonia Gandhi and General Secretary and heir-apparent Rahul Gandhi pulled out some old rhetoric about fighting communalism and the inequality between &ldquo;two Indias&rdquo; to divert attention away from growing public concern about corruption and lack of good governance. All the talk about fighting inflation also rings hollow when the Congress party has been in power for six years. It is, after all, a Congress-led coalition that runs the government! The opportunity provided by this week&rsquo;s All-India Congress Committee (AICC) session to re-energise the party and instill some discipline in it was wasted. None of the speeches made were either inspiring or thought-provoking.

AICC's talk-a-tora

Indians will be ashamed but unsurprised that India has slipped three notches in Transparency International&rsquo;s latest global Corruption Perceptions Index. The country is now ranked at 87 out of 178 countries from 84 in 2009. Many would argue that 2010 does not really signify a major deterioration of an already appalling situation. But two points are worth noting in this context. One, China, which is often cited as a major culprit, is not only way ahead of India at rank 78, it has also improved its position one notch from 79 in 2009. Second, India&rsquo;s ranking was skewed by the globally publicised unauthorised wealth creation in the run-up to the Commonwealth Games (had the Adarsh Society scandal involving the defence forces and politicians in Mumbai broken when the survey was being conducted, India's ranking might well have been worse).

Black hole

For months it was expected that the Democratic Party in the United States would fare poorly in this week&rsquo;s elections to the US Congress. Indeed, it has been long remarked that President Barack Obama timed his travel to Asian democracies to, in fact, get away from the expected bad news. It is also clear that with these elections in mind, and given the complete focus at home on domestic economic issues, President Obama has been demanding that emerging economies like China and India ought to do more for the US and be willing to take a knock from reduced outsourcing of jobs. All this is well taken. The silver lining is, of course, that the democrats have actually done better than expected. They have managed to retain control of the US Senate. If Mr Obama is able to touch American hearts, and not just win minds, he can still comeback for a second term. The results will, however, keep him focused on the domestic economic situation.

Yes, he still can

Business Standard wishes all its readers a happy and healthy Diwali, or Deepavali. Hopefully, this year fewer of our readers have had bronchial and asthma attacks, chest congestion, cough and throat irritation and red and watery eyes! A colourful festival of lights has become an evening of fumes with a morning after of smog in many parts of the country. Deepavali has always been associated with not just lights but also sound, since bursting crackers is part of the fun and the tradition of celebrating the victory of good over evil and the warding off of evil spirits. The bursting of crackers has always left a trail of smoke. However, over the years this trail has become a cloud of injurious smoke. In the nation&rsquo;s capital, with the usual winter smog, people report high incidence of asthmatic and bronchial attacks and throat and eye problems.

Happy and healthy Diwali

The President of the United States, Barack Obama, pressed all the right buttons on his first day in India. His statements on the bilateral relationship, on terrorism, on business opportunities and on the relations between the peoples of both countries struck all the right chords. The meat, however, was in a series of announcements made regarding lifting of export controls on high-technology equipment exports and the removal of three important institutions in the field of strategic industries and high-tech research and development from the &ldquo;entities list&rdquo; that bars trade between US companies and these institutions, namely the Indian Space Research Organisation, the Defence Research and Development Organisation and Bharat Dynamics. Taken together, these decisions will lay the foundation for real defence and strategic cooperation between Indian and American companies.

Deals, words and gestures

The agreement that was recently concluded at the 10th Conference of the Parties (COP-10) to the Convention on Biological Diversity (CBD) at Nagoya in Japan will go down in history as the second most important global initiative, after the CBD itself, in protecting the Earth&rsquo;s fast-depleting biodiversity. This is vital for sustaining life on the planet. The ball was set rolling way back in 1992 with the adoption of the CBD at the Earth Summit in Rio de Janeiro. It set three broad goals &mdash; conservation of biodiversity; its sustainable use; and fair and equitable sharing of the benefits from its use with rightful owners of genetic resources. However, the credit for concretising these goals, by fixing time-bound targets and ensuring funding for safeguarding genetic resources will truly go to the Nagoya accord arrived at after 15 days of bitter haggling by environment ministers of 193 countries.

Nagoya is a step forward

Incisive columns and editorial comment by top opinion leaders

Page 508 - Editorial Comment