India Insight

“Government Plan To Tackle Prices Is Just Hot Air” screamed the front page of Friday’s Mail Today, as India’s political media lined up to belittle what was billed as a list of anti-inflationary remedies but was robustly rejected as “already failed measures and oft-repeated homilies.”

Prime Minister Manmohan Singh’s meetings this week with senior cabinet ministers to tackle year-high food inflation dragged on long into the night, keeping editors on tenterhooks and assuring Congress of front page headlines.

This morning, those headlines would have made for painful reading. After rumours of export curbs and future markets tweaks, what emerged to be a paltry list of recommendations was seen by many as nothing but ineffective band-aids for a broken economy requiring surgery.

Barraged by charges of inaction over tackling corruption, Congress appears to be heading towards firefights on two fronts as India runs out of patience with the ruling party’s attempts to curb inflation.

From economic hero to inflation-battered zero, perhaps more than anyone else Prime Minister Manmohan Singh encapsulates the Congress party’s current woes.

Even as India Inc celebrates U.S. President Barack Obama’s recognition of the country as a world super power, a recent study by the World Bank presents a contrasting view.

India ranks 134 among 183 nations in a survey called “Doing Business 2011″  — that gauges the ease of doing business in a country — and is ranked behind countries like arch rival Pakistan, Bangladesh and Sri Lanka.

Singapore leads the pack, while Hong Kong grabs the second position in the list.

As the pundits predicted, India will have the inauspicious honour of being the first country to host U.S. President Barack Obama following the largest shift in public support away from an incumbent President’s party in over 60 years.

But if the results show a clear message of dissatisfaction at Washington from U.S. voters, the fallout once the dust settles on Capitol Hill could well result in good news for India.

Here are three ways that a shift in Washington politics could play into India’s interests:

When Barack Obama heads for India next month, he'll be carrying a heavy policy agenda -- questions over the handling of nuclear material, the outsourcing of U.S. jobs and India's status as a growing economic power, along with regional relations with Pakistan and Afghanistan. But Rajendra Pachauri, the Nobel Peace laureate who heads the U.N. Intergovernmental Panel on Climate Change, hopes the U.S. president has time to focus on clean energy too.

Even as Pachauri and the U.N. panel evolve -- and as Pachauri himself weathers pressure from some quarters to resign -- he urged Obama to work on U.S.-India projects that he said would enhance global energy security.

Given India's red-hot economic growth rate -- 8 or 9 percent a year, Pachauri told reporters during a telephone briefing -- he said it makes sense for the United States to work with India to head off an expected soaring demand for fossil fuels.

India is globalising, but not the way much of the world wants.

That rather contradictory thought nagged at me one morning during the chaotic Commonwealth Games here in New Delhi.

On the road to the media venue’s gate, I trudged past a squatter’s family living in a tarpaulin. The mother was helping her son pee on my left. Rubbish, the smelly, sickly kind, lay to my right. My shoes sunk in mud from an unfinished pavement.

Hardly the stuff of a showcase international event meant to rival China. But after four years in India, the scene appeared normal. So was news during the Games that stocks had hit a near three-year high and that the Economist had predicted India’s economy would soon outpace China.

India’s current approach to urban development is insufficient for the task and needs an immediate revamp, according to global consultancy McKinsey & Co.

In its report “India’s Urban Awakening – Building cities, sustaining economic growth”, McKinsey states that a good city should be able to offer fine public infrastructure, reliable social services, recreational and community infrastructure and sustainable environment. 

As Delhiites complain of increasing road traffic, pollution and population many experts suggest that the development of the capital for the Commonwealth Games will lead to an increase in urban migration. Do you think Delhi is ready for this? 

It’s a laudable effort that often gets more brickbats than bouquets. This year, when Finance Minister Pranab Mukherjee presents the Union budget in parliament on February 26, he will walking a tightrope between managing ballooning fiscal deficit and supporting economic recovery in Asia’s third-biggest economy.

Expectations from the finance minister, as always, are high — people and corporates want more in their pockets. There has been no let-up in the rise of food prices and most middle-class families still have to wait for annual sales to get branded products home.

In other words, the nation would like to see changes in tax rates, consumables getting cheaper and credit continuing to be available easily.

The ‘reform agenda’ understood as ‘market-oriented reform’ or giving more space to market mechanism in food and fuel economy seems to have been held up.

The government can not be seen to be doing away with subsidies just as prices are up. Its hand is stayed for now.

But is that enough for say the gross national happiness?

Food and fuel inflation has been in the news for a while.

The government has no short-term control over supply side issues causing price rise like a bad monsoon leading to a low harvest or floods, but it can control the rising demand by reining in liquidity.

The war of words between the billionaire Ambani brothers took an unexpected turn when younger sibling Anil offered an olive branch to elder brother Mukesh in a bid to resolve a feud over the split of the Reliance business empire in 2005.

The widespread coverage the Indian media has given to the squabble between the brothers has led to a debate on social networking sites such as Twitter, with some accusing news organisations of playing host to a reality show or soap opera that stars the Ambani family to boost ratings.

Prominent columnist Vir Sanghvi wrote through his Twitter account virsanghvi: “Do you think some network should plan a reality show on the Ambani battle? Or are they doing it already on the news?”

“To define is to limit,” wrote T.S. Eliot.

Indeed sometimes, to limit things, they just may have been defined in a particular manner.

This struck home when I saw a communication by the World Bank on poverty estimates.

The World Bank produced an update of poverty numbers for the developing world based on an international price survey conducted in 2005.