One joke about Bollywood endings, one quote from Kautilya, but para after para of 1980s-style sector-specific duty exemptions made finance minister Pranab Mukherjee&rsquo;s budget speech a rather dull affair, but for the noisy interlude provided by a united Opposition that was determined to play spoilsport. The dullness was, however, understandable since Budget 2010-11 was almost along predictable lines. The fiscal deficit to GDP ratio was brought down to exactly the level the finance minister had promised: 5.5 percent, not a decimal point less or more; the excise duty rates were hiked by 2 percentage points, as we first reported they would be in the columns of this newspaper; not much tinkering with customs duties, despite the Economic Survey&rsquo;s suggestion that the peak rate be brought down to 7.5 per cent; and, a series of plans and schemes aimed at making the growth process more inclusive.

Good housekeeping

Business Standard

Indian politicians need tutoring in addressing TV audiences.

Policyspeak and television

Most of the world is under the mistaken notion that humankind has just entered a new year. The truth is that, according to most calendars, the new year does not start today, but some weeks or months into the future. The Gregorian calendar, which denotes today as the first day of the new year, is only a refinement of the Julian calendar, in which Julius Caesar aligned the Roman year with the tropical year. &ldquo;Tropical&rdquo; comes from the Greek word tropos, which means to turn.

So many new years

The entire media has been focusing this past week on the decade that was, the year gone by, and what lies ahead. The exhaustive coverage of events and trends in newspapers, magazines, websites and on television has left nothing out. All the great achievers have been toasted, the important events analysed, the failures and foibles listed and the major challenges ahead noted. What is interesting about this carpet bombing is its generally upbeat tone.

Sustaining growth

Given that almost all historical, cultural, economic and geo-political factors overwhelmingly point to a close partnership between India and Japan it has taken an inordinately long time for these two Asian nations to strike a meaningful strategic partnership. Hopefully the visit to India of Japanese Prime Minister Yukio Hatoyama should spur this up-again-down-again yo-yo relationship forward. The news that came on the evening of the Hatoyama visit that India has become the most important destination for Japanese investment, as it has been for Japanese aid, defines the new tenor of the relationship. This change is significant considering that in the past two decades there has been a secular decline in Japan&rsquo;s economic engagement with India.

Japan's yo-yo ties with India

The Union government&rsquo;s new Maharatna policy, aimed at offering more managerial freedom to large public sector enterprises (PSEs), should be welcomed. Far too many PSEs have suffered in global competition due to domestic bureaucratic bungling and political interference, even in strategic sectors. Delayed approvals have been the bane of PSEs wishing to take advantage of global opportunities. A good owner must know how much space ought to be given to professional managers. Modern management theory debunked long ago any link between ownership and management performance. There can be good and bad owners both in the public and private sectors just as there can be good and bad managers. Hence, there is no inherent reason for poorer performance by public sector enterprises. If many of India&rsquo;s PSEs have performed under par, it is either on account of undue political interference or on account of bad managements.

From Navaratna to Maharatna

When the global textiles market was opened up with the abolition of the MultiFibre Agreement in December 2004, many thought India&rsquo;s textile exports would surge once import quotas in developed countries were removed. There was another lot, however, who were convinced India&rsquo;s legendary problems would ensure this never happened. In the end, textile exports did rise, but nowhere near potential, and not even well by India&rsquo;s own standards. Exports of textiles and apparel rose from $11.5 billion in 2000 to a little over $21 billion in 2008, a period during which India&rsquo;s exports rose three-fold &mdash; as a result, the share of textiles and apparel in India&rsquo;s overall export basket has more than halved.

Fixing the warp

The Indian Medical Council (IMC) has revised its 2002 regulations for professional conduct and ethics to fill a glaring gap by taking into account doctors&rsquo; dealings with the pharmaceutical and allied health care industries. It bans taking of gifts from firms or their representatives, travel benefits for attending conferences, seminars and continuing medical education programmes, hospitality, cash or grants in their individual capacities and endorsing a drug or product. Any research finding should be disclosed only through scientific bodies and publications. What is more, the regulation says doctors can work for research projects funded by industry but enjoins upon them to ensure their right to publish research results in the greater interest of society by inserting a suitable clause in the agreement to do such research.

