Frontier India » Editorial

The fact is that CAD is widening, are you listening Mr P Chidambaram?

(FINN) Frontier India News Network — Tue, 11 Jun 2013 16:01:41 +0000

Rupee fall in addition to nearly every major indicator of economy is being defended and poo-pooed by Finance Minister P Chidambaram, who is now dabbling with Home Ministry and Naxalism. This is his repeat failure after his previous term as finance minister and had to be replaced by Pranab Mukherjee.

Chidambaram’s latest excuse of falling rupee is rise in import of gold, which he tried to curb. The gold imports rose so much that the rupee fell is a lame excuse. Gold imports have been always high without rupee falling. Oil prices have been low for sometime and it was the oil marketing companies which were raising prices in India. There is no data to suggest exports have picked up. Dr. Raghuram G. Rajan, Chief Economic Adviser, Ministry of Finance, who is doing all the talking for Chidambaram has listed many other factors for the rupee fall.

The over all picture is that Current Account Deficit (CAD) is widening and P Chidambaram has failed to curb the the trend.

While Dr Raghuram claims that CAD is being safely financed, it logically means that money will be pulled out from some other part of need. Rest of his speech was dangling carrots. For example, “measures to ease foreign investor portfolio inflows some will be done very shortly; In the coming weeks, we will be recommending the policies to enhance FDI limits in a number of areas.” Then he closed it with all is well in short term and long term speech.

Hopefully sanity prevails and Chidambaram is shunted out to some other ministry where it hurts common man’s pocket less.

With LK Advani gone, BJP might have a fighting chance

(FINN) Frontier India News Network — Mon, 10 Jun 2013 11:07:54 +0000

LK Advani has resigned from Bharitya Janta Party’s (BJP) the national executive, the parliamentary board, and the election committee. Narendra Modi’s elevation as 2014 general election chief was bound to bring in interesting outcomes in the political theatre of the country.

Advani did help make the BJP strong with Hindutva agenda, but Advani himself is not an agenda. Narendra Modi is an agenda and it is for the first time after Indira Gandhi that a leader is rising who has mass popularity and appeal. It is not just Narendra Modi who has become an agenda, it also his his economic development theme which attracts people. Even Atal Bihari vajpayee and Father of Modern India PV Narasimha Rao, did not have a combination of both personality and theme.

LK Advani was projected as an Iron man (Loh Purush) during the last elections and BJP paid for it clearly. India Shining may be the reason attributed for BJP’s failure but it was not so. Advani had contrasting image. On one hand he was hindutva icon and iron man, while on the other hand his love for prime ministers chair made him bow to Sonia Gandhi (Read Lal Krishna Advani : The (Pig) Iron Man). Narendra Modi’s Congress Mukt Bharat Nirman (development of India without Congress) will find resonance with a lot of quarters, especially upper caste and middle class.

Modi, RSS and BJP have clearly seen the end of LK Advani. Speaking at Karyakarta Sammelan in Goa after his appointment as election chief, Modi said “Our motto must be – Congress Mukt Bharat Ka Nirman … we must start from where Atal ji left things”, which clearly points out to the leadership vacuum.

Advani’s charge that partymen are looking after themselves unlike Dr Mookerji, Deen Dayalji, Nanaji and Vajpayee may prove wrong especially when Modi has an image of being selfless.

Why India – US defence agreements never really take off?

(FINN) Frontier India News Network — Sun, 26 May 2013 08:34:28 +0000

There is considerable anxiety amid the strategic community which fails to understand why India – USA defence relations don’t fully reach their potential. Most cooperation agreements peter out as soon as US agreements like CISMOA, logistics support agreements (LSA) come into picture. These are cold war components which India would not like to get associated with. Infact, even Soviet Union had no access to Indian ports and there was no agreement signed with Soviets in spite of their insistence.

There is immense scope of India US cooperation towards the west of Indian ocean region as China is not a factor there. Indian Navy can take a lead for patrols towards African continent. Iran should have less objections as India is also cooperating at Cha Bahar port.

