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INDUSTRIAL ECONOMIST
Cover Story

Oil Shock: The recent control of oil market by Wall Street speculators have been a disaster to consumers in poor countries.
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Inklings

Lawyers’ agitation:
By a strange, tragic coincidence, the two most attention-grabbing recent incidents involving the police have both been connected with the legal profession.
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Banking

Small Banks: After 25 banks going under liquidation in the US, concern clouds small banks in India.
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Limited as it is in its scope, the Interim Budget 2009-10 of the Union government has made only a few references to the banking sector.
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Economy

Budget 2009-10: In its last budget before the elections, the UPA government seems to have thrown away all its pious proclamations on fiscal responsibility.
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Interim Budget: The UPA score card 2004 - 2008
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Budget

Lalu Prasad has successfully projected himself as a skillful chief executive producing surpluses for Indian Railways, the public sector leviathan.
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Report

SICCI Agri Summit: There is urgent need to step up research and development efforts on designing and mass-producing simple farm equipment.
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Tribute

A freedom fighter, lawyer, trade union leader, constitutional expert, state minister, Cabinet minister and finally President, RV wore multiple caps with great ease and skill.
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Comment

US Economy: Somehow, Washington with its economists cannot seem to make the connection between its actions and the problems getting even bigger.
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Satyam Scam: Lessons from possibly the worst scam in Indian corporate history would have to be based partly on hindsight and partly on foresight and almost entirely on media reports and speculations.
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Macro Economics

Aggressive Fiscal Policy: Budget deficits per se need not be bad. It all depends on whether they are revenue expenditure-focused or finance supply enhancing capital investments.
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Commentary

US Economy: Free market capitalism has voted itself out by landing America in its worst economic crisis.
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A rat race: You would notice frequent articles in business magazines on rating business schools or the best colleges.
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Report

TNEB and BHEL will be setting up a 2 x 800 MW super-critical thermal power project, the first such project in the state, at Udangudi in southern Tuticorin District at an investment of Rs 8700 crore.
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Global Briefs

Global financial crisis has been wreaking havoc across the board for all economies, in varying degrees, leading to a virtual collapse in manufacturing...
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Mail Box

This letter is from an Indian investor. With the dominant share of my investments routed through the National Stock Exchange, I am a stakeholder too.
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Editor's Notes


Public sector exploitation not different from private sector's

Railway minister Lalu Prasad maintained his record of presenting yet another surplus budget. Not much known for modesty, Prasad took credit for the healthy state of railway finances and for the size of the surpluses generated. He also offered concessions by announcing a great two per cent across-the-board reduction in passenger fares.

The boom in revenues has flown from the much higher rate of the growth of the economy that has been generating much higher volume of freight and passenger traffic. The railways resorted to a couple of ingenious (ingenuous) methods: increasing the number of boggies in hundreds of express and mail trains: from an earlier around 15 to 22 making use of higher capacity engines to meet with the exploding volume of passenger traffic, Railways have also been introducing dozens of new long distance trains. Though Lalu Prasad claims not to have increased railway fares, railways have massively increased cost to the passenger in several ways: eg: re-designating several trains as super fast. A more glaring instance is the massive increase in the Tatkal quota and a humungous three 'fold increase in the charges for this. For a number of years, the seats allotted under the Tatkal quota was limited to a few; today several bogies are filled with Tatkal passengers each of whom coughs up Rs. 150 even on a second class ticket costing Rs. 150 or less. With demand in main routes far in excess of capacities offered, Lalu Prasad has been quietly adapting the private sector practice of hefty pricing of a commodity in short supply. It is an interesting evolution in which there is no qualm over public sector exploitation not much different from a private sector company taking advantage of a commodity / service in short supply through hefty pricing.

When lawyers do not respect law...

