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Climate Change Meet:IT IS “NOW OR NEVER”,by Syed Ali Mujtaba, 7 November 2009 |
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Open Forum
New Delhi, 7 November 2009
Climate Change Meet
IT IS “NOW OR
NEVER”
By Syed Ali Mujtaba
It’s less than five weeks for the crucial Copenhagen summit for climate change. It’s a
deadline for a deal to stop the climate catastrophe. The issue involved is
developing countries won't join in a climate deal unless the rich countries,
which created the climate crisis, pay to fix it.
The Copenhagen summit will
have more than 100 world leaders, including the US President Barack Obama and
Chinese President Hu Jintao. While the talk will be about the environment, the
substance will be about money. Developing nations say that if rich nations want
them to stop burning coal or cutting down forests, they should be willing to
pay them.
The price tag of a fair, ambitious and binding global treaty
is $150 billion a year in funding to help poorer countries to adapt and cut
emissions. So far only a fraction of that is pledged by the developed country. The finance ministers of the world’s 20
biggest economies are meeting prior to that to discuss these issues but it is learnt
the funding proposal isn’t even on the agenda for such a meeting.
The Copenhagen
summit could collapse without a funding plan as $150 billion a year is needed
by 2020 to invest in low-carbon development and the green economies of the
future. However, there is no shortage of bold and practical ideas for how the
funds could be raised. Experts suggest levies to close the tax-free loophole on
aviation and shipping fuels or a charge on financial speculation could raise
tens of billions each.
Activists are putting up ads and campaigns that Europe must raise their offer, and other rich countries
need to join them. The European Union must set a precedent by starting to put the
money on the table is said in the campaign. However, so far the US has not
pledged any funds to deal with the climate issues. Although it’s going ahead to
participate at the Copenhagen
summit, it’s still not clear how much funds it may pledge and under what
conditions. It’s learnt that it wants to put a rider for releasing the funds
with which the developing countries are not so comfortable with. It is certain
that if Washington is not a party to the
global treaty on climate change, the summit at Copenhagen would have no meaning.
As far as India
is concerned it is of the view that any attempt to address the problem of
climate change must take into account the imperatives of poverty reduction and
economic progress in developing countries and the responsibility of the
developed countries. New Delhi
maintains that any long-term goal or conditionalities being set towards
lessening the effects of climate change “should always take into account the
centrality of the need of the developing countries in this regard.”
India's defiance on the issue of climate
change came during the U.S. Secretary of State, Hillary Clinton's visit to India this July, when Union Environment Minister,
Jairam Ramesh, publicly asserted that “India's
position is clear and categorical that New
Delhi simply is not in a position to take any legally
binding emissions reduction.”
There is no doubt that the world is sitting on the climate
catastrophe. If the world has to be saved from this imminent danger, a
consensus has to evolve how to fund this problem in a comprehensive way. To me
the entire debate on climate change is going on the lines of the Gandhian
campaign in India.
There is a total disconnect between what is being preached and practiced.
There is the North and South divide. The rich countries want
the developing countries to adopt austerity measure to help save the planet,
while they may like to continue with their pace of life. They may agree to some
funds to the developing countries and may even allow some cheap technology
transfer but are unwilling to compromise on their lifestyle.
This means the developing countries should cease to develop
and remain in the poverty trap for years to come. It is one of the most complex
puzzles that are being spun at the backdrop of the climate catastrophe. Within
the rich countries there are differences, particularly between the European
Union and the US.
Europe has one line of thought, the US has other. And, within Europe too there are differences.
Even the developing countries are not a unified house. There
is a clear urban and rural divide on this issue. The argument of the north is
extended by the urban centers with which the rural centers are not so
comfortable. Those living in the urban centers want the rural folks to live in
the primitive stage to address the issues of climate change while they may like
to continue with their sedentary lifestyles.
This is the most ludicrous part of the campaign on the climate change.
