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ANINDA GHOSH.

SONGSOPTOK THE WRITERS BLOG | 8/10/2014 |

A YOUNGISTAN BUDGET
- AN EPOCH AT THE END OF A BLIND ALLEY, A DECADE OF SHAME


A Youngistan  budget—an epoch at the end of a blind alley, a  decade of shame
Introduction:


Aug 2014 has created some extremely proud moments for India-- at least short lived. After BRICS Bank & SAARC Bank , Modi is on his prowl to SAARC nations --- Buddhist kingdom of Bhutan to Hindu democracy of Nepal, both submerged in poverty. And , India has asserted against the Imperialism slogans so popular with left / ultra left brats—Uncle Dunkel go back… And this assertion is coming from a person extreme in right wing of politics , who has asserted & helped India take a center-stage in World politics . Because he has estd a skeleton for a vertibra India, which was going missing. And India has thrown its bouncer to a shaky US—more shivers shall start flowing thru the nerves of NATO.
On June 21 & 22 ICAI organized 2 days’ conference in Bangalore. Main agenda was preparation for budget. What are our expectations from the new govt? This time, for a change , there was an inclusion of a presentation on Indian Economy & the author was none other than recently popular author of the book “ A Decade of Shame”. Generally all our lectures concentrate around taxation aspects & companies act & eco laws like FEMA etc… , which is not relish able by outsiders to profession. I requested Mr Raghu, our new Chairman, to include some non boring topics. In all of our discussions , the main concern that comes out center around the following vicious circle--- a) in Eastern India supplies of CAs far exceed demand & people drift southwards. b) Ahmedabad stands as the worst chapter in campus despite so huge industrial growth of Gujarat, c) in public sector our bills get hung up in case we qualify our reports , & in pvt sector rotation , although brought in recently, it is very crude one & it is too hard for small firms to get good business. d) Indirect tax profession has not grown beyond metros & so many thousands of CAs in practice depend on statutory audits of small entts, internal audits / certifications of big giants, or I tax practices or in a/ctg / share mkt actions; there is a total dearth of excise , sales tax, service tax practices. And this dearth is so huge that we do not mind blind signing of records , despite so many CAs found guilty of misconduct… across the globe knowingly / unknowingly we have defaulted, & the professional n unprofessional bosses, the promoters & govt servants alike , the panchayat / local bodies that take our services … we are whisked by all… to sign what is given to us,… in pvt sector every time you run the risk of losing the client… whether you are big 4 or a tiny firm.

After the seminar that was more of a fair of families , with food stalls , free snax, fun fare… the promoters got the flair of tax saving in the best of tax heavens in India--- the housing & infra sector, the black money’s own heaven of tax-less cap gains—Bangaluru, we got out for Puducherry. There are 2 ways from Blore that lead to Puducherry…. We went by the 4 lane route via Vellore, having a glimpse of the Golden temple . This temple full of gold has never been raided like its Tirumala counterpart, but to many who know this temple’s source of gold shall be a source of mystery always. ,….only diff with the richest God of Tirumala is that it is pretty new & not so well known. We went there to meet my cousin’s wife, in coma & under ventilation, after a head on collision on the East Coast Road. But she died just after we reached… the cremation ground was excellent … manual burning spread over 8 hours…. On the left Muslim & Christian burials , on the right Hindu cremations… a perfect blend of Secularism near Aurovilla--- the global village hotspot… and an excellent trauma hospital so neat & clean … so open… skeleton dissections in open rooms… open air modern day cafeteria in the hospital & a sultry , salty , sweaty beach….. may be , the coastline was really good , with a very beautiful road , benches , but we were too stressed… actually weather put it off, and behavior of people incl at bar & restaurants , so very unsocial, so inhospitable, uncaring & unbothered to visiting guests… unprecedented.

My parents visited us last week. Just 2 weeks back they went to Tarapeeth by car from Kol & stayed at a star resort. They were describing very pathetic experience of potholed roads to Tarapeeth post- Bardhaman. My business associates told me about recent drastic improvements in roads to Haldia , which can be reached in 2.5 hrs from Kol nowadays. Digha & Bakkhali my parents reached in 3—3.5 hours from kol. But what pained me is that after a business aloof Left Front Govt did not take care of road developments, in last 2 years+ TMC govt too did not spend on SHs & even NH31 in N Bengal. Compare that with Karnataka & Tamilnadu . During his regime, Mr YSR made good all major AP roads. In Ktaka road repairs started off late , but BJP regime saw many / most of smaller roads, NHs & SHs. Today you can reach Kol to Vizag in 12 hours & Chennai in 24 hrs. Kol to Deli takes 18 hrs, Haldia 2.5 hrs. But pitiable are smaller roads , even if they connect some of best tourist destinations. T NADU has already repaired its roads in last 5 years. But there are black spots in each state. The narrow, winding roads to Ooty from across Madhumalai , Mumbai –Kchi highway at long n short stretches from Murudeswar to Kozhikode are cases in point. The area is too very affluent. Blore is gold capital of India , but Kerala is the land of gold. It looks strange to find a state of narrow winding roads , with official speed limit of 25 kmph, abound in so much of prosperity, near nil poverty, high HDI . And such a huge development divide to the north & south of Kozhikode… Muslim belt of Waynad daily bathes in imported n smuggled gold… Had the budget of GOI been able to bridge such gaps…..

But Kol has changed for better in last 2 years. This is realized by us, who need to slog, dodge &saddle thru the hour-long jams across Blore roads so very patiently. The people used to the daily hanging struggles by Mumbai suburban rail & the famous / infamous jams of Mumbai ( santacruz w to e in 1 hr) , may also be aware of the jam-packed SP Road of Hyd & the jams of Anna Salai , Nagambakkam , T Nagar & other areas of Chennai & all of them breath a very big sigh of relief at the jam-less streets of Kol, load shedding less days n nights, -- the best managed city of India , the best urban landscape… But you have so many lesser brands in Kol compared to Blore, Delhi, Mumbai or even Hyd. Branded hotels, restaurants & malls / apparel stores are so very less here, and Kol is still a heaven for Goldlites-- light gold with excellent artwork , artecraft….Kol has greenery of Maidan far better than garden city…

What India lacks today is skill that edn fails to impart on to us. On the one hand , our IITs & universities hardly qualify within top100 of Asia / even BRICS. Even after All downfalls & systematic degradation over last 35 years JU & CU still stand among first 100--- equivalent to Madras IIT, & far above fat campussed engg colleges @ 1 in each town / city of AP, TN , Ktaka. Running on populism, Mod govt has usurped in creation of quantity instead of improving quality & innovation. My friend Kallol ranked 3rd in MSc Geology from CU , who remained jobless for long & ultimately settled for a LDC’s job in AG Bengal. He, like uncles & aunts , go to office at 12pm & depart at 4 pm. There are plenty from sociology/ anthropology / Comparative literature, wasting life n career at unprimed avenues.
The Budget :
The Finance minister said that 79 central public sector enterprises have incurred losses, of which 49 are sick. At the same time he said that there are 19 that have turned around, indicating that there will be an effort to revive the viable ones that remain competitive. Over Rs 1.57 lakh crore has been pumped into these enterprises over the past few years. Coming days after the finance minister said that being pro-business does not amount to being anti-poor, Tuesday's statement is being seen as a signal that it won't be business-as-usual in matters of economic policy. For a decade, the UPA government had dragged its feet on shutting down even the terminally sick PSUs, despite it clearly stating it as a policy goal. As a result, the government kept on pumping money to pay salaries and keep these money guzzling entities alive, all for the sake of political expediency.

The budget has been a dream budget for Moditva in so far as he has unveiled the power of the common man. He has unleashed Rs 10 K crore of corpus fund for start ups. India has given Flipkart ---21st century’s Indian answer to Facebook. Rug to riches are being woven in doors of Redbus, goibibo… Every odd person from Bengal u meet, or every 2nd Bengalee, would tell u, no indusy has come up in Bengal in last 10 years…. Nor in last 2 years… Correct. Very true. But it is als true that in trade, service, hotel, hospitality gradual rise is happening, & imports—exports also on the wave. Courtesy Mamtadidi, newer & newer trains also see gree signals. But Standard Volvo / AC sleeper buses do not go up . On any date , paying Rs 3500/- a night in Ghy you derive the comfort you derive by paying Rs 1500/- in Bangalore. In a land bereft of any minerals, IT industry can be reckoned as the basic industry that can steadily grow. At least from govt end clear indication has come that strikes shall not be tolerated. But back to back murders in old industries lik jute mills prove beyond doubt that real estate has become a business much bigger than traditional industries. Every industry has got its life. Kol proximate industries have lived that . People have to be brought up from poverty line , to infuse fresher venture capital into the industrial belts of Howrah, Hooghly & 24 Pgs (N).
Flipkart, Snapdeal, ShopClues and Infibeam are among e-commerce notables that have stock options for lowerrung, non-managerial staff. A typical example of the next inspiring wealth creation story may well be Shambu Biswas. He joined a six-member Bangalore startup as an office boy in 2009 and received employee stock options (Esops). That startup is Flipkart, expected to be valued at around $5 billion after the next round of fund-raising.Esops given to Biswas, who earns Rs 15,000 a month now, can at that time cross the Rs 10-lakh mark. They are worth around Rs 7 lakh currently. And the good thing for Biswas and six other Flipkart employees at the level of administration assistants and operations executives, who between them hold 0.07% of the company's Esops, is that they don't have to necessarily wait for an IPO.Flipkart can offer to buy back and indeed, Biswas sold 10% of his Esops last year and put Rs 40,000 in a fixed deposit. For lower-rung employees, this is a game changer - the value of their Esops, Flipkart says, is between four and thirteen times their annual salaries. Flipkart's rival Snapdeal told ET it has four employees at the lower level who have Esops. But Snapdeal refused to share details of these. Neither did it answer questions on how employees can encash these Esops. Snapdeal is valued at about a billion dollars. Infibeam's founder and CEO Vishal Mehta told ET around 15-20 employees - office boys, customer service staff, administration assistants and delivery personnel - have Esops. Mehta also said these employees are allowed to encash some portions of their Esops whenever the company raises fresh funds. Infibeam is reportedly preparing for a Rs 500-crore IPO, potentially valuing the company in the Rs 2,500-Rs 3,000 crore range. Singh started as a warehouse supervisor and was one of the first Shopclues employees. His Esops will be worth Rs 10 lakh-plus by 2016. That's the time - after four years of employment -Singh's Esops will be fully vested. But Singh and around 20 other lower-level Shopclues employees will have to wait for an IPO or an M&A events to encash their Esops. Radhika Aggarwal, co-founder of Shopclues, told ET "employees cannot encash till there is a buyer ..  

