The investigation ordered by the Lok Ayukta court in Karnataka into the Nandi Infrastructure Corridor Enterprise (NICE) project, which has the mandate to build the Bangalore-Mysore Infrastructure Corridor (BMIC), consisting of an expressway and five townships, is significant for two reasons. One, despite being headless for some time, the Karnataka Lok Ayukta is not a toothless organisation; it played a key role in B S Yeddyurappa losing his chief ministership. The full investigation now ordered is based on the preliminary investigation initiated by the assertive Santosh Hegde. Two, among those to be investigated are three former chief ministers of Karnataka of different parties: H D Deve Gowda, S M Krishna and B S Yeddyurappa. This is likely to be a long-drawn-out affair, and the final denouement cannot be anticipated.

The expressway mire

Business Standard

At the 18th Congress of the Communist Party of China (CPC) this week, one of the world&rsquo;s most outwardly smooth transitions of power will occur. The administration of President Hu Jintao and Prime Minister Wen Jiabao, the &ldquo;fourth generation&rdquo; of leadership of the People&rsquo;s Republic, will step aside and be replaced by younger partymen. Unlike the transition from the first generation &ndash; of Mao Zedong and Zhou Enlai &ndash; to the second generation of Deng Xiaoping, this transfer of power is planned and stable, as was the case when Jiang Zemin and Zhu Rongji of the third generation gave way to Messrs Hu and Wen in 2003. But, unlike in 2003, the economic fundamentals are likely to make the new administration&rsquo;s task difficult.

Fifth-generation problems

Come winter, and Delhi is wrapped in a blanket of smog. It isn&rsquo;t pretty. Also, it poses grave environmental, health and transportation hazards. Winter seems to have come early this year, and so has the smog. The economic costs are considerable: the winter schedule of airlines and trains invariably goes haywire owing to poor visibility. People breathe in more particulate matter, which increases the risk of respiratory illnesses &mdash; especially among those vulnerable to asthma and bronchitis. The problem&rsquo;s genesis lies in natural and uncontrollable fog-causing factors such as thses: a drop in temperature, more moisture in the air and an absence of winds. Yet fog becomes smog through the alchemy of human activity: the pollution, smoke and dust that a city and its surroundings churn out.

Delhi's smog failure 

American voters have returned President Barack Obama to office in an election far closer than it need have been. Mr Obama&rsquo;s Republican opponent, Mitt Romney, was handicapped by the radical, reactionary views that currently dominate that party. Mr Romney was also handicapped by his divisive record as a successful private equity executive, and because of the not unfair impression that he found it impossible to sympathise with &ndash; or even understand &ndash; the &ldquo;47 per cent&rdquo; of America less fortunate than the half to which he himself belonged.

A bluer America 

Recent analysis by Ingovern Research Services, reported by this newspaper on Wednesday, shows once again the governance rot in India&rsquo;s companies. Nineteen per cent of the directors, both executive and independent, in top companies attend fewer than 75 per cent of the board meetings.

Just too many meetings

After four successive quarters of disappointment, corporate results showed encouraging trends in the quarter ended September 30, 2012. An analysis of 1,071 companies (excluding banks and other financial entities) by the Business Standard Research Bureau, reported in this newspaper on Wednesday, indicated that most key margins have improved. There has, however, been a slowdown in the sales growth rates.

The margin story

In India, there is always context to a statement. So much context, apparently, because of how complicated this country is, that Indians often prefer to ignore all context completely. This is the case with the outrage across the internet, and in West Bengal, that the writer Girish Karnad, known for writing some of modern India&rsquo;s best-loved plays, called Rabindranath Tagore a &ldquo;mediocre playwright&rdquo;. This statement was part of a discussion of Tagore&rsquo;s multifaceted output &mdash; he was a poet, a novelist, a writer of short stories and plays, a composer and an artist &mdash; and Mr Karnad&rsquo;s perfectly reasonable point was that he was better at some of these things than he was at others. Mr Karnad argued that many of Tagore&rsquo;s plays were meant to be performed in-house, and by family members; and also that he thought that some of the poorer characters were one-dimensional.

