Plebiscite to solve farmer’s plight and land acquisition for industrialisation?

Maharashtra’s decision to hold plebiscite for MahaSEZ is radically different from WBengal’s decision on land allotment for Tata. This is evolutionary attempt in land acquisition policy for industrialisation. The news of plebiscite is bound to give sleepless nights for corporate, who will find it difficult to deal with the new situation. The new arrangement brings in a new party into the process.

The process gives farmers/land owners right to decide whether they would like to part of an industrial project or not. This is a good step in reducing the backlash over industrialisation in rural areas. It would also give farmers better say in rejecting any proposal to acquire land without a good and sustainable package.

However, there are also chances of manipulation of farmer’s interest as any misinformation would jeopardise interest of both stakeholders. Also unclear is what would happen when a minority of farmers oppose the project. The present policy provides that government will buy only 30% of total land for the project. Will government buy that small portion of land in case of opposition by farmers? This would add more uncertainty.

Government needs to bring in more clarity to the acquisition process, it should take notice of the new experiments and concepts, but until and unless government brings in new measures and rationalise the land acquisition, it will remain contentious issue.

Indian Govt claims record Rice Procurement, Mulls Rice Exports. Is it another Blunder?

Just a few months back several state governments had announced to provide rice at Rs2-4 a kg citing soaring prices of food grains and shortage as a reason populist measure to make this staple food available. Government had also banned the export of rice and India subsequently vanished from the list of rice exporting nations. Now comes the announcement from the government agency Food Corp of India (FCI) that India will be able to export rice this year. Unbelievable it may sound but, the FCI says that it has already bought 28 Mn tones of rice from farmers, much higher than the target, thus will be in position to export it.

Ironic it may sound but India as few months back government was pleading helplessness over controlling food prices now the government has indicated that it may lift the ban on non-basmati rice exports after October. Food management program in India is not only incoherent and inconsistent but also lacks vision. No one knows the possible reason for government’s enthusiasm for rice exports (probably except exporters) when future food security is on question mark.

Just few months back, government put advertisements on every tv channel claiming bumper harvest but it failed to procure wheat and had to import wheat at twice the rate which it was unwilling pay to the domestic farmers. Now government claims that its wheat inventory stood at 23.5 Mn tones, much above 13.5 Mn tones last year but, it has no answers why it couldn’t get wheat for poor. The political apathy with food security is to such intolerable extent that India is probably the only country where bumper foodgrain gets spoiled in poor storage facilities and worse it buys spoiled foodgrain for its people, yet it never stops at taking hasty decision and looks short-term benefits overlooking the long term concerns.

Tata & Ambanis: Ethics Vs Acumen

In span of few months we have seen that one industry house has failed in its dealing with the government while other has succeeded in its endeavor to gain business. While, Tatas are sulking at the failure to break the political deadlock over its ambitious small car project; Ambanis have successfully negotiated with their political adversaries and twisted proposals for windfall tax.

Irony exists between the two industrial houses (well its three now but thinking more or less unites Ambanis). One of the oldest business houses, Tata, believe in more old fashioned way of creating wealth, setting up private ventures with financial institutions. But, they are quite modern about business ethics and governance. Ambanis, on the other hand are more flamboyant with creating wealth for themselves and public through public investment. Though, the same public (and even government) doesn’t have a hint about the company structure and shareholding pattern.

Both Ambanis and Tata pursue policy matters but Ambanis do it more aggressively, they manage to get politicians on every committee to lobby for them. The Ambanis have been maneuvering policies for their good; if something would adversely impact their business they never hesitate to reach out to the top. Tatas on the other hand wait for the policy announcement to come out. Tatas had to scuttle their aviation project with Singapore Airlines due to policy hurdle but Ambanis never had to. One Ambani kept windfall tax at bay; the other prevented scrapping of dadri power project and got into Pension Fund management, where it was not even shortlisted.

But, Ambanis had to pack up their retail biz in many states. Tatas to had trouble with land acquisition in past but not as much as it is in Singur. Also, Tatas seem to have been unable to use their experience in dealing with states that have had inconsistent economic policy (i.e.Bihar, Chattisgarh) with respect to Bengal. They really believed that communist would replicate china’s model without any trouble. Ambanis have been cleverer in continuously amending their offer for land acquisition in case of MahSEZ in new Mumbai. One thing that is visible is none of the Indian industrial houses have learned lesson to tackle is public unrest over industrial projects.

WTO fiasco : its US fighting India

After inking nuclear deal to encourage nuclear trade between India and the US, both countries are at loggerheads on terms of trade for agricultural items. It’s the second week of the all important World Trade Organisation (WTO) talks at Geneva, already finger pointing and blame game had began. Trade ministers have repeatedly broken up their meeting, while blaming others for the break up. The WTO secretariat is releasing the revised texts reflecting the convergence achieved so far in agricultural goods and industrial products. But the texts also have blank spaces denoting disagreements. The US without naming India and China has accused them of unraveling the talks. Meanwhile, India in its own might has blamed the US of digging in its heels.

A major point of objection for a large number of developing economies, including India and China, is the safeguards against import surges. An effective remedy will have to wait till imports surge by 40% by volume, a trigger they think is too high. To lower cotton subsidies the US wants China to lower import duties. It wants the large developing countries to abolish import duties on automobiles, chemicals and textiles, while itself taking 10 years to lower high duties on items of interest to India and China, that is textiles and garments. Though there is agreement on many issues, unless some of these politically sensitive issues are settled, the talks could be back to where they were.

Meanwhile, India’s Commerce Minister, Kamal Nath, said that, "We have issues on NAMA (non-agricultural market access), we are opposed to anti-concentration, we want to protect our auto sector. We have given nothing and got nothing because nothing is settled yet. "

With just few days to go for the talks to end, time is wearing out and patience is wearing thin. The developing countries say they have yielded a lot, but have got little in return, though these talks were supposed to address their developmental concerns.

However there is still hope for a positive development in the time left. As Commerce Minister Kamal Nath said that, India still hopes make-or-break talks at WTO to salvage a global trade pact will make progress even though he disagreed with last week's compromise.

We will have to wait and watch in the next few days, whether these WTO talks churn out something fruitful, or will it end in a fiasco.