India Insight

India and the art of the 24-hour economic reform

It’s not every day that India makes such a dramatic move as raising diesel prices, or allowing foreign direct investment in its debt-walloped passenger airlines. It’s certainly not every day that it caps this 24-hour period by allowing foreign investment in retail businesses.

In short, big international companies like Wal-Mart will be able to start their own shops in India, or will be able to buy up to 51 percent of existing retail businesses. This could affect small grocery stores like Nilgiris in southern India all the way down to local street vendors.

The Indian government made all these moves as part of increasingly urgent efforts to firm up its sagging economy. While the diesel price rise of 5 rupees a litre and the retail moves are sure to cause a lot of anger and pain on the part of many Indians, the government has suddenly revealed a desire to think about the collective future of the country.

While sceptics might expect the government to abandon moves that are politically risky, the ruling coalition that implemented the changes — particularly the coalition’s leader, the Congress Party — has silenced its worst critics. The timing isn’t bad either, considering recent corruption scandals that have cast doubt on the ability of the coalition to lead effectively.

So why all the activity all of a sudden? Asia’s third-largest economy was facing multiple threats of a credit rating downgrade. It also has its returning finance minister, P Chidambaram, back in control of the purse.

Bold move on diesel, but hold the rollback

Sometimes the government does what it promises. India raised diesel prices by 5 rupees per litre on Thursday in a move guaranteed to alienate the common man, but please foreign investors, oil marketing companies and ratings agencies.

Opposition parties and key government ally Mamata Banerjee expressed their expected disappointment with the decision. The BJP called it a “cruel joke” and “mortal blow,” while West Bengal Chief Minister Banerjee planned a street rally on Saturday and said she was “shocked“.

So… on with the protests and demands to lower the prices. But let’s think for a minute about why that might be the wrong thing to ask for.

from The Human Impact:

Rage in India a spotlight on Sri Lanka’s war victims

Almost four years since Sri Lanka's war ended, rage over the lack of rehabilitation for thousands of survivors of the bloody 25-year-long civil conflict has surfaced - not on the war-torn Indian Ocean island itself, but in neighbouring India.

India's Tamil Nadu state -- where the majority Tamil ethnic group have a close association with Tamils living across the Palk Straits in Sri Lanka - have long felt their brothers have been discriminated against by the Sinhalese-ruled government.

The war, pitting separatist Tamil Tigers against President Mahinda Rajapaksa's Sri Lankan Armed Forces, saw tens of thousands of mainly Tamil civilians in the north and east of the island killed or injured, and hundreds of thousands were displaced.

The race for India’s next prime minister

With the Congress-led coalition government more than halfway through its five-year term, the political temperature is heating up in the world’s largest democracy. The question on everyone’s minds is — who’s going to be the next prime minister?

A recent Nielsen survey had showed Gujarat chief minister Narendra Modi was the top choice for the post, ahead of Congress party scion Rahul Gandhi and Bihar chief minister Nitish Kumar.

But last week’s conviction of a Bharatiya Janata Party (BJP) lawmaker in the Gujarat riots is a blow to Modi, and the political fallout from the case may have dented his hopes of sitting in the prime minister’s chair.

from Breakingviews:

India begins the post-Mukherjee clear-up

By Jeff Glekin

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Pranab Mukherjee’s reign as Indian finance minister was stained by economic meddling and political favouritism. Now he is gone, and some of his excesses are being reversed. An enemy has been pardoned and a friend has not received a plum job. This could be the beginning of a better era.

Imagine if Tim Geithner had been accused of putting pressure on the securities regulator to protect some political friends. The U.S. Treasury Secretary would be in serious hot water. But when the former number two at the Securities and Exchange Board of India (SEBI) accused Mukherjee of something similar – putting pressure on the SEBI chairman to “manage” some high-profile corporate cases – there was little attention.

from Anooja Debnath:

In India, what goes up must keep going up

With a faltering economy, political gridlock, high interest rates, delayed monsoons and an epic power outage that has plunged half its 1.2 billion population into darkness, optimism is a sparse commodity in India.

Just not when it comes to rising house prices.

'What goes up a lot must keep going up' was the conclusion from the very first Reuters Indian housing market poll this week. And it sounded very familiar.

Past experience shows that respondents to housing market polls - whether they be independent analysts, mortgage brokers, chartered surveyors - tend to cling to an optimistic tone even as trouble clearly brews below the surface.

from Photographers' Blog:

Solar power nightlight

By Adnan Abidi

Near my house in Delhi at Deenu bhai’s tea stall, I noticed a very young visitor; 7-year-old Sohail. He was Deenu bhai's relative visiting him from Aligarh for the summer breaks. Before leaving for work, I enjoyed a cup of tea at Deenu bhai’s, and as usual, I was sipping a steaming hot cup of tea with a snack when I saw Sohail with a drawing book.

Hot summer mornings keep away a lot of lazy lads who otherwise are found gossiping at Deenu bhai’s place. I was finding no such company, so I asked Sohail what he’s been up to. He showed me a few landscape drawings, which were mostly village scenes with huts and animals, with the sun rising at a location painted in yellow.

GALLERY: SOLAR INDIA

I am no art critic, and couldn’t actually make out anything in those drawings. But I recalled my childhood days, and compared it with Sohail’s to figure out a similar thought process in both of our generations. Neither of us have ever imagined a typical Indian village scene during or after sundown.

from The Human Impact:

Prostitution: their bodies, their rights

It is seen as a job no woman would want to do. A job no woman would willingly do.

Yet, spending time in one of Asia’s largest red light districts gives a view of prostitution that jars with what many feminists, gender rights activists and, in fact, society in general believe.

The Sonagachi district – a labyrinth of narrow bustling lanes lined with tea and cigarette stalls, three-storey brothels, and beauty parlours – in the east Indian city of Kolkata raises eyebrows with many who know this place.

from Breakingviews:

India’s power vacuum needs to be filled

By Jeff Glekin

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Perhaps Manmohan Singh and Sonia Gandhi got trapped in the Delhi metro yesterday. If the two leading Indian politicians were indeed victims of the world’s largest electricity blackout ever, they would at least have an excuse for their lack of public response to this clear sign of policy failure. Actually, there was a response, but it was not what might be expected. The power minister was promoted to Home Minister and replaced with a part time substitute.

The promotion was not really a reward for failure; it was part of a planned reshuffle prompted by the move of Pranab Mukherjee from finance minister to the ceremonial role of President. Mukherjee’s tenure in the finance ministry was basically disastrous. He overturned the Supreme Court’s tax ruling in the Vodafone case and tried to retrospectively tax foreign investors. And he appears to have pursued these policies without consulting Singh, the prime minister.

from The Human Impact:

Acid attacks: the faceless women you can’t forget

Since I met her over a week ago, I have been unable to forget.

Every morning as I put on my lipstick and black eyeliner in front of the mirror, I am reminded of her face. Or lack of it.

Sonali Mukherjee, 27, is one of hundreds of women across the world who have lost their faces, and their will to survive, as a result of one of the most heinous crimes against women I have come across: Acid violence.

Nine years ago, three men broke into Sonali's home in the east Indian city of Dhanbad as she slept, and threw concentrated acid over her face.

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