Threshold 2014- Stepping in terpidation

The weather  in the Capital at the threshold of a new year,is reflective of the state of the nation's economy,uncomfortably cold. The employment scenario is still keeping us away from a technical stagflation,even as the other two criteria, slow growth and  rapidly rising consumer prices are attempting to push us into one.A sub 5 % GDP ,with WPI  peaking to 7.52 % and CPI to 11.24 % and  record low of the rupee in 2013,can perhaps help to show 2014 in some better light.That said the monetary policy continues to be wielded to fight inflation at the cost of growth.More worrying  should be the changing political dispensation that  is patently averse to fiscal conservatism .Delhi  has just led the way with  "  utility empowerment "  and  the Centre likewise  going soft yesterday on gas cylinder subsidy. The MSP on grains is already at record levels and the States do so on cane procurement. Inclusive social schemes that do not raise productivity has been a bane for quite a while.In the face of all this the fiscal deficit will be adrift .Crude prices that are benign today may not be so down the road. The resultant spike in Inflation  will put growth recovery in greater straits to tweak the  CAD and a plunge of the rupee.Till the 2014 elections the nation is destined to travel its perilous economic path. What results the elections throw up is another saga in itself
ET Jan 1 http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETM/2014/01/01&PageLabel=12&EntityId=A
FE Jan 2
http://epaper.financialexpress.com/207112/Indian-Express/02-January-2014#page/6/3

Of egos and alter-egos

 Blogs did not shape the destiny of AAP or its leader.Anna's year of glory was not heralded by his blogs.Of late front end political leaders are increasingly taking recourse to being seen through their alter-ego that pens  erudite blogs to avoid being seen in public voicing issues  that have  strong political undercurrents ,an Agony Aunt coloumn of sorts !.

      In the adjacent apartment in Kaushambi, there are no police cordons as hitherto, escorting VIPs and their egos into the CM's house with the Aam Admi  imperiously held at bay as in the days of the Raj, then and now. In fact no VIP  wants to be spotted in the vicinity. If there is an ego that is palpable,it is seen on the faces of a milling  hoi-polloi at the gate, that joyfully claims credit for anointing its man.An ego that so far had been  the prerogative of the elect, is now appropriated by the elector and perhaps rightfully so.

A politician's blog

.Of late Blogs have  turned into notes to the Agony Aunt.Modi's musings stops far short of even a leader's genuine introspection, let alone the angst of a politician.So long there was no Kejriwal on the Indian political scene such blogs might have passed muster.A tone of plain speak has now been set in public discourse and any politician of substance is expected to enunciate his views in simple, if unpalatable terms. Blogs did not shape the destiny of AAP or its leader.Anna's year of glory was not heralded by blogs.If Modi or for that matter any other  leader  wishes to bare himself he should have faith both in himself and  the people, to do so in public meetings.There are many such occasions ahead till 2014 and one would expect  front end political leaders to desist from taking recourse to being seen through their alter-ego that pens  blogs,  pristine and erudite as a salve for an immediate ill or a political end.

Published Mail Today Dec 30

http://epaper.mailtoday.in/epaperhome.aspx?issue=30122013

Global trade ,the measure of universal growth

In the recent WTO meet at Bali ,we   " won ' a reprieve of  four years during which countries like India will not be sued under the WTO rules for breaching the food subsidy limit.From the GATT era of battling tariff barriers in International Trade,the universal perception across trading nations has remained strait jacketed. Post  2008 global downturn ,disagreements still continue in the WTO,over several key areas including agriculture subsidies .The developed countries give $400 billion of subsidies every year to farmers but are still considered compliant with WTO rules because they opt for income support to their farmers instead of providing subsidies like India.In these skirmishes the larger battle for expanded wold trade is lost. Trade has sadly not received the seriousness it increasingly deserves, though   global  economic adversity is rewriting our economic expertise  in the realm of monetary and fiscal policies. While individual nations would gladly tap into the advantages provided by  globalisation ,they show reluctance to share common problems of a unified economy.Global trade has steadily weakened,  almost  stagnant in the last six months.  In good times, the trade generated by a country’s growth bolsters global growth. But, in times of crisis, the trade spillovers have the opposite effect. Considered not as worrisome as  financial disruptions, trade imbalances do profoundly influence global growth prospects. We ought to realise  that policy errors and delays, both  in collective fora and  individual countries,   cause substantive  setbacks  to every economy. As growths decline it is  followed by a decline in trade  thus  setting up a vicious cycle that skews progressive  discussions in trade fora,that sees deterrence as an operative part of trade  regulation.  To the extent that it could find some minimal agreement , Bali has not been a disappointment .The next Doha round  must bring in positive  fillip to the larger cause of a stepped up  global trade.
   ( Published Fin .Express Dec 27 )
http://epaper.financialexpress.com/204079/Indian-Express/27-December-2013#page/6/3

Privileged Profligacy

Polls are won on emotive bread and butter issues in urban megaliths ,as is the case of Delhi.This time it was on the promises of heavy undercutting of electricity charges and on supply of minimum assured free water to a city that has no sources of its own with its one life line Yamuna serving  more as a  drain than a fresh water medium. If the former is predicated on a possible fiscal misadventure, the later is on a growing curse of nature on tis entire region and its neighbour hood, for which there are no plans either by the Capital city or by  the Centre.Add to this the pains of heavy urbanisation.The population density in the emerging city-hubs force a vertical mode of living that  geometrically  pushes  up costs ;land, water and sewerage, transport logistics ,health and hygiene.Cost of running a city can not be left to the largess of a benign government of the day ,that would itself, in time. go under debt.
Civic bodies must learn to be self-sufficient.Cost of maintaining civic
services/ utilities in most municipalities are not matched by civic revenue and in cases like Mumbai despite an ample  treasury , professional management is wanting  as does accountability.The great city of Detroit that had the highest per capita income in the US  went bankrupt on fiscal profligacy.If civic services and utilities are to be subsidised by state largesse as a principle of popular governance, Delhi too would go the way of Detroit.But being the nation's Capital with the Centre sanguinely expected to bridge the fiscal gap endlessly,  are we not perpetuating a  exclusive and elitist  dispensation of welfare of a privileged city at the larger cost of an entire nation.