Even as the time is ticking for the Copenhagen summit and there is a consensus on
the issue that it is extremely essential to sustain the campaign to save the
planet from the perils of climate change, sadly the camps are divided.
One school of thought led by the developing countries say
“no deal is better than an unfair deal.” They want to abide by their agenda and
are not ready to compromise, a proposition that could spoil the deal. “Seal the
deal” is another campaign that is being launched by the developing countries
ahead of the Copenhagen Summit. It says if we have to move forward on the issue
of climate change, it is essential to “Seal the deal”
Arguments and counter arguments are put forward before the Copenhagen summit. The
house of hope and despair are equally divided. The skeptics’ view this talk
shop may fail to kick off for want of consensus. The optimists argue it will
roll on in fit and starts because it’s a question of survival of human
mankind.
As the largest-ever gathering of world leaders at Copenhagen
gets underway, the UN Secretary-General Ban Ki-moon has appealed there is an
urgent need for collective action to save the planet. He has called upon the
civil society, faith groups, businesses and governments to join forces to
combat climate change.
The sliver lining in the black cloud is that India and China have signed a memorandum of
understanding on the issue. It shows that the two world's major players are
serious about finding an alternative path alongside trying to attain
sustainable development. Not withstanding, how this story plays itself out, the
fact remains that Copenhagen summit on climate change is turning out to be a
basket case of ‘now or never.’ --INFA
(Copyright,
India News and Feature Alliance)
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It Is Only A Song:MUSLIM ANTE ON VANDE MATRAM, by Poonam I Kaushish,7 November 2009 |
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Political Diary
New Delhi, 7 November 2009
It Is Only A Song
MUSLIM ANTE ON VANDE MATRAM
By Poonam I Kaushish
A tempest in a teapot. That is the
sum total of the zero sum game over the needless hungama over Vande Mataram. Yet again. No matter that it ignited
patriotism, galvanised Indians to gang up against the British and throw out the
firangis and won India its
freedom.
Stirred by who else, but the widely
respected Jamiat Ulema-i-Hind (JUH)
which out of the blue issued a fatwa against
singing Vande Mataram. In a
resolution on the concluding day of the three-day conference at Deoband in UP
the Islamic clerics stated that singing the national song was anti-Islamic and
amounted to worshipping the motherland. This went against the concept of tawheed (oneness of God), according to
which a Muslim cannot supplicate to anyone except Allah. Besides, patriotism
didn't require singing Vande Mataram
in schools.
Arguably why now? A question that
has perplexed many given there was no immediate provocation and all was quiet. Why
a fatwa? Many shrug it off by
averring that opposition to Vande Mantara
taken from Bankim Chandra Chattopadhyaya’s 19th century Hindu nationalistic
novel, Anandamath, has a long
chequered history of reservation among certain Muslim groups and would continue
to be fodder for future debates Besides, the Supreme Court has indicated that
singing of the national song must not be made compulsory for all.
Not a few assert that the national
song is just another prop to celebrate the nation State and undue importance
mustn’t be given to it. Others aver that singing Vande Mataram must neither be made a test case of patriotism nor
should people be obstinate about not singing it. Notwithstanding, that it is
compulsorily played at the end of every session of Parliament.
However, some suggest there is some
method in this madness. The Muslims seem to be tilting towards the Congress given
the Party’s unexpected victory in 20 seats Lok Sabha seats from UP in the General
Elections. But with a rider. Fulfill our
demands, like implementation of the Sachar Committee report etc. Knowing that by doing so, it has put the
Party in a quandary. If the Congress concedes this, it could lose the upper-caste
Hindus vote-bank which is slowly returning to its fold. Thus, the safest bet
for the JUH is to raise the ante on an emotional issue to ignite the rabid Hindutwa brigade and leave the Grand dame with no option.
