It’s credibility, stupid
Pratap Bhanu Mehta | Contributing editor, Indian Express
The Indian Express
Mehta writes that it is becoming “impossible” to “disguise the sense of gloom surrounding the Indian economy”. An “obvious fact” that we aren’t paying attention to is the “pervasive loss of credibility in the Indian system”. He notes that there are three gaps in credibility at play – first, no one knows “what to believe” when it comes to the Indian economy since there exists a gap between what people say in private and in public regarding the economy. He writes that “privately, almost no one believes our growth is more than two to three per cent”.
The second gap is “the undue power exercised by the rich and the powerful to distort the [economic] system”. Mehta talks about the “credibility-undermining influence” wherein the rich can “disproportionately claim exemptions from the state” and also exercise influence “over the regulatory system”. Two “opposed trends” are creating a “credibility crisis”, writes Mehta. While there have been “attempts to clean up the system”, there is also the “perception that the system” is “moving in a direction” wherein some groups “will exercise disproportionate influence on the political system”.
Finally, the third credibility gap is the “private sector itself”. The “episodes” of Ranbaxy, IL&FS, DHFL have “exposed” the “fragility of accountability systems in the private sector”. In conclusion, Mehta maintains that we are “frittering away at every level, even economics”.
Internationalising the Kashmir issue
Karan Thapar | Television anchor
The Hindu
Thapar raises questions on the recently-concluded European Parliament members’ trip to Jammu and Kashmir. He notes that only 23 members visited the Valley and most of them belonged to “right-wing parties best known for their anti-immigrant stand”.
Thapar writes that a few MPs were “disinvited” after they claimed they wanted to meet “ordinary people without police and army security”. He asks if “these discordant voices suggest the others were willing to be co-opted as part of thinly-disguised PR exercise”.
His second concern is Madi Sharma, the organiser of the event. The trip was funded by the International Institute for Non-Aligned Studies (IINS) that raises questions about Madi Sharma’s influence and INS’ resources.
The third “intriguing issue”, according to Thapar, is how the EU MPs gained “access right to the very top”. The fourth concern is related to “Kashmiri people they met as well as those they were not permitted to have access to”. Furthermore, MPs were given a “sanitised view”. In conclusion, he raises the question of “domestic interest” and whether this visit “internationalised the State to the country’s disadvantage”.
RTI 2.0: Eroding a valued right
Yashovardhan Azad and Sridhar Acharyulu | former central information commissioners
Hindustan Times
The Right to Information (RTI) Act is “set to play a fresh innings in the future”, writes Azad and Acharyulu. They note that, earlier this year, the Centre “had passed a bill to give itself full authority for deciding the tenure and salaries” of information commissioners.
However, they observe a “strange anomaly” in the change of the “salary structure” wherein the Chief Information Commissioner is “entitled” to his/her earlier salary, but the salary of the central information commissioners has been reduced. The “strange part” is that these rules have removed this salary dispute in the states where earlier, the state chief commission officer used to receive a higher salary than other information commissioners. Azad and Acharyulu state that these steps “violate the parliamentary standing committee deliberations during the formulation of the RTI Act”.
The second “indication of erosion” regarding the autonomy of information commissioners is “the reduction of their tenure from five years to three”. They maintain that this will not just “weaken” the commission but also the “individual information commissioners”. In conclusion, they write that the RTI regime is at a “crossroads today” and the new rules “will curtail the autonomy and authority of information commissions”.
When the going gets tough
Devashish Mitra | Professor of Economics, Syracuse University, New York
Economic Times
There is “no reason not to be optimistic” about the steps being taken to address the economic crisis and GDP growth, writes Mitra. He identifies aggregate demand as “a symptom” of structural problems in the economy, adding that India’s business environment may not be as competitive as before – the automobile sector or the textiles and apparel sector are evidence of this.
Protectionism and high import tariffs have hampered both exports and imports and call for a return to trade reforms proposed during the Narasimha Rao and Vajpayee administrations, he explains. Mitra suggests that PM Modi push for more land and labour reforms and the central government should consider privatisation and alternate sources of revenue to change the way it spends.
The limits of monetising fiscal deficits to counter downturns
Nouriel Roubini | Professor of Economics, Stern School of Business, NYU
Mint
“Crazy and unconventional policies” can be expected from governments across the world as they grapple with a potential global recession and “a synchronized slowdown”, writes Roubini. Currently, the “tail risks” of a recession are the US-China trade war, a potential military conflict between the US and Iran, Brexit and, pressure on oil prices, he explains. While resolutions for these risks are in sight, economies also have to deal with the “large build-up of public and private debt”.
Mitra predicts what may happen in the event of a global recession. First, policymakers will find themselves “low on ammunition” in terms of finances and resources and pressure to act will lead to “crazy” policies. For example, monetising large fiscal deficits by central banks in order to stimulate demand – something Japan already has a head start on.
However, if the next recession is triggered by permanent supply shock, “fiscal and monetary loosening is not an appropriate response”. It all depends on what kind of shock triggers an economic downturn, writes Roubini.
Don’t bet on BSNL, MTNL’s revival
Rahul Khullar | Former chairman, Telecom Regulatory Authority of India
Business Standard
The government’s revival plan for the cash-strapped telecos, BSNL and MTNL “is on a wing and a prayer”, writes Khullar. The financial health of the two companies deteriorated after two significant incidents – the 2010 3G auction and the transfer of surplus staff from the Department of Telecom to BSNL and MTNL, which raised the wage bill.
Khullar recommends that augmenting revenues, cutting costs and selling assets will help generate resources for the core business. However, monetising assets and decision-making in public sector units (PSUs) is “tardy, cautious… driven by risk-aversion” and will probably take time, he explains.
An “attractive” voluntary retirement scheme (VRS) can solve overstaffing but this depends “on the perceived sweetness of the VRS handshake”, he adds. BSNL’s management practices and organisational culture will need to adapt to changing conditions as well, writes Khullar.