About 50 million private sector employees have earned a percentage point increase in interest income from their deposits with the Employees Provident Fund Organisation (EPFO) simply because one of its trustees detected a calculation error, apparently being made for several years, and quickly corrected that to provide additional funds to take care of a higher interest payment burden. This is Kafkaesque not just because of the manner in which it happened but also because of the uncomfortable questions it has raised about the governance and safety of these funds. Employees and members of the central board of trustees, overseeing the EPFO, were mentally prepared to accept an 8.5 per cent interest rate on its accumulated deposits during 2010-11, as the Organisation did not have the necessary funds to meet the demand for a higher rate.

Accounting for errors

Business Standard

India&rsquo;s public health system has become dysfunctional. There is no reason at all why vector-borne and other infectious diseases should recur with predictable regularity after every monsoon season. Government, especially state and local governments, must take primary responsibility for this malaise. Equally, civil society. A combination of governmental negligence and public apathy contributes to the unacceptably high incidence of diseases like dengue, chikungunya, Japanese encephalitis, swine flu, conjunctivitis (eye flu) and malaria. The media has understandably focused on the problem at hand in India&rsquo;s national Capital on the eve of an international sports event. If New Delhi appears so helpless in dealing with the problem, one can only imagine the plight of lesser habitations. Over 1,600 cases of dengue fever alone have officially been confirmed to have occurred in Delhi, though the actual number of victims is believed to be several times higher.

India's public health

The last couple of weeks have confirmed that the stock market moves in stochastic fashion. For weeks, pundits had been saying that stock prices and major indices would be range-bound, with only a minority putting out optimistic forecasts.

Bullish on India

The railways have at one go raised container haulage charges by between 100 and nearly 300 per cent for such major bulk items as iron and steel, cement and petroleum products. This is what the railways levy on third party &mdash; private and public &mdash; owners of freight trains for using the railways infrastructure. As this comes in the wake of a much smaller 3-6 per cent rise in these charges in January, it raises several questions. What are the extraordinary developments beyond the control of the railways which prompted such drastic action in the middle of the financial year? If it is a desperate move to shore up a seriously deteriorating financial position, then it puts a question mark over the sanctity of the budgetary exercise.

Unduly drastic revision

The government appears to be moving towards finalising legislation to ensure that those displaced by mining projects get 26 per cent of the profit accruing from them. This is in response to the growing realisation, after the rise of militancy in central India, that those dispossessed by such projects, mainly forest-dwelling tribals and cultivators, need to be made a part of the development process as winners, not losers. The intention is sound but the device chosen is not. Government cannot pre-empt revenues like this and hurt mining interests. There are other ways in which government can raise revenues rather than eat into profits, and that too in perpetuity. After all, there is also the issue of inter-generational equity involved here. Industry associations have opposed the idea on the ground that this may make such projects unviable.

Compensating the displaced

The fury of the ongoing flash floods that have devastated vast stretches of northern India and neighbouring Pakistan, could have been minimised, if not wholly averted, had the water flows in the river systems and reservoirs been managed better. Most floods and flash floods in India owe their origin to human causes, ranging from deforestation, poor land conservation, miscalculated storage of water in reservoirs and its ill-timed release downstream. Unchecked silting of rivers and canals, and poor upkeep of their embankments have made matters worse. Floods in the Yamuna river in Haryana and Delhi, posing threat to even the Common Wealth Games Village, where the athletes and other participants in the Games are to stay, are the outcome largely of massive water discharges at irregular and mistimed intervals from the Hathnikund barrage in Haryana. Regular offloading of water in manageable quantum could have prevented this from happening.

Managing surplus water

Winds of change have begun blowing across India&rsquo;s petroleum sector, even though the speed is excruciatingly slow and the direction often confusing. In August 2009, the United Progressive Alliance government had decided to set up an expert group to recommend a viable and sustainable system of pricing for petroleum products. Six months later, Kirit Parikh, a former member of the Planning Commission and the expert group&rsquo;s chairman, submitted his findings which, for the umpteenth time, reiterated the need for complete deregulation of petrol and diesel pricing. It took another four months for the government to act on the expert group&rsquo;s recommendations, apparently in a half-hearted fashion. Petrol prices became free with its price going up by 7 per cent, but diesel prices remained under government control.