But with a rider. Fulfill our
demand, like the implementation of the Sachar Committee report. Knowing that if
the Congress concedes this, it could lose the upper-caste Hindus vote-bank
which too seems to be returning to its fold. Thus, the safest bet for the JUH
is to raise the ante on an emotional issue to ignite the rabid Hindutwa brigade, put the Party in a
quandary and leave it with no option.
In this context, it is pertinent to
understand how and why Vande Mataram came to be recognized as a national song
and why the Muslims consider it un-Islamic, full of hatred against Muslims and
offensive. Vande Mataram was written in 1875 and published in Chatterjee’s Anandamath in 1882. The story starts
with a group of sadhus who call
themselves santan, the children of Bharat Mata whose leader Satyanand is imprisoned by the Nawab. The sadhus vow to set their guru
free, shout that they would throw the Muslims into the river and set their
houses on fire. They not only succeed in freeing their guru but welcome British rule in India. In short, atrocities against
Muslims, is a recurrent theme in the novel.
When Bengal
is ravaged by the 1770 famine, the East India Company, forces the farmers to
cultivate cloth whitener instead of foodgrains as it is a big export earner. Triggering
an anti-British revolt wherein Vande
Mataram soon became the popular battle cry for freedom from British Raj. Large rallies all over the country
worked themselves to a feverish pitch by shouting Vande Mataram. Many were jailed and the song was banned. But it
failed to stop the patriotic fervour. Nobel laureate Rabindranath Tagore sang
it in 1896 at the Calcutta Congress Session and Lala Lajpat Rai started a
journal called Vande Mataram from Lahore.
The Congress formally adopted it as
a national song through a resolution at its Varanasi Session on September 7, 1905.
Thereafter, it became the opening note for all the Congress meetings and
sessions. Its powerful patriotic lines stirred the whole nation. Neta Subhash
Chandra Bose made it the Indian National Army's principal song and his
Singapore-based radio station regularly broadcast it.
In October 1937, some Muslim leaders
objected to Vande Mataram on the
ground that it contained verses that were in direct conflict with the beliefs
of Islam. True, the first two stanzas of the hymn eulogise Mother India and its
beautiful natural bounties with “hurrying streams, gleaming orchards…..” But
the fourth stanza of the song, for instance, addressed Mother India as,
"Thou art Durga, Lady and Queen,
with her hands that strike and her swords of sheen, Thou art Lakshmi lotus-throned…." It was
argued that by singing this, a Muslim was forced to equate his country with the
Hindu goddesses Durga and Lakshmi. This
went against the concept of Islam according to which a Muslim could not
supplicate to anyone except Allah.
Nehru understood his Muslims
brethrens’ religious predicament and soon worked out a compromise formula
through some fine balancing. Even as he underscored the hymn’s national
importance in the freedom struggle. The Congress Working Committee met in
Kolkata in 1937 under his Presidentship and adopted a resolution, whereby only
the first two stanzas of Vande Mataram
would be sung. Moreover, freedom was given to the organisers to sing any other
song of an unobjectionable character, in addition to, or in the place of, Vande Mataram.
Interestingly, while Vande Mataram was treated as India’s national anthem for long, Jana Gana Mana was chosen as the
national anthem of free India
following Independence.
The song was rejected on the ground that Muslims felt offended by its depiction
of the nation as "Ma Durga"—a
Hindu goddess— thus equating the nation with the Hindu conception of Shakti, divine feminine dynamic force. No
matter the Constituent Assembly on 24 January 1950 that Vande Mataram would enjoy “equal status” with Jana Gana Mana.
Over the decades Muslim animus towards
Vande Mataram has reared its head
time and again. In 1998, the NDA had to withdraw a circular by the then UP
Government making the recitation of Vande
Mataram compulsory. Ditto the case with the UPA in September 2006 when it’s
then HRD Minister Arjun Singh had to hurriedly retract his order to all the
State Governments making singing of Vande
Mataram compulsory in all schools on 7 September to mark completion of the
centenary celebrations commemorating adoption of the national song.
