There is as yet no serious damage to kharif prospects.

An uncertain monsoon

Business Standard

In the fifties, sixties and to some extent even the seventies, Formula One racing was simple. Enthusiasts representing manufacturers and teams got together to build state-of-the-art racing cars which met the rules set by the &lsquo;Formula&rsquo; and raced against each other. Racing was mostly on historic European circuits, and car makers stood a good chance of selling more cars when they won on Sunday afternoons. When the costs of car development mounted, a new breed of teams with huge financial backing sprang up. They used new-age metallurgy and tyre technology to take Formula One to a level where it became impossible for just any old bunch of enthusiasts to build cars and race them competitively. And so it was that Bernie Ecclestone made use of his tobacco millions and created the highly-televised, money-spinning circus that the world knows as Formula One today.

No winners in Formula One

It is hard to see who among the participants could have emerged with much satisfaction from the two-day meeting of the Bharatiya Janata Party&rsquo;s national executive. Meant to discuss the party&rsquo;s poor showing in the Lok Sabha elections, and the way forward, the last word was said by the gentleman who almost certainly will not lead the party in the next elections.

Out of sync

This newspaper has consistently opposed the government&rsquo;s policy on special economic zones. The plethora of market-distorting tax giveaways, the liberal mix allowed of &ldquo;processing&rdquo; and other areas in a zone (which helped convert some into real estate projects rather than export zones), the minimum and maximum sizes stipulated without economic logic, the administrative difficulties that would be there in dealing with hundreds of &ldquo;no-tax&rdquo; zones, all these made this a thoroughly irrational policy that had little to commend itself. And if none of these arguments carried weight, there was the additional outrage that all that was required of the tax enclave was that it be foreign exchange-neutral! Even after the inevitable group of ministers tweaked the model, SEZs continued to be quite lucrative as real estate deals.

SEZzzzz

The groups that merged to form the Communist Party of India (Maoist) a few years ago were on the government&rsquo;s banned list; that did not prevent them from forming a consolidated Maoist grouping and spreading their zones of influence and control. The Rashtriya Swayamsevak Sangh (RSS) was banned for a while after the Babri Masjid was brought down in 1992, but showed no signs of having suffered on that account. The Students Islamic Movement of India (Simi) has also been banned, but seems to be active nevertheless. To cite these examples is not to argue against the imposition of a ban (which has become a needless point of dispute with the Left Front government in West Bengal).

Banning is a first step

The key choice that the government has to make in the Budget is whether to allow the fiscal deficit to rule high through the new year, or whether to apply the brakes and impose some discipline. Planning Commission Deputy Chairman Montek Singh Ahluwalia has signalled that he is in favour of pushing for growth now and worrying about the deficit later, given that there is no immediate risk of general inflation, and since there is still some evidence of a shortage of private demand. But the Reserve Bank governor, D Subbarao, has been sending out different signals, arguing apparently that the time may have come to start tightening up on money supply and let interest rates rise. The latter may happen anyway, if the government follows a lax fiscal policy, because it will translate into higher government borrowings which will then cause money to be tight and raise interest rates.

Fiscal dilemmas

The government&rsquo;s decision to give fast-track clearance to coal mining projects in degraded forests may help boost coal production, but it bodes ill for the country&rsquo;s forest cover. While environment activists are red-faced over the decision, taken at the meeting of the environment and coal ministers, legal pundits maintain that laws stand in the way. Besides, it will be difficult to delineate degraded forests, as the Forest Survey of India does not recognise any such category.

Coal or forests?

The monsoon forecast update issued by the Met office, projecting total rainfall during the season at 93 per cent of the long-period average (with an error margin of 4 per cent), should not be cause for alarm. Instead, it should put to rest the speculation about an impending drought.

Over-reaction to forecast

President Obama revealed his plans for restructuring the US financial regulatory system last week. The broad principles and priorities of the plan were already known, courtesy of an article by Timothy Geithner and Lawrence Summers, two of its main architects, in the Washington Post, a couple of weeks ago. Now the proposals are on the table and, from the initial responses, a tough fight in Congress awaits them.