Looking a gift in the mouth

The Union government&rsquo;s decision to revive a long-forgotten concept of primary producers&rsquo; companies (PPCs) ought to be welcomed. Such companies can help small farmers and individual craftsmen come together to derive economies of scale. The idea of farmers&rsquo; companies which extend the benefit of being a registered firm while allowing farmers to derive all the benefits of agricultural land ownership, was mooted nearly a decade ago. After much debate, the idea did not go beyond some legal change. For example, Section IX (a) of the Companies Act, 1956, was amended in 2002, providing for the formation of PPCs not only by the farmers but also by other tiny entrepreneurs pursuing common vocation. But not much else has happened since. The challenge of reviving the idea of PPCs has been taken up by the Indian Institute of Corporate Affairs (IICA) and the National Rainfed Areas Authority (NRAA).

Farmer's business

The demand for a separate state of Telangana has brought into focus the economic performance of small states. Data brought out by the Central Statistical Organisation do show that most of the reorganised states tend to grow faster post-reorganisation and smaller states such as Uttarakhand, Jharkhand and Chhattisgarh have grown faster after achieving state-hood than before, and at a rate higher than the average for the country. Moreover, we find that even UP and Bihar are showing growth rates significantly higher than in the past. However, economic growth is only one of the many issues and parameters that must inform serious thinking on the question of large versus small states. State-level growth figures for the 2000s are affected by many forces; reorganisation is only one of them. The improved economic performance of many of the poorly performing states, Bihar and Orissa included, could also be ascribed to economic convergence.

Road to development

The bad guys in the news these days almost look like characters out of a B-grade film. With his painted moustache all twirled up and a smirk that immediately angered the viewer, former Haryana Director General of Police SPS Rathore was destined to get punished once the media went for him. Not only has he lost his police medal, the Haryana government has also filed an FIR charging him with abetting Ruchika Girotra&rsquo;s suicide. The relentless media exposure finally did to this police officer what the entire law and order system failed to do all these years. It is likely all of us in the media will chalk it up as another victory for campaign journalism. Add to this other media victories like reversing the Jessica Lal verdict, the Priyadarshini Mattoo case, the Nitish Katara trial, and a host more, and it is obvious the fourth estate is stepping in to reform the law and order system where the executive and the judiciary are failing to deliver.

Crime and punishment

With global auto majors showcasing 10 new models, including three for the first time ever in the world, India&rsquo;s Auto Expo has come of age. With the Indian car market growing around two-and-a-half times and exports rising over nine times in the decade &mdash; as a proportion of domestic production, exports are now up to 13 per cent from 3.5 per cent in 2000 &mdash; this was bound to happen. After the Chinese market, which overtook the US one in terms of the number of cars sold in 2009, the Indian market has exhibited one of the highest growth rates. The question is whether these launches of new cars presage India&rsquo;s arrival on the global stage, as a small-car hub for instance &mdash; selling global cars in India and developing new cars from scratch here are two entirely different things. Certainly, the ingredients are there.

Driving manufacturing

Having contributed in its own way to the current crisis in Andhra Pradesh, the Central government has done what it ought to have in the first place &mdash; seek to create a more congenial environment for further discussions. Indian democracy has evolved far too much for one man&rsquo;s fast or a few hundred men&rsquo;s anger to overturn the verdict of a silent majority. Even if there is a legitimate case for the creation of a separate Telangana state, violence, mayhem and political blackmail cannot be the midwives of the new state&rsquo;s birth. Democracy can express itself in two ways &mdash; either through the verdict of an election or through mechanisms of open and inclusive consultation. The verdict of the 2009 election is being interpreted by different political parties differently.

Talking about Telangana

In his inaugural speech at the Indian Science Congress, Prime Minister Manmohan Singh promised to improve the environment for scientific research in India. The takeaways: incentives to scholars who return from abroad; the National Science and Engineering Board (NSEB) to start functioning &ldquo;soon&rdquo;; school students to receive scholarships under the new Inspire scheme. Also academic and other research institutions will be asked to streamline processes, cut red tape and improve autonomy. Inspire appears to be a variation on the National Talent Search &mdash; it will highlight teenaged talent but the JEE examinations already do that. There are a plethora of boards and committees overseeing various matters. But it is an open question if they make a positive difference. Hence, a new NSEB doesn&rsquo;t necessarily inspire confidence.

