The purpose of a report like that of the Comptroller and Auditor General (CAG) on coal block allocation is to inform discussion in Parliament, to ensure that the executive is held accountable and, if necessary, policy is re-framed. Of course, that is only possible if Parliament is functional, and a credible and active Opposition uses the system to hold the government&rsquo;s actions up to scrutiny. Were their representatives to put in the hard work, research and careful reading required in that process, India&rsquo;s citizens would have no cause to complain. Unfortunately, Opposition members of both Houses of Parliament do not seem willing to do the work involved; which is why they have chosen, instead, to disrupt proceedings for two successive days, demanding the prime minister&rsquo;s resignation.

Shouting over discussion

Business Standard

It is rare, in India&rsquo;s fractious polity, to see almost all its major political parties agreed on a policy proposal. However, that unusual sight is currently visible in the general agreement, at a recent all-party meeting, to the need to ensure that reservations for Scheduled Castes and Scheduled Tribes in government promotions stand up to judicial scrutiny. One of the dissenters, the Samajwadi Party, doesn&rsquo;t object to the nature of the provision, but to its scope, saying that Other Backward Classes, or OBCs, its main political base, should not be ignored. This lack of discussion and debate over what is, after all, a far-reaching and important issue is worrying.

Quotas and consequences

India&rsquo;s warship-building capability is ramping up with its most experienced shipyards, Mazagon Dock Ltd, Mumbai (MDL) and Garden Reach Shipbuilders &amp; Engineers, Kolkata (GRSE), soon to deploy vastly improved infrastructure. Their new integrated yards, which are geared for &ldquo;modular&rdquo; shipbuilding, are expected to reduce the time needed to build a warship while also improving construction quality. This will help create the 160-ship armada that the defence ministry requires for the Indo-Pacific region, which is looming ever larger as the world&rsquo;s most vital geo-strategic patch. Defence shipyards like MDL and GRSE have been building for decades, hamstrung by global technology denial regimes and Indian industry&rsquo;s technological limitations. Over time, these shipyards have gained invaluable experience in the many complex facets of building warships. Their prime customer, the Indian Navy, is pleased with the battle-worthiness of the vessels that it gets.

Towards maritime power

The Indian state has once again, over this week, shown its inability to grasp the essentials of new media and the internet. In the poorly planned blocking of several websites and accounts on the social networks Twitter and Facebook, it has demonstrated not just the wrong instincts, but a wholesale lack of effectiveness. This is more than just a free speech issue, though that is an important argument.

The web's laughing stock  

There is no doubt where the primary responsibility belongs for the problematic continuance of the old method of coal block allocations: with the central government, and ultimately with Prime Minister Manmohan Singh, who retained the coal portfolio for a crucial period. This newspaper has previously argued that Dr Singh must explain his government&rsquo;s delays in introducing more equitable methods of allocation, such as auctions, through a discussion in Parliament. The principal party of opposition, the Bharatiya Janata Party (BJP), by not allowing such a debate, is thus guilty of a dereliction of its duty to India&rsquo;s voters, who need to be allowed to make up their mind.

Debate, don't disrupt

The government made an error of judgement when it barred futures trading in guar seed and guar gum in March on suspicion of &ldquo;excessive&rdquo; speculation. It is faltering again now, in holding back the permission sought by the commodity exchanges to resume forward contracts in these largely export-oriented agricultural commodities. Both the government and the commodity market regulator, the Forward Markets Commission (FMC), seem to disregard the simple fact that no purpose could have been served by the suspension of futures trading in these products; nor would any be served by carrying on this ill-advised embargo. The prices of these products have continued to be determined by the demand-supply fundamentals. This has been conceded, in a way, by Food and Consumer Affairs Minister K V Thomas in a written reply to a question in the Lok Sabha.

Up a gum tree

The government has again resumed clearing proposals for foreign direct investment in the pharmaceutical sector, after it was taken off the automatic route and the government figured out how exactly to go about the task. At a time when the balance of payments situation and the need to revive foreign investor confidence are paramount, this is to be welcomed.