Delicate balance

Veerappa Moily, the law minister, has talked of introducing judicial reform, and of bringing to Parliament a Bill that will mandate wealth disclosures by judges. While many kinds of reform are needed and desirable, two simple steps should be given precedence. The first is largely, if not almost entirely, in the government&rsquo;s domain and relates to the appointment of judges&mdash;far too few exist, and far too few are being appointed.

Quick justice from transparent judges

In 30 days, a flurry of ministerial pronouncements.

Busy ministers

Private, public interests can co-exist in higher education.

Incentives and accountability

Does a utility have a duty to serve its customers first, even if there is short-term financial loss involved? The question has come up in the context of the huge power cuts the capital city has been facing in two of the three circles that are run by the Anil Ambani-managed BSES. The question acquires a sharper edge when the power distribution company in another part of the city, run by the Tata-managed NDPL, has amuch better record on meeting demand (as it does on cutting transmission and distribution losses). BSES will argue that the heat wave has raised the demand for electricity, while the shortage of water in hydel power projects affected supply (the company points to 500 MW of committed supplies having fallen short), but the plain fact is that a rival company has met the surge in summer demand by managing supply better.

Failing your customers

The Mumbai commuter&rsquo;s travel time between the Bandra flyover and Love Grove Junction at Worli is set to come down from 35 minutes to seven minutes from today, with the inauguration of the 5.6 km Sea Link, including India&rsquo;s first cable-stayed bridge in the open sea. Yes, but only if wishes are horses. The sevenminute timeframe for the 7.7 km distance between the two points was promised by the Maharashtra government; like most government promises, this one will remain a pipedream.

A bridge too far

India&rsquo;s political climate gets very hot very quickly if anyone suggests the privatisation of individual enterprises owned by the state. The Manmohan Singh government did none in the last five years, and the Congress manifesto now formally abjures such privatisation in selected sectors. Oddly, though, the political class does not object to the privatisation of whole sectors&mdash;as has happened with civil aviation, telecommunications, coal mining, power generation and much else.

Hidden costs

Each time the International Monetary Fund takes a look at global economic prospects, it raises its estimate of the likely losses from the financial crisis, and quite dramatically at that. When the first estimate of $400 billion was put out by the Fund, it did not shock too many people; with such low figures, it looked quite likely that de-coupling would work and the developing world would escape unscathed.

The bill climbs

As the country heads for the final round of the elections, the possibility that every opinion poll had ruled out is now very real: The Bharatiya Janata Party (BJP) could emerge as the single-largest party.

A party of government

The trade numbers for March 2009, released by the ministry of commerce and industry on Friday, show that the decline in exports that began last October not only persists but seems to be accelerating. In dollar terms, exports declined by 33.3 per cent over March 2008, the largest monthly decline yet. For the year as a whole, exports came in at $168.7 billion, significantly short of the original target of $200 billion and also below the revised range of $170-175 billion.

The shrinking trade deficit

The New Pension Scheme (NPS) is one of the more ambitious programmes tried out by the government. If successful, it has the power to transform India&rsquo;s savings habits. Millions of Indians who, today, don&rsquo;t have a long-term flexible savings option will now have one, irrespective of where they live and where they are employed.

Attractive over the long term

The reported decision by the government to raise the level of viability gap funding, or grants, for projects under the fifth phase of the National Highway Development Programme, may breathe some new life into a scheme that has stuttered to a halt. No project has been awarded in recent months because no one bid for some, while for others there was only a single bid.

No speed on highways

Last week&rsquo;s order of the Appellate Tribunal for Electricity, in a case filed by National Thermal Power Corporation (NTPC), should set at rest the year-long concern about the maintainability of the rights of state-owned power generating companies if they wish to take punitive action against errant state electricity boards.

A wrong undone

Incisive columns and editorial comment by top opinion leaders

Page 572 - Editorial Comment