Bogged Down By Numbers

Wanted: Efficiency

Direct Taxes: The Death Of (Some) Taxes

Landlords Homeless On Their Land

Tengpura is only a 10 km drive away from the heart of Srinagar. It’s a place where for generations people who tend farm lands have flocked together. Now this community is in disarray – living in a haphazard tented relief camp that has come up on the banks of a stream, which drowned the area, taking down 35 houses of the 900-odd that exist in the area. There are just 65 tents, no toilets, no water supply, no medical facilities, no beds or tables or chairs.Abdul Rashid, 52, has three sons and 1 daughter in his family of 11 people, including grandchildren. “All the families here are having just one meal a day here,” he informs, “since there is no water to even cook food.” No officials have visited the camp to check the conditions, he claims and complains that the government has also stopped providing the 35 kgs of rice as ration. He adds that the residents of the camp have not had any milk, eggs or meat for the past two weeks.Apart from food supplies, he feels that the camp area needs at least 20 more tents, solar lamps, mobile toilets and medical supplies. People are complaining about itching and fever and there is a fear that there may be an outbreak of disease with the water level remaining stagnant and the stench arising from the increasing litter around the camp.There are 500 children in the camp area, including about 50 newborns and infants, as well as about 40 pregnant women. Since all the schools – government and private – are still under water, the children are traumatized and would need psycho-social support as well as some activities that can occupy them.The residents will need to take shelter till at least Eid, which is still a month away. As these landlords look out at their drowned homes from the embankment along the river, many of them wonder if they will receive any help in their hour of need.(The writer, Devendra Tak, is the National Manager - Media & Communication of Save The Children, India This article was written soon after the Kashmir floods)

Defence Expenditure: The Holy Cow

Subsidies: High Cost, Low Impact

India To Unveil New Monetary Policy Framework By End-Jan

India will unveil a new monetary policy framework by the end of January 2015, a finance ministry official said on Tuesday (7 October), making it easier for the Reserve Bank of India (RBI) to focus on tamping down persistently high inflation.India has long struggled with prices rising at double digit levels annually, causing most distress for the poor.Consumer price inflation slowed to 7.8 per cent in August, making the central bank more confident that a near-term target of 8 per cent inflation in January would be met.An RBI panel this year proposed moving to a medium-term inflation target of 4 per cent, with a band of 2 per cent on either side, when setting monetary policy, sharply below current levels.The recommendation had stirred concern about a potential clash with the traditionally more pro-growth government. Although the RBI is not statutorily independent from the government, it has long enjoyed wide latitude in policy-making.The reforms foresee a panel-based approach that is standard international practice but, as in Britain, would require the RBI to adhere to an inflation target set by the government, known in the jargon as operational independence.Finance Minister Arun Jaitley, in his maiden budget in July, promised to revamp the monetary policy framework to meet the challenge of an increasingly complex economy."It has to be put in place not later than December-January because it is a budget announcement," the official, who asked not to be identified because of the sensitivity of the matter, told reporters."We have completed our internal work. And the (RBI) Governor and the finance secretary had some conversations."The finance ministry and the RBI are soon expected to sign a formal agreement on the issue, the official said.RBI Governor Raghuram Rajan has already said he wanted to bring down consumer price inflation to 8 percent in January 2015 and a more difficult 6 percent the following year, in line with the "glide path" recommended by the central bank panel.However, the official said it was up to the government to set the new inflation target."What is the appropriate inflation target for India, cannot be decided by the RBI. It has to be decided by the government," he said, adding it could consult with parliament and the central bank before setting the target.This effectively means the RBI would not enjoy the independence enjoyed by the US Federal Reserve, which has latitude to set an inflation target as part of a broader legal mandate to achieve full employment and stable prices.Rajan sent a strong signal last week that he would refrain from cutting interest rates until he was confident the inflation target for January 2016 could be met.(Reuters)

Govt Clears 33 Long Pending Defence Projects

Indian Government has cleared 33 pending defence projects, including those of Reliance Aerospace, Bharat Forge, Mahindra Telephonic Integrated Systems and Tata Advanced Materials, a move that is expected to boost advanced manufacturing and attract huge investments.The Licensing Committee, chaired by Secretary in the Department of Industrial Policy and Promotion (DIPP), has cleared these long pending applications last week and granted industrial licences to them, an official statement said.The 33 projects include 14 cases whose applicants have been informed that licences were not required anymore as a vast number of defence items have been delicensed, it added."It has been possible to approve these cases as a consequence of the simplification of FDI policy," the release said, adding that the development would give a big boost to 'Make In India' campaign which seeks to make the country a hub for global manufacturing.The Narendra Modi-led government has liberalised the FDI policy in the defence sector by hiking the cap from 26 per cent to 49 per cent.India imports up to 70 per cent of its military hardware."It is expected that clearance of these 33 applications and the deregulation of defence product list excluding a large number of components from purview of industrial licensing will provide a major impetus to advanced manufacturing in defence sector," the statement said.According to sources, the decision is expected to result in investments of billions of dollars.The Licensing Committee also discussed the possibility of removal of stipulation of annual capacity in the industrial licence as also to permit sale of licensed items to other entities under the control of Home Ministry, state governments, PSUs and other defence licensed companies without requiring approval of the Department of Defence Production."It was agreed that the above stipulation would be relaxed subject to submission of bi-annual returns by the unit. The DIPP would be shortly notifying the above decision by issue of a Press Note," the release said.(PTI)

Power Blues

Even as per capita consumption of electricity has been on the rise, generation has failed to keep pace on account of poor fuel linkagesClick here to view graphicCompiled by P.B. Jayakumar; Graphic by Prashant Chaudhary(This story was published in BW | Businessworld Issue Dated 02-06-2014)

Japanese, American Win 2014 Nobel Prize For Physics

Japanese scientists Isamu Akasaki and Hiroshi Amano and American Shuji Nakamura won the 2014 Nobel prize for Physics for inventing a new energy efficient and environmentally friendly light source, the LED, the award-giving body said on Tuesday."With the advent of LED lamps we now have more long lasting and more efficient alternatives to older light sources," the Royal Swedish Academy of Sciences said in a statement awarding the 8 million Swedish crown ($1.1 million) prize.Physics was the second of this year's crop of Nobels. The prizes were first awarded in 1901 to honour achievements in science, literature and peace in accordance with the will of dynamite inventor and business tycoon Alfred Nobel.(Reuters)