      ( Published ET;Dec 26 )
http://epaper.timesofindia.com/Default/Client.asp?Daily=ETM&showST=true&Enter=true&Skin=ETNEW
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETM/2013/12/26&PageLabel=1         (Published Deccan Herald :Dec 26 )
http://www.deccanheraldepaper.com/svww_zoomart.php?Artname=20131226aG010100004&ileft=239&itop=1134&zoomRatio=137&AN=20131226aG010100004
 ( Published in Pioneer Dec 28 )

Infy,due for vision upgrade

Fortunes of Indian IT industry today, are  linked to the ebb and tide  of a globalised economy.  That said, Infosys is beset with internal  problems.Clearly its top management is out of sync both amongst themselves  and the external environment. That Narayana Murthy has not been able to stem the elevated levels of senior staff attrition  points to the intensity of the problem .
       Infy the Brand had outgrown its current levels of  performance and  perhaps its vision is urgently due for an upgrade.  In the  decade after Murthy 's departure ,Infosys like other IT majors, has acquired more  evolved and innovative set of hands.Today's IT is not even about  tomorrow but the day after and beyond . The job profile of a CEO of Infy can only  fit a younger and energetic path finder  to enthuse and  pilot  these young men and women, through newer challenges even as  he keeps the company growth and profits, in sight.The ideal fit would be for  one who would  get the mix right, most of the  time.
      (Published BS Dec25 )
http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20131225aT012101002&ileft=582&itop=1034&zoomRatio=146&AN=20131225aT012101002

AAP serves a stronger brew

.There is a basic difference in the Tea Party of the US and the Aam Admi movement in India.The former is driven by undiluted extreme right wing ethos and the latter more akin to rudimentary flavour of a French revolution against an entrenched power elite.So long we had an vociferous Left with reasonable clout, the common man's angst had been finding a regular outlet..But then three decades of indifferent governance by the CPI(M)  and a faltering economy had to find a renewed expression, set the stage for a political moulding of sorts.. Anna happened to stir the embers and AAP was able to reignite a dormant fire.The Tea party has a limited target of ending the Obama liberalism and would fade away once that is achieved one way or the other. The AAP is still less of a party than a movement. If other parties disregard its possible political import,the AAP will gather steam as a regular party for a long innings.

Mission impossible-May be not

The Congress VP is on a desperate mission of resurrecting his party fortunes. An economist PM heading the UPA-I had largely delivered .There were dissensions within but the need to prove a point to the ousted NDA  kept the egos in Congress in check. The  unexpected windfall of 206 seats for Congress in  2009 proved to be the end of these inhibitions within and it was every one to himself thereafter ,and that included the allies.The liberal and inclusive policies put in motion by the Congress had shut out the regular Left which was packed off into political hibernation.  Pranab Da was  not exactly a success as the FM and then,the scams going viral. That the  UPA-II  could last for two long years since late 2011,ought to be ranked as a political miracle that a coalition government alone can perform ,of course aided by a sulking BJP, itself in  disarray.It is because of all this that  Rahul Gandhi  does not need much nerve today on the threshold of national elections,to  castigate corruption !. That too when AAP is already center stage and thriving , on the issue. To cap all this the Congress goes to town  supporting the AAP government in Delhi. Rahul and his party may well hit it off ,given that  BJP  is left with the  singleton Modi card, that is not infallible to rapid paced changes in the national scene leading up to 2014 ,as also its own uncertain internal equations .
  (Published Fin Exp Dec 30 )
http://epaper.financialexpress.com/205522/Indian-Express/30-December-2013#page/6/3

AAP,a party run by Apps

 The AAP seems to have upended traditional politics in this country, perhaps for the better. Kejriwal is the political alter ego of Anna, born out of the same cauldron of change.Anna got his Lokpal in 46 years and AAP its mammoth foothold in 46 weeks,Test match and a T -20 if you like but cricket nevertheless. AAP is a product of the current generation that loves and lives by Apps on a 24/7 basis.No wonder the instant and  interactive feedback mode of operating a political outfit ,be it an entire ideology or a facet of it, a mini referendum of sorts on agenda / candidate selection or even in the realm of pure  realpolitik, is received with a pragmatism by the electorate that appalls the older and traditional votaries of politics hitherto in vogue. BJP / Congress and other old regional entities are now compelled to be more savvy in political technology !.They are anxious to be back to the door-to-door mode of customer sales. But the AAP is far ahead of them . They have already gained purchase both on the demographic dividend and a gamut of one-to-one Apps. In fact AAP itself was built that way.Such an universal model  stands to transcend application beyond Delhi.They have pioneered the seamless weld between the elector and the elected ,that ensures a mutually shared concern and onus.

   (  Published in ET Dec 20  )

There have been write ups in the print media on the debut  win of the AAP, as an object lesson  in marketing fit for the  B school curriculum.The euphoria notwithstanding , the crux of a successful manager finally lies in his ability to  spot business opportunities.The AAP, thrust into political adulthood overnight,must see an opening in learning the hands-on  administration of a small and uncomplicated City state. Another asset  is to possess the clarity of purpose. The AAP is  juggling with one too many priorities; should it be to serve Delhi now and hone its administrative and realpolitik skills on the go or should it  push its luck for larger seats in a re election. Then there is the ambition to  pursue  a pan-Indian footprint for which it needs time,money and men .By  overlooking an opportunity to govern Delhi now it may reignite its activism but perhaps at the cost of  ceding  valuable political  space.The third is,a clear understanding of your business. In  cinema, a star is born when a  hit is delivered. In politics, a win is needed to take the screen test itself .The casting is still far off.
http://www.thehindubusinessline.com/opinion/letters/just-another-party/article5470526.ece

The screen test

There have been write ups in the print media on the debut  win of the AAP, as an object lesson  in marketing for the  B school curriculum.The euphoria notwithstanding , the crux finally lies in the ability to  spot business opportunities.The AAP, thrust into political adulthood overnight,must see an opening in learning the hands-on  administration of a small and uncomplicated City state.The second area is clarity of purpose. The AAP is  juggling with one too many priorities; should it be to serve Delhi now and hone its administrative and realpolitik skills on the go or should it  push its luck for larger seats in a re election. Then there is the ambition to  pursue  a pan-Indian footprint for which it needs time,money and men .By  overlooking an opportunity to govern Delhi now it may reignite its activism but perhaps at the cost of  ceding  valuable political  space.The third is,a deep understanding of your business. In  cinema, a star is born when a super hit is delivered. . In politics, a win is needed to take the screen test itself .The casting is still far off.

