Sharad Pawar and the politics of sugar!

India is the largest consumer of sugar on planet earth but it is only the second biggest producer of sugar after Brazil. This means that any significant drop in domestic production could send the price of sugar way up not only in India but worldwide. That is exactly what has happened during the last 12 months. Sugar prices have gained 50% in the last one year. This has happened even before the current drought hit the nation last June through the middle of August 2009. The reason for this fiasco is the stupid politics of Shri Sharad Pawar. He himself is a sugar baron from Maharashtra and the Minister for Agriculture and Food, Government of India. There lies the conflict of interest. The price of sugar directly impacts the personal interests of Sharad Pawar! This is precisely the problem of sugar shortage in India. Is he responsible for creating this artificial shortage? This possibility must never be ruled out!

“India’s demand and supply has become an important factor in affecting the trend of sugar price, even though the situation in Brazil, the world’s largest sugar producer and exporter remains stable”, said Vibul Panitvong, executive chairman of Thai Sugar Millers Corporation, Thailand. He further elaborates, “India was expected to produce 22 million tonnes of sugarcane over the 2008/09 harvest, but actually produced 14.7 million tonnes. It was due to this uncertainty in production that India had to import a large amount of sugar last year, when it actually used to export around 4 million tonnes of the sweetener a year”. This is a shocking statement as far as I am concerned. India is not some third-world country in Africa any more; we ought to have a comprehensive agriculture policy as well as a sophisticated monitoring system of demand and supply. How can a third-rate sugar baron from Baramati, Maharashtra take the whole country to ransom? This fraud must be investigated!

Enlisting Nandan Nilekani should only be the first step…

There is no excuse left for the Government of India not to do what it needs to do. Dr Manmohan Singh is no Indira Gandhi; he has a very fine brain. Sonia Gandhi is no Indira Gandhi; she lets others use their brain. Rahul Gandhi is no Indira Gandhi either, he actually uses his brains. The Government always had Montek Singh Ahluwalia, then they got Kapil Sibal in the cabinet and then Shashi Tharoor in the Ministry of External Affairs. Now that the Government of India has also enlisted Nandan Nilekani to head the department of Unique Identification Authority of India, there is no reason why India should not leap-frog to the next level of development. It has the required brain-power to articulate the vision for a new India! Shweta Rajpal Kohli of NDTV spoke to Nandan Nilekani on Monday August 24, 2009, on his appointment as a full cabinet rank minister by Dr Manmohan Singh to streamline the identification card system. Nandan underplays the appointment and compares himself to a plumber who is assigned a job to create a pipeline to the consumers. This is a huge statement and he is exactly right. What India needs is a set of good implementers who can make things happen. Just THINK about his statement!

There are always some very good ideas available to the Government of India but it never had the resources to implement them. Now that they have the money to do the things that have been discussing for decades, the communists and their ‘Left Front’ became the cog-in-the-wheel. That problem has also been solved by a sophisticated Indian voter early this year. What remains to be seen is if this government has the backbone to stand-up to the entrenched interests and implement the much touted reforms. Nandan Nilekani has been extremely articulate in his book ‘Imagining India’ about the problems India faces and some simple solutions to those impediments. The Unique Identification Card system is one such solution. Nilekani believes that once the remote consumer is identified and given a tamper-proof ID card, they could then access any product or service directed towards them by the government or any other agency. The problem that I see with this very exciting proposal is that how do you guarantee that the consumer got the service and that he or she was able to retain it? Take for example cash transfer, the remote consumer could be in debt and the creditor could be waiting alongside the recipient to strip him/her off the money. In this case the identified recipient would be left high and dry. How would the government guarantee that the aid or any other service is received by the needy and used to achieve the objective? I hope Nandan has an answer to that!

