Prime Minister Narendra Modi has told India's civil servants to throw out dusty files, clear clutter from corridors and may even demand that they work a six-day week.The apparatchiks? They are apparently loving it.Within days of taking office, Modi issued 10 administrative commandments. The first: Build Up Confidence in the Bureaucracy."This is unprecedented. Power has been shifted," said Suhaib Ilyasi, editor of Bureaucracy Today, a professional journal."The bureaucrats are feeling happy - even though they will have to work harder," added Ilyasi. In a readers' poll, more than 70 percent backed Modi's shakeup.It's a huge turnaround for a state apparatus that, despite recruiting its top cadres through tough competitive examinations, has been ranked Asia's worst by one political risk consultancy.In a two-pronged attack, Modi has targeted slovenliness in government offices - often grimy places where red spit from chewed betel nut stains walls, toilets are rarely cleaned, and discarded furniture and rotting files clog corridors.In an edict seen by Reuters he demanded "hygiene and cleanliness". Offices must be "cleared and spruced up"; each department should scrap 10 archaic rules; and forms should be no longer than one page.Change has been dramatic at government buildings across the colonial-era heart of New Delhi. Outside the Agriculture Ministry, unused files and old computers were piled up to be taken to a junk yard. Missing ceiling tiles have been replaced in passageways to cover loose cables.The Health Ministry issued a statement saying that 35 steel cabinets, three water coolers and 40 chairs had been cleared from its corridors. The Ministry of Women and Child Development has launched an tender to auction off "obsolete/unusable/unserviceable items".Modi also wants bureaucrats to think creatively and take risks to overcome administrative paralysis that set in over the past decade as the previous government became engulfed in a series of corruption scandals.He has abolished a slew of cabinet committees, concentrated power in the Prime Minister's Office and is expected to overhaul a Soviet-style Planning Commission.Modi's gruelling schedule has ministerial secretaries - the top-ranking civil servants - rushing to keep up.And for some, old habits die hard."I too want to clean my room," said one senior bureaucrat, surveying an office table covered with stacks of files. "But there is a fear I may lose a document which could prove fatal." (Reuters)
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The rupee on Thursday (12 June) depreciated by 9 paise to 59.36 against the dollar in early trade on the Interbank Foreign Exchange market.Dealers said the US dollar strengthened against the rupee in line with its gains against other Asian currencies.However, early gains in stock markets capped rupee's losses against the American currency, they added.The rupee had snapped its two days of losses and edged up by two paise to close at 59.27 against the dollar following late selling of the US currency by exporters Wednesday.Meanwhile, the benchmark BSE index Sensex was up by 55.77 points, or 0.22 per cent, at 25,529.66 in early trade.(PTI)
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Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed optimism on India's growth rate going beyond the 5 per cent mark soon. "The economy has been growing at a flat rate of 5 per cent and hopefully we will see it picking up in the near future," he told PTI on the sidelines of a special talk at Oxford University on 5 May. Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation. "I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India's growth," he added. Rajan was addressing student members of the Oxford Union Society (OUS) on his way to Switzerland, where he has meetings planned with the Bank for International Settlements (BIS) on May 11 and 12. He stressed that his comments to the students were off the record and would not address any political issues as things will be clear only on May 16, when the general election results are announced. Rajan also expressed confidence that whichever government takes over, will lay a clear path to revive growth as he answered a series of questions on the state of the Indian economy from students. The senior economist joined a league of distinguished speakers at the OUS, which has hosted Queen Elizabeth II, the Dalai Lama and Mother Teresa in the past. (PTI)
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The rupee is trading at 60.14/15 after gaining as high as 60.05 in opening deals but still stronger than its close of 60.21/22.Traders, however, say good dollar demand from importers, particularly oil firms, being seen pulling the rupee off highs.The dollar was subdued in Asia, holding largely around where it began this week after an aimless session overnight with holidays in Japan and Britain crimping activity in markets.All Asian currencies stronger versus the dollar.Traders expect the rupee to hold in a 59.90 to 60.30 range during the session with domestic shares being watched for cues on foreign fund flows.(Reuters)
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Hot on the heels of a stiff opposition from allies, the government on Monday (5 May) decided to drop its move to name a judge to head the Commission set up to probe the snooping of a young woman by Gujarat police allegedly at the instance of Chief Minister Narendra Modi. "We have left the decision on appointing a judge to the next government," government sources said a day after two UPA constituents NCP and National Conference openly opposed the move in the "dying days" of UPA-II. A controversy had broken out last week when senior ministers--Kapil Sibal (Law) and Sushilkumar Shinde (Home)-- told the media that a judge would be named into the surveillance, which was dubbed as 'snoopgate', before May 16 when the counting of votes in the Lok Sabha elections will be taken up. The announcement came under severe attack from the BJP which slammed the UPA saying it was practising vendetta out of desperation of defeat in the elections. BJP questioned the move now saying the original decision of the Cabinet was taken in December and they could not decide on a judge all these days. The party also questioned the need for such a probe when the state government itself had ordered a commission of inquiry into the same subject. However, what apparently took the government by surprise was the opposition from its allies. Yesterday, NCP leader Praful Patel had said: "When the results of the Lok Sabha elections are due in two weeks' time, where is the need for such an enquiry." Significantly, NCP chief Sharad Pawar had talked to Prime Minister Manmohan Singh yesterday to convey the party's view in the matter. NCP is the second largest constituent of the Congress-led UPA. Striking a similar note, National Conference leader and Jammu and Kashmir Chief Minister Omar Abdullah said if the decision to appoint a judge could not be taken in December, then it was wrong to appoint a judge five months later. "Was talking to my dad last night and he felt the same way-setting up a commission of inquiry in the dying hours of UPA 2 is just wrong. "If the decision to appoint a commission was taken in Dec it should have been implemented. To appoint a judge 5 months later is wrong," Omar tweeted. It was alleged that illegal surveillance was carried out on a young woman architect in Gujarat in 2009 at the behest of Modi and Amit Shah, who was the Home Minister at that time. Unfazed by the opposition from its two allies, Congress spokesperson and Mahila Congress chief Shoba Oza had said there was "no compromise" on going ahead with the probe as the matter does not involve any political party, but women of the country who constitute half of the population. (Agencies)