Every activist can not be a politician but every politician needs to be an activist. Kejriwal chose  politics.When given a choice to form a minority government today in Delhi, AAP is perhaps diffident to take on the onus .It is seen as now seeking the familiar and cosy cover of activism to stay away from political toil..Here was an opportunity  before AAP to learn hands-on  administration of a small and uncomplicated City state  .The handsome gains of AAP could thus begin to sound hollow. The problem is that it is having one too many priorities; should it be to serve Delhi through governance; should it  push its luck for larger seats in a re election and  also pursue  a pan-Indian footprint despite its abdication to run a government in Delhi.Timidity in activism may entail a setback but in politics, it could well  hasten  ceding  valuable public space.

http://epaper.asianage.com/PUBLICATIONS/ASIAN/AAGE/2013/12/15/ArticleHtmls/AAP-KI-KASAM-With-reference-to-your-editorial-15122013006036.shtml?Mode=1

http://epaper.mailtoday.in/epaperhome.aspx?issue=15122013

Delhi polls is not a guinea pig

The  mixed basket  of seats in Delhi  seems to have seeded a needless political impasse. The hesitation of a debutant AAP with 28 berths, to run Delhi is unfortunate but the BJP's circumspection is inexcusable.Both are treating the Delhi poll as a laboratory pilot project, one its effervescent new ideology and the other to  validate its campaign leadership..Both must realise that political timidity tends to leave deep scars on the credibility of  any political outfit. Precisely why Congress has heavily  paid for it now. .The six month window , if utilised to run Delhi and achieve even a few telling points on consumer prices / a visibly perked up administration , would serve to boost the image ,be it the AAP or BJP.In this the AAP  would stand on a better footing ; its failures / slip ups will be condoned even as its honesty of purpose and its sense of obligation to its electorate would raise its acceptability into the big league , quite a few notches.The Congress would only be happy to gain a reprieve in the abdication of  others.

Timidity in politics,invites extinction

Every activist can not be a politician but every politician needs to be an activist.Anna ,in his  wisdom opted to remain  single as an activist and Kejriwal  married politics.Post wedlock activist-politicians are expected to deliver on their vows.We have the CM,W'Bengal, the nemesis of the Left, still pursuing to the exclusion of all else, wins in every election in the state big and small. The activist in her for two years now, is still ascendant over  the politician in her. The state is worried at the inordinate length of the gestation in the delivery of effective governance and will have to wait till every seat is taken by the TMC ?. Following her foot steps,the AAP is perhaps diffident to take on the onus of running a government in Delhi  allowing  it unencumbered, to pursue its brand of activism on a pan-Indian canvas.Here is an opportunity  before them to learn hands-on  administration of a small and uncomplicated City state  . Is there no place left in their activist space to address even this moderate challenge. Winning then is rendered without a purpose  . Did not in living history, a Mandela the epitome of an activist,turn overnight into a consummate and enviable politician  to single mindedly unify his srtife torn nation. The AAP ought to choose a similar onerous but rewarding option as now before them,in Delhi.Timidity in activism may entail a setback but in politics, it hastens extinction.

Political hijack

A limping economy and the long shadows cast by UPA-II, had the Congress  on the back foot and the Assembly polls  reflect this. The irony is that Shiela Dixit ,with her   largesse to the urban conglomorate Delhi,  inter-alia ,regularising many a slum cluster to colonies,was handed a  personal defeat by the urban voter. And in Rajasthan, the  Congress despite   launching  its many  flagship  inclusive rural schemes there,  was rudely  abandoned by this very  rural segment.An upgraded and modern mode of high decibel ,whistle -stop politics is perhaps managing  to skew  our perceptions at the upper crusts , more than the core concerns . The UPA  did indeed provide both growth and inclusiveness.The global downturn has many a nation in the grip of economic stasis and high inflation and  governments are bearing its political brunt . India is no exception. Whereas  a government can merely enable  growth, it alone can subscribe to inclusiveness and . in a democracy, that is a hard task.Concerns of the Congress on economic equity,of growth by the BJP and of inflation by the AAP ,all have their relevance  but our political choices can not be allowed to be exclusively hijacked by just one of them. 

End of cloak and dagger politics ?

The Congress was on the back foot with a limping economy and the long shadows cast by UPA-II .The concluded polls  reflect this and in two cornered contests , the sole  beneficiary was the BJP  But the  AAP,exposed the standing of BJP in the three cornered Delhi polls, despite Modi.,   by matching the  saffron seats This must be ominous for  Congress and the BJP as both now seem to be vulnerable against an organised third  major contender in the Lok Sabha polls of 2014.. This could be provided by an AAP or a like avatar  and  better still, by a re invented '" Third Front ",that has pre-poll arrangements and not the opportunistic post-poll number game  .There is a clear opportunity for regional entities to  also become a mature and sagacious electoral group.Otherwise erelong they too stand to suffer the ignominy of being humbled by modern day nascent parties that are able to capture the imagination of the younger electorate  growing by the day.Perhaps we are seeing the end of old day cloak and dagger politics with its quid-pro-quo dispensation.

Published -Fin.Exp Dec 9-http://epaper.financialexpress.com/195704/Indian-Express/09-December-2013#page/6/1
Published Hindu Dec 9
Published Business  Standard Dec 10

China and its disputes

A study finds that  since 1949, China has settled seventeen of its twenty-three territorial disputes and has offered  compromises in most of these settlements.Regime insecurity prevalent in totalitarian states, might  explain China’s pattern of cooperation / delay in its territorial disputes with others. Currently China suffers from no major internal upheavals. But then China's great wall screens its politics as well. We are having territorial disputes with China for ages now. Our greater concern should be the Chinese pseudo suzerainty over river waters flowing into India.Our  insistence on installing monitors , in April this year to share hydro logical data pursuant to China's plan for three big dams on Brahmaputra,  triggered their  stepped up   rhetoric on Arunachal Predesh.These  will predictably continue to occur, for one reason or another. We must not lose sight of of our vital  riverine interests ,keep
pegging away at the  important aspects of our bilateral equations and  react soberly to   transient  incidents as stapled visas and the like.
 (Published ET Dec 6 )
http://epaper.timesofindia.com/Default/Client.asp?Daily=ETM&showST=true&login=default&pub=ET&Enter=true&Skin=ETNEW

Winning-A prologue to politics

Merely entering the electoral fray ,the AAP has restored primacy to political probity. Even a modest 4/5 seats in Delhi for the party,would provide the necessary anchor to this long lost and much missed public concern.The parties that dared the Anna movement to stop sermonising but  enter the arena,would stand chastised.Should the AAP hit a tally of say,15 ,it would  open up  new dimensions.  This would  heighten the negation of the two national parties and should the trans Delhi entities like SP ,BSP further garner amongst themselves a high score,the reassertion of the Congress & BJP back into the Delhi state equations, will get harder over time.The NOTA tally in the recent Delhi polls, if significantly high, should worry them even more.On the national canvas too,the implications  are likely to go beyond 2014. The take away  is that the ruling and Opposition parties must immediately endeavour to regain national stature and the best place to do it right now  is in the Parliament . This winter session will indicate if both are wise enough to learn lessons ,if necessary,the hard way. Right now,a Modi or a Rahul  can well do without another  wild and acrimonious winter session. 

