June 28, 2006
June 16, 2006 Despite rapidly escalating violence throughout Darfur and eastern Chad, the UN Security Council refuses to push for urgent measures to protect civilians and humanitarians. Instead, deferential Council members have repeatedly insisted that the genocidaires of the National Islamic Front regime in Khartoum will determine whether an international force deploys to Darfur, even as the regime continues to send explicit signals that it has no intention of allowing for such deployment. In short, all evidence suggests that the only protection for a region the size of France will continue to be a radically inadequate African Union (AU) force---and that most of eastern Chad will continue to be without security of any kind. This continuing exclusive reliance on the AU, whose performance has recently deteriorated badly, comes even as "reports from the UN and the AU indicate that violence against civilians in Darfur has doubled since the May 5 peace deal" (Associated Press [dateline Khartoum], June 7, 2006).
The AU itself increasingly recognizes that it simply cannot provide the security required in Darfur or implement the merely notional "Darfur Peace Agreement," which has been overwhelmingly rejected by Darfuris in the camps and elsewhere as wholly inadequate in addressing their security concerns"
"We need to hand over the baton to the UN, [AU Commission Chairman Alpha Oumar Konare] said. There is a necessity today to implement the Darfur Peace Agreement.... The AU today does not have the resources to be there. We have to be clear about that.... We dont have the capacity to face a peacekeeping situation or an extended conflict." (Associated Press [dateline: Addis Ababa], June 7, 2006)
But even were the Security Council to find the political will, over Khartoums objections and a menacing Chinese veto threat, to pass a resolution authorizing deployment of a UN peace support operation with Chapter 7 authority, the timeline is unconscionably long. As UN peacekeeping head Jean-Marie Guehenno recently confessed:
"A six-month timeline between the decision to deploy and the deployment is a more practical timeline especially if you think of the logistical conditions in Darfur, [Guehenno ] said. January 2007 is a much more realistic date." (Reuters [dateline: Khartoum], June 12, 2006)
at 11:27 PM
June 27, 2006
Of Foreign-Born Scientists
Despite Demand for Them
June 27, 2006; Page A1
FORT COLLINS, Colo. -- Manajit Sengupta studies clouds -- how they can be used to forecast hurricanes, how they may relate to global warming, how to predict their formation over a battlefield.
In the post-Katrina world, Dr. Sengupta's expertise would seem to make the 39-year-old Indian national a highly prized immigrant. Colorado State University, which helps fund the Fort Collins institute where Dr. Sengupta works on a temporary visa, thinks so highly of him that it is sponsoring him for a type of permanent visa that is available only to "outstanding researchers."
Even so, Dr. Sengupta can expect a years-long wait for a visa that would allow him to stay and expand his research. With the economy humming, so is the demand for visas for skilled workers such as scientists and engineers. But Congress caps the number of visas available to them.
Meanwhile, terrorist concerns and antiquated government procedures mean there are enormous paperwork backlogs for would-be immigrants. The Labor Department, which clears one of three forms that most skilled immigrants must file to become permanent residents, has a backlog of 235,000 cases. The Citizenship and Immigration Service, which clears the second form, is 180,000 cases behind. And after those two agencies have acted, the State Department, which issues the visas, predicts waits of a further one to five years for even the most highly trained Indian- and Chinese-born immigrants.
That leaves people like Dr. Sengupta in long-term legal limbo. After 10 years in the U.S. on temporary and student visas, he feels at home here. He's bought a house and is raising a U.S.-born daughter. But his immigration status means he can't change jobs, apply for certain government grants or adopt a child, as he and his wife would like to do. "I have this feeling: Am I wanted here or am I trying to push myself on this country?" he says.
The immigration debate swirling through Congress this summer is mostly about low-skilled illegal immigrants. Largely ignored are the highly skilled legal immigrants who help keep the U.S. a technology leader, even as U.S. students struggle with math and science.
While U.S. industry is eager to have them, the government caps the number of employment visas far below market demand. As other countries, such as the United Kingdom and Canada, loosen their rules on immigration to attract these same highly skilled workers, the U.S.'s long-term competitiveness could be hampered.
Next Big Thing
"Economists worry about another place owning the very next big thing" -- the next groundbreaking technology, says Stanford University economist Dan Siciliano. "If the heart and mind of the next great thing emerges somewhere else because the talent is there, then we will be hurt."
The foreign-born now account for about half of the Ph.D. engineers, life scientists, physical scientists and math and computer scientists in the U.S., the National Science Foundation says. A Stanford University study estimates that half of all Silicon Valley high-tech companies have at least one founding member who is foreign born. Eight of 18 Ph.D.s in Dr. Sengupta's research program are foreign-born.
The immigration service, part of the Department of Homeland Security, says that in 2005 1.1 million immigrants received green-card visas, which means they are allowed to stay permanently and eventually apply for citizenship. But most green cards go to relatives of earlier immigrants. Congress caps the number of permanent visas available to skilled workers and their families at 140,000 a year. The result is that the typical wait for a permanent employment-based visa is now five years or more.
Congress also allows the State Department each fiscal year to issue 65,000 temporary employment visas -- so-called H-1B visas -- that allow skilled workers to stay in the U.S. for up to six years. But H-1Bs for the 2007 fiscal year ran out last month, five months before the fiscal year even begins and just weeks after the government began taking applications.
The immigration bill that passed the Senate in May would boost the number of permanent employment-based visas to 650,000 a year, although some of these would be available to the millions of unskilled illegal immigrants. The Senate bill also raises the yearly quota on H-1Bs to 115,000. Those numbers would admit "probably just enough" skilled workers "for now to avoid irreversible damage" to the economy, says Stanford's Mr. Siciliano.
|U.S. born||Foreign born|
|Architects, surveyors and cartographers||87.4||12.6|
|Drafters and engineering technicians||88.8||11.2|
|Social scientists and related||90.2||9.8|
But there's no comparable measure in an immigration bill passed last year by the House. With elections just months away, and the Republican Party deeply split over immigration, the Senate measure seems unlikely to become law.
