New Delhi has done well to declare its intention to play a proactive role at the forthcoming Convention on Biological Diversity (CBD) at Nagoya (Japan) in October for thrashing out a legally binding pact on access to and benefit-sharing of biological resources. Being one of the world&rsquo;s 12 mega biodiversity centres, India has substantial stakes in both preserving the biodiversity and capitalising on its commercial potential. Though the CBD, signed under the aegis of the United Nations in 1992, provides for equitable sharing of benefits from the use of genetic resources and related knowledge, there are no legally binding rules to enforce these provisions. The Bonn convention, adopted by the Conference of the Parties (COP) to the CBD in 2002, lays down guidelines on access to genetic resources and fair and equitable sharing of benefits but these are not mandatory rules and remain only on paper.

Legally bound

Business Standard

It will be interesting to hear what Prime Minister Manmohan Singh says when he addresses the valedictory event of the Reserve Bank of India&rsquo;s (RBI) platinum jubilee celebrations in Mumbai on the first day of the new financial year. Will Dr Singh stick to the framework of his remarks last week at the Planning Commission where he said one should not take return to the high growth path of the past few years for granted.

April first message

Apart from the fact that this is the first time since independence that a new fundamental right &mdash; Right to Education (RTE) &mdash; has been added to the Constitution, it is also true that the educational empowerment has been a cause close to Prime Minister Manmohan Singh&rsquo;s heart. A beneficiary of scholarships and good education, the PM began his professional life as a teacher and his last non-political job was that of chairman, University Grants Commission.

The right lesson

Indian depository receipts (IDR) are set to get going after a long gestation period of six years with Standard Chartered Bank filing a red herring prospectus to raise up to $750 million. It took this long because the stringent Indian regulations made it possible only for large global companies to come. This, along with the tough disclosure and corporate governance norms stipulated made it easier and cheaper for medium-sized companies to list in Luxemburg, or the Alternative Investment Market in London or Dubai. Some initial rules have been eased for members of the International Organisation of Securities Commissions who have signed the multilateral memorandum, thus requiring an issuer company to follow only its own country regulations. But even now, there are things you cannot do with IDRs which you can do with say ADRs, their American counterparts, like free fungibility between ADRs and the underlying shares to seek an arbitrage opportunity.

Joining global capital markets

The Planning Commission has offered an objective assessment of the unsatisfactory situation as far as Indian agriculture is concerned in its mid-term appraisal of the 11th Five-Year Plan. The commission has done well to remind us that the farm sector is still subject to strangulating controls that dissuade private investment in key areas, including logistics and storage. The government&rsquo;s agricultural pricing policies, which have rendered minimum support prices (MSPs) the de-facto procurement prices, have also come in for sharp criticism for discouraging farmers from diversifying into high-value crops even while failing to keep food-price inflation down. What should cause concern is that the challenge of food security continues to stare us in the face despite the generous funding of the agriculture and irrigation sectors, where Plan outlays have more than doubled in the 11th Plan compared to the 10th Plan.

Thought for food

Physics, to borrow a phrase from Rumsfeld has &ldquo;known unknowns&rdquo; as well as &ldquo;unknown unknowns&rdquo;. Established theories like the Standard Model predict the existence of undiscovered particles like the Higgs Boson. There is also the dark matter problem &mdash; a major discrepancy between the amount of matter that should be in the universe and what has been observed.

Back with a bang

The watchword of India&rsquo;s decennial population census for 2011 is &ldquo;Our Census, Our Future&rdquo;. By focusing on the future the managers of Census 2011 have wisely tried to steer away from the past in enumerating the present. Demographers and social scientists will understandably use the data to analyse changes in the economy and society since the last census of 2001. But Census 2011 is more about the future than the past because it will be used to construct for the very first time an electronic database on the basis of which the government of India will issue a Unique Identity Number to every enumerated and finger-printed person. Covering 640 districts, 5,767 tehsils, 7,742 towns and more than 6 lakh villages in the country, the 15th National Census takes forward a process first launched in 1872. The socio-economic and cultural database will enable the government to produce the National Population Register.

