The New Delhi Declaration adopted at the end of the fourth BRICS summit last week has brought out quite eloquently how the global economic order has remained virtually unreformed since the organisation&rsquo;s first meeting in 2009, and how the economic challenges before its member countries &ndash; Brazil, Russia, India, China and South Africa &ndash; have become even more daunting.

Losing relevance

Business Standard

The latest quarterly balance of payments data released by the Reserve Bank of India (RBI) show that the current account deficit, or CAD, rose sharply for the quarter that ended in December 2011. In the three months of October, November and December 2011, CAD was 4.3 per cent of gross domestic product (GDP), a full two percentage points higher than the figure for the corresponding quarter the previous year.

Twin-deficit fears

The 2012-13 Budget allocates Rs 6,715 crore to&nbsp;the Indian Space Research Organisation, or Isro, a 36 per cent increase over the allocation in 2011-12. This is a vote of confidence in the beleaguered organisation, and is especially notable given that it is still embroiled in the Devas-Antrix controversy. Breaking up the allocation allows some insight into the areas that are more in focus. The largest allocation, of Rs 2,280 crore, is to launch vehicles to put heavier satellites into geosynchronous orbit. This means developing solid- and liquid-stage boosters and cryogenic engines. A new area of research is indicated by a Rs 150-crore allocation to the development of a kerosene-powered semi-cryogenic engine.&nbsp;Isro has hitherto been unable to develop stable cryogenic technology. Two geosynchronous satellite launch vehicle (GSLV) missions were aborted due to the failure of systems associated with indigenous cryogenic engines.

Still eyeing space

It has been reported that the central government may consider creating a holding company for its largest public sector enterprises, and that this company will own them on the state&rsquo;s behalf. That the Centre accepts that the public sector continues to suffer from interference is welcome, as are continuing efforts to solve the problem. However, there are reasons why this latest plan should be viewed with some scepticism.

Lose control

To get to the logic underlying the new regulatory regime outlined by the Securities and Exchange Board of India (Sebi) for market infrastructure institutions (MIIs) like stock exchanges, depositories and clearing corporations, it is necessary to understand what kind of animal the regulator considers them to be. They are hybrids &mdash; neither government departments nor private firms, but commercial enterprises discharging important regulatory functions. Hence stock exchanges should be able to attract capital by listing, and pay shareholders something. No cap on payout, that&rsquo;s too statist, suggests Sebi, but please pay 25 per cent of profits to a settlement guarantee fund. Thus, Sebi has deviated from some of the specific recommendations of the committee headed by Bimal Jalan but accepted the spirit behind them &mdash; and Mr Jalan appears quite pleased.

Defining stock exchanges

Wednesday&rsquo;s report in The Indian Express of events that purportedly occurred on the night of January 16-17, 2012, throws open many questions that deserve answers. The newspaper says that central intelligence agencies told the government that two military units, one of mechanised infantry based at Hisar and another of paratroopers based at Agra, were moving towards New Delhi. This was on the very day that civil-military relations had hit a new low, with the army chief, General V K Singh, petitioning the Supreme Court on the matter of his date of birth. According to the report, New Delhi responded by putting little-known procedures into effect &mdash; lookouts, status checks, traffic slowdowns. The prime minister was apparently informed, and the defence secretary flew back from Malaysia. The government&rsquo;s stated position now is that these were justifiable movements for training purposes &mdash; to test reaction times in the fog that blankets the North Indian plains.

In the January fog

Many, including those keen to benefit from investments in resource-rich Myanmar, may be celebrating the victory of Aung San Suu Kyi and her National League for Democracy (NLD) party in the recent parliamentary elections. The NLD won 43 of the 44 seats it contested; only the wilfully blind would have predicted anything less, if the hordes who risked brutal treatment by security forces to openly support her all these years were anything to go by.

