First food: business of taste
Good Food is First Food. It is not junk food. It is the food that connects nature and nutrition with livelihoods. This food is good for our health; it comes from the rich biodiversity of our regions; it
India
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Farm loan waiver runs into trouble
Nath: Where Will Funds Come From? The mega loan waiver announced by the Manmohan Singh government is running into some in-house scepticism with doubts about funding for the give-away being aired in the Cabinet. On Monday, a meeting of the Cabinet saw commerce minister Kamal Nath asking whether the government had made provisions for the Rs 60,000 crore scheme it has announced in the Budget. He also seemed to argue that it would have been better if the Cabinet had been taken into confidence. Sources said that Prime Minister Manmohan Singh intervened to commend finance minister P Chidambaram and the loan waiver. Foreign minister Pranab Mukherjee also said that the finance ministry has chalked out the broad direction and details will soon be worked out. This reflected doubts put forward that the waiver unfairly lumps farmers tilling irrigated lands with those in dry-land conditions and that the two hectare cut-off for beneficiaries cannot apply across the country. Wondering whether the waiver would benefit distressed farmers, minister of state for new and renewable energy Vilas Muttemwar told TOI, "The problem lies in many farmers in areas like Vidarbha owning up to 15 acres of land, but being very poorly off. It is not just the small farmer, even those with larger holdings, who actually can access credit, are suffering.' Muttemwar said he would speak to the Prime Minister and Congress chief Sonia Gandhi and ask for the eligibility for the Rs 60,000 crore waiver announced by the government to be altered in a state or regionwise manner. He also said that even smaller farmers might not be able to use the waiver as they were largely indebted to private money lenders. Muttemwar disputed agriculture minister and NCP boss Sharad Pawar's call to farmers to stop paying money lenders. "This is easier said than done. These loan sharks get farmers to sign agreement to sale documents. Even those sales are being closely scrutinised, it is not easy for farmers to simply throw off the yoke of money lenders,' he said. The minister's views could be some cause for worry as he represents Nagpur, the political centre of the Vidarbha region which has been reeling from suicides by farmers. The criticism that farmers who need help might be outside the waiver also dovetails with the argument that UPA's largesse will help well-off agriculturalists in areas like western Maharashtra. Well-known agro-economist M S Swaminathan agreed that it was difficult to compare farmers from green revolution states with those in impoverished dust bowls. "Comparing farmers owning two hectares in Punjab with those with holdings of similar size in Rajasthan or Vidarbha is unfair. The size of holdings in distressed areas should be much bigger,' he said. Swaminathan said farmers in irrigated areas who used advanced methods had access to credit much in excess to what farmers in distressed areas were able to garner. Budget can't be challenged in court: SC Even before the applause for a Budget
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NDA, UPA in war of words over funding of dole for farmers
The discussion on the President's address got off to a confrontationist and bitter start in Lok Sabha on Monday with NDA and UPA benches repeatedly interrupting each other even as Leader of Opposition L K Advani called on Prime Minister Manmohan Singh to reveal how the mega loan waiver would be funded. Advani said while a relief package for farmers was welcome, it was incumbent on government to tell Parliament how it intended to compensate banks and cooperatives for the Rs 60,000 crore sop. "Will this be by way of bonds that will be redeemed later?' he asked. He also pointed out that rural distress had been aggravated by price rise. The Radhakrishnan report on indebtedness said that there were a range of factors that were adding to the farmers' burden. Many farmers who were facing a debt trap had borrowed heavily from private money lenders. He sought to link the waiver with the possibility of an early election and said "since last August there has been uncertainty' referring to Congress-Left brinksmanship over the India-US nuclear deal. He said an unstable government could not deliver. Advani was interrupted with Congress MPs questioning him on issues like the record on combatting terror and BJP's position on Telangana. The heckling seemed part of a pre-planned script. Congress chief Sonia Gandhi's decision to sit on the last bench during the debate seemed to encourage her MPs who competed with one another in aggressively defending the party. The loan waiver issue also had an echo in Rajya Sabha with BJP and CPM charging the Centre with not addressing the real concerns of the poor. Participating in the discussion on the motion of thanks, Abhishek Singhvi (Congress) said the economy had grown by over 8% in the last four years. "But this gung-ho spirit has to be tempered' in the face of hard reality of 25% people still living below the poverty line.
