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Open Forum
Serial Blasts In Jaipur:RED ALERT ON TERRORISM, by Insaf,14 May 2008 |
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Round The States
New Delhi, 14 May 2008
Serial Blasts In
Jaipur
RED ALERT ON
TERRORISM
By Insaf
Brazen terrorism in Jaipur has blown sky high hopes of peace
and an end to senseless violence from across Pakistan,
despite assurances by the new leadership in Islamabad. The serial blasts on Tuesday evening
in the Pink city have only confirmed the signals sent out by militant attacks two
days earlier in Jammu
and put the nation on alert. Seven blasts within a span of just 20 minutes in
busy marketplaces and near five temples in Jaipur’s congested old city have so
far claimed 60 lives and injured over 150 people. The bombs, of medium
intensity with clock timers, a mixture of RDX and ammonium nitrate, were placed
under bicycles and cars, pointing the needle of suspicion towards three
militant outfits: Pakistan-based Laskhar-e-Toiba (LeT), Bangladesh-based Harkat-ul-Jehad-e-Islami
(HUJI) or Students Islamic Movement of India (SIMI). In addition, not only was
the attack very well coordinated, but the militant outfit ensured world
attention as Jaipur is an international tourist hub.
Regrettably, both the State and the Centre were once again taken
by surprise in Rajasthan, even though security agencies suggest that there was
an alert regarding “most popular tourist destination.” Other than deployment of
the Rapid Action Force (RAF), the Centre has rushed National Security Guards (NSG)
to Jaipur and more BSF and CRPF troops to J&K. The latter follows attack by
militants near the international border at Samba, Jammu, on Sunday killing six persons, and
injuring 15 others. Two militants, suspected to belong to the LeT, were killed
in the fierce encounter in Samba which lasted 13 hours. The attack came close
on the heels of an infiltration bid three days ago, which the BSF claimed to
have foiled. However, that is not the case. The infiltrators obviously were
able to negotiate the fence across the border in J&K and strike prior to
the Amarnath yatra in July. With terror attacks on Jaipur and Jammu,
New Delhi would need to tread cautiously with
the new regime in Pakistan
and focus on critical local support.
* * * *
Disillusionment In
Karnataka
Karnataka elections have failed to generate the expected
enthusiasm among the voters. The past four weeks saw all political parties
actively push for popular involvement. Yet the average voter turnout in the
first phase of the Assembly polls for 89 seats, held on Saturday last, was a
mere 60 per cent, as against 65 per cent recorded in 2004. Worse, the urban
voters, whose numbers and importance has grown with fresh delimitation of
constituencies, appear to be a disillusioned lot vis a vis the politicians, if Bangalore turnout is any
indication. The capital city recorded just 44 per cent voting as against Bangalore rural district,
which polled a record highest of 72.5 per cent. Of the 953 candidates whose
fate was sealed included former chief ministers H D Kumaraswamy, former deputy
CM Siddaramaiah and 10 ex-ministers.
Meanwhile, political parties are not allowing the poor
turnout to dampen their spirits. The BJP, for its part, is already claiming
that it has emerged “as the leader” in the first phase, thanks to an increase
in the urban seats and an urban disenchantment with Deve Gowda’s JD (S). In
fact, an exit poll suggests that the BJP could win 119 to 129 seats, out of a
total of 224 seats, the Congress 60-64 and the JD (S) would suffer a major
setback with just 20 seats. Three other reasons are being cited for the BJP
scoring over its rivals: One, there is widespread sympathy for the way the BJP
was “betrayed” by the Deve Gowda’s JD(S) and done out of power. Two, Mayawati’s
BSP, which has put up 218 candidates, is expected to cut into the Congress’ dalit
vote. Three, price rise, is a major issue which the Congress can’t wish away.
Of course, opinion polls could go completely off the mark, as happened in the
UP and Tamil Nadu Assembly elections.