Either which way, the Islamic clergy
has to realize that in secular India
there is no place for fundamentalism, be it Hindu or Muslim. All our patriots.
At the same time the Jamiat Ulema-i-Hind
and its ilk have to realize that a regressive and orthodox social agenda that it
propagates (like anti- Women Reservation Bill, homosexuality, no TV et al) will
prevent the minority community from making full use of the windows of opportunities,
social cohesion and change offered by a democratic State. Instead it will present a fait accomplice and perfect foil to
parochial groups with vested agendas to play up the politics of victimhood and feather
their own nests. This has to be prevented at all costs.
Remember, India’s multi-pluralistic character,
pulsating democracy and civil society is neither rigid nor frozen in time. It
is constantly evolving. True, one song cannot make or mar the future of a
nation or its people. But Vande Mataram
is our national song and symbol of national pride, on par with Jana Gana Mana. It is high time we
stopped trivializing and trashing it. All secular minded Indians must
collectively thwart our beautiful and melodious national song Vande Mataram being turned behsura, in the hands of our political
drumbeaters! ----- INFA
(Copyright India News and Feature Alliance)
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ASEAN Meet:TAKING ‘LOOK EAST POLICY’ FORWARD,Dr Parama Sinha Palit,3 November 2009 |
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Round The World
New
Delhi, 3 November 2009
ASEAN Meet
TAKING ‘LOOK EAST
POLICY’ FORWARD
By Dr Parama Sinha
Palit
The 15th Association of
Southeast Asian Nations (ASEAN) Summit held in
the seaside town of Cha-am, Thailand last
month successfully brought together leaders of 16 Asian countries at the table
pushing for greater Asian economic and political integration. The Asian leaders
who gathered for the Summit,
while discussing economic cooperation, disaster management, and climate change,
also made attempts to reach out to their counterparts in an effort to build
trust and goodwill.
For India it was yet another step
towards furthering its ‘Look East’ Policy (LEP) launched in 1992 as a response
to the new geo-economic and geo-strategic landscape following the end of the
Cold War, and connecting to its East and Southeast Asian neighbours. Prime
Minister Manmohan Singh appropriately pointed out that “India’s
enhanced engagement with the ASEAN is at the heart of our ‘Look East’ Policy….”
Given the demographic and economic
heterogeneities of the ASEAN countries, the region can act as a crucial partner
in the future growth of major Asian economies. The region’s economic and
strategic potential has prompted New Delhi and Beijing to engage the
Southeast Asian countries like never before. However, the Indian initiative to
engage the region has been more recent than China’s. The latter’s engagement
with the region has been more exhaustive.
Over the years, China has
successfully built bilateral economic links with individual ASEAN members. India, on the
other hand, has been a late-starter due to many reasons including historical
ones. However, its pronounced intent to engage the region culminated in the
Free Trade Agreement (FTA) signed with ASEAN recently. The FTA signed by India in August 2009 in Bangkok with one of the world’s largest trade
blocks is a major step in this direction.
“A free trade agreement with ASEAN
is an international political commitment and is also part of the Look East
Policy,” the Economic Times quoted
Prime Minister Singh as saying during the Cabinet meeting held on 24 July 2009.
After signing of the FTA Singh pointed out that “the conclusion of the
India-ASEAN Trade-in-Goods Agreement in August 2009 is a major first step in
our objective of creating an India-ASEAN Regional Trade and Investment Area.
India-ASEAN trade has grown at a healthy rate and stood at about US $ 48
billion in 2008. The India-ASEAN Summit is an occasion to review the progress
in our relations with ASEAN countries. I will inform ASEAN leaders about the
several initiatives that India
has taken to qualitatively enhance our partnership in diverse areas of our
cooperation.”
