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Bs Editorial 07.12.16 @thehindu - Zone
Bs Editorial 07.12.16 @thehindu - Zone
Bs Editorial 07.12.16 @thehindu - Zone
me/TheHindu_Zone
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>
MEDIA SCOPE
VANITA KOHLI-KHANDEKAR
> CHINESE
Twitter: @vanitakohlik
WHISPERS
Often, when laws are made in India, the merits of the objective sought to be achieved from them are conflated and projected
as the legitimately anticipated outcome
WITHOUT CONTEMPT
SOMASEKHAR SUNDARESAN
Mother-in-law of invention
CAUGHT IN A HAZE No one wondered how the law imposing a charge on entry of vehicles into Delhi, fundamentally
driven by the intended (if not promised) outcome of curbing air pollution, had not met its stated objective
the pollution came from vehicles. It was
felt that imposing a charge on entry of
vehicles into Delhi would create disincentives to ply via Delhi and thereby
curb pollution. This was a fully judgemade law that later came to be adopted
by the executive formally. This year,
Delhi has faced its worst air pollution
crisis. The thick haze is attributed to
multiple factors this time newer factors are being guessed ranging from
burning of farmland waste to fireworks
after the Diwali festival. No one wondered how the law imposing a charge on
entry of vehicles into Delhi, fundamentally driven by the intended (if not
promised) outcome of curbing air pollution, had not met its stated objective.
The death penalty is an easy example of legislature-made law failing to
deliver promised outcomes. When the
Nirbhaya assault case occurred in
> LETTERS
BUSINESS LIFE
Decadent approach
With reference to the editorial, Not profitable (December 2), I wholeheartedly
support the view of this newspaper that
the anti-profiteering provision in the
proposed goods and services tax (GST)
law would be against the interest of trade
and industry. I would add that the proposal to make an anti-profiteering
authority would be a great hurdle in promoting ease of doing business. It would
be nothing short of a debacle.
On enquiry, I learnt that 18 per cent
profit was tentatively suggested to be the
limit above which it would be taken as
profiteering. This has not been finalised
but even considering this line shows how
decadent the thinking can be.
First, such a provision would take
away from a company all desire to reduce
cost and become efficient and profitable.
Second, companies such as SAIL, TISCO,
which make profit and loss at different
times depending on international
demand for steel, would get eliminated if
they are not allowed to make profit of
any amount when the opportunity
arrives. Third, it would throttle innovation. No company will invest in research
and innovation if they cannot make a
profit. How will they finance research, if
they do not make sufficiently high profit? Fourth, a company cannot grow and so
also the country if high investment is not
made by either private or government
companies. And last, all start-up companies would be ruined as they make no
income for long and when they invent
something they make a one-time large
profit, that too, if they succeed at all.
If a company pays all taxes properly
and abides by all laws, how can the government stop it from making any amount
of profit?
No other country except one has this
kind of law. Not the USA, UK, countries in
Europe, Japan, China or Russia. Only
Malaysia has it. The Empowered
Committee noted this. Since when has
Malaysia become the leader of thoughts
> HAMBONE
BY MIKE FLANAGAN
https://telegram.me/TheHindu_Zone
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OPINION 11
>
he death of J Jayalalithaa brings down the curtains on one of independent Indias most charismatic political leaders. In a remarkable political
journey, Jayalalithaa has left a huge imprint on how state governments
can use policies to not only win over the masses but also work towards
industrial growth, a feat few states have managed to emulate. Born in Karnataka to
a Tamil Iyengar family, Jayalalithaa started off as a film actor when in her teens.
Between 1965 and 1973, she delivered 28 successive hits with MG Ramachandran,
the iconic film star of his age. But, the biggest role of her life was when she followed
MGR into politics and swept aside gender biases to become the sole leader of the All
India Anna Dravida Munnetra Kazhagam (AIADMK) and the chief minister of Tamil
Nadu in 1991. In the next two-and-a-half decades, she fought with her arch-rival M
Karunanidhi of the Dravida Munnetra Kazhagam (DMK) for the chief minister (CM)s
position in the state. But, every time she came to power she became the CM on
five occasions Jayalalithaa administered the state with striking astuteness.
Her approach to governance efficient, near-authoritarian and businessfriendly set the template for chief ministers across the country, from Nitish
Kumar to Narendra Modi. She often asserted every time she came to power after a
spell of DMK rule that she had to contend with a knocked-down house and had
to rebuild the state. However, while she pushed for industrial growth, she also
came to be known as the mother of welfare schemes. Amma (or mother), as her followers called her, stressed on providing several products of essential need, from salt
to cement and from bottled water to baby care products, at subsidised prices, or even
free, to the poor in the state. This came with a cost; during her current rule, Tamil
Nadus fiscal deficit to state output ratio has steadily risen from 2.2 per cent in 201213 to 2.9 per cent in 2015-2016. But, this is still below the cap mandated by the Finance
Commission. On the flip side was her reputation of administrative efficiency that
contrasted favourably with the DMKs, and her record of propelling the state among
the best in the country across parameters. Be it health (infant mortality, fertility rate
and maternal mortality) or education (gross enrolment ratio, especially for the girl
child) or crime (against women, SCs and children) or indeed, industrial growth and
employment generation Jayalalithaa ensured that Tamil Nadu not only surged
to the top but also that it stayed there.