* * * * *
Shiv Sena Revives
“Mumbai” Agitation
One upmanship between political parties continues to play
havoc in Maharashtra. Even as the Congress-led
government is dragging its feet over Raj Thackeray’s Maharashtra Navnirman Sena’s
(MNS) shameless and unrelenting tirade against the North Indians since February
last, the Shiv Sena is gearing up to revive its 90s agitation to rename Bombay
as Mumbai. On Sunday last, a dozen-odd Shiv Sainiks painted “Mumbai Scottish”
on the wall outside Bombay
Scottish School.
The sainiks also knocked down Bombay Dyeing boards outside the company’s showroom
in Worli. Balasaheb Thackray’s “Samna”, sharply rebuked institutions for still
using Bombay.
“Even when the whole world refers to the city as Mumbai, by using Bombay they are trying to
smite the self respect and dignity of the Maharastrians.” What about the shock
caused to the whole world by the insanity let loose by the Sainiks in India’s financial
capital?
* * *
*
Dalai Lama To Visit
Arunachal
Congress Chief Minister Dorjee Khandu of Arunachal Pradesh deserves
three cheers. He has imaginatively invited Dalai Lama to visit the State and
leave no one in the world, especially China,
in any doubt, that it is an integral part of India. The invite was extended to Tibet’s exiled
spiritual leader by Khandu and his nine-member ministerial delegation on Monday
last during a visit to Dharamshala, the Dalai Lama’s spiritual abode.
Responding to specific media queries, the CM minced no words and said: “We are unhappy over the situation in Tibet.” And as
for his State, he asserted: “China
is making an untenable claim…there is no question of a border dispute… Tawang
is an integral part of India”.
Khandu’s statement is certain to ruffle feathers in Beijing. But it will send a much-needed
message to China,
a message which should have been sternly delivered by none less than Prime
Minister Manmohan Singh himself during his recent visit to the State.
* *
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*
Alarm Bells Over Ganga
Alarm bells are ringing in Allahabad
and Varanasi.
The holy river Ganga may get reduced to a
trickle! This is a feared at the Sangam, following a sharp fall in the water
level of the Ganga, especially downstream from
Narora, Bulandshahr district, Uttar Pradesh. The reasons being cited by
engineers range from mandatory diversion of river water to different sources of
irrigation, to rapid industrialization and increasing levels of pollution to
steep rise in number of water users. The river, which originates from Gangotri
as Bhagirathi, and is joined by Alaknanda at Prayag raj to become Ganga, is considered the lifeline of UP since ancient
times. With water levels going down, its state in Varanasi is no better. However, as summer progresses the mighty
glaciers in Gangotri, in the upper reaches of Himalayas
are likely to start melting, thus replenishing the river level. So, there is
hope. --- INFA
(Copyright,
India News and Feature Alliance)
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Karnata Assembly Poll:MONEYBAGS FOR POLITICAL POWER, by Insaf, 7 May 2008 |
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Round The States
New Delhi, 7 May 2008
Karnata Assembly
Poll
MONEYBAGS FOR
POLITICAL POWER
By Insaf
The forthcoming Assembly poll in Karnataka has thrown up a new
trend in Indian politics, which is at once ugly and dangerous. More and more moneybags
are actively showing interest in what is being called the “business of politics”.
It’s now no longer the industrialists and liquor barons, but real estate moguls
and mine owners eager to control the levers of political power. Worse,
political parties are welcoming them with open arms. A quick glance at some such
candidates is not only revealing but knocks out former Chief Minister H D
Kumaraswamy, worth about Rs 50 crore, as a match. The BJP’s kitty includes G
Prasad Reddy, a real estate magnate with assets worth Rs 313 crore, Hemachnadra
Sagar, Rs 71 crore, Karunakara Reddy and Somashekar Reddy, both Rs 30 crore
each. The Congress has Kupendra Reddy with assets worth Rs 180 crore, Anil H
Lad, Rs 170 crore, H R Gaviappa, a mine owner, Rs 89 crore. Obviously, money is
no constraint. Rs 10 crore in cash was seized in Bellary and sarees worth Rs 20 lakhs in
Davanagere.