The ASEAN-India FTA aims to build an
institutional framework for greater economic partnership between India and the
ASEAN countries. Under the arrangement, the ASEAN member countries and India plan to
lift import tariffs on more than 80 per cent of traded products between 2013
and 2016, beginning from 1 January, 2010. Similarly, tariffs on sensitive goods
will also be reduced to 5 per cent in 2016, while tariffs will be maintained up
to 489 items of very sensitive products. India and the ASEAN are currently
negotiating Agreements on Trade in Services and Investment. With a combined
Gross Domestic Product (GDP) of US$ 2.3 trillion, and the ongoing economic
interactions/exchanges between the countries in the region, there is a huge
possibility that they together will create a new free trade area of 1.7 billion
people covering 11 countries.
The FTA signals India’s
commitment to global economic integration along with political cooperation with
its neighbours in the east. However, New
Delhi needs to pursue the next stage of economic
engagement with ASEAN after the FTA. While the signing of the FTA has taken India’s engagement with the ASEAN countries to a
new level of growing partnership by carving a space for India in the
region, it has also paved the way for an Asian Economic Community.
While economic engagement has been
the hallmark of India-ASEAN growing partnership, the two have made considerable
progress in other areas too. The India-ASEAN Science and Technology Fund, the
India-ASEAN Health Care Initiative, cooperation in traditional medicines, the
India-ASEAN Network on Climate Change and the establishment of a Green Fund are
some major initiatives of collaboration between the two. Several programmes to
promote people-to-people contact are also in the process of being implemented.
The engagement between India and the
ASEAN is mutually beneficial. While India
has a lot to gain from its engagement of the region, the ASEAN countries also
realize the shared concerns they have with India. These include economic
benefits for greater trade and investment, security cooperation and
collaboration on environment and climate change. India’s
growing significance within the region was reflected during the latest Summit that acknowledged India as an important player.
India,
which became ASEAN’s full dialogue partner during the fifth ASEAN Summit in Bangkok in 1995, is treated
a ‘significant’ player by the Asian community given its strengths and expertise
in fields like education, herbal medicines, IT, science and technology.
According to ASEAN Summit spokesperson, Vimon Kidchob, “the role of India cannot be ignored and that ASEAN expects
to enhance trade with New Delhi”.
The India-ASEAN partnership has
other facets as well. While both India and ASEAN aspire for greater
representation in global councils as well as for developing capacities to
contribute constructively and meaningfully to the management of global affairs,
the stage has also been set for India to initiate work on areas of mutual
interest of the ASEAN member countries namely energy, education, finance, and
national disaster management.
Apart from providing opportunities
for enhancing ties between India
and the ASEAN member countries, the framework has also provided a platform for India and China to bridge differences,
especially after the recent spate of border tensions between the two. By
bringing together the two heads of State during the Summit,
ASEAN has expressed itself as a geographical and political entity trying to act
as an effective intermediary between New Delhi
and Beijing. It
makes immense sense for ASEAN to remain connected to both countries for strategic
and economic benefits. By facilitating the meet, the ASEAN group of nations has
only further expressed their collective desire to foster peace and cooperation
within the region.
The ASEAN was indeed successful in
translating the meet of the Prime Minister Singh and his Chinese counterpart
into a success by easing the tension between the two Asian giants. The two
heads of States agreed to build “trust and understanding” in their bilateral
relationship by beefing up their strategic and cooperative partnership.
