Gross domestic product in India is now expected to grow 6.3% during the fiscal year 2012/2013 and by 7% next fiscal, down from 7.1% and 8%, respectively, expected in the last survey in April. Growth of 6.3% would be slackest pace of expansion for Asia's third-largest economy since 2002-2003, when it grew 4%. - Reuters poll
(Because of the below average monsoon) we estimate agriculture and GDP growth in FY13 (2012-13) at 1.8% and 5.8% respectively. The consequences would be much worse if the monsoon fails. The agriculture sector could contract 1.5%, bringing growth in 2012-13 down to 5.4%. Worse still, the food inflation could touch 18% and WPI inflation 10% by December this year. - Anand Rathi Financial Services
There is a huge discrepancy between our balance of payments (BoP) and GDP data. My analysis suggests that in 2009-10 and 2010- 11, the negative contribution of net exports was around Rs. 50,000 crore less in the GDP data than the number in the BoP data (goods and services). The gap has jumped to Rs. 120,000 crore in 2011-12, with the fourth quarter reporting a positive contribution of net exports to GDP. - A V Rajwade
The overall picture that emerges is that Team Manmohan may well be able to show some revival of growth by the last quarter of 2012 from an investment stimulus. But their chances of success on other policy fronts like infrastructure, fiscal and balance of payments management and inflation control are less than even. I am afraid 9 per cent growth is becoming a distant dream. - Nitin Desai
After the collapse of investment, consumption has been the engine of growth for the Indian economy. This creates a formidable policy problem: any fiscal compression now is likely to depress consumption and, in turn, growth. Any fiscal correction now, such as a reduction in fertilizer subsidy and a correction in the price of diesel—especially when there is agrarian distress—is bound to create problems. - The Mint
Corporations are sitting on a lot of cash, and there is a real possibility of a sharp increase in investment demand if projects that have been put on a back-burner are revived. But for this to happen, apart from convincing companies that growth — and with it demand — will revive, a variety of regulatory bottlenecks and decision delays have to be resolved. Many of the regulatory bottlenecks are at the state level, where a new type of crony capitalism is taking root. Many of these regulatory hurdles are not the product of socialist enthusiasm but simply one businessman using political contacts to screw another. With all the posturing and money-raising that is inevitable before elections, the PM’s team of non-political technicians may face some real difficulties in resolving these state-level problems. - Nitin Desai
FDI in retail wasn’t going to be easy. When it had been proposed in the winter of 2011, it was not just Opposition parties and smaller UPA partners like the Trinamool Congress that had criticised the idea, but influential sections of the Congress itself had sabotaged it. No doubt they would attempt that again. What would be their excuse?
This past week, US President Barack Obama may just have provided it. In telling an interviewer that “in too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow”, the man in the White House may have in effect killed chances of a quick opening up of retail.
To the naysayers in the Congress — and the party is packed with old-style statists who have never had a kind word for liberalisation and deregulation — this provides a heaven-sent opportunity. Hostility to economic reform and protection of discretionary powers of the political class can now be dressed up as principled protest against American imperialism. In this happy and self-serving universe, MGNREGA is presumably the highest form of non-alignment and the pursuit of a high fiscal deficit the best exemplar of an independent foreign policy. - Ashok Malik
Welfare considerations suggest (at least according to me) that higher absolute growth for the poor, with greater inequality, is much preferable to substantially lower growth for the poor, and considerably less inequality. - Surjit S Bhalla
Most of us generally expect that mainstream attitudes in India would be quite left-wing, pro-State, anti-market, etc. The evidence does not seem to support these preconceptions. - Ajay Shah, citing PEW Global Attitudes Project research
The sourcing rule for single brand retailers currently stipulates that local suppliers must not have more than $1 million invested in plant and machinery. The rule was designed to ensure that India’s manufacturing sector, which pales next to China’s, benefits from foreign money rather than being muscled aside by imports. But it represents a headache for retailers looking for scale and reliable, high quality suppliers. .....
