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.

Kingfisher:Govt's dog in the manger policy

Is the inactiveness of the Government to save the private airline industry due to the fact that in a free trade regime nothing is free? If you want to do business, it is your business, and government has no business to bail you out, if you have problems. What would happen to its impact on the economy, if kingfisher airlines were to shut stop. Airline group chief and billionaire business tycoon, Vijay Mallya is struggling to keep India’s Kingfisher Airlines afloat due to surging fuel costs and fuel taxes. In the past week, the Bangalore-based carrier has cancelled 200 flights in hopes to reduce its debt from Rs. 6,500 crore (about $1.4 billion) to Rs. 3,000 crore ($600 million). Kingfisher has suffered a loss of Rs.1027 crores ($200 million) in the past fiscal year, adding to its mounting debt. Malaya’s friends in the Industry especially a top industrialist like Rahul Bajaj, wants nothing of it saying the vows of the industrialists are his own, and there can be no intervention. People of the ilk like Rahul Bajaj were the beneficiaries of the license era when they capitalized on the monopoly of two wheeler segment. When globalization set in, Hamara Bajaj became one among the two wheeler segment. What are CII and FICCI doing to assist the friendly airline to come out of the woods? There are captains in the capitalist industries who control India’s industrial economy? They do not bother about the loss of jobs, money going bad as investment would go bad, banks’ debt would remain unpaid, goods and services will suffer, the airline’s closure will affect the flight schedules. There will be overall economic effect which would be disastrous start to the XII Five Year Plan. Aviation sector will remain in chaos. With the national airline, Indian, already in the red, the future of the aviation industry looks to be grim and dim. Kingfisher’s plea for government help and the ailing state of India’s ailing aviation industry has raised some questions why the government still has not lifted its ban on foreign airline investment in India. While recent reports suggest that the government has been considering a plan to open up the aviation market, at present foreign institutional investors are allowed to acquire up to 49% in Indian carriers but foreign airlines are banned from investing directly or indirectly in domestic carriers. Kingfisher has been in favor of lifting the foreign investment ban, while Jet Airways has opposed to it. According to the Associated Chambers of Commerce and Industry of India, allowing foreign direct investment is key in helping the aviation sector, along with cutting fuel taxes and lowering airport charges. With the exception of IndiGo, India airline carriers on the whole seems to be taking a hit. Jet Airways reported a loss of $158 million for the quarter ending September. The airline attributed the loss to high fuel and currency devaluation. Spice Jet also reported a Rs 240 crore (approx $48 million) net loss. The Centre for Asia Pacific Aviation (CAPA) forecasts that the industry needs about $2.5 billion of new cash to maintain operations, including $1.32 billion for the state-owned Air India airlines. Now the airline is seeking a government bailout while members on the Kingfisher board are meeting to explore ways out of their financial turmoil, including a proposal to sell more than half its property. Opposition parties in India, including the Bharatiya Janata Party (BJP), strongly oppose a government bailout package to help the cash-strapped airline. Government is unable to do anything to save Kingfisher. In the meanwhile, Income Tax department, Service Tax department, etc have applied Garnishee orders in the a/cs of Kingfisher in various Banks. Salaries for staff have not been paid. Oil Companies are demanding payment of their dues threatening to stop supplies. The airports are demanding payment of landing and take off charges. In the meanwhile, consortium of Banks has declared Kingfishers’ accounts as Non Performing Assets. Kingfisher is choked from all sides, and government’s punitive action is going to dry out the little Oxygen that is available with the airline to come out of the woods. Government escorted Nedungadi Bank out of death by amalgamating it with Punjab national Bank. Any asset if it is turning useless, we need to provide bail-outs and not take punitive action to scuttle its hold ups even in precarious situation. One suggestion is offered. We have Foreign Exchange Reserves to the tune of $ 300 billion. Half of it is invested in debt bonds and government backed securities begetting meager returns. Why not keep a reserve of $ 30 billion, and provide it on demand to the Indian industry instead of asking them to seek External Commercial Borrowings. Money from this Revolving fund can be lent to commercial enterprises like Kingfisher to bail it out, and in the process of doing so, these idle funds would redeem better interests advantageous to the Indian economy. This does not require any political debate, but the amount of good it can do cannot be quantified. But, who would come to the rescue of Kingfisher in its dire need? The “King of Good Times” is facing some grim times at the moment. But the King in the form of Government is sitting in stoic silence thanks to the precarious political situation of their making?

Can Corruption be prevented?