Slipping on oil

In a democracy, talking is always good. So, an all-party delegation going from New Delhi to Srinagar was a good initiative, even if a belated one. The visuals of Muslim leaders from mainstream Indian political parties hearing and conversing with separatists from Kashmir, along with leaders from other national and regional parties, have their own therapeutic value. Even the worst political adversaries must be seen talking all the time in a plural and democratic polity. It is not clear if any concrete results will come out of this initiative, but that should not be the basis of evaluating its purpose. If the streets and homes in Srinagar can return to a modicum of normalcy, and people feel more reassured about their safety and security and the government&rsquo;s commitment to zero tolerance for both terrorism and human rights violations, that in itself would be a huge achievement. However, the next steps are now as important.

Consensus on Kashmir

India has over 2,000 business schools &mdash; perhaps more than any other country. They churn out hundreds of thousands of management graduates every year. Has that made much of a difference to the way things are managed? How good is the quality of the talent being created, and is there adequate demand for it? While graduates from top business schools are lapped up by companies in India and abroad, a vast majority of them struggle to find a job. It is a clear indication that the quality of education is abysmal in the lower-rung business schools. The Business Standard Best Business School Survey 2010, published last week along with the September issue of Indian Management, shows that there is a precipitous decline in quality of management training as one moves down the list of B-schools. Look at some of the numbers. In the top category, 85 per cent of the faculty members are PhDs; in the bottom category, they form just 23 per cent of the faculty.

The business of B-schools

By approving the Forward Contracts (Regulation) Amendment Bill, 2010, the Union Cabinet has set the stage for much-needed reforms in the regulation of commodity exchanges. It is worth recalling that the first bid to amend the archaic Forward Contracts (Regulation) Act, 1952, was made in 2003-04 by introducing an amendment Bill in Parliament. However, the Bill could not be voted on due to dissolution of the Lok Sabha.

Going forward with markets

Nobel laureate, eminent economist and global public intellectual Amartya Sen may not know this but he has done immense damage to public discourse in India with the admittedly appealing and highly marketable title of his very readable book, The Argumentative Indian! Sen ought to have known better. He is familiar enough with village India, even if it is only rural Bengal, to know that most Indians still tend to prefer a consensual outcome to argument and conflict. Pushed to the extreme Indians, like all humans, would react violently. But short of that, there is a preference for mutual accommodation. Without that spirit of live and let live urban India&rsquo;s slums would have been overtaken by anarchy, mayhem and much worse. Except in legislatures, especially after live television coverage has started, and in television studios, most Indian discussions, debates and arguments tend to be rather civilised.

Television's daily rant

Worrying news about economic growth from the United States sent the Japanese yen up last week, raising new concerns about the prospects for Japan&rsquo;s economic revival. Japan&rsquo;s macroeconomic indicators have again become a source of concern just the week when a stand-off between Japan and China raised political temperatures in East Asia. Japan&rsquo;s decision to release the arrested Chinese occupants of a fishing boat, coming days after China retaliated with several measures, including the delayed export of rare earths to Japan, and the visible power play involving Beijing, Tokyo and Washington DC once again draw attention to China&rsquo;s new assertiveness and to increased concerns about China&rsquo;s rise among most of its neighbours. The sooner China and Japan tone down their rhetoric and cool down temperatures the better for all concerned.

Rising yen, setting sun

The Union finance ministry has written to public sector banks in its capacity of majority owner asking them to ensure that microfinance institutions (MFIs) do not lend to the poor at more than 22-24 per cent interest rate, calculated on the basis of diminishing balances, what they borrow from banks. This comes in the wake of the Reserve Bank of India (RBI) considering taking bank lending to MFIs out of loans that qualify for priority sector lending.