That would leave immigration caps where they are, which worries business groups and high-tech employers. They warn that as India and China reform their securities laws, improve their graduate-education programs and gain access to venture capital, their skilled immigrants will abandon long waits for permanent U.S. visas and return home -- or never leave home in the first place.
For now, Dr. Sengupta is staying put as he continues his research on a weather satellite called Goes-R, the latest-generation Geostationary Operational Environment Satellite, which the National Oceanic and Atmospheric Administration plans to launch in 2012. Goes-R will sit 20,000 miles above the equator and be capable of sending back an image of each 1.5-square-mile section of North and South America every five minutes. NOAA will be its primary user. But scientists world-wide will have access to the Goes-R data, which the government anticipates they will use to monitor fires, dust storms, air quality in the national parks, fish populations and the health of ocean coral, among other things.
From a squat office building on the edge of the Colorado State campus here, Dr. Sengupta is working to simulate and interpret the images that Goes-R will send back -- a project aimed at giving scientists a meaningful interpretation of the Goes-R images as soon as the satellite is launched. Under a separate contract with the Defense Department, Dr. Sengupta also is developing the science to forecast clouds hours before they form. Because lasers can't see through clouds, bombing missions over distant battlefields are often aborted when they run into overcast skies.
A physics major in his native Calcutta, Dr. Sengupta applied to U.S. graduate schools in 1995 to study radiative science, which looks at how the earth's heat is redistributed by clouds. Three universities offered tuition waivers and research assistantships. He chose Pennsylvania State University after a professor there called to invite him to join his research team as an $18,000-a-year assistant.
In 2000, he followed his mentor to the Pacific Northwest National Laboratory in Richland, Wash., one of the government's nine national labs, as a postdoctoral fellow. Three years ago, he moved to Fort Collins for his current $66,000-a-year research job at the Cooperative Institute for Research in the Atmosphere, or CIRA, which is funded by NOAA and Colorado State.
U.S. colleges typically graduate about two dozen Ph.D.s a year in meteorology, Dr. Sengupta's field, and CIRA illustrates how reliant U.S. research organizations are on immigrants like him. At a recent CIRA symposium, 10 of 14 academic papers were presented by foreign-born researchers.
At the Ph.D. level, "our field would shrink by two-thirds if you cut out foreign immigration," says Andrew Jones, who heads Dr. Sengupta's data-simulation research group. When CIRA runs a job search, he adds, "the best person goes to the top of the list. It might be No. 3 or No. 5 before we get to an American citizen."
Dr. Sengupta arrived in the U.S. on a visa that is reserved for temporary visitors on education exchanges. Colorado State next sponsored him for an H-1B, which requires an employer to attest that it can't find a U.S. worker and is paying the immigrant the prevailing U.S. wage. In February, at the urging of CIRA's director, Colorado State offered to sponsor Dr. Sengupta for a type of green card that is reserved for what the immigration service calls first-priority workers.
In 2005, the immigration service awarded visas to 26,000 first-priority workers, including 5,606 termed outstanding professors or researchers. Because of their special talents, first-priority workers are exempt from the first step of a three-bureaucracy process that other skilled workers endure.
The First Step
That first step requires an employer to demonstrate to the Labor Department that it can't find an American to fill the job. For years, the process involved Labor Department offices at the state, regional and national levels. By last year, that bulky process had caused a backlog of 325,000 cases, some dating back to 1998. The department finally packed the files into cardboard boxes and dispatched them to special backlog-reduction centers.
In a statement, the department blamed its backlog on "an out-dated, paper based" system that it inherited "from the previous administration." The department says it is now computerizing its files and will cut the processing time to as little as 45 days.
In place of the Labor certification, Dr. Sengupta must prove that he is outstanding to the Department of Homeland Security, the next bureaucracy in the immigration process. A Nobel prize winner or a member of an international body like the American Academy of Arts and Sciences is a shoo-in. Younger scientists like Dr. Sengupta typically submit their published research and get noted scholars to praise their work, a process he hasn't yet begun because he fears being diverted from his research.
But the immigration service's backlog is as daunting as the Labor Department's. Burned by findings that some of the Sept. 11, 2001, terrorists were in the U.S. legally, the agency began running FBI checks on all would-be immigrants, instead of just those who aroused special attention. By 2003, that had caused an 809,000-case green-card backlog that the immigration service says it hopes to clear in September. But Director Emilio Gonzalez boasts about the tough new security standards, and insists his agency isn't about to lower its guard to speed up the process. "As long as I'm here, national security will be our focus. We're not part of the Department of Education or the Peace Corps," he told reporters recently.
For Dr. Sengupta, the third step in the immigrant-visa process might be the steepest. Only 7% of the green cards reserved for skilled immigrants can go to applicants from any one country, a Congressional restriction aimed at encouraging diversity. That means that the State Department can give as many green-card visas to skilled workers from Singapore and Chad, for example, as it can to those from India and China.
The per-country cap has created a 71,000-case backlog, mostly among Indian and Chinese nationals who already have received clearance from the departments of Labor and Homeland Security, but exceed the 7% limit. The State Department estimates that a first-priority worker from India or China will wait another year to get to the head of the queue. Second-priority workers from India -- who include physicians, professors and Ph.D. engineers -- have a three-year wait in the State Department queue.
"It's like getting in line for a movie ticket -- only so many can get in for each show," says Michael Aytes, director of domestic operations for the immigration service.
The Senguptas are unabashed admirers of American ways. Dr. Sengupta says he's lost his passion for Indian cricket and now roots for the Denver Broncos. He drives a Ford, watches congressional debates on C-Span and fusses about the lawn of the airy Fort Collins house he and his wife, Nilanjana, bought two years ago for $225,000. Their 6-year-old daughter, Pourna, an American by birth, bubbles about a kindergarten project to help Pakistani earthquake victims.