With the region’s increasing clout
becoming evident there is little doubt about ASEAN’s escalating role in shaping
the future of the world. With a push for larger ASEAN Community by 2015 and
enhancing intra-regional connectivity, in keeping with ASEAN’s agenda, there is
considerable scope for meaningful economic exchanges amongst the member
countries. India’s qualitative and quantitative economic interactions with
Southeast Asia will only integrate India further into the region helping India
and the Southeast Asian countries to define a new world order dominated by
Asia. ---INFA
(The author is Chief Editor & Singapore Representative of
India-China Economic & Cultural Council)
(Copyright,
India News and Feature Alliance)
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States Alerted Again:HOPES NOW ON RABI CROP, by Insaf,5 November 2009 |
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Round The States
New Delhi, 5 November 2009
States Alerted
Again
HOPES NOW ON RABI
CROP
By Insaf
The States are being engaged and alerted constantly by the
Centre on the basis of the first advance estimates now available to the Union
Agriculture Ministry to go all out in augmenting Rabi production so as to
off-set the losses in Kharif. The Centre has set itself an additional target of
8.5 million tones of foodgrains and 1.5 m tonnes of oil seeds, according to
what Union Agriculture Minister Sharad Pawar told a conference of Economic
Editors in New Delhi
on Wednesday last. The year 2008-09 recorded an all-time high production of
233.3 m tonnes of foodgrains comprising 117.70 m tonnes of Kharif and 116.18 m
tonnes of Rabi. The advance estimates indicate a shortfall of around 15 m tonnes
in rice, 5.5 m tonnes in coarse cereals, 21 m tonnes in food grains and 2.5
million tones in oil seeds. Most of this shortfall in Kharif is likely to occur
in UP, Rajasthan, Andhra Pradesh, Jharkhand, Bihar,
Karnataka and Madhya Pradesh.
The States are being reminded about their renewed commitment
to increase the area under Rabi as follows: (1) Acreage under wheat to be
increased by 0.5 m hectares, resulting in increased production of 2 m tones;
(2) Acreage under rice to be increased by 1.2 to 1.5 m hectares in states like
West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Bihar and UP. This is expected
to result in additional production of 1 m tonnes, (3) Area under Rabi pulses to
increase by 1.5 m hectares due to improved soil moisture on account of late
monsoon. This is expected to result in additional production of 1 m tonne.
Similarly, additional area under oil seeds would bring in about 1.2 m tones of
extra production (4) Rabi maize and sorghum and summer bajra too would bring in
1.5m tones of additional production. Importantly, the Centre has taken upon
itself the responsibility to ensure that the states do not face any problem in the
clearance of schemes and there is sufficient availability of inputs like seeds
and fertilizers.
* * * *
Kisan Credit Ahoy
Two other points need to be made. First, investment plays a
key role in achieving higher growth rate. The plan outlay for agriculture and
allied sector has been increased substantially. Among other things, the
allocation under Rashtriya Krishi Vikas Yojana has been stepped up from Rs.3165
crores last year to Rs.4100 crores this year. Second, the availability of
agricultural credit, has been stepped up from Rs.18,045 crores in 2005-06 to
Rs.2,87,149 crores in 2008-09. A target of Rs.3,25,000 crore has been kept for
disbursement of loans this year. An interest subvention of 2 per cent is being
provided by the Government for short-term agricultural credit. In addition, a 1
per cent interest subvention for prompt repayments has also been announced. The
effective rate of interest for short-term credit to farmers will be 6 per cent.
Up to July 2009, 8.53 crore Kisan Credit Cards have been issued to enable
farmers to access credit easily from banks.
* * * *
Jharkhand
Spotlights Corruption
Jharkhand has clearly spotlighted the ugly side of politics.
This past week, its former Chief Minister Madhu Koda and now an Independent MP,
has been hogging the headlines for alleged money laundering, diversion of State
funds and making huge illegal investments abroad -- to the tune of over Rs 2000
crore! From a man of modest means-- a labour contractor, Koda’s assets snow-balled
from Rs 35 lakh in 2004 to over Rs 30 crore in 2009. Worse, investigations by
the Enforcement Directorate so far reveal that Koda and his associates are
involved in hawala transactions worth Rs 560 crore, illegal investments of Rs
1,500 crore and own 70 alleged properties in Delhi,
Lucknow and
Mumbai among others. Sadly, this great wealth was amassed by Koda when he was
Chief Minister and Minister of Mines for nearly two years. Apparently, the
Mines department under him had recommended to the Centre grant of lease of coal
and iron ore mines to nearly two dozen-odd companies after striking underhand
deals, each running into crores. Gross misuse of authority. Will the buck stop
here? Koda has no party to back him!