For an idea of India

Two decades after Prime Minister Manmohan Singh first unleashed his dose of economic liberalisation, industry continues to be shackled &mdash; an average manufacturing unit has to comply with 70-odd legislation, each of which requires at least one licence/certificate. All told, a unit has to fill up around 100 returns a year. In addition, there are the usual issues of lack of labour flexibility, the time it takes to close units down, and so on, basically all the issues that ensure India is at the bottom of most &lsquo;doing business&rsquo; surveys. To the extent the services sector, like the IT/ITeS segment, was relatively less shackled, it grew faster. Not surprisingly, the government wants to increase the share of manufacturing to 25 per cent by 2022 &mdash; it&rsquo;s around 16 per cent right now if you don&rsquo;t include construction and around 25 per cent if you do &mdash; since this will also create large-scale employment.

Liberated enclaves

At least seven important bills including the nuclear liability bill, the foreign universities bill, the women&rsquo;s reservation bill and a couple of other long-standing economic bills are all awaiting parliamentary approval and seem unlikely to secure it. Congress Party managers are blaming the opposition Bharatiya Janata Party (BJP) and the Left Front for this legislative impasse, especially in the upper house of parliament, the Rajya Sabha. The ruling United Progressive Alliance (UPA) coalition does not have the numbers in the Rajya Sabha to get official bills passed. In the Lok Sabha the UPA has the numbers but the margin has come down sharply with supporting parties like the Rashtriya Janata Dal, the Samajwadi Party and the Bahujan Samaj Party no longer extending unconditional support to the UPA. With a wafer thin majority in the Lok Sabha, where the UPA now has 277 members in the 543 member house, the government feels constrained to back off.

Legislative impasse

This has to be the ultimate irony. Barely a few weeks after a Supreme Court committee comes out with a verdict that the public distribution system is bust and needs a drastic overhaul, the government clears a food security bill that seeks to push more food through this very same burst pipe. If newspaper reports are to be believed, the Congress president is not happy with even this and wants the government to increase the quantity of subsidized food from 25 kg per poor family per month to 35 kg. Apart from the issue of what this increase will do to the subsidy bill, surely there should be a discussion on how the PDS can possibly deliver on its new responsibilities when it is practically non-existent in several states, apart from the huge leaks in it? What is even more curious is that the Congress party should be keen on increasing the scope of the PDS when the government is talking of switching over to cash transfers linked to the Unique ID system.

Right to governance

The horrific attack on security forces by armed Maoist extremists in Chhattisgarh is yet another reminder that the government, both at the Centre and in the states, needs a more effective strategy to deal with what Prime Minister Manmohan Singh has long dubbed India&rsquo;s biggest national security threat. India&rsquo;s major political parties must stop the blame game, must stop passing the buck and sit together and work out a joint strategy. A senior and experienced police officer like Mr K P S Gill has raised serious questions about the manner in which the state government was dealing with the situation on the ground. The questions he has raised must be addressed. It is clear, at one level, that the intensity of the battle has been heightened by increased desperation on the part of the Maoist groups precisely because the security forces have been on the offensive.

Time for stocktaking

The future looks somewhat bright for the Indian pharmaceutical industry which is wholly into generics. It expects to get a push from the new US legislation bringing into the health-care fold 32 million or 10 per cent of the country&rsquo;s population which is currently uninsured.

US opportunity for pharma

After a somewhat rocky February, the rupee has been back on an appreciation track through March. This has revived fears of currency overvaluation and erosion of export competitiveness. The real effective exchange rate index of the rupee against a six-currency basket computed by the investment bank JP Morgan (RBI&rsquo;s own index is available only with a lag) currently shows a level of about 112. It was incidentally about 107 in January.

Rupee redux

The sugar industry&rsquo;s renewed plea to the government to unshackle it from stifling controls and regulations merits consideration. This plea is being made in the context of rising production. The sugar production cycle has bottomed out and is on the upswing. The total sugar production in the ongoing season seems likely to exceed 17.5 million tonnes against less than 15 million tonnes last year. This seems an opportune time, therefore, for de-controlling as well as de-regulating the sector.

