Open Forum

New Delhi, 12 January 2011

New Year 2011

SAVE INDIA FROM CORRUPTION

BY Dr. P. K. Vasudeva

Year-end reviews tend to look back with anger or nostalgia at the twelve months gone by. Gazing back at 2010 one cannot help feeling frustrated and disappointed at the scandalous affairs of the Government while experiencing a warm glow at the wondrous achievements of the Indian economy in a world that is still sobbing over the lingering consequences of the 2008 downturn. The general unease at the fractured state of our polity and society behind a resurgent India is palpable.

On 1 January 2011 morning Indians woke to a dawn deeply crimson-coloured with volcanoes that rocked Parliament and the Government. Thanks to a number of financial scams and ironically involving the very icons of India's politicians and super babus.

The Commonwealth Games, the 2G spectrum allocations and Kargil martyr’s Adarsh Housing Society were emblematic of India's capacity to showcase its administrative skills and professional management. All have scarred not just the system of governance but also civil society by their corrupt practices. In its wake they have shattered not only Indians but also the rest of the world.

In 2011, Indians will have to recognise the hollow premise that corruption and poverty decrease with free-market economics; policy-makers will have to reckon with the shallowness of their rhetoric that promised transparency in governance and deliverance from poverty and gave neither.

As the UPA Government and the Opposition awake to a new decade, both will have to understand how dangerously close they have come to turning public accountability for elected representatives into sound bytes on the 24-hour electronic media, targets for immediate rage or approbation of drawing room audiences rather than the studied evaluation of an articulate citizenry.

Even the Prime Minster, who had comforted the nation with words that inflation would fall by December last, has almost trivialised policy-making on contentious and complex issues such as food inflation (18.34%) with its trajectory wildly off-the-mark forecasts.

So when New Delhi woke up to a chill and foggy New Year 2011, introspection on how perilously close India has come to turning its most potent weapon, the rhetoric of optimism, into its own over-dosed parody would be a good start. Then it might want to get down to cleaning its stables of accumulated dirt and incompetence, and its backyard of delayed core projects all of which give the lie to its self-furnished image of an efficient and transparent Government.

The statistical figures of growth/decline in 2010 shows the six “core” infrastructure industries have registered a 2.3 per cent annual growth in November, compared with the 5.9 per cent for the same month 2009. The lower growth has been mainly on account of cement and refined petroleum products, which have both registered a year-on-year production decline of 11.6 per cent and 3.7 per cent respectively against corresponding increases of 9 per cent and 4.8 per cent for November 2009.

Even coal and finished steel have registered lower growth rates of 0.7 per cent and 4.4 per cent respectively in November 2010 relative to their November 2009 levels of 4.7 per cent and 11.7 per cent, while crude oil (17 per cent versus 1.6 per cent) and electricity (3.3 per cent versus 3.1 per cent) have posted higher growth.

For the April-November 2010-11 period, the growth rate for the six industries – having a combined weight of 26.7 per cent in the official index of industrial production ---- worked out to 5 per cent, which was better than the 4.5 per cent year-on-year increase during the corresponding eight months of 2009-10.

During April-November in 2010, the country generated 5,30,411.3 million units of electricity, marking a 4.5 per cent jump over the 5,07,476.4 million units in the first eight months of 2009-10. The corresponding cumulative output numbers were 319.80 million tonnes (mt) and 317.80 mt for coal (up 0.6 per cent); 137.43 mt and 131.97 mt (up 4.1 per cent) for cement; 24.812 mt and 22.25 mt (up 11.5 per cent) for crude petroleum; 99.07 mt and 98.296 mt (up 0.8 per cent) for refined petro-products; and 39.611 mt and 37.068 mt (up 6.9 per cent) for finished steel.

India's external debt stood at $295.8 billion as of September-end 2010, representing an increase of 12.8 per cent over the level of $262.3 billion at end-March 2010. The long-term debt increased by 9.5 per cent to $229.8 billion, while the short-term debt showed an increase of 25.8 per cent to $66 billion, said a Finance Ministry statement.

Of the total increase of $33.5 billion in external debt at end-September 2010, the valuation effect arising from depreciation of the US dollar against major international currencies accounted for $6.3 billion (18.8 per cent). Excluding the valuation effect, the increase in external debt would have been $27.2 billion.

Short-term debt accounted for 22.3 per cent of India's total external debt while the rest 77.7 per cent was long-term debt. Component-wise, the share of commercial borrowings stood highest at 27.8 per cent followed by NRI deposits (16.9 per cent) and multilateral debt (15.8 per cent).

External debt increased by 4.1 per cent in the first quarter of this year over the level recorded as at the end of March 2010. The debt went up by $10.8 billion during the quarter ending June and stood at $273.1 billion on account of significant rise in short-term trade credits, commercial borrowings and multi-lateral government borrowings, according to the RBI data.

The increase in debt worked out to $12.1 billion by excluding the valuation effects due to the appreciation of the US dollar against other major international currencies and the Indian rupee over the quarter. The foreign exchange reserves provided a cover of 101 per cent to the external debt stock as compared with 106.4 per cent as at the end of March. T

The share of commercial borrowings was at 27.3 per cent, followed by short-term debt (21.2 per cent), NRI deposits (17.6 per cent) and multilateral debt (16.4 per cent). The share of short-term debt, based on residual maturity, was 42.5 per cent of the total external debt.

The long-term debt at $215.2 billion and short-term debt at $57.8 billion accounted for 78.8 per cent and 21.2 per cent, respectively, of the total external debt. The ratio of short-term debt to foreign exchange reserves increased to 21 per cent from 18.8 per cent as at the end of March 2010.

The US dollar-denominated debt continued to be the largest component with a share of 59.8 per cent in the total external debt. The share of Indian rupee was 13.2 per cent, followed by Japanese yen (11.5 per cent), SDR (10 per cent) and Euro (3.3 per cent).

The scams, corruption at almost all levels, double digit inflation, and fiscal deficit are worrisome indications of 2010 which need to be eradicated with full force available with the Government to save India for becoming the most corrupt country of the world. ---- INFA

(Copyright, India News and Feature Alliance)