Editorial : Another ‘baby’ step?
It is expected that RBI will drop Repo Rate to facilitate economic growth. The expectations are rising because government has kept and has promised to keep the fiscal deficit in check.
Why RBI can lower the Repo rate?
- The Centre’s smaller borrowing programme.
- Some small savings rates (like EPF) have been cut recently
Why RBI will not lower the Repo rate?
- CPI above 5% mark.
- States borrowing to finance ‘UDAY’ scheme.
- Repo reduction since 2015 is 1.50% points, the rate itself is at its lowest level in six years.
Will the rate cut help producers?
- No. Because low revenue generation for producers because of insufficient demand.
- Also a lack of power to set prices freely because of surplus capacities in many sectors.
Lending rates will become reasonable only when there is greater convergence between WPI and CPI. This can happen only in a good monsoon year, when food prices (which heavily influence the consumer price index) come under control, or when the tumble in agricultural prices gets reversed.
Editorial : Not just a flyover collapse
Collapse of flyover in Kolkata. Highlighting various problems affecting the infrastructure sector and how poor governance magnifies it.
Hurdles in the way of building new infrastructure
- A trillion dollar-plus infrastructure gap has to be financed.
- Various methods of implementing infrastructure plans are falling short.
- Safety audit of flyovers revealed serious flaws in many flyovers.
- Infrastructure under construction for years and years with no sign of the work likely to finish soon.
- Inability of the government to make land available for the project.
- People consider it legitimate to refuse to part with land even for public projects.
- The role of the private contractor executing the project is under scrutiny.
- Role of local politicians who have to be awarded contracts or simply accommodated in the rent-seeking.
All this requires governance house to be set in order.
The Indian Express
Editorial : Panama Papers lift the veil
Indian Express along with International Consortium of Investigative Journalists (ICIJ) and German Newspaper SUDDEUTSCHE Zeitung, extracted secret documents from law firm, MOSSACK FONSECA, headquartered in Panama. MOSSACK FONSECA services include incorporating companies in offshore jurisdictions, administering offshore firms and providing wealth management services
Some Important Points to Remember
- 500 Indians have been named in Panama Papers expose who have made investments in offshore companies through Mossack Fonseca
- PM Modi has initiated enquiry into the matter; Finance ministry has stated that two similar investigations, one in 2013 and other in 2011, has yielded results in same line
- Regulatory framework regarding capital convertibility in India has been ever changing; till 2004, Indians were not allowed to transfer money abroad for any purpose. In 2004, RBI allowed transfer of sum upto $25000 under Liberalized Remittance scheme.
- However it was not clear whether Indians could set up entities abroad. In 2013 RBI allowed setting up of 100 percent subsidiaries and joint ventures in foreign countries
- Still unclear whether existing companies abroad can be acquired
- Time for govt to punish the culprits and clear the legal and regulatory framework
Editorial : Politics of intimidation
Debate on slogan Bharat Mata Ki Jai
Some Important Points to Remember
- Darul Uloom Deoband issued a fatwa against chanting of slogan as it is against tenets of Islam
- Baba Ramdev and Maharashtra CM D. Fadnavis made remarks against those who refuse to chant it; CM Fadnavis said those who refuse to chant Bharat Mata ki Jai have no place in India
- AIMIM MLA Waris Pathan was also suspended from MAH legislative assembly for refusing the same
- Constitution neither prescribe slogan chanting as necessary criterion for citizenship nor does it envisage Indian state in terms of motherland or fatherland
- However such statements can give rise to communal tension and violence
- People holding constitutional posts are required to respect their responsibility as desired by constitution
- India’s economic rise will be effected if nation is seized by forces perpetrating religious, ethnic and cultural violence
Editorial : Modi addresses Saudi business leaders
- India is trying to deepen ties in West Asia as shown by frequent visits by Indian side. This follows the wider policy of India to improve ties with close allies of Pakistan
- The recent Riyadh visit of the PM is particularly significant as it comes at a time when Pakistan and Riyadh relations are a bit strained over the Iran issue.
- Reality check for India- Various Joint Statements are issued by Saudi Arabia and India but yet to translate into reality. Saudis are still accused of funding Wahabi groups around the world. Also if India favours Saudi Arabia to much it appears biased against Iran. Mr. Modi’s visit seems to focus only on positives of the relation and by pass the negatives.
- The editor suggests India has to address the flaws in relations with Western Asian nations. According to the editor the best way forward is use of multi-directional policy in West Asia but maintaining equilibrium.