Enter the Dragon

With Asia already emerging as a global growth engine, in spite of a temporary business blip in both India and China, both the countries have paramount part to play in a new business order in the emerging trade scenario

India’s bilateral trade in 2012-13 was in the region of $791.1 billion comprising $ 300.4 billion worth of exports and imports valued $ 490.7 billion.  India has been able to forge trade relationship with its proximity neighbors especially China.  From a mere $ 2.2 billion in 2000-01, it has swelled to $ 65 billion in 2012-13 and expected to go up to $ 100 billion by 2015.

            Even though the bi-lateral trade between India and UAE is around $ 75.4 billion, while to China it is $ 65.8 billion, the balance of payment in favour of China is $ 38.6 billion meaning the Trade is having leaning in favour of China. Indian exports to China between April-November 2013 touched $9 billion against imports which totaled $ 34.5 billion. During the current fiscal, it is estimated that Trade deficit with China may well cross over $ 40 billion. Only against United States of America we have a favourable Balance of Trade with a surplus of $ 11 billion in the total bi-lateral trade of $61.4 billion. China contributes to 10.6% of India’s total imports of $ 490.7 billion, while it accounts only for 4.5% of India’s total export of $ 300.4 billion during 2012-13.

            “Made in China” goods from power making equipment to small batteries and from laptops to crackers- continue to flood the Indian markets. China has moved from being India’s seventh largest source of Imports a decade ago to becoming its largest source. Machinery and machinery making appliances, chemicals and chemical products, base metals and products account for three-fourth of India’s import from China.

            India’s early years of trading Reforms, India was mainly concentrating on trading with the West. We did not think our neighbours who were in the peripheral proximity could assist us in improving our export capabilities. China has emerged as India’s Second largest trading partner, trailing behind UAE (total bi-lateral trade of $75.4 billion) and ahead of America ($61.4 billion) in 2008. China would lead the list, if one were to include India’s trade with Hongkong. The advantage of the trade between India and China is in China’s favour wherein the Balance of Payments which was less than $ 1 billion in 2000-01 ballooned to $38.64 billion in 2012-13. At that level, China accounted for a fifth of India’s global trade deficit and half, if India were to exclude oil imports.

            If Indian trade has to grow, and achieve trade surplus, then there is a need to explore avenues to bridge the insurmountable trade gap between the two countries.

            India does not produce what China fancies buying. Our exports mainly centre on Base metals and products, Textiles & Products, Mineral products (iron ore). These dominate as our exports to China. India was exporting iron ore to China but iron ore mining has been banned which has put at rest our foreign exchange income from export of iron ore. India exports lower grade iron ore, destined to feed Chinese steel mills, but halt in mining in Goa and Karnataka has dried up that source.

            China was early to adopt an export oriented strategy in accordance with its abundance in labour way back in 1980. India switched from inward oriented controlled regime only in 1990. The late development of an export oriented pro development strategy partially results in India’s relative lower export level volume today.

            China exports more complicated and sophisticated products than India, and high technology products to the rest of the World in terms of value and relative export market share. The situation reflects the importance of processing Trade rather than ordinary trade. China is setting up Ports in Sri Lanka, rail tracks through Myanmar to take back oil, and donating in billions to African nations such as Ethiopia. China’s purpose in taking investments to Ethiopia is to take on US whose investments in Ethiopia is considerable.

            India should adopt a suitable trade Policy to make effective inroads to Chinese markets. India also needs to restructure its export orientation to meet the specific import requirements of China so that it can have wider access to its domestic market. If product restructuring is not possible in the export basket, it has to reduce is pressure on bi-lateral imports so as to normalize its trade balance in the medium term.

            It should not be difficult for India to focus on more access to Chinese market for its value added products including IT enabled service enhancement of procurement of pharmaceuticals.  China has enormous capacity in manufacturing. India has developed enormous capacity in Information Technology. Chinese needs to provide opportunities to India to find more hospitable environment to do more and more business in China.

            India is also looking at attracting large FDI inflows from China. India to open to accommodate a group of Chinese companies to invest and often the products to Indian Domestic market through an operational Chinese Industrial Park to be set in India. Different delegations have scanned different areas identified by India for the Park.

            60,000 MW plus of imported Chinese equipment for the power sector will be available to India to fulfill its power needs. China’s biggest power companies will set up permanent presence in India by opening power equipment Service centers.

            India needs to concentrate on accelerating export of Indian pharmaceutical products, linoleum, plastics, and auto components to China so as to derive better its export increase to China.

            Enhanced fund flows can go a long way in facilitating, promoting, sustaining the economic relations between two of the World’s largest populated nations.

            When India’s trade blooms, the role of Dr Manmohan Singh, the Indian Prime Minister who had for the last one decade scuttled to various countries in pursuit of his trade agenda, enhance trade and business opportunities, played a decisive role to push bi-lateral and multilateral trade, by his exquisite scholarly Trade philosophy which had seen successful fruition. When India’s trade history will be unveiled, the saga would acknowledge his frontal role in leading India to a super economic and business power.

Gold Glitters in India

You cannot find a single household in Kerala which does not possess gold. It has been officially stated that every single marriage in Kerala, the bride will wear at least 400 grams of 24 carat gold, which approximately makes for an addition of 80 tonnes of gold every year only for marriage purposes. In the elite marriage of the upper middle class, the minim gold, the bride will wear on her wedding day would be around  1000 grams or 1 Kg, and there will be atleast 1,00,000 such marriages in Kerala annually.

            Kerala has gold trove. The retail trade in the State is well spread out and has envious patrons and sizable businesses every year.  When the gold coins and jewellery found at Sri Padmanabha Swami Temple at Thiruvanathapuram was stated to be Rs 1.50 lakh Crore, no Keralite seemed to be exited except in the other parts of India. Kerala’s other temples like Sabarimala; Guruvayur is also in possession of a huge gold treasure.

            Kerala’s appetite for gold never severed even if the price of gold rise to monstrous proportions.  Today, in addition to small retail shops which make gold against orders, three is a big wholesale gold selling shops known as Retail brands like Malabar Gold, Alukkas, Kalyan, Prince, Josco, who have imposing colourful collection of branded jewellery for sale.