Clearly, the Election Commission faces a tough task in
ensuring a free and fair poll. However, it has already embroiled itself over
its code of conduct. Surprisingly, it has asked the BJP to delete all
references to the Centre and the Congress in its three short films spotlighting
rising prices and the agony of the aam
aadmi. This has given the BJP a new plank in addition to the “great
betrayal” by Deve Gowda’s Janata Dal (Secular). The BJP is now understandably
campaigning against the EC playing the censor and violating its constitutional right
of freedom of speech and thereby denying a “legitimate political debate”. On
its part, the Congress is going all out to woo the voters with promises of waiver
of loans, reservation for women, stipend for unemployed youth, Rs 50,000 crore
investment for infrastructure development et all. The voters shall make their
choice with the first phase of polling beginning today. .
* * * *
Deshmukh Gets Reprieve
Meanwhile, the Karnataka poll has given a breather to Maharashtra’s Congress Chief Minister, Vilasrao Deshmukh.
His head is no longer on the chopping block, as was the case last month, when
Sonia Gandhi had sought an assessment of his Government. Instead, he has been
asked by the Congress High Command to campaign for the second phase of polls on
May 22 in Bijapur, Gulbarga and Bidar areas, which have a sizeable Marathi-speaking
population. At home, Deshmukh has to decide what to do with Maharashtra Navnirman
Sena (MNS) Chief Raj Thackeray, who is back with his tirade against north
Indians. Though the Congress-led coalition Government is keen to help build the
MNS as a counter to Bala Saheb’s Shiv Sena, how long can it look the other way?
In a massive rally on Saturday last at Shivaji Park, Mumbai, Raj reiterated
that he would not allow the outsiders to destroy Maharashtra’s culture. He even
dared the Government to arrest him.
* * * *
Centre Seeks Meghalaya’s
Help
Meghalaya has assumed great importance for the UPA
government—at least in one core area of nuclear power. The Centre is running
short of 50 per cent of nuclear fuel, which according to Union Minister of
State for Power Jairam Ramesh could severely affect power projects. The Department
of Atomic Energy (DAE) has estimated that it can extract about 3,75,000 tonnes
of high-grade uranium ore from Domasiat in West Khasi Hills district of
Meghalaya. However, it has stiff opposition from some NGOs and political
parties for the past decade and more. Jairam Ramesh termed on Friday last in
Shillong the shortage as a “life and death issue for India”, and appealed to
the anti-uranium mining lobby to allow the mining of the precious ore. Those
opposed believe that mining of uranium would endanger the locals’ health by exposing
them to radiation. The Prime Minister too has personally conveyed the Centre’s
wish to Meghalaya Chief Minister Donkupar Roy. Much now depends upon Meghalaya
and its people.
* * * *
Manipur Villagers
To Be Armed
Manipur has decided to follow in the footsteps of
Chhattisgarh and Jammu and Kashmir to fight militancy. With the State having
the largest casualties in the troubled North-East, the Okram Ibobi Singh
government has decided to arm inhabitants of two villages—Heirok in Thoubal
district and Lilong Chajing in Imphal West District to protect themselves from
militants. On Friday last, his Cabinet also agreed to train and recruit 500 villagers
as ‘special police officers’ as in militancy-ridden J&K. The SPOs will get
a salary of Rs 3,000 per month and will be armed with .303 rifles. The decision
comes in the wake of the Centre mounting
concern over the deteriorating law and order situation in the State and the villagers’
demand for arms from the Government following the killing of three persons by
militants in March. Manipur’s move is on the lines of the Chhattisgarh Government’s
decision to set up Salwa Judum, a vigilante force, to fight the Naxalites. Ironically,
the Supreme Court recently expressed itself strongly against the concept of
Salwa Judum and even denounced it as violation of human rights. .
