This month, banks move to a new, more transparent regime of loan pricing. They will jettison the Benchmark Prime Lending Rate (BPLR) and price loans off a &ldquo;base rate&rdquo;.

Base rate and after

Business Standard

Undeterred by the lacklustre performance of the monsoon so far, the India Meteorological Department (IMD) has revised upwards its long-range rainfall forecast for this year to 102 per cent of normal from 98 per cent projected earlier in April. By contrast, the rainfall till now is 12 per cent below normal and its distribution over space and time is highly skewed. Besides, its advance towards the central and northern parts is behind schedule by one-to-two weeks.

Up in the sky

The sharp and unanticipated rise in the current account deficit (CAD) in India&rsquo;s balance of payments (BoP) in fiscal 2009-10 could well be due to the sustained rise in the oil imports bill and the jump in defence imports. At 2.9 per cent of national income (GDP) and $38.4 billion, India&rsquo;s CAD in 2009-10 is only marginally below the 1991 BoP crisis year level of 3.1 per cent.

The external imbalance

Prime Minister Manmohan Singh did well to reiterate his government&rsquo;s commitment to a rational energy pricing policy by categorically stating that the government would do with diesel what it has already done with petrol. Deregulate them as well. For too long has the United Progressive Alliance government &mdash; and the Congress party &mdash; dithered on the issue. Even when the government was willing to take some difficult decisions, the party would subvert these politically.

Energy subsidies and BoP

The United Nations (UN) report on progress in attaining the Millennium Development Goals (MDGs) that countries set for themselves paints a disappointing picture of slow improvement. While the report acknowledges that gains have been made in areas like poverty reduction, elementary education, child health and drinking water supply in several parts of the developing world, these are not always on track and more can clearly be done. The report recognises that there has been a setback in hunger mitigation in recent years due to the sharp spike in food prices in 2008 and on account of the impact of the global economic crisis. Jobs have been lost, and economic access to food has been curbed.

MDG - numbers vs. reality

Just when questions were beginning to be asked whether the Reserve Bank of India (RBI) was being taken for granted by an assertive Union finance ministry &mdash; a question raised by North Block&rsquo;s ordinance last month creating a &ldquo;joint committee&rdquo; of heads of regulatory institutions in the financial sector chaired by the Union finance minister &mdash; the central bank has acted to show that it has a mind of its own.

RBI's alive and kicking

It is only the so-called &ldquo;pseudo-secularists&rdquo; of the Congress party and the residual victims of the Jain &ldquo;hawala&rdquo; diaries who can truly bear a grudge against former Prime Minister P V Narasimha Rao. All others would take a more objective view of his legacy and would be quite willing to concede that Narasimha Rao did make a difference and, for that reason, ought to get more credit than he does as a former PM. At a time when sundry &ldquo;VVIPs&rdquo; regularly drive around the nation&rsquo;s Capital to lay wreaths at the samadhis of former PMs, presidents and other sectional political leaders, it is a pity that Narasimha Rao&rsquo;s 90th birth anniversary went by last week without much ado.

Remembering Rao

Monday&rsquo;s call for an all-India bandh by the Left Front and the National Democratic Alliance symbolises the desperate attempt of the Left and the Right to join forces against the Centre. The communists are worried about their political survival in Kerala and West Bengal and the Bharatiya Janata Party (BJP) is keen to end its &ldquo;untouchability&rdquo;, what it perceives as a &ldquo;secular apartheid&rdquo;. That is why, for instance, the BJP leadership is trying to pick secular issues &mdash; price rise, nuclear liability Bill, women&rsquo;s reservation Bill, oil sector decontrol, etc. &mdash; so that it can offer the Left an opportunity to come closer. Monday&rsquo;s &ldquo;Bharat Bandh&rdquo; has to be seen in this light, more than in any other way. The Congress party, for its part, will hope to be able to rake up some communal issue and hope that its secularism-in-danger call will ensure the BJP remains isolated.