After the landslide

When the production of pulses touched a record 18.2 million tonnes in 2010-11, substantially outstripping the historic 14 to 15 million tonne output level, it was trumpeted officially as a sustainable uptrend. However, this optimism has been shaken already, with 2011-12 output likely to drop by about a million tonnes. Clearly, the previous year&rsquo;s harvest was an exception, a response to an unprecedented price spike which saw dal being sold at close to Rs 100 a kg. However, farmers&rsquo; hopes of a reasonable share of the price bonanza were dashed as the higher production, coupled with duty-free imports, brought down post-harvest mandi prices to levels below the minimum support price (MSP) fixed by the government. Even today, prices are lower than the MSP in many key pulse-producing states. Evidently, the fixing of an MSP for pulses is meaningless without an effective organised price support mechanism of the kind in place for wheat and rice.

Pulses slowing down

The defence ministry has revised its offset policy, which requires any foreign company that wins an order of Rs 300 crore or more to plough 30 per cent of the business back to India. Apart from other changes, it will allow foreign companies to get offset credits of three times the value of the technology transferred to India. Thus, a foreign company can meet its offset obligation by transferring technology worth 10 per cent of the order. With defence purchases expected to range from $75 billion (Rs 3.8 lakh crore) to $100 billion (Rs 5 lakh crore) over the next seven years, it is suggested that much technology could thus be transferred to Indian companies.

Trading secrets

There are but a few hundred Great Indian Bustards left. The bird &mdash; one of the heaviest capable of flight, and found only in the subcontinent &mdash; is slowly vanishing. India&rsquo;s owl population is in similar decline; and the vulture, once a common sight in India&rsquo;s cities, has almost disappeared. Now comes news from the International Union for Conservation of Nature that 14 more species of birds from India are critically endangered. Aside from vultures, the IUCN lists the Himalayan Quail, once abundant, and the majestic Siberian Crane, which used to migrate in such large numbers that they would fill the sky. Some of these birds are central to the Indian landscape and to this country&rsquo;s myths. Others have an irreplaceable role in controlling the population of pests that affect crops, or of vectors for diseases that kill human beings. By some estimates, at least 82 of India&rsquo;s 1,250 bird species are fading into history.

Nowhere to fly 

The notion that Pakistan President Asif Ali Zardari&rsquo;s one-day visit to India was a purely personal, private trip receiving more attention than it deserved could not quite stand up to the sight of two Pakistan air force planes landing in New Delhi and disgorging Mr Zardari and his 40-member entourage. However, this was not designed to be a headline-grabbing, summit-to-end-all-summits sort of visit. The statement read out by India&rsquo;s foreign secretary outlining what was discussed in the half-hour meeting between Prime Minister Manmohan Singh and Mr Zardari showed, instead, that both countries&rsquo; leaders are more than willing to restate positions on matters of domestic political salience &ndash; terrorism and Kashmir &ndash; while moving forward on other matters on which compromise appears easier.

Low-key lunch diplomacy

It is fitting that former West Bengal Chief Minister Buddhadeb Bhattacharjee refused to attend the 20th congress of the Communist Party of India (Marxist), or CPI(M), at Kozhikode. Mr Bhattacharjee cited ill health for staying away; but as one of the few &ndash; if not the only &ndash; leaders of India&rsquo;s largest communist party imbued with some understanding of the modern world, he would have been at odds with the proceedings as much as he is with the leadership that, showing little self-awareness, accused him of &ldquo;arrogance&rdquo;. Indeed, anybody listening to the inaugural speech of CPI (M) General Secretary Prakash Karat could be forgiven for thinking they were in a time warp. Devoid of a single new or original thought, it denounced the US (for &ldquo;imperialism&rdquo;) and the Congress and the Bharatiya Janata Party (for &ldquo;neo-liberal policies&rdquo;) and urged the party to reconnect itself to the struggles of the working class and peasantry.

The Left marks time 

The 2012-13 Budget cannot be said to have been greeted with great joy by anyone. If there is one exception to this rule, surely it is the Centre&rsquo;s revenue officers. In its desperate attempt to scrape up enough tax revenue to plug the fiscal gap created by unbridled expenditure, the government has expanded the powers of discretion available to assessment officers in a manner that is both foolhardy and short-sighted. In doing so, it has lost sight of how taxes should in fact be reformed. Tax laws cannot be simultaneously complicated, rigidly and discretionarily applied, and administered by a corrupt system. The government has correctly moved to plug some loopholes in the tax system. Yet, unless accompanied by a decrease in discretion and wholesale reform of revenue administration, these moves will be self-defeating.

