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Tuesday , September 3, 2013 | Updated : Sep 3, 10:34 IST

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Public expects PM to rise like a statesman or quit


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SEPTEMBER 03, 2013 By Naresh Minocha , Our Consulting Editor THE Prime Minister Dr. Manmohan Singh has rationalized the worsening economic crisis without offering any concrete solution. In his speech on rupee depreciation and other economic woes given in Rajya Sabha , Dr. Singh made an avoidable and unsuccessful attempt to score political brownie points. People wanted him to rise like a large-hearted statesman and unveil the roadmap for overcoming the socio-economic crisis which is fast transforming into a crisis of confidence. Critics expected him to resign for lack of leadership and governance and thus redeem his lost prestige. He did neither. He did not exhibit an iota of remorse for bringing the nation to such a pass. Dr. Singh must keep in mind that humility is a sign of greatness and not weakness. The global factors have no doubt accelerated depreciation of the Rupee. The malaise, however, lies in UPA's haughtiness and indifference towards the early warning signals of gathering storm. This columnist has also done his bit in reporting about such signals at and at other forums. Dear Singh sahib, spare one minute to check this out from this sample of overlooked signals. ( FTAs - The surefire way to slowing down investment in new projects 24 Jan 2005; Mr. PC, define fiscal discipline & rework budgeting 11 Dec 2007; UPA to borrow & spend on poll benefit 26 July 2009 and UPA taking India back to 1991-type economic crisis 21 Aug 2011 Dr. Singh frittered away his reputation as an astute manager of economy after becoming Prime Minister. The bitter truth is that the root cause of bad governance is UPA's dual control model with Mrs. Sonia Gandhi calling shots without any accountability and Dr Singh working as a helpless, submissive CEO of the country. Without resorting to point-by-point negation of what PM claimed, one must bring to his notice a few facts to drive home that problems are serious. And the blame for them lies solely at the door of the Government.

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H e stated: "We have the more difficult reforms to do such as reduction of subsidies, insurance and pension sector reforms, eliminating bureaucratic red tape and implementing Goods and Services Tax. These are not low hanging fruit and need political consensus." Yes, political consensus is required to speed up economic development and to win back the confidence of investors. Lack of consensus should, however, not serve as alibi for the bad governance. The fact is that the Government has done hardly anything to act on issues on which there is 101% unanimity. Dr. Singh, when you next time rake up the issue of consensus, please reflect on Parliament's 'Agenda for India' resolution passed in September 1997. Before blaming lack of political consensus for policy logjam, the UPA Government should first make up its own mind on economic issues and avoid fickleness in framing and implementing policies. Two recent instances would suffice here. After virtually decimating the domestic telecom equipment manufacturing through naked bias for imports, the Government belatedly realized that it has compromised national security. In October 2012, it thus notified eight-page policy for preferential market access (PMA) to domestic equipment on security considerations, which would of course create jobs and generate wealth. Following pressure from foreign suppliers and their commission agents, the Government backtracked. It not only put the policy on the hold but is now also revisiting it. A s put by an official release in July 2013, "The entire policy on Providing Preference to Domestically Manufactured Electronic Goods (PMA Policy) will be revisited and reviewed. The overall policy on PMA will be recalibrated and submitted to the Cabinet." And this somersault was done at meeting held in PM's office. The National Security Adviser, Cabinet Secretary, Principal Secretary to PM and officials of other ministries participated in this meeting. The very next day, a US IT industry advocacy group hailed the somersault. Take now the case of fertilizers. The Government notified the New Investment Policy 2012 (NIP) for urea plants in January this year to end the 13-year drought in setting up of new urea plants and to prevent the surge in urea imports. Overwhelmed by 15 investment proposals whose aggregate investment is likely to amount to Rs 75,000 crore , the Government is now considering changing NIP! The proposed