I reported the speech of Gujarat chief minister Narendra Modi (IE, February, 2009) claiming a drastic fall in the total number of cases pending in the different courts in Gujarat - from over a crore to a targeted 25 lakh by the end of March 2009. Modi also expressed confidence over bringing it down to zero by 2010 when the state will celebrate its golden jubilee of formation.
Sadly, the record of Tamil Nadu provides the contrast. Times of India reported (15 February 2009) to the number of cases awaiting disposal at the Madras High Court increasing from around 3.71 lakh at the end of 2005 to around 4.29 lakh at the end of 2007. The report mentions the number of court cases filed during 2007 at 2.59 lakh – in excess the 2.32 lakh cases disposed of during that year. There are cases of early 1990 vintage still awaiting disposal.

Lawyers resort to boycotts and agitations at the drop of a hat. There are frequent reports on the unruly behaviour of the lawyers inside the court premises. Last year one witnessed such a case at the Saidapet Court. Boycotting courts to express solidarity with the Sri Lankan Tamils, some lawyers disturbed proceedings at the Madras High Court showing disrespect to the sitting judges.

In the first two months of 2009 the Madras High Court has worked for less than 12 days. For the whole year the court is scheduled to work only for 210 days. There are no plans on the part of the Courts or for the lawyers to compensate the days lost through agitations.

The situation is no different for other courts in the state where the number of cases pending are piling up. Steps taken like setting up a branch of the Madras High Court at Madurai and increasing the number of judges substantially have not helped.
There is need for an attitude change on the part of the judiciary. The propensity to ask for adjournments without limit needs to be curbed. Hardly a couple of cases out of around 20 listed for a day, are taken up for examination and the balance adjourned.

Renowned jurist Ram Jethmalani, as Union minister of Law in the NDA government, brought forth amendments to speed up disposal of cases. A major amendment related to limiting the number of adjournments. The lawyers have a vested interest: in getting paid for their appearance, even for the adjournments, they stoutly opposed this. While the rest of the country reconciled to the beneficial aspects of the amendments, Tamil Nadu lawyers continue to oppose this. Curiously, a section of lawyers goes to the extent of suggesting the state government to enact a law on its own to ensure this!

While other states like Karnataka, West Bengal, Rajasthan and Orissa have gone ahead with setting up top class law schools and are also expanding the number of law colleges, Tamil Nadu lags behind even in this regard. Unemployment and underemployment among lawyers are rampant. With little work to do, lawyers actively indulge in politics; true to the divisive nature of politics in Tamil Nadu, the legal fraternity is also sharply divided on political lines. It has thus become difficult to work on any consensus on vital legal reforms.

In private, senior lawyers agree and express deep concern over the paralysis of courts and the prolonged nature of litigation that contributes to humungous delays and costs. They plead helplessness on fear of getting roughed up by politically charged lumpen elements.

On 18 February, one witnessed lawyers throwing eggs in court halls, manhandling court staff in front of judges, throwing to winds all canons of decent professional behaviour . But what followed the next day took such behaviour to new lows. Sun TV showed for quite some time lawyers pelting stones at the police, setting fire to the police station inside the court premises and to the vehicles. The TV also showed a fire engine along with the personnel prevented by the lawyers from dousing the fire with sections of the mob throwing more material in to the fire. Right through, the posse of policemen appeared to wait for orders. This seems to extend for quite some time. One can imagine the pent-up emotion on the part of policemen provoked so much to retaliate.

It is time such lack of respect for law is put an end to. Chief Justice K G Balakrishnan has been expressing concern time and again over lawyers resorting to strike. It is time for the judiciary to assert itself and put an end to the prolonged agony inflicted upon litigants for no fault of theirs. Sadly, consumers are at the receiving end of educated professionals whether they be doctors, lawyers or chartered accountants. Their combined might comes in the way of government treating these with firmness. Look at these professionals escaping the service tax or provided protection from competition from outside the country! It is time some serious thought is bestowed on ensuring these bodies conforming to a certain code of conduct.

There is intense politicisation right from the college days (remember the recent gory incidents at the Law College hostel in Chennai). Sadly, a politically divisive and politically active state like Tamil Nadu appears paralysed to look at reforming this vital arm of governance. The few attempts made by the judiciary at such reforms had been thwarted by organized opposition on the part of a few lawyers. Even writ appeals get prolonged over ten years! The cost and agony of hapless litigants need to be mitigated.