More power to the taxman 

A group in the Planning Commission has proposed that cities be allowed to build upwards so as to bring down high real estate prices. Indian cities are among the least built-up in the world, and real-estate prices are unaffordably high. Low-priced housing is largely unavailable, and India is becoming subject to urban sprawl that is economically unviable, stresses transport systems and increases travel costs inefficiently. Cities offer the best return on investment in their infrastructure when they allow for dense living. If a pipeline supplying water is shared by more families, then the per capita cost of laying that pipeline drops. Among the restrictions that have caused this inefficiency is the artificial restraint on floor-space indices, or FSI. The Commission has proposed that these restrictions be lifted, albeit in a &ldquo;granular&rdquo; manner, and with carefully worked-out pricing systems in place.

You have the floor 

This newspaper reported on Tuesday that the rural development ministry approached the food ministry suggesting that work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) be paid for using foodgrain. The impetus for the rural development ministry&rsquo;s action is perhaps understandable.

Foodgrain-for-work

The road map for direct transfer of fertiliser subsidy to farmers that Finance Minister Pranab Mukherjee outlined in the Budget has come under a cloud even before it is rolled out. Most in the fertiliser sector &ndash; including, notably, the fertiliser ministry and fertiliser dealers &ndash; are wary of trying it out, for fear that it might create more problems than those caused by the current system that it seeks to replace.

Waiting for Aadhaar

In the past year, a tsunami of intellectual property (IP) lawsuits has meant that the battle for market share in the personal technology space has shifted to the courts. Apple and Samsung are perhaps the most high-profile opponents. The two companies are in face-offs across at least 10 national jurisdictions, where they have sued and counter-sued each other for diverse patent violations. At last count, there were over 30 cases involving these two companies.

The era of patent wars

The Reserve Bank of India bears a responsibility to control inflation and promote growth, one it shares with the government in New Delhi. The Centre has continually shirked its responsibility. The Budget presented for 2012-13, while claiming to focus on fiscal responsibility, leaves much undone. Its projections for growth, revenues and deficits depend on the government taking tough decisions &mdash; &ldquo;biting the bullet&rdquo;, the prime minister had called it.

RBI's hard choice

The government&rsquo;s chief statistician, T C A Anant, had the embarrassing duty of informing the public that the January figures for the index of industrial production or IIP were, in fact, a massive overestimate.

Death of data discipline

In about a month from now, the country&rsquo;s ever-bulging foodgrain stockpile will bloat further to over 75 million tonnes, a record amount. This will be nearly two-and-a-half times the stipulated maximum food buffer. Worse, it will outstrip the available warehousing capacity (covered and open) of 63 million tonnes by a wide margin. Even today, a good part of the present food inventory of over 53 million tonnes is lying in the open, under fragile plastic sheets; pakka storage space is only around 45.5 million tonnes. With over 30 million tonnes more wheat from the fresh crop slated to land up in the Centre&rsquo;s grain kitty in the next four weeks, the problem will only get worse &mdash; with the possibility of rot in the monsoon season, and exposure to insects and rats.

Granaries to graveyards

Billboards across the Delhi skyline exhort voters to &ldquo;be Dabangg, be a voter&rdquo;. The odd spelling of the Hindustani word for &ldquo;powerful&rdquo; clearly indicates the appeal&rsquo;s connection to the successful 2011 movie starring Salman Khan. By voting, the Election Commission wishes to imply, the capital&rsquo;s citizens can seize control of their city&rsquo;s political landscape in a suitably Salman-esque manner. The EC has argued that its publicity campaign was responsible for the record numbers of voters who turned out to vote in the recent round of state Assembly elections, and clearly intends to try for a repeat. Unfortunately, it is not exactly being assisted in this noble endeavour by the political parties contesting in Sunday&rsquo;s election to Delhi&rsquo;s three new municipal corporations.

Delhi is not India 

Incisive columns and editorial comment by top opinion leaders

Page 623 - Editorial Comment