          For its part,the AAP has to set about  synchronising its party management and developing  administrative skills to run even a small  state like Delhi, should occasion ever arise. Mamata Di ,despite  years of  hard core politics, is struggling in W'Bengal despite an overwhelming mandate

   

Audit must move with the times

The spate of  " scams ' in UPA-II had their genesis from the reports of CAG The CAG is the institution through which the accountability of the government and other public authorities spending  public funds — to Parliament and State Legislatures and through them to the people is ensured.The word ‘accountability' really means answerability.  Should the CAG question policy decisions and it  be the CAG's duty as the instrument of accountability, to comment on such a policy that prima facie seems unconstitutional? Answers are currently being  dispensed  supporting either side of the divide.For long the CAG  has  stuck   essentially to post-audit with all its attendant drawbacks even as growth exploded manifold.A system of Internal Audit  ( IA )was set up but had no teeth as it was part of the line management and subject to influence. Auditing  governments and their ministries need to be reinvented.Constructive on-line audit  interventions by IA , must replace post audit . This will make the IA audit team a stake holder rather than an adversary as now. Post audit  can then go into areas of policy formulation in order that it can identify zones of concern and evolve guide posts.With economy going global a good auditor is one who has been able to identify  areas of aggressive caution and ready to help out when national /international commercial scenarios abruptly change. Presently neither the auditor is happy putting out reports on matters sometimes beyond his ken  nor the administrator who had taken  major decisions based on the circumstances at a given point in time.Clearly all this demands auditors of the highest calibre well versed in  multifarious aspects of formulating decisions instead of merely accounting for notional loss of Revenue, after an event

  ( Published inFin Express  Apr 19 )

Thorium- the energy miracle

 India having  failed every attempt to reach its annual targets of increased  electricity production ,  now faces a deficit of 8.5 percent on its base electricity load from 2010-2011. Thorium is a naturally occurring radioactive chemical element , hailed as  the biggest energy breakthrough since fire.India has the world's largest thorium deposits  , eight times that of its uranium . It thus makes sense for us to develop thorium reactors .Our plans are to obtain a quarter of  electricity from nuclear power by 2050, up from around three percent now. Quietly researching this fuel for decades, Indian scientists have waited for  the right moment to build their first thorium-powered nuclear reactor.Initially this  is  to be a mainly research-based project that will lead the way for commercial ventures in the future.This reflects our ken to think long-term.It's easy to be skeptical about the achievements of Indian
scientists.They haven't made nearly as much of a mark as other developed  nations in research publications,yet they have been  planning for a distant future, a technological one.  On date,the basic physics and engineering of the thorium-fuelled Advanced Heavy Water Reactor (AHWR) are in place, and the designs are ready .and its Construction  will begin soon, The reactor could be  operational by the end of this decade. The reactor is designed to generate 300 MW of electricity – about a quarter of the output of a typical new nuclear plant in the west.The reactor will require 52 tonnes of fuel in its core initially – and just 4.7 tonnes of fuel per annum after.We can sustain on our thorium reserves for hundreds of years.

Overstepping his brief

 Modi's campaign machinery now runs practically independent of the party, with his hand picked men calling the shots and strategy.His re-take on the Article 370 comes out of the blue, taking by surprise his own party as much as the others.Clearly his penchant for feeding an aura for himself could continue to  out pace his brief as the BJP's campaign leader for 2014. Modi may well get away with all this and more and could even place his party within the  reckoning for power, post 2014.Should he continue on such an uncharted and  maverick course, he  could well  frighten away potential allies for an NDA -II,making it imperative for BJP to attain near majority on its own.The moot question is whether the strident individualism of Narendra Modi could end up in  ceding  place to a debilitated Congress, by default. 

    ( Published Indian Express Dec 4 )
http://epaper.indianexpress.com/193786/Indian-Express/04-December-2013#page/12/1

Election Fair 2014

The tasks before the nation just keep increasing even as the time available to complete them is shrinking with the National Election Fair 2014 round the corner. . What better way than to go for a division of labour. The Fin. Ministry  is  singularly engaged in  bringing down the CAD and the RBI , with inflation.But the GDP that lost its patron saints quite a while ago ,has an unlikely saviour in the high ground level inflation that props it up by at least 20 %..The political parties are not behind. If one attends to majority concerns the other nurses the minority affairs even as regional chieftains micro manage the interests of the many  " divisional " components thereof.To lighten the huge burden on Foreign policy, issues now stand reduced to bare basics, visas ; stapled ones  of China and the US ones, for our IT men.Our neighbours have to fend for themselves without us for some time .The Media is equally eager to share the nation's ballooning  judicial burden. Their studios have been refitted as fast track courts that can come with  same-day judgements on crimes of every description.The common man is at his stoic best, crying over high vegetable prices even as he buys into gold, breaking a 10 year record in Q2 2013 !, Everyone is doing his best to  unwind the tangled web of a nation beset with problems.The nation is getting set to visit the 2014 Fair . The central attraction will be the  EVM with an array of buttons that one needs to  choose and press for the set of dreams he alone fancies.The variety of choices before him is sure to be  mind boggling.The saving grace in all this is that the next Fair is not due for another five years !. 

  (Published in BUSINESS standard Dec 4)

http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20131204aT008101004&ileft=582&itop=1032&zoomRatio=146&AN=20131204aT008101004

Aadhar card- More diligence needed

Passport and PAN were designed as single purpose identity vehicles and yet the sheer number and geographical spread for securing such pan -national identity  entailed decades to stream line their delivery together with highest levels of data fidelity.The Aadhar on the other hand ,was conceived in a multiplicity of  end purposes most of which  were yet to be even identified .Thus it was weak on two counts ; the number was many times higher than say the passport & PAN put together and perfection and effective delivery was expected in less than half a decade  even as it was prematurely loaded e.g to cater to refund of commodity / utility prices after an universal pricing format came into being.Such overloading will continue unless the Aadhar Stage I goal and time frame get fixed.In the meantime perhaps PAN could offer a  temporary platform for DBT  Else an overloaded Aadhar  will discover newer bottlenecks and  greater disillusionment .UID is a good concept but without concomitant excellence in design, administrative support ,oversight and monitoring it goes nowhere. 