"This is my country, as far as I'm concerned now," says Dr. Sengupta. He insists he'd leave only "if America chases me away." Still, he's puzzled by a system that invited and even paid him to study with leading U.S. scientists, but now seems indifferent whether he stays. "This thing escapes me," he says.
With four years left on his temporary visa, he isn't in imminent danger of being forced out, but feels little government encouragement to stay and profound uncertainty about whether his future lies here.
Once Colorado State files his application for a first-priority visa, he won't be able to change jobs -- even to take a teaching post or more-senior research position at the university. His ability to win grants and get security clearance is also restricted. "You want to grow and they tie your hands," he says. Without access to federal grants, he can't set up his own lab and train other scientists. Without security clearances, he can't work at many of the private-sector companies that will use his CIRA research to develop weather-forecasting computer programs. "I can do the science, but I cannot look at the applications the science generates," he says.
His mortgage company charges him a premium because of his temporary status. His permanent visa will cost him $10,000 in lawyers' bills and government fees, he calculates. His H-1B visa precludes him from earning extra income as a consultant or outside lecturer, which worries him as he calculates the eventual cost of Pourna's college education. Mrs. Sengupta, a special-education teacher in India, can't work under her visitor's visa -- instead, she volunteers at a day-care center and is taking education classes at a community college.
After Mrs. Sengupta had a difficult pregnancy with Pourna, the couple had hoped to adopt their next child. But U.S. adoption and foster-care agencies won't deal with immigrants who are here on a temporary visa. Adopting from India is out of the question: The State Department predicts a five-year wait before the child could join the Senguptas -- and that is after they get their permanent visas.
Top Home Countries
Representation by country of foreign-born science and engineering workers, 2000
|India||China, Taiwan and Hong Kong||Vietnam||Former USSR||Philippines||Mexico||Canada||Other countries|
|Architects, surveyors and cartographers||6.3||10||1.7||2.1||5.7||6.8||5.7||61.8|
|Drafters and engineering technicians||4.4||5.4||14.7||4.1||9.7||12.1||2.9||46.7|
|Social scientists and related||7.1||8.1||1.5||2.8||3.7||3||7.3||66.3|
Source: Immigration Policy Center
at 11:49 PM
|Now that Prime Minister Manmohan Singh has got a committee to investigate the charges against AIIMS Director P Venugopal and whether he has run down the countrys premier hospital/medical college, one hopes its findings will be made public and, equally important, Health Minister A Ramadoss will not be allowed to get rid of Venugopal even before he has a chance to respond to the committees report (assuming it is a negative one). This is not an empty fear as something similar happened just last month, when ONGC chief Subir Raha was unceremoniously shown the door. While the committee was set up after Venugopal went public with his spat with Ramadoss (which, in turn, followed Ramadoss appointing persons to various posts in AIIMS after removing Venugopals nominees), the health ministry has already asked Venugopal to explain why he went public on the issue!|
|The ministry of petroleum and natural gas had been having a running battle with the then ONGC chief Subir Raha for over a year (much like the one Ramadoss has been having with Venugopal, primarily over the latters support to the striking anti-Mandal doctors). So when a committee appointed by it (TNR Rao committee) severely indicted Raha for the Bombay High fire, the ministry simply got rid of Raha without getting his side of the story, or getting a neutral party to judge the case (the law requires the Public Enterprise Selection Board be this agency). Indeed, based on the Rao report, Petroleum Minister Murli Deora even said privately that ONGC had submitted fake documents to show its rigs/platforms in Mumbai High were safethe Rao report had suggested a probe by agencies like the CBI to rule out collusion between ONGC and the agency that certified the platform as meeting the OHSAS 18001 safety certification. Yet Raha was asked to go without getting his side of the story (see Rahas fire refuses to die down, Business Standard, June 5).|
|This is the ultimate irony: this is a government that was brave enough to come up with a Right to Information Act, and yet it remains extremely frugal when it comes to critical information. Deoras insinuations about Raha, for instance, affect not just Raha, but lakhs of investors in the company, and given ONGCs size, are a serious reflection on the manner in which the countrys companies are run. Yet, there is no official reaction to the report. So, neither the countrys investors, nor the insurance companies who have billions of dollars riding on ONGC have any clue as to whether the charges are worth the paper theyve been made upon.|
|Nor is this the only instance of frugality with information. The Haryana State Industrial Development Corporation (HSIDC) inked an MoU with Reliance Industries to set up an SEZ in the state, and provided the company with 1,500 acres of land at Garhi Harsaru in Gurgaon district. While the land was originally acquired by HSIDC for its own SEZ, when the discussions with Reliance began, the proposed SEZ was merged with the Reliance one. A Congress MP, Kuldeep Singh Bishnoi, opposed the project saying that the land itself was worth at least Rs 3,500 crore and that the Haryana government had got very little for its contribution. The state was paid Rs 360 crore to compensate it for the cost of acquiring the land as well as equity in the projectif the Reliance SEZ was up to 10,000 hectares, the governments equity share is to be 7.5 per cent, and if it was larger, this would go down to 5 per cent. Based on the proposed Rs 40,000 crore investment in the SEZ, the market value of the land should theoretically have entitled the government to a share of between 25 and 35 per cent, depending on whether a debt equity ratio of 2:1 or 3:1 is taken.|
|Once Bishnoi made the charges, youd expect some sort of explanation for how the deal was structured, for whether or not the Haryana government and the state would benefit from the deal, apart from the usual spiel about the number of jobs the SEZ would createafter all, if the SEZ didnt create the number of jobs promised, would the government be contractually bound to take back the land? And given the fact that up to 75 per cent of the land in the SEZ can be used to create housing, shopping malls and other such facilities for non-SEZ individuals, how would this give a fillip to the states industrialisation?|
|Now it is always possible the government and its investment bankers have done all the calculations and the deal is indeed a win-win one for everyone, but none of this has been made public. After all, if a state is investing over Rs 3,500 crore in a private sector venture, youd expect a lot of information to be put out for discussion. Not only does this not happen, Bishnoi gets a show cause notice from the Congress party for daring to take the matter public! After Bishnoi went public with his opposition, the state has, however, increased its stake in the SEZ from 7.5 per cent to 10 per cent, something that is an indicator of the fat in the system. Bishnoi certainly hasnt been thanked for this but, more important, no one really knows how this additional figure was arrived at.|
Another politician who opposed a similar project in Punjab was made to keep quiet in much the same way. If Dr Singhs government is as committed to transparency as it claims youd expect it to laud such whistleblowers instead of pulling the plug on them.