Home truths on science

The Ficci-Yes Bank report on farm mechanisation couldn&rsquo;t have come at a more appropriate time. For one, since it suggests waiving of VAT and excise duty on farm machinery, this is the time the Budget exercise has just begun. More important, the study points out that, while the use of new devices in performing key farm operations is vital for doubling agricultural growth from the present 2 per cent, the adverse effect on rural employment is likely to be more than offset by the new jobs created in the post-harvest handling and value-addition of larger farm produce. Greater use of machines in agriculture has turned all the more essential in view of new challenges posed by factors like the decline of natural resources and climate change. Besides, the implementation of the National Rural Employment Guarantee Act (NREGA) has increased the scarcity of farm labour during peak agricultural seasons like sowing and harvesting, especially in states where agriculture is doing well.

Harvesting growth

When Google speaks, its competitors and the media sit up. They know that the $23 billion online search giant means business. This time is no different. After nearly three years of speculation that it would eventually manufacture its own phone, Google has launched what it calls a &lsquo;super phone&rsquo; and christened it the &lsquo;Google Nexus One&rsquo;. The handset has been made by Taiwan-based HTC, though the design, branding and software platform is Google&rsquo;s, the Android 2.1. The phone is available only in the US, UK, Hong Kong and Singapore, but will later be sold in India too. What Google has done differently this time around is to create a retail store for customers to purchase the phone &mdash; the &lsquo;Google webstore&rsquo; sells an unlocked (not tied to an operator) version at $529 (around Rs 23,000) while the phone costs $179 with a T-Mobile contract (the telco-driven model subsidises the handset price).

When web meets the phone

East Asia&rsquo;s growth over the last two decades has been underpinned by rapid growth in trade within the region. Between 1986-87 and 2006-07, the share of intra-regional trade (exports plus imports) grew from 34 per cent to 52 per cent. China has been a big contributor.

Asean's increased muscle

In a year of ascendant Keynesianism, the finance ministry is cautioning that too much stimulus can be injurious to the economy. This can only be interpreted as indications of ebbing of the fiscal tide in the forthcoming Budget. That the stimulus needs to be unwound is undisputed. But using the same metaphor of excess, there is such a thing as good and bad cholesterol, i.e.

Subsidies are injurious to health

It is now over a year since the founder-chairman of Satyam, Mr Ramalinga Raju, was picked up for questioning after he virtually confessed to corporate fraud. For 12 months now, Mr Raju has been in judicial custody and police lock-up as an undertrial. To this day, it is still not clear how long the investigations will take and when the trial will begin. How long will Mr Raju be denied bail? An equally ignominious corporate fraud was perpetrated by the founder of the Galleon group, Raj Rajaratnam, in the United States and the accused is out on bail. More to the point, the US district court judge, who is handling the case, has even fixed a date, March 26, for pronouncing the verdict. Surely one cannot make much of a muchness about the plight of high-profile undertrials in India when there are literally thousands of lesser mortals languishing in judicial custody and police lock-up with no certainty about how long their ordeal will last.

Judging business

The attacks on Indians, mostly students, in Australia keep hitting news headlines with disturbing regularity. The authorities in Australia don&rsquo;t seem to either know what to do about it, or don&rsquo;t seem to care about it. Apart from denying that the attacks are &ldquo;racist&rdquo;, there has been little done to reassure Indians seeking to travel to Australia. The problem is no longer just about improving public relations. It is about reversing a disturbing trend. Over the past year, there have been more than 100 incidents involving attacks on Indians. The violence is only escalating, as the killing of Nitin Garg last week and the burning of 29-year-old Jaspreet Singh, who is in a serious condition in a Melbourne hospital, prove. Indeed, the government has been remarkably restrained, advising Indian students to travel in groups and to avoid going to dodgy Australian colleges.

Fixing things down under

With the January 11-12 deadlines for mock auctions for 3G spectrum (with January 14 the day for the actual auction) passing off without any action, it is safe to assume this is yet another deadline that&rsquo;s going to be breached. The latest, going by a draft note prepared by the Department of Telecommunications (DoT), though not approved yet by the government, is that the auction will be held on February 12. Under the plan, the spectrum will, however, be allocated only in September since the Ministry of Defence (MoD) is unlikely to free up the spectrum before then. Those waiting to bid for the spectrum, though, would be advised not to hold their breath. Talk on 3G spectrum began over three years ago and deadline after deadline has been breached since then.

Whose spectrum is it?

Incisive columns and editorial comment by top opinion leaders

Page 554 - Editorial Comment