.There is a new Army chief in Pakistan and some  changes in the offing  .But  for a  nation  that had been looking inward for close to three decades now,these changes would perhaps remain peripheral and synthetic.With its democracy held in leash by its army for most of its post partition existence, its every single institution  systematically de-rooted and reduced to bonsai, there has been not one event that can point to any simmering embers of  a popular move to pragmatism and progress. Rip Van Winkle must be feeling envious . Pakistan 's foreign policy does not extend beyond its borders . Its ideology is circumscribed by its tenuous relations with India and its economy dependent on big power largess.The Arabs can at least boast of a " spring " but Pakistan remains bound by its deep ethnic hierarchy and divisions.Pakistan has long been  led on a day -to-day basis by circumstances and very seldom by its leaders. Only a major internal upheaval ,for whatever reason,will make the nation sit up , introspect and radically change. Till then Pakistan will be confined to a make believe world of its own ,acquiring a fresh set of PMs,Army Chiefs et al from time to time

Published Pioneer Dec 2
http://www.dailypioneer.com/letters-to-the-editor/shock-treatment.html#

Debt's respectability

With the lever of growth ,the GDP, shortened from 9 % to 5 % the nation's effective economic lift  gets   reduced.The loan market will be the  first sufferer as returns from business would not be able to fully cover loan repayments. Lending institutions ,by their very nature of business are risk prone.No loan can ever be considered absolutely risk free and   today the NPAs, an euphemism for bad debt, seem to form a major chunk..But  traditionally,debt had  been abhorred by  society ,including bankers !. The 19 th century bankers were circumspect and  matched the value of their deposits with their own capital even up to  a 50/50 basis for a near total equity cushion, that was reduced next to nothing as banks  became limited liability companies .They were now free to  assume far greater risk even as they took on more debt to boost their returns. Both risk and reward, exploded in tandem.Modern capitalism then dared to be  more  permissive as banks were  allowed to deduct their interest payments from their tax liabilities .Endless and  unholy  subsidies as these egged on  financial risk-taking. The  Basel framework,assigns a risk weight of zero to government debt of developed countries . That meant that with  hardly any capital, major banks could hold unlimited amounts of the sovereign debt of such nations and yet pass the credit test.The rules that allowed Greek sovereign debt , facing a scandalous 70% loss on the face value, to carry zero credit risk is a travesty .  Both risks and returns have soared under a blue print of western capitalism..But whereas  the risks have  been borne by wider society , the returns  go to  bank shareholders and managers .Debt,once a societal stigma but  today's major  lever of growth, stands  elevated to respectability .
   ( Published Fin Exp Nov 28 )


 http://epaper.financialexpress.com/190853/Indian-Express/28-November-2013#page/6/2

Back to basics

Of the innumerable  serious crimes in the nation,the Talwar's have come into exceptional prominence. And what do we find .Every ' Don't ' of investigative methodology has been scrupulously followed.It requires tenacity and sticking to the basics to investigate and  reconstruct a difficult crime. Perhaps the grounding in forensics of the average police officer remains outdated .The intrusion by media ,the fouling up of evidence at the scene of crime and so on is a result of an unsure chief investigator who is easily distracted and lacks focus and control over the essentials of the many  crime components.If the first team on the scene is found wanting any subsequent investigator is heavily handicapped.This twin murder case was thus substantially  lost to a genuine solution in the first 24 hours itself.What followed was dictated more by extraneous circumstances than intuitive brilliance or forensic acumen.

Esoteric economics of Europe

That modern day economics can get complicated as we go along, is borne out by the very genesis of the European Monetary Union, the catalyst for European integration that brought together 17 diverse economies in a single monetary union; but without fiscal solidarity, a road map to enforce fiscal discipline, or an established lender of last resort. The global dip of 2008 ushered in new problems in the monetary and fiscal planes, for every economy. To stimulate economies, patch-work solutions were attempted by substituting public and private debt for investment. Borrowing against future income and consumption can only sustain short- and medium-term growth. Economies that went for large stimulus spending got caught up in a closed cycle, their balance sheets damaged as demand plunged steeply. Huge deficits then followed in its wake. It opened floodgates for massive capital inflows and unsustainable borrowing in the peripheral economies, most notably the PIIGS nations, accelerating their loss of competitiveness. When the global financial crisis hit, the Eurozone caved in. Countries that have done well around the world have maintained their manufacturing base. Britain, Spain, Italy lost their manufacturing base and ended up badly. Lack of this support base, taken together with congenital structural defects in its monetary policy makeup, the EU was heavily handicapped ab initio. As a result, the global crisis post 2008-09 saw the euro nations with an open licence to borrow generously but with a shared credit card! Since none took the rules seriously, they not only borrowed from their own banks but from each other’s too. Each has been trying since to exist at the other’s expense! As things stand today, though the euro has no enemies, it is disliked by its friends!

   ( PUBLISHED FINANCIAL EXPRESS NOV 26 )

http://www.financialexpress.com/news/letters-to-the-editor-esoteric-economics-of-europe/1199396
http://epaper.financialexpress.com/189917/Indian-Express/26-November-2013#page/6/2

A template for conflict resolution

. The Iran nuclear deal is perhaps an early New Year gift for the comity of nations.Eternal conflict has ever been a trait of human civilization.The Middle East cauldron was kept boiling by the oil & arms lobby for decades on end now. It has taken a liberal leaning US president to be brave enough to break through the cordon. The decreasing dependence on imported oil by the US and emergence of the " Arab spring " could well be a factor for such peace initiatives from either side. Nevertheless  it does credit to leaders across both sides of the divide, to have gone beyond narrow political dictates, for the larger aim of finding peace than the  pursuit of existing or newer contentions.Should this deal go through and sustain ,we would have a proven template for the resolution of many a conflict spread across the globe.The US has also realised that it neither wants nor is able to be the universal policeman and that nations need to come together without compunction, for the greater good.
( Published Busns Std Nov 28 )

 ( http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20131128aT012101004&ileft=235&itop=1323&zoomRatio=180&AN=20131128aT012101004

  