Road bump for MFIs

One positive outcome of all the negative media that the Commonwealth Games (CWG) in New Delhi has got could well be an honest re-examination of the relevance of such mega events for the promotion of sports talent in India. India&rsquo;s record in athletics and other sports, barring cricket and tennis, is by and large abysmal.

Rethinking the Games

A bilateral comprehensive economic partnership agreement (CEPA) with Japan has reportedly been finalised so that it can be signed when Prime Minister Manmohan Singh visits Japan next month. This comes in the wake of similar agreements with South Korea and Asean last year, in the footsteps of a path-breaking agreement with Singapore in 2007. A thrust in this regard, particularly looking east, has come because of the personal initiative that the prime minister has taken through Commerce Minister Anand Sharma. Bilateral and regional agreements have gained in importance even as prospects of a successful completion of the multilateral Doha round have receded and India appears to be doing none too badly by vigorously pursuing this alternative route. For example, the agreement with Japan has reportedly been sewed up without giving in on government procurement and intellectual property.

Trading with Japan

As the monsoon retreats, India is once again left with potholed roads. Like malaria and other monsoon-related diseases, potholed roads are an annual affliction. Yet, there is no reason whatsoever why India cannot have all-weather roads in this day and age. At over 33 lakh kilometres, India has the world&rsquo;s second-largest road network. The density of its highway network is also comfortably high, similar to what the United States has and much higher than what China and Brazil have managed to achieve so far. The road network in India has another critical dimension as far as the country&rsquo;s infrastructure is concerned. It carries almost 90 per cent of the country&rsquo;s passenger traffic and about two-thirds of its freight. Dependence on roads has risen sharply since the country gained Independence with the Indian Railways not making much progress over the years and, therefore, losing its share in passenger traffic and freight business to the road network.

Monsoon's other bounty

Krishi Bhawan&rsquo;s preliminary reckoning of this year&rsquo;s likely kharif output is not as comforting as it is made out to be. Though output this year will be higher than last year, when drought depressed it, it is likely to be still below the harvests of 2008 and 2007. This brings into question the hope expressed by government functionaries about a likely fall in the prices of farm commodities.

Remain focused on food prices

India&rsquo;s National Environment Appellate Authority, which hears cases challenging the rulings of the Ministry of Environment and Forests on the environmental sustainability of projects, is a skeleton without body and flesh. It has only one of its required five members in place for over a year now. The lone functioning member is its chairman, who himself is in office on extension and even that extended term ends next month! The consequences are not too far to seek. As in the case of civil or criminal courts, the number of pending cases with the Authority has been piling up. There are about 40 pending cases with the Authority, 15 of which pertain to environmental clearances for steel plants, thermal power projects, hydroelectric power plants and mining leases. Ten more pending cases pertain to construction of retail malls, five-star hotels and high-rise buildings.

A vacant authority

Most Indians took it for granted that the national Capital would be cleared temporarily of hawkers and small vendors, along with beggars and vagrants, ahead of the Commonwealth Games. This is standard operating procedure before a big global event. The moral argument for these periodical eviction drives can be endlessly debated. But the bigger issue is whether local governments should radically reconsider their approach to these people. There is no doubt that hawkers at the weekly flea markets, fruit and vegetable vendors, household helps and so on &mdash; who broadly fall under the category that economists call the &ldquo;urban informal sector&rdquo; &mdash; remain the most marginalised people in Indian urban environments. The tony glass and concrete offices and malls may stand as monuments to India&rsquo;s new-found entrepreneurial spirit, but it&rsquo;s the informal sector that still drives the country&rsquo;s urban economies.

Big cities need small people

Govt and courts must respect international conventions

Fighting a betrayal

Yes, Centre's unfair to Bihar - but 'special status' is no solution

The wrong answer

Incisive columns and editorial comment by top opinion leaders

Page 635 - Editorial Comment