In anation, where just 8 industry empires a/c for 60% of bank & FI loans, contrary to becoming a protégé of Adanis & Ambanis, Modi has livened n lined up dreams of d new gennext of netizens that hold a mouthful of sky in the likes of myntra, Zivame, Zorpia, & scores of others, that have made clerks millionaires thru ESOP route. Hindu capital n capitalism????  

Startups & SMEs represent the PPP model, hat youngistan dreams everyday--- Modiji finds solace in his days of extreme struggle… In a society that has so far mostly valued only / mainly elitists’ façade n fog, and IASs rub oil in the feet of Rabrhis & Mayavatis… Stephenians pride in doing servitude to an undergraduate alien lady—world’s largest democracy’s de facto head of state, what is the significance n contribution of Senonomics?  

India is learning thru transitional tests… the spend on MNERGA has been curbed… & people are smelling rats.. But , people have also seen , how on baseless false promissory basements didi has ruined rlys… and that purely popular & populist measures do not pay…Was it enough that agro labor got jobs for 100 days @ 100/-, much much lesser than MW act promulgations? Without asset creation pure populist ways rekindle inflation. 

Health for all, house for all… sanitation for all… electricity for all…. Can all these be any govt’s prime prerogatives, with a permanent brake on inflation? India , at central planning level,m has a very big control panel—Planning Commission, but no conspicuous corpus… So, health for all means FDI business & their enhanced business eans group protection to a class & a creed. FDI in housing means more banking.. –now, more money to people. Why should only Gujaratis be the no 1 business people? There should be many more Shettys in K’taka & more Chettiars in TN, business class in castes other than banias, Agawals, Jaiswals , Jains, Maheswaris… Why should not all Bengalees , all Oriyas, all Assameese, all Himachalis, all Kashmiris, & last but not the least the Biharis---in groups—start up new businesses that they have dreamt throughout their growing years? 

Since my growing years, which have seen traditional ghoti unemployed youth feeding on ‘ bekarvata’ , I used to compute , how much money as loans to each of my unemployed young friends, shall yield them freedom from the curse of dependent lives? Just Rs 50 K per head to 10 crore unemployed youth ( by 2020, Indian demography shall have highest working age bracket youth in the world) means Rs 500 K crore. But allotment in budget is just Rs 10 K crore—what shall be done in that? Whatever has been traded & pocketed over last 10 years in the name & guise of NERGA, at least 20—40 % of that should have been spent on entrepreneurial development & that would have seen an emergent India, at the end of a blind alley, a “ decade of shame” . 

Budget has provided for a hefty , gigantic Rs 39458 crore to MTNL & BSNL---the thelecom giants, why? Details needed. But was this Tele-Highway so crucial at govt finance n public money? Or was it not better to give this fund to 10 crore unemployed? Social health Card & Bei Padhao programs--- Senonomical welfare doctrines…no govt. could have done with NERGA… 

Rs 7060 crore has been allotted to smart city creation. When Mamta set out in making Kol London, all Marhwarihs started taunting. … now London Eye like Kol Eye shall embrace many cities. Now, all Indians alike , residents & aliens to Bengal , like the tripod lights that make New Kol bye pass road the new dreamy dotting lines of Kol. Eco park to Rabiteertha are newer additions to cultural extravaganza of Kol; Ganga cleaning that GOI has ventured just thru this budget is 2 year old already in Kol & Kol happens to be only Indian Metro on the banks of its biggest & most sacred river.
Sanitation projects to reduce open defecation, increasing green cover and emphasis on creating assets form the crux of the Narendra Modi-led government's blueprint for redeploying UPA's flagship social sector programme — the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA. Top officials aware of the government's re-orientation roadmap for the rural employment guarantee scheme, being steered by rural development minister Nitin Gadkari, told ET that assessment of its outcome would go beyond number of man days of work offered to tangible ground-level changes it achieved. For instance, people digging a pond will have to mention the storage capacity being created, its impact on groundwater level, and so on. Similarly, folks erecting compost pits will have to outline the quantum of compost they will generate. According to the officials, it is proposed that about half of the scheme's fund allocations will be earmarked for rural sanitation projects and plantation of trees along highways and rural roads. While farm-related projects will continue to get 60% of MGNREGA funds, as under the UPA, the NDA is putting in place a more rigorous system to monitor asset creation. "The leader - who could be the NREGA sachiv or any villager representing his or her fellow villagers asking for work under the programme - will have to stipulate the outcomes," one of the officials said, requesting anonymity. While payments won't be contingent on achieving these outcomes, 'consistently poor outcomes will need to be explained', the official explained. The idea of planting trees and granting rights and responsibilities to the poor to boost their income is not new. It had been used in undivided Andhra Pradesh a few years ago. This idea will now be rolled out nationally in 2014-15. Villagers will be given Rs 15 as maintenance fee for every sapling that survives. This is expected to work as an incentive for them to care for the saplings and follow a specified schedule in the first year of plantation (apart from watering the plants). As for the sanitation component, the national sanitation programme will pay for material and NREGA will pay for labour. Monitoring to see whether intended outcomes are being achieved would need a higher level of scrutiny than the present system entails. "The states are a concern. Some have very poor monitoring abilities," the official conceded. The question is whether these problems should be fixed using MGNREGA. Corruption and payment delays have shrunk the number of people seeking work under the NREGA, said Himanshu, assistant professor in economics at JNU's Centre for Informal Sector and Labour Studies."MGNREGA is not a sanitation programme, but a safety net for people who can demand work whenever they need it. In the process, some assets also get created," he told ET, adding that the Act ceases to deliver 'work available on demand' the moment it gets linked to another program like sanitation. "What if the money for sanitation is not released? Then NREGA, with 20% of its budget earmarked for sanitation, will suffer," he added.
After reading certain reports by the Municipal Corporation of Delhi stating that 70 per cent of the water supplied in Delhi is unfit for drinking, 16-year-old Prakriti Singh decided to be the 'water ambassador' and solve the problem in her own way.After visiting certain areas in Delhi and getting their water samples tested, Prakriti, a class XII student decided to work in the Madanpur Khadar area of Delhi and installed an Aqua Pristine's RO 250LPH water purification system that she claims purifies up to 1,500 litres of water on a daily basis.
"I found out that over 200 families are staying in Madanpur Khadar and are forced to drink contaminated water.They aren't well off families who can buy Bisleris for drinking. I decided to send the water samples to a laboratory and then researched upon the solutions and technology that can be used to make the water potable," Prakriti told PTI.While looking for experts' suggestions was easy, the major problem came with the funding as the cost involved amounted to over Rs.1 lakh, she says."I decided to bake cakes and sell them in certain functions to generate funds. I also approached certain companies for donations and could manage Rs.1.5 lakh. But now, the problem arose as to where the plant would be installed," said Prakriti.
The girl, then approached 'Project Why', an NGO working in the area and with their help the water purification plant was installed in a school run by the NGO in June 2013."So, the water is not just being used by the 200 families but also the students studying in the school have access to hygienic drinking water. But the message needs to be spread and people need to understand the importance of clean drinking water. Hence, I appointed 'water ambassadors' in the school who would spread the message and the technique in their proximity," she said.
Enthusiastic after the successful installation of the first plant, she facilitated another installation at Manav Ashram in Punjabi Bagh last month.Next on her agenda, is installation of a similar plant in an old-age home in Tughlakabad area."After my grandfather died of jaundice and certain reports about contamination of water in Delhi, I toured interiors of Bihar studying water scarcity and contamination issues. But it wasn't practically feasible for me to work in those areas, hence I decided to start with Delhi but I plan to take it to other states as well," she said.

In 
NEW YORK: India had 175,000 millionaire households in 2013, ranking 15th in the world, according to a wealth report which said the total number of millionaire households in the world rose to 16.3 million last year. The Boston Consulting Group's 14th annual report on the global wealth-management industry 'Riding a Wave of Growth: Global Wealth 2014' said global private financial wealth grew by 14.6 per cent in 2013 to reach a total of $152 trillion. The rise was stronger than in 2012, when global wealth grew by 8.7 per cent. The key drivers, for the second consecutive year, were the performance of equity markets.India ranked 15th last year and had 175,000 millionaire households. Its position improved slightly from 2012 when it had ranked 16 in the world for its number of millionaire households. India is projected to become the seventh wealthiest nation by 2018. The number of ultra-high-net-worth (UHNW) households in India, those with $100 million or more, stood at 284 last year.The total number of millionaire households reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 per cent of all households globally. The US had the highest number of millionaire households at 7.1 million, as well as the highest number of new millionaires at 1.1 million. Robust wealth creation in China was reflected by its rise in millionaire households from 1.5 million in 2012 to 2.4 million in 2013, surpassing Japan. The number of millionaire households in Japan fell from 1.5 million to 1.2 million, driven by the 15 per cent fall in the yen against the dollar."As the debate over the global polarization of wealth rages on, one thing is certain: more people are becoming wealthy," the report said. As in previous years, North America at $50.3 trillion and Western Europe at $37.9 trillion remained the wealthiest regions in the world, followed closely by Asia-Pacific at $37 trillion.A key driver in the rise of private wealth in the Asia- Pacific region has been strong GDP growth over the past five years, especially in China, India, and Indonesia, the report said.Globally, the amount of wealth held privately rose by $19.3 trillion in 2013, nearly twice the increase of $10.7 trillion seen in 2012.The growth of private wealth was driven primarily by returns on existing assets.The highest density of millionaire households was in Qatar (175 out of every 1,000 households), followed by Switzerland (127) and Singapore (100).The US had the largest number of billionaires, but the highest density of billionaire households was in Hong Kong (15.3 per million), followed by Switzerland (8.5 per million).At an expected growth of 9.1 percent over the next five years, UHNW households are projected to hold 13 trillion dollars in wealth by the end of 2018.India's weight among GEM funds was 7.5% during the peak of 2007, which later declined below 5% in the middle of 2008. The weight rose to 8.5% in November 2010, but dipped below 5% within a year. However, it started rising since September last in the hope of a business-friendly government at the Centre, and ever since Narendra Modi won the elections by a thumping majority, reigniting hopes of a revival of stalled projects, Sensex has been flirting with greater heights. Foreign institutional investors ( FIIs) have pumped in nearly Rs 69,000 crore so far this year in Indian equities. As a result, the Sensex surged 23% in rupee terms, and 20% in dollar terms, outperforming almost all major global Indices. 

