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Editor's Notes

Protest protests

In a highly populated country like India, with a high degree of political consciousness, it has been possible to mobilise support for each and every cause.

Look at the experience of Tamil Nadu over the last year. The prolonged protests against the Kudankulam nuclear plant; groups of Muslims marching into the American Consulate in Chennai, protesting against a film by a little-known American; the agitation against screening of the film Viswaroopam; farmers’ protests against laying of the Kochi-Bengaluru gas pipeline in Tirupur; the clash between Pattali Makkal Katchi and Vidhuthalai Chiruthaigal Katchi on inter-caste marriages; opposition to the divestment of shares of Neyveli Lignite Corporation; the several protests against rights being denied to Sri Lankan Tamils by the Rajapakse government and protests against the visit of Sinhalese to Tamil Nadu. The list is only illustrative.  A recent report mentioned Tamil Nadu topping the list for such agitations thanks to the ability of the leaders to mobilise people, on specific issues.

Activists may justify such protests as an expression of democratic dissent. However, they cause widespread damage to the peace and tranquility of civil society. In several cases, like the Kudankulam agitation, they have huge economic implications. The production loss suffered by the nuclear power plant is valued at Rs 14.4 crore per day.

The three-year delay in commissioning the project exceeds the total cost of the project. The felicity with which parties opposed to the government join hands to voice protests make it difficult for the government to enforce law. There is need for a higher degree of tolerance and appreciation of the other point of view.

Policy change to step up investments

Every time I meet B Muthuraman (BM), Vice Chairman, Tata Steel, I get a sharp perspective on the global steel scene. An incurable optimist, BM also used to be quite upbeat on the prospects for India rapidly expanding its steel capacity. He passionately spearheaded Tata Steel’s expansion of  capacity almost four times in a short period and was part of the company’s illustrious team to help it emerge a global producer. He expanded his horizons when he served as President of CII during 2011-12.

I was, therefore, sad to note his  not being enthusiastic over the current state of affairs. He pointed to delays in getting clearances from the various fronts for new projects. The Odisha project of Tata Steel on which he has been working for close to a decade, is a case in point. Phase I of the 6 MT capacity plant is expected to be commissioned only in 2014.

The experience of the South Korean steel giant Posco Steel for its 12 MT capacity steel plant is worse. Opposition from the local population on land acquisition  has stalled this project with potential investment of over Rs 50,000 crore. This despite strong support from the state government.         There is finally news on the completion of the land acquisition process. For Odisha, a state very rich in minerals, such a project can promise jobs and handsome revenues. Yet, unfortunately, several precious years were lost on just the preliminaries. Posco steel offered to set up another 6 MT steel plant at Gadag district in Karnataka as a follow-up to the Global Investors Meet 2010 organised to solicit large FDI. The company deposited Rs 60 crore towards land acquisition. Three years later, Posco Steel was unable to acquire the needed land.

There was also the paralysis  in administration caused by the mining scam of Karnataka. While the administration was enthusiastic about the prospects for a handsome FDI flow through such large projects, the political leadership has not been able to tackle opposition from the locals. Posco with its bitter experience in Odisha, did not feel equal to facing another prolonged battle. The company has withdrawn its plan to set up its second steel plant in India.

The UPA II government, which has been announcing relaxations in its FDI, has failed miserably in tackling issues at the ground level. Several thousand crores of rupees of promised investments are not being made or are idle through severe policy deficiencies relating to issues like land acquisition and allocation of mines. Tata Steel abandoned a Rs 3000 crore titanium project in southern Tamil Nadu after a ten-year ordeal. Several such examples further depress the enthusiasm of investors to invest in large projects. They will increasingly prefer to look for acquisitions or mergers, which may not add much to investment flows.

I am particularly worried over the impact of such withdrawal of projects by multinationals like Posco and the Tatas in the southern states, which have long been considered progressive and investor-friendly. Over a year ago, S Mahalingam, the then CFO of TCS, mentioned the distinct waning of interest on the part of IT industry to invest in the state due to the very high cost of land. The great enthusiasm with which the southern states welcomed the SEZs has also vanished.

The governments at the Centre and the states would do well to resolve the issues of land acquisition, relief and rehabilitation in quick time.


Revamp agriculture before promising food security...