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amendments would obviously force the investors to rework their project proposals. No one knows when and whether any project would come under this policy. Similarly, the Government has not framed the new pricing scheme (NPS) for existing urea plants, though it should have announced the modified NPS or NPS-IV as it is called in April 2010. As put by Minister of State for Fertilizers S.K. Jena in Rajya Sabha on 23 rd August, "The matter of formulation of policy for the existing urea units beyond stage-III of New Pricing Scheme (NPS) is under consideration of Group of Ministers constituted to review the fertilizer policy, the meeting of which was held on 5th June, 2013 and during the meeting, it was decided that further deliberation on the issues are required before formulation of policy for existing urea units beyond stage-III of New Pricing Scheme." T he policy flip-flops and delays have become integral part of governance. So is lack of transparency. If the Government cannot make up its mind on pricing scheme for more than three years, where is the issue of seeking political consensus with the Opposition? Do e s Dr. Singh require political consensus to create a single-window for grant of environmental, forest, wildlife, forest rights, tribal rights, coastal and other clearances in the larger environment domain? T h e separate and sequential grant of approvals by different wings of the Ministry of Environment and Forests is the biggest stumbling block for projects including the reputed public sector companies that, for God's sake, have not yet been accused of corporate greed by NGOs. By the time a project gets forest clearance, its environment clearance lapses and it has to apply for its renewal, which is as good as seeking fresh approval! It is worse than the licence raj and phased manufacturing programme of the pre-reforms era. Dr. Singh, global shocks are understandable. But shocks induced to creators of Temples of Modern India by bureaucratic goof-ups and self-indulgent activists are a national shame. Just one example would suffice. NTPC is developing 800 MW Koldam hydroelectric project in Bilaspur district of Himachal Pradesh (HP) at a cost of Rs . 4527.15 Crore . It inherited this project from HP in 2000. The forest clearance for this project was given way back in 1990. Ministry of Environment and Forest (MOEF) gave its consent to transfer forest and environment clearance for this project to NTPC in 2000. T h e Standing Committee of National Board on Wildlife (NBWL-SC) was constituted in November 2003 to grant separate wildlife clearance to various projects. The construction work on Koldam started in 2004 and NBWL-SC rejected the project in October 2010 as it would submerge 51,262 trees. The minutes of this meeting does not contain a word about the threat to wildlife. The Committee was obviously dabbling in the domain of forest clearance and that too retrospectively. The project was again put before NBW-SC for clearance. In its meeting held in March 2013, the committee noted that NTPC had completed 80% work on the project without getting NBWL clearance. NBWL-SC concluded that NTPC had violated the Wildlife Protection Act by implementing the project after its rejection. The Committee also now realized that the project posed threat to habitat of endangered bird named Cheer Pheasant. It thus rejected the project and ordered that the work on the project must stop immediately. When the project again came up for reconsideration at the meeting of NBWL-SC in June 2013, an HP official admitted that the fault was of the State Government and NTPC was not guilty. NBWL-SC thus approved this project as "fait accompli case" with a directive to NTPC to buy 500 hectares of Cheer Pheasant habitat and hand over the land to the State Government. If a bird is an endangered species, its habitat also must be hard to come by and in any case it must be a forest area. Would NTPC require fresh forest clearance for purchase of this land and at what price? Is this not a classical case of retrospective application of procedures and rules on already approved projects? Retrospective changes in laws, mid-course changes in policies and procedures and post-tender changes in contracts has become the gold standard of governance for the UPA. Dr. Singh, ask your office to go through the minutes of all project appraisal committees of MOEF over the last nine years and then find who is scaring investment - activists-driven UPA or the opposition parties. Contrary to what PM claims, the fundamentals of both the economy and governance are not strong. The fundamentals of economic reforms have been wrong all through since mid-1991. The reforms have had a distinct bias for imports and bias against indigenous production. The reforms wrongly relied on foreign investment including hot money and black money inflows and not on domestic savings. Crony capitalism has become an integral part of reforms. A lot has been written about it. If fundamentals are good, why have different ministries asked Tariff Commission to undertake 'Impact Assessment of FTAs/PTAs in capital goods sector', 'Import of second hand machinery of Capital goods and their impact on domestic manufacturers' and 'Impact Assessment of Free Trade Agreement' with ASEAN, Thailand and Singapore? If reforms have not gone awry, why has TC also been asked to undertake 'Inverted Duty Structure studies on Project import of all goods pertaining to high voltage transmission insulators, project import of insulators, electrical insulators, insulated wires and cables, stainless steel wires, power capacitors, aluminium conductors, ACSR aluminium conductors, project imports power generation equipment boilers and turbines, 107 medical devices, mobile phones, etc ? A few more such studies are in the works and a few have already been corrected.