Supriya Sule has rightly said, NDA has inherited a De Ja Vu on CAD & Fiscal deficit  from UPA2, &  not just an indecisive  non-governance. And now it is time for action.

"We pulled it off 10 minutes before the end of the game," said a Brazilian diplomat, requesting anonymity. "The Chinese got the headquarters. The Indians got the first presidency. The South Africans got a regional headquarters. We were happy to facilitate all this. And the Russians were happy that finally there is a bank that could challenge the IMF and World Bank." Often mocked at as an "impractical idea", the creation of the bank is the first major achievement of the BRICS countries since they got together in 2009 to press for a bigger say in the global financial order run by the International Monetary Fund and the World Bank. "It will help contain the volatility faced by diverse economies as a result of the tapering of the United States' policy of monetary expansion," Rousseff said, after the signing of the document. "It is a sign of the times, which demand reform of the IMF," she added.
While the announcement about the new bank reflects the growing influence of the BRICS, which account for almost half the world's population and about one-fifth of global economic output, it also made huge political statements on behalf of the five leaders.
"The biggest achievement of the document is that it will be governed through 'one country, one vote' model. All fears of this turning into a Chinese bank are baseless," said an Indian diplomat who was part of negotiations.
"With the first bank president coming from India, we will play a major role in its structuring and policies. Just imagine an Indian heading an international bank in Shanghai. It's a game changer." With India and China and three other emerging countries working so closely on global finance, the rest of the world will be watching BRICS with even more interest. "Commerce department has come out strongly in support of the South Asia Development Bank as it will go a long way in facilitating regional integration through financing of infrastructure for trade," a government official told ET. "The final call will, however, lie with the partner countries," the person added. If agreed by the partner countries, the bank would be the first for the eight-nation regional grouping that will provide countries with access to capital to finance infrastructure for trade facilitation and development. It will be on the lines of the $100-billion New Development Bank (NDB) announced by the BRICS grouping of Brazil, Russia, India, China and South Africa last week. While NDB, to be headquartered in Shanghai, will finance infrastructure and development projects across the developing world, the proposed South Asia Development Bank will focus on the eight SAARC nations — Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. India has been playing the big brother for the region. It has provided duty-free, quota-free access to the least-developed countries of the region, barring just 25 items under the SAFTA goods agreement signed in 2006. The country is also looking at giving unilateral access to Bangladeshi vehicles to deliver goods in India."The regional bank could be a turning point in the history of the South-east Asian regional economic development, as it will provide impetus to trade in goods, services and investment for development," said Ram Upendra Das, professor at Research and Information System for Developing Countries, a New Delhi-based autonomous think tank under the ministry of external affairs. "No country should have an objection regarding setting up of the bank though some lobbying would be needed to have the bank's headquarters in India. But as a big brother, India should also contribute a substantial share of the corpus," Sahney said. India's exports to the region grew 15% in 2013-14 to $18 billion while imports contracted by 8.25% to $2.4billion . There is already a SAARC Development Fund (SDF), incorporated with a paid-up capital of $300 million to provide financial assistance to social sector and infrastructure projects. India contributed $189 million towards it.

Now  , it is time for action.  We definitely need  IITs & IIMs in all  states , as the budget envisaged, but what we need more is the up gradation of  infra &  teaching talent pool  at existing ones.  With much more emphasis on  practical  real time situations & solns than just theories  in book pages. Yaa, we need  best quality labs, and more R&D  dedns to industries . Prof Dr Gupta  of IIM ( A)  repented in a  discussion , that  Indian entrepreneurs , promoters &  big  houses alike still  lack in research. They are still falling back, way behind  MNCs &  Chineese cos. There maybe failures ,  they  must not be punitive. Idea  cells  should be the need of the hour--  24*7  working  with new joinees , old employees &  even summer trainees  &  fresh grads from IITs, NIITs,  other Govt n pvt  colleges  alike to put  in best efforts to innovate.  Cost of failures has to be much smaller than cost of success.
With a first  time Rs 53706 crore astronomical allocation in its pocket, NE has to prove its mantle—not by stealing & pocketing the money in connivance between  NEDFI, beaurocracy  & industry / promoters,  --but by real meaningful addition of assets & capacities. It should lokk forward to  being rich in  rainwater harvest,  solar & wind power, organic farming  roads & hydel power  from rugs in next  5 years.
It is time to  see more meaningful outlays  in quality edn  that does not promote mediocrity. Agro, irrigation, & handicraft output growth   should be the main objective of  NERGA. NERGA cannot  be stopped  all of a sudden, wherein country  has invested Rs 206K crore in last 5 years, & provided  jobs to 35 crore  people ( or just 7.5 crore jobs ?) . Sudden brake  shall suddenly raise the mobility of marginal & landless farmers .  And, NERGA  cannot be  simply  evaluated  thru  the test paper of how many  assets were  meaningfully created.  It has gived the have nots – mostly the dalits, mahadalits , STs , &  the Shudras  the rights to employment &  rights to food. UPA regime  gave them official legal protection against child labor & right to edn. In last 5 years  they have  learnt how to live like humans, with heads held high . NDA must  nip in the bud Ms Vasundhara Raje’s  attempt to terminate such acts that  reverse  the accolades  of such fundamental rights .
But NDA needs also to garner courage to say No. Once biggest critic of NERGA, Jaitley-Modi combine should continue NERGA at last year’s  level only for a year , till the substitutes gain momentum & draw people’s  faith. Even on GAAR, retrospective taxation, approach should be  not too open , not too shut. Cautious but not  reluctant to relegate to the old faith. 
But if 2 basic major loopholes / shortcomings are  to be highlighted of this budget, they are a)  Judiciary & b) Handicrafts.   Not only that leaves  in all SCs, HCs & local / district courts to be slashed, but  no of judges  have to go up by  around 100%. Immediate  fill up of  32% vacancies is crucial & critical , if  people  have to gain back lost faith in  nation’s  judicial systems.  Political will, accompanied by budgetary support , can only  volta face the  appearance  of legal system from a farce to a  boon.
It is not understood why GOI acted  too hastily in dust-bite action  wrt Gopal Subramanian case , or it got hell bent on trf of  UPA appointed governors off  the Rajbhavans.
A budget is essentially  a gamble--  a gamble that is played  by  business , industry, trade , commerce , service sector & consuming  millions. Success lies in broad basing  the powerful consumers to 1 bn &  arrest  of fiscal deficit n inflation. Estimates are hell bent on industrial & service growth, as agro is still at mercy of rain Gods at most pockets. Scrapping old hogs  should give way to realistically rejuvenating schemes like JNURM  .
India has got the 4th largest platoon of doctors &v engineers in India, although its MRR is the highest in the world—50K deaths of chidren & child bearing mothers.  And despite that  we are  the 7th wealthiest  nation in the world , & why not?  Inequity in Distribution of wealth  has only ballooned over decades.
Jay Modi, Jay jay Moditva ,Modiji Namo namo
Talks for the first major accord in theWorld Trade Organization’s 19-year history collapsed over objections raised by India, which was seeking to bolster farm protections.Negotiators for a Trade Facilitation Agreement at WTO headquarters in Geneva failed to agree as a midnight deadline passed to implement part of the accord by the end of July. India refused to go along without assurances the pact would allow it to keep protections for its domestically produced food.“We tried everything we could. But it has not proved possible,” WTO Director-General Roberto Azevedo, said in a statement.The failure is a setback for the global trade talks and throws into question the ability of the WTO to serve as a forum for international accords as well as its status an arbiter of trade disputes. The U.S.’s envoy to the WTO last week said a failure to agree would be tantamount to killing the accord, struck in Bali, Indonesia, in December.The WTO estimated that the deal would have stimulated the world economy by more than $1 trillion by cutting regulatory hurdles and red tape at international borders.

‘Square One’

“Now we’re back to square one, to where we were before Bali,” said Biswajit Dhar, an economics professor and trade specialist at Jawaharlal Nehru University in New Delhi.“Hopefully, the members all come back to the table and pick up negotiations instead of letting them die” as they did during a round of trade talks in 2008, he said.The U.S. “regrets that a handful of members have decided not to adhere to their commitment” under the Bali agreement, according to a statement by U.S. Trade Representative Michael Froman.
“Geneva will be quiet for the next several weeks,” Froman said in the statement. “This is a good time for all of us to reflect on these developments and to consider the implications going forward.”The Bali agreement, reached under Indian Prime Minister Narendra Modi’s predecessor, lets India and other developing countries subsidize food staples so long as they don’t distort trade. Members also agreed to negotiate a permanent solution for adoption at a meeting scheduled for 2017, the text says.Negotiators were trying yesterday to agree on a technical provision of the trade deal, which would allow nations to begin steps to ratify the accord in their own countries.

New Phase

“The fact we do not have a conclusion means that we are entering a new phase in our work -- a phase which strikes me as being full of uncertainties,” Azevedo said.WTO members should take the coming weeks to consider how to move forward when they reconvene in September, he said.Australia’s Minister of Trade Andrew Robb said it was “difficult to see a way forward in the current circumstances.”“Australia is deeply disappointed that it has not been possible to meet the deadline,” he said in an e-mailed statement. “This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes.”An accord to smooth commerce at borders, negotiated by all 160 WTO members, is an increasingly unlikely option, according to a person familiar with the talks, who spoke on condition of anonymity.WTO members are now talking informally about moving ahead without India, and may use the already negotiated text as the basis for those discussions, according to the person.

