On the face of it, the new sugarcane policy is aimed at bringing about uniformity in cane prices throughout the country. The policy replaces the central government&rsquo;s statutory minimum price (SMP) with a fair remunerative price (FRP) and says that if state governments wish to fix a higher price, they will have to pay for it. The amendment of Sugarcane (Control) Order, 1966 will discourage states from fixing a state advised price (SAP), which is higher than the SMP &mdash; this will help provide a level playing field to the sugar industry in states which regularly declare SAPs (Uttar Pradesh, Punjab, Haryana, Tamil Nadu and Uttarakhand) in comparison with its counterparts in states where this isn&rsquo;t done. At the same time, the new policy also helps the Centre achieve another objective. Had this amendment not been made, thanks to a recent Supreme Court ruling, the Centre would have had to pay higher prices to sugar mills which have paid a higher SAP to cane growers.

Making cane able

Business Standard

It can be no one&rsquo;s case that the greatest of caution should not be used while evaluating the safety of genetically modified (GM) crops or that we be blinded to the impact of these crops on reducing bio-diversity. But there has to be a limit to everything. Nine years after the gene-altered brinjal was first developed, and after over five years of the country&rsquo;s biotech regulator scrutinising test reports of field trials, Bt-brinjal is still far from being commercialised. Bt-brinjal, which carries the insect-killer gene, cry1Ac, borrowed from a common soil bacteria (Bacillus thuringiensis,Bt) has been cleared by the Genetic Engineering Approval Committee (GEAC), the apex body for approving GM products. However, under pressure from the anti-biotech lobby, the environment ministry wants a fresh public debate on Bt-brinjal before finally approving it.

Genes in a twist

The talk about connectivity is back in South Asia. In the east, India and Bangladesh are narrowing down their differences on transit rights, trade and connectivity. This agenda could be the focus of Bangladesh Prime Minister Sheikh Hasina&rsquo;s visit to New Delhi next month. In the west, Prime Minister Manmohan Singh has brought issues relating to trade and connectivity across the line of control, between Jammu &amp; Kashmir and Pakistan-occupied Kashmir, back onto his agenda for improved relations with Pakistan. Properly taken forward, these economic initiatives can help improve political relations in the sub-continent. As reported in the Business Standard, India has agreed to provide 100Mw of power from its central grid to help Bangladesh dredge the Ichhamati river, for the first time since 1971, and has also agreed to speed up talks on river water sharing. India has also agreed to be more transparent and sincere about trade liberalisation and facilitation.

Reconnecting with neighbours

After two successive quarters of GDP growth of 5.8 per cent, the first signs of improvement have been provided by the estimates for the first quarter of 2009-10. GDP grew by 6.1 per cent over the corresponding quarter of last year. That isn&rsquo;t very different from the previous two quarters, but is reassuring nonetheless.

Out of the trough

The five-year BP outsourcing deal for $1.5 billion (Rs 7,500 crore) is the best piece of news that the outsourcing industry has had since the global recession began. It tells the country that outsourcing, and its companion off-shoring, are here to stay.

Outsourcing stirs again

The second Manmohan Singh government has got off to a more ambitious start in its first 100 days than any since perhaps Rajiv Gandhi&rsquo;s in 1985. To be sure, the Vajpayee government did the atomic big bang once it assumed office, and the Narasimha Rao government did the big bang economic reforms in its first few weeks, in 1991. UPA-II has done nothing remotely comparable in terms of &lsquo;big bang&rsquo; impact. But in terms of the range of initiatives, legislative and executive, perhaps only the Rajiv Gandhi government compares. A quick reading of the list should make this clear.

A good beginning

Given that the country&rsquo;s security establishment has raised objections to Chinese companies operating in India in the past, it is no surprise that the government has asked telecom operators to avoid using Chinese equipment in 20 of the 29 states. The impact on equipment prices may also not be as serious as is being made out. Chinese equipment suppliers can still compete in around 40 per cent of the market including states like Uttar Pradesh, Karnataka and Andhra Pradesh and will set benchmark prices that other suppliers cannot ignore. It is inconceivable, for instance, that BSNL will allow Ericsson to supply equipment to it in the north Indian states where the ban applies at a price which is much higher than what it gets from the Chinese Huawei in the southern states. It is also true that several of the top telecom firms, like Bharti and Vodafone, hardly have any Chinese equipment.