Open and shut case

The spectacular success of the new Terminal 3 (T3) at the Capital&rsquo;s Indira Gandhi International (IGI) Airport says volumes for the distance India&rsquo;s infrastructure story has travelled. From a time when the IGI Airport was among the worst in the world, T3 is now among the biggest &mdash; it&rsquo;s too early to say, but from what you see of it, the airport&rsquo;s functioning promises to be world class. With 48 boarding gates, 78 aerobridges and 168 check-in counters, it&rsquo;s difficult to see how it won&rsquo;t be. It is already there in terms of size. T3 is much bigger than Singapore&rsquo;s Changi Terminal 3 and 2 put together, and it is also bigger than Seoul&rsquo;s Incheon. With a capacity to handle 34 million passengers, it is, though, smaller than Dubai&rsquo;s Terminal 3, which can handle 60 million passengers, and Beijing&rsquo;s Terminal 3, which handles 43 million.

Learning from T3

No one will deny that the least a democratic government can do for its people in a civilised society is to ensure access to food at a reasonable price. Ensuring food security is, therefore, a fundamental responsibility of the state. However, it is not clear if enacting a Food Security Bill is the best way to go about it. India has become a democracy of laws. On paper, every citizen is assured of every possible right. In practice, the state is able to deliver on very few. Hence, the current obsession of the newly reconstituted National Advisory Council (NAC) may be nothing more than an act of self-congratulation. The real challenge before the government is to improve the institutions that are charged with the responsibility of delivering food to the consumer through the existing public distribution system (PDS). The NAC is reportedly considering changes in the provisions of the draft Food Security Bill. It would use its time better if it can show how the PDS can be made more efficient.

Ensuring food security

The Union Minister for Food, Civil Supplies and Agriculture, Sharad Pawar, who also doubled as president of the Board of Control for Cricket in India (BCCI) and has now become president of the International Cricket Council (ICC), has reportedly pleaded with Prime Minister Manmohan Singh that his ministerial burdens be reduced so that he can devote more of his time to his cricketing responsibilities. The prime minister should request Mr Pawar to choose between government and cricket. Mr Pawar will not be any less popular in his home state of Maharashtra, or any less respected as an elder statesman or any less influential in Indian politics if he ceased to be a Union minister. Indeed, his popularity may shoot up if he prefers to give up his ministerial perks and devotes the rest of his life to promoting cricket in India and around the world. He could make cricket an Olympian sport! He could get a bigger audience for Indian Premier League matches compared to World Cup soccer.

Just not cricket, Mr Pawar!

It is that time of the year. In the run up to a new session of Parliament, and with one year of the United Progressive Alliance (UPA) government&rsquo;s term completed, there is naturally some speculation about a reshuffle of Prime Minister Manmohan Singh&rsquo;s Council of Ministers. This has been triggered by Union Food, Civil Supplies and Agriculture Minister Sharad Pawar&rsquo;s reported request for a reduction in his ministerial responsibilities in the light of his election as president of the International Cricket Council. Mr Pawar also wants a couple of extra junior ministers. There is also the vacancy created by the ignominious exit of Shashi Tharoor and a couple of ministries, like culture, are waiting for a minister. It is entirely possible that Dr Singh will settle for a minor rejig, postponing any major changes. This is entirely understandable since there are no major political compulsions this year necessitating a shake-up of the Union Cabinet.

Revitalise, not reshuffle

Road Transport and Highways Minister Kamal Nath&rsquo;s outburst against the Planning Commission (read Deputy Chairman Montek Singh Ahluwalia&rsquo;s adviser Gajendra Haldea) at a function on public-private partnership (PPP) has to rank among the most bizarre episodes of two arms of the government fighting in public. While describing the Planning Commission as essentially an &ldquo;armchair adviser&rdquo;, Mr Nath said people in the GMR consortium who&rsquo;d just unveiled the new airport terminal in the Capital had told him they&rsquo;d built it despite the Planning Commission. The example, this newspaper has said earlier, was a bad one since, in the case of the airport terminal, the Planning Commission&rsquo;s interventions were valid, given flaws in the initial bids that were subsequently corrected. The Planning Commission, similarly, has played an important role in various other ways in the infrastructure sector.

Uses of an armchair

There is something odd about India&rsquo;s export numbers. While the government focuses month after month on the rapid growth in exports (on the 2009 base and on the 2008 base, the 2010 numbers continue to show that exports have shrunk), the even greater success story that has been reported is the doubling and more of exports from the new special economic zones (SEZs). Exports from 111 such zones totalled $49 billion in 2009-10, up 123 per cent from the $22 billion earned in the previous year.

