The Reserve Bank of India is likely to cut interest rates for the fourth time this year at a policy review next week, as falling energy prices have cooled inflation and the economy has slowed, a Reuters poll showed. Several government policymakers and business leaders have advocated a cut in interest rates to boost economic growth, but the central bank's priority is to ensure a sustainable reduction in inflation. Forty-five of 51 economists polled this week predicted the repo rate will be cut by 25 basis points to 7.0 percent, a four-year low, at the policy review on September 29. A month back, economists gave only a 60 percent chance of it happening. Since then, consumer inflation sank to a record low of 3.66 percent in August, over two percentage points lower than the central bank's Jan 2016 target, while annual economic growth slowed to 7.0 percent in the quarter ending June. Abhishek Upadhyay, economist at ICICI Securities predicted a cut as recent data suggested inflation would comfortably undershoot a target of 6 percent in January. "But, given the long lags in monetary policy transmission, further accommodation will be contingent on achieving the medium-term inflation target of 5 percent for January 2017," Upadhyay said. Inflation in India has typically stayed stubbornly high, but a steep fall in global commodity and oil prices has brought it under control, even though there are abiding concerns that weak monsoon rains could lead to a spike food prices. Twenty-seven out of 37 of the analysts surveyed said the inflation outlook would determine the RBI's stance. Only seven economists said it would depend on how well commercial banks pass on the benefits of lower rates to their borrowers. Two economists said the likely timing of an expected rise in U.S. interest rates would be crucial to the RBI's decision-making. Slackening global demand and concerns over economic growth abroad, particularly in China, were key reasons the Federal Reserve stood pat this month, but the U.S. central bank is expected to raise rates for the first time in nearly a decade in December. The poll also showed that while the RBI could cut rates on Tuesday, its tone in the policy statement was unlikely to change from the cautious note struck in August, when it spoke of the risk of latent food inflation and a need to anchor medium-term inflation. If the RBI does cut interest rates this month, economists expect another reduction of 25 basis points by the end of the poll horizon in 2016, taking the repo rate to 6.75 percent. The cash reserve ratio, currently at 4.0 percent, is not expected to be changed any time over the next year. Economists were divided on whether the central bank will shift its focus to the medium-term inflation target of 4 percent by March 2018, or stick with the short-term goal of 6 percent by early next year at the coming meeting. (Reuters)
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In an exclusive chat with Sutanu Guru, Debroy argues that these “commentators” are upset because they have lost access and patronage Even for Indians who do not follow politics, Prime Minister Narendra Modi is a controversial personality. On one side are the Modi Bhakts who have raised him to demi God status and brook no criticism of the man or his office. On the other side are Modi baiters who would smell out a fascist conspiracy even if Modi tousles the hair of a small school girl. The war between the two “gangs” has become so unremitting and so vicious that even reasoned and sober commentators have got fed up. One such person is Niti Ayog member Bibek Debroy. As far as Modi baiters are concerned, the economist and analyst Debroy went beyond the pale when he started writing columns a few years ago praising Modi and the work he was doing as the Gujarat Chief Minister. Today, he smiles and shrugs when it’s pointed out that he firmly belongs to the Modi camp. Rather, he launches a characteristically mild, but blistering attack on habitual Modi critics.He says, “These commentators set up their own benchmarks and are now gauging and evaluating. It is these commentators; let’s not take names…several of those commentators wrote columns as late as December 2013 and even March 2014 saying the BJP will never cross 180 seats; saying the NDA will never cross 200 seats. I think these commentators should have an explanations for their readers as how they went so wrong. Obviously these commentators started off with a bias. No one is completely objective. But honesty lies in admitting that…Hey Look, I am not objective…I am a commentator but I am a biased commentator.” Debroy thinks that this unremitting hostility towards Modi is not going to go away very soon. While he is convinced these hostile commentators do not reflect public opinion and perception at large, he has a theory about why these pundits are so hostile towards Modi. Debroy says, “This kind of commentary emanates from a section of people who feels slightly marginalized. This section represents people who frequent the National Capital Region, between Noida on one side and Gurgaon on the other. Mind you, this section is not completely representative-both print and electronic-of the entire media. The vernacular media will give you a slightly different kind of flavor. You see this class of commentators has often been nurtured in the past; has received government patronage. And if you are recipient of government patronage in whatever form; it may not always be pecuniary, for a long duration, then obviously you are not going to like the fact that you no longer have access to that patronage.” For those who are not aware of a bit of titillating history, Bibek Debroy was Director of Rajiv Gandhi Institute of Contemporary Studies in 2005. The institute is an adjunct of Rajiv Gandhi Foundation headed by Congress President Sonia Gandhi. In 2005, the institute published a report that ranked states on economic freedom. Gujarat happened to top the rankings. Ever quick to grab an opportunity, Modi, who was then the chief minister of Gujarat, ensured that his government released a series of ads highlighting this fact. Many in the Congress party were embarrassed and apparently the “fiasco” led Sonia Gandhi to issue a directive that no report be published without the approval of the Executive Committee of the Rajiv Gandhi Foundation. Debroy resigned in July, 2005.We all know what has transpired since then!
