left without a solution

The left parties have made obstruction of governance and policy making into something of a fine art. From international relations to domestic financial policies, seems beyond their ambit when it comes to expressing reservations and stalling progress.
There is an uncanny method in this apparent madness. Raise the stakes, make a loud noise placket your constituency - and then end it all with a whimper. In politics when cynical maneuver replaces reasoned strategy the results are stalled progress and gains ephemeral.
On two recent issues, the stand of the left parties has been appalling. On Iran the left opposed the Indian government even before the government had taken a stand. That they mellowed down - not after an explanation from the Indian government - but when China and Russia went with the vote - puts a question mark on where left loyalties truly stand.
In the more recent case of the striking airport employees, who by no starch of imagination can be described as laboring proletariat - the left’s stand has been akin to that of a street fighter out to browbeat with his brawn. The bluster is all the more galling given the pathetic record in efficiency and honesty of the airport staff.
On national television Sitaram Yechury, the articulate politburo member and MP, compared the strike with the Bofors scandal. He went as far as to draw parallel between the falls of the Rajiv Gandhi government with that of an impending fall awaiting the Manmohan Singh government on the airport issue. This is a patent absurdity. The airport strike is not a political issue f any consequence. The privatization deal has a lot to offer the airport staff including profit sharing and a sizable financial stake.
The worrying thing is that the left rhetoric is bound to get shriller still. With elections ahead in left ruled states of West Bengal and Kerela policy and programs - indeed governance itself - could be held hostage for perceived political mileage.
On its part, the congress is toughing its stand. The airport bids went ahead in the face of strident protests by the left. At the Hyderabad plenary, Sonia Gandhi made it clear that Congress will fight the state elections as a full alternative even as they remain partners at the center.The left would do well to heed a recent survey which predicated a shrinkage of their political space should snap polls be called at the current time. However as things stand, they seem to be in a happy position classic to a status where power is without responsibility.

boom town shillong

Shilong learns to rock
Shilong
Economic change is literally sweeping through this hill town of the Khasi’s. The humble broom we use in our everyday life contributes Rs. 300 crore to the economy of Shillong every year. The brooms made here are used across India and have seen a demand spiral in synch with the real estate upswing. The brooms cost Rs. 12 a kilo two years ago and now cost upward of 30 ruppes per kilo. Says Anand Aggrawala, who trades in this commodity at the up market police bazaar in downtown Shilong“ The broom is our best-kept secret. This is only the beginning - as rural India modernize hygiene consciousness come about this business grow manifold” It’s classic bottom of the pyramid.

From brooms to tourism and hydel power to software the city is witnessing growth. The city derives its name from the legend of a deity called shy long – one that grows naturally - and is at last living up to its name.

The free market works in fascinating ways here. The helicopter ride from Guahati costs 900 ruppes - take a taxi and the tab is 1100. With air connectivity has come the higher end tourist. Says Mrs. J R Phambo, who is developing a mountaineering and wellness resort in picturesque cherapunji,“ For years Shilong sounded exotic but out of reach now it is a two hour flight and a half hour chopper hop from Delhi. This has translated into a mini tourism boom. Suddenly we are accessible!” And it is likely to get closer. Plans are afoot to lengthen the runway at Shilong to land jet and turboprop aircraft. The first landings may happen this January. The result is a hotels boom - companies including the Taj group and DLF are reportedly exploring possibilities for opening new hotels.

The real growth though may come from unlocking the hydel power potential of the state. The state has seen interest from 40 power firms so far and at least six new hydel power projects are already in various stages of commission. Says Manas Chaudhery, editor of the Shilong times and an MLA “ If execution meets intention Hydel power could a be really serious money spinner for us.“

With an English speaking work force and property prices 40 per cent less than metros it is only a matter of time before information technology arbitrages the Shilong advantage. M Larsing, the NIIT franchise and hotelier says, “Info tech firms are looking to save cost and yet need a diligent workforce that is fluent in English. We have experienced that Shilong youth - once given the technical skills love to work within their homes even if wages are less. I believe that as far as cost arbitrage goes Shilong is the future IT hotspot.”

Yet another trigger for growth is from timber and non-timber forest products. Says Sahihun lang a young women entrepreneur “ Forest products are a strength of Shillong and with the well ness business and the retail revolution unfolding we see great opportunities in supplying top grade honey, turmeric and many other items.” To this end the government has set up an e commerce portal called the Meghalaya agricultural marketing portal and he bigger retails chains have already started procurement.
Finally there is the mineral wealth such as coal and limestone on offer. However the lack of clarity in policy and the difficulty of obtaining land ownership has deterred investors in this sector and much of the mining is illegal. There is also a disputer on mining uranium fro shilong give environment concerns.

One intangible reason for Shilong’s growth is its young population. It’s late in the nigh and the trendy disco Tango is full up trouble has broken out and fists exchanged. The waiter at the Disco informs that they need more bouncers - and from out of town since tribal and clan affiliation ensure that the local ones don’t do a good job of restraining fellow tribals. So economic growth and social change with it, in the city that annually celebrated Bob Dylan birthday, is blowing in the wind.
Growth triggers
Agro and forest products feeding retail chain
Forty proposals for power plants
Airport modernization likely to lead to tourism boom
English speaking workforce and low property and wage cost could prove a cost arbitrage for the information technology industry
Bottlenecks
Tribal society means a few powerful satraps garner most of the gains
The north east periphery yet to gain critical economic mass
Insurgency remains a issue especially in nearby agro hills

free the business of inteernet commerce inindia

Scrap B2C curbs
The proposed curbs on business to consumer firms that sell goods through the Internet are a retrograde idea. Anything that the Internet firms sell from abroad has to go through the tariff and duty regimes of the Indian government. That ensures the government revenue. Currently it is a 2500 crore market and growing at robust clip.

