The audacity of the airline industry

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Do private airlines have a case for protesting? They say that high domestic jet fuel prices are killing and the average 26 percent sales tax rate is positively murderous. They are demanding that jet fuel be pronounced a 'declared good' so that it attracts a uniform four percent sales tax rate across the country. This was also the recommendation of the committee that crafted a blueprint for expansion of the civil aviation industry, headed by former Cabinet Secretary Naresh Chandra. The airline industry estimates its losses at Rs 10,000 crore. If allowed to bleed, it will inflict damage beyond the private investors who took a punt on the industry. High sales tax on a crucial ingredient of an infrastructure industry is unconscionable. But are the airlines right in browbeating the central government? First of all, the Centre cannot unilaterally bring down sales tax rates. It is for....

Delhi Metro Places Integrity Over Image

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When Delhi Metro had named its chief design engineer to the four-member team probing the accident that killed six workers on July 12, it gave the impression of prizing image over integrity. Gammon India executives were distraught. They were afraid the 90-year old contractor would be made a scapegoat. Their anxiety was aggravated when Gammon was blamed for the crane mishap of July 13 at the accident site. Gammon executives were making the point that it had engaged design consultant, Arch, with the approval of Delhi Metro, which had also vetted the design of the collapsed inverted 'L' shaped pillar bearing the concrete bed on which trains were to ply. It could be blamed for inadequacy in execution and poor quality, but not for a design flaw. In a meeting with Delhi Metro officials on April 15 (a fortnight after cracks in two pillars were discovered), it had....

Mamata must fight land sharks with fairer Land Act changes

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Railway Minister Mamata Banerjee had to be persuaded from walking out of a Cabinet meeting in protest against amendments to the Land Acquisition Act. She has termed them anti-farmer and anti-tribal. But it was she who triggered those amendments in the first place because the act belongs to a time when we were subjects. By championing the cause of farmers in Singur against the Tatas, Banerjee showed that it is very wrong for the state to deprive one set of citizens of their right to property and fair compensation to favour another set in a purely business transaction. A report on land as a resource critical to infrastructure commissioned by the Infrastructure Development Finance Company affirms that point. Ironically, the report was released on Friday by minister for highways, Kamal Nath, whose previous stewardship of the special economic zone policy has caused so much anguish in the countryside.....

Shopping for Schooling in Seelampur Janata Colony

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Parth J Shah of the Centre for Civil Society says "the right to education cannot become meaningful unless it becomes the right to education of choice." He is an economic libertarian who believes the application of free market principles can deliver quality schooling even to slum children. So I went to Seelampur in North-east Delhi, for the launch of the second edition of school vouchers. CCS received 1,600 applications after a door-to-door call, over the course of a month, on 1,900 municipal girl students in seven wards with a concentration of Muslims, Dalits and tribals. Of these 400 were selected by lottery for entitlement to annual fee vouchers ranging from Rs 3,600 for Class II to Rs 4,000 for Class V. They have a choice of 35 private schools. The fees are funded through donations. The security-enhanced vouchers are supplied and processed by Accor Services, that provider of....

We Need City Planners Who See And Listen

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Sagarika's accompanying piece on cities has got me started. I have come around to the view that urban planning is a mindless exercise. Last week, we found the Municipal Corporation of Delhi constructing a Baraat Ghar (marriage hall) right in front of our apartment block. This on a street that has three housing societies, where Analjit Singh's Max Healthcare has added a 10-storey annexe to a 4-storeyed hospital that it acquired. The traffic is in a mess with cars to the hospital capturing every inch of pavement space. Imagine patients being rushed for emergency care jostling with baraatis, laltenwallahs and the groom on horseback! The municipal councillor (BJP's Manju Guptra) agrees that the road cannot bear the extra load but seems helpless to do anything on her own. Our MLA (Nasib Singh of the Congress Party) advises a philosophical resignation. Congestion is a way of life in India, he....

Market reacted to Budget's packaging, not substance

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The panel of discussants I was associated with on CNN-IBN did not share the stock market's disappointment with the Budget. Former economic adviser Shankar Acharya rated it "almost good", Shubhashis Gangopadhayay, former adviser to former finance minister P Chidambaram found it "good", former revenue secretary N K Singh agreed and the country head of ABN Amro Bank (now RBS) said it was "good and honest budget" because it did not hide the large fiscal deficit of 6.8 percent in off-Budget items. The markets seem to dislike subtlety. They want it written in black and white in bold letters. They wanted the Finance Minister to set a large disinvestment target. They wanted him to clearly spell out the reforms that would be undertaken. They think this is a safe, status quo budget. I disagree. Just because the Finance Minister has not shouted from the roof tops the....

Eco Survey high on ambition, is past scepticism in order?

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Is this year's Economic Survey irrationally exuberant? Not in its diagnosis of the state of the economy and the prospects of high growth - about which it is guardedly optimistic - but in its ambition for fiscal, tax and investment reforms. The Survey not only calls for disinvestment, it sets a target of at least Rs 25,000 crore a year, and even spells out the roadmap. Begin by selling 5-10 per cent in profitable non-Navratnas, it says. Convert port trusts into companies and list them by off loading 49 percent equity. List all wholly-owned state enterprises (61) on the stock markets, by selling 10 per cent equity and auction loss-making government firms. It is equally ambitious on tax reforms. Abolish Fringe Benefit Tax, remove securities transaction tax, make dividends once again taxable in the hands of the receiver, convert all specific duties on imported textiles (say....