            Government had to resort to levying customs duty as it found that Gold was an important ingredient of import which created a huge current a/c deficit which occurred due to imports exceeding exports. Gold imports peaked to 162,000 Kg in May 2013. Government raised the Customs duty on imported Gold from 4% to 10% between March 2012 and August 2013.   In addition the Customs prescribed the Gold tariff, the minimum rate at which import of Gold could be allowed to land in the country. But one of the essential stipulations under which one can import gold is conditioned on the premise that every 1 Kg of gold imported, 200 grams should be re-exported in the form of finished jewellery. This is known as 80:20 formula. All these measures resulted in a drastic reduction of improted Gold which fell to 19,300 Kg and the current a/c deficit which was around $ 88 billion (Euro 53 billion), being 4.8% of the GDP to come down to less than $ 50 billion, which was a tad less than 2.5% of the GDP, which was the prescribed comfort level of the Reserve Bank of India.

            Though the import of Gold was curbed officially, the domestic demand remained the same.  According to World Gold Council, the gold demand in India was 975 tonnes in 2013 and is expected to touch 1,000 tonnes by 2014. Of the 975 tonnes of yellow metal required by India, we import around 900 tonnes annually.  In addition, the WGC estimates that smuggling of gold through land, sea, air ports occur which would constitute around 200 tonnes every year. The official estimates put out gold smuggling through Kozhikode and Kochi airport at 90 Kg which were seized between April and October of 2013. More than 100 Kg was smuggled into Chennai through sea in 2013. Gold is also smuggled into India through Nepal and Myanmar by road. Most of the gold from Dubai, Singapore reaches neighbouring countries; thereafter, this reaches India by sea, air, road routes. Officials report that around 700 Kg is smuggled into the country on a day-to-day basis. 871 cases of Gold smuggling worth Rs 99 Cr were filed in 2012,while this fiscal saw 1,131 cases worth Rs 320 Cr (till Dec 2013) being filed. Smuggled Gold valued Rs 2500 million ($41.18 million, Pound 24.75 million) was confiscated at various Ports, and airports in India between April-Dec 2013.

            The country has never seen such a large and sharp increase in contraband gold for two decades. Smugglers indulge in innovative ways to bring the metal. Gold is melted into seed shaped chips, hidden in dates or ground into granules and mixed with other metals to look like iron ore. The metal is converted into gold belt buckles and torch batteries.

            Smuggling is difficult to control. Regular use of the air route, taking advantage of airlines that club international routes with domestic ones using the same flight, coveted smuggling becomes easy. First, carriers smuggle gold from abroad, hide it in the aircraft, while another set of carriers board the same flight on the domestic route and walk away with the Consignment. This is unprecedented and unbelievable. A new industry has emerged. It is dangerous to both the economic and defence point of view. Smuggling rose by a whopping 300% between March 2013 and April 2014.

            In Kerala, the gulf returnee, can bring along with him up to 10 Kgs of gold by paying a nominal duty, if he has worked in abroad for a minimum period of time. Many poor workers, who had lose their job, or have poor pay or debts, become carriers, get a commission any way around Rs 30,000/- to Rs 50,000/- for every Kg of gold plus their air ticket charges are met. A large chunk of gold comes to India through this route and ends up with the jewellery firms. Nearly 50% of the 90 tons of gold annually used by Kerala is crafted as ornaments. New patterns account for around 500 Kgs. This is purchased against re-sale of old jewellery, etc. There are gold coins of 1 Kg, 2 Kg, 4 Kg variety. 10 gm gold coin sells briskly. Those who want to spend above Rs 50,000/- prefer jewellery but those who would like to invest less than that, go for gold coins. 5 Gms gold coins are purchased vividly towards investment by many.

            In all history, only 161,000 tons of the yellow metal has been mined. Between 2000-12, $ 44.5 billion (42% of the non ferrous metals exploration budget was allotted to gold mining). Global exploration expenditure funding to 29% ($ 152 billion), the gold mined is expected to touch 87.5 million ounces by 2014. Brazil, China, Ghana, Indonesia, Mangolia, United States are gold producing countries. South Africa, Australia has reduced production from their mines. China is the largest producer accounting for 16% of global mine supply, approx 13.8 million ounces (2013) and 14.5 million ounces in 2014.

            The traditional goldsmiths and small retail shops have been replaced by affluent branded shops which have a large commercial area with different patterns of gold jewellery neatly displayed. They have decorated show-rooms and beautiful film actresses as their brand ambassadors.  The prices for gold was determined by Kerala Jewellery Federation which announced its daily rate based on London bullion rate, value of the rate adopted by banks for exchange, local availability of Gold etc. But now, the big branded firms have come together under Kerala Gold Board rate. Grey market for retail gold gears its head, a dual pricing system emerges in Kerala with smuggled gold undercutting official pricing. The difference in rates indicates the yawning demand supply gap and bristling competition amongst traders of precious metals. The high end market retailers fixes prices which include around 500/gm as wastage charges which are tantamount to making charges as retail chains have huge overhead expenses while they trade in large volumes.

            Kerala based reputed chains have already have a base in Dubai and other Persian Gulf Countries. Recently two of the biggest groups have set shop in Mumbai knowing fully well that Mumbai market has a full- scape market using 200 tonnes of gold for jewellery.

            You need not try to search for buried gold in the confines of the mountains, as hilariously portrayed by the famous movie ‘Mackenna’s Gold’ which was filmed in the 1960s.  In Kerala, gold glitters in every home, summer or winter. 