..... the government is also rethinking what to do if a supplier grows beyond its original size. According to a policy document in November, an Indian company would be disqualified from supplying a foreign firm if it grew beyond its original $1 million investment.
“I would call it penalising success,” said Devangshu Dutta of Third Eyesight, a retail consultancy.
“If you are successful in actually helping small companies grow, they would be penalised because they would not be able to supply you any more. And you would be penalised for helping them grow.” - Reuters
On the fiscal front, the figures for the first two months, when the deficit was about 27 per cent of what it was planned to be over 12 months, are not very promising. As of now, the Budget’s goals for the deficit look rather distant. The problem here is again political. The targets for the deficit cannot be met without reducing the burden of subsidies. Since food subsidies cannot be touched with the commitment on food security, the adjustment has to be in the petroleum subsidy. Though there is a lot of brave talk, one doubts whether Team Manmohan has political backing for the substantial increases in diesel and LPG prices that will be needed. The deficit will be under further pressure if the monsoon plays truant. Hence, something has to be done soon, given the expectations that have been aroused, if we are to avoid a downgrade by some international rating agency — which would add to our woes. - Nitin Desai
The budget provided Rs 43,580 crore for oil subsidies, but as at the end of April, this money has been cleaned out. It was used to pay for last year’s dues (Rs 38,500 crore) and the remaining amount would have been barely enough to pay for April’s subsidies.
This leaves Manmohan Singh with no option but to raise diesel prices steeply. In the April-June quarter, oil marketing companies (OMCs) reported under-recoveries (losses) of Rs 47,811 crore, and oil prices have begun rising again. Whole-year losses could top Rs 1,50,000 crore, and the PM has no money for it. - R Jagannathan
On the eve of his resignation, Mukherjee cleared about Rs 20,000 crore in compensation dues to state governments in lieu of their phasing out the central sales tax (CST), one of the key steps in the move towards the goods & services tax (GST) regime that aims to replace a plethora of central and state indirect taxes with a single nationwide levy ..... But Mukherjee had only allocated a sum of Rs 300 crore towards this head in the budget for 2012-13, which means that his successor— Prime Minister Manmohan Singh, who holds charge of the finance ministry now—will have to figure out how to rustle up the remainder to make good the promise at a time the government's fiscal position is already very stretched. - The Economic Times
During NDA rule, the BJP was a votary of the GST. Now it has become the defender of the bogus states’ rights argument. Quite simply, the BJP leaders seem to be willing to thwart any proposal of their political opponents. And they call themselves patriots. - Jaithrith Rao
While these anti-growth, anti-poor tax policies were piling up, we created, by administrative fiat, one of the worst features of our tax system. We completely forgot the principle of the “goose that lays the golden egg”. Rather than tell our tax collectors that it was their job to humanely and rationally collect taxes from citizens without destroying the creators of wealth, our government set ‘targets’ for its tax officials and signalled to them that it was perfectly in order for these officials to harass taxpayers by making inordinate, unreasonable and sometimes even illegal demands. Setting “tax collection targets” is both immoral and economically injurious. We now have a situation where tax officials send out notices and insist on garnering payments that they know will not stand the scrutiny of tribunals and courts. The official does not care if he or she is overruled after 10 years, as long as the current year’s targets are met and one’s promotion is assured. In this fundamentally tyrannical course of action, these tax officials receive support from the highest levels of the executive branch, where the finance minister’s concern is to meet the current year’s revenue projection, for who knows who will be the finance minister in 10 years’ time when the refunds are due? - Jaithrith Rao
Income tax disputes hit 4.37 trillion rupees ($76 billion) in the year ending December 2011, almost double the year before. - Wall Street Journal
The government might have to announce a drought within a fortnight. - Mala Das, NDTV on 20th July
All its Herculean labour notwithstanding, the IMD has never foretold a looming weather disaster. It typically weighs in after a heat or cold wave, thunderstorm, flood or cyclone and warns us of more to come when the worst is already over. Its record of providing information for what it calls “nation-building activities”, such as agriculture and irrigation, is worse. Most recently, it failed to predict the 2009 drought and continued to mislead policy makers into believing that it was only a “rainfall deficit” well into August! - Shreekant Sambrani
