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?

Business Standard

The index of industrial production (IIP) has posted a growth rate of 11.7 per cent in November 2009. For the past three months, the IIP has registered an average growth rate of above 10 per cent. This pace was stronger than expected, and instills confidence that it will continue to rise at this pace well into next year. What is important about this revival of industrial growth is that it is also broad-based.

Industrial recovery

The success of the just concluded visit to India of Bangladesh Prime Minister Sheikh Hasina has to be judged by how India&rsquo;s handsome response to her various gestures of friendship will be viewed in Bangaldesh. Ms Hasina has sought to put an end to the policy of her political rivals at home to provide a sanctuary to anti-India extremists. The arrest of the topmost leaders of the United Liberation Front of Assam (Ulfa) provided the backdrop to her visit this week. Clearly, this initiative has laid the foundation for improved relations between the two South Asian neighbours. It remains to be seen how Islamist opinion in Bangladesh which, along with a section of the country&rsquo;s middle class and elite, remains unhappy about the breakup of Pakistan, will respond to improved relations with India.

Helping Bangladesh

After Copenhagen, the North-South divide on the global commons will once again come to haunt the efforts to hammer out an international legal framework on biodiversity that seeks to supplement, if not replace, the existing Convention on Biological Diversity (CBD). The proposed accord deals with bio-piracy, which is a cause for grave concern for biodiversity-rich nations like India, apart from access to bio-resources and sharing of benefits arising out of their use with the country to which they belong. The deal is proposed to be formally adopted at the forthcoming 10th Conference of Parties (COP) on biodiversity at Nagoya in Japan in October this year. The United Nations has declared 2010 as the International Year of Biodiversity.

Copenhagen to Nagoya

Two recent rulings relating to the Right to Information (RTI) Act have favoured a broad interpretation of the ambit of the law. The ruling that has invited the most comment is by a full bench of the Delhi High Court, which has upheld the view taken by a single judge of the court that the office of the Chief Justice of India is covered by the RTI Act. The other ruling, a few days earlier, was by the Chief Information Commissioner who declared that individual income tax records can be sought under the RTI law, on the ground that it is not an invasion of privacy and that it will help curb tax evasion. Both rulings deserve comment.

Right to privacy

Year 2010 is the &ldquo;Year of the Tiger&rdquo; in the Chinese calendar. Tiger conservationists fear that this could steeply increase the demand for tiger parts and encourage poaching and smuggling out of India. Clearly, protecting India&rsquo;s tigers must become a bilateral agenda for India and China. For all the good work done, and the special attention given by the government&rsquo;s highest functionaries, Project Tiger has not been able to prevent the decline in India&rsquo;s tiger population from 1,800, when it was launched, to just around 1,000 today. The year 2009 alone saw the loss of 120 tigers, the highest in a single year in last decade. Three more tigers have died in the first few days of this year. These numbers speak volumes about the failure of the Project Tiger in achieving its mission. World-wide, too, these striped big cats are fighting a losing battle for survival.

Year of the Tiger?

At a weekend retreat with officials of the union finance ministry, film actor Aamir Khan, now celebrating the resounding success of his latest ouvre, 3 Idiots, was asked to speak on the &lsquo;soft power&rsquo; of Indian cinema going worldwide. One does not know why finance ministry officials were interested in the topic, unless they are presently pouring over files recommending some fiscal concession or incentive for Bollywood exports! Whatever the provocation for suggesting the topic, Mr Khan disappointed his hosts by confessing that he had never given the subject much thought while planning his films. Making an honest confession, he reportedly said that he, like most Indian film makers, makes his films for an &lsquo;Indian&rsquo; audience, not a &lsquo;global&rsquo; audience. Indeed, most of the so-called global market for Bollywood, which is now substantial and growing, is almost entirely comprised of people of Indian origin worldwide.

Soft power and hard currency

Central bankers, as a species, are known to dwell between a rock and a hard place. Their remit in setting monetary policy is to balance the conflicting objectives of supporting growth and keeping inflation at bay. This is not an easy trade-off and the monetary policy announcement due on January 29 will not be the exception. High food price inflation and signs of accelerating growth have invited a rising clamour for monetary tightening from some quarters of the economist and policy community. But there seems to be an equally strong demand for restraint. One could argue that the current debate on monetary policy has been bogged down somewhat unnecessarily in the narrow question of whether monetary instruments can be effective in curbing food price inflation.