‘Little Hope’

“Today’s developments suggest that there is little hope for truly global trade talks to take place,” Jake Colvin, vice president for global trade issues at that National Foreign Trade Council inWashington, said today in an e-mailed statement.“What is most impactful is the slowdown or the lost growth opportunities that will happen in the developing world,” Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers in Washington, said before the talks collapsed. The agreement would have helped U.S. companies expand their exports, she said.U.S. officials had seen the WTO agreement as a test of Modi’s intent to boost growth, which has slowed in recent years, and as a way to revive relations between the world’s largest democracies.U.S. Secretary of State John Kerry and Commerce Secretary Penny Pritzker pressed Indian officials to advance the accord during a visit to New Delhi for U.S.-India strategic talks this week.
Latest News 03:14 PM IST UPSC row: Opposition creates ruckus in Rajya Sabha 03:11 PM IST Iraq jihadists threaten Kurds after battlefield victories 03:01 PM IST Oriental Bank of Commerce Q1 net profit up 3% on higher other income 02:30 PM IST Beijing to bar Symantec, Kaspersky anti-virus in procurement: report 02:25 PM IST The case for big bang economic reforms Editor's picks NDA proposes action plan to revive mining Narendra Modi announces $1 billion line of credit for Nepal A happy consensus on reforms Monetary policy: RBI may hold rates CCI to scan drug patent settlements The Bharatiya Janata Party’s ascent was seen as the time when Indian government will finally give up the so-called failed ideas of service delivery like providing subsidized food grains and instead immediately move to the smarter option—the cash transfers. Photo: Mint Patriotism is the last refuge of a scoundrel—Samuel Johnson I suspect that, when Johnson made that observation, he was referring to the false pretensions of patriotism—the tendency of selectively using arguments of nationalism and sovereignty when it suits one’s purpose. I have been quite amused reading the vociferous defence of India’s stand at the World Trade Organization (WTO). The deadline for resolving the ensuing stalemate is Thursday. While I support not just India’s stand on the WTO but also the inherent reason for it (the National Food Security Act, or NFSA), the near unanimous defence does two interesting things. One, it busts the myth propagated by several commentators on a routine basis that Narendra Modi’s victory in the recently concluded national elections is essentially a rejection of the so-called populist social welfare policies which worked on the principle of entitlements. The NFSA (commonly called the right to food) for the underprivileged sections of the society was the most reviled among such schemes. The Bharatiya Janata Party’s ascent was seen as the time when Indian government will finally give up the so-called failed ideas of service delivery like providing subsidized food grains and instead immediately move to the smarter option—the cash transfers. That is, if the new government did not scrap laws like the NFSA to begin with. Two, it exposes the dichotomy, if not the downright hypocrisy, of those commentators who, in the past never tired of arguing against the NFSA and characterized it as possibly the most ruinous government scheme ever, but have all of sudden rediscovered why India must defend it tooth and nail before the whole world. It is unlikely they changed their opinion of the NFSA overnight. It is to them that I dedicate Johnson’s quote above. Let me take the first one first. In short, the WTO issue is as follows. India is being blamed globally for holding up the Trade Facilitation Agreement (TFA) in the WTO because it wants the freedom to provide whatever subsidies it deems fit to its farmers domestically to ensure the implementation of the NFSA. Readers should know that running a successful NFSA by providing subsidized food grain would necessitate the government to procure and store huge quantities of grains. Such procurement will require paying increased minimum support prices (MSPs) to incentivize farmers to sell their produce to the government and not in the open market. This will amount to foreseeably increased production subsidies. Most developed countries, and several key developing countries as well, oppose such subsidies once the Indian subsidies breach a certain threshold. But since India has enacted the NFSA, it is bound by domestic law to provide such subsidies. Hence the deadlock. But what makes this stalemate truly intriguing is that the TFA will benefit India since it will simplify customs procedures and reduce the transaction costs for trade. Moreover, if instead of production subsidies like MSPs, India were to shift to income transfer to farmers and consumers, it would be fine by the WTO regulations. Income transfer or direct benefit transfers (DBT), as they more commonly known in India, would imply farmers would produce at the costs prevailing in the market and consumers (including the poor) would purchase at the market price while the government transfers money to the bank accounts of the farmers and the consumers it wants to support. The previous United Progressive Alliance (UPA) government was castigated by many of the commentators I referred to for not adopting such cash transfer if at all the right to food must be enacted. So, on the face of it, India appears to be blocking a global trade agreement that is to its own advantage and which it can possibly adopt if it were to dedicate itself to moving in the direction of cash transfer. Is India playing spoilsport? No, it is not. It has genuine concerns about the large number of poor in the country and wants to provide them a modicum of decency by not letting any one of them go hungry. However, it busts the myth propagated by several commentators that the National Democratic Alliance’s (NDA’s) ascent marks the end of the so-called populist policies. Of course, there will be tweaks in policy but it is unlikely that the NDA disagrees with the populist agenda of the UPA. If anything, it was the BJP-led government in Chhattisgarh that provided the role model for the NFSA. Frankly, I do not think UPA lost because it legislated the NFSA (which incidentally the BJP supported wholeheartedly) or persisted with the national rural employment guarantee scheme. The UPA lost because it could not implement the make-work programme efficiently. It lost because it could not legislate the food security law earlier than 2013. And in equal measure, it lost because it could not manage the other sectors of the economy, which would have improved supply and generated growth. There were other reasons too—lack of strong leadership and a whole slew of scams. In fact, I suspect, Indians would not resent an NFSA if the India were to grow at a faster clip. It is a misleading and mischievous argument that the rural jobs guarantee scheme and NFSA alone are to blame for inhibiting India’s growth rate because such an argument absolves the UPA of all other economic mismanagement under its watch. Moreover, how come the new NDA government did not scrap the NFSA, or at least attempt to do so, if that essentially was problem and if that essentially was the NDA’s mandate. On the contrary, we find NDA defending the NFSA against the world, even to India’s own economic and diplomatic detriment. But nothing is more absurd than the flip in stance of several commentators typically opposed to the NFSA all these years. All of a sudden, there seems to be a groundswell of opinion that India should not agree to the TFA in order to defend the right of the Indian poor to receive food. In the past, before the NFSA was enacted, India defended its freedom to provide price support via MSPs via a more technical argument. India said the prices used to calculate the subsidy threshold were outdated and too low. However, post the NFSA, curiously enough, the argument is about India’s policy sovereignty, which had to cater to the felt needs of the poor and the social complexity in the country which, in turn, necessitates adopting such an administratively complicated way of providing subsidies. Funnily enough, many who make these arguments never really believed in them until now. For long they held that it was a bad idea to provide a right to food. Bad, not just for the economy, as it inhibited growth, but also, for the poor, since it made them lazy. Moreover, it was held that if support must be given then it should be in the form of cash transfers, not actual foodgrains. Lo and behold! Just as the new government took over India gets an opportunity, thanks to the WTO, to set all of that right. Okay, at least some of it. The new government could blame the proverbial foreign hand and pass the buck, quite justifiably, on the global developments. This was what the NDA would have done, what according to many commentators it was elected to do by none other than the neo middle class. Just as India has deregulated the fuel prices in the recent past, NDA could deregulate food prices. I would have thought that the concerned commentators would jump at such an opportunity. But what do they do? Ah, invoke the patriotism clause. I would have respected it had it been borne out of a genuine concern for the poor in the country. But it is not and nobody is getting fooled. Policy Puddle comments on public policy developments every Thursday.
(Reuters) - The World Trade Organization failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India's demands for concessions on agricultural stockpiling."We have not been able to find a solution that would allow us to bridge that gap," WTO Director-General Roberto Azevedo told trade diplomats in Geneva just two hours before the final deadline for a deal.
"Of course it is true that everything remains in play until midnight, but at present there is no workable solution on the table, and I have no indication that one will be forthcoming."The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" last December, but it needed to be put into the WTO rule book by July 31.Most diplomats saw that as rubber-stamping a unique success in the WTO's 19 year history, which according to some estimates would add $1 trillion and 21 million jobs to the world economy, so they were shocked when India unveiled its veto.
Trade experts say Thursday's failure is likely to end the era of trying to cobble together global trade agreements and to accelerate efforts by smaller groups of like-minded nations to liberalise trade among themselves. India has been vocal in opposing such moves, making its veto even more surprising."Today’s developments suggest that there is little hope for truly global trade talks to take place," said Jake Colvin at the National Foreign Trade Council, a leading U.S. business group."The vast majority of countries who understand the importance of modernizing trade rules and keeping their promises will have to pick up the pieces and figure out how to move forward."
Some nations have already discussed a plan to exclude India from the agreement and push ahead regardless, and the International Chamber of Commerce urged officials to "make it happen."“Our message is clear. Get back to the table, save this deal and get the multilateral trade agenda back on the road to completion sooner rather than later,” ICC Secretary General John Danilovich said.U.S. Secretary of State John Kerry, on a visit to New Delhi, had earlier said he was hopeful that differences between India and much of the rest of the world could be resolved.But after Azevedo's speech, U.S. Ambassador to the WTO Michael Punke was downbeat.
"We're obviously sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali, and we agree with the Director-General that that action has put this institution on very uncertain new ground," Punke told reporters.India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules. It got support from Cuba, Venezuela and Bolivia.
India's new nationalist government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set last December in Bali.Kerry, whose visit to India was aimed at revitalising bilateral ties but was overshadowed by the standoff, said the United States understood India's position that it needs to provide food security for its poor but India would lose out if it refused to maintained its veto.
DEAL WITHOUT INDIA?
Diplomats say India could technically attract a trade dispute if it caused the deal to collapse, although nobody wanted to threaten legal action at this stage. The summer break will give diplomats time to mull options, including moving ahead without India.Technical details would still have to be ironed out, but there was a "credible core group" that would be ready to start talking about a such a deal in September, a source involved in the discussions said."What began as a murmur has become a much more active discussion in Geneva and I think that there are a lot of members in town right now that have reached the reluctant conclusion that that may be the only way to go," he said.An Australian trade official with knowledge of the talks said a group of countries including the United States, European Union, Australia, Japan, Canada and Norway began discussing the possibility in Geneva on Wednesday afternoon.New Delhi cannot be deliberately excluded, since that would mean other countries slowing down containers destined for India, but if it becomes a "free-rider" it will add another nail in the coffin of attempts to hammer out global trade reform.Trade diplomats had previously said they were reluctant to consider the idea of the all-but-India option, but momentum behind the trade facilitation pace means it may be hard to stop.
Many countries, including China and Brazil, have already notified the WTO of steps they plan to take to implement the customs accord immediately.Other nations have begun bringing the rules into domestic law, and the WTO has set up a funding mechanism to assist. But WTO head Azevedo said he feared that while major economies had options open to them, the poorest would be left behind."If the system fails to function properly then the smallest nations will be the biggest losers," he said. "It would be a tragic outcome for those economies — and therefore a tragic outcome for us all."
(Additional reporting by Rajesh Kumar Singh, Manoj Kumar and Krista Mahr in New Delhi, Matt Siegel in Sydney and Krista Hughes in Washington DC; Writing by Sanjeev Miglani; Editing by Mike Collett-White and Grant McCool)
US Secretary of State John Kerry told Narendra Modi that India's refusal to ratify a key WTO trade deal sent the wrong message, as he met the country's new prime minister for the first time on Friday.Kerry expressed optimism about expanding cooperation between the world's two largest democracies during a first visit aimed at reviving a relationship clouded by mistrust.But a raft of disputes has cast a shadow over hopes for a warmer relationship, with India on Thursday blocking a major World Trade Organization pact to streamline customs procedures and boost global commerce.
During the meeting -- aimed at breaking the ice with a leader once shunned by Washington -- Kerry told Modi India's stance was at odds with his desire to open up the country's economy."We note that the prime minister is very focused on his signal of open to business and creating opportunities and therefore the failure of implementing TFA (Trade Facilitation Agreement) sends a confusing signal and undermines that very message that he is seeking to send about India," a US official quoted Kerry as saying.
"While we understand India's food security concerns, the Trade Facilitation Agreement is one that will bring tremendous benefit, particularly to the world's poor. India's actions therefore are not in keeping with the prime minister's vision."But Modi told Kerry developed nations needed to display greater understanding of the difficulties faced by the developing world in meeting the needs of their poor populations.
"The prime minister emphasized the need for developed countries to understand the challenges of poverty in developing countries and their governments' responsibilities in addressing them...," a statement issued by Modi's office said.The Press Trust of India national news agency, meanwhile, quoted commerce ministry officials as saying India remains committed to the deal as long as its demands for concessions on its anti-poverty food stockpiling deal are met.
The WTO meets again in September and "we are prepared to engage on day one with a clear understanding that our position with regard to food security and our commitment to Trade Facilitation Agreement (TFA) is 100 percent firm," said the official, who could not be named due to ministry rules.Kerry urged India to work with the United States to move the WTO process forward, the official said.Speaking on condition of anonymity, the official also said Modi told Kerry while areas of difference would always exist, "what is critical is what we do to enhance and build on our trust".Earlier, Kerry said the United States wanted to "try to really take the relationship to a new place", following a series of diplomatic spats with India.Washington has had little relationship with Modi, a Hindu nationalist who was refused a US visa in 2005 over allegations he turned a blind eye to anti-Muslim riots as leader of the western state of Gujarat. The United States caught up with other Western nations during the election campaign, sending its ambassador to meet Modi who since taking office has shown no visible signs of holding a grudge over his past treatment.But US officials, who value frank and free-wheeling relationships with foreign leaders, are unsure what to expect from Modi who is known for his austere, solitary lifestyle.
Modi, who as a young man wandered the Himalayas, is seen as a very different character than his predecessor Manmohan Singh, a bookish Oxford-educated economist with whom President Barack Obama had found a kinship.- Break from Middle East efforts -Kerry has nurtured personal relationships as he pursues key goals including seeking peace in the Middle East.The top US diplomat went ahead with the trip to India despite working around the clock to end the bloodshed in the Gaza Strip.
Just hours before his scheduled meeting, Kerry announced a 72-hour ceasefire between Israel and Hamas but the humanitarian truce collapsed only hours after it began Friday amid a deadly new wave of violence.The United States has sought to put relations with India on firmer ground after the Modi visa row and a crisis in December when US authorities arrested an Indian diplomat for allegedly mistreating her servant, infuriating New Delhi.But new disputes have kept arising.
Late Thursday, the WTO said the 160-member body had failed to approve the landmark customs pact.India stalled the deal as it pushed for a WTO green light on the developing power's stockpiling of subsidised food. India says the policy is vital to help the poor, but rich nations charge the practice distorts global trade.The United States voiced "disappointment" and "regret" over India's stance, while India said it protested to Kerry over reports from former NSA contractor Edward Snowden that US intelligence snooped on Modi's Bharatiya Janata Party while it was in opposition.
US officials, however, have signalled they do not want to create a new rift by renewing past concerns about Modi's track record on minority rights.Kerry trod lightly on the issue on Thursday, saying the two democracies shared the belief "every citizen, no matter their background, no matter their beliefs, can make their full contribution"."From women's rights to minority rights, there is room to go further for both of us," Kerry said.