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Prime Minister Narendra Modi, who arrived in New York on his second visit to the US, has a "packed schedule" ahead of him, during which he will address world leaders at a landmark UN sustainable development summit and interact with top CEOs and the Indian diaspora in the Silicon Valley. During his stay in the financial capital of the country for next two days, Modi will attend a roundtable on the financial sector, an "important meeting" with FIIs keen to invest in India. He will also headline a roundtable on media and communications hosted by News Corp's Rupert Murdoch and attend a dinner with Fortune 500 company CEOs. He would then fly to the West Coast for his visit to California from September 26-27. "A packed schedule awaits in the BIg Apple. PM @narendramodi arrives in New York on the first part of his US visit," Ministry of External Affairs spokesperson Vikas Swarup tweeted soon after Modi's plane touched down at the JFK International Airport here. The Prime Minister was received at the airport by Indian Ambassador Arun K Singh, India's envoy to the UN Asoke Mukerji, Consul General Dnyaneshwar Mulay and their spouses. Modi later arrived at the Waldorf Astoria hotel here to a grand welcome by his supporters. He will return to New York on September 28 for a bilateral meeting with President Barack Obama as well as to attend a high-level peacekeeping summit at the United Nations. On Friday, he will address global heads of state at the Sustainable Development Summit hosted by UN Secretary General Ban Ki-moon when the new and ambitious post-2015 development agenda will be adopted. India will also host the G-4 summit here on September 26, before Modi leaves for the West Coast for a packed two-day trip during when he will have meetings with Facebook CEO Mark Zuckerberg, Apple CEO Tim Cook and Google's new CEO Sundar Pichai. He will also attend a grand community reception in San Jose. Modi will also meet President Barack Obama on September 28, his third summit meeting with the President in about a year. During his stay in the city, Modi will have meetings with French President Francois Hollande and heads of state from Bhutan, Sweden, Guyana and Cyprus, as well as the heads of state of Brazil, Japan and Germany at the G-4 summit on September 26. Modi is expected to focus on giving a further push to early and urgent reform of the Security Council and to send an "unambiguous message" of "zero tolerance against terrorism". Meanwhile, officials said, Prime Minister Modi will not have a bilateral meeting with his Pakistani counterpart Nawaz Sharif during his current five-day trip to the US. "As of now there is nothing, no bilateral meeting on the schedule," Ministry of External Affairs spokesperson Vikas Swarup told reporters. Modi and Sharif are staying in the same hotel in the city - the iconic Waldorf Astoria. When asked if there will be a "deliberate attempt" to ensure that paths of the two leaders do not cross, Swarup replied in the negative. "There will be no deliberate attempt (at paths not crossing). If a hand shake happens, you will get to see it. If a pull aside happens you will get to see it," he said.