Another SEZ controversy

The Opposition challenge to the government over the fuel price hike may now be followed up by the opening of another front. Both the BJP and the Left will react strongly to the government&rsquo;s move to argue (in a discussion paper) in favour of allowing foreign direct investment (FDI) into organised, multi-brand retailing. Such retailing is already there, the contentious issue is whether to allow foreign investment or not, the potential danger being to the corner or kirana stores that now account for the bulk of retailing. An Icrier study found recently that 4.2 per cent of the unorganised retail outlets closed in a year, a rate lower than the global one for closure of small businesses. What is more, only 1.7 per cent of the closures were on account of inability to face competition from the organised sub-sector.

Adapt and innovate

In 2007, Fifa President Sepp Blatter visited Kolkata and watched a match between traditional rivals East Bengal and Mohun Bagan. Afterwards, asked whether Fifa would invest more money in Indian football, the voluble Swiss said: &ldquo;Help yourself and heaven will help you&rdquo;. Which was an elliptical way of saying no. Few people would argue with Mr Blatter on this point, even if they haven't witnessed the painfully low quality of India&rsquo;s top football clubs. With a country ranking of 133, India has few reasons to put before Fifa for funds. But Mr Blatter was making a more important point that Civil Aviation Minister Praful Patel, who heads India's football federation, may want to consider as the 2010 Fifa World Cup draws to a close after being hosted by a country with an economy a quarter the size of India&rsquo;s.

India's own goal

A year ago, the International Monetary Fund (IMF) forecast that the world economy would grow 2.5 per cent during 2010. Last October, it raised that number to 3.1 per cent. By January this year, the Fund had become positively optimistic, raising its global growth forecast to 3.9 per cent. That was raised further to 4.2 per cent in April, and has now been pegged at 4.6 per cent &mdash; which would make it a boom year. That&rsquo;s a good distance to cover for any forecaster.

The IMF gets more upbeat

Twenty-five years after launching the Ganga Action Plan (GAP), the government has realised that a new plan backed by proper technical advice is needed to clean this mighty river, which is fast turning into a drain. A consortium of seven Indian Institutes of Technology (IITs) has been roped in to suggest strategies and actions to rejuvenate the Ganga basin and restore the quality of river water. This, in a way, is tantamount to confessing that over a thousand crore of rupees have been frittered away in the past quarter-century on cleaning the Ganga without making any headway. The Ganga is more polluted now than in 1985, when the then prime minister, Rajiv Gandhi, launched the Ganga Action Plan. The Ganga basin is the largest in the country and the fourth-biggest in the world. It is a source of livelihood for the 400 million people who live along its 2,500-km length from Gangotri in the Himalayas to Ganga Sagar, where it merges into the Bay of Bengal.

Once more, with technologists

The Unique Identification Authority of India (UIDAI), entrusted with the task of providing identification numbers to all residents, had a brush with controversy last week. Newspaper reports said that the expenditure finance committee of the finance ministry had slashed its budget by more than half, to Rs 3,000 crore. The implication of the reported cut was that the Authority would be able to issue only 100 million unique identification numbers, compared to 600 million numbers originally planned for the first phase.

Incentive for a number

A bad workman, it is said, finds fault with the tools. This seems to be true of the environment and forest ministry when it comes to wildlife conservation. Unable to check the rise in wildlife crime and the illicit trade in wildlife products, the ministry has put the blame on the Wildlife Conservation Act, 1972, which, it feels, is not stringent enough to deter criminals. It has, therefore, come out with a draft Bill to amend this statute, and hike steeply the penalties for wildlife-related misdeeds, the idea being to raise the economic cost of committing wildlife crimes. This is fine, but the cost of a crime becomes an effective deterrent only if the perpetrators are caught and convicted. This is not usually the case; wildlife activists reckon that the conviction rate is as low as 1 per cent. Even when notorious wildlife traders, such as Sansar Chand, are nabbed and convicted, the follow-up action to destroy their networks is usually found wanting.

Not the law

Is it more important that inflation in primary articles has risen 16 per cent in the latest week (compared to the corresponding week a year earlier), or that the index, at 306 in June, was 4.5 per cent higher than what it was in March? Private consumption in the fourth quarter of 2009-10 rose in relation to the fourth quarter of 2008-09, but fell relative to the third quarter of 2009-10; which base period is more relevant for comparison, if one is to understand the latest trends? Questions such as these get repeated each time the official statistical machinery releases any set of data.

Statistical challenges

Incisive columns and editorial comment by top opinion leaders

Page 540 - Editorial Comment