2014

Amar Ujala, November 14, 2014

By Pradeep S Mehta Ever since bank nationalisation took place in 1969, many schemes aimed at financial inclusion have been launched. Most have flopped. There is a danger of the same thing happening with the Jan Dhan Yojana. The Jan Dhan Yojana should be looked as just one of the multiple approaches to achieve financial inclusion. Only a holistic framework inclusive of the Jan Dhan Yojana, financial education, specialised products, improved infrastructure can result in effective financial inclusion. But that requires political will, bureaucratic support and persistent persuasion by the regulator. More…

The Asian Age, December 05, 2014

By Pradeep S Mehta The Make in India campaign seems to be focused on big industries in big cities. But it is time to see how micro, small and medium enterprises in rural India can be a force multiplier. Whenever anyone mentions the word ‘rural’, what springs to mind is farming. But more than 65 percent of rural labour is engaged in non-farm livelihood activities, or the Rural Non-Farm Economy (RNFE). The majority of rural labour is involuntarily engaged in low-skill, low-paid, tertiary-level jobs. Their lot can be improved if a synergy is created between Make in India and Make in Bharat. More…

The Hindu Business Line, December 05, 2014

Daily News Analysis, December 02, 2014 all good things will happen only when the bureaucracy delivers, transparently and is accountable. Many good ideas have suffered due to cynicism, corruption and chalta hai attitude and that will require the personal attention and commitment of the supremo, the chief minister. More…

The Hindu Business Line, November 06, 2014

By Pradeep S Mehta Narendra Modi’s government has been successful to an extent in altering perceptions about the business climate in India. It started from a very low base, when policy paralysis ruled the environment. But it is yet to succeed in changing the mindset of the bureaucracy. The dream of a business-friendly India will become a reality only when businesses and investors have an impartial avenue to get their grouses settled swiftly. Ombudsmen at all levels will be pivotal in achieving this. More…

The Hindu Business Line, November 23, 2014

By Pradeep S Mehta When our public sector is much in news whether it involves privatisation or disinvestment, it is worth recalling whether they are good corporate citizens, especially when they are monopolies. Many are not. This was evident when the Competition Commission of India fined a whopping Rs 1,773 crore on Coal India for abuse of dominance in December 2013. The matter is still pending final adjudication but the issue is that Coal India has been truant. This was the first case of fining by CCI on a state owned enterprise (SOE), while it has come down with a heavy hand on several private sector firms… This might call for a relook on the manner in which the competition law is applied to SOEs. Whilst the competition law should indeed apply to SOEs, there might be need for the law to apply with some narrow derogation when it comes to SOEs.More…

The Asian Age, November 22, 2014

By Pradeep S Mehta In spite of improving on some parameters, India has slipped down two notches in ‘Ease of Doing Business’ from 140 to 142 out of 189 countries in the last World Bank 2014 rankings report. The slide in position is also due to the fact that other countries have improved considerably since 2013. This wake-up call has provoked the Government to respond that our rankings will improve next year as massive efforts are on to take us to the 50th position in the not so distant future. This is conflated with the ambitious programme of maximising ‘Make in India’. More…

The Asian Age, November 06, 2014

By Pradeep S Mehta In spite of improving on some parameters, India has slipped down two notches in ‘Ease of Doing Business’ from 140 to 142 out of 189 countries in the last World Bank 2014 rankings report. The slide in position is also due to the fact that other countries have improved considerably since 2013. This wake-up call has provoked the Government to respond that our rankings will improve next year as massive efforts are on to take us to the 50th position in the not so distant future. This is conflated with the ambitious programme of maximising ‘Make in India’. More…

The Hindu Business Line, November 06, 2014

By Pradeep S Mehta Myanmar is now on the growth path with several countries providing aid and technical assistance. India is one of them, for several reasons. India shares a border with Myanmar and have a treaty to build the India-Myanmar Friendship Highway and the India-Myanmar-Thailand Trilateral Highway. The Friendship Highway is lagging but one hope it will pick up speed soon after the government of India has agreed to increase its role. Both these roads will help our and Myanmar’s economy in a big way. More…