Did you forget Anna Hazare and his fight against corruption which brought fresh air in the polluted political stage of India? Every Political party in India saw to it that the movement died prematurely otherwise, it would grow to monstrous proportions to devour them. But the movement is still evergreen as the People’s tirade against the corrupt polity! Hon’ble Shri Santhosh Hegde, Retd Judge of the Supreme Court, eminent jurist, a leading Advocate, erudite scholar of law, and son of Shri K S Hegde, who was one of the Judges superseded by Mrs Indira Gandhi on 25 April 1973 and appointed Hon’ble Shri Ajit Nath Rai, as Chief Justice of India and Shri KS Hedge (father) chose to resign. He became Speaker of the Lok Sabha during 1977-80. Shri Santhosh Hegde was the Lokayukta of Karnataka who took up some sensational corruption cases. His Report about sequence of corrupt cases included that of Shri B S Yedurappa, who was the then Chief Minister of Karnataka. In a massive report submitted to Governor H R Bharadwaj, Shri Santhosh Hegde, named the BSY as a guilty party having favoured South West Mining Ltd for which he is supposed to have made pecuniary gain through the Education Trust founded by his immediate family and selling own lands to the mining company far higher than the market price. This, the Lokayukta concluded prima facie proved the nexus, and quid pro quo for granting the mining deal in lieu of payment of money which has been received by the kith and kin of the former Chief Minister. This, the Hon’ be Lokayuta concluded was tantamount to misuse of office, hence recommended criminal proceedings against Yedurappa under the Prevention of Coruption Act. The Governor, to whom the Report was submitted, gave permission for prosecution of BSY under PCAct. Shri Yedurappa, filed a writ in the High Court stating that the First Information Report filed against him in the Lokayukta Court was faulty, as it was based on Governor’s sanction which was linked to the Lokayukta’s Report submitted to the Governor by Hon’ble Shri Santhosh Hegde, a legal luminary, who had gone elaborately on the sum and substance of the allegation and collected materials which should have had legal scrutiny. The High Court quashed the FIR, and held the sanction of Governor untenable and unlawful and the report which failed to seek the response of the then Chief Minister Shri Yedurappa. Hence it is tainted with constitutional inadequacy, and principles of natural justice were a casualty. Justice Santhosh Hegde should have known better; a report of Lokayukta, judicial body, should have no bias. Yet, the Report was quashed. Now, the question, the civil society raised on the corruption at high places, who is responsible for action being vitiated? Another Retired Judge of the Supreme Court, Fathima Beevi, appointed Smt Jayalalitha as Chief Minister of Tamilnadu when she was the Governor. Supreme Court held that her decision to appoint Smt Jayalalitha did not have constitutional sanction. Now, did the former Judges of the Supreme Court err? All noise about the involvement of B S Yedurappa in the mining scam based on the report of Lokayukta now remains quashed by the High Court of Karnataka which has appeal jurisdiction. Now, will an appeal be preferred in the Supreme Court? The Karnataka State Government may not do so. Can some private individual under the Public Interest Litigation route file a petition in the Supreme Court against the divisional bench’s order exonerating Yedurappa on technical grounds? Can one assume locus standii as a Public citizen, as did Shri V S Achuthanadan in the Balakrishna Pillai case when state failed to prefer an appeal against the High Court order exonerating him, and the Supreme Court held that VS Achuthanadan had the locus standii to file the appeal as a citizen!

Can Coir industry stand on its own feet?