Procedural Bottlenecks to international Trade

Trade facilitation is an important area which came for discussion at the recently concluded interministerial multilateral Bali conclave. With tariff rates having fallen after the Uruguay Round, trade and commerce facilitation has become important in the context of dealing with non-tariff barriers. With more countries becoming part of the global supply chain, goods manufactured in a Country are made of components assembled in many countries. Slow and complex procedures complicate supply chain dynamics. The sheer volume of Exim trade forces countries to look at new and newer measures to tap markets, existing and new. Indian bi-lateral trade has grown enormously; from $ 123 billion in 2002-3 to $ 792 billion in 2012-13. Transaction costs hurt small and medium companies which contribute around 40% of India’s total export efforts ($ 125 billion) in value and dominate transaction in volume terms. Government of India constituted a Task force which estimated that the transaction losses amounted to around 8-10% of free-on-board value, which translated to $ 63-79 billion in 2012-13 alone. Global transaction losses are pegged at $ 1.3 trillion/year. India’s freight transport remains heavily reliant on roads- more than 60%, against 22% in China. This makes it more expensive and time consuming, besides being fewer environments friendly. The average turnaround time for a ship at an Indian Port has worsened to 4.2 days from 3.85 days four years ago, while it has improved significantly in China to less than a day from 5.8 days in 2006. As a result, one estimate places our average logistical costs remain high, at around 14% of GDP vis-à-vis less than 7% elsewhere. This not only leads to loss of potential growth opportunities and employment, but also erodes our overall competitiveness globally. Exporters and Importers, from developed and developing countries, face and encounter enormous problems and bottlenecks when they move merchandise across borders. Documentation requirements often lack transparency and are repetitive in many countries including ours being no exception. Despite advancements in information revolution, data flows are a problem, between the various agencies involved in the Export/Import regulation regime. While the Customs daily list is an accurate picture of shipment which corresponds to the entries in the shipping manifest, RBI’s realization of foreign exchange in convertible currency list shows a different realized foreign exchange figure, with the result the export figures between what is released by DGCI&S and RBI often do not tally and picture the actual exports from the Country. Inspite of different agencies like DGFT, DGCIS, Customs, Banks, all have documentation, yet agencies ask exporters to provide information regarding their transactions in paper form. Agreement on Trade Facilitation at Bali, would require a) each member shall promptly publish information on imports and exports; b) establish or maintain one/or more enquiry points to answer reasonable enquiries of Governments, traders and other interested parties; c) provide an appropriate time period to traders to comment on the proposed amendments or introduction of laws relating to movement, release and clearance of goods. Issues connected with Trade facilitation Measures: The revised Kyoto protocol convention has recognized the importance of the use of Risk Management System (RMS) which comprises a series of technical processes meant to identify and quantify individual risks. The RMS has helped in faster customs clearances in India. But the new RMS for imports has increased the percentage of physical examination, which is a great set back. It is suggested that only high risk cargo be put to physical examination to ward inconvenience to users. Another facet of risk management is to do away with obsolete practices. Most cases of duty drawback are held up due to non filling or incorrect filling of Export General Manifest (EGM) by shipping/airlines companies. Shipment of exports takes place after endorsement of the ‘Let Export Order’ by Customs. Less than 0.05% of shipments are withdrawn after the attestation of LEO, and doing so requires complex procedure. Why don’t issue of drawback at the LEO stage itself which will result in quick disbursal, adding to exporter’s liquidity, with negligible apprehension or risk to the exchequer. In the case of application for import authorization, the amount of fees payable is based on the cif value of authorization. This is unreasonable breaches the reasonable fee norm of WTO. Customs advance ruling coverage introduced is discriminatory (introduced in 2004) as only foreign firms who invest in India through JV or wholly owned subsidiaries can avail the facility. Indian companies cannot avail the benefit of advance ruling. The novel Scheme of Authorized Economic Operator (AEO) which provides for accelerated clearance both inside and outside India is yet to take off. Other disadvantages to the Export Sector: Foreign Banks with more than 20 branches in India are not required to lend to the export sector. Foreign Banks are compelled to provide loans to agriculture as priority sector advance but export sector is excluded and is not mandatory. Foreign Banks operating in India expanding their lending to the export sector could offer more sops through their network of branches abroad where export operations take place. Standard Chartered Bank, HSBC, Citibank, all having more than 20 branches in India have to lend 18% of priority sector advances to agriculture and nothing to exports as it is non priority area! This dried up export credit to export oriented units, thereby affecting exports and GDP. It is estimated that a 1% fall in priority sector lending to the export sector will reduce the export GDP by 0.76%. India is facing a rising current a/c deficit and an export led growth strategy could reverse the trend. Mismatch between imports & exports: The volumes of exports from India is still much lower than import in sharp contrast to some Southeast Asian nations and China which run export surpluses. Deficit, being a function of both exports and imports requires multiple changes at a macro level; Rupee has been driven largely by inflation management which has led to a bias against Indian goods; Capital formation has not taken place in the country in areas like capital goods, electronic machinery and technology goods- import of these items have ballooned. With the right incentives and signals, capital formation in these areas can lead to manufacturing investments; The definition of Small & Medium businesses differs from country to country. When you have WTO and Preferential Trade Agreements, a disinvest get created in front of an entrepreneur when his competitor is eligible for concessions when he is twice his size; In India, an entrepreneur has to approach 25 different windows he ends up setting up a Plant while in an overseas location, his counterpart has to approach just 1. Besides the increasing levels of tax incidence, multiplicity of tax incidence at both Union and state levels, the industry also suffers from retrospective effects of tax ruling. Huge amounts of tax revenues remain under dispute- estimated to be at Rs 2.56 lakh Cr in 2011-12. In India, investment decisions are made on tax considerations and not purely on economic concerns, - this is most unfortunate! India, if it needs to gather momentum in trade, need to grow to its potential by cutting red tape, labyrinth of laws, bring down the many windows of regulatory maze, and create one solid door. We compare the achievements of many countries with ours; but seldom, we compare the easiness with which regulatory authorities act in other countries and facilitate results.