* * * *
J&K Gets Rude Shock
Jammu & Kashmir is seething with anger. A week after
Prime Minister Manmohan Singh flagged the first-ever train service in Kashmir to “improve connectivity”, his Home Minister P
Chidambaram did just the opposite. From November 1, his Ministry has banned
pre-paid mobile connections in the State. The reason? Security concerns as
proper identity verification was not being done by service providers while
giving the connections. The impact: 39 lakhs of the 45 lakh subscribers will
get affected, about 10,000 telephone operators will lose jobs and, worse, the
“unwise and ham-handed move” negates the PM’s assertion that “the era of
violence is coming to an end.” The big
question: Can’t identity requirements be tightened? Not just that. The State received
another rude shock when the Services team of the Defence forces (which also
claim that the situation is improving) failed to show up for the Ranji Trophy
match against the J&K team in Srinagar.
The no-show was apparently because of security concerns. Time for the Centre to make up its mind
whether Kashmir is moving towards normalcy or
not?
* * * *
Battle Royale In UP
The Samajwadi Party in UP should be on edge today. The
byelections to 12 seats in the State are a crucial challenge for its chief
Mulayam Singh Yadav. More so in three strongholds-- Ferozabad Lok Sabha seat,
and Etawah and Bharthana Assembly seats, where both rivals, the Congress and
the BSP are leaving no stone unturned to upset his OBC applecart. All eyes,
however, are on the Ferozabad seat, where Singh has fielded none other than his
daughter-in-law Dimple Yadav. But the going could be tough as other than the
BSP, the SP has had to contend with an aggressive Congress. The latter not only
has put up former SP MP and film star Raj Babbar, but has had Rahul Gandhi
making a rare bypoll campaign with AICC General Secretary Digvijay Singh
camping there. Interestingly, the BSP chief Mayawati, whose stakes too are very
high, has not campaigned “to ensure that there is no consolidation of anti-BSP
votes behind any single candidate”. This happened in the Lok Sabha poll to her
great cost.
* * * *
Poll Crorepatis!
The recent State Assembly elections have thrown up a new
mantra: the more money you have the better your chances of winning elections.
This is a bizarre but distressing message that comes out loud and clear. According
to an analysis by National Election Watch (NEW) a staggering 50 per cent of
MLAs elected are reportedly crorepatis!
Worse, the numbers are increasing with every election. In Maharashtra,
the number is 184 MLAs as against 108 in 2004, a rise of 63.89 per cent. In
Haryana the figures are up from 47 in 2004 to 66 now or 72.22 per cent and in
Arunachal the number is up from 17 to 35 or 58.33 per cent. As against this,
only 0.98 per cent of candidates who declared assets less than Rs 10 lakh got
elected in Maharashtra and a mere 2.34 per cent in Haryana. Sadly, money power
is flourishing and getting more and more powerful! The much-celebrated Aam
Aadmi will need to worry and watch out! ---INFA
(Copyright,
India News and Feature Alliance)
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Recovery Fragile:RBI PREPARES FOR MORE SHOCKS, by Shivaji Sarkar, 30 October 2009 |
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Economic Highlights
New Delhi, 30 October 2009
Recovery Fragile
RBI PREPARES FOR
MORE SHOCKS
By Shivaji Sarkar
It’s an awkward situation. The doctor has a diagnosis but his
prescription does not treat the symptoms. This is what the Reserve Bank of India has done
in its latest review of the economy. Its diagnosis, however, has little to
cheer the nation. The Central bank Governor, D Subba Rao, says, “The recovery
is fragile, inflation is to touch 6.5 per cent by March 2010, private demand
has yet to pick up and services sector is performing below the expectations.”
The RBI has not made any change in the growth forecast. It
continues to peg it at 6 per cent and it appears that it still conforms to its
earlier projection of 5.75 per cent. Though Rao does not say more but his
actions indicate that he apprehends a serious crisis. Officially except
increasing the statutory liquidity ratio (SLR) - the percentage of deposits
that banks are required to invest in government debt - to 25 per cent from the
existing 24 per cent he has done little.