* * * *
States Overdrawing
Power
With temperatures already soaring high this summer, the
demand for electricity from various States has increased. Worse, most States
have started resorting to heavy overdrawal from the power grid, ignoring
mandatory safety measures. The Union Power Ministry is concerned. Instead of
load shedding, the States are overdrawing power thus risking a complete power
collapse in the country. In April, the
States which were issued overdrawal warning include, Uttar Pradesh, 137
notices, Rajasthan, 104 such warning, Gujarat 78, Punjab 71 and Haryana 30. The
demand for electricity is learnt to have increased on an average by 12 per cent
and in some cases even by 20 per cent. And, is bound to go up further. The Ministry
has done well in issuing the following advisory to the State governments: give
priority to drinking water supply, public utility and other essential services
if and when supply is less than demand.
* * * *
CBI To Probe Rhino
Poaching
Last week, the Camel made news in more ways than one. This
time around it is the rhinoceros. None less than the Central Bureau of
Investigation (CBI) has been approached by
the Assam Government to look into the recent spate of poaching of rhinos in the
Kaziranga National Park and Orang and Pobitora parks. So far, six rhinos have
been killed this year, while 21 rhinos were poached last year. The tally adds
up to 78 since 2001. The decision to involve the CBI follows allegations of
involvement of international agencies in poaching incidents. The reason? The rhino horn is in big demand as its powder
is widely believed to be an aphrodisiac. It is five times more valuable than
gold and fetches around $ 45,000 per kg in the international market! Kaziranga
is said to have the largest number of rhinos in the world—2,000, about 80 per
cent of the global population! --INFA
(Copyright, India News and Feature
Alliance)
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Agni III Missile:PROPELS INDIA IN BIG LEAGUE, by Radhakrishna Rao, 19 May 2008 |
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Defence
Notes
New
Delhi, 19 May 2008
Agni III Missile
PROPELS INDIA
IN BIG LEAGUE
By Radhakrishna Rao
The smooth and flawless test firing of the
long range nuclear-capable Agni-III missile capable of hitting targets at a
distance of 3,500-km early this month from the Integrated Test range (ITR)on
Wheeler Island on the east coast has
come as a shot in the arm for India’s credible nuclear deterrence capability.
According to sources in the Defence Research and Development Organisation
(DRDO), which designed, developed and tested Agni-III, this firing has cleared
the decks for its production and induction.
However, Agni-III would need to be
subjected to one more flight before it is declared operational. Significantly,
the trade embargo imposed by the US in the wake of Pokhran II in
1998 had impeded the pace of development of these missiles. Washington
exerted pressure on New Delhi to drop the
project as it was a threat to the stability in South Asia
region.
Clearly, Agni-III’s successful test flight
has propelled India into the
select group of countries such as Russia,
US, France and China
which have missiles similar to Agni-III in their arsenal.
Described as a “fire and forget” missile
the Agni-III is capable of computing its own trajectory and is immune to all
the extraneous forces once it is launched. Perhaps the biggest advantage that India
could derive from Agni-III is that this missile has given the country for the
first time a clear cut capability to strike deep into the Chinese territory.
Defence observers say that Agni-III could easily reach cities like Shanghai and Beijing.
As it stands China’s
latest submarine launched ballistic missile JL-2 and its land- based variant
DF-31 have been causes of concern for India’s defence establishment.
Besides, many short range Indian missiles could easily hit urban centres of Pakistan
with ease. Notwithstanding, that Pakistan’s long range Shaheen-II missile could
easily hit many cities in the northern and western parts of India.
There is no gainsaying that Agni-III’s
capability has gone down well with India’s of no-first-use nuclear
policy which holds that ‘nuclear retaliation to a first strike will be massive
and designed to inflict unacceptable damage”. The 50-tonne heavy, 1.7 metre
tall 100% indigenous all-composite Agni-III is an all solid fuel driven
two-stage weapon system. Being rail mobile, it can be launched from any part of
India.