at 6:05 AM
I only wish India had such forward thinking leaders like Eisenhower, instead we are stuck with turds like Deve Gowda and his son who are hell-bent on jinxing the construction of even just 120km of highway from bangalore to 1 small town, mysore. God bless India if it going to approach the construction of roads in fits and starts with regular interference from egoistic politicians. It's a very good recipe for stagnation. And then politicians blame businesses for not creating jobs. How the f**k is business going to be able to create jobs if you the govt can't provide the raw material- infrastructure. http://logtk.blogspot.com/2006/06/how-not-to-build-developed-nation.html
The Man Who Changed America, Part I http://www.tfhrc.gov/pubrds/03mar/05.htm
by Richard F. Weingroff
President Eisenhower's interest in good roads began in 1919 and resulted in the Federal-Aid Highway Act of 1956but he had to fight for his Grand Plan.
On Inauguration Day, January 20, 1953, after the ceremonies ended, President Dwight D. Eisenhower would have much to do. He would face the immediate problems first, as all Presidents must. But the road-building community, which had been disappointed by President Truman (see "The Man Who Loved Roads," Public Roads, May/June 2002), was optimistic about a new President who had written in a preelection statement to the Hearst Newspapers:
The Man Who Changed America, Part II http://www.tfhrc.gov/pubrds/03may/05.htm
by Richard F. Weingroff
President Eisenhower achieved his Grand Plan for the Interstate System with passage of the Federal-Aid Highway Act of 1956but his interest in the new highways didn't end there.
On July 27, 1955, the U.S. House of Representatives dealt President Dwight D. Eisenhower's hopes for the Interstate System a bitter defeat. His proposal, developed by General Lucius D. Clay and tinkered with by other Administration officials, went down to an expected defeat in the House. The bill generated little support and much opposition.
There's a 5 part series on the 50th anniversary of the Interstate system at The Engineer's Place http://cr4.globalspec.com/article.pl?sid=06/06/26/1248237
at 5:56 AM
June 22, 2006
The petrol and diesel price hike has fuelled a futile blame game. Unless political parties move towards a consensus on tax reforms, their protests will be seen as hollow.
|By Shankkar Aiyar|
The party flags are fluttering, the banners are strung out, and rhetorical sloganeering rents the air followed by token arrests. Politicians and political parties of every hue and colour have found reason to fuel the summer of discontent. The reason for the theatrics: the long awaited fuel price hike of Rs 4 and Rs 2 per litre of petrol and diesel since crude oil prices have shot up from $55 per barrel when prices were last hiked to $70 a barrel. The Government added that unless prices were hiked the oil PSUs would collapse. Clearly, nobody wants to buy into the logic. From former prime minister Atal Bihari Vajpayee and former Andhra Pradesh chief minister Chandrababu Naidu to the recently-defeated Tamil Nadu chief minister J. Jayalalithaa, everyone wheeled themselves out to share the pain of the masses and protest. The Left parties had already sent a note to Prime Minister Manmohan Singh on June 5 after the increase in prices seeking an explanation. Signed by the general secretaries of the CPI(M), CPI, RSP and Forward Bloc and authored by economists, the letter alleged that the UPA had no justification in raising fuel prices. They even rebuffed a missive from the prime minister for a discussion. CPM General Secretary Prakash Karat declared dramatically, "We will take the issue to the people." In Kolkata, Thiruvanantha-puram and Delhi, the Left Front unleashed a red flag wave.
It was not just the Left and the Opposition which courted arrest for the voters' gallery. Even the ruling Congress jumped on to the bandwagon. Indicative of a growing dilemma on what constitutes good politics and right economics, the party opposed its own government's decision. It didn't matter that the dramatis personae-Finance Minister P. Chidambaram, Petroleum Minister Murli Deora and the prime minister-are all Congressmen. It wasn't as if a coalition ally took the decision. Besides, other ministers were party to what was a Cabinet decision. But party spokesperson Abhishek Manu Singhvi first called for a rollback and then said, "We have not demanded a zero price rise but some decrease is certainly possible."
You could say everybody loves a fuel price hike for it affords them a chance to be politically relevant. To be fair, a section of Congressmen and UPA allies argued that the Centre should simply trim down its taxes and neutralise the impact of prices. Deora, interestingly, was among the believers. Chidambaram then pointed out that the arithmetic of coalition spending did not match its political beliefs. Very simply, unless he collected these taxes he would not be able to fund the ambitious social schemes of the UPA regime like the Rs 10,000-crore employment guarantee scheme, the Sarva Shiksha Abhiyan, or the Bharat Nirman programme. On his part, Deora presented the fait accompli, stating that PSUs could go into the red unless they were compensated for at least a portion of the Rs 73,500 crore they claimed were the under-recovery. Very simply, under-recovery is the difference between the real price and the price realised by oil companies for goods sold.
The Left parties and many in the UPA regime doubt the claim. Dipankar Mukherjee of the CPM argued in a note that the figure was opaque. "This is a notional figure and not actual." Mukherjee asks how the PSUs could be in trouble when they were declaring profits and paying dividends to the government despite claiming under-recoveries of Rs 19,910 crore in 2004-05. There is also the belief that the figures presented by PSU chiefs were calculated on the basis of the import parity price (that is, the cost of the fuels if they had been imported) and ignore the subsidies received by them and the discounts delivered by ONGC. Experts in the Planning Commission believe that while there was a gap in the pricing of the fuel given the rising crude prices, the sum claimed was not losses but loss of notional profits.