US warns Indian threat will 'flip the lights' off at WTO

Reuters | Jul 25, 2014, 09.34PM IST

GENEVA: An Indian-led ultimatum to unravel a World Trade Organization deal struck in Bali last December would end global trade reform efforts, US ambassador Michael Punkewarned in a speech to the Geneva-based body on Friday. "Today, we are extremely discouraged that a small handful of members in this organization are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark," Punke said.

India blocks WTO deal 

At a meeting in Geneva, diplomats from the 160 WTO member countries were supposed to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December. Some estimates say it could add $1 trillion to the world economy and create 21 million jobs.
But India said it would veto the agreement until it gets what it wants in a separate area linked to its system of subsidizing and stockpiling crops. Several countries issued statements saying that a failure to agree to the deal would be a massive blow to the WTO, which is trying to emerge from a decade of failed negotiations on further liberalizing global trade. WTO director general Roberto Azevedo said talks were ongoing to try to resolve the problem before a deadline of July 31.


"We are informally talking, yes," he told Reuters. When asked what would happen if there were no deal by July 31, he said: "That's part of the conversation." A group of 25 countries including Australia, Canada, Colombia, Mexico, Norway, Switzerland and Thailand said they were "dismayed" at the failure to agree at Thursday's meeting. They warned that failing to seal the trade facilitation deal would unravel the whole package of trade agreements done in Bali, effectively destroying the chance of further global trade reform, something that India has long demanded.

"Contradictory stance"

"A decision to step away would be in no one's interest. It would seriously undermine the ability of the WTO to deliver for the future," the group said in a statement.

The European Union gave a similar warning, saying: "Without adoption of the Trade Facilitation Protocol by July 31 a great opportunity to mobilize trade as an instrument for growth and development would be lost, and the credibility of the WTO, which has during the financial crisis proven its value as a firewall against protectionism, would be further damaged."

Japan also said it strongly urged those members who take a "contradictory stance" to try to achieve the common objective.

Several trade diplomats said they were mystified by India's stance, since it has not made any specific demands, making it impossible for the rest of the WTO to resolve the problem.

Some think India might want to bring forward the 2017 target date for agreeing permanent rules on food stockpiling, or it might try to postpone the July 31 deadline for adopting trade facilitation, linking it to wider negotiations that the WTO plans to line up by the end of this year.

But the EU said it would not renegotiate existing timelines.

Many diplomats thought India would be reckless to maintain its veto.

"It will be suicidal, absolutely. And that's not a threat, that's just a statement of fact," said one Western diplomat.

"They say we're going to get what we want or we'll blow everything else up, but if they do that they won't even get what they want."

Many trade experts think that if global trade negotiations lose momentum again, many WTO members, including the European Union and the United States, will effectively give up and focus all their efforts on more ambitious trade reforms that they are already negotiating bilaterally and in small groups.

Those include regional deals such as the Trans-Pacific Partnership and the EU-US Transatlantic Trade and Investment Partnership, as well as sectoral negotiations in areas such as services, information technology and environmental goods. 

NEW DELHI: India's domestic compulsions and the danger of breaching the subsidy cap for wheat and rice forced the government to thwart attempts by other World Trade Organization members to push through a new set of customs rules without addressing its concerns.

The subsidy data, due to be released by the government over the next few weeks, will reveal that the subsidy on rice was over 9% of the value of production in 2011, while on wheat it was only a shade lower. Although India is safe for the moment, there is a real prospect of it crossing the 10% limit and facing penal action at WTO. What has compounded the problem for the government is rising minimum support price (MSP), higher levels of procurement as well as depreciation of the rupee against the dollar.

Besides, the 10% ceiling is based on 1986-88 prices, while actual subsidy calculations are based on current prices.

A nationwide Food Security Act is expected to increase the procurement burden, while MSP has increased by around 10% annually over the past few years. By all indications, the trend will continue. Add to that the bonus paid by the state governments. "It's a matter of time before we reach the limit," acknowledged an official.

In contrast, other than forced reform at ports and airports, the government sees little benefit from the trade facilitation agreement, as easier customs rules are expected to aid imports into the country compared to exports from Indian shores.

"We have saved MSP and the Food Security Act. If we had stuck to what was agreed at Bali, it would have sounded the death knell for the Food Security Act," finance minister Arun Jaitley said on Friday, hours after talks collapsed at WTO. Jaitely, himself a former trade minister, has been critical of the Bali deal since it was signed.

While India has been demanding a review of the food subsidy limit for several years, the developed countries have refused to play ball. In fact, in the run-up to the Bali ministerial last December, the rich countries had even refused to acknowledge the food security proposal submitted by G-33, which includes countries such as Indonesia, Brazil and China. It was only after a link with trade facilitation was established that food security even came on the agenda for the ministerial.

Then, the US and European Union put up stiff resistance saying a tweaking of rules by changing the reference price from 1986-88 to the current rates was tantamount to reopening WTO's agreement on agriculture, a move that will set a bad trend. After India held firm, threatening to block a deal at Bali, the developed countries conceded ground, but only partially. In return for a trade facilitation agreement by July 31, which is to be implemented next year, they agreed not to seek penal action even if the 10% subsidy cap is breached. But there is confusion over how long this "peace clause" is in place. One interpretation was that it will only be in place till a permanent solution is found. The other was it will stay intact till 2017.

"It was a play of words and we seem to have settled for a wrong formulation since a crucial comma is missing," said a top-ranking official, who did not wish to be identified.

In any case, Indian officials said, there was little effort from the rich countries to address India's concerns as there were only two meetings of the committee dealing with the food security problem, while there have been over 20 on trade facilitation since the Bali ministerial. So, when the Narendra Modi government took charge, India decided to link an agreement on easier customs rules, for which the deadline ended Thursday night, with finding a permanent solution on food security.

The US and EU did not heed India's demand, resulting in the latest stalemate and a fresh round of name calling. Indian officials, however, maintained that all is not lost and when WTO reassembles after a vacation, fresh attempts would be made to salvage the deal and things may be back in place by the end of 2014.

While the West has described India as the deal breaker, the government is refuting the charge. "It is not justified for the simple reason that the deal was not broken. Pushing the date from July 31 to December 31 is not bringing the heavens down," an officer said. 

NEW DELHI: India's domestic compulsions and the danger of breaching the subsidy cap for wheat and rice forced the government to thwart attempts by other World Trade Organization members to push through a new set of customs rules without addressing its concerns.

The subsidy data, due to be released by the government over the next few weeks, will reveal that the subsidy on rice was over 9% of the value of production in 2011, while on wheat it was only a shade lower. Although India is safe for the moment, there is a real prospect of it crossing the 10% limit and facing penal action at WTO. What has compounded the problem for the government is rising minimum support price (MSP), higher levels of procurement as well as depreciation of the rupee against the dollar.

Besides, the 10% ceiling is based on 1986-88 prices, while actual subsidy calculations are based on current prices.

A nationwide Food Security Act is expected to increase the procurement burden, while MSP has increased by around 10% annually over the past few years. By all indications, the trend will continue. Add to that the bonus paid by the state governments. "It's a matter of time before we reach the limit," acknowledged an official.