More than 70 Indian industrial units have contributed to its development
vis-à-vis technology, systems and subsystems, components and raw materials.
As it is, Agni-III has benefited from the technological elements
developed for the short range Agni-I already inducted into the Indian army and Agni-II which after completion of user
trials is ready for induction into the services .While Agni-I has a range of 700-kms, Agni-II has a range of 2000-km.
The Agni-III is expected to be ready for test flight early next decade.
Spurred on by the unqualified success of
Agni-III, the DRDO is now preparing the ground to launch a project aimed at
developing longer range Agni-V missile capable of hitting targets at a distance
of 5,000-km. “The development process has already begun and in the next two
years the design should be ready” quipped a senior official of the DRDO.
The Agni-V would derive most of its
sub-systems from Agni-II. But they would need sufficient scaling. Also on the
anvil is a plan to develop Agni-IV as an intermediate step between Agni-III and
Agni-V. Besides, the Agni-V would need to be thoroughly evaluated for severe
thermal environment and other factors while on flight.
Significantly, the long term goal of the
DRDO is to achieve Multiple Independently Retargettable Vehicle (MIRV)
capability .But achieving MIRV capability could pose a serious technological
challenge in terms of the size and weight of the warheads. The DRDO has also a
plan to develop a hypersonic missile, the technology developed for which could
have civilian spin offs in the form of a low cost satellite launch vehicle and
an ultra fast civilian aircraft.
Asserted another DRDO official, “We have
the capability to go in for even longer range missiles but it is for the
political leadership to take a decision.” As things stand now, developing the
ICBMs (Inter Continental Ballistic Missiles) capable of hitting targets beyond
the range of 10,000-kms is well within the country’s capability. India’s advances in launch vehicle
technology as highlighted by the success in pulling off multiple launches and
the ground covered in developing heavy lift-off vehicles could smoothen the
country’s plan to develop a range of ICBMs in the near future.
Yet another feather in the cap of DRDO is
the progress, though modest, achieved in giving a shape to India’s nuclear capable submarine
launched ballistic missile (SLBM). As envisaged, the Indian SLBM whose initial
range would be around 750-km, is expected to be ready by early next decade when
India’s
own nuclear submarine would hit the blue oceans.
Meanwhile, the DRDO is hopeful of testing
its EXO Interceptor which forms a part of its BMD (Ballistic Missile Defence)
system in July. This would be followed by another test involving both the EXO
and ENDO interceptors in tandem in Sept-October. As it is, the Indian BMD
system has gone through two successful test flights in Nov 2006 and Dec
2007. In sum, as India’s missile programme
progresses from strength to strength, an old adage needs to be recalled: If you are strong in your defence, your
adversary will think twice before any misadventure. ---INFA
(Copyright,
India News and Feature Alliance)
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Inflation Still Untamed:RETHINK POLICY PEGGING RUPEE TO DOLLAR, by Dr. Vinod Mehta,21 May 2008 |
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ECONOMIC HIGHLIGHTS
New Delhi, 21 May 2008
Inflation Still Untamed
RETHINK POLICY PEGGING RUPEE TO DOLLAR
By Dr. Vinod Mehta
Former Dir
(Research) ICSSR
The rate of inflation after having dipped to below 4
per cent surpassed the 5 per cent level in March
and now for the week ending 3 May it moved to 7.83 per cent, touching a
44-month high. The measures taken so far to control
inflation have not yielded any results.
The Reserve Bank of India has raised the credit reserve
ratio twice while the Finance Minister has reduced the import duties as well as
imposed/increased the export duties on a few essential commodities. It is also persuading
the steel and cement manufacturers not to increase their prices. In spite of positive sounds that inflation
will be controlled nothing is happening.