Unwarranted curbs on this growing business could lead to constriction of revenues and loss of jobs. At the heart of the issue is the fact that selling though Internet is not a vending matter but that of commerce. Put differently, it is in the realm of tariff and not retail policy.


What is more, the move could lead to retaliation from foreign countries and impact sourcing of goods from India thought the internet - which is a far larger business.
In fact the government would do well to encourage this business by simplifying norms for warehousing, logistics and the cold chain since. It should be borne in mind that the “at the door step” industry globally generates a substantial number of jobs and in time could compare with the growth of pure play retail. The potential for business to customer industry is enormous given the increase in broadband connections and greater online security in commercial transactions.

There is need for the government to allow greater equity in e commerce ventures that are pegged at 51 per cent and to libralise the current regime that does not allow any equity in foreign firms wanting to business to customer e commerce in India.

This is not to say that the Internet based businesses do not need regulation. There are cases of fraudulent and late delivery and also of banned goods making there way into India through the Internet based e commerce model. These should be regulated and not the system of supply and selling.

Internet based business to customer model is good for another reason. It is at the cutting edge of information driven business and add to the competitive capabilities of an economy. An Internet based model cuts waste and inventories and invests in technology for speedy delivery. This is turn ensures that even off line firms become leaner and more competitive. It is an industry that needs to be encouraged and not – as the proposed measures could – nipped in the bud.

replace pay with perks

The big pay hike decided by the government for the office of the President, Vice President and Governors is welcome news. Before the pay hike, with a salary of Rs. 50,000 per month the president of India earned less than a manger at one of the top end call centers. Now that the government has doubled the paycheck for the head of state, the office still earns less than a manager whose job may be to sell soap in a tire II city for a multi national firm. The hike is in line with the a similar augmentation in the salary of the MP’s who now earn Rs. 68,000 a month. The Government has obviously decided to follow some of the Singapore model where government functionaries are played in line with salaries that are in the private sector.

The real need is to overhaul the pay structures of public sector undertaking bosses. The average pay for a PSU boss is in the region of about 600,000 a year. This is not enough in the booming job sector of India and neither is it commensurate with his responsibility that includes managing financial outlays of hundreds of crores. The private sector bosses earn that sort of salary in a month.
The discrepancy in pay between the government and private sectors has lead to three chief issues. The first is that it leaves PSU bosses open to temptations and corrupt practices. Secondly the best brains in the public sector can easily be lured to the private sector. This is a real and present danger for PSU's sectors ranging from realty to big industry and even start up companies now poach from the government. lastly the morale of the people on the top is effected if they have to constantly worry about small beers.

There are counter arguments concerning pay hikes in the public sector. that the Psu people get great homes, lot of help, free car and other related perks. They also come under far less scrutiny on the performance front compared to the private sector, which is answerable quarterly to share holders.
These are valid points. Perhaps the time has come top replace perks with pay in the public sector there by you will have greater flexibility as well as transparency on how much is being spent from the tax payers pocket for these mandarins.

The specter of jobless growth

The latest employment figures thrown up by the national sample survey organization raise troubling questions. From the survey it appears that over than last two years there has been a fall in employment by two percentage points. The employment figure has fallen from 43 percent to 41 of the population. Put differently, there is a decline in number of people employed either as casual labor or as organized sector workforce. This even as the private sector investment is at record levels. The grim employment numbers are in spite of the massively ambitious rural job guarantee scheme. The survey says that the proportion of employment in female causal labor was higher by one percentage point when compared to their male counterparts. Traditionally higher employment of females in casual labor has signaled agriculture distress.
Taken together the survey point out that the massive infrastructure growth has not yet provided the tertiary sector employment growth that is normally associated with building roads, ports and power plants. In it self this is not unique to India. It takes a time lag for tertiary sector to take off with infrastructure investment. The bad news is that stagnant agriculture growth has added to the job seekers pool and thus pushed up the unemployment figure.
The survey has also found a stagnation in terms of wages with the casual labor earning only 59.29 rupees - that is just about a dollar and half a day. This bellies the claim that Indian rural causal labor earns two dollars a day. The Indian pyramid, if these statistics are reliable, has an abyss at the end.
For those interested in economic policy and employment creation the survey holds three valuable lessons. In the first the infrastructure effort needs to be streamlined. The delay in implementations across sectors has created a concurrent employment slowdown. Secondly the governance of center sponsored job schemes needs greater scrutiny especially in the backward states. There is an urgent need to shake off complacency in this flagship effort to provide people minimum number of workday a year. Thirdly credit supply to micro businesses have to be streamlined further if self-employment has to be strengthened in India.
The survey paints a grim picture where more then half of all Indian workers are casual labor - that is if they get the opportunity to do so in the first place.