In fact, it is a more cosmetic prescription as most of the
banks are maintaining a higher SLR at 27 per cent. It is, however, a signal
that the Government is short of funds and its revenue generation is not
matching its demands. This is a sign that the Government would be borrowing
more to sustain its budget projections. The rise in SLR is a step backward
leading to the pre-reform age, when banks were forced to finance large government
deficits. “It is reversal of an exceptional measure,” says Subba Rao. This is
an indication that 2010 may not be as bright as it is being projected. The RBI
stress on tightening the screws, to prevent an impending financial crisis, is a
grim pointer.
In its concern the Central bank withdrew a special facility
that made funds available from banks to mutual funds and finance companies, made
loans to commercial real estate more expensive and forced banks to invest more
in Government bonds. The special facility was introduced last year to boost
liquidity to the financial sector firms after the credit market froze. It also
means squeezing the funding process that ultimately leads to speculative
activities in the stock market and the real estate. It should be seen as a
warning and signals distrust in the stock market functions and the real estate.
It is also a reversal of the policy from providing stimulus
to checking money supply so that inflation could be controlled. In other words
it could be said that the course of debate on economic stimulus has been
shifted from boosting growth to controlling inflation or managing inflationary
expectations.
In doing all this, the Central bank admitted that bank
credit remained sluggish, which is at 10.8 per cent now, and cut its forecast
for adjusted non-food credit growth in 2009-10 to 18 per cent from 20 per cent.
Non-food credit is a euphemism for the credit off take by the industry,
manufacturing and related sectors. This indicates that actual activities at
most levels have come to the minimum and there is little hope of recovery in
the near future. This possibly explains why Subba Rao calls the recovery or growth
“fragile”.
The RBI has reason to be alarmed with the rise in prices of
all assets - real estate, equities, gold and commodities. The equity prices
have risen by 75 per cent surprisingly in an economy that has remained
sluggish.
A 43 per cent year-on year growth in bank lending to real
estate at the end of August had already sparked speculation that the RBI might
act on these loans. The real estate prices spurted on easy funding and this had
to be curbed. The step would be welcome by all who are being fleeced by the
real estate sector but it does not give solace to over 30 million people who do
not own a dwelling unit. The real estate sharks so have not been contained but
the poor seekers of a hue are the worst sufferers. The Central bank with its
flip flop policies has not been able to bring any succour to them. Its
prescription of raising interest rates and squeezing credit has not hit those
it had aimed at. It has not yet ushered in a regime of quality credit - proper
appraisal of assets and the commercial sellers.
It is difficult to understand why it does not empower and
also make it mandatory for the banks to scrutinize the housing pricing system.
The banks have little say on the housing prices but they are expected to fund a
sector managed largely by rogue companies. The present prescription is also not
expected to hit them. Therefore, it calls for a strong instruction to deal with
these elements and not come out with mere showpieces as the RBI is doing
repeatedly.
Despite some improvement in the rise of the index of
industrial production (IIP) at 5.8 per cent compared to 0.6 per cent growth in
2008-09, it is not being considered as very positive. Intermediate and consumer
durable goods sectors witnessed higher growth but the performance of capital
goods and consumer non-durable goods was relatively modest.
The biggest concern is on the agricultural front. Fears have
been expressed because deficient rainfall might cause disproportionate impact
on overall economic prospects and on the sense of well being. “Poor output”, says
the Central banks “is bound to push up prices and depress rural labour incomes.
Given the inter-sectoral supply-demand linkages, the knock-on impact on the
industrial and services sector can also be significant".
Except expressing concern, the Central bank has not come out
with a viable solution to push the economy up. Going by its reservations, it
seems the country is in for many more shocks. ---INFA
(Copyright,
India News and Feature Alliance)
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