And now the Prime Minister has stated that it will
come down by September this year. But fears are being expressed in certain
quarters that the rate of inflation may become double digit in a few
months. The reason is that earlier the
inflation was mainly due to a mismatch in the domestic demand and supply and
now an international dimension has been added to it. Namely, the rising oil
prices, shrinking supply of essential commodities internationally and the
weakening of the US dollar are showing their impact.
In fact, inflation has suddenly spurted in many countries of the world
and in some developing countries like Afghanistan,
Bangladesh, Pakistan, Indonesia,
Philippines,
Tajikistan etc. Besides, the increase in the prices of essential commodities
have been very high. With food and fuel prices soaring, inflation topped 8 per
cent in the Philippines and
9 per cent in Indonesia.
Even Japan,
which suffered nearly a decade of deflation, last month reported that inflation
hit a decade-high. Oil rich countries of West Asia too like Egypt and Jordan are unable to explain the
unprecedented increase in the prices of essential commodities to their
citizens.
Apart from India
other BRIC (Brazil-Russia-India-China) countries are also facing the menace of
inflation. Compared to Russia, India
and China the rate of
inflation in Brazil
is less at 4.8 per cent but it is increasing.
However, the rate of inflation in Russia
is above 7 per cent and in China
about 8.5 per cent, way above India.
China's
recent bout of inflation has been triggered mainly by soaring food prices. The
overall food prices have increased by 22.1 per cent in April from a year
earlier, “while pork, the favorite meat for the vast majority of Chinese,
became 68.3 per cent more expensive over the same period.”
Inflation is, thus, a worldwide phenomenon today but
for India the increase in prices have come at a time when there has been some
slowdown in the growth of the domestic manufacturing sector and the fear of
worldwide recession especially in the US which may affect our exports and
indirectly affect the growth of the economy in general.
This is indeed, a very difficult situation for the Government
in power especially when the elections are due both in the States as well as at
the Centre. If the choice is between
growth and inflation, it makes sense to choose growth and ignore inflation,
which can be tackled through short term measures like imports in weeks or
months.
But if we lose the growth momentum it will take years
to get back that momentum. It has taken
almost 50 years to raise the growth rate by nearly three times from almost
three per cent (the so called Hindu rate of growth) to nine per cent today. But
with the inflation rising above 7 per cent there is a likelyhood that some growth will be sacrificed to tame
inflation since untamed inflation is a politically hot potato.
It is common knowledge that inflation strains family budgets
with more or less fixed incomes and erodes their real incomes. While higher
growth impacts the whole economy bringing in more revenues to the Government
and leads to creation of more productive assets and more jobs. An ideal situation is one where the growth
rate is higher and the rate of inflation is modest. In real life we seldom get such ideal
situations. The Government’s of the day
have no option but to manage the situations with the options available to them
at that particular point of time.
But as every one knows there is no magic wand to
control or bring down the rate of inflation overnight as the people would like
it to be. There is always a time lag. Steps
taken now will have the desired effect a month, two months or even three to
four months later. And in certain
situations it may take a few years as in the case of agro-based essential
commodities.
The main reason for the increase in the price level
is the mismatch between the demand and supply of essential commodities. This
mismatch has not occurred overnight but has been gradually developing for the
past few years. For instance, the
acreage under food crops has been shrinking, productivity of agricultural crops
is stagnant and there is still no freer movement of agricultural products
within the country.
In short, nothing has been done to increase the
supply of essential commodities. And the supplies cannot be increased overnight
to control inflation. The Government
will have to take certain decisions now so that the prices of essential
commodities remain relatively stable over a longer period of time.
This calls for large investments in the agricultural
sector and rural infrastructure. This
also calls for raising the agricultural productivity by providing farmers with
improved seeds and other inputs, timely credit, chain of cold storages, market
information and so on. A large number of
volumes have been written on this aspect in the past 50 years but the need is
to implement them. Can one ask if there
is any blue print for this?