FDI in pharma resumes

Over the past couple of years, Apple and Samsung have been embroiled in an epic global dispute over a large number of smartphone and tablet patents. This has indeed been the courtroom equivalent of the &ldquo;thermonuclear war&rdquo; the late Steve Jobs promised, with lawsuits filed in South Korea, Germany, Japan, Italy, the Netherlands, Britain, France, Australia and the US.

After Apple's victory

The 12th Five-Year Plan (2012-17), it was widely reported, could shift the emphasis of the state&rsquo;s role in healthcare provision to a &ldquo;managed network approach&rdquo;, wherein the government would provide funding to a system of private providers, who would have their costs per patient partially or wholly reimbursed. The idea of such a shift in approach met with considerable criticism, including from members of the high-level expert committee on healthcare reform whose report was supposed to serve as the basis for the Plan. The health ministry, too, had objected, citing an insufficient commitment of funds &mdash; 1.5 per cent of GDP, reportedly, as opposed to the 2.5 per cent of GDP that the ministry would prefer and was suggested in the Budget. Following sustained criticism, the Planning Commission is in the process of revising its approach.

No short cuts to health

A sudden spurt in the price of wheat in the past few weeks, even as the government is sitting on a virtual mountain of food, confirms fears that ill-advised grain procurement and stockholding policies are sucking the markets dry of supplies. Today, barely three months after the harvest of an exceptionally bountiful wheat crop &ndash; nearly 94 million tonnes &ndash; markets all over the country, including in the wheat-producing northern states, are facing an acute shortage of wheat.

Bizarre wheat policy

It may seem counter-intuitive, but lenders dislike a trend of rising interest rates almost as much as borrowers. First of all, rising rates reduce the mark-to-market value of any loans advanced previously at lower rates. They also choke off credit offtake volume. In a competitive lending environment, lenders are also compelled to hike their deposit rates, leading to pressure on spreads.

Provisioning for more

The Land Acquisition Bill &ndash; now renamed the Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, perhaps because the United Progressive Alliance really likes to call things &ldquo;rights&rdquo; &ndash; has been further delayed. After two successive attempts to pass it through the Cabinet failed this week, it has been referred to a group of ministers so that it can be gone through &ldquo;clause by clause&rdquo;.

Time to acquire

The Commission for Agricultural Costs and Prices has suggested that the government should do away with the &ldquo;levy quota&rdquo; on sugar mills, in which they need to set aside 10 per cent of their output for the public distribution system (PDS). Since it&rsquo;s meant for poor households, this sugar sells at a price that is significantly below the market price. This, in the Commission&rsquo;s opinion, has crimped the mills&rsquo; ability to adequately compensate sugarcane farmers.

Squeezing sugar mills

The Mines and Minerals (Development and Regulation) Act of 1957, generally called the MMDR Act, is clearly not serving its purpose. It allows natural resources to be subject to cronyism and corruption, for example. Nor has the mining sector expanded sufficiently to keep up with growing demand. And there is also a growing perception that mineral resources are being exploited without many inhabitants of the areas around mines receiving any concomitant benefit or a sufficient say in the matter. Starting in July 2011, a new version of the law, also known as the Mines and Minerals (Development and Regulation) Bill, was cleared by the Cabinet, introduced in Parliament, and reviewed by its standing committee. The prime minister in his Independence Day speech, in fact, said that he expected its passage would be &ldquo;speedy&rdquo;.

Mining woes

The troubles at the highest levels of Indian tennis over the past week serve as explanation for why this country has consistently underperformed in terms of sporting achievement: its sports administration is stuck in a previous century &mdash; culturally and organisationally. The All India Tennis Association or AITA richly deserved the humiliation it was handed by Indian tennis&rsquo; top-ranked woman, Sania Mirza, in the letter that she wrote after her participation in the London Olympics was confirmed. She pointed out that it was unacceptable for a national sporting federation, in the 21st century, to use one of the most successful Indians in the sport&rsquo;s history as &ldquo;bait&rdquo; for another player&rsquo;s participation and compliance. The reason, which she did not have to spell out, was that she was a woman, and the AITA is incapable, apparently, of putting female achievement on a par with that of a man.