The lack of rains is being felt across the country in different ways. Scrap gold sales are gaining momentum as farmers, distressed at the poor monsoon, prefer to sell their gold at a time when gold prices are skyrocketing. In fact, this trend has picked up in urban areas, too, where a cash crunch is forcing people at large to take advantage of rising gold prices. - Rashme Sehgal, Deccan Chronicle
The prospects for inflation will depend on the weather, which, right now, is giving some cause for worry. The rice and wheat markets can be managed given the stocks available. The real worry is panic reactions under political pressure if a sudden supply crisis leads to a spike in some other food item. So Team Manmohan better keep a watch on the usual suspects like edible oils, onions, potatoes and tomatoes. - Nitin Desai
h/t Equitymaster
h/t Deepak Shenoy
Today, people enter politics mainly to make money. The emergence of political dynasties should surprise nobody: they are business dynasties by another name. - SA Aiyar
When Khurshid was quoted as saying Rahul had only put in a “cameo appearance”, he was actually saying on record what others say off it. Short of any real-time info on members of the dynasty, there are only intelligent guesses (from individuals who are usually right) that Rahul will not be posited at the front of a ship that is expected to sink by 2014. - Saba Naqvi
(On guessing Rahul Gandhi's choice of ministry) That leaves the Food Ministry, current held by KV Thomas of the Congress. Now consider how this may work best for Rahul Gandhi.
For 2014, Congress needs a vote winner. The Food Security Bill is the next big idea of the UPA, and the cabinet has just decided to cover 70 percent of the population under this Bill. It is UPA-2’s NREGA.
Giving food away for cheap in a drought or bad monsoon year is an angel’s job. Enter Rahul Gandhi. There is little downside to the ministry, provided it is given a carte blanche to spend money like water – which should not be a problem for Rahul Gandhi. - R Jagannathan
As President, after he takes his oath of office on Wednesday, Pranab Mukherjee will be on stern test to see that he has in fact stopped being a Congressman in the conduct of his official duties. His long years as Mr Fix-It for the Congress party may have helped him get to the highest office in the land. In the next few years, he will repeatedly be called upon to put country before the Congress. It is a test he has failed in the past. - Venky Vembu
Nearly 900 million Indians now have the power to call for some critical information about the candidates contesting from their respective constituencies prior to an election.
Nearly 900 million Indians are now tantalizingly close to accessing vital information, access to which can make an impact on the quality of elected representatives who lord over us in the parliament and state assemblies ; information that is, not inexplicably, withheld from us by those who gain the most by withholding such information.
All you need is intent and a mobile phone.
How?
Do you know the pin-code of the area where you are registered as a voter?
Yes?
We are good to go…..
SMS MYNETA to 56070 or to 92465-56070.
Here is what I got when I sent that text: “Lok Sabha constituency XXXXX, MP YYYY, Party-name ZZZZ, Criminal cases – Yes(1), Assets Rs. 5.4 crore, Liabilities Rs. 3.3 crore, Education 12th Pass”
During elections, the voters can retrieve this basic information on the criminal background, the financial summary and the educational qualifications of the contesting candidates. During non-election period, citizens will be able to access complete background information of sitting MP and MLA of their area. - Shining Path, Firstpost
With 1.25 million infant deaths annually and 42 percent of the kids being underweight, India has slipped in the area of child well-being in the last 15 years, according to a report released on Thursday.
The Child Development Index (CDI) released by NGO Save the Children showed that Japan is the best place in the world to be a child while Somalia is the worst.
The report noted that while many countries in the world made remarkable progress in child health, education and nutrition – the three premises that form the basis of this report – India slipped by 12 ranks between 1995 and 2010. - Firstpost
CNN-IBN had accessed documents last year that showed that the Bhopal Memorial Hospital and Research Centre had been carrying out clinical trials on humans. The documents showed that at least 80 per cent of the patients on whom trials were conducted, were victims of the Bhopal gas tragedy. ..... What was suspected and had been alleged was confirmed. The multi-specialty hospital set up for gas victims conducted unethical drug trials on 279 patients of whom 215 were gas victims. - CNN-IBN
(On Satyamev Jayate) I had spotted Bezwada Wilson in the audience, and I was waiting to see if this leader of the Safai Karamchari Andolan—a man who had pioneered the demolition of dry latrines across India—would salvage the morning. He too was asked to narrate his early life, and he too shed tears. As did Khan with practised ease.