Poet and playwright

There appears to be a clear deterioration in the performance of State Bank of India (SBI) in the second quarter of the current financial year. It cannot entirely be explained by the slowdown in the economy. The bank had expected to gain from an improvement in sentiment as a result of a pickup in the monsoon, but that has not happened. In fact, as the largest bank, it seems to have set the tone for other large public sector banks, which together account for a major chunk of the banking sector and have all performed poorly. This is in sharp contrast to the performance of some of the new private sector banks. Although the latter do not have to carry the same type of priority sector lending burden, they do have substantial exposure to both large and small companies, many of which are stressed. The private sector banks seem to be handling the downside of the current economic slowdown considerably better.

Worsening asset quality

The long months of campaigning in the US saw a clash between two schools of political forecasting. Like the elections themselves, it ended with a decisive victory. The winners were several groups of apolitical number crunchers who predicted results with astonishing accuracy and in detail, relying on similar models using public data from opinion polls. All the number crunchers consistently predicted an Obama victory, with daily updates on margins and details. The most prominent was former baseball statistician Nate Silver. Mr Silver called the exact Electoral College (EC) split of Mr Obama&rsquo;s victory with correct results in all the states. This improved on his 2008 predictions, when he got 50/51 right. He was also correct in 36 out of 38 Senate 2012 predictions. Mr Silver&rsquo;s blog &ndash; FiveThirtyEight (the number of votes in the EC) &ndash; is hosted by The New York Times, which is the sixth-most popular site on the internet.

The other victors

When the industrial production statistics for the month of August 2012 were released last month, many observers quickly declared that the economy had bottomed out. The index of industrial production (IIP) for August 2012 was 2.5 per cent higher than for August 2011. Some senior government figures publicly claimed the 2.5 per cent per cent year-on-year growth indicated the Indian economy had turned a corner. However, as this newspaper warned at the time, greater caution was warranted.

A long winter for industry

The documents that Arvind Kejriwal released last week, which he claimed were leaked witness statements recorded by income tax officials in the course of a raid, raise serious questions about the Indian entity of the Hongkong and Shanghai Banking Corporation (HSBC).

Stop the silence 

At first glance, the last samvat &ndash; the year as reckoned by the lunar calendar, from one Diwali to the next &ndash; has seen decent gains for equity investors. The Nifty and the Sensex are up about 10 per cent year-on-year and, of course, some individual stocks and specific sectors have done better.

A muted celebration 

It is clear that much agricultural credit, heavily subsidised by the government, is being either misdirected by banks or misused by its recipients. The total flow of such credit has increased manifold in the past decade; but a commensurate impact is visible neither in agricultural growth nor in farmers&rsquo; reduced dependence on informal sources of credit. The use of inputs like fresh seeds, fertilisers, pesticides and farm machinery hasn&rsquo;t expanded proportionately, either.

Big loopholes in farm credit 

Discussing the &ldquo;moderation&rdquo; of India&rsquo;s tax regime recently, Finance Minister P Chidambaram indulged in a bit of soul-searching. He insisted that 15 years of moderation have &ldquo;by and large&rdquo; promoted growth and equity &ndash; remember, the finance minister who reformed taxes 15 years ago was a certain Mr Chidambaram &ndash; but said the question must be asked as to whether the unequal accumulation of wealth has been ignored in the process. Even with that in mind, he said he was nevertheless &ldquo;still hesitant&rdquo; even to talk about inter-generational equity or an inheritance tax &ndash; which was abolished in 1985 &ndash; but that these questions need to be debated.

