Monday, April 25, 2016


by Harish Gupta, National Editor, Lokmat Group

Haryana is unique in many ways. Its newness, being carved out of East Punjab as late as 1966, is set off by its rapid rise to the frontline of a bouquet of accomplishments. It is the second wealthy state of India, after Goa. It is most advanced agriculturally, with the largest number of rural crorepati.Haryana’s mix of high-end industry, like automobile and ancillaries, with the post-industrial chrome-and-glass modernity of Gurgaon, and its IT empires, is unparalleled by Indian standards.

Monday, April 18, 2016


by Harish Gupta, National Editor, Lokmat Group

In May 2014, Narendra Modi, on assuming power as India's Prime Minister, seemed an epitome of strength in stark contrast to UPA in its last leg. But it took only a few months to find the Modi administration's Achilles Heel—its deficit in numbers in the 245-member Rajya Sabha. Pitted against an opposition determined to crush Modi's reputation as a human dynamo, if not his credibility, the government had to sit out as scores of its bills got stalled in the upper house. The government was crippled and the opposition thought it had won.

 However, the Congress' fencing in the Rajya Sabha is showing gaps that may soon be wide enough for Modi to ride through. Come August 1, when biennial elections fall due to 56 seats across 15 states, and seven more nominated members are replaced by 'eminent' personalities chosen by the present dispensation, the NDA/UPA difference will be greatly neutralised. But the real change lies in the growing pull of BJP among large regional players, like TMC in West Bengal, BJD in Odisha and, significantly, both SP and BSP in Uttar Pradesh.

But the number game in Rajya Sabha has only begun. In Andhra Pradesh, one has to watch if TDP gifts an assured seat to BJP minister Nirmala Sitaraman or INLD offers an olive branch in Haryana. And how many seats are gained by BJP's 'frenemies', like SP, YSR Congress and TRS is yet to be seen. And AIADMK, always a supporter of Modi except on the GST Bill, may get even closer to him if it is returned to power in the state for another term. No doubt it is Modi's skill as a player on India's vast political chequerboard that has begun to reap dividends. 

But he is lucky not only on the political front. The met department's forecast of 106 per cent of July-September "long period average" rainfall, after two years of below-average showers, has given a boost to demand which is so overwhelming that it kicked off a week-long stock market rally. Perhaps, rain Gods are also smiling at Modi after two years of drought. The Index of Industrial Production has registered a two per cent rise in February after months of contraction. Of course this rate of growth is midget sized compared to the 6 per cent that India has clocked on an average in the past ten years. But it is the first green shoot after a long drought. It synchronises with yet another happy tiding, that of the consumer price index rising only 4.8 per cent in March from over 5 per cent. Significantly, this drop in retail inflation is due to moderation in food prices, a key factor that can put more disposable income in the hands of the rural population. Besides, it signals the prospect of agriculture turning the corner at last, after a minimal growth of 1.1 per cent in 2015-16 and generally lackadaisical performance in the past. Tied to that is the destiny of half the country's population engaged in agriculture, a sector that contributes only 15 per cent to GDP.

Optimism about India under Modi is not limited to his loyalists and RSS bhakts in the country. It is shared by some of the world's largest Private Equity funds who specialise in the art of investing in businesses that has the prospect to grow in the future, often on a 10-year horizon. Carlyle, the world's second largest PE fund, in a note circulated by its director of research, has noted: "The most optimistic forecast for 2016 GDP growth in China (7%) matches the most pessimistic for India". It quotes IMF data to put India's expected returns on incremental capital (a single unit of capital newly deployed) between 2016 and 2020 at 24.7 per cent. It is twice that of the global figure and 1.7 times of the Emerging Markets. Be it power, railways, roads, airports and ports, the signposts of future growth, India has come a long way in the past two years.

Under Modi, India's politics is moving away from its traditional populist mould. Earlier, Congress was identified with its populist programmes—be it MGNREGA, PDS or doles. The real gains from them remained doubtful due to lack of strict monitoring mechanism and corruption. But Modi, the pragmatic leader, is doggedly pursuing Jan Dhan Yojana, Mudra and Aadhar, projects that bring welfare within the scope of audit. Only future can tell how much of wasteful expenditure Modi's fiscal filters are going to save. He is painted as hardhearted but that did not deter him, or his colleague, Maharashtra chief minister Devendra Fadnavis, to send