Indian economy could grow at 8% in 2009-10

Reserve Bank of India expects the Indian economy to grow @ 6% in the financial year 2009-10. The Finance Minister, Pranab Mukherjee on the other hand is much more optimistic and pegs the rate of growth at 7%. The Planning Commission of India said that a 7.4 % growth rate is possible for the current financial year. My personal opinion is that we could land up with a strong growth of even 8% in fiscal year ending March 31, 2010. The reasons for that are multiple. The first indication came with the return of the UPA government at the center earlier this year in the Lok Sabha elections. This was an excellent indicator of the consumer confidence in their government. The second signal came with the appointment of an excellent union cabinet in terms of experience and competence. These two put together signaled the optimism of the country. The union budget followed and fair-minded people agreed with the Minister of Finance in keeping the wild expectations of ‘Corporate India’ in check. The ‘Central Government’ has announced a robust agenda for the next five years and has allocated resources for the same. These are the fundamentals of good governance and that breeds investor confidence. Just THINK about these fundamentals!

The hypocrisy of Dalal Street on the federal budget!

Since when has Dalal Street become the adult in the family? The 869 points drop in Sensex index at the Bombay Stock Exchange today was childish and without merit. The fiscal deficit of 6.8 percent of GDP is high but not higher than other major economies of the world. Finance Minister Pranab Mukherjee has made it clear that it is a short term measure to consolidate the rural demand which has come to the rescue of Indian economy. Dalal Street (The Wall Street of India) has very little credibility these days as it clearly failed the investor confidence during the last 18 months. The flight of foreign capital was not large enough to justify the drop in Sensex from the high of 21,000 points plus to the low of 7,000 points plus at its worst. Corporate India failed the Indian people as the captains of our economic future. Now let Bharat take care of India since it has a much larger footprint and the recovery might be more sustainable. Dalal Street needs to learn a lesson or two!

Kapil Sibal could harvest the demographic dividend

Twenty years back when we left India, Indira Gandhi and her son Rajiv Gandhi used to consider India’s exploding population as a major national liability. Their successors, P V Narasimha Rao, Atal Bihari Vajpayee and Dr Manmohan Singh converted this liability into a global human capital. How could this happen and that too virtually overnight? The reason was simple, the Gandhi’s were modestly educated, unlike the three scholars who followed them as Prime Ministers of India. Gandhi’s of India, excluding Mahatma Gandhi, were political animals with a short-sighted vision of India. It was Prime Minister P V Narasimha Rao who completely changed the destiny of India. Even today the sycophants of Nehru-Gandhi cabal would hate to admit the fact, but then who cares? The fact of the matter is that Prime Minister Rajiv Gandhi got a unique mandate in 1985 but squandered it on petty politics. India is lucky to have a window of relief from this political dynasty and grow to its full God given potential.

Kapil Sibal, a Master’s of Law from Harvard Law School, has been appointed the Minister for Human Resource Development by Prime Minister Dr Manmohan Singh, replacing a dogmatic and infirmed, Arjun Singh. Sibal has already indicated his willingness to open India’s educational sector to foreign universities and thereby provide vastly expanded higher-education opportunities to millions of Indians. This has the potential to further enhance India’s growing human capital. India is on its way to become the world’s largest English-speaking liberal democracy. Currently, 30 million Indians are fluent in English language and 60 million more are somewhat functional in an English speaking environment. There seems to be a unanimous opinion around the world that India would have 300 million English-proficient workers by 2020. Besides being fluent in English, these Indian workers are likely to be better educated and trained compared to their Western counterparts and would cost only half to one third of their competition. Just THINK about its global impact!

The best part of India’s story is its demographics. India has the youngest population in the world, unlike China or the ‘Western World’. According to Vijay Srinivasan, “Nearly 31% of the Indian population is less than 14 years old, and approximately 58% of the population is less than 25 year old, which translates to over 600 Million young people. As the Western nations age and even China ageing fast due to its “one-child policy”, the future workers of the world would be coming from India, it seems. The GDP growth of India itself would absorb most of these young workers, if only India manages between 8 and 10% growth annually for the next 25 years. This is entirely possible, and India could well become the only country in the next few years to reach a double-digit economic growth rate. China would experience an inevitable slow down, possibly dropping down to no more than 5 to 6% growth rate.” India is likely to provide low-cost legal and health-care services to the world for decades to come. Indian design and culture has the depth and breadth to fire the imagination of the world. Young people around the world are likely to follow India in this century!