In contrast, other than forced reform at ports and airports, the government sees little benefit from the trade facilitation agreement, as easier customs rules are expected to aid imports into the country compared to exports from Indian shores.

"We have saved MSP and the Food Security Act. If we had stuck to what was agreed at Bali, it would have sounded the death knell for the Food Security Act," finance minister Arun Jaitley said on Friday, hours after talks collapsed at WTO. Jaitely, himself a former trade minister, has been critical of the Bali deal since it was signed.

While India has been demanding a review of the food subsidy limit for several years, the developed countries have refused to play ball. In fact, in the run-up to the Bali ministerial last December, the rich countries had even refused to acknowledge the food security proposal submitted by G-33, which includes countries such as Indonesia, Brazil and China. It was only after a link with trade facilitation was established that food security even came on the agenda for the ministerial.

Then, the US and European Union put up stiff resistance saying a tweaking of rules by changing the reference price from 1986-88 to the current rates was tantamount to reopening WTO's agreement on agriculture, a move that will set a bad trend. After India held firm, threatening to block a deal at Bali, the developed countries conceded ground, but only partially. In return for a trade facilitation agreement by July 31, which is to be implemented next year, they agreed not to seek penal action even if the 10% subsidy cap is breached. But there is confusion over how long this "peace clause" is in place. One interpretation was that it will only be in place till a permanent solution is found. The other was it will stay intact till 2017. "It was a play of words and we seem to have settled for a wrong formulation since a crucial comma is missing," said a top-ranking official, who did not wish to be identified.

In any case, Indian officials said, there was little effort from the rich countries to address India's concerns as there were only two meetings of the committee dealing with the food security problem, while there have been over 20 on trade facilitation since the Bali ministerial. So, when the Narendra Modi government took charge, India decided to link an agreement on easier customs rules, for which the deadline ended Thursday night, with finding a permanent solution on food security.

The US and EU did not heed India's demand, resulting in the latest stalemate and a fresh round of name calling. Indian officials, however, maintained that all is not lost and when WTO reassembles after a vacation, fresh attempts would be made to salvage the deal and things may be back in place by the end of 2014. While the West has described India as the deal breaker, the government is refuting the charge. "It is not justified for the simple reason that the deal was not broken. Pushing the date from July 31 to December 31 is not bringing the heavens down," an officer said. 

NEW DELHI: Against the backdrop of the US blaming India for the failure of WTO talks, Prime Minister Narendra Modi on Friday said developed countries should "understand" the challenges of poverty in developing nations and their governments' responsibilities to address them.Modi conveyed the message to US secretary of state John Kerry and secretary of commerce Penny Pritzker when they called on him here.

"Prime Minister emphasized the need for developed countries to understand the challenges of poverty in developing countries and their governments' responsibilities in addressing them when discussions take place in international forums," a PMO statement said.The meeting took place against the backdrop of India taking a tough stance on the issue of foodgrain holding and food subsidy at the WTO talks in Geneva last night after which the US blamed it for failure of the negotiations.


Asked about this, external affairs ministry spokesman Syed Akbaruddin said the Prime Minister articulated India's requirement of ensuring that food security is provided for a "significant" number of people because of the circumstances in which the country is.
"I think the PM is on record to have said that development challenges that developing countries face are something that should be understood by all."India, as a developing country, has challenges and responsibility to ensure food supplies to all its people and that is reflected in our stance. That stance takes into account our needs. If other countries have a different stance, we understand their perspectives because they come from a different direction," he said.

The spokesman added "our direction is determined by our current circumstances which require us to provide food security for a significant number of people and that is what the PM has said."

Statement by Nirmala Sitharaman in Lok Sabha Regarding Indias Stand in the WTO

August 5, 2014

1. I am making this intervention in the House today in order to place before the Hon`ble Members the facts relating to the stand taken by India in the World Trade Organization (WTO) recently.
2. The Bali Ministerial Declaration was adopted on 7 December 2013 on conclusion of the Ninth Ministerial Conference of the WTO in Bali. Ministerial Decisions were adopted on ten issues relating to the Doha Development Agenda which is the agenda for the unfinished Doha Round of trade negotiations, underway in the WTO since 2001.
3. Amongst these Ministerial Decisions, two are of particular significance - the Ministerial Decision for an Agreement on Trade Facilitation and the Ministerial Decision on Public Stockholding for Food Security Purposes.
4. The Trade Facilitation Agreement is basically aimed at greater transparency and simplification of customs procedures, use of electronic payments and risk management techniques and faster clearances at ports. We have autonomously taken several similar measures such as the `Indian Customs Single Window Project` announced in the Budget 2014-15 to facilitate trade, under which importers and exporters will be able to lodge documents at a single point, reducing interface with Governmental agencies, dwell time and the cost of doing business.
5. The Protocol of the Trade Facilitation Agreement (TFA) was to be adopted by 31 July 2014 by the WTO. After this the Agreement would automatically come into force from 31 July 2015 if ratified by two-thirds of the members of the WTO.
6. In contrast to their efforts on Trade Facilitation in the WTO, some developed countries have been reluctant to engage on other issues.
7. Seeing the resistance to taking forward the other Decisions, the apprehension of developing countries was that once the process of bringing the Trade Facilitation Agreement into force was completed, other issues would be ignored, including the important issue of a permanent solution on subsidies on account of public stockholding for food security purposes.
8. India, therefore, took the stand that till there is an assurance of commitment to find a permanent solution on public stockholding and on all other Bali deliverables, including those for the Least Developed Countries (LDCs), it would be difficult to join the consensus on the Protocol of Amendment for the Trade Facilitation Agreement.
9. Without a permanent solution, public stockholding programmes in India and other developing countries will be hampered by the present ceiling on domestic support which is pegged at 10 per cent of the value of production and is wrongly considered as trade-distorting subsidy to farmers under existing WTO rules. The existence of such a subsidy element is determined by comparing present day administered prices with fixed reference prices of the 1986-88 period which is unrealistic.
10. The problem is a very real one. Developing countries are finding themselves hamstrung by the existing rules in running their food stockholding and domestic food aid programmes. The developed world too had market price support programmes and was able to move away from such support - though not fully even now - because of their deep pockets. This is not possible for developing countries. It is important for developing countries to be able to guarantee some minimum returns to their poor farmers so that they are able to produce enough for themselves and for domestic food security.
11. Developed countries continue to have large entitlements to provide support to farmers. These would have been cut in the Doha Development Round which unfortunately remains unfinished. Had this Round, which has development at its core, concluded as per the agreed timelines and its development agenda, the world would have had an outcome in a single undertaking in which competing interests could have been balanced. Today, developing countries are fighting to keep the negotiations focused on development against the single-minded mercantilist focus of most of the rich developed world on market access issues.
12. Overall balance is important even in a limited package of outcomes. The Bali outcomes were negotiated as a package and must be concluded as such.
13. It is regrettable indeed that today the WTO is unable to agree even to fast track negotiations on an issue of such importance to millions of subsistence farmers across the developing world, while the rich world can continue to subsidise their farmers unabatedly.
14. The matter came up for discussion in the margins of the BRICS Trade Ministers meeting in Brazil on 14 July and the G20 Trade Ministers meeting in Sydney on 19 July. It was also raised by the representatives of some countries in their interactions with the Indian government. On each occasion I explained that India is a signatory to the Bali Decisions, including Trade Facilitation and is not standing in the way of its implementation but is seeking an equal level of commitment and progress in working on the issue of public stock holding which affects the country’s livelihood and food security. A permanent solution on food security is a must for us and we cannot wait endlessly in a state of uncertainty while the WTO engages in an academic debate on the subject of food security which is what some developed countries seem to be suggesting before they are ready to engage on this important issue.
15. Food security is a humanitarian concern especially in these times of uncertainty and volatility. Issues of development and food security are critical to a vast swathe of humanity and cannot be sacrificed to mercantilist considerations.
16. Developing countries such as India must have the freedom to use food reserves to feed their poor without the threat of violating any international obligations. This is our sovereign right. It is our duty to protect our citizens` fundamental rights to life and livelihood.
17. Agriculture is the mainstay of the Indian population. In a country of the size of India with 60% of the population dependent on a relatively unremunerative agriculture sector, we cannot give up administered prices. This is the only way we can procure food for the Public Distribution System (PDS), the central pillar on which our efforts to ensure food security, rest. Public stockholding is a widely used means to ensure food security in many developing countries where agriculture is largely rain-fed.
18. We have to look after both consumer and producer interests. We have to enable our people to live a life of dignity by ensuring access to an adequate quantity of quality food at affordable prices.
19. On 25 July 2014, India made a statement in the WTO General Council conveying, inter alia, that the adoption of the TF Protocol must be postponed till a permanent solution on public stockholding for food security is found.
20. India offered suggestions on the procedure to be followed in order to ensure time-bound delivery of an outcome on public stockholding for food security. We also urged that a similar approach be adopted on all other elements of the Bali Package notably the LDC issues.
21. The integrity of India`s stand is reflected in our unwavering efforts to offer a way forward in the face of criticism. Even on 31 July 2014, India offered a way to achieve not only a permanent solution on the issue of public stockholding for food security but also to implement the Trade Facilitation Agreement in the agreed timeframe as well as deliver favourable outcomes for LDCs.
22. We have offered practical suggestions for the way forward. The issue of a permanent solution on public stockholding is a simple one that can be addressed very easily as there are already several proposals on the table. A solution to this simple problem will be a tremendous relief for millions of farmers and poor consumers.
23. However, despite India`s efforts, our concerns were not satisfactorily addressed.
24. The Director General of the WTO reported to an informal meeting of the Trade Negotiations Committee on 31 July 2014 that a solution could not be found to bridge the gap.
25. The General Council meeting was, thereafter, formally declared closed without adopting the TF protocol.
26. India stood firm on its demands despite immense pressure. The Government of India is committed to protecting the interests of our farmers against all odds. Our farmers work in extremely adverse conditions, most of them at the mercy of the vagaries of the monsoon, aggravated today by climate change. For farmers in many developing countries farming is a subsistence activity, not a commercial one. We are committed to their welfare and I am grateful for the support and understanding extended by farmers` organizations in this cause.
27. I must also thank Hon`ble Members of Parliament, many civil society groups and academicians who have lent their voice in support of the Government`s efforts to ensure a fair deal.
28. It is evident from the expressions of support that India`s stand has resonated across the world and I take this opportunity to also thank the countries that have stood by India in the VVTO.
29. India is an unwavering votary of the multilateral trading system and we reiterate our commitment to the WTO. We continue to believe that it is in the best interest of developing countries, especially the poorest, most marginalized ones among them and we are determined to work to strengthen this institution. The timely correction of any imbalances or anomalies in the working of the system or its rules is critical to ensure that the WTO works impartially and fairly in the interest of all its Members and not just a select few.
30. I am confident that India will be able to persuade the WTO Membership to appreciate the sensitivities of India and other developing countries and see their way to taking this issue forward in a positive spirit. This would be a major contribution by this institution towards `meeting the global challenge of food insecurity and would convey -a strong message that .the WTO is genuinely committed to the cause of development.