At Shastri Bhavan, Deora, whose ministry had been campaigning for a price hike since February, was speed dialling Congress chief ministers to come to the aid of the party. He also appealed to chief ministers in BJP ruled states as also UPA allies and the Left parties in West Bengal and Kerala. His plea: state governments must exempt the hike from sales tax and help the consumer. The BJP and Left party governments ignored the pleas. "Let the Centre first roll back fuel prices, we'll address sales taxes later," said West Bengal Chief Minister Buddhadeb Bhattacharya. Meanwhile, some Congress-ruled states and the DMK in Tamil Nadu paid heed to Deora's pleas. Maharashtra clipped 80 paise from the hike and Delhi, 67 paise by exempting the hiked portion of petro and diesel prices from state taxes. In vintage style, Vajpayee dubbed the entire exercise of asking state governments to cushion a price hike effected by the Centre "a cruel joke on the common people".
He has a point. Delhi consumers would have had to pay Rs 47.51 for a litre of petrol. Delhi Government's relief of 67 paise amounts to barely one per cent of the price. Indeed, of the Rs 47.51, only Rs 23.52 is the cost of the fuel; Rs 15.17 goes as taxes to the Centre and Rs 7.70 is VAT levied by the state Government. Essentially, taxes account for Rs 22.93 paise or 48 per cent of the price. You could argue that high taxes curb hydro-carbon consumption but the concern is not reflected either in developing alternative fuel systems like bio-diesel and ethanol or feeding the fund flow for conservation methods through grants or subsidies. Compare this with the Asian tigers or advanced countries like the US. All developed economies have an enlightened price policy. In the US, for instance, taxes account for only 17 per cent of the fuel cost. Juxtapose this in the Indian context and the cost of petrol would be Rs 23.52 plus 17 per cent tax. That is, Rs 27.51. This is primarily because it is not based on value but is specific on the volume. It is not that this thought has not occurred to the government. Indeed, committees have suggested this time and again but governments are addicted to easy money and lazy about taking hard policy decisions.
This is why even the protests are a cruel joke. The NDA hiked prices 33 times in six years. It was during the NDA regime that the administered price mechanism (APM) was dismantled. But only in name because just as the Congress is sensitive to the political impact of economic pricing, the BJP too was wary of allowing free pricing of a sensitive good like petrol or diesel. So even though the APM was dismantled, the government continued to dictate procurement and pricing. Indeed, every state ruled by protesting parties is just as guilty as the Congress of duplicity. In a sense it is a compulsion. To appreciate this compulsion consider these figures. Between 2002 and 2006 crude oil prices shot up from $24 a barrel to $75 a barrel. Riding this wave were both Central and state governments which cashed in on the revenues. The Centre's share of the booty (including Customs, excise, OIDB cess, royalty, corporation tax and dividend) rose from Rs 96,751 crore to Rs 126,600 crore. On the other end, the states' share of taxes (VAT/sales tax and cess) rose from Rs 32,156 crore to Rs 48,800 crore. Similarly, levies on petroleum goods by state governments account for between a fifth to as much as 50 per cent of the sales tax on petrol and diesel. Even the Left-ruled West Bengal collected Rs 902 crore or 22 per cent of its revenues from petro-goods sales tax. Some states even collect levies on kerosene and LPG sales.
Indira Rajaraman, the RBI Chair Professor at the National Institute of Public Finance and Policy, quotes OECD studies and points out that petro revenues account for just 1.15 per cent of total revenues in the US while the figure is 6.92 per cent in the UK. Compare this with India. Last year, the Centre collected Rs 49,300 crore just in excise, which accounts for 44 per cent of its total excise collections. The total booty collected by the Centre from the petroleum sector-Rs 126,600 crore-was 34 per cent of its total tax revenue. The moot point Rajaraman is making is whether an economy can afford to hinge so much on revenues from one commodity. What happens, for instance, if there is a slideback, as was the case in 2002 when crude prices ruled at around $23 a barrel? Perhaps that may not happen. But even if crude prices revert to, say, $55 a barrel, the Centre and the states which have retro-fitted expenditure to match the bounty could see a drop in revenue by as much as Rs 10,000 crore (the sum being spent on the rural employment guarantee scheme) and may be staring at revenue deficits. Even with buoyant petro revenues, the combined deficit of the Centre and the states is nearly 8 per cent and rises to 9.6 per cent when off- budget items like subsidies (and oil bonds) are added. In a recent report, Morgan Stanley economists Andy Xie and Chetan Ahya state that "India's deficit is the highest among major emerging markets and double that of developed economies".
The crux of the problem is the inability of political parties to blend good economics with good politics. Essentially, successive governments have only lamented the lack of funds for sector spending but have failed to walk the talk on widening the tax net and bringing down exemptions. The Left is not always right but it has a point when it identifies the mounting tax arrears caught in disputes. It is also in favour of taxing of agriculture. In his Budget this year, Chidambaram cited tax exemptions that have cost the nation Rs 192,000 crore in revenue forsaken (see box) ostensibly to enable growth and development. Not all such exemptions would pass the test of equity or diligence. Is there a rationale in allowing punters in the stockmarket to walk away with profits worth crores without paying adequate taxes? Similarly, while there is a need to promote investment and growth, not all exemptions enjoyed by industry are economic in nature. Some are purely political. Also, the exemptions are not so much a loss to the Centre as to the states which would have got two-thirds of the share. Bibek Debroy, secretary-general, PHDCCI, adds that states too have to "wake up and adopt tax reforms suggested by successive commissions".
But tax reforms would have to begin at the Centre. The Government must restructure petro taxes. This could be done by first bringing them under a uniform VAT and then moving towards a system of specific taxes rather than the ad valorem system. Simultaneously, there has to be reform in the tax system to widen the base. The first step should be to go back to the Kelkar Committee and start unwinding the exemption regime. A crisis is often an opportunity. The Government must seize the moment.