Laggard steel production diminishes India's growth

A key reason why India’s economic growth has halved from 9 per cent to 4.5% is due to the fact that core sector is in inertia; in order to curb illegal mining activity, all legitimate mining activity is put on hold necessitating India’s which is the third largest exporter of iron ore, importing iron ore of at least 1 million metric ton per month to meet the demand of steel of which sponge iron is an intermediate product. India’s iron ore was directed at world’s largest consumer China. This action resulted in invaluable foreign exchange loss; second, lower growth in the core sector resulting in infrastructure and manufacturing sector being underdogs in producing growth. The present halt in mining of iron ore and coal, which has world’s biggest reserves, has made India a deficit nation in respect of these two critical raw materials, making us import them at high costs. The non availability of sponge iron has dampened the steel industry, a core sector, which has affected the automobile industry (which is in the manufacturing sector). We need to balance the needs of Production with availability so that there are no constrains in the availability of raw materials which are primarily economic drivers. If we need to go in for higher production, we should not torch the house to kill a rat. Illegality should invite deter punishment while legal acquisition should be allowed to function without any breaks. We have lost valuable time during which time the dented growth levels increased poverty which resulted in checking economic growth. We need legislatures to draft Laws and the Executive to design Policy. Judicial activism should be restricted to look at the imperfections in the Law and not to deter business development caused by delays, which are crucial, detrimental to the Rule of Law and the well being of the Economy. No attempt should be made to hurt growth, while any form of illegality should be dealt with sternly and impartially. It is time, we understood the weaknesses, and put in a system in place where legitimate business activity does not suffer from legal impediments. Otherwise, there will be flight of capital, businesses will migrate, making India’s economy restive. The Supreme Court recently lifted the complete ban and permitted a maximum annual excavation of 20 million MT from Goa mines. This will be a great relief to the beleaguered domestic steel industry. However, the order makes it specific that the iron ore is not exported. Global demand forecast for steel to grow faster by about 3.30 % in 2014. India currently has about 95 million tonnes of installed steel capacity and 13-15 million tonnes is expected to be added within 2014-15. In fiscal 2012-13, growth in domestic steel demand is expected to be around 5.5 percent. Total demand is expected to be around 75 million tonnes, up from 71 million tonnes in 2011-12. In 2013-14, demand is expected to be higher at around seven percent. The demand for steel in India is expected to rise 7 percent in the next financial year beginning April 1 as compared to the sluggish 5.5 percent projected growth in 2012-13, India was expected to emerge as the second largest producer of crude steel in the next two years. With the ongoing Greenfield and brown field expansions India is expected to become the world's second largest producer of crude steel in the next two years. India is currently the world's fourth largest producer of crude steel after China, Japan and the US. Demand expected from investment in both infrastructure and manufacturing sectors. India, Brazil, Russia and MENA to experience faster steel demand growth. But despite the optimism, today’s tough economic conditions have led to a reassessment of risks, strategies and operations at each stage of the steel value chain. “Steel producers should test the vulnerability of their business models and the resilience of their strategies to ensure sustainable growth” according to a Global Steel dealer. According to the government data, steel production is expected to reach 200 million tonnes by 2020 as compared to 71 million tonnes recorded last year. In steel production, India is expected to leave behind USA and Japan in a couple of years. However, it will substantially lag behind China that produces almost 700 million tonnes of steel per year. The government's recent measures to ease infrastructure investment rules and push forward economic reform measures would boost steel demands in India. Formation of the cabinet committee on infrastructure for single window clearance for mega projects will generate activity in the power and roadways sectors, among others. The government has reiterated its commitment towards investment of $1 trillion in infrastructure during the XII Plan. This auger well for the steel industry. The expected lowering of interest rates by RBI in the near future will provide impetus to the manufacturing and consumer durables sectors, among others. The full impact of all these will be felt in 2014-15. The larger story of India on the steel sector remains intact. In fact, India would see the next phase of expansion, which will take our capacity to 50 million tonnes by 2025. In the next 3-4 years, India is set to emerge as the second biggest consumer and producer of steel. SAIL, a unit of the Government of India, has come up with a huge Road map to invest around Rs 72,000 Cr for modernization of its Plans for better capacity utilization. It has also envisaged spending Rs 6,500 Cr on Pollution, abetment and waste energy systems. SAIL has also purchased coal mines in United States, Mozambique. It proposes to set up overseas mining projects with SAIL’s technical knowhow in Afghanistan. All these will result in increased growth of the Navaratna’s growth status. 2014 will change the Steel environment for the better, both in exports and domestic production and consumption as signs of recovery are already evident. There has been a pick-up in exports and some of the products which had experienced a demand slump are experiencing a demand growth. At the global level, 2014 should see recovery of demand in Europe and the U.S. It is projected that world steel consumption could grow at around 3 per cent and India’s at around 5 per cent, signaling a demand recovery. India’s steel production which was around 71million tones in 2012-13 while it was on an average 20 million tones every quarter during the current fiscal. This was due to the fact that the glut in Indian economy which expanded around 5% during the current and last fiscal, accounting for decrease in new investments. Eight core industries (base 2004-5) have a combined weight of 37.90% in the Index of Industrial Production (IIP). The cumulative growth of steel production recorded between April-Feb 2014 was 2.6% while it recorded a significant growth of 4.6% in February 2014 over Feb 2013. The third largest user of the alloy is by steel consumers. The sluggish growth in the automobile sector which waned amid an economic slowdown contributed to a lower consumption of steel in India. The worst is over for the economy as well as the steel sector. The steel sector expansion plans are based on the prospect for the sector in India defined over medium- to long-term. There is little reason to revisit that because of temporary sluggishness in the market. The draft Steel Policy has pegged Country’s steelmaking capacity in the range of 244-281 million tons by 2025-26. The Indian economy holds enough promise for the future. In steel usage, for instance, consumption is only 59 kg per capita per annum as against the world average of 225 kg.. However, while there are signs that the outlook for demand is slowly improving, excess capacity remains the biggest threat to the steel sector. While some capacity is expected to be removed over the next decade, the announced addition of capacity by steelmakers out to 2020 shows that investment is still increasing rapidly. To counteract the increasing levels of investment in steelmaking capacity, it is estimated that about 300 million tons of steelmaking capacity needs to be closed over the next decade for the industry’s profit margin to reach a sustainable level, and raise capacity utilization rate for the sector globally from below 80% to more than 90%. Steelmakers are addressing numerous challenges such as volatility, shifting demand centers, complex supply chains, productivity and cost efficiency. As steelmakers increase their ability to survive in tough times, we will see increased market competition in nearly all products especially as there is a focus shift to high-value, higher margin steel products. Increasing market competition will also result from the flatter marginal cost curve in the sector. With little difference between the positions of steelmakers along the cost curve, small changes in the operating environment, such as increased productivity or changes in cost of capital, can produce swift changes in positions, competitiveness and ultimately survival. Steel companies who monitor and constantly create new sources of value are likely to be more successful. As a highly geared sector, with limited access to capital, there will be increased pressure for 10%–15% of steelmaking capacity to close over the next two to three years. The knock-on effect will be: • An increase in M&A activity as stronger operators acquire their weaker competitors with the aim of rationalizing the sector • Early refinancing as steel companies seek to take advantage of low interest rates ahead of potential rate rises • Portfolio optimization as steelmakers assess their assets for value creation • The complex dilemma of where to allocate capital– whether capital should be invested upstream for raw material security or downstream to capture a greater share of the value chain The speed and degree of changes in the global economy and the increasingly complex interplay of factors influencing a more globally integrated steel business make horizon watching essential. To succeed, steelmakers must determine how to optimize and create a new product mix and decide whether they are prepared to take the plunge to invest in new geographic markets. As demand continues to shift to developing nations, the steel sector is directed toward China, with some focus on Brazil, Russia and India. As Africa becomes increasingly urbanized, it may be that the future scramble for African demand could completely shift the landscape in years to come. When steel sector grows stealthily, India’s core sector’s dynamics will alter the GDP growth to double digits. This will also help in the manufacturing sector performing rather fairly due to the cost of production coming down due to steel prices coming down. Iron ore prices is likely to come down from $ 100/ton to $ 75/ton making a large difference in the pricing of steel. 2014-15 looks buoyant for the Indian steel industry.