The easiest of agreements has been the the Foreign Military Sales (FMS) which gives an appearance of non corrupt practice in defence deals. FMS is negated by End user inspection of military equipment which has been approved by India but the intrusive inspections have not been practiced. The India – US military exercises have an example of friction during Cope India 2005 at Kalaikunda. Fortunately for the administration it was an air exercise and the villagers who allegedly assembled there for protest were awestruck at the giant planes and dog fights.

Communication Interoperability and Security Memorandum of Agreement or “CISMoA” has a political component. Ports in southern states of India are not the friendliest places where US Naval Ships can chug in with LSA. Notwithstanding the software outsourcing boom from US and substantial economic activity, you can expect protests and rallies in these places. Local protests are not a new phenomenon for US, but is a political hot potato within India.

NATO is not its former self. There are protests in Japan and other places due to US bases. US needs to wake up and scrap the policy of applying cold war formats on India. Instead, US should evolve India specific agreements which could be a template with new emerging world. The strategic community should also stop being fixated at official statements emerging out of posturing.

Back stabber Li Keqiang wants India’s trust

(FINN) Frontier India News Network — Mon, 20 May 2013 09:26:06 +0000

Chinese Prime Minister Li Keqiang wants mutual trust with India. He claimed that peace and regional stability cannot be a reality without strategic mutual trust between China and India. This is hilarious. Li has not yet explained the Chinese PLA incursions that lasted 21 days.

The peaceful rise slogan of China is now showing. Most Asian countries are now rattled due to Chinese aggressiveness. Japan and Taiwan, which invested in Chinese industrial zones are now in bind. India should be cautious if investing in an Chinese industrial zone. Chinese have shown that they can arm twist using trade as means.

Premier of the State Council of the People’s Republic of China, Li Keqiang, inspecting the Guard of Honour, at the Ceremonial Reception, at Rashtrapati Bhavan, in New Delhi on May 20, 2013

Information sharing of water flow in river Brahmaputra (called Yarlung Zangbo in China) is a welcome change. However, sharing information is the least India could hope for as the river flows from Chinese Occupied Tibet and nothing can be done incase Chinese put up their famous denial techniques.

Li Keqiang hardly looked like a statesman when he stood at the forecourts of Rashtrapati Bhavan and preached Mutual trust. It looked as irritating as Kapil Sibal expounding zero loss theory after the monumental 2G scam. Since the current government gives so much importance to Pt Nehru, the Prime Minister who was on the receiving end of trusting Chinese in 1962, should learn from his follies too.

Unlimited FSI in Andhra, have the urban poor benefited?

(FINN) Frontier India News Network — Sun, 19 May 2013 07:04:08 +0000

Construction Companies and Builders have always cribbed that they don’t have unlimited floor space index (FSI) in order to help make houses for the urban poor. Andhra Pradesh can be a test case study for the country as it allows unlimited floor Area Ratio (FAR) since past 7 years and Hyderabad has real estate prices 50% lower than the surrounding states thanks to economic slowdown followed by Telengana issue.

Despite grand posturing by government in 2010, Andhra has not been able to make much headway in Low Income Group Housing or Housing for Economically Weaker Section. Rajiv Swagruha project for 175,000 units in Hyderabad with Andhra Pradesh Housing Board (APHB) targets living space for people earning between Rs 6000 – Rs 25000 per month, is performing like Rajiv Gandhi’s tenure as the prime Minister. Land reservation regulation Government Order (GO 45), which mandated allocation of 20% of the developed land to the economically weaker section (EWS) as low-income (LIG) housing has been relaxed in 2012-13.

As TATA Housing’s TATA Nano equivalent moves from approx Rs 1500 per Sqft to approx Rs 2500 per Sqft, it is evident that construction costs and high bank interest may not meet governments criteria of Approx Rs 1500 per Sqft criteria. The newer constructions at Hyderabad’s Nehru outer Ring road (ORR) are being priced at Rs 2200 – 2500 Psqf for the middle segment, which is actually the price for EWS housing in Mumbai.

LIG, EWS housing could have been a growth driver in otherwise stagnant real estate market in Hyderabad. On contrary, it is FSI starved Mumbai and Ahmadabad who have taken a lead on EWS housing and that too at private developers own initiative.