Third Front-three steps back

The thought of a Third Front is amusing.Where was the "Front" in 1999 when an ascendant BJP heading the NDA,went on to win massively.Or for that matter when Congress led the UPA-ll scored handsomely.The Front manifests itself as and when both national majors are seen to be on electoral backfoot,the current scenario.The front is a medley of smaller parties hedging a leverage of opportunity and riding a vehicle of convenience.As the race of the majors heats up and credible picture emerges,the Front will unwind and its members pick options of their reading.Should both BJP & Congress  fare badly,the Front will reassemble itself to a governing entity,only to crumble shortly later.This has happened before and will recur should the electorate shy away from a decisive choice,one way or the other.Fronts as these push back the nation both in terms of the quality of politics and economic well being.http://epaper.asianage.com/PUBLICATIONS/ASIAN/AAGE/2013/11/23/ArticleHtmls/CONVENIENT-FRONT-The-thought-of-a-Third

Savings fund growth

India’s economic push of the past two decades are largely due to our savings rate that is higher than that of several countries with AAA rating.I But of late, India's household savings  had  dropped to below 10% of GDP, for the first time in 13 years.Moreover, the financial savings of the nation, mostly government owned , are deployed inefficiently. They often provide an average rate of return that barely covers the inflation rate. The government grabs these savings which are supposed to fund healthcare, primary education and old age, to use them in unproductive populist  schemes.On the other hand , even as the much vaunted foreign direct investment and portfolio investments constitute just 5% of nation's gross savings, there is a disproportionate stress to attract external money flow. . It is heartening that the nation is today,re learning the values of savings ,that too  in the more productive and growth enabling mutual funds. A renewed push for savings is overdue.Studies show that growth and savings have a symbiotic relationship.

 ( Published Economic Times ,June 13 )

Lateral vision, a must for nations

In an evolving economy it  is hard  to identify   " the poverty  line " ,which  by nature is dynamic and its constituent factors keep changing in inter-se priority.Today in the US  economy , the element of Health care dominates all else and jobs is the  major concern of the eurozone. Nonetheless  a  fleeting satisfaction  is justified  over  the recent   data put out on our declining poverty , even if from an uncertain datum. . But a call for caution can do no harm. . USSR long endured  Putin’s social contract that had  been trading freedom for security, China  built  up its vast middle class wielding  absolute authoritarianism, our own Left gave primacy to land reforms and  ideology over education and industry .  None of them had pondered over  the poverty line.All are waging an uphill struggle now  ,towards socio-political resurgence and to redefine  the sum and substance of a  state's true well
being.Transient  policy fixations over time tend to be  accepted as  validated tenets .Our present  concept of inclusiveness could turn out to be  narrow enough to restrict  lateral vision, so vital for a nation.An excessive  subsidy /   dole- driven  political bent could  leave  the nation with  a hunch-backed  economy that would rather  stoop   down to  look at  the poverty line,  than be looking up to growth  .  Today, every single national economic index is  drooping and planners,economists and administrators are at a loss to effectively re-rail the economy. Our demographics is heavily dependent on job creation and  without growth even existing jobs would be threatened. The luxury of a subsidised economy that was available at a 9 % plus GDP can not be replicated, at  the ongoing  5-6 % level.

   ( PUBLISHED IN Economic Times ,28 July ) 

Customer is Emperor

The primacy of the customer for a business was never in doubt.It has since captured pre-eminence in competitive business Social networking has now assumed mega proportions and Facebook was the pioneer to latch on to the idea fairly early. Does one start with the goal of making profit, and then find products that enable that goal or start with the aim of delivering amazing products, and then let profit flow from the products.The former aims to maximise shareholder value while  the  latter firmly believes that customers  are key to its future.  What was earlier seen as a reward for serving customers, had by  now evolved into a vision . Facebook  thriving extraordinarily , then strayed and mislaid its aim and thus its vision.It for some reason got into two minds and decided to put profit ahead of all else. It attempted  to pull off one of the largest IPOs with a misguided evaluation out of sheer hubris of spawning countless shareholder millionaires
and leveraging its brand value. The IPO  plunged , only to somewhat  recover later but the damage was done.They unpardonably overlooked that running a social network is today increasingly about responsible stewardship of users' personal information. Facebook   the young and fast moving company  was  cavalier and  lacking
adequate respect for user data privacy. One reason why  attention could be  shifting to the Google Plus ,seen as more trustworthy in safeguarding user privacy.Today's customer is discerning and demanding as well and the likes of Facebook unfortunately still opt to learn lessons,the hard way.

Opinion polls :beyond onions and straw

Much hype has been generated by Opinion polls .Happily though, it has helped us looking into Opinion polls with greater focus.Democratic voting is predicated on informed opinions. It could be through party manifestos or various media.A voter is muchinterested in what is the trend of general thinking and this can not be attempted to be denied to him. That said,there is a distinct differentiation say between Straw polls and Opinion polls.In a two party dispensation the party agendas being clearer and evident ,there is not much of a hiatus between these two variations. In a multiple party set up leaning heavily on endemic local issues,an opinion poll is invariably jacketed into a narrow band of issues and reduced to a straw poll.For a national level election , such polls would always tend to skew away from core concerns.In a six decade old democracy as ours,even opinion polls would need a guided path to travel along and gather increasing significance.We have surely moved past the " onion age " of recording public perceptions. It is time that the EC itself shepherds opinion polls under broad guidelines ,be it specific questionnaires ,spread or scientific representation and so forth, in drawing out opinions. It is imperative that all the stakeholders to a fair election ,warmly encourage opinion polls ,albeit under initial guidance and oversight. In fact ,we may over time as guide lines get assimilated, be even able to step into an era of referenda that has proved beneficial in big ticket course correction for many a progressive nation.Size of our vast electorate should not deter us. nor should informed opinions.
( Published Fin Express Nov 22 )

http://epaper.financialexpress.com/188101/Indian-Express/22-November-2013#page/6/2

Benign snooping !

       Right to privacy,right to the freedom of expression , right of the State to secure its citizens have all suffered or thrived on how it is   interpreted.In 1644, during the English Civil  War, poet John Milton called on the parliament , to bring  to an end the state licensing of newspapers.That notion of liberty of free speech being above all liberties, endured for centuries ,till technology undid all. Julian Assange had his own view on politically sensitive correspondence now it is Snowden on the universal  eavesdropping by US government .Rupert Murdoch thought nothing of hacking into private telephone conversations, voice-mails, sms , yielding  rich dividends for his papers.Today governments snoop under the pretention of  national security being "paramount " over every other liberty !.Even as the  modern netizen twitters his private thoughts, the government strangely argues that conventional sense of privacy may not apply.The two Mumbai girls arrested on 19 Nov 2012 for their personal comments in Facebook ,will testify to it. But the one from Ahmedabad must be the most benign and well intended. No wonder ATMs there are far safer than Bengaluru !