Pepper, a by-gone legacy of Kerala

For almost 20 centuries, Kerala’s economy grew at the pace of the growth of its pepper vines. Kerala’s economic history’s rendezvous coincided with the fortunes of Pepper, considered the King of spices. We zealously guarded its growth secret. Every trading power from Europe, west, orient, for the last two thousand years had traded with Kerala. Idukki, Wayanad, had been the bastion of pepper cultivation. Kerala’s monopoly over pepper trade has been taken over by Karnataka. Kerala’s coir industry has conceded space to Tamilnadu, which excels in coir pith, coir mattresses, coir fibre. Tamilnadu accounts for double the productivity for Coconut production per hectare. More than 2500 million Coconut nuts are exported through the Port of Tuticorin while Kerala exports none. Activated Carbon and charcoal have been manufactured in sufficient quantitative for both export and internal consumption while our production is feeble. Why does not Kerala’s planning apparatus try to understand why all these are happening? Along the South West Coast(in Kerala) secluded behind the peaks of the Western Ghats slopes that trap the rain laden monsoon clouds, the wealth of the lush land- pepper- that once attracted traders from different lands, countries, were cultivated. King Solomon’s ships came in 1000 BC. In later times, Greeks, Romans came in their galleys and traders from the court of Tang emperors in 7 AD. Christianity, Islam, Jews and other world religions came to Kerala much before it travelled to Europe. Pepper vines thrive best in the tropics in a moist, hot climate at elevation from 1500 ft mean sea level with an evenly distributed rainfall of about 100 inches. The richest growth is seen on fertile flat or gently sloping land, rich in humus with drainage, light shade, etc. Inevitability of twin monsoons, tropical climate, and Black pepper (pipernigum) world’s most widely used spice is indigenous to Kerala. In Sanskrit, it is called, Pippali most valued for its medicinal properties.. Pepper used to be a store of value or an exclusive prize to be had in Kerala coast. Pepper was Kerala’s gold earner apart from being a predominant crop that raked in high returns to the trader of the commodity. Kerala had sizable area under pepper cultivation. According to Kerala Agricultural University study in 2010, there was depletion of 24% of area under pepper when 2.02 lakh hactres (2002) (70% of India’s total production) dropped to 1.54 lakh hactres between 2001-09. Production dipped by 6,000 tons to 42,000 tons (around 42%) and productivity decrease touched 221 Kg/ha from 301 Kg/ha. Karnataka which had a production of 3264 mt in 2007-8 increased their yield to touch 22,032 mt in 2012-13 when over the same period, Kerala’s pepper production dwindled from 41,952 mt to 23,678 mt. Pepper imports during January-Dec 2013 through Kochi Port touched 12,489 tons while its exports declined by 1.25% to 17,592 mt from 17,814 mt. Pepper, popularly known as “black gold” holds a prime position in the world of spices. From an unenviable leadership position in the cultivation, production and sale of pepper for almost 2,000 years, Kerala stands regaled to the Second position after Karnataka which has taken over as the leading producer and seller of pepper. We do not shed copious tears at our weakness? The point of interest that would invoke is why Kerala would import pepper, when it was, once upon a time, great producer and exporter of pepper. Production of pepper in Kerala is not enough to meet even the internal demand. There are 70 major Pepper export firms in Kerala. 90% of the world spice extraction units are positioned in India of which 75% are located in Kerala. Bulk exporters of pepper are concentrating on extraction, processing, and export of value added pepper products. Value added products from pepper include pepper oil, pepper oleoresins, hydrated green pepper, green pepper in brine, canned green pepper, etc. This offers them better economies of scale, storage of shelf life, prices on volume. They have reduced their dependence on pepper within Kerala as plentiful cheap pepper from Vietnam is plentily available. Kerala based pepper export firms buy from Vietnam, convert pepper powder to oil and Re-export. There is a large demand for use of pepper as food condiment, as a preservative and has excellent medical properties for use in medicinal purposes. Kerala produced all the four varieties of pepper namely, black pepper, white pepper, green pepper and ground pepper. There are various varieties of pepper produced and developed like Karimudra, Kottanandan, Paniyur 1, Paniyur 3, Paniyur 4, Paniyur 5, PLD 2, Subhakara, etc. Today, production of these varieties is becoming subdued. Pepper cultivation is on a never-before decline in Kerala, the land of its origin. Are we witnessing the end of a region's historic role? The most surprising part of this tale of decline and perhaps the end of the region’s historic role is the sense of resignation about it that pervades in the pepper tracts of Idukki and the rest of the Malabar Coast. Idukki is one of the most important centres of cultivation in Kerala along with some other monsoon drenched district stretches such as Waynad. Central Kerala includes part of Idukki. Copious quantities of black beads were produced here. It is necessary to look into the cause of decline here and defined steady growth in Karnataka. Karnataka have surged ahead as a good yield was expected from the Plantations. It is mainly due to the prominent alternative bearing tendency shown by the Panniyur 1 variety which is widely cultivated in Karnataka. Better crop management practices, good tending of the vines and the fact that around 80% of the area under pepper is inter-cropped with coffee, which had augured well for the state to mount a strong challenge in pepper production. Pepper acreage in Karnataka is likely to increase further in line with the rise in coffee plantations. Average yield of pepper vines in Karnataka was five to six times higher when compared to Kerala. All the cultural practices like irrigation, fertilizer application and other operations done in time for coffee plantations are timely irrigated which contribute to higher productivity. Kerala, on the other hand is hit by small and marginal holdings, recurrent wave of pest/disease attacks and presence of unproductive vines which have been responsible for the fall in pepper production. 