Has Coir industry found its feet? Coir industry is Kerala’s poor man’s industry, a legacy of the British, where women outnumbered men in doing jobs that saw Coconut fibre turn into lively brown, which was taunted as God’s Own Country’s traditional industry. The first spinning wheel perfected by the Englishmen, started defibering coconut fibres to coir yarn in 1857 when, elsewhere, Indian soldiers started showing dissidence to their superiors and this unrest was called the First War of Indian independence. Down the line after 150 years, is the Coir industry standing on its firm feet? If we compare the Coir manufacturing industry of 2005, and the Coir industry of now (in 2012), what has been the growth accomplished by the manufacturing sector? Inclusive growth and livelihood betterment of its workers? Government’s direct support to the industry? Market growth- domestic and export? The entire industry was posting a growth of around Rs 350 Cr by way of growth in 2005. The total quantity of coir used was around 1, 25,000 metric tones. The industry has never modernized, stayed put with its obsolete machinery, fresh capital investment was practically nil, and the workforce was around 4.5 lakh, who claimed that they were getting meager wages, and saw no future in the industry hence migrated to greener pastures. Coir industry came out with a Millennium Goal Plan to take the golden fibre of God’s Own country, to new and fresh destinations through avalanche of Schemes. State Bank of India came out with a project Uptech Scheme, which was to provide a cluster model growth. Central Government also sanctioned Rs 50 Cr (in the ratio: Rs 43.5Cr:Rs10Cr) Industrial Infrastructure Up-gradation Scheme. This Scheme has been in operation for the last decade or so. In addition, SFURTI Scheme was introduced to upgrade 4 Clusters in Kerala. None of this had any impact and the severity of the manufacturing problems continued, and the industry was no where, clueless on the directions to take, indecisive on its future and directionless growth. In the meantime, around 2 lakh workers deserted the industry to take to other occupations like the Construction industry which provided them 2 times the wages they were getting in Coir industry. One superficial change occurred in the industrial landscape. Defibering of Coir was done at Pollachi and other Tamilnadu centers. Coir fibre, found surprise buyers from China, demanding around 1 lakh tonnes for which they were willing to give higher prices. Between April-Dec 2011, Rs 89.74 Cr (equivalent to 64,000 tonnes) found way as exports which were more than 25% of the total quantity of Coir end products produced in quantity by us. The handloom mat and tufted mat which had rubber content, saw export value as Rs 254.28 Cr (handloom mat), Rs 253.51 cr(tufted mat), a growth of 9.16% in quantity and 26.67% in value of the total Coir exports in respect of handloom mat and 10.38% quantity and 29.69% value in terms of tufted mats(of Coir exports). Rubber has an enlarged ratio in the end Coir products. Does it augur well for the Coir industry? Coir pith accounted for 49.17% of the total quantity of 2, 95,000 tonnes while its value on total Coir exports was 18.37% of Rs 804.05 Cr. (Direction of Exports) 25.46% of 2,95,000 tones of Coir products were directed at United states, 15.40% to China, 35.74% to Europe. In 2005, Coir industry was getting a Duty Entitlement Pass Book Credit of 1%. Today, they are getting 3.5% Duty drawback for handloom and tufted mats, 5% for Coconut mats(Chapter 57 of the ITC HS Code) under Special Focus product Scheme, Table 2 of Appendix 37D of HBP, Vol I, bonus of 2%, transport allowance of 7.5% from handloom export promotion council. A Scheme to develop the downtrodden labour known as REMOTE was envisaged with an outlay of Rs 243 Cr, with government assistance around Rs 99 Cr. People tend to create a frame around the industry saying that the industry is in doldrums. For every dollar earned, the industry gets 17.5 cents for handloom mats and 10.5 cents for tufted mats by way of inducements. In addition, interest subvention in the Pre-shipment and post shipment Credit, liberal credit under Packaging Credit under Foreign Currency, plethora of Schemes under ECGC, foreign trade participation substantially subsidized are other Schemes that stand to benefit the Coir industry. Kerala has sufficient Coconut trees, and Coconut fibre is available, but why the industry, industrial associations, bodies connected with the state/central government failed to introduce large defibering units in Kerala. It is a mystery, and not a pro -active policy for an industry which has set its eyes on 15% growth in exports. Regarding the quality of Coir fibre, why the Research Organizations in the Coir industry which is spending Crores of Rupees of Tax payers money, has not come out with viable options. Why are new machinery manufacturers not creating new innovative machines, when Jute which is having similar production methodology has introduced them? Tangible investment, higher productivity, new capacities, new innovations, R&D etc will be seen deployed in a growing industry. If Coir industry needs to remain traditional with low economies of scale, then laggard results will affect the industry. Futuristic growth, in these days of competition, must be visible at ground zero. Along with high turnover exporters, and merchant exporters who depend upon the spare capacity of industry, there are medium scale and small scale manufacturers, whose obsolete machinery and environment, and poor returns drive them out of the industry. What seems to be the future in store for them? The labourers per se. Do they get decent wages? Any measurement of growth of any industry depends upon the payment earned by the labourers and their positive attitude to the fortunes of their companies. Are their wages competitive? Is it with the times? What about the Coir markets. Does it have a domestic market? Up-country market? Has market push or market pull ever evolved. Does the industry have a marketing plan to take on the market of contemporary times? What is the contribution of the Coir ministry at the States, this being a subject in the concurrent list and the administrative ministry which administers the commodity board. Has it ever evaluated the entire industry with its futuristic growth projections, skilled labour, R&D growth, and compared the same with the picture of competitive markets? With all the support, benign assistance granted, the industry has not made any notable growth. There may be serious problems at the threshold which may need analysis. If Coir industry needs to become stable, there is a new need for re-oriented approach.