All sound and fury

For a ' party ' conjured out of Anna Hazare and Sunday movements, the AAP has done well.Given that Delhi, a  mere overgrown urban megalith having false pretenses to being a state,a fledgling AAP had  managed to position itself as a  ' party ' of substance. This would never have been possible in a regular State as it has neither the resources nor an assiduously built up cadre to be of reckoning, for larger spreads. With many of the founders washing their hands off on a near daily basis, AAP took to fireworks display with its limited stock of the anti corruption sulphur .Now,some of those rockets seem to misfire in its own  backyard, which  may sadly singe its raison d'etre.  But then,  raw politics often boomerangs and  AAP is new to it. Delhi could now see the usual  elections  , with internal rifts of the BJP and to a lesser extent in the Congress,  broadly steering the outcome.The onus is on the electorate  now,to carry the spirit forward  by retaining  the corruption factor center stage,through to 2014 with or without AAP. Should that happen, Anna would have the last laugh.

  ( PUBLISHED MAIL TODAY NOV 24 )

The extremes

Narendra Modi ,even today,feels insecure of his anointment.BJP in desperation had elevated Modi and in the process left many of its old leaders in disillusionment The first months ,as an endemic Gujarat chieftain,saw him talk of  the  'Gujarat story ' to press himself into the vanguard among his co -contestants. Later, in an effort to assume the pan-India mantle,his  ceaseless and intemperate  attacks on the Opposition and the acidity and needless sarcasm  of his personalised remarks , have only  served to expose his inner anxieties .It would need complete reassurance from within his own party for Modi to emerge as a legitimate and mature national leader, to deal with issues of substance with composure and confidence. This may yet be denied to him unlike Rahul who enjoys more than what is advisedly necessary.The crucial difference  has always been , that in the BJP inner party intrigues are active before elections and in the Congress,after it wins elections.

 ( PUBLISHED ECONOMIC TIMES NOV 22 )

http://epaper.timesofindia.com/Default/Client.asp?Daily=ETM&showST=true&login=default&pub=ET&Enter=true&Skin=ETNEW

THE ELUSIVE BALANCE

The Third Plenum of the 18th Central Committee of the Communist Party of China has inter-alia,resolved to "  foster an inclusive, innovative, and sustainable growth order ".A  Command economy like China, predicated on the power of the proletariat, did touch higher base growth sooner than normal democratic regimes.To  achieve sustained and elevated levels progress now on,individual entrepreneurship has to set the pace.And that comes with a price-greater personal freedom and broader reforms that involve less of the government. Decades earlier, a powerful USSR tardy on reforms saw its  powerful party oligarchs under the Hubris of totalitarian power, ruining the economy and dividing up a  vast republic. China clearly intends to learn from history.At this  bivouac of  reorienting national directions, it could attempt to keep the nation together by a calculated tempering of its " growth-at all costs " policies .But inclusiveness ,political and economic , does not come easy as even Obama struggles over broad based healthcare and taxing the super rich in his  200 year old epitome of democracy.Will China have the patience to seed socio- political  inclusiveness in a soil driven barren for decades by ideological  over saturation,remains to be seen.Our own nation is going through an uncertain mix of growth and inclusiveness, trying to strike the elusive balance between the two!.

          llll       R.NARAYANAN ,GHAZIABAD . lllllllll

( Published Business Standard NOV 21 )

PIONEER NOV 22 http://www.dailypioneer.com/letters-to-the-editor/beijings-challenge.html

TECHNOLGY- THE SUPREME MASTER

.The equation is now no longer between just the manufacturer and his labour and by extension ,the Unions. In fact it is the   human gift of innovation  and the devising of new technologies, that will dictate and subjugate  all . Exploding demand in developing economies and a wave of innovation in materials, manufacturing processes, and information technology are driving today’s new possibilities for manufacturing. From nanotechnologies ,microelectronics , additive manufacturing systems ( 3D printing) and  emerging new materials and methods are set to revolutionise how products are designed and made. The relationship between employment and employability now becomes highly dynamic.The riveter of yesteryear's yielded to the welder and now to robot. The programmer and his computer replaced the comptometrist. Machining and moulding are outmoded by 3D printers.
                             The third player,the state and its political class however has done little to keep up   with the times. They pander to labour to protect historical vote banks rather than work for growing the economy thus ensuring greater inclusiveness for all, lest they be seen as  pro Capitalist   Take the Left leaning France where Jobs in the manufacturing sector are simply  vanishing; 400,000 lost in the past five years.  Its contribution to  European exports of manufactured goods fell to 13.1 % from 15.7 %  a decade ago. Its ratio  manufacturing  /  GDP is the lowest among Eurozone countries: 9.3% , half of Germany's 18.7 . Back home , our socialist leaning and pro-labour  centre, stifled national growth till the reforms era of the '90s and militant trade unionism in  W'Bengal, de -industrialised  the state in just  three decades .For a politician,giving labour lasting inclusiveness through growth needs
time and genuine toil , where as pampering  labour into  returning them to  power even at great national cost, is so easy. As we advance into the future, the labour, the employer and the state must learn to address the imperatives of a galloping technology . They must band together to protect their common stake against this newly emerging  master.Better still befriend him with labour constantly  matching up its skills,  employer  abiding  by bi lateral  agreements and a pro active state that keeps upgrading  educational / training levels and  is alive to changing realities in business and manufacturing. 

 lllllllll      R.NARAYANAN ,GHAZIABAD .       lllllllllll

( PUBLISHED FIN EXPRESS JULY 12 )

Lesson from Detroit

 Detroit ,the roaring city of yesterday, is no more..This was once the capital city of capitalism, the  centre of America’s rise to world power and greatness.In WW-II, Franklin Roosevelt christened the city the ‘Arsenal of Democracy’ as it turned from making Cadillacs and Fords to producing 35 per cent of America’s war production: tanks, Jeeps and B-24 bombers in tens of thousands.We in India are presently   in the midst of growth  as also the pains of the pursuant heavy urbanisation, be it centred on trade,business ,  manufacturing or services.The population density in the emerging city-hubs force a vertical mode of living that  geometrically  pushes  up costs ;land, water and sewerage, transport logistics ,health and hygiene.Cost of running a city can not be left to the largess of a benign government of the day ,that would itself, in time. go under debt. Civic bodies must learn to be self-sufficient.Cost of maintaining civic
services in most municipalities are not matched by civic revenue and in cases like Mumbai despite an ample  treasury , professional management is wanting   as does accountability. Bangaluru is deteriorating and so is Kolkata and may be others too.In a surging economy , the population inflow into centres of boom will remain high and hence, forward urban planning in modules of 10 or even 15 years is imperative and more crucially a civic administration structure that can seamlessly blend and meet increasing load on it .Not the least, a modicum of civic sense needs to be continuously  instilled in the citizens through  education , training and strict enforcement . We tend to smirk at excessive civic oversight on citizens, be it in Singapore or most of the Nordic states. It is time we realise that  for growing cities, discipline  is their   only insurance against premature decline and perhaps eventual demise.

                   llllllllll          R.NARAYANAN



(PUBLISHED IN THE PIONEER 20 SEPT )

Looking for a Casabianca !