The Asian Age, November 06, 201

By Pradeep S Mehta All secretaries to the Government of India should have received ‘outstanding’ grading over their last five annual appraisals, by and large, otherwise they won’t be eligible to claim the coveted title. As one babu quipped, if all of them are ‘outstanding’, why is their performance so average as evident from the poor results in many cases? Granted, truly excellent officers have to work with average colleagues and an archaic system, and cannot really work as lone rangers.More…

The Hindu Business Line, September 26, 2014

By Pradeep S Mehta The Supreme Court had to step into another policy area gas pricing and directing the government to come out with a clear policy. Due to the Assembly elections in some states, the Government of India will submit it to the Supreme Court on November 15, 2014 and thus close the uncertainty over a long-delayed decision. But what will happen is still a million-dollar question.More…

The Asian Age, October 13, 2014

By Pradeep S Mehta It’s time to sweep away the pervasive red tape that makes India one of the most difficult places in which to do business. The Clean India campaign can serve as an inspiration and a metaphor. After all, we also need to clean up the maze of regulations to enable a success of the Make in India campaign. Both need a blitzkrieg approach…As with the Clean India project, the Make in India project requires will, a national campaign and a huge change in mindset. This includes getting rid of fears surrounding the endeavour to industrialise, create jobs and entrepreneurs, and ameliorate poverty.More…

The Hindu Business Line, October 10, 2014

By Pradeep S Mehta A pact between major parties would end the prevailing climate of adhocism and policy uncertainty. Our polity is quixotic. One party proposes a reform when in government and then opposes it when in opposition. When in opposition, it flags an excuse that it does not agree with some provisions. The recent amendment Bill on expanding the foreigners’ stake from 26 per cent to 49 per cent in the insurance sector was opposed by the Congress party when brought forward by the National Democratic Alliance.More…

The Hindu Business Line, September 26, 2014

By Pradeep S Mehta When Prime Minister Narendra Modi announced the scrapping of the Planning Commission and establishing a new think tank, many were astounded. He was responding to calls by many that the plan body has outlived its utility in a market-driven economy, while it was relevant and useful in our early years. However, he recognised the need for a central think tank which would work closely with the Union Government and our states in pushing the reform and development agenda. Plainly, Modi is a political entrepreneur who has marketed himself brilliantly in the last general elections. He aspires to see India become a developed country and will not do it walking down a beaten path.More…

The Hindu Business Line, September 12, 2014

By Pradeep S Mehta While Prime Minister Narendra Modi in his Independence Day speech inter alia highlighted petty corruption, it was RBI governor Raghuram Rajan who made a frontal attack on crony capitalism, i.e. big-bang corruption in another speech. Both cancers have to be attacked. Hopefully this phenomenon will subside if the government is as serious as it claims to be. What is crony capitalism? It happens when business colludes with the polity and bureaucracy to gain unfair advantages, like the 2G spectrum scam or the Coalgate affair when a handful of oligarchs got favours without any competition or proper procedures. Just these two scams cost the nation in excess of Rs. 300,000 crore, according to CAG estimates.More…

Hindustan times, August 28, 2014

By Pradeep S Mehta Among several adrenaline-pumping measures, three points of Narendra Modi in his scintillating speech on Independence Day stood out. First, his ridicule of the siloed approach of different departments of the government. Second, rejuvenating the plan body by scrapping it and giving birth to a new body with active participation of the states. And third, to work in co-operation with the opposition parties to carry the reforms agenda forward. All three ideas need an institutional approach if they have to be realised in their true sense, and not just by establishing bodies to deal with them. Institutions must not be confused with organisations. Organisations are a part of an institutional framework for achieving its objectives.More…

Business Standard, August 22, 2014

DNA, August 05, 2014

By Pradeep S Mehta Laws governing land acquisition, environmental clearances and the modalities of PPP will have to be looked into again to make this ambitious road project a success. It would make great sense if the state government drafts a comprehensive policy for roads, transport and road safety, and establishes one composite independent regulator to deal with all the three dimensions under one roof. Such a move will ensure coherence rather than face turf issues with different agencies governing the three different aspects of smoother and safer transportation to the citizens of the state. Such a regulator will be insulated from different line ministries and thus can be more effective.More…

DNA, August 05, 2014

By Pradeep S Mehta Chief Minister Vasundhara Raje’s budget tries to answer questions surrounding the economy of state through her budget speech, including that of job creation. However, questions remain over how the government will achieve the target of creating 15 lakh jobs over the next five years or how the Public Private Partnerships (PPP) would be executed to the advantage of the end user. Indeed, job creation is a core agenda of any government in today’s dismal scenario, but not the only oneMore…