18 quintals(1800 Kg) pepper was realized from 0.4 ha(1 acre), while today it has shrunk to 10 Kg. Ageing pepper gardens, changing weather patterns, unfriendly market conditions. Kerala pepper farmers already hit by returns are making frantic shift to more remunerative crop especially rubber which is yielding high returns. It is difficult for the present pepper cultivators to shift to warmer regions as they are unfit for pepper cultivation. Pepper is a fragile plant, is vulnerable to variations in weather. It needs rain, scattered at specific intervals, sun and warmth, in almost the same measure. Watering the plants in summer and draining out the water during monsoon is a herculean task. No yield from the plant for the first three years when the crop is most vulnerable and is usually ravaged by severe ailments, when they are expected to start flowering, the wither away. National Horticulture Mission has come to the aid of rejuvenation of pepper vines with a package of Rs 120 Cr with each new vine planted gets a subsidy of Rs 28/- for every vine. The farmers are shifting to cardamom which starts the yield from the first year and is more profitable. An acre of cardamom would give 1000 Kg of output and 1 Kg would fetch between Rs 600-700. While for pepper, an acre would fetch Rs 400 per Kg while with a total productivity of 10 Kg, he would get Rs 4,000/-. Many pepper enclaves are giving way to Rubber plantation as well due to attractive returns. Major spice growing pockets in Waynad like Pulpully, Sultan Bathery are now being converted into Rubber. Karnataka pepper cultivation is flourishing while the farmers of Kerala face a disastrous future in continuing with pepper production due to unremunerative demand and ruinous future in Kerala. Karnataka has overtaken Kerala in terms of production, yield, and increasing acreage. The reason for better production in Vietnam and Karnataka are similar. Fresh soil unlike in the degraded disease prone farms of Kerala. Disease tolerant varieties are used for planting. Mattancherry market, main centre for procurement, processing, export of pepper, ginger and other spices, coir, have huge warehouses on the water front. Pepper arrives in boats, barges to be unloaded and stored have all re-engineered as marts selling huge antiques, handicrafts today. Local traders ensured control over its supply during the heydays of pepper growth. Mattancherry which had a concentration of spice brokers is a dying pepper enclave in Kochi. Helplessness of the traditional players and dramatic way the trade is being hijacked by market players with money power has made pepper uneconomical. National Commodity exchange was inaugurated in 2002. With it, Spices especially pepper business transformed. Gradually trade changed, market changed, demand and supply of pepper trade got concentrated in the hands of a few. This led to the downfall of the pepper business in Kerala. With more and more pepper farmers exposed to the vagaries of the Commodity markets, intense international competition, Kochi lost its luster for pepper market and ended up in small sales. Big inventory has become a thing of the Past, with Mattancherry losing its charm and poise. Climate change, mysteries of trade had gone and the supply chain has been seized by multinationals or big retailers. Several multi-national companies such as Mc Cormack-world’s largest private firm- have a joint venture with a local company AVT christening themselves as AVT-McCormick. There are others like Ned Spices (Netherlands), Olan (Singapore), who target traditionally family owned spices exporting units. Ancient Kerala had been famous for her species and it was the fame as the land of spices that brought Egyptians who used spices for making holy oils, perfumes, to preserve the dead bodies of their Kings and queens through mummifications. In 1500 BC Queen Hateshesput sent 5 ships down the Red Sea to Kerala Coast in quest of spices. Alexandria, the great Egyptian City was the trade emporium of oriental spices. Old Testament refers to spices indigenous to Kerala. King Solomon and Queen Sheba (1015-966 BC) exchanged spices. Arabs, Phoenicians were pioneers in this trade. Herodotus (484-413BC) Greek physician, contemporary of Pliny, claims that spices possed medicinal values. (In his work Materia Medica). With Roman conquest of Egypt, the former continued the trade connections with Kerala for its spices and pepper. When Constantinople became the capital, it became a trading post for pepper. Chinese trade relations with Kerala were long before Greek, Rome. Marco Polo, celebrated traveler, talks in awe of the pepper trade. Early Sangam works contain innumerable references to the Kerala’s famous spices trade. Pliny refers to seeing Kerala ships off German coast. [Courtesy: A Sankara Menon, A Survey of Kerala History, pages 53-61), Logan, Malabar Manual, page 254] Vasco-da-Gama’s discovery of the Sea route to the spice lands of Malabar Coast in 1498 triggered by Europe’s obsession with spices particularly pepper (yellow gold). Gama’s feat had two direct results; one, it gave Portugal a secure monopoly over spice trade; two, it destroyed the economies of Alexandria, Genoa, Venice, who owed their prosperity to this priceless commodity. For the next few centuries, Lisbon was the richest European Port, since it remained the key trading center for pepper and other oriental spices. In 1595, Hotman of Holland made a successful voyage of Indonesia. This was the beginning of the end of Portugal’s monopoly over spice trade. By 1605, the Dutch drove the Portuguese from Moluccas. Holland established a firm grip over the pepper producing centre of Lampung in Sumatra and Banten in Java. Indonesia, Bali, Vietnam, Sri Lanka, is some important pepper cultivated destinations aside from India. When the fortune of the Dutch declined, United States of America entered the scene in 1797. When Jonathan Carnes of Massachusetts entered New York, he carried Sumatra pepper worth $ 100.000. The United States cities of Salem and Boston are prosperous pepper cities. Countries set off several voyages of exploration seeking to find its source and control its supply, and these led to the discovery of a sea route to India from Europe and changed the course of history in many parts of the world. No other commodity was perhaps so romanticized in the ancient world as this. Many maritime explorations, fostering cultural exchanges with ancient civilizations which were so enthralled by the oriental spice. Malabar Coast was the epi centre of trade routes and destination of choice for traders from ancient countries. Today, everything seemed lost to the pepper farmers, and the small and medium farmers who cultivated pepper in Kerala will become extinct, while Karnataka, whose cultivation is in the hands of the big cultivators, large industrial houses who do cultivate pepper as a multi crop along with coffee is bound to succeed. Pepper is directed at big purchases from source markets and not cultivators and big purchases are done through national commodity exchanges seeking pepper instead of from terminal markets of Mattancherry (Kochi) which has resulted in money power overcoming demand and supply economics. It is a pity though this has been happening over the last many years, those vociferous critics who claim to protect the farming community and commodity produce, do nothing but maintain eerie silence. There is no Kerala history without pepper and history will definitely place a wreath on its coffin!