 

Modi’s move to thwart WTO deal causes confusion

By Amy Kazmin in New Delhi
As a means to trim the bureaucratic impediments to global commerce, the World Trade Organisation’s laboriously-negotiated “trade facilitation agreement” seemed to perfectly align with the red tape-cutting priorities Narendra Modi highlighted in his campaign to become India’s prime minister.
Yet Mr Modi, installed in India’s highest office two months ago, effectively torpedoed the WTO’s Bali deal this week, in an emphatic debut on the world stage that has left trade specialists and business executives both fuming and confused.
Nirmala Sitharaman, the commerce minister, cited the need to resolve a separate WTO dispute over India’svast food stockpiles, which the erstwhile Congress government had agreed could be put on the back burner, for India’s refusal to accede to a seemingly uncontroversial protocol.
Dismayed Indian businesses were on Friday struggling to understand why the new administration took such a hardline stance on a deal that would have benefited them even after several compromises were offered in eleventh-hour negotiations in Geneva on Thursday.
“What do we gain from this – nothing,” said Surjit Bhalla, a New Delhi-based economist. “It’s a genuine mystery. But when you have Bolivia, Cuba and Venezuela as your only allies, something is going wrong somewhere.”
Rajiv Kumar, a senior fellow at New Delhi’s Centre for Policy Research, wrote this week that India’s “splendid isolation at the WTO” reflected poor advice to a politician still changing from provincial satrap – mainly concerned with infrastructure and industrial build-out – to national leader, navigating a complex international environment.
“Making the right policy choices in an increasingly complex and globally integrated economy requires technical inputs and expertise,” Mr Kumar wrote.
Mr Modi is known to run a tight ship, with decision-making consolidated in his own office, leaving his ministers little autonomy or manoeuvring room in negotiations. He relies heavily on Arun Jaitley, the finance minister and former commerce minister in the previous BJP-led government, for policy guidance.
“It must be a well thought out and well calibrated decision, with India willing to take the consequences,” says Shaurya Doval, director of the Indian Foundation, a conservative think-tank. “The world may disagree, but India has protected its interests as it has thought them to be.”
Mr Modi did not comment on the collapse of the WTO talks on Friday, instead taking to Twitter, the microblogging service, to post a picture of him meeting a popular Indian cricket player.
As Thursday’s deadline neared, India’s business press slammed the government’s stance. In an editorial, the Business Standard newspaper accused the administration of making a “strategic and tactical mistake” and questioned its larger international trade policy.
“Trade facilitation is a universal good; to see India veto that, as well, will cause other countries to think the worst of India – and of the WTO, which hurts a WTO-dependent India particularly,” the paper said.
The Economic Times warned that the collapse of the WTO process would lead to the US putting greater emphasis on regional trade deals among selected players, from which India would be excluded.
But one analyst, who asked not to be identified, suggested that in blocking the deal the prime minister was less concerned with India’s national interest than his own.
“Modi is obsessed with his public persona and was concerned that this could have been portrayed in the media as having buckled to foreign pressure and sold out the little people,” the analyst said. “It would have taken the shine what is still his honeymoon period.”

US secretary of state John Kerry arrived in India on July 30 for ice-breaking talks with Prime Minister Narendra Modi, forecasting a transformation in Washington's relations with New Delhi. Here is what both the countries want from each other:

India 

First strategic dialogue under Modi. To prepare for big visit to Washington in September for Modi-Obama meet. During last few years while Delhi did little to boost commercial ties, it was upset about shifting priorities of Obama administration.

India would seek closer cooperation in West Asia where situation is getting fluid. Besides energy imports, it has a huge diaspora there whose security and livelihood would get affected if the crisis persists.

Delhi upset with US decision to withdraw from Afghanistan. UPA governments had conveyed same to Washington. NDA would like to impress upon Obama that Afghanistan should not become source for terror in India.

The Modi govt would like to work with US for skill development of the Indian youth that would in turn create job opportunities. Job creation is a top priority for Modi himself.

Disputes over protectionism and IP rights have soured business climate. India would like more clarity on these issues from the USA.


John Kerry greets businessman Ratan Tata before a dinner at the US ambassador's residence in New Delhi.

US

Big opportunity for US to engage with Modi — a leader US denied visa for a decade & rushed to engage from May 16 onwards. There are expectations that economy will be opened up further.

US keen to push for removal of obstacles to US firms' participation in India's nuclear power industry. They would look for some compromise formula.

Last Friday, India blocked WTO reforms, prompting US warning that its demands on food stockpiling may kill trade reform.




US seeks India's greater involvement in Southeast and East Asia, where China is making aggressive moves. However, India is cautious.

US keen to push its defence sales to India and defence secretary Chuck Hagel will be in Delhi in September.

Focus of this round of talks from the US viewpoint will be trade. Kerry will be accompanied by US commerce secretary Penny Pritzker.

In the clearest articulation of India's position on the WTO standoff — from the highest level — PM Narendra Modi on Friday told visiting secretary of state John Kerry that the first responsibility of his government was to the poorest people of the country.

Kerry's meeting with Modi saw the two leaders elaborating on their respective positions on the trade facilitation agreement (TFA) in a forceful manner — even though officials insisted there was no spat — with Modi insisting that the interest of the poor was paramount. This was after Kerry told Modi that India's position on the issue was sending confusing signals to the international community.
"The first responsibility of my government is to the poorest people of the country," Modi told Kerry in the meeting.

"While we don't oppose the agreement, we believe that the needs of those living on the margins of the society, not just in India but elsewhere too, have to be addressed," he added.

US has accused India of not adhering to its commitments under the Bali agreement in the TFA negotiations. India has blocked negotiations in the absence of assurances that it would be allowed to maintain its food subsidy programme. In doing so though, the government has opened itself to criticism that it is only continuing with the policies of UPA 2.

According to a copy of the background briefing available on the State Department's website, Kerry told Modi that india was not just giving confusing signals but also undermining the very image Modi was trying to project of India.

After he co-chaired the 5th India-US Strategic Dialogue along with his counterpart Sushma Swaraj Thursday, Kerry had expressed hope a compromise deal would be worked out and that the Bali agreement could take care of India's food subsidies.

The TFA negotiations seem to have dominated Kerry's meeting with Modi too.

NEW DELHI/SYDNEY: US secretary of state John Kerry told Prime Minister Narendra Modi on Friday that India's refusal to sign a global trade deal sent the wrong signal, and he urged New Delhi to work to resolve the row as soon as possible.

A World Trade Organization pact to ease worldwide customs rules collapsed late on Thursday over India's demands for concessions on agricultural stockpiling.

"Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India," a US state department official told reporters after Kerry's meeting with Modi.

Kerry was in New Delhi as part of an annual strategic dialogue to revitalize ties and lay the ground for a visit by Modi to Washington in December.

The official said the meeting was "strong and positive" despite the breakdown at the trade talks in Geneva.


Several WTO member states voiced frustration after India's demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline.

"We have not been able to find a solution that would allow us to bridge that gap," WTO director general Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight (2200 GMT Thursday).

Most diplomats had expected the pact to be rubber-stamped this week, marking a unique success in the WTO's 19-year history which, according to some estimates, would add $1 trillion and 21 million jobs to the world economy.

They were shocked when India unveiled its veto and the eleventh-hour failure drew strong criticism, as well as rumblings about the future of the organization and the multilateral system it underpins.

"Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes," Australian Trade Minister Andrew Robb said on Friday. "There are no winners from this outcome — least of all those in developing countries which would see the biggest gains."

Kerry held out hope that there was a way forward that both addressed India's concerns about its food security programme as well as advance global trade liberalization.
India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidize and stockpile food grains than is allowed by WTO rules.

India's new nationalist government has insisted that a permanent agreement on its subsidized food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set in Bali last year.

Move on without India

Some countries have already discussed a plan to exclude India from the facilitation agreement and push ahead regardless.

An Australian trade official involved in the talks, who requested anonymity to speak more candidly, said officials were exhausted with the process and that there was already discussion about major reforms at the WTO and the Doha Round of trade negotiations, which began in 2001.

"Some see it as a final trigger for ending Doha and pressing ahead with plurilateral reform, leave behind those that don't want to come along," he said.

Some nations, including the United States, the European Union, Australia, Japan and Norway, have already discussed a plan to exclude India from the agreement and push ahead, officials involved in the talks said.

A Japanese official familiar with the situation said that while Tokyo reaffirmed its commitment to maintaining and strengthening the multilateral trade system, it was frustrated that such a small group of countries had stymied the overwhelming consensus.

"The future of the Doha Round including the Bali package is unclear at this stage," he said.

New Zealand minister of overseas trade, Tim Groser, told Reuters there had been "too much drama" surrounding the negotiations and added that any talk of excluding India was "naive" and counterproductive. "India is the second biggest country by population, a vital part of the world economy and will become even more important. The idea of excluding India is ridiculous."

"I don't want to be too critical of the Indians. We have to try and pull this together and at the end of the day putting India into a box would not be productive," he added.

Still, the failure of the agreement should signal a move away from monolithic single undertaking agreements that have defined the body for decades, Peter Gallagher, an expert on free trade and the WTO at the University of Adelaide, told Reuters.

"I think it's certainly premature to speak about the death of the WTO. I hope we've got to the point where a little bit more realism is going to enter into the negotiating procedures," he said.