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Budget can't be challenged in court: SC
Even before the applause for a Budget
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Kapil Sibal seeks area in seafront for national ocean technology institute
GREETING: Union Minister of State for Science and Technology and Ocean Development Kapil Sibal with Chief Minister M. Karunanidhi at his residence in Chennai on Monday. Minister of State for Science and Technology and Ocean Development Kapil Sibal called on Chief Minister M. Karunanidhi at his Gopalapuram residence to seek a "large area in the seafront in Tamil Nadu to carry out research activities such as deep sea mining' and "coastal management.' "We want to carry on more activities in Tamil Nadu. So I requested the Chief Minister to look into a proposal by the Ministry to give a large area in the seafront in Tamil Nadu for carrying on research activities such as deep sea mining and others. As you know the Cabinet has in principle accorded approval to the setting up of a maritime university in Tamil Nadu and we hope that the setting up of the university and the grant of a seafront to us to carry out research and development would go hand in hand. This will enable us to invest more money in research activities in Tamil Nadu along the coast,' he said. Asked about the reaction of Mr. Karunanidhi, he said the Chief Minister told him that he would consider the issue very seriously. When it was brought to his notice that a parliamentary committee was looking into the issue of setting up of maritime university, he said that it was only concerned about the methodology and "how it is to be done.' Asked about the location of the university, he said: "We are setting up a maritime university. It will be located somewhere near the coast of some particular State.' Asked if there would be two maritime universities, he said he did not know about that. "It is not under my domain. I only know that in principle it has been agreed to. The location is yet to be decided and wherever it is, it has to be near the coast. And wherever it is, now with Information Technology you can do a lot of activities.' D. Rajasekhar, head of the Vessel Management Cell at the National Institute of Ocean Technology, said the area the Minister sought was for his institute, which is located in Pallikaranai. "We have to use Chennai Port for our berthing facilities
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India gets hi-tech offshore lab for Rs 232 crore
On Board Sagar Nidhi: It's an acquisition that would make India's deep-sea research scale new heights and the grit of scientists from National Institute of Ocean Technology (NIOT) indicates they are raring to put the Rs 232-crore
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Focus on India's new trillion-dollar economy
The growing relevance of India's newly-minted "trillion-dollar economy' to the changing global economic order was emphasised at a seminar here on Monday in the context of Finance Minister P. Chidambaram's 2008-2009 budget. India's High Commissioner to Singapore S. Jaishankar said China, as "a political aside' in this emerging global story, "has now overtaken the United States as India's largest trading partner.' K. Venugopal, Joint Editor of The Hindu and The Hindu Business Line, traced some "fantastic aspects of India's growth story' but cautioned that the current trends of "a miserable show' in the power sector and project slippages in the overall infrastructure domain could still "stop ... the trillion-dollar economy from cantering' at a comfortable pace. KPMG India Executive Director Girish Vanvari said the Finance Minister had opted for "cautious' projections for the future, keeping in mind the current reality that "the Indian economy is on a roll.' Setting the tone for the seminar, organised by KPMG and the Singapore Indian Chamber of Commerce & Industry in association with The Hindu Business Line, Dr. Jaishankar said: "We are now, probably for the first year, talking about the budget of a trillion-dollar economy. We are talking about a country, where there is a 150 per cent increase in the net FDI flows, where the outward investments have actually also gone up almost seven times over what it used to be in 2003-2004, where the trade-to-GDP ratio has gone up very sharply. The [latest] budget, like any other happening in India, has a certain immediate context and a longer-term context in terms of reform.' Key factors Outlining the budget proposals in the context of what Mr. Chidambaram might have had on his mind, Mr. Venugopal spelt out an array of factors that served as the political and economic background. These were the possibility of general elections within the next 14 months; farm suicides; the drop in public investment in the agricultural sector; some indices of an economic slowdown; the appreciating rupee; the surge in foreign investment inflows; the ebb and flow of the stock market trends which, in the last six months, were "not bad' compared to the U.S. and Chinese markets; "the divergent worms' in regard to trade deficit; and the political sniping at "an economy on the downswing.' He summed up the "budget response' as follows: Rs. 60,000-crore debt waiver for small and marginal farmers; tax breaks for individuals, not companies; and excise duty reduction from 16 per cent Cenvat to 14 per cent, with no sops for exporters. Posing the question whether these proposals would work, Mr. Venugopal said: "Not everyone in the political world congratulates Mr. Chidambaram for the debt waiver. [Some] say he has not done enough. Why is India's agriculture on the rocks? One reason is that irrigation projects have failed to deliver in the last decade or so. The government's Economic Survey conceded as much. The weakening farm pulse [is such that] the only thing that has grown smartly is credit supply.' On income tax, he said the Finance Minister was "like India's spinners: flight the ball more and probably you will get the batsman out.' The growth of the economy "is delivering a lot more as tax revenues for the government.' Citing some "concerns,' including rising food prices, and turning the focus on "some very bright spots' such as the telecom and aviation sectors, Mr. Venugopal said, "The agenda is [still] pretty long' for the future. In addressing it, Mr. Chidambaram might also have to reckon with the "fragility of the coalition that he is part of.' Mr. Girish Vanvari gave an expert overview of the budget matrix of direct and indirect taxes. Vishal Sharma, KPMG Singapore Executive Director, presided.