DNA, July 15, 2014

Amar Ujala, July 06, 2014

By Pradeep S Mehta and Amol Kulkarni The Plan panel needs to reinvent itself as a professionally run organisation providing inputs to states. The new government means business and many of our institutions will be restructured. Empowered states would mean that the Planning Commission in its present form will undergo an overhaul to enable every state to grow without depending upon the mercy of the Central government. However, shutting down the Plan body will be a case of throwing out the baby with the bathwater.More…

The Hindu Business Line, July 05, 2014

By Pradeep S Mehta Better opportunity ? Proposed changes include the need for approval from the government for retrenchment in firms with over 300 workers, as against the existing norm of 100 workers. In order to create new job opportunities, one of the most remarkable steps taken by the Vasundhara Raje government is to propose reforms in labour laws, one of the key hurdles in industrial progress and creation of new jobs. Vasundhara Raje has started taking forward looking steps to improve governance and development in Rajasthan, which are welcome. She should aim at taking the Gross State Domestic Product from the current level of Rs4.8 lakh crore to Rs10 lakh crore by 2018, so that two lakh new direct and six lakh indirect new jobs can be created every year.More…

DNA, July 01, 2014

By Pradeep S Mehta When one former bureaucrat cannot get things moving, what will be the plight of the hoi polloi? If Narendra Modi can whip the bureaucracy across country to follow the Gujarat form of glasnost, our citizens will be happier and productive. Yesterday I wrote about the high level of bureaucratic responsiveness in Gujarat based upon our own empirical experiences and compared it with Madhya Pradesh. Our own findings have also been validated by reliable people living in Gujarat and MP, by anecdotes. If Madhya Pradesh is doing well in terms of growth, Gujarat is doing better by taking along its people. Is the same happening in Rajasthan? The short answer is no.More…

DNA, June 02, 2014

By Pradeep S Mehta Guj babus are more open to sharing info; in MP it is just the opposite. While the officials in Gujarat readily shared information with us and also pointed out ways to deepen our research, officials in Bhopal with much ‘enthusiasm’ violated principles of logic and work ethics. As an election campaign issue, the Gujarat model of governance and development is being challenged that it is smoke and mirrors. One of the indicators of good governance is how bureaucrats interact with people when asked for information. Our own field experience on different dates and with different agencies suggests that unlike other states, Gujarat babus are more open and forthcomingMore…

DNA, June 01, 2014

By Pradeep S Mehta Trade is expected to be big part of India’s foreign policy when the new government comes in this summer. More importantly, States will be closely engaged in the strategy, which would also allow them to speak with their counterparts in neighbouring countries to enhance trade. Let us review the current situation of trade with neighbours. Only 137 items are allowed to be traded via the Attari-Wagah post bordering India and Pakistan. ‘Ridiculously small’ is an under-statement because there are more than 10,000 items, which are legally traded across the globe. This lack of cross-border trade between the two nations who fought four wars since their independence is as much due to absence of political will on both sides and as a result of poor trade-related infrastructure. Fortunately, the necessary infrastructure has now been developed due to an enlightened policy on both sides. This policy will be revisited after the Indian elections in May to allow cross-border trade in almost all commodities More…

The news on Sunday, May 11, 2014

By Pradeep S Mehta and Bipul Chatterjee The UPA has played around with numbers. This makes fiscal consolidation a daunting task for the new government. The government has time and again shown its proficiency in accounting sleight of hand, when it comes to containing the fiscal deficit. It has painted a façade of a healthy fiscal situation, thereby hiding the structural cracks in budgetary and planning processes. Clearly, the next government will have a tough time in bringing down the deficit, a root cause for several of our problems. More…

The Hindu Business Line, April 08, 2014

By Pradeep S Mehta There is a need to adopt a more inclusive trade policy by taking into account investment concerns and other major objectives of the National Manufacturing Policy of India, producer and consumer welfare, and other socio-economic objectives of India’s development. That would help the Foreign Trade Policy of India to better achieve its major objectives of export promotion as well as employment generation..
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NewsYaps, April 23, 2014