Securing business

The finance minister has done well to clarify that some of the tax rates and brackets mentioned in the draft Direct Taxes Code are only indicative. In doing so, he has signaled that the government is open to revisiting the rates and slabs, perhaps in response to feedback that the ministry has got. But the problems go beyond rates and slabs, questions need also to be asked about some of the concepts that have gone into some of the proposals in the Code. The exercise is welcome in that it introduces simplicity and medium-term stability into the tax system and rates, but the Code should be finalised only after a full discussion with all stake-holders, and the vetting of some of its assumptions.

Code Red

The plan to use hydrogen as fuel to run a small fleet of vehicles, to ferry athletes from their &ldquo;village&rdquo; to the contest arenas during the forthcoming Commonwealth Games in Delhi, is experimental in nature, but a &ldquo;first&rdquo; nonetheless in a city which has put its entire public transport system on the pollution-free compressed natural gas (CNG). The world is looking to hydrogen as a future source of clean energy to run automobiles and also to power factories, businesses and homes. Hydrogen is of course the most abundantly available element on earth. When used as fuel in an engine, it is reckoned to be about 30 per cent more efficient than conventional fuels like petrol. And when it is used through the fuel cell route, its efficiency betters petrol by between 100 per cent and 200 per cent. The Indian Oil Corporation, which has mooted the plan to operate hydrogen vehicles during the Commonwealth Games, plans to use a mix of hydrogen and CNG in a 20:80 ratio.

Tapping hydrogen

The tragic death of Andhra Pradesh Chief Minister YS Rajasekhar Reddy in a helicopter crash should open everyone&rsquo;s eyes to the dangers associated with small private planes and helicopters. Mr Reddy&rsquo;s death was preceded by those of Congress politician Madhavrao Scindia, Lok Sabha Speaker GMC Balayogi, industrialist OP Jindal and Haryana Agriculture Minister Surender Singh.

Mayday, mayday

Forty years back, no one could have imagined that a quarter of the world's six billion people would be surfing the internet. Till as recently as the early 1990s, the benefits of the internet were restricted to military agencies and research institutions. What made the internet all-pervasive was the introduction of the World Wide Web and the browser (later named Nexus) by British physicist Tim Berners-Lee and the emergence of service providers like America Online which connected millions of people for the first time. Browsers like Netscape and Internet Explorer have helped countless users make sense of the internet. Who, for instance, remembers the last time s/he sent a postcard or birthday greeting by snail mail? Emails and online greetings now do the trick. People surf encyclopedias digitally, and search engines like Google and Yahoo ferret out rich data. Social interaction has both increased and been challenged by social networking sites.

Caught in the web

We are approaching the first anniversary of the Lehman Brothers collapse. Lehman&rsquo;s filing for bankruptcy on September 15 last year triggered the near-collapse of the western financial system and sent the global economy into a tailspin from which it is only now beginning to pull out. The crisis had been building up from about the middle of 2007, when the US housing bubble got pricked, and grew in intensity till the earthquake of a year ago.

T N Ninan: One year later

In May, a &ldquo;moderate&rdquo; Kashmiri separatist stood for election to the Lok Sabha. This was a &ldquo;first&rdquo;, and there was more than the usual interest because the separatists have always been taunted that they do not subject themselves to the test of popular choice because they know that they do not represent the majority view in even Kashmir valley. Well, Sajjad Lone had decided that he would take the test, and he failed badly.

Making the grade

The &ldquo;informal ministerial&rdquo; meeting of key members of the World Trade Organisation (WTO), held in the capital last week, has been declared a success because it has paved the way for fresh, formal negotiations to re-start at the WTO headquarters in Geneva. In the process, India has played the role of successful host and shown itself to be a member in good standing, intent on making the Doha Round of trade negotiations come to a successful end. This was a useful purpose to achieve because many developed countries had blamed India and its commerce minister of the time for the talks being stalled in the summer of 2008. While Kamal Nath may have had an abrasive style and rubbed some of his counterparts the wrong way, the &ldquo;blame&rdquo; cap did not fit India; more correctly, it should have sat on the US negotiator&rsquo;s head&mdash;as Europe&rsquo;s negotiators too felt at the time.