However, her career was not without blemishes as she faced a string of corruption charges on two occasions (2001 and 2014) she had to resign from the CMs post
after being convicted of wrongdoing, although she was eventually acquitted in both
the cases. Moreover, she seemed to approve of the cult following she enjoyed not just
among her followers but also among her cabinet colleagues. The disadvantage of this
approach is the lack of clear succession in the party. Even though her finance minister, O Panneerselvam, has been sworn in as the new chief minister, there is an uneasy
calm since there was no obvious successor in the AIADMK. Many expect Jayalalithaas
trusted aide Sasikala Natarajan to be the real power centre within the party. A battle
for control within the party in the coming days could be a serious blow not just to
Jayalalithaas legacy but also to Tamil Nadus growth record. Her death, in that
sense, could be a wake-up call for many regional parties led by dominant leaders that
do not develop a second rung to take over when the time comes.
SPEAKING VOLUMES
NILANJANA S ROY
Some of the pleasure of a Books of the
Year list is felt by the reader, but only
some. I hope I never grow so jaded as to
lose the pleasure of going over each
months reading diary, revisiting the surprise of discovery, the deeper satisfaction
of letting an author unsettle you. This is,
as always, a partial list but it might be a
useful starting point.
Demonetisation and
the cash shortage
The liquidity crunch may extend far beyond the calendar year. A
quick way to remonetise would be to import currency notes
Union). The on-going cash shortage in India is without any of these exceptional antecedents.
A large shadow economy is estimated by some at
over a fifth of gross domestic product. This, along
with the change in societal norms towards a more
accepting attitude, bordering cynicism, towards
black money, is troubling. The big painful jolt of
demonetisation creates the right psychological
milieu for the war against black money to start, some
claim. Are government steps, such as the Income
Declaration Scheme (IDS) in the Budget for 2016-17,
monitoring black money stashed abroad with the
Tax Exchange Information Agreements with several countries, the August 2016 amendment of the
Benami Transactions (Prohibition) Act of 1988, and
the Taxation Laws (Second Amendment) Bill in
November 2016, part of a concerted plan? Will it be
any different from what followed in 1946 and 1978?
Only time will tell.
In the meantime, what needs to end soon is the
cash shortage. Cash is the preferred medium of
exchange in several transactions, such as in vegetable
markets, for road transportation and even some segments of retail trade. It is the lubricant that keeps the
wheels of the economy moving. Vegetable prices,
normally low around this time of the year because of
seasonal factors, for example, have been further
affected by the cash shortage. Almost a half of the
third quarter was without any cash shortage, but if the
shortage continues, its full impact, including on real
economic activity, will be in the fourth quarter.
Of the ~16.6 trillion cash circulating on March 31,
2016, as much as over 85 per cent was circulating in
15.8 billion and 6.3 billion pieces of ~500 and ~1,000
notes, respectively. By November 8, the numbers
may have grown to 16.6 billion and 6.5 billion, respectively a total of 23.1 billion pieces demonetised.
The government claims the shortage will disappear
by end-December. Some commentators say it will
take much longer, perhaps as long as May, 2017.
How long the cash shortage persists will depend on
how many of the demonetised notes will have to be
substituted and how soon the substitute notes can be
secured and distributed. The payments system in
India may indeed be in the cusp of a revolution and its
transformation may be as fast as that of telephony in
the recent past. India may be moving towards a less
cash-intensive economy, and the demonetisation
itself may hasten the move, but this movement by
itself is unlikely to make the post-demonetisation
cash shortage disappear.
Bank notes are printed at four note presses: At
Nashik, Dewas, Mysuru and Salboni, owned by either
the government or RBI. According to the latest annual
report of RBI, the total number of notes supplied was
20.9 billion in 2013-14, 23.6 billion in 2014-15 and 21.2 billion in 2015-16, and such supply fell short of indent by
17.5 per cent, 2.3 per cent and 11.3 per cent, respectively. The maximum ~500 and ~1,000 notes supplied in the
last three years were 5 billion and 1 billion in 2014-15. The
cash shortage may take far beyond the calendar year if
the reliance is only on supply from these four presses.
A quick way to relieve the shortage is to employ the
strategy followed by Prime Minister Atal Bihari
Vajpayees government in 1998. To rapidly wipe out the
cash shortage, among other things, it decided to import
3,600 million pieces of printed notes adding up to a face
value of ~1 trillion.
The writer is a former chief economic adviser
Fiction
Moonglow Michael Chabon
(HarperCollins): A visit to see his dying
grandfather sparked Moonglow, where a
man on his deathbed tells stories of war,
persecution, and looking up at the stars,
dreaming of spaceflight.
Commonwealth Ann Patchett
(HarperCollins): Two families, five
decades, and an author who steals their
childhood to write a bestseller that clears
his writers block Patchett in great form.
Selection DayAravind Adiga (Fourth
Estate): Mr Adiga slices through the
mythology that surrounds cricket in India
with this story of two brothers, robbed of
childhood by the game they love.
Chain of CustodyAnita Nair
(HarperCollins): A brilliant dive into the
tangled nets of Bangalore and the child
trafficking industry by a writer whos set
her imprimatur on Indian crime with the
Inspector Gowda series.
The Association of Small BombsKaran
Indian non-fiction
Three exceptional books will reboot the
way you think about India: Indias War
(Allen Lane), where Srinath Raghavan
presents a gripping and different view of
World War II; Incarnations: India in 50
Lives by Sunil Khilnani (Penguin Random
House), which restores a complex, syncretic past; and The Burning Forest
(Juggernaut) by Nandini Sundar, which
measures the state by its misrule over its
most vulnerable citizens.
Among the years best non-fiction:
Ramachandra Guhas Democrats and
Dissenters (Penguin Random House) is
useful reading for anyone who fears that
the years of illiberal democracy are upon
us; Barkha Dutts This Unquiet Land
(Aleph) is a first-hand account of some of
the countrys greatest political conflicts;
and Anubha Bhonsles sensitive, wellresearched Mother, Wheres My Country
(Speaking Tiger) tells much of Manipurs
contemporary political struggles through