There have been wide criticism on the Food Security Ordinance, which appears to be a major platform for the Congress party for the forthcoming Lok Sabha elections. FSB requires 80 MT of foodgrains per annum and an outlay of around Rs 120,000 crore. In the light of the slow growth in food production, averaging less than three per cent per annum, procuring and distributing this huge volume of foodgrains will pose a serious challenge. Some 50 years after the setting up of the Food Corporation of India, the public distribution system has not been efficiently managed across the country. There is a problem of identification of the beneficiaries. Tamil Nadu chose the easy option of making the scheme universal: the state offers 20 kg of rice free of cost to all eligible ration-card holders in the state. Again, there are other states that offer rice or wheat at low prices. In this background, the offer of rice at Rs 3 per kg and wheat at Rs 2 per kg is not unique. Voters thus, may not find the new scheme any better.

There is the additional problem of procuring, storing and delivering this large volume, which is much higher  than at the present levels.

With the procurement drive sucking in bulk of the marketable surplus of farmers, there is also the danger of shortages in the open markets leading to higher prices. Even while Tamil Nadu’s experience provides a warning: rice is freely offered by the state, involving a huge annual subsidy of over Rs 4000 crore; but the open market price of rice of finer varieties have shot up in excess of Rs 50 per kg.

Sadly, the obvious solution, of  a massive step up in production, is not receiving the needed attention. With productivity levels so low, there is enormous scope for stepping up production. All it needs is a focus on the application of science, technology and management, along with efforts to agglomerate the small land holdings. The Punjab and Rajasthan governments’ approach of permitting lease of land for over 15 years, without alienating ownership needs to be replicated.

IE reiterates its suggestion of doubling the target of food production to 500 MT by 2020.

Need to focus on manufacturing

“25 per cent of world’s total export is made up of hi-tech capital goods. But India’s share in this is negligible,” said T C A Ranganathan, CMD, Export Import Bank of India.

Delivering a special address at the 177th Annual General Meeting of Madras Chamber of Commerce and Industry, Ranganathan stressed the importance of India emerging strong as a manufacturer of high quality engineering products. He suggested that industry should utilise the present slow down of the global economy to weed out inefficiencies and gear up manufacturing capacity.

I met the Exim Bank Chairman at his sprawling office at the World Trade Centre, Mumbai. For several years in the past, IE has been organising special seminars on trade issues in cooperation with Exim Bank. In these, several companies assisted by Exim Bank presented case studies on Exim Bank’s expertise and assistance.

These have been of value to the entrepreneurs of the region, especially from the medium and small scale sector. Ranganathan’s special knowledge on emerging economies in Africa and Asia will be of special interest.


Can’t compete? Copy.

I have been pointing to the impact both, desirable and otherwise, of Times of India (TOI) on the 136-year old The Hindu. The welcome features include a much better coverage of local issues, particularly those relating to the civic problems of Chennai metro. The recent series of articles in The Hindu under the title Who Cares, pointing to the neglect and encroachments of footpaths, is a welcome effort.

 The sustained campaign of TOI on the bizarre manner of operating auto-rickshaws in Chennai was another welcome effort. For years, auto-rickshaw drivers have been a law unto themselves, fleecing customers and defying law by refusing to charge by the meter. How coolly they had dispensed with the meters! From the usurious capitation fees charged by most private engineering and medical colleges to the plethora of civic issues, TOI has been reporting extensively on issues that impacted severely on the hapless citizens. Happily, the pressure from this peer and leader has influenced the The Hindu, which still accounts for a major share of English newspaper readership in the state.

In another area also one could see the copycat syndrome: of The Hindu massively expanding coverage of film news on the lines of TOI. Of course, TOI has no qualms in presenting a daily fare in its Chennai Times supplement, a portion of which, presumably,  is also paid news.

Press Council Chairman, Markandey Katju, should be looking askance at the full-page analysis in The  Hindu of the Hindi film Raanjhanaa subjecting it to a semantic thesis by several experts spread over a page. I would agree with Katju on the lopsided devotion of space even while a number of burning developmental  issues like a gas pipeline for the south suffers neglect.

I can well understand the impact of TOI - several top managers, including the editor and CEO - are ex-TOI executives.

Former Editor-in-Chief N Ram conceived a sort of ombudsman for the paper: initially ex-employees of The Hindu who had served the paper for decades,were appointed as the Readers’ Editor. The third incumbent, A S Panneerselvam, has better credentials as one from outside. As an active journalist, he seems to perform a greater role as a regular columnist liberally commenting on national and international news relating to media.

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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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