Lessons from a letter 

The confusion at the end of last week between the finance ministry and the Prime Minister&rsquo;s Office over whether or not the draft guidelines for the General Anti-Avoidance Rules (GAAR) bore the imprimatur of Prime Minister Manmohan Singh should not detract from one basic fact: the conversation has started on how to implement GAAR swiftly, fairly and transparently. The prime minister&rsquo;s initiative to have a public review and discussion on the rules is welcome and timely, though, clearly, the manner in which it was done gave rise to an avoidable degree of misunderstanding. Changes in tax policies often have implications that go beyond the revenue department&rsquo;s predictions, and without a wide-ranging consultation with those affected by the changes, governments can frequently slip up. In India, this has been seen to happen several times in the past &mdash; the banking cash transaction tax and the fringe benefit tax are just two examples.

Preparing for 2013

Across Delhi, taps have run dry. Water shortages in the scorching weeks just before the monsoon hits the national capital are not unknown; but there is little question that this year they have been more than normally acute. Nor, unfortunately, is Delhi&rsquo;s situation unusual. While it perhaps suffers more than others &ndash; being located, after all, in a semi-arid climatic zone &ndash; cities in other parts of India also experience such scarcity annually. A recent World Bank report ranked Delhi and Chennai as the worst-performing metropolitan cities in terms of water supply among 27 big Asian cities. This is in spite of the fact that this problem is both predictable and preventable. The causes are simple and straightforward: mismanagement of water, coupled with its wasteful use, and the unchecked degradation of water bodies.

Towns without water

The Reserve Bank of India has, according to reports, turned down the finance ministry&rsquo;s suggestion that electronic funds transfers, or e-transactions in general, be made free for bank customers. The main reason cited for this is that no product or service should be offered free, as then it would not be commercially viable and so would not be scaled up. This needs to be contested. Banks&rsquo; major sources of revenue, other than net interest income, are fees for different services and investments. While income from investment can be quite volatile, fee-based income like remittance charges tends to be stable and, therefore, desirable. There is no reason to argue that all these three revenue sources should always stand on their own feet and there should be no cross-subsidisation. In a year of market volatility, income from buying and selling of securities can be low or negative, leading to cross-subsidisation from other activities.

21st-century banking

For both economic and political management of the European crisis, perceptions matter. Yet there is a degree of distance between the perception of what happened and what actually was agreed on at the recent summit of European leaders. On Friday afternoon, the Indian stock market went through a major rally on the back of a belief that the European problem was on the mend; oil prices, too, saw some movement that reflected the belief that commodity demand would now firm up. From that point of view, clearly, the summit was a short-term success. Whether or not Europe has in fact managed to help solve, or even mitigate, future problems with the euro zone is not as certain.

The Brussels compacts

A massive 30 per cent deficiency in the monsoon rainfall in June, coupled with an anticipated low precipitation in September, may add to the government&rsquo;s difficulties in achieving its growth and fiscal deficit targets. Agriculture may not be the only victim of poor rainfall. Its contribution to gross domestic product (GDP) may have dipped to mere 15 per cent but it still sustains the livelihood of over half of India&rsquo;s population. Rural income has, in recent years, been seen to impact the demand for two-wheelers and numerous other white goods, which contribute revenue to the exchequer. On top of that, if the government has to increase its spending on job creation and other drought-relief measures, which seems quite likely, the fiscal deficit will further worsen. Equally worrisome are the prospects of further food inflation, which is already in double digits.

30 per cent below

Barely a week after London-based Barclays Bank Plc was fined a record &pound;290 million (Rs 2,500 crore), for allegedly participating in the fixing of the London Interbank Offered Rate, or Libor, by regulators in the US and the UK, its chairman Marcus Agius and outspoken CEO Robert Diamond have finally resigned, though Mr Agius will still run the bank at least till a new chief executive is chosen.

The Libor saga

Incisive columns and editorial comment by top opinion leaders

Page 615 - Editorial Comment