By Pradeep S Mehta The UPA has played around with numbers. This makes fiscal consolidation a daunting task for the new government. The government has time and again shown its proficiency in accounting sleight of hand, when it comes to containing the fiscal deficit. It has painted a façade of a healthy fiscal situation, thereby hiding the structural cracks in budgetary and planning processes. Clearly, the next government will have a tough time in bringing down the deficit, a root cause for several of our problems. More…

The Hindu Business Line, April 08, 2014

By Pradeep S Mehta Cross-border trade between India and Pakistan through the land route has picked up steam after the recent détente. However, much of the same is happening between Pakistan’s West and India’s East Punjab through the Wagah-Attari border and between the two parts of Kashmir. What is absent is the possibility of trading between Rajasthan and Sind. In the first two decades of independence in 1947, bilateral trade between India and Pakistan was very frequent. According to estimates, out of the total trade between the two countries, 70 per cent of India’s imports from Pakistan and 40 per cent of India’s exports to Pakistan were channelised through land routes. The trade volumes were significantly high. The reason is simple. Cross-border trade was at full pace before the 1965 hostilities, but it slowed down since then, until trade resumed recently. More…

The Financial Express, Bangladesh, April 05, 2014

By Pradeep S Mehta It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory, and try novel social and economic experiments without risk to the rest of the country,” said Justice Louis D Brandeis, Associate Justice on the Supreme Court of the US, in 1932. This view forms the basis of the new federalism philosophy in the US that advocated restoration of some of the autonomy and powers to the states , which they lost to the federal government, as a consequence of the New Deal. A key determinant of the role of the states in a federal polity is their participation in the formulation and implementation of critical economic plans. A central plan body usually indicates a stronger role for the central government and vice versa. It is unable to handle the differences among the states in a clear manner. More…

Business Standard, April 03, 2014

By Pradeep S Mehta The recent orders of the Competition Commission of India (CCI) asking its Director General to investigate Ericsson’s alleged anticompetitive conduct raises issues lying at the crossroads of Intellectual Property Rights (IPR) and competition. The order also raises the issue of third-party access on fair and reasonable terms, which our judiciary is yet to comprehend. More…

Financial Express, March 31, 2014

By Pradeep S Mehta Our regulatory architecture is a perfect mess. Line ministries design the law pertaining to the regulatory agency the way they please The Law Ministry, which needs to ensure coherence across similar laws, does not do so. Hence, the ambiguity over qualifications and period of the commission members; this varies from law to law. The terms of appointment vary from one sectoral regulator to another. Now, there’s a Bill that takes such issues head-on. More…

The Hindu Business Line, March 29, 2014

By Bipul Chatterjee and Venugopal Ravindran The direction of global trade is set to change as mega agreements like the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP) come into force. The TPP includes 12 of the Pacific Rim countries including the US and Australia, whereas TTIP is between the US and the European Union. Respectively, they represent around 39 per cent and 60 per cent of the world GDP. They have the potential to adversely affect excluded countries such as India by diverting trade and investment away from them and weakening their positions in global value chains. More…

Business Standard, March 22, 2014

By Pradeep S Mehta The Competition Commission of India (CCI) levied a fine of Rs 1,773 crore on Coal India Ltd, a state-owned enterprise (SoE), for abuse of dominance in the fuel-supply services market, and also recommended that it should be broken up. Although CCI has slapped heavy fines on other firms since it started operating, this was its first major penalty on an SoE…Whilst the competition law should indeed apply to SoEs, there might be need for the law to apply with some narrow derogation when it comes to SoEs. It is, therefore, not surprising that the central theme for the International Competition Network’s annual conference in April 2014 would be to debate on the application of competition laws to SoEs. More…

Financial Express, February 17, 2014

By Pradeep S Mehta The nexus between the pharma industry and doctors needs to be broken. A doctor friend and his wife said that a pharma company had paid for their recent trip to Bali. This was standard practice, the doctor said, rather nonchalantly. The idea, he explained, was to feel sufficiently incentivised to prescribe their medicines. Britain’s largest pharmaceutical company, GSK, has just said it will stop offering allurements to doctors to promote their drugs. It will also stop linking the bonuses of sales staff to the number of drugs they sell. This is a much appreciated initiative from a leading player in an industry that has for long been accused of unethical sales and marketing practices by governments and regulators. More…

The Hindu Business Line, January 17, 2014