The usual trade-offs

Former West Bengal chief minister Jyoti Basu, who died on Sunday at the ripe age of 95, was a communist party apparatchik and a bhadralok gentleman. Very Bengali and very English, a trade union leader and a liberal democrat, an indulgent father and a tough party soldier. He was a bundle of contradictions and that is why he endeared himself to so many. The initial hypocrisy of unalloyed praise for a dead leader will in time yield place to a more balanced assessment of his contribution to his home state of West Bengal. It is a pity, though, that apart from lamenting the &ldquo;historic blunder&rdquo; of the politburo of the Communist Party of India (Marxist) in denying him the opportunity to become India&rsquo;s prime minister, one can say very little about his impact on national politics. Jyoti Basu will always be remembered as the unquestioned leader of West Bengal, and India&rsquo;s longest serving chief minister, with very little lasting impact on national politics and policies.

A gentleman communist

Many of the supply-side measures taken to contain prices of essential commodities by the Cabinet Committee on Prices (CCP) last week are based on flawed assumptions. It is na&iuml;ve to assume that hoarding alone is behind the spurt in the price of agricultural items. Commodities like vegetables, fruit, milk, eggs, meat and fish, all of which have contributed significantly to food inflation, are highly perishable in nature. Hoarding cannot explain the rise in their prices. In the case of wheat and rice, the government has curtailed the role of private trade by raising stock limits and imposing other controls. The government has become the sole purchaser in the peak, post-harvest, marketing season in the grain-surplus states. It is astonishing that at a time when prices are soaring, the government is building up its stocks far beyond buffer stocking norms.

Managing food prices

The Reserve Bank of India (RBI) has strongly advised commercial banks to desist from offering low &ldquo;teaser&rdquo; rates to new customers of housing loans. The practice, started by the State Bank of India, has now been adopted by several banks as a competitive environment does not leave any option for players but to follow suit once one major player takes the lead. Teaser rates enable a borrower to start off at a relatively lower interest rate, with the higher market-related rate kicking in after a couple of years or so. While this is an incentive with which customers can be attracted, the fact of the matter is that the effective rate of interest for home loans, which usually stretch for long periods, is not what a teaser rate offers but the reset rate which kicks in later. The danger from this is easy to see. Customers who cannot afford to borrow at the longer term higher rate are nevertheless induced to take on a long-term commitment, only to rue their fate later.

Stop teasing, please!

It was only a matter of time for Google to come up against China&rsquo;s censors. If Google sticks to its threat of walking out of China , Google.cn (its Chinese portal) would no longer exist. Even if Google doubled its $300 million business in China, as it hoped to, that would still be a mere 2.3 per cent of its global business. The China search market too, is not very big in terms of revenue. iResearch estimated the market at $1.02 billion in 2009 &mdash; but up 38 per cent year-on-year. Besides, iResearch iUserTracker data reveal that Google&rsquo;s market share was 19.8 per cent as of June 2009 (some reports peg the market share at 31 per cent) as compared to home-grown Chinese search engine Baidu&rsquo;s 75.7 per cent (other reports peg its share at 58 per cent). The point is that China has huge potential &mdash; the largest number of internet users (around 385 million) and cellphone users (over 700 million).

Googled in China

The deemed universities scam is the tip of a humungous iceberg of corruption in the higher education regulation, accreditation and financing system. HRD minister Kapil Sibal must be complimented for appointing a review committee that has brought to light this rot. In the five years that Arjun Singh lorded over the ministry, with his acolytes actively engaged in the vetting of applications and granting of permission, the pre-existing rot in the system had only gone deeper. Using the veneer of a left-of-centre&rsquo; ideology, with helpful comrades and cheerleaders in the academic world and media hailing him as a messiah of liberalism and secularism who was repairing the damage done to education by his Hindutva predecessor, Singh allowed market forces to run rampant in the higher education system. In the name of widening access to education, the Congress party allowed the dilution of the system of accreditation and regulation.

The skeletons tumble out

India&rsquo;s sugar industry has always been subject to government regulation. But in Uttar Pradesh the industry has come under a vice-like grip of the state government. At a time when sugar mills ought to be crushing cane, they are busy escaping the crushing weight of government-inspired charges of forgery, cheating, poaching of cane and other irregularities. Worse still, FIRs have been lodged against almost 90 private sector mills, accusing them of committing non-bailable offences under the draconian Essential Commodities Act. While UP&rsquo;s businessmen have become used to such treatment from Chief Minister Mayawati, the pattern is slightly different this time. While in the past, the FIRs used to name those in charge of the estate, this time, the promoters of the mills are being named. All this lends credence to allegations made publicly by Chief Minister Mayawati&rsquo;s adversaries that this action is extortionary in intent.