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The Rashtriya Swayamsevak Sangh (RSS) cannot stretch the reservation argument beyond a point, writes Suman K Jha Did RSS chief Mohan Bhagwat recently call for a relook at caste-based reservations? The operative part of Bhagwat’s interview to the editors of Organiser and Panchajanya (RSS organs in English and Hindi) reads: "Reservation for socially backward classes is the right example in this regard. If we would have implemented this policy as envisaged by the Constitution makers instead of doing politics over it, then present situation would not have arrived. Since inception it has been politicised. We believe, form a committee of people genuinely concerned for the interest of the whole nation and committed for social equality, including some representatives from the society, they should decide which categories require reservation and for how long. The non-political committee, like autonomous commissions, should be the implementation authority; political authorities should supervise them for honesty and integrity." This is not really a call for relook at caste-bases reservations, as many have interpreted. But the problem is far more complex. Is the RSS pro-reservation or anti-reservation? Indeed, is the BJP – which considers the RSS as its ideological mentor – pro-reservation or anti-reservation? Those who have followed the RSS will vouch that it doesn’t believe in caste-based discrimination. Indeed, a number of RSS programmes are geared towards promoting social cohesion. Its critics, however, argue that the RSS doesn’t do enough to dismantle the institution of caste itself. By implication, thus, it ends up protecting and promoting Brahminical supremacy – goes the argument. This is the reason why Bihar parties like the RJD and JD (U) have latched on to their interpretations of Bhagwat’s statement, and dared the RSS and the BJP "to end-based caste-based reservations". This, they hope, will help them in rallying the vast numbers of OBC and SC/ST supporters on the election eve in the state. All the RSS chiefs, save for one, have been Brahmins. This reinforces their Brahminical outlook towards life, goes their critics’ argument. So, is the RSS pro or anti caste-based reservations? For the RSS, samrasta (oneness and cohesion) is paramount. It would vigorously promote the disadvantaged. It would promote inter-dining and inter-marriages between various caste groups for a pronounced Hindu identity. If all that happens without reservations, it would welcome it. How would the BJP respond to caste-based quotas? Complex RelationshipThe BJP’s advent, during the Ram Mandir movement, was in a response to the divisiveness that Mandal had unleashed – Mandal vs Kamandal, as it is called. But this is only half the story. The entire BJP upsurge of the early 90s was led by Mandal / OBC leaders. Mandir, in a way, subsumed Mandal. Over a period of time, the BJP came to boast of a galaxy of OBC leaders – Narendra Modi, Kalyan Singh, Shivraj Singh Chouhan, Uma Bharati… the list goes on. So, would the OBC leadership or even SC / ST leadership in the BJP buy the argument that there are more ways of affirmative action other caste-based quotas? Never. This is where there’s a divergence of views between the RSS and the BJP. The RSS cannot afford to lose the huge chunk of OBC support base that was at the forefront of Mandir movement among others. This is a reason why the RSS cannot stretch the reservation argument beyond a point. At a time when Gujarat faces unrest over the Patidars demanding OBC status, and the Rajasthan Government enhances the quantum of caste-based quotas, the RSS-BJP faultline is apparent. This symbiotic yet complex relationship is interesting for another reason. After many years, the RSS and the BJP are being led (in effect) by Mohan Bhagwat and Narendra Modi, who are more of contemporaries. So, Bhagwat won’t dictate terms to Modi. Modi, on the other hand, would give the pride of place to Bhagwat. And it all looks a happy pariwar - until an issue as divisive as caste threatens to rock the relationship. This leaves the question unanswered: Will caste-bases reservations continue in perpetuity? Why have upper caste leaders in Congress like Jitin Prasada and Manish Tewari recently raised upper caste concerns, which they argue, have been compromised by OBC interests? Why are the Gujarat Government and Rajasthan Government – bot ruled by the BJP – now also giving sops to upper castes? How will all this pan out when the latest caste-based census numbers are out? The fact is that the disadvantaged – the SCs, STs, OBCs -- far outnumber the upper castes. This will only get reinforced by the yet-to-be-released caste numbers. Former BSP supremo, the late Kanshi Ram had a simple formula for all this: the riches will be in proportion to the caste group’s numbers. The born-again Mandal votaries are not radicals in the same mould. But it can safely be said that there’s nothing which shows that caste-based reservations can be reversed. Except in a rare case, where some rare statesmanship is displayed. Take for instance, Modi, an OBC leader, who believes in meritocracy, and someone who has never used his caste to move up the ladder – except for a few occasions (in the present Bihar Assembly election, where he is being projected as a great backward leader). What would happen if he, statesmanlike, were to appeal to the well-off among the disadvantaged to give up caste-based privileges so that the less fortunate can get benefitted? (Much like the appeal to give up LPG subsidy which is becoming more of a movement now.) What would happen if he were to involve leaders like Mulayam Singh Yadav and Ram Vilas Paswan in this? Unless a voice comes from within, to have a relook at such privileges, one cannot imagine caste-based quotas going away. Ever.
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Prime Minister Narendra Modi on Wednesday (23 September) sought Ireland's support for India's membership of UN Security council and international export control regimes including NSG during wide ranging talks with his Irish counterpart which also covered global challenges like terror and radicalisation. During his nearly five-hour stopover en-route to the US, Modi, who is the first Indian Prime Minister to visit Ireland in 59 years, held talks with his Irish counterpart Enda Kenny after which he hoped that Ireland's visa policy will be sensitive to the requirements of India's IT firms. "I was pleased to exchange views on a broad range of international challenges, including terrorism, radicalisation and the situation in Europe and Asia," Modi said at a joint media event with Kenny. He also noted that their discussions underlined the importance of closer cooperation between the two countries which share democratic values and are consistent advocates of international peace and stability. Thanking Ireland for its support which was crucial for India-specific exemption from Nuclear Suppliers Group (NSG) in 2008, Modi said,"I have now sought Ireland's support for India's membership of the NSG and other international export control regimes. India's membership will deepen our bilateral cooperation and strengthen international non-proliferation efforts." In this context, he asserted that India has been a leading voice on universal nuclear disarmament since Independence and will remain strongly committed to that goal. "Our credentials and record on non-proliferation are second to none," he said. The Prime Minister also sought Ireland's support for the reforms of the UNSC within a fixed time frame in particular, for successful conclusion of inter-governmental negotiations in the 70th year of the United Nations. "I also sought his support for India's permanent membership of the reformed Security Council," Modi added. On the trade front, he said the bilateral trade and investment ties were growing, despite global and regional uncertainties and the economic partnership can have a strong technology focus information technology, biotechnology and pharmaceuticals, agricultural and clean energy. "I also hope that Ireland's visa policy will be sensitive to the requirements of India's Information Technology firms. I also conveyed our interest in concluding a social security agreement, which will be of great help to professionals from both countries," Modi said.(Agencies)
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China’s economic pain cannot be India’s gain as both economies are not at the same level of development, according to an article in a state-run Chinese daily which said a view that India can take advantage of China’s turmoil may cause “unnecessary jitters” between them. “China’s economic fluctuation is worrying the international community. But India has a different opinion. It seems to have sensed an opportunity to acquire a competitive advantage over China,” the article in Global Times said. “Optimists argue that the Chinese slump in the stock market may steer foreign investments out of China into India, and India can benefit from China’s rising labour costs, due to which international companies will be inclined to shift their production lines from China to India,” said the article titled ‘China’s economic pain can’t be India’s gain’. Such panglossianism (excessive optimism) studded with schadenfreude (pleasure derived out of others troubles) has raised a public debate, after the media hoopla, in the Indian society and academia, the newspaper known for its nationalistic views said. China’s economic restructuring and industrial upgrade have dimmed the dazzling economic data of the past, with foreign funds withdrawing and manufacturing industries shrinking. This change, as for China, is bitter but necessary. China should move toward the upper reaches of the global chain, so its excess capacity could be transferred to other countries which still depend on making massive low value-added products, the article said. “During the process, a volatile stock market, the withdrawal of foreign funds, and the relocation of factories are all contractions before the economy notches up an upgrade,” it said. “The process will be a win-win instead of a ‘lose-win’ for China and India. Since both economies are not at the same level of development, they can achieve a mutually beneficial industrial conjunction. China’s excess capacity, along with the withdrawn international funds from the Chinese market, is what India desires,” it added.“It is true that economic rivalry between India and China is increasing….It is possible that China and India’s economic competition, as the Indian economy develops to a certain point, will be expanded worldwide,” the article said. “But, so far, the Chinese economy shouldn’t be at the priority of India’s concerns, because the economy is still vulnerable due to many problems such as a weak work ethic, poor quality control and the terrible enforcement of business contracts,” the article said. “India is a large economy, but for now, its major competitors do not include China, but economies like Vietnam and the Philippines, which are eager for investments and infrastructure development, many of which are from China. “India should understand that without a proper environment to attract these crucial elements, its ambition to be a world economic engine is merely a dream,” it added.“Even the last quarter’s economic growth rate, which was expected to be 8 per cent, was actually 7 per cent. (Prime Minister Narendra) Modi and his government need a new impetus to brace themselves up in front of the public,” it said.(Agencies)
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Prime Minister Narendra Modi arrived in Dublin on Wednesday (23 September) for his maiden day-long visit to Ireland enroute to the US.He is scheduled for a "tete-a-tete" with Taoiseach (Prime Minister) Enda Kenny at the Government Buildings in Dublin City Centre followed by a working luncheon hosted by Kenny in honour of Modi, the first Indian Premier to visit the country in almost 60 years."We hope to further develop strong people-to-people and economic ties with Ireland in the years to come," Modi had said in a Facebook post in reference to the visit.Relations between India and Ireland date back to independence and in 2013, the total trade in goods and services was pegged at euro 2.48 billion.The key items of Irish export include computer hardware and software, pharmaceuticals and chemicals, food and machinery.Indian exports to Ireland cover textiles, garments and clothing accessories, pharmaceuticals, light engineering goods and chemicals.Major Indian companies with a presence in Ireland include pharma majors like Wockhardt, Sun Pharma and Reliance Genemedix and information technology firms like FirstSource, Tata Consultancy Services (TCS), HCL and Wipro.Following the government-level interactions, the Prime Minister will interact with the Indian community in Ireland at a special event being hosted at Hotel Double Tree Hilton in Dublin.Ireland is home to around 26,000 persons of Indian origin, of which around 17,000 are Indian citizens. The bulk of the community is in the healthcare sector, working as doctors and nurses, with information technology and engineering among some of the other sectors.The country is also fast emerging as a significant destination for Indian students seeking higher education, particularly in post-graduate, doctoral and post-doctoral courses in these particular fields."This is a very historic visit and there are lots of expectations from Mr Modi. We are confident the PM is the right person to trust to increase foreign investments for India," said Lalubhai Parekh, president of the Overseas Friends of BJP (OFBJP).From Dublin, Modi sets off for New York this evening to address a UN Sustainable Development Summit and participate in a summit on peacekeeping being hosted by US President Barack Obama. He then travels on to the West Coast of the US, where he will address the Indian community in the Silicon Valley and hold meetings with top tech CEOs as part of this two-nation, three-city tour which concludes on September 29.The last Indian prime minister to visit Ireland was Jawaharlal Nehru in 1956.There was considerable optimism in the Irish media over Modi's visit, going by the coverage in all the leading dailies."India presents an opportunity to boost our exports to the faster growing parts of the world - but requires the same level of focus and dedication which Ireland has invested in other trading partners," said the 'Irish Independent' in a comment piece titled 'There are 1.27 billion reasons why Indian visit is crucial to Ireland'."The visit is one of major importance and offers an extensive opportunity for Ireland to reposition itself with one of the largest and fastest growing economies globally," echoed the 'Irish Examiner'."Irish officials see Modi's visit - only his third to Europe, after visits last year to France and Germany - as a rare opportunity to raise Ireland's profile in the world's most populous democracy, where Ireland is relatively unknown," added the 'Irish Times'.(PTI)
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In a double blow to farmers in Uttar Pradesh, drought-like situation looms large in a number of districts after untimely heavy rains and hail storm early this year."This year, rainfall has been very low in a number of districts in the state," an agriculture department officer said.He said data was being collected from each of the 75 districts in the state and the exact picture would emerge only after the figures are complied.The government has sought a district-wise report, he said.According to the Met department, deficiency in rain till September 15 in eastern and western UP stood at around 42 and 44 per cent respectively."The problem is that the deficiency has come during September month which is the mid of the kharif crop," he said.He said if scanty rainfall was predicted at the beginning of the Kharif season, then the government would have promoted crops which require less water."In the current case, June and July rainfall was nearly normal, but September was relatively very dry. This will impact the farmers as they have already sown the crop," he said.The officer said scanty rainfall would also impact Rabi crop as soil moisture would be low.Districts which have received less rainfall, include Lucknow, Fatehpur, Kaushambi, Kanpur (Rural), Amethi, Rae Bareli, Ambedkarnagar, Etah, Hathras, Farukkhabad, Rampur, Lalitpur, Mau, Sant Kabirnagar, Unnao, Hamirpur, Deoria, Chitrakoot, Maharajganj, Mainpuri, Auraiyya, Pilibhit, Kanpur city, Mahoba, Agra and Kushinagar.The farmers are worried as they have been already hit by unprecedented rain and hailstorm in February and March this year.Though the state government extended compensation to the farmers in areas where crop was damaged and even relaxed the norms, there were allegations of irregularities in distribution of financial assistance."At some places compensation was given to fictitious beneficiaries, whereas there are examples where farmers were handed cheques of amounts as low as Rs 100," BJP spokesman Vijay Bahadur Pathak claimed.He said even as the spectre of drought looms large, the government seems to be in no mood to act promptly."Drought-like situation prevails in around 40 districts of the state, but the government is yet to send a proposal to the Centre," he said.Pathak said that last time also the proposal was delayed and when fund was released by the Centre, the government failed to distribute it."SP government, which is observing 'Kisan Varsh', is negligent towards the plight of farmers," he alleged.(PTI)
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