-with bureau inputs
at 10:41 PM
June 19, 2006
Two quick quiz questions about mega construction projects, one 117 years old and the other very recent, both of which got the world talking about them.
l how long did it take for Gustav Eiffel and his engineers to complete the 320-metre Eiffel Tower, which even today remains one of the tallest structures in the world? (Answer: 2 years, 2 months, 5 days.)
l How much time has China taken to complete the worlds highest and most complex railway projectthe 1,140-km rail link from mainland China to Lhasa in Tibet? (Answer: Six years. That is, two years ahead of its scheduled opening for the 2008 Beijing Olympics.)
The purpose of asking these questions is not to test the readers GK. No. Rather, it is to highlight the contrast between how ambitious nations implement big projects, and how we in India (with proud exceptions) generally put up with awful delays.
Last Sunday, I was saddened by a front-page story in this newspaper: Kumaraswamy govt works on law to take over Bangalore-Mysore expressway, long stalled by his father despite being cleared by the SC. Records show humble farmers son sits on real-estate goldmine. The 175-km link was one of the earliest expressways conceived in India. No Indian city has achieved such dizzying growth in the past 10-15 years as Bangalore has. Also, no other city has contributed as much to enhancing Indias global reputation as a software superpower. Naturally, growth in prosperity has also brought in its wake growth in population, and the attendant pressure on the citys woefully inadequate infrastructure. Thus, even as IT and biotech parks proliferated, the original city of parks and gardens began to wilt under pollution, choked roads, encroached open spaces and that bane of unplanned urbanisationslums.
It therefore goes to the credit of H D Deve Gowda who, as the then chief minister of Karnataka, green-signalled construction of an expressway as far back as in 1995. His government also consented to provide 20,190 acres of land for building five modern townships along the Bangalore-Mysore corridor, equipped with their own power plant, water supply and sewage system, so that future growth would be decentralised.
Unfortunately, after 11 long years, the same person is trying to scuttle the project by getting his sons government to throw its private promoterNandi Infrastructure Corridor Enterpriseout and take it over. If the promoter had played foul or showed no commitment to the project, the state government would be justified in taking such a drastic step. But the facts of the case, as examined by both the Karnataka High Court and the Supreme Court, point to an altogether different truth. And that truth is unsavoury. It shows an arrogant politician wanting his sons government to flout an agreement that he himself had signed, and a cabal of professional PIL-filers who misused a pro-people judicial instrument in order to stall the project at the behest of vested interests. The Supreme Court judgement, delivered in April this year by Justices Ruma Pal, B N Srikrishna and Dalveer Bhandari, is an eye-opener. No other state government has been so roundly chastised by the apex court for conspiring to wreck its own signature infrastructure project, simply because some corrupt politicians want to grab a bigger pie in the real estate boom.
The Bangalore-Mysore expressway is just one of the many infrastructure projects in India that tell the sad tale of delays and the resultant cost overruns and lost opportunities in economic development. The corruption-infested Enron power project; the sea-link in Mumbai between Bandra, Worli and Nariman Point; the long-stalled expansion and modernisation of Mumbai and Delhi airports; the delay in construction of greenfield airports in cities like Bangalore; scores of incomplete irrigation projects all across the countrythe list is long. The Central Government has a separate ministry for programme imlementation. Its annual report makes for painful reading. Over a hundred projects, with tens of thousands of crores of investments already made in them, have been languishing for years together. Once, during my PMO days, I visited the office of this ministry to acquaint myself with its functioning. I was appalled to find that a ministry that was meant to keep a watch on important projects around the country was itself in a state of utter neglect. Bureaucrats working there consider it a punishment posting and no minister wants that portfolio if he can help it.
Its not that our country has no examples of speedy project implementation. They abound, especially in Indias increasingly gung-ho private sector. L&T, for instance, built Hyderabads famous Hi-Tech City at such blinding speed that each of its floors was completed in just 12 days, prompting the then prime minister Atal Behari Vajpayee, who inaugurated it, to say that L&T has lived up to the promise contained in its corporate slogan: We make things that make India proud. In the government sector, a prime example of speedy project implementation is the Mumbai-Pune expressway. What Nitin Gadkaria go-getting PWD minister in Maharashtras BJP-Sena coalition governmentdid, by first raising funds from the capital market and then involving the best of private construction companies to execute the project, remains an exemplary case study in public-private partnership. In many ways, the Mumbai-Pune expressway inspired Vajpayees vision of building a garland of international-class highways (The Golden Quadrilateral) linking Indias four metros and hundreds of cities and towns in between.
At least the proven benefits of the Mumbai-Pune expressway ought to have convinced the government of Karnataka, which had formalised the Bangalore-Mysore expressway much earlier, to go full steam ahead with its flagship project. Alas, the will and vision of many leading politicians in that state seem to stand in inverse proportion to those displayed by its business leadersthe likes of Narayana Murthy, Nandan Nilekani, Azim Premji and Kiran Mazumdar-Shaw.
A key dispute-causing factor in all big projects has been land acquisition. I have argued in one of my previous columns that small and medium farmers usually lose out when big money comes and starts acquiring land. In Bangalore, however, it is big sharks that are making the noise by posing themselves as farmers sons and opposing the agreed transfer of land to the project.
I have another reason for backing this project. Its main promoterBaba Kalyani of Bharat Forge of Puneis not a fly-by-night operator. His is a self-scripted success story of a businessmen who has turned globalisation to Indias advantage. In less than a decade, Kalyani transformed Bharat Forge from a non-descript metal bender into the worlds second-largest forging company, all thanks to induction of state-of-the-art technology, eye on quality and harnessing the cost advantage that India has over European and American foundries. I admire him especially because of his proposal to partner with the government to establish a world-class R&D centre, which would help small-scale foundries in places like Ludhiana, Jamshedpur, Belgaum and Kolhapur.