The bitter truth

The surest sign of an economic recovery in the developed countries comes from the third quarter results of India&rsquo;s top export-driven software companies, all displaying a confirmed upward trend on a sequential basis. However, the clear indication that a full-fledged recovery is still some distance away comes from the numbers not looking so bright on a year-on-year basis. In the case of Infosys, both net profit and revenue have grown sequentially by a modest amount but are down compared to those a year earlier. The picture looks brighter for TCS. Its numbers are exciting, whichever way you look. Wipro&rsquo;s IT services revenues have also grown both year on year and sequentially. Of the three, it is TCS which has put up an exceptional performance, registering a rise in net margin for three successive quarters. The difference between the net margins of the top two, which used to be around 10 percentage points, with TCS trailing Infosys, is now down to four.

Software out of trough

Climate change science is about as exact a science as economics. There are so many variables and imponderables involved in both disciplines that it is impossible to predict, with any degree of precision, what will result and when. For instance, despite all the dire warnings about global warming, the last 10 years have been cooler than the year that went before&mdash;mostly because 1998 was a particularly hot year. Such contrary facts encourage the use of caution when approaching firm predictions as to when exactly the earth will have warmed by 2 degrees Celsius. Even though this is a quite different issue from the bogus science that now stands exposed, on the issue of when the Himalayan glaciers will melt, it is worth keeping in mind that even bogus science becomes mainstream fact only when the prevailing climate of opinion permits. In that sense, the world may now be ready for a more careful debate that focuses on reliable probabilities than on dubious certainties.

Beyond global warming

Anthropogenic global warming (AGW) and consequent climate change is perhaps the most contentious issue in the world today. At the centre of it all is the Intergovernmental Panel on Climate Change (IPCC), which collates the work of thousands of scientists, assessed through peer-review and approved by 192 governments.

Hard times for climate scientists

The decision to introduce currency futures for dollars last year and to extend it now to euro and yen is a sign that Indian regulators are learning the right lessons from the global financial crisis. Instead of shunning the market, they seem to be focusing on improving its depth and transparency. Besides, the large trade volumes with Europe and Japan make a compelling case for introducing hedging instruments in their currencies. Trade with the EU was about $56 bn in 2007-08 and $10 bn with Japan.

A basket of futures

India was right to serve a demarche on China last week protesting the role of non-tariff barriers in the accumulation of a huge trade deficit that has ballooned from $1.08 billion in 2001-02 to $22.05 billion in 2008-09. Indian industry has long complained that a lack of transparency in Chinese procedures, regulations, systems and pricing methods was adding to the rising trade deficit. If India&rsquo;s exports to the rest of the world are rising in double digits, why is India unable to export more to China? For their part, Chinese authorities have argued that their products are more competitive and India&rsquo;s less so. Clearly, the truth lies somewhere in between and the sooner the two governments address the problem, the better for bilateral relations.

Beyond the Great Wall

There will be much celebratory and self-deprecatory talk about national unity as India marks the 60th anniversary of the Republic. In this land of contradictions and contrasts, every statement about India, and its opposite, can be taken as true. For every valid celebratory comment, there would be equally valid critical ones. One must, therefore, strike a balance while commenting on any contemporary political, social and economic phenomenon. Even so, the growing temptation to resort to chauvinism, of various kinds &mdash; communal, caste, linguistic, religious, regional &mdash; should worry anyone who has the best interests of the Indian nation and the Republic at heart. The ease with which politicians are able to create, maintain, manipulate and exploit a range of chauvinistic political platforms does not augur well for the future of the Republic.

Competitive chauvinism

Condoleeza Rice was all of 46 years of age, a professor and not a retired official, when the most powerful head of state in the world appointed her as a National Security Advisor (NSA). Ms Rice was chosen because of her impeccable intellectual credentials in the field of strategic policy, apart from her political affiliation to the incumbent President of the United States. India has yet to decide what ought to be the qualifications of its NSA. Thus far, it is the individual in the job who has defined the post, and not the other way round. India&rsquo;s first NSA, Brajesh Mishra, defined the job in his own idiosyncratic way. It was a model that his successor, the late JN Dixit, wanted to follow but that was not to be, for purely political reasons.

What does an NSA do?

Incisive columns and editorial comment by top opinion leaders

Page 555 - Editorial Comment