Emerging Kerala need to empower Panchayats

If Kerala has to emerge, it needs to empower Panchayati Raj without spending Rs 1/- from its exchequer? Kerala had emerged as a Trading post, 2000 years ago when Arabs, Egyptians, Mesopotamians, Chinese and many well trenched economies before Christ sent their dhows and boats to this Coast in search of various products like pepper, spices, ginger, herbs, etc paying in gold coins which has been unearthed from time to time from ancient historical ports of the past and the overstretched hinterland. Emerging Kerala inaugurated by Indian Prime Minister on 12 September was to hearld the born again covenant of kerala’s trade Past to a New Age future of industrial economic growth. It appears that the present day bureaucrats, who were in charge of a movement, forgot Kerala’s history when they planned Emerging Kerala which has already emerged, evolved and endured as a State where retail trade was their economy! Kerala is one state where retailing thrives. There are no industries; hence, there is no industrial economy. FACT, Shipyard and Naval Base and Refineries cannot be catalogued as industrial development projects for spin-off economic growth. The infrastructure project, Cochin port which is worth the entire jewellery sold in India for a year or more as its wealth is inexhaustible, remains lusterless as Tuticorin port formed in 1985 has overtaken Cochin port by miles. We have in our possession, the Jewel in the Crown in the form of Cochin port. It is mainly a Port that caters to import rather than to export. Its marketing prowess is limited. Kerala and its hinterland is not export centric. Has Government thought any plans to boost its revenue so that allied services and economy of service sectors will grow in leaps and bounds? We have no Plan at all to develop Cochin port. Every ambition of Sir Robert Bristow, who is the architect of Cochin port(read Cochin Saga), has been thrown to the Vembanad waters, thereby the Queen of the Arabian Sea remains an old damsel having lost her charm The dilapidated and uncared Vathurthy and vendurthy bridges are typical examples of this neglect. The reclamation in Ernakulam which submerged lands to the extent of miles, which raked for GCDA Crores of Rupees made Arabian Sea furious and she in turn grabbed many miles of inland land from Fort Kochi to Veli and much more. Nobody has bothered about the coastal erosion which is systematically taking place submerging precious lands. Sir Robert Bristow had cautioned that any activity on the peripherals of the Cochin bay will cause tidal uprising. But who reads history when everybody wants a role in history making? And along with that the notional loss on submerged land! Kerala is a land of literacy. It has a developmental model not created by any Economist, but emerged on its own. There was no need for any catalyst to design a model, because it was sayambu. Educational institutions and educational facilities provided in the state helped the people to be top brats who with their immaculate knowledge could be the bench mark of perfection. This attitude came up from dependence of these educated people with other people, as no opportunity is available for these great brains here. Keralian is everywhere with his superior intellect, excellent mannerisms, hard work, except in Kerala! Don’t blame Kerala or its education or its Politics for it. It is a trait, a grit that came from nothing from hard work. Treated worse than David Copperfield, these destitute need care, and protection. When no body offered, they became anti thesis of exemplary work. That agitation resulted in Attimari, Nokkukuli, etc. Kerala workers are the best, intelligent, hard working lot. They work as long as they are wanted to finish the work. They work independently. They do not need a supervisor to guide them. Their fertile imagination is better than that of his supervisor. These are hall mark of greatness. But you don’t see them, anywhere in Kerala, and on account of this, there was no economic or industrial development. The money order economy and remittance to Banks made many Managers to get elevated posts. It was not because of their ability. It was because the hard working expatriate send his money to these banks, and they transferred this sum to the neighbouring states of their bank’s branches so that those states prospered in leaps and bounds with kerala remittance money. Every application received from an entrepreneur was consigned to a closed file with the remark” technically not feasible, nor economically viable. Units of similar category have become Non performing Assets. Hence reject”. Period. Now, with the Emerging Kerala revolution already on, industries are pouring into Kerala. It is a good sign. That a Government at least makes a symbolic gesture to publicise its strong points. THE embassies were represented by the respective Ambassadors. There emerged lot of opinions. Comments. Desires. Some people refined their thoughts. Many decided that it was a new dawn. A new era. New Kerala emerging. Banquet of opportunities. Global connect with Kerala. Is Emerging Kerala, a meet designed to engage in business carriage vis-à-vis entre nous? And how does B2G (Business-to-Government) terminology though euphonious fit in inter alia B2B (Business-to-Business) meet? KSIDC says it has received 140 proposals at B2G meet. Investment and starting of industries, bringing capital, introducing new technology etc cannot in any context be defined as Doing Business with Government. What Government is doing is one of its charters- ushering in industrial growth by publicizing Kerala’s assets. It is not Business to Government, as vouched by the KSIDC spokesman! Just as they discuss any issue, the newspaper fraternity found many areas to criticize. The opposition boycotted the function. Many others who always had a dominant role in extolling the ‘doom’ theory just propelled it. There was controversy over Trade mark of the event. Plagiarism. In the summing up Press Conference, CM said one figure while Industries minister gave another figure while the Government Press note gave a third figure. Now, there are many, who are asking this question, “Who choose the event Partners?” Day in and day out, our indigenous Chambers of commerce is breathing fire- suggesting various bits and pieces on industrialization? Why were they ignored? What is CII to Kerala? NASSCOM is a specialized body, whose services we do not require, because we have a country cousin of that organization in our own Techno Park. We are waiting for the arrival of which industries? What is our menu? We can plan for setting up of industries. But that cannot be at the cost of depriving patches of agricultural lands, as commented by one Planning Lord, because Malthusian theory will operate and is already operating in kerala. The Meet discusses projects having colossal costs, educational institutes of excellence, tourism, infrastructure, metro rail etc. When Vallarpadam Transshipment Container terminal is finding it difficult to put its foot properly with asking amendment to Cabbotage Law and with emerging strong competition from Colombo and Singapore, who are strongly entrenched hub Ports, would Vizhigam Transshipment Container make a viable story.? Adventure, eco, holistic sports and parks have economic sparks. But will they sparkle? Kerala’s Roads, especially Ernakulam roads, Broadway which is the narrowest way was a broad road by existing standards then. 70 feet Mahatma Gandhi road otherwise MG Road was another. When Roads with narrow footpath and crowded commercial shops dotting both the sides, where can one acquire land? It is high time, satellite towns, with all pharafernia need to be created where modern gadgets and modern hi-fi form of transportation can be developed so that it will take congestion off present day Ernakulam. Caveat that new buildings can come up only in the satellite town and counter magnet Cities adjoining Ernakulam having the highest facilities. Housing has come up in the most haphazard way, and has been unplanned, the causality being the civic amenities. Electricity and Water, the two essentials planning has gone awry, because of uneven growth. Planning of industrial parks, which are neither Greenfield, nor dedicated, has created denial of the common facilities to the most of the units. KINFRA had a very queer agenda of industrial growth- its planning and location of industries needed a higher proficiency in terms of planning and locational advantages. Setting of the First Apparel Park in Trivandrum instead of at kannur was a Himalayan blunder. It was disclosed that in the Emerging Kerala meet projects worth 10 K Cr was mooted to come up in Ernakulam, Kollam 3K Cr, Trivandrum, Kasargode, Malapuram 2 K Cr and Kozhikode 1 K Crwhile Alapuzha 0.5K Cr), Kottayam (0.12 K Cr), Wayanad(0.15 K Cr), Kannur 0.03 K Cr), while Thrissur, Palakkad, Idukki, Pathanamthitta meager offering. Government talks in terms of Kochi-Palakkad corridor when enough interest has not been shown by the investors in a congruous manner. If this promised investment pours in, it is most welcome as it will re-draw Kerala’s industrial landscape. Kerala’s industrial Policy is staid. It has a discontinuous programme which does not take off from one Policy to the next because of distortion, inequality and proper allocation. Kerala does not have an Export Policy, even though from time of history, Kerala was a mercantile trade spot. The sea trade brought Kerala Gold, and almost all powers of the trading world then had succeeded in developing ties with Kerala. It was a harmonious relationship lasting at least 2500 years. Spices, black pepper, cinnamon, ivory, were all Kerala’s Unique selling Preposiition. The New Age brought afresh wave of European traders for spices, cashew, marine products, coir, coconuts, tea, coffee, etc. Today, a bunch of Commodity Boards, wayward and isolated as they are, have been able to notch up little improvement in trade, commerce, export without the support of the Kerala Government which has no proficiency in exports. There was a body called KERAXIL. It got the boot. KINFRA is supposed to be the nodal agency for ASIDE Scheme, and ask them their contribution to exports? . The Policy makers have not fulfilled the aspirations of the Policy seekers by going for export options of the existing products and going in for new products. Creating the right infrastructure, right climate with expedious clearance. In today’s situation of the manufacture of motor car industry, automobile spareparts industry is growing at around 40%. Replacement Parts market manufacture can be ideal for Kerala. Textiles with a rough Rs 12,000 cr retail, is there not scope for lady tailor’s co-operatives. In Kerala, one does not even manufacture a hand kerchief, Tie, blouse piece on a mass level. Then needless to say, we do not grab the chances that our neighbour states do to attract funds. Let us experiment with each district or Parliamentary constituency taking it as one unit. We have a Member of Parliament. He has a fund to develop his constituency on an annual basis. There are MLAs representing the different bifurcated Constituencies under Parliamentary constituencies. They have been granted funds for development. Let them group as one unit, with District Collector as Convenor and Panchayat President as Joint Convenor. Let this body forget Politics in this body. Decide on the Sector Plans of the Constituency. Alleppey has coir industry; Kannur has Handloom industry; Aroor has fisheries industry; Kollam has Cashew industry; Idukki has tea estates; spices are pre-dominent in Wayanad, Rubber is the forerunner in Kottayam, etc. The MPs and MLAs will ear-mark a percentage of their development quota as allotment to this corpus. With a well written Scheme after discussing with the stake-holders, go to Delhi and apply for Rs 50 Cr Industrial Infrastructure Up gradation Scheme of the Commerce & Industry ministry, Department of Industry. Micro Small and Medium Enterprises has a Scheme known as MSE-Cluster Development programme with Rs 10 Cr as outlay; Ministry of Rural development has also a scheme known as Swarna Jayanthi Grameen Rozgar Yojana (for Rural development). If we plan and design 6 projects under various Schemes, a corpus of Rs 100 Cr will be available, with the state Government investing nothing. No allotment is required for the Panchayat from the state budget. Panchayat need not even such from revenue avenues for doing these projects. Even Waste disposal project can be undertaken. Six projects worth Rs 100 Cr in a constituency, 20 constituencies can project 20x6= 120 projects; 20x100= 2000 Cr (over a dozen year period), employment, each project 100 direct, 100 in-direct. 24,000 direct/indirect employments. Why not we start. Somewhere, something has to begin. We have Rajya Sabha MPs as well including its Dy Chairman and No 2 in the Indian Cabinet from Kerala. They can make Kerala’s dream to emerge in an industrial Kerala. (Kerala’s Panchayathiraj Plan) If we have to emerge, we have to Endeavour, empower, and evolve. Only then, we can merge the present Kerala with a new Kerala and emerge as a Land of new opportunity. Kerala is on the move. -o-o-o-o-o-o-

