Author: Rajiv Kumar, FICCI

The Luddites have won for the moment, with their recent protests following the Indian government’s decision to allow FDI in the retail sector.

A mere 10 million owners of traditional and self-organised retail and wholesale trade have held a country of 1.2 billion people to ransom and thwarted progress. Read more…

Author: Rajiv Kumar, FICCI

For the foreseeable future at least, India will meet the majority of its energy demand with fossil fuels.

Renewable energy does not yet offer effective substitutes for oil in transport and power generation, despite marked improvements in hybrid transport technology and the steep decline of photovoltaic panel prices. Read more…

Author: Rajiv Kumar, FICCI

Pakistan’s decision to grant India most favoured nation (MFN) trading status opens up many potential benefits for both countries; existing trade arrangements will be improved and new opportunities will emerge as bilateral trade is normalised.

At present, a great deal of trade occurs via Dubai, a situation which is inefficient and fraught with illegalities effectively functioning as behind-the-border barriers to trade. Read more…

Author: Rajiv Kumar, FICCI

The Pakistan Commerce Minister’s recent visit to India, along with nearly 80 business delegates and high-ranking officials, will hopefully provide the platform from which commercial relations between India and Pakistan move into a higher trajectory.

This visit comes after three-and-a-half decades and follows a very successful round of meetings between the two Commerce Secretaries in Islamabad in April this year. These developments have, for once, taken the external observers of South Asia by surprise. Read more…

Author: Rajiv Kumar, FICCI

The Supreme Court of India seems to have created a crisis after imposing a large-scale ban on iron ore mining in the Bellary district of Karnataka.

Although the Supreme Court has subsequently allowed the public sector entity National Mineral Development Corporation to continue operations, its imposition of a ban on iron ore mining in Bellary remains an extreme step. Read more…

Author: Rajiv Kumar, ICCI

Anna Hazare’s movement against corruption in India confronts the government and threatens immobilisation of the parliamentary process.

There are those who see this state of affairs as the consequence of some kind of foreign plot. Maybe not; but I wonder if those who see foreign influence on Anna Hazare’s movement realise how close they are to the truth. Read more…

Author: Rajiv Kumar, FICCI, New Delhi

The recent pilot’s strike in Air India has once again brought into focus the state of India’s public sector enterprises.

An Air India board member has suggested that not much is gained by apportioning blame at this stage because the patient is already suffering from cancer. Read more…

Author: Rajiv Kumar. FICCI, New Delhi

A recent world-wide survey of popular support for capitalism reveals that 67 per cent of the Chinese strongly support their variety of capitalism.

The delicious irony is that China has emerged as capitalism’s saviour! Surprisingly, in the US, the holy land of free market capitalism only 43 per cent (if my memory serves me right) were positive about capitalism and this has declined perceptibly in the last five years. Read more…

Author: Rajiv Kumar, FICCI, New Delhi

The corruption that has been corroding India’s economic and political system over the decades now threatens to derail the India growth story. It has perhaps already become systemic and according to the pessimists the rot is so deep and widespread that it is beyond repair.

Such pessimism, I think, is both undesirable and also unwarranted. While the rot is undoubtedly extensive and seriously damaging to brand India, it can still be reversed and the system saved from its pernicious impact.

Today we are free from the earlier forms of petty corruption that characterised nearly all aspects of daily life in India. Read more…

Author: Rajiv Kumar, FICCI, New Delhi

Last year has indeed been a rollercoaster year for India. The high point has been India securing a firm place on the high table of global governance.

The process started with the G-20 summit in November 2008 and culminated in the second half of this year that saw the heads of government of all five Security Council members visiting Delhi. Read more…

Author: Rajiv Kumar, FICCI

Bihar’s election results have come as a ray of sunshine amidst the gloom cast by the sordid saga of large scale, brazen and meticulously planned corruption that has emerged recently in India. With television channels competing for viewership through ever more damaging exposes of systemic corruption, the image of the entire Indian political class, at all levels, has been severely damaged.

The people are now clearly ranged against corruption, and the competitive media, having tasted blood in earlier cases like Jessica Lal, Nitish Katara and Rathore, is doggedly following corruption cases. Read more…

Author: Rajiv Kumar, ICRIER

Agriculture has emerged as the key constraint to achieving rapid growth and improving equity in India. It is also clear that while land, the principal productive asset, is almost entirely under private ownership, the sector is characterised by extensive government intervention and a visible lack of large-scale corporate investment.

As a result of insufficient investment, the agricultural sector – except perhaps in the Punjab, Haryana and the Terai region of Uttar Pradesh – remains backward. Read more…

Author: Rajiv Kumar, ICRIER

If the joint committee established to regulate the financial sector threatens to erode the credibility and autonomy of the Reserve Bank of India, the Multi-Commodity Exchange-Stock Exchange’s (MCX-SX) appeal against the Securities and Exchange Board of India (SEBI) should be seen as an attempt to undo possible regulatory capture. The MCX-SX asserts it has fulfilled all the SEBI conditions for conducting business in equities and other instruments.

Financial sector regulation has been in the news recently, and not for the right reasons. Read more…

Author: Rajiv Kumar, ICRIER

The Reserve Bank of India (RBI) has acted according to expectations in attempting to restrain inflationary concerns and sustain gross domestic product (GDP) growth rate by freeing up investment demand. I doubt it is possible to argue against the RBI moving to a tighter monetary policy stance in the given circumstances. But in its latest move, the RBI has underestimated the inflationary risks and not acted strongly enough in a situation where it faces substantially greater pressure on liquidity management and where global commodity prices could be rather volatile, and possibly move upwards. The RBI should have set a lower growth rate target.

The RBI projects GDP growth rate for 2010-11 at 8 per cent with the possibility of an increase. But the RBI has overlooked some major risks to GDP growth. Read more…

Author: Rajiv Kumar, ICRIER

When discussing the potential crisis in Indian agriculture, some point at the archaic laws that govern land lease and sales and others at the continuing ban on inter-state movement of agricultural produce as major impediment to the modernisation of the sector.

These are surely valid issues, but the way to overcome these constraints is to facilitate the entry of private, cooperative or commercial investors in any segment of agriculture. These investors will generate the impulses to change the ground realities of archaic laws, the ban on inter-state movement, the tyranny of petty babudom or the dysfunctional working of the entire range of service providers who see their mandate not as providing a particular service but as a licence for generating rents. Read more…