The BJP, a partner in Karnatakas coalition government, must stoutly oppose the JD(S) move to nationalise the expressway project. This misadventure would certainly invite a stinging judicial slap. What is worse, the project itself would take many more yearsand also many additional hundreds of croresfor completion. This is not the way to build India as a Developed Nation. Chief Minister H D Kumaraswamy would do well to rebuff his fathers pressure and, instead, do whats good for his state. He should assure all support to Kalyani for the fastest possible implementation of the entire project. Kalyani, in turn, should take some proactive steps to assure the people of Karnataka that he is not in the game of profiteering from Bangalores real-estate boom but is committed to constructing something that the whole nation would be proud of.
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A little more opinion at Govindraj Ethiraj's journal- http://datelinebombay.blogspot.com/2006/06/fighting-government-to-survive.html
at 12:10 AM
June 18, 2006
I acquired it.
When I moved to buy a second station in Charlotte--this one worse than the first--my accountant quit in protest, and the company's board vetoed the deal. So I mortgaged my house and bought it myself. The Atlanta purchase turned into the Superstation; the Charlotte purchase--when I sold it 10 years later--gave me the capital to launch CNN.
Both purchases played a role in revolutionizing television. Both required a streak of independence and a taste for risk. And neither could happen today. In the current climate of consolidation, independent broadcasters simply don't survive for long. That's why we haven't seen a new generation of people like me or even Rupert Murdoch--independent television upstarts who challenge the big boys and force the whole industry to compete and change.
at 1:32 AM
Akash, still in the maroon V-neck sweater and tie that he had worn to school that day, was a robber. But as he crouched behind a wall, waiting for the schoolfriend designated as the cop to find him, a large man with a turban and a beard grabbed him from behind and clamped a cloth over his nose and mouth before he could cry for help.
Akash woke up in a dark room with a bare brick floor and no windows. The heat was suffocating. As he languished there over the next month, 19 other panic-stricken boys were thrown into the room with him.
The children, all Christians, had fallen into the hands of Gul Khan, a wealthy Islamic militant and leading member of Jamaat-ud Daawa (JUD), a group linked to the Al-Qaeda terrorist network.
Khan lives near Pakistans border with Afghanistan, but when in the Punjab he stays at the JUDs headquarters in Muridke, near Lahore, where young men can be seen practising martial arts with batons on rolling green lawns patrolled by guards with Kalashnikovs. Osama Bin Laden funded the centre in the late 1990s.
at 12:04 AM
June 17, 2006
at 12:02 AM
June 16, 2006
June 15 (Bloomberg) -- For all the pain that it continues to inflict on investors, the crisis in the Indian stock market is a blessing in disguise for the country's economy.
The Bombay Stock Exchange Sensitive Index has slumped 29 percent since May 10, thanks to overseas institutional investors selling a net $2.3 billion of Indian stocks.
This money may not be coming back in a hurry.
A Merrill Lynch & Co. fund managers' survey released June 13 showed that India's weighting among Asia-Pacific investors had collapsed to its lowest on record.
The drop in the risk appetite for Indian stocks has a silver lining: Now that India has been pushed off the gravy train of easy money, Prime Minister Manmohan Singh will have a strong incentive to focus on steps needed to improve the country's business climate and competitive position.
In the two years that it has been in power, Singh's government has had to do little for the economy, which drew a large part of its strength from a 27-month-long acceleration in bank credit, the longest such spell in India since the early 1970s, according to Morgan Stanley.
This exceptional credit growth was fueled by the $20 billion of overseas money that went into the Indian stock markets from June 2004 to April 2006.
In May 2004, when Singh's Cabinet was being sworn in, a cyclical revival in manufacturing was under way in India after several years of an investment drought.
As demand for money rose, the new government quickly receded into the background and made economic growth the responsibility of the central bank, which kept interest rates low to spur business expansion and consumer spending.
Equity investors, feeling flush with a 154 percent, two-year surge in the Sensex and impressed by the 9.3 percent expansion in gross domestic product in the first quarter of 2006, haven't complained as loudly as they should have about the lack of policy action to sustain the growth momentum.
In the past couple of years, I have heard very few investors rage about the stalled Indian state asset-sale program. Fewer still have ranted about the government's continued tolerance for archaic labor laws that force employers to choose machines over men. The most draconian of these laws was supposed to be struck off the statute books five years ago.
There are many areas where Singh's government has failed to deliver on its promises because its communist backers won't let it. One such proposal that has hung in limbo since at least February 2005 recommends throwing open the $178 billion-a-year Indian consumer market to global retailers.
A January 2006 announcement that India was ready to receive ``single-brand'' global retailers was a half-hearted step. Big- ticket retail investments in India will come when multi-brand chain stores such as Wal-Mart Stores Inc. and Carrefour SA are allowed in; and that isn't even on the horizon.
Similarly, Finance Minister P. Chidambaram promised in July 2004 to allow overseas investors to raise their stakes in insurance joint ventures to 49 percent, from 26 percent.
Two years later, the plan is still stuck for lack of political consensus. Manulife Financial Corp., Canada's biggest insurer, this week flatly refused to look at India until it was allowed to control at least 49 percent of the business.
The proposal for deregulating the pension industry, too, is mired in political opposition.
It isn't that the Indian government is utterly helpless because it relies on communist parties for its survival. In areas where it has tried harder, it has met with greater success.
Singh overcame strong opposition from the Marxists to push for a civilian nuclear agreement with the Bush administration. The accord, if it is approved by the U.S. Congress, would secure fissile material supplies for India and ease the country's chronic power shortages.
In the face of stiff opposition from labor unions, the prime minister stood his ground on the government's decision to award contracts to private parties for upgrading the prehistoric New Delhi and Mumbai airports.
It is time the Singh government took a bolder stance on a broader range of economic issues, including the rapid nationwide implementation of a 2003 law that will bring down the cost of electricity for businesses that currently pay twice as much as their competitors in China.