Another reason for inflation in India is that the
rupee is pegged to the US dollar and the dollar’s weakening worsens it. To quote from a US financial paper : “The weakening
U.S. dollar is another source. Not only is it pushing up prices of American
imports, it is transmitting inflation to the dozens of economies that link
their currencies to the U.S. dollar, from Saudi
Arabia to Hong Kong to Mongolia. Because of their currency
pegs, these economies are forced to track Fed rate cuts even if they aren't
facing recession.
“Isn't that strange that in every country
pegged to our dollar, when the Fed floods the system with
liquidity, every country tied
to us gets more inflation, but we do not? Almost ironic isn't it, but I trust
the Government reports --- and if they say no inflation --- then no inflation
it is!
“In
China
we are now seeing nearly 9 per cent inflation. In India, white collar wage inflation
is sometimes in the 20%+ range. Most of South America has Central Banks raising
rates to try to fight inflation, as is Australia. It appears America, Canada,
and Antarctica are immune to the scourge - no
inflation zones!”
It is high time that we rethink our policy of pegging the rupee to the US
dollar. There have been suggestions that
we should link the rupee to a basket of currencies say, the Euro, Japanese Yen
and US dollar. But for that we will have
to make changes in the RBI rules. May be
the RBI can enlighten us on this? --- INFA
(Copyright India News & Feature Alliance)
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Uncompetitive Economy:WHO PAYS FOR EFFICIENCY & CORRUPTION?, by Dr. Vinod Mehta,15 May 2008 |
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Economic Highlights
New Delhi, 15 May 2008
Uncompetitive Economy
WHO PAYS FOR EFFICIENCY &
CORRUPTION?
By Dr. Vinod Mehta
(Former Director, Research, ICSSR)
As
the economists say, nothing comes free in this world. One has to pay for it. But when a consumer pays for something he or
she gets in return something tangible like bread or butter or intangible like
the services of a lawyer or a doctor.
This is the positive aspect.
There
is also a negative aspect to costs in the sense that a consumer gets nothing
tangible or intangible in return but increased cost. This negative aspect of cost is reflected in
higher prices, higher taxes etc., which in turn are nothing but costs of
inefficiency and corruption at various levels inside and outside the
government, within the organizations as also within the system itself.
So
far, no systematic study has been done to quantify the costs the individual or
for that matter the country as a whole pays for the inefficiency and corruption. However, one can bet that if any such study
were to be done based on an appropriate methodology, the costs of inefficiency
and corruption would run into thousands of crores of rupees every year.
Let
us take steel for instance. India is
rich in iron ore and many countries especially Japan buys large quantities of
iron ore from India to turn it into steel and then make products like car,
tractors etc. out of them. It pays the
freight charges for importing Indian iron ore as also pays relatively much
higher wages to its steel workers, but still Japan
is able to sell steel at a relatively competitive price than India. Why is it so?
In
fact, public sector steel units are over-manned-- where one worker can do the job there are
three or four employed. The Indian
labour laws are such that it becomes very difficult to lay off an inefficient
worker or to re-deploy him elsewhere.
Those who are familiar with the recruitment practices of workers and
employees for public sector undertakings (PSUs) would know that most of its
workers and employees are recruited not on the basis of their skills or
qualifications but on recommendations of politicians.
Similarly,
the top positions are also filled not on the basis of the qualification and the
expertise of the person concerned, but on some other considerations like the
political propinquity of the concerned person or bureaucratic lobby etc.
The
result is higher administered prices and higher taxes. In a competitive environment most of these PSUs
would have been closed down by now or taken over by healthier units. Since this
is not possible in the existing circumstances, therefore, to keep the steel
mills running or for that matter any PSU running, the government raises the
prices to cover up a part of its losses, increases taxes to cover another part
of the costs and raises the countervailing duty on imported steel to protect
the steel industry.