Back on the road

The verdict by the single judge bench of the Delhi High Court, that information with the Chief Justice of India on judges&rsquo; assets comes within the purview of the Right to Information Act, marks one more step in a continuing saga. The Supreme Court has declared its intention to go in appeal before a division bench. The story began with a carefully framed application by an individual before the Information Commission, seeking to know if Supreme Court judges had declared their assets before the Chief Justice of India, as judges of the apex court had unanimously resolved to do in 1997. The Chief Information Commissioner upheld the application and the present judgment is the outcome of the appeal against that decision.

Judges' error of judgment

Duvvuri Subbarao, who completes his first year as Reserve Bank governor today, took office under very adverse circumstances. The global recession was under way, reinforced by the fact that central banks around the world had hiked their policy rates to combat the inflationary surge of early 2008. That surge was abating by the time Dr Subbarao took office, but the lagged effects of interest rate increases were yet to be felt. Within a week of his assuming office, Lehman Brothers went bankrupt, which triggered violent upheavals in the global financial system. For countries like India, this was the prelude to massive outflows of capital as global investors flew to &quot;safe&quot; havens. The RBI had to deal simultaneously with the combined impact of a worsening recession and an acute liquidity crunch.

Trial by fire

With a large number of citizens in the capital complaining of electricity bills that are up by between 50 and 100 per cent, the point gets reinforced that, though the Delhi government has privatised electricity distribution, it needs to continue protecting consumer interest. This was also evident a few weeks ago when it was found that the Anil Ambani-controlled BSES, one of the two companies running the distribution firms in the capital, had not contracted enough electricity supplies to meet peak summer demand. While Chief Minister Sheila Dikshit has given the expected tongue-lashing to BSES, the distribution company which has the maximum number of complaints, she needs to figure out a more permanent solution.

Ending power monopolies

Thanks to the global economic crisis, it is commonplace to talk of job losses in India. But does anyone have a fix on just how many jobs have been lost? Certainly the manner in which the National Rural Employment Guarantee Programme (NREGP) is expanding, it would appear that certain sections of the government believe that the problem is a lot more severe than they would like to admit publicly. But if it is true that the rapid expansion and the high wages in the NREGP have resulted in several avenues of employment drying up (farmers growing certain crops, for instance, don't find it profitable to do this at current wage rates), then the NREGP may actually be working at cross purposes. Sadly, however, there is no data worth the name that policymakers can rely upon, other than the once-in-five years National Sample Survey's (NSS) thick sample. For practical policy purposes, the NSS data is so out of date that it offers no real indications of the facts on the ground.

The job at hand

The forest and environment ministry's proposal to give fiscal incentives to the states that are maintaining their forest cover and are taking steps to improve it seems a well-intended move aimed at protecting the country's vital, as also threatened, forest resources. Such financial assistance can help state governments to withstand, even if only to an extent, the ever-increasing pressure to divert forest land for other purposes. The simultaneous announcement of the intent to extend such sops to the local self-governments as well is equally significant, as the actual implementation of the programmes is taken care of at that level. What is important here is the involvement of the local stakeholders, which include the tribal people and others forest dwellers who rely solely on the forests for their livelihood.

Well-intended move

The National Rural Employment Guarantee Scheme (NREGS) was launched by the previous United Progressive Alliance (UPA) government in the first flush of its commitment to the 'Aam Aadmi' agenda. Criticised by many for a variety of reasons, from fiscal burden to the prospect of leakages, it nevertheless became the UPA's defining and differentiating programme.

The essence of NREGS

Finance Minister Pranab Mukherjee has reason to feel satisfied with the outcome of the meeting of finance ministers and central bank governors of the G20 countries, in London last week. India's role in breaking the deadlock over the Doha round of trade talks came in for appreciation as the gathered ministers renewed their call for an end to all forms of protectionism and an early conclusion of the ongoing multilateral trade negotiations.

Outlook for Pittsburgh

Incisive columns and editorial comment by top opinion leaders

Page 563 - Editorial Comment