Miles to Go before We sleep

Congress seems to be like humpty dumpty. They seem to be living in a blunder land. Except that the Opposition is in tethers, there is nothing positive about the UPA Coalition which is slowly drowning. Even a massive transplant cannot save India’s grand old party. The party seems to have lost its glow. Its magic wand. Midas touch. It is groping in the dark, and before long, will end up with past legacy. It is a repeat story of mistakes, one after another, due to lack of sagacity, political maturity, and pragmatic realism and brinkmanship. It has many votaries who imagine them to be its spokesmen. But they babble in lot of drab, littering the political landscape with their blunders and howlers. They speak to bring disgrace to the Organization, they represent. All of them have the foot-in-the-mouth disease. Congress party cannot live without power, is accustomed to pampering, which eludes the party from reflecting on its errors and introspection on its failures. The Party does not have intellectual leaders, men on the hour to catch the finest hour, who can call a Spade a spade, and yet win over people for their honesty, sincerity, and humility. Reasoning is not congressman’s forte. It does not dawn on him that he is slowly ebbing out of the mind of the average Indian. The party is in its stupor. It is the indecision that is the hall mark of its working; but when pilloried and blackmailed, takes high voltage decision which aggravates the problem and eludes the solution for which it was taken with hesitation. This happened in the case of Anna Hazare. In the 2G scam. FDI in Retail. When the Prime minister of India stakes his prestige and signs the Nuclear Deal with America, despite the Left who were staunch supporters of UPA opposing the deal tooth and nail, he underscores the need for nuclear energy to solve India’s perennial power problem. Yet, in another breadth, he is candid that United States is trying to sabotage India’s nuclear programme by funding NGOs to spearhead an anti nuclear programme movement in Tamilnadu. Does it mean, US supports India with supply of nuclear energy equipments but opposes India’s dealing with Russia as the fast breeder reactor is from Russia in Tamilnadu? Why did the protestors wait till end of the construction of the plant to start its stir? Sharad Pawar, talks of farmers’ woes when he argues for continuation of Cotton export shipment. He is categorical that such a move would harm the farmer. Cotton exports have exceeded its target of 84 lakh bales by an additional10 lakh bales. Cotton is already in shortage for conversion into value added products. The same Agricultural Minister is happy to import uncontrolled quantity of edible oil, even though it critically affects the homegrown edible oil, solvent extraction domestic industry and oil seed farmers! Mamata may not be happy with the signing of river water treaty with Bangladesh, but her opposition to the UPA of which she is an inseparable part is astounding. Jayalalita’s rouse against the Centre is political. Modi’s anger comes out of the Congresses blatant accusation that he is a villan instead of a hero. Nitesh Kumar, Biju Panaik, and other states ruled by the Opposition cry hoarse against the centre for lack of patronizing them. There is merit in their accusations. But, all states should be taken as equals, and Centre is nothing but a Union of States. It should blend the resources equally to be divided amongst states so that they will beget revenue to embark on economization. Progress must be uniform and over spreading to the near by state from the metropolis. Hosur takes the advantage of Bangalore, while Kasargod is supported by Mangalore. Noida gets the support of Delhi. Government does not have political colour even though the Party that has gained the majority forms the government. Government policies and party politics are divided by oceans, though the waves may flow to and fro the beaches. Congress needs to re-invent. Instead of being passive to the issues, it must be proactive to draw solutions anticipating issues. Both the ruling dispensation and the Opposition can criticize one proposal or policy, if they can point out a viable alternative proposal. Blind opposition will not do the country any good. Today’s Congress leaders do not see the sunshine of tomorrow, but believes that the dusk has come, to postpone its problem to the next day. This is a wrong attitude, please.