Try sugar decontrol

The government&rsquo;s decision to seek Supreme Court opinion on the proposed Constitutional amendments to facilitate introduction of the goods and services tax (GST) will help it overcome legislative hurdles to what is arguably the most ambitious revamp of India&rsquo;s indirect taxes regime since reforms began in 1991. A Presidential reference to the Supreme Court will undoubtedly reduce the scope for any further litigation on the issue. This also pre-empts any action that some state governments may have planned to approach the Supreme Court to pre-empt the Centre&rsquo;s move on GST on the grounds that the new regime would adversely affect their finances by curbing their flexibility in raising tax revenues. A ruling from the apex court on what is good in law will eliminate such delays in the roll-out of GST. The downside risk, however, is that the Supreme Court may take six months to a year before coming out with an opinion on the questions raised.

Concurrent planning helps

The union minister for environment and forests (MoEF) is in the unenviable position of having to publicly confront his cabinet colleagues and risk being dubbed a stick-in-the-mud, anti-development green crusader. First it was a tiff with the agriculture ministry over Bt brinjal. Then it was a rebuke by the Planning Commission over mining and power project approval delays and now, a dispute with the surface transport minister that is on full display in the Supreme Court. The road of contention goes through a tiger reserve near Mr Kamal Nath&rsquo;s constituency, and Mr Jairam Ramesh will not oblige. The tiger and road conflicts are but symbolic of a larger question that the nation has to wrestle with: how to manage the trade-off between environmental concerns and economic development. It is not just jobs versus air and water quality, but the interests of present versus future generations.

'Econological' growth?

If there&rsquo;s any company that can match or even emulate the hype that online search giant Google generates when it is to launch a product, or sometimes even a couple of years before the launch, it is Steve Jobs&rsquo; Apple Inc.

Steve Jobs does it again

The central government has set the stage for a further tightening of monetary policy by the central bank and has, very correctly, reached out to state governments to become active partners in the battle against inflation. New Delhi believes the economy is over-heating and views the renewed surge in food prices as a symptom of that process. It is now clear that next week the Reserve Bank of India will be expected to raise policy rates and hike cash reserve ratio (CRR).

Getting prices right

A disinformation campaign of sorts has been unleashed by some in Pakistan and their fellow travellers in the West, especially in the United States, on the issue of river water sharing between India and Pakistan. Disputes between riparian states on river water sharing are frequent and routine, and nothing sinister need be read into them. There have been more inter-state arguments within India on river water sharing than there have been between India and its neighbours.

Gas on water

Financial sector regulators are usually armed with draconian powers so that they can deal effectively and quickly with crisis situations, and because they have to protect the interests of millions of retail customers who depend on the safety and reliability of the financial system. Such sweeping powers should be used carefully, and with restraint. The stock market regulator, the Securities and Exchange Board of India (Sebi), has failed on this elementary count. Its order on Friday evening, asking over a dozen private insurance companies to instantly put a stop to the bulk of their business, relating to the selling of unit-linked insurance plans (Ulips), was a hasty and thoughtless act, unworthy of a serious regulator in a market economy.

No way to regulate

It is a measure of the continuing drift and listlessness in the India-United States relationship that Prime Minister Manmohan Singh spent an entire 36 hours more than he had originally planned in Washington DC for a 50-minute conversation with US President Barack Obama on terrorism and related issues. Apart from the usual spin about how the two get on famously, the official briefing suggested nothing substantial was achieved. It is, therefore, not clear why the meeting was arranged at all. If it was the case that both sides wanted to be seen conversing with each other a day before the presidents of the US and China were to meet, then the differing agenda of the two conversations should say it all. President Obama talks business and the world with President Hu Jintao and terrorism and the region with India.

Shrunk India-US canvas

Incisive columns and editorial comment by top opinion leaders

Page 547 - Editorial Comment