Welcome French interest in IIT-J

It's welcome news: of the French government's interest in lending support to the setting up of a new Indian Institute of Technology in Jaipur (The Hindu, 24, February). The report mentions that the focus will be on aeronautical engineering and energy research.

When the first set of IITs were set up almost five decades ago, they received excellent support from the Germans, the British, the Americans' and the Russians. IIT-Madras received handsome support from the German Federal government with liberal funding for setting up the infrastructure and for academic exchange programmes. IIT-M is the largest educational support programme of the German government.

The French had not been too aggressive in this area. From time to time, one heard of the specific interest of France towards closer collaboration with India; but progress had been modest.

France is a leader in engineering, particularly, in space science and aeronautics, nuclear power, telecommuni-cations and automobiles. Close to 80 per cent of power consumed by France comes from nuclear power. Airbus Industrie, Touluse, part of the European Aeronautic Defence and Space Company (EADS), in a matter of just two decades from the 1970s, ended the near monopoly of the Americans in global aircraft business; it rendered the two large American aircraft manufacturers, Lockheed and McDonnell Douglass, sick and provides tough competition to the Boeing Company.

There is thus a lot to be gained by the French interest in joining hands with IIT-Jaipur.

Japan, world's second largest economy, investing a lot in India's large infrastructure projects like the metro rail and dedicated freight corridors, would not lag behind. States selected for the new IITs, one hopes, would take the initiative to win over the Japanese. Narendra Modi selected the Japanese as the partner country for his Vibrant Gujarat Global Investors' Meet, January 2009. I am sure he would have made the first move.

- SV


Finally, Oscars come to India

Cancel all your plans tonight and go watch Slumdog Millionaire. Not because I think it is the best movie in town, but because you must absolutely see a movie narrating an Indian story that has won EIGHT Oscars and, more importantly, huge international acclaim.

What makes these wins even more special is that it is not a Spielberg or Tarantino movie; (formerly) little-known British director Danny Boyle has won the Oscar for best director. It doesn't have a famous lead - the protagonist is played by first time British-Indian Dev Patel.

The most recognisable name among the film crew is music director A R Rahman (apart from supporting actor Anil Kapoor). Even the rags-to-riches story is nothing unique. The movie-based on an adaptation of Q&A, a book by an IFS bureaucrat Vikram Swarup, is mostly in English, interlaced with a lot of Mumbai Hindi. And much of the movie takes place in the slums of Mumbai, not exactly very scenic.

Yet, this story of a boy from the Mumbai slums making it big and winning the Who Wants To Be A Millionaire show to get his lady love to watch him on TV is inspiring and madly romantic. The film has all the ingredients of an Indian pot-boiler: two brothers going their separate ways, Hindu-Muslim riots, the love angle, Mumbai slums and streets and, of course, the underworld. Importantly, it's a story of hope winning against all odds–even though in seemingly impossible ways in certain instances–which has touched a million hearts around the world, especially in an environment of economic gloom and slowdown.

For India, Slumdog Millionaire will be remembered for many generations as the movie that won us three Oscars-two for Rahman (for original score and original song 'Jai Ho' along with lyricist Gulzar), and one for Resul Pookutty for sound mixing.
Rahman's win (though for music that many, including me, feel is not his best), is long overdue. This genius, who made his presence felt across India in his first Mani Ratnam film Roja, took a big leap into the global music scene by composing music for Bombay Dreams, a musical by Andrew Lloyd Webber. With this double Oscar recognition, Rahman is sure to have a much more global presence in the future.

On a parting note, I wish our stars and sportsperons are better prepared to talk at international events. One expected a better acceptance speech from Rahman: his meri paas ma hai (I have my mother by my side) line, which was meant to be funny, fell flat and didn't impress an audience not used to such sentiments. But then, he probably redeemed himself, by attributing it all to God (ella pugazhum Iraivannukke).

 
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