"It's 153 countries. We can't all move at the same speed on the same things, and it's time to let those that want to do it, do it."
Islamabad, Aug 4 (IANS) India is "powerful enough" to block an initiative at the WTO, said a Pakistani daily that, however, noted the move is "something of a U-turn by the neo-liberal" Indian Prime Minister Narendra Modi.
An editorial in the News International Monday said that during US Secretary of State John Kerry's visit to India on bilateral matters "there was slightly less cooperation".
"The US is displeased with India for blocking an initiative at the World Trade Organisation to streamline customs procedures. India has said it will only agree to the measure if it is accompanied by a parallel agreement allowing it to stockpile and subsidise grains.
"The move is something of a U-turn by the neo-liberal Modi, who had criticised the Congress government for implementing a similar food security law, and he has obviously angered the Americans," said the daily.
It added: "That India is powerful enough to resist such efforts should be welcomed."
The daily said that Modi struck "another important blow against the US by criticising the surveillance regime the superpower maintains around the world".
The editorial referred to the arrest of an Indian diplomat in the US for underpaying her maid despite asserting immunity and the travel restrictions the US had placed on Prime Minister Narendra Modi for his role in the Gujarat massacre, and said: "Kerry had quite the task at his first meeting with Modi".
"None of these issues, however, mean that the burgeoning alliance between the US and India has met anything other than a temporary speed bump. Modi will likely meet President (Barack) Obama at the UN soon and the two countries are so intertwined on matters of trade that any problem will remain a minor impediment," it added.
It went on to say that Kerry's statement with Modi "took a none-too-subtle dig at Pakistan in its reference to terrorist safe havens and calls for the trial of the Mumbai attack suspects to be speeded up".
"This should serve as a reminder that Modi's initiative of inviting (Prime Minister) Nawaz Sharif to his swearing in and the subsequent exchange of letters may remain little more than a public relations exercise."

Good Bye—with a panchanama
Driven substantially by the higher education sector, real estate deals and mining income, India’s black economy could now be nearly three-quarters the size of its reported Gross Domestic Product (GDP). These are among the findings of a confidential report commissioned by the government and accessed exclusively by The Hindu.Since there were no “reliable” estimates of black money generated in India and held within and outside the country, the UPA government commissioned the National Institute of Public Finance and Policy (NIPFP) to estimate the black money in India and held overseas by Indians.The Special Investigation Team on black money, constituted by the Narendra Modi government on May 27 in compliance with a Supreme Court directive, is studying the report.Though the report was submitted to the Finance Ministry in December 2013, the UPA’s Finance Minister P. Chidambaram did not place it in Parliament. Nor has his successor Arun Jaitley done so.The capitation fees collected by private colleges, on management quota seats in professional courses, last year was around Rs 5,953 crore, the report estimates.

1)Gaza’s horror continues. Friday’s ceasefire attempt to stall the violence that has ravaged homes and lives of Palestinian civilians lasted less than three hours. Israel’s bombing of civilian areas over the last four weeks continues to wreak breathtaking havoc. More than 100 civilians were killed last Wednesday; more than 70 on Friday. Around 1,600 Palestinian civilians have died so far, more than 7,000 are injured and nearly half a million displaced from their homes. No image of human tragedy is prompting a rethink in Israeli policy. UN schools sheltering civilians have been targeted. Tel Aviv maintains that Hamas remains a threat and that it will press ahead till its capacities are destroyed. Hamas fires rockets at Israel daily but the latter is able to successfully intercept them with its advanced weaponry and continue reacting with disproportionate force. Three Israeli civilians died from Hamas’ rocket attacks while 63 Israeli soldiers have been killed during this ill-thought through and unconscionable assault.
It is not clear what Israel’s endgame is. Prime Minister Benjamin Netanyahu has warned of a prolonged campaign. His government must know that a violent subjugation of civilian populations works rarely and is no guarantor of peace and stability. Such State-sponsored campaigns will have a toxic effect on its society and worsen Israel’s isolation. Accusations of war crimes too will not go away easily. Tel Aviv must contend with the effects of world public opinion increasingly arrayed against it as a nation, even as governments continue to support Israel for most part.
The Obama administration, in a way, articulated the wedge between State and civil society perspectives through its contradictory messages on Israel this week. It termed the shelling of a UN school as “totally unacceptable and totally indefensible” but it also approved an immediate transfer of grenades and mortar rounds to Israel, apart from shipping rocket motors two weeks ago. Exporting weapons at this time is also indefensible. The United States and Israel are equally cynical about Gaza’s suffering.
2) If it was Uttarakhand in 2013, it is Maharashtra this year. Last week, Malin, a village near Pune, was flattened by landslides triggered by torrential rains, killing more than 75 people.
Like Uttarakhand, this tragedy could also have been avoided — or at least minimised — if the people and local authorities listened to warnings and had been a little more conscious of the way they were implementing a project plan. Environmentalists have blamed the short-sightedness of the government in implementing an employment generation scheme for tribals that required hill slopes be flattened and tress cut down to develop cultivable plot. The official data indicate that nearly 28,000 trees were cut for this project; unofficial figures put the count at 300,000. Malin was also marked as an ‘ecologically sensitive’ village by the Kasturirangan committee report on the Western Ghats last year. In 2013, the Union ministry of environment and forests had notified it as an ecologically sensitive village and recommended a no-development policy but yet, as the tragedy shows, it was business as usual at Malin. It’s not only Malin that refused to learn from the Uttarakhand tragedy; even the Himalayan state seems to have forgotten last year’s tragedy. The state government is still pushing for hydropower projects that were blamed for upsetting the ecological balance of the area and it also restarted the Kedarnath Yatra — the rush of pilgrims can again put pressure on the fragile ecosystem of the area and this could lead to disastrous consequences.
3) We are so close, yet it took 17 years, conceded Prime Minister Narendra Modi, referring to the fact that his was the first bilateral visit by an Indian PM. “This pinches, but let me assure you. It will not happen again.”

3)The visits may become more frequent but Modi’s contribution on Sunday was setting a new template for the relationship. He has unequivocally underlined that Nepal is sovereign to take its decisions; that Nepal should decide the pace at which and issues for which it needs India’s support.
He adopted the role of a concerned advisor but did not prescribe; he gave a glimpse of the potential roadmap which can lift both Nepal and India’s economy.
And he reached out to all of Nepal’s political forces — emphasising democracy which was music to the ears of traditional parliamentary parties; lauding Maoist transition from war to peace and endorsing the agenda of federal democratic republic they championed first; and emphasising on an ‘inclusive constitution’ which pleased Madhesi forces.
At an Indian embassy reception right after the speech, Nepal’s power elite could not stop gushing about the speech.
Shashank Koirala, son of the legendary democratic leader BP Koirala said, “This is a game changer. Nehru operated with a certain regional doctrine, which appeared to be divide and rule. But Modi has recognised that without the region, India cannot grow.”
Khimlal Devkota of the Maoists said Modi had cleared all the ‘confusion’ that persisted about Indian intentions. A top Madhesi leader said, “The ball now is in Nepal’s court to build this relationship.” And a top Nepal Army general called the speech ‘absolutely magnetic’.
Baburam Bhattarai, Maoist ideologue and former PM, tweeted Modi had won the ‘hearts and minds’ with his ‘magical address’.

4) After  rape of 6 year old child in a  Bangalore school almost sponsored by school management, now it is the turn for rape of a judge.
The State Bar Council of Madhya Pradesh (SBCMP) on Monday demanded that the charges of sexual harassment levelled by an additional judge in Gwalior against a MP high court judge be thoroughly probed by the Chief Justice of India.
According to reports, the administrative judge had asked the additional judge to "perform dance on an item song" at a function at his home and influenced her transfer to a remote location despite her requests.
She wrote to the President, the Chief Justice of India and the Union law minister complaining about the harassment, reports said.
Talking to the Hindustan Times SBCMP chairman Rameshwar Neekhra said, "This is a very serious matter. Whether the charges hold any truth or not should be decided after an inquiry. There should be no room for any aspersion on the integrity of judiciary. Hence, a thorough probe is badly required."
"We call the judges 'My Lord'. Meaning of the words means we hold them in high esteem and similar to a god. As per our belief God doesn't do any wrong. Hence, for the sake of maintaining the integrity of the judiciary the probe is required,” said Neekhra.
He also said that all aspects of the case like why the woman judge levelled the allegations only after she was transferred or why she did not lodge the complaint to the CJI earlier should be probed.
"If the administrative judge is found guilty he should be punished and if the woman judge is found guilty of levelling false allegations against the administrative judge she should be punished too."
She resigned on July 15 and wrote to the CJI and others on August 1.
The judge in her complaints alleged the administrative judge told her "he missed the opportunity of viewing a sexy and beautiful figure dancing on the floor and that he is desperate to see the same" a day after his "request".
Reports said she also alleged that when she spurned the judge's "various advances and malicious aspirations", he targeted her professionally.
"The administrative judge, along with district judge and district judge (inspection), possibly made a false, frivolous, baseless and malicious reporting to the chief justice of MP and got me transferred on July 8, in the mid-academic session of my daughters to a remote place Sidhi by overruling the transfer policy of MP HC," she wrote in her complaint.
She said her appeal for an eight-month extension so that her daughter, who is in Class 12, could finish her academic year was rejected.
She has alleged that the judge mocked her and threatened to "spoil my career completely and make sure that I face ruinous prospects all my life", when she pleaded against the transfer.
She also claimed the HC chief justice declined to meet her when she wanted to apprise him of the situation.
5) Union Minister for Urban Development and Parliamentary Affairs M. Venkaiah Naidu asked the urban local bodies (ULBs) to focus on mobilisation of resources on their own for improving infrastructure as merely looking up to governments won’t help.
The problem starts at the ground level itself as the elected office-bearers of ULBs are not keen on tax collection with the fear of losing votes and it is affecting development of towns and cities directly, the Minister said. “That mindset has to be changed if development is our agenda,” Mr. Naidu said and asked the ULBs to take up tax collection and development as their prime responsibility.
Addressing a press conference here on Sunday he said: “What’s happening now is the ULBs are approaching municipal ministers of the States concerned for funds, the ministers are seeking money from their Chief Ministers/State Governments, the States are moving the Union Minister for assistance and in turn the Centre is approaching the World Bank.” Ultimately, the burden of repayment of such loans would fall on people, he noted.
He had met Chief Ministers of Telangana and Andhra Pradesh K. Chandrasekhar Rao and N. Chandrababu Naidu respectively on Saturday, explained the Union Urban Development Ministry’s plans and requested them to inculcate transparency and accountability among ULBs, Mr. Venkaiah Naidu stated. He had also told them to focus on development by sorting out issues, if any, mutually as dictating the State government by intervening their functioning was not the NDA government’s policy.
Stating that Tanuku Municipality had succeeded in making people pay taxes on par with demand Mr. Naidu said a woman chairperson had set up display boards in each ward citing how much tax is collected in the area and how much was spent on facilities there.
The ULBs should levy taxes and collect them properly and spend them with transparency to address problems such as drinking water, drainage, power supply, roads, slum development, housing, capacity building/skill development and checking illegal constructions, the Union Minister suggested.
                                                                                                                                      
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