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T he destiny of the economy is lately shifting from the hands of the Legislature and the Executive to the Judiciary, the so-called civil society, instant justice-delivering popular media and the mobs. The governance at the Centre is in shambles with activist ministers calling shots. Others are either busy making money or doling out favours . There are several independent power centres operating within the Government whose adverse impact on the growth and jobs is perhaps not fully known to Dr. Singh. Aided by NGOs, certain deviant ministers and other powers that be including the mediarevered National Advisory Council (NAC) have used everything on the statute book ranging from protecting wildlife to safeguarding the religious rights of tribals with vengeance to scare away investors, job-generators and wealth multipliers. The risk of doing business in India is today far more than that of doing in a banana republic. T he governance-growth-judicial matrix is disoriented. It is focused on short-term benefits and not on the long-term interest of the country. It focuses on rights of different stakeholders and not their duties. It has wrongly pitted economic development against public welfare. On the contrary, economic development is enabler and driver of public welfare. T he system has created several laws and institutions for protection of wildlife, forests, environment, coastal areas, heritage sites, tribal people, etc. Their implementation has substantially shrunk the access to natural resources and made economic development next to impossible in the country. We are getting back to the long-term Hindu rate of growth, if not worst. Competitive populism, religious and caste considerations have become the hallmark of politics. Even judiciary at times plays to the gallery. T he nation expects its CEO to lead it out of this morass and hopelessness by initiating sincere, time-bound dialogue with all stakeholders. If consensus is sabotaged by petty and belligerent politicians and NGOs, then the collective will of the Legislature and the Executive must prevail. If a national emergency has to be imposed, it must be done with courage and conviction. This column requires a post script on Dr. Singh's attempt to project himself as a victim of the Opposition's corruption slur on him in Parliament. Responding to the Opposition Member comments on his speech, PM posed: "Have you heard of any other country where the Members of the Opposition walk into the Well of the House, shouting Prime Minister is ---. Prime Minister is ---." It is a bitter truth that decorum and ethics of debate are alien to Indian legislatures. And one of the pre-requisites of a good debate is good homework which the PMO has not done when preparing Dr. Singh's speech and background material. Dr. Singh, who has repeatedly been charged with going soft on corruption by his Cabinet colleagues, is wrong when he contends that nowhere in the world PM is accused of theft. In Jordan, an MP called the premier corrupt in Parliament, prompting another MP to pull out gun in support of PM in July this year! In Australia, a MP was ejected from Parliament over corruption slur against the then PM Julia Gillard in October 2012. In November 2011, Kuwait's Cabinet resigned after the Opposition demanded PM's resignation over allegations of corruption. The Prime Ministers in Spain, Slovenia and other countries are battling corruption charges. If Dr. Singh is so sensitive about his image, let him install closed circuit television sets in his office as well as offices of all ministers. The public should have access to the live footage. Let all files, except the ones dealing with defence and home security, be put in public domain. No file would then go missing. And truth will prevail. POST YOUR COMMENTS

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Public expects pm to rise like a statesman or quit naresh minocha www taxindiaonline com  

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