These
relatively higher prices of steel and higher taxes are in fact, the costs of
inefficiency, which the Indian consumer as well the Indian nation as a whole is
forced to pay. (The government at the moment is asking the steel manufacturers
to keep the prices down to help it tackle current level of inflation. It does
not affect the larger argument that the steel prices are still administered to
a very large extent).
In
a chain reaction, with the price of steel being high, the cost of construction
becomes high for the consumer, the cost of motor vehicle is high and we are
unable to sell our steel goods abroad. So as a nation we also lose on
exports.
This
is true of many of our industries. In the airlines business, we employ about
five to 10 persons on a job, which is normally handled by just one person
abroad. In the hotel industry too, we
employ more people than what are actually required. This is also true of government employment.
It
needs to be noted that this was the state of affairs in the erstwhile USSR and for
this reason its industry was totally inefficient and uncompetitive in the world
market. Even today, 18 years after the breakdown of the USSR and the introduction
of the market economy, the Russian industry is still uncompetitive. It is true
that over- manning provides employment to more people, but in the long run it
turns those surplus people into parasites. The over-manning of business and
industry only signifies a stagnant economy--an economy which is not
growing.
A
growing economy would generate more employment, which would be more
productive. This is what is lacking in
this country. While no new jobs are being created, more and more people are
being employed on same jobs. All our
attempts in the past, to raise the level of investment either through the
domestic or foreign investment route have not succeeded.
Likewise,
there is a cost to be paid for corruption, which is again reflected in higher
prices and higher taxation. Over the years, corruption has entered our body
politic to the extent that it has become somewhat a second nature with a
majority of our people. We seldom pause
to think that this personal gain can have bad effects on the economy.
Take
the case of electricity. It has become
normal practice to steal electricity in connivance with the electricity board
officials; an employee gets monetary benefit, while the electric distribution
unit does not recover the cost of its operations. In many cases the bills remain unpaid for
months together. Once the State Electricity Board runs into losses the
situation is retrieved only by either raising the electricity charges or other
taxes and this cycle carries on for years together. Electricity charges have been raised umpteen
times, but units never come out of losses!
In
fact, corruption is visible in almost every deal. If somebody wants his tender to be accepted
he has to pay a bribe. The loan cannot
be raised from a bank without greasing the palm of the concerned officer. You
cannot get your child admitted in a particular school or a course without
paying some kind of consideration, money euphemistically called ‘donation’ or ‘capitation
fee’. The inconvenient files can be made
to disappear from offices by paying a bribe.
The engineers will not pass the bills of the contractors unless they pay
them a bribe. It is so much so that the contractors now keep the necessary
margin for a bribe while submitting their tenders.
All
those who have paid bribes and all the organizations which have lost money due
to bribes automatically will resort to other means to recover their
monies. Those who have paid bribes would
recover them by taking bribes or by doing other illegal acts like concealing
their income etc. Organizations will jack up the prices of their products while
the government would raise the administered prices as well as taxes.
The
country must get out of this vicious circle of inefficiency and corruption at
the earliest. It is for the people to
understand this vicious circle and come out openly against this inefficiency
and corruption. As the citizens should ask political leaders what they have done
in these past five decades to root out corruption and improve the efficiency in
the country!--INFA
(Copyright, India News and Feature Alliance)
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More...
-
Increasing Food Demand:MALNUTRITION & & FAMINE SCARE, by Dhurjati Mukherjee, 16 May 2008
-
Police Reforms In India:PLEASE REVIEW JUDGMENT, by Ashok Kapur, IAS (Retd), 13 May 2008
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Police Reforms In India:A CURE WORSE THAN THE DISEASE, by Ashok Kapur, IAS (Retd),12 May 2008
-
Tamil Nadu Shows the Way:TRANSGENDERS NOW NO LONGER OUTCAST, by Dr. Syed Ali Mujtaba,9 May 2008
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