After PLA incursion in Ladakh, Chinese PM Li Keqiang’s imposed visit to India

(FINN) Frontier India News Network — Tue, 14 May 2013 03:10:09 +0000

China’s new Prime Minister Li Keqiang intends to visit India to showcase India’s importance in Beijing’s calculations. His first ever visit after taking over as the new Chinese premier is expected to redefine Sino – Indian relationships. As a Vice premier, Li Keqiang had told foreign minister SM Krishna during the June 2012 SCO meet that Sino-Indian ties would be the most important bilateral relationship in the 21st Century.

Rhetoric aside, Li’s visit to India is not an invite. His proposal to visit India was actually a surprise to Indian’s during the BRICS summit in Durban. Infact, it was Indian PM Dr Manmohan Singh’s time to visit Beijing in June, which had to be rescheduled to a later part of the year.

An over eager Indian Government bent back to accommodate imposer Li Keqiang’s wish to visit New Delhi, just because Li wants to keep his schedule of visiting Pakistan and other countries. Li then pushed his troops into Ladahk and the Indian Government was again seen bending back to accommodate Chinese concerns. The government argues technically that they have not traded anything, but it mirrors the governments number game in parliament claiming majority. The moral aspect is missing.

There a displeasing feeling over current and recent past (in addition to 1962) misdeeds of the Chinese and the latest PLA intrusion shows that Li Keqiang is not a trustable partner in Asia. India needs to rethink this visit as PLA can return as soon as Li Keqiang has left the Indian soil. Li Keqiang’s visit can be permitted at a later date after China has demonstrated that it can maintain the sanctity of 2005 agreement. India should make Li Keqiang work hard to earn an Indian visit.

Traders are right, Maharashtra’s Local Body Taxes are common man’s problem too

(FINN) Frontier India News Network — Sat, 11 May 2013 03:26:10 +0000

Local Body Taxes protests are increasingly seen as traders vs Maharashtra government tussle, but ultimately it is the common man who is set to suffer. LBT is mandatory for traders to pay for entry of goods into a local area for consumption, use or sale therein. Tax is self assessment or account based method of paying local tax, where the trader has to declare the tax liability by submitting records voluntarily. It is a replacement of Octroi, which was to be paid every time a consignment enters the city, at Octroi Nakas. Trading community of the state has been fighting for Abolition of Octroi since 1987. LBT will be implemented in Mumbai City from 1st October 2013, while it has been already implemented in Thane, Pune, Pimri Chinchwad etc since 1st Apr 2013.

Traders have gone on an indefinite strike protesting against LBT and has brought the financial capital of the country to a standstill.

Traders must have their own reasons but they do merge with common man’s interest. The LBT will eat into an additional 3 – 7 % from common man’s pocket. Government had justified Value Added Tax (VAT) introduction by stating that it will do away with complex tax laws in the country. Maharashtra’s LBT actually goes against the spirit of VAT implementation.

LBT affects small shops which are increasing loosing their margins and it is affecting their ability to do business. The advent of discount stores also don’t make sense. The discounts that a consumer can expect from these shops will be snatched away from the government.

Maharashtra is easily one of the costliest state to live in. Even the fuel prices are higher from that of New Delhi. It is the only state where such regressive taxes are charged and still manages to not provide citizens with better transportation, water, power and other basic amenities.

Now prosecute Pawan Kumar Bansal & Ashwani Kumar in fast-track court

(FINN) Frontier India News Network — Sat, 11 May 2013 02:31:03 +0000

On Friday, Prime Minister Dr Manmohan Singh accepted the resignation of Railway Minister Pawan Kumar Bansal and Law Minister Ashwani Kumar. Bansal was caught in corruption allegation and Ashwani Kumar was interfering with manipulation of the CBI which is conducting probe on Coal allocation related graft. The duo had cost National Food Security Bill in the parliament which happens to be the brainchild of Congress president Sonia Gandhi.

Taking a leaf from Anna Hazare’s demand during Janlok pal protests, the government should implement fast-track court to prosecute Pawan Kumar Bansal & Ashwani Kumar. Mere resignation from posts is hardly a punishment for such grave crimes. Any politician aiding corruption is automatically an anti – national and anti social element.