Bequest tax worries

In its mid-year review, the software association Nasscom has revised its forecast for software and services exports (IT &amp; ITeS) for the current fiscal year of 2012-13 to 11 per cent, from the 11-14 per cent range indicated at the beginning of the year. While this is, strictly speaking, not a downward revision, the implication is clear: any hope at the start of the financial year that things may get better further down the line has been belied.

IT exports slow down

Global investment in clean energy will decline perceptibly this year for the first time in eight years, signalling an unwarranted complacency in the fight against climate change. A report by Bloomberg New Energy Finance says funding for renewable energy generation in the first three quarters of this year was $164.2 billion, down from last year&rsquo;s $196.4 billion. The downturn is the steepest at 62 per cent in heavily polluting America and 29 per cent even in environmentally friendly Europe.

Losing the climate fight

The unfortunate part of the lacklustre auction of telecom spectrum is that India appears no closer to a real solution to the question of spectrum pricing. Five telecom companies participated in the auction, which was completed after 14 rounds of bidding in two days. The industry has been quick to complain that the reserve price of Rs 14,000 crore (for 5 MHz) for a pan-India licence fixed by the government was too high and that was what kept the bidders away.

Telecom's damp squib

The Board of Control for Cricket in India or BCCI has not been known for its ability to think long term. True, it could argue that the spectacular success in this country over the past decade or so of the game it has steered should suggest it knows what it is doing. But there are repeated instances of the BCCI&rsquo;s willingness &mdash; indeed, eagerness &mdash; to push for a quick cheque now as opposed to working towards the longer term health of the game, in all its versions. That is, of course, the exact opposite of how a sports administrative board should behave. Consider the most recent examples, connected to the ongoing series. England&rsquo;s team is visiting India, and is playing the first Test of that series at the moment. However, the readers of British newspapers have to do without photographs of the action.

Strangling a sport

Balasaheb Keshav Thackeray bestrode the city he renamed Mumbai for decades. He dominated its politics and greatly influenced the governance of India&rsquo;s richest state, although he never held any official post. When his party controlled the municipal corporation, he did not become mayor. When it &ldquo;stormed Mantralaya&rdquo;, as he described its victory in alliance with the Bharatiya Janata Party in the 1995 Maharashtra Assembly elections, he did not become chief minister. But his power remained absolute; he famously boasted of his &ldquo;remote control&rdquo; of the Manohar Joshi-led state government. On Sunday, the long lines of mourners that brought Mumbai to a standstill, the official condolences from India&rsquo;s leaders, might deceive an onlooker into thinking that Bal Thackeray&rsquo;s career was no different from that of many other regional strongmen. But that would be a mistake.

Bal Thackeray's true legacy

The government&rsquo;s concerted attack on the Comptroller and Auditor General (CAG) is more than worrying: it misses the point. And it reveals a clear lack of understanding of what serves India in terms of policy. The peg, of course, is the recently concluded, Supreme Court-ordered 2G auction to replace the licences handed out by the telecom ministry under A Raja in 2008. The low incomes from the auction have led Union ministers to question the CAG&rsquo;s computation of presumptive losses in the earlier spectrum sale. They have called the 2G scam figure of Rs 1.76 lakh crore a myth and said that such calculations sensationalised the issue, in addition to restricting the space in which the government could operate. Certainly, the CAG came up with figures for presumptive losses that many believed to be an overestimation. But it presented three scenarios depending on which the amount could have been between Rs 57,000 crore and Rs 1.76 lakh crore.

Defend your choices

The government&rsquo;s move to set up a permanent tribunal for resolving inter-state water disputes makes little sense. Given the dismal record of tribunals, both present and past, in settling bitterly contested water rows and states&rsquo; minimal compliance with their awards, it would be futile to expect results from the proposed new tribunal. If the objective behind this plan is to expedite the dispute disposal process, as seems to be the case, it is unlikely to be served.

Water nonsense

Incisive columns and editorial comment by top opinion leaders

Page 607 - Editorial Comment