The next day I called Wilson and told him I was annoyed that even he did not bother to mention Ambedkar and Reservation. Wilson clarified that he indeed had. It had been edited out, as was his rant against the Supreme Court and Parliament—since both institutions had been dragging their feet on the issue of manual scavenging. Then he revealed something that shocked me. He said he had not been in the audience when Kaushal Panwar was being interviewed by Khan. I countered saying I had seen him ‘reacting’ to what Kaushal said on stage. “Even I saw myself in the audience and hence was shocked,” said Wilson. He said Kaushal had been interviewed in total isolation, in an empty studio. And yet on Sunday we saw, every once in a while, close-ups of fretful, anxious, pained and agonised faces of members of the studio audience as Kaushal was narrating her story. They even clapped on cue, like when Khan asked Kaushal her heroic father’s name. Clearly, all this had been manipulated and faked—with clever editing and splicing of shots. - S Anand
(On falling media standards) Today, many Indians live with this dismaying sense of news as theatre. Every day, viewers are treated to a summer storm — a sense that something of tremendous magnitude is happening. The next day, it is gone. - Shoma Chaudhury
(On the Guwahati molestation case) If proven true, this would perhaps be the first incident in which a media house has had a frighteningly complicit role in a despicable crime against a woman. While it is almost sure that this is our News Of The World moment, media houses, especially electronic media, need to rethink their priorities: higher TRPs or news ethic. Until that happens, the spectacle will continue. - Ratnadip Choudhury
(On internet policing) A more worrying development regarding ISP actions came to light at the end of May, when the activist group Anonymous India hacked into the servers of one provider, Reliance Communication, and released a list of 434 web addresses that had been blocked. Among these were 45 addresses that Reliance had not been asked to block by either government or the courts—all of them related to an accused in the 2G scam, Satish Seth, a group managing director at its parent company, Reliance ADA Group (R-ADAG). The 45 addresses were soon unblocked. (For the record, an R-ADAG executive denied in an email that their servers had been compromised by Anonymous India, and said they had not blocked any web pages unless asked to do so by the government or the courts.)
All this adds up to what can be called private censorship, as distinguished from government censorship. But whereas acts of censorship ordered by the government can be challenged by citizens through Right to Information applications or appeals to elected officials, it seems virtually impossible for customers to hold ISPs, entertainment companies or copyright lawyers accountable for their acts of censorship. Going to court seems to be the only option, but many experts and activists who work on Internet freedom in India are wary of taking this route; the consensus among advocates is that Indian courts are unable (or unwilling) to appreciate the complex issues involved in regulating or blocking Internet sites.
It did not encourage them when in January, a one-judge bench of the Delhi High Court told Google and Facebook, “Like China, we too can block such websites.” Shivam Vij, Caravan Magazine
Pranab-da has left more ticking bombs for Manmohan - R Jagannathan, Firstpost
To reform or not to reform in the monsoon session? - Business Standard
Team Manmohan's chances - Nitin Desai, Business Standard
Sharad Pawar, the sound policy-maker - S A Aiyar
Incredibly cynical piece on Rahul Gandhi's choice of ministry - R Jagannathan, Firstpost
The dysfunctional tax regime - Jaithrith Rao, Tehelka
How to use an SMS to know the secrets of our netas - Shining Path, Firstpost
Is a proportional representation based electoral system better? - Jayaprakash Narayan, Outlook
How true is Satyamev Jayate? - S Anand, Outlook
Tehelka's investigation into the Guwahati molestation case - Ratnadip Choudhury, Tehelka
On India's receding internet freedoms - Shivam Vij, Caravan Magazine
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