The previous Indian government of Prime Minister Atal Bihari Vajpayee had to work hard for the $2.9 billion it raised over four years from selling 22 hotels and 12 state-owned companies to strategic investors. Almost none of the deals were easy. In most instances, workers protested against the passing of management control to private owners. In several cases, the ministers in charge of overseeing the management of these state companies were themselves opposed to the sales.
The present government, by contrast, has been spoilt by easy money. It raised $585 million in just one minute in October 2004 by selling a small stake in NTPC Ltd., India's biggest producer of electricity, on a stock market that was starving for Indian issuances.
No wonder then that Singh's administration hasn't attempted outright asset sales even when its communist allies have sold -- even shut down -- unprofitable government-owned companies in West Bengal, the eastern Indian state where communists are in power.
If a depressed stock market fires up Singh's government, it will be a price worth paying.
(Andy Mukherjee is a Bloomberg News columnist. The opinions expressed are his own.)
at 10:35 PM
June 15, 2006
Provide Familiar Noises;
Whistles, Pigs and Lasers
June 14, 2006; Page A1
When professional investor Ken Sullivan bought a big pile of Treasury notes recently, he did it surrounded by the sounds of people shouting out prices. It was almost as if he were right there among the brokers on the floor of Chicago's bond-trading pits.
Mr. Sullivan was actually a few miles up the city's Chicago River, sitting in the office cubicle where he works. And the shouting didn't come from any humans. It came from his copy of MarketSound, computer software that cranks out pretend trading noises. "I never turn it off," said Mr. Sullivan, a 15-year bond-trading veteran.
MarketSound is one of a wave of products capturing an unusual niche: former financial traders who miss the bustle of the trading pit, and believe they drew energy and even trading ideas from the noise.
The sounds ebb and flow based on the size of trades and price movements. In general, the sounds get louder as the size of trades and volume increase.
The rise of electronic trading has meant the decline of the traditional trading floor -- an icon of capitalism that dates back over two centuries. Much of the trading in the U.S. now consists of numbers flashing across computer screens rather than brokers shouting prices and waving pieces of paper. At the New York Stock Exchange, the ranks of traders have thinned so much that the lunch club for senior traders shut down in April due to lack of demand.
The Big Board's owner, NYSE Group Inc., recently announced plans to merge with a giant European owner of five electronic exchanges. Last month, Nasdaq Stock Market Inc., a large electronic U.S. market also rolled out its own simulator, dubbed Market Velocity. It, too, gives traders cues similar to the sounds on the floor, which they can use to sense when prices might turn.
MarketSound is designed to generate a realistic mix of background noises that fluctuate in time with the market, as well as spoken prices in a choice of three voices. Its automated voices read out stock quotes and other market data. A companion product, Virtual Pit, generates fake sounds of people shuffling around, talking and, occasionally, yelling in the background.
One voice, recorded by a British nightclub singer, clears her throat, saying "ahem, excuse me," before reading her next price. It is programmed to happen randomly, once every month or so. In 2003, the program's creators received patent No. 6,507,818 on the algorithms used to produce natural-sounding crescendos that rise and fall smoothly in line with the peaks and troughs of actual, real-life trading.
One early MarketSound customer, a Chicago broker named Jim Oliff, left the trading pit after 22 years following his seventh vocal-cord operation. When he switched to electronic trading, he didn't miss the yelling that led to the surgeries. But he longed for the surges of energy that came from big price moves. "It was extremely comforting to get even the imitation of a pits noise," he says.
Goldenberg Hehmeyer & Co., a brokerage and trading firm based in Chicago with a hundred-plus traders, liked MarketSound so much so that Goldenberg bought its maker in 2003 and now provides the software, which was introduced in 1999, as a perk to clients. It says more than 100 have used it. At one office, the noise blared for years from loudspeakers strapped to the ceiling.
"It wasn't faint, it was loud," says Joe Cheff, a bond trader there. "The lady in the next office didn't like us very much." After months of complaints about the ruckus, the company next door, a phone-sales operation, moved out, he says.
In addition to MarketSound, Goldenberg traders also use another software product called Trading Technologies, which blasts sound effects -- a referee blowing a whistle, a pig squealing -- based on how a trader is doing. On one recent morning in the firm's New York office, the sound of a laser burst came screaming out of one person's PC, followed by the sound of a window being shattered. Across the room, an actual trader hollered, "Man, I stink."
"The younger guys like the videogame sounds," says Bill Barry, who heads Goldenberg's New York office.
Floor noise can be a valuable asset to traders, conveying important information not reflected in raw numbers. A dramatic example took place on Oct. 19, 1987, when U.S. stocks suffered one of their most climactic tumbles ever. That day, NYSE floor traders got a warning of trouble from the sound of quote machines all humming simultaneously to print "sell" orders. "Anytime there was an influx of program trading, you'd hear the printers," recalls Warren Meyers, a Big Board floor broker.
In May, CNBC's Maria Bartiromo broadcast a scoop from her dinner conversation with Federal Reserve Chairman Ben Bernanke. The fact that it was going to have a big effect in the market was immediately apparent, directly behind her. She was broadcasting from the Chicago Mercantile Exchange, and after she broke the story, the surge in floor noise got so loud she had trouble being heard over it. "It seems like something is going on behind us," Ms. Bartiromo said on the air, looking over her shoulder.
Moments later, stock prices accelerated their decline in an already shaky trading day.
MarketSound isn't a perfect substitute for real market noise, says Larry Gazette, a hedge-fund manager in New Jersey who helped create the product before he and his business partners sold it to Goldenberg. He still uses it on speakers at home and over headphones at the office, so he can take his eyes off the screens every now and then to read a research report. His biggest complaint is that it lets him listen to only one market at a time. And some traders tell Mr. Gazette the software isn't fast enough to keep up with the increasing speed of trading today.
at 2:28 AM