In three short  years  we have been hit by an avalanche of  problems . First a sticky inflation, then high  fiscal deficit,an elevated CAD and now an ever dipping rupee value.The economic maze is getting complex by the day and no one wiser for an exit route.The similarity of our predicament to Brazil is uncanny.If this BRIC compatriot's economic boom for much of the past decade was driven by exports of iron ore, grains and other raw materials, mostly to China,we were at a steady  9% plus growth not from raw material exports but by dint of a  broad based progress be it  industries or a global IT  services sector or even positive agri indices.In Brazil,the commodity bonanza caused a surge in the Real and an erosion of the country’s industrial base; a typical case of  the “resource curse”; its  car exports  plummeted,and  overall manufacturing output  fell
drastically .In contrast India under the hubris of having survived the 2008/09 economic tsunami and thriving too, allowed a runaway political philosophy of inclusiveness and administrative recklessness to take over. A heavy drain through subsidies and welfare programmes that bred waste and inefficiency, resulted.Graft and lack of accountability in a coalition set up saw the gains of growth getting frittered away.
                                               A 30 % crash in iron prices this year and wide ranging commodity slide have  stalled recovery and left Brazil with a current account deficit of 3% of GDP. This is an external factor and the scenario could change for the better We are worse as our adverse factors are all internal.Foreign investors are  withdrawing funds due to decreased level of confidence in our economy and the absence of any cogent approach to set things right.Both nations incidentally,have nearly the same FE reserves in their kitty.Brazil ranks 107 in infrastructure,123 for roads, 135 for ports,129 in customs red tape,121 for starting business and 116 for enforcing contracts. Needless to mention that we lag behind on all these World Bank rankings. Given the dire need to pull ourselves by the boot straps from such base levels that cover a gamut of factors be it policy ,planning, effective and quick administration
particularly  our systems of political governance, it is too naive to think that even given  the broadest of shoulders, the new RBI governor alone ,can sustain such a huge burden of this nation.

                                                                                                     llllll     R.NARAYANAN ,GHAZIABAD 

 ( Published Fin Chronicle column of Aug 12 )

Schemes for inclusiveness or consumerism

      For far too long,calculated political skew in the  farmer's incentives / subsidies did  little to improve production or productivity. We now end up in record procurement by the Centre at high support prices with huge grain piles thereof, isolated from the supply chain and rotting away.Despite  bumper grain crops, the retail prices are soaring and thus elevating overall consumer price levels. Inclusive  schemes like MGNREGS have led to higher wages in rural areas which have risen faster than inflation since 2007-08. Fueled by job opportunities in urban construction projects,the rural -urban migrants, sent back remittances flowering a new found rural prosperity.If a third of automobiles are sold in non-urban markets, is there any wonder that rural demand for  vegetable , milk & poultry products would also shoot up. The income-trailing rural/ urban  population has still to make do with onions and
potatoes  and the  contingent price escalation of the tubers, in the overall scenario, seeds bewilderment and anger.Serious structural maladies,in the secondary agro system ,be it reach of productive technology ,storage or efficient and easy sale of produce at the farm -gate,  can not be blamed on climate or middlemen.

 In the depressing mood of economies ,world over,the call of the recent Third Plenum of the 18th Central Committee of the Communist Party of China  to "  foster an inclusive, innovative, and sustainable growth order ", has not received due attention.  Command economy like China, predicated on the power of the proletariat, did reach higher base growth sooner than normal democratic regimes.To  achieve sustained and elevated levels progress now on,individual entrepreneurship alone can contribute.And that comes with a price-greater personal freedom. The USSR ,on similar path earlier, could not act in time and party oligarchs under the Hubris of totalitarian power,not only ruined the economy but dismembered the vast republic. China clearly  is keen to learn from history.At this  bivouac of  reorienting national directions, it may yet manage to keep the nation together by a calculated veering away from blind  growth .But inclusiveness ,political
and economic , does not come easy as even Obama finds in his hoary democratic nation.Will China have the patience to seed socio-political and economic inclusiveness, in a soil driven barren for decades by ideological  over saturation,remains to be seen.

Government Debt - Quality counts more

A government that has its fiscal arithmetic wrong, heads for a packet of problems;nominal interest rates  rise over fear of inflation, business   moves wealth out   fearing   higher taxes, real interest rates  rise and,and inflation shrinks  division of lalabour;and hence, productivity.  Can this scenario  loom over economies with low  interest rates , stock prices remaining buoyant, and inflation remaining subdued. After all, low interest rates  put no downward pressure on public investment,low inflation keeps the extra debt that a government issues  still  prized as having   value, and  boosts economy by deleveraging and  accelerating  spending.Economists are not so sure.They now look at  not  only quantities – the amount of debt that a government has issued – but  key indices.The prices of government debt reflect the rate of inflation ( as bonds are traded  for commodities, cash, and stocks )  ;the nominal interest rate and the level of the stock market. If all three  are in green, it  means  markets would prefer government debt to grow at a faster pace than current forecasts indicate.As a thumb rule, debt at 80-90% of GDP, crowds out conomic  activity.Correlation between high debt and low growth  must  predicate whether the government debt itself is a risk. A  study  of  economies  a) where interest rates are higher and the stock market is lower, and a higher debt/GDP ratio ,does indeed mean slower growth ,b) where inflation rates and govt. debt are both high and c) where growth was already slow, and thus where high debt/GDP ratios  show  that the crux of the issue   emanates from the denominator, not the numerator. It now appears that  there is less  risk to accumulating more government debt until interest and inflation rates begin to rise above normal levels, or the stock market plunges.But much  larger benefits accrue from tackling  inadequate infrastructure, administrative lag and  capacity under - utilisation.This seems to be borne out in  most world economies,today.

        ( PUBLISHED FIN CHRONICLE MAY 27 )