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Rising food prices worry Chidambaram
Expressing concern over rising food prices, finance minister P Chidambaram said he had not forgotten the corporate sector and defended the Rs 60,000 crore farm loan waiver on the ground that the money would flow to a distressed segment of the productive sector where the output was either stagnant or falling. "One of the reasons why inflation is still a threat is food prices in India,' Chidambaram said, adding that after a long gap, India has become a marginal importer of foodgrain, which is a dangerous sign. "Because we are dependent on import, we are subject to world prices... No country with as large a population as India can be dependent on imports (of foodgrain),' he said at the postbudget interactive session with industry chambers. Since April 2007, prices of wheat in the global market has risen by 88% and that of rice by 15%, he said. "Taking all this into consideration, we came to the conclusion that farmers' distress called for an unorthodox response... the response was farm loan waiver,' Chidambaram said. The wholesale price-based inflation rose to 4.89% from 4.35% in the previous week. Responding to the issues raised by the corporate sector, he said, "I have not forgotten the corporate sector. Despite the advice given by my chief economic advisor and suggestion from Economic Survey, we accepted your (corporates) demand of retaining peak customs duty rate.' He said excise duty reductions and relief given in personal income tax would help in spurring demand for consumer goods and benefit the industry. Exports grow 20.5% in January India's exports showed a healthy growth of 20.47% in January this fiscal over the same month last year, but expanded by a single digit figure of 7.66% in rupee terms due to pricey domestic currency. Exports increased to $13.14 billion in January 2008 from $10.9 billion a year ago, while imports grew by a huge 63.57% to $22.50 billion, leaving a trade deficit of $9.36 billion. PTI
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Band aid, in wrong place
No one asks the farmerBringing up babus With its Rs 600 billion farm loan waiver in the current budget, the government has applied some band aid to the financial haemorrhaging of India's farmers. It is another matter that the hurt is at some other place. The farmer has difficulty in obtaining cheap and reliable credit; various laws prevent him from selling his produce at the most competitive prices in the open market; there is no reliable advice available to him on how best to tend his fields in an economical manner; existing farming techniques, guided by corporate interests, continue to suck life out of the soil without replenishing it and there is no system of health security in the villages. On all these counts, the government has yet to show even minimal movement. The farm loan waiver gives the impression that farmers do not wish to repay their loans. This is a serious misrepresentation of the ground reality. According to figures from the NABARD, only some 10 per cent of the farmers default on bank loans. And even then, it is rarely that farming assets are taken away by the banks for failure to pay back loans. The problem for farmers lies in the loans taken from informal sources: moneylender and relatives. Often, the moneylender himself is a prosperous neighbourhood farmer. He gives large loans that are beyond the paying capacity of the borrower. These loans come with exorbitant rates of interest and severe penalties for default. The lender here does not falter in taking away farming assets, including land. After all, this could be a strategy for acquiring more land for himself. The advice of the agriculture minister a few days ago at Mumbai that farmers need not pay back loans taken from
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Aam aadmi to ride the auto sector
The real winner is the small car buyer who will have to pay Rs 5,000 to Rs 20,000 less for his purchase.
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Budget bonanza
A few years ago, while delivering the Palkhivala Memorial Lecture in Mumbai on the then Finance Minister Jaswant Singh's Budget, P Chidambaram made the perceptive comment that it was the most unfunded budget in the country's history. There was no provision in the Annual Financial Statement on many new items of expenditure. Now, ironically, it is the turn of Yashwant Sinha to point out how Chidambaram's budget is silent on expenditure on such proposals as debt waiver! Any issue of bonds to banks by way of compensation for debt waiver and relief, especially when staggered over three years, will put them in the same predicament as the oil marketing companies burdened with similar IOUs. The bonds are not likely to qualify for investments to meet the Statutory Liquidity Ratio. In case of depreciation in their values, the banks will face the same problems they experienced a few years ago in adhering to prudential norms. The difficulties are cropping up at a time when the system is in transition to Basel-II norms. There is an ominous suggestion in some official quarters that banks that have already made provisions for the overdues of farm loans may not be given the compensation. It will be unfair to them. The overdue loans will still remain part of the gross non-performing assets of the institutions, reflecting on their soundness. The loan waiver does not solve the problem of farmer distress. The inequity in the definition of marginal or small farmers based only on cultivated holding is obvious. According to the budget document, a marginal farmer is one with a holding up to one hectare and a small farmer is one with holdings between one and two hectares. A farmer with, say, five hectares of rain-fed land in Pali Marwar in Rajasthan is economically in no better condition than one with two hectares with assured irrigation families in Ludhiana in the Punjab. But the former will not be eligible for the waiver. The need for adopting an income criterion for defining the size of farms was discussed in detail in the Reserve Bank of India's Report on the Seventh Follow-Up Rural Credit Survey entitled "The Small Farmers