Pawan Kumar Bansal’s family and colluding officials should also be not spared and their activities should be investigated and law must take its own course.

A fast track court and quick justice will be a relief to common man on the streets who has come to believe that corruption is rewarded and shamelessness is the only benchmark to be a successful politician. Cutting across the party lines, the Congress and the BJP should improve the moral fabric of Indian politics.

Is Supreme Court soft on people in power?

(FINN) Frontier India News Network — Thu, 09 May 2013 02:06:22 +0000

Ideally Prime Minister Manmohan Singh, Law Minister Ashwini Kumar, CBI Director Ranjit Sinha and Attorney general G E Vahanvati should be in jail now for their manipulation of Coal Scam investigation, contempt of the court and ofcourse betraying the trust of the nation.

Instead, the apex court is asking the same conniving bunch to see if the Central Bureau of Investigation (CBI) can be freed from Government control. The meddling A-G has been tasked to head the decontrol of CBI. The court forgets that the same subversive forces were at helm when the entire country stood up with Anna Hazare over the need for Jan lokpal bill and the need to free CBI from government control.

The judges of Supreme Court are not above suspicion. Like CBI, the appointment of judges too should be freed from government control. In a situation where the president of India is an ex-ruling party member, the scope of manipulation multiplies. It is not a secret that Judges are usually worried about post retirement benefits. Corruption is a folklore among the judges and hobnobbing with fellow former lawyers who are now in politics is not a new phenomenon.

A token 1 minute jail term for Prime Minister, law Minister AG and other related bureaucrat would have sent the message. If thick skin and shamelessness persists (for example P Chidambaram stating in parliament that Section 144 is routine), the term could be increased for suitable time in future.

Is Indian government indirectly responsible for ponzi schemes?

(FINN) Frontier India News Network — Wed, 08 May 2013 02:51:12 +0000

Indian government has announced an inter-ministerial group, IMG, to suggest ways to tackle fraudulent money pooling activities and protect the interest of investors. The move follows rising instances of people being defrauded by ponzi schemes.

It is a common knowledge that when you close or throttle legal avenues, people resort to other ways. Take for instance the prohibition of liquor, guthka (chewable tobacco), hike in gold taxes etc. Here is where the problem starts. It is totally agreeable that liquor and guthka are not comparable to investments, but there are lessons to be learnt. There is no prohibition of manufacture of tobacco or liquor, but there is prohibition is sale and consumption. The trio, former (and current) Finance minister P Chidambaram, former SEBI Chairman CB Bhave and former PFRDA Chairman D. Swarup have killed the entire chain of foot workers in investment distribution chain by claiming investor protection. Mutual Fund Independent Financial Adviser’s, small stock investment advisers have been displaced due to follies of the mentioned three and the distribution has been handed over to institutional channels, which were the prime reason why investors were suffering and continue to suffer. Insurance industry managed to save its foot workers and continues to progress. While two of the mis-managers have retired comfortably, P Chidambaram continues to pretend that he is working hard.

D swarup floated government’s own Ponzi scheme the New Pension Scheme (so what if it is legal, UTI US-64 is not yet forgotten) has no takers in the competitive investment market. Shraddha chit fund has more takers than government’s NPS because there is an incentive to sell and people know that the government will have to eventually return the money to people incase of fraud. Investors went through similar agony during UTI US-64 fall.

Inter-ministerial group should recommend for sacking of P Chidambaram as finance minister as the first step to investor protection. P Chidambaram appears to be biggest Ponzi scheme being played over the economy by UPA. Frontier India has repeatedly maintained that Chidambaram was the cause of down-spiral of economy even before the 2008 world crisis started. Secondly, IMG must restore incentive’s to the foot workers of financial industry and generate self employment. Foot workers should be channelised to more safer investment avenues and compete against ponzi schemes. SEBI, the market watchdog, should be made more transparent as there is a general feeling that it acts on behalf of bigger corporate’s and as per estimates 120,000 grievances are already pending with it with no redressal or regulatory action.