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Late on Monday (03 March), India notified an incentive of 3,300 rupees per tonne for production of raw sugar for exports as the world's second biggest producer of the sweetener tries to bring down its stockpile by promoting exports. A cabinet committee on economic affairs last month approved the proposal and mills had been awaiting the notification. Indian mills traditionally produce white sugar, but a global glut has made exports difficult. Exports of raw sugar will eat into the share of top suppliers Brazil and Thailand. The government will provide incentive for export of 4 million tonnes of raw sugar produced in the 2013/14 and 2014/15 sugar marketing years, that run from October to September, the notification said. The incentive of 3,300 rupees will be applicable for exports in February and March. From April onwards, the incentive will be recalculated after every two months depending on the rupee-dollar exchange rate, it said. Mills need to pay incentives to make cane payments to farmers, it added. (Reuters)
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The rupee is trading at 60.04/05 versus its close of 60.16/17 on Friday (May). The unit rose as high as 60.03, its strongest since April 10.All Asian currencies stronger versus the dollar. The index of the dollar against six major currencies currently down 0.06 per cent.The dollar got off to a cautious start on Monday, having staged a curious reversal late last week that saw it erase all of the gains sparked by a strong payrolls report.Traders expect the spot market to hold in a 59.90 to 60.25 range initially and watch local shares for further cues.(Reuters)
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Onno Ruhl, country director, World Bank, speaks to Anjuli Bhargava about how India needs to get its infrastructure act together and not abandon public-private partnershipsWhat would be a good way for India to finance its massive infrastructure needs?The ideal way for India to finance its infrastructure is in any way imaginable. No single source is large enough. If you look at the sources, the first source has to be public finance — the government’s own books, financial institutions and a bit from foreign institutions. It makes sense to focus first on maintenance of infrastructure. There is a lot of infrastructure out there and you can get a lot out of it by maintaining it better. It could be very dangerous to say build new roads but not maintain the roads that are already out there. This is a very costly mistake many governments make because in the end they have to rebuild what they already had. There is no higher return on infrastructure than maintaining what already exists.Actually, that’s not true. Management of infrastructure may be even more crucial. With regard to new investment, the government needs to prioritise investment to areas where the private sector is unlikely to go. Also, as you go towards the trillion-dollar range, it’s quite important for the government to spend whatever money it raises judiciously since what it borrows crowds out private sector borrowings. So, it is important to first manage what you have better, then maintain and then only build.How successful has India been with the public-private partnership (PPP) model?India has been quite successful with PPPs, especially in terms of the volume of money it has managed to attract. It now has a lot of PPPs based not on the underlying projects but the balance sheet of the corporates and the willingness of the banks to finance the corporates. The problem is that the model is limited by the size of the balance sheet of the corporate and how much exposure the banks can have to the same corporate. That limit was reached just when growth was slowing down.The logical next step is to identify which asset classes are more amenable to this kind of financing and then be much more aggressive in creating financing for it. The balance sheet of the corporate has no further leverage. But there is leverage in projects that are really well structured; people will finance them. Then, how well the project is designed and how well risks are assessed become critical. There is a lot more scope in this but it will be in projects which have more revenues. Projects like airports, captive roads, bridges, and so on. There is no denying that PPP in airports has given India far better facilities, but many feel that it was at too high a price...It is possible that some of these airports are somewhat over-dimensioned. In Delhi, for instance, Terminal 1 does not look over-dimensioned but Terminal 3 does. In some other country, they may have built one wing and then another wing and, in that way, kept costs down. That would not be a bad idea. Government officials will say that if they build small, they will be accused of being myopic...We at the World Bank are, in fact, guilty of advocating under-dimensioning as we are so hung up on the economic rate of return. Sometimes we don’t see how dynamic the market can be. In urban areas, right-sizing is difficult as the growth is so fast — it is difficult to imagine under-dimensioning anything. The Indian roads sector is also going through a lot of pain. People are talking of abandoning PPPs in roads altogether. What is your view?Partly, it is the same problem of banks lending based on corporate balance sheets, which can only be leveraged to an extent. Then, in some cases, there were optimistic assumptions about traffic forecasts. So, bidding did become quite aggressive. Also, many construction companies became bidders and it was the construction that they were really after. So, it is a mix of things. I don’t think that justifies abandoning PPPs for roads. India should just learn from it and see which ones work and which ones don’t and based on that, structure projects differently.Hardly any project has worked. Everyone is looking to restructure, renegotiate or get out of PPPs...Globally, close to half the PPPs that are contracted are renegotiated at some stage. It is just exceptionally difficult to figure out revenues and returns for the next 30 years.Renegotiation in India is frowned upon. Since you are re-opening a deal, you could be accused of corruption. It is very tricky. The best solution will be a form of arbitration that is fast and which both sides will actually stick to. The government of India, in fact, has a track record of not sticking to arbitration and then going to the courts, which is not helpful. This requires a change in attitude. It has to become a more business-like relationship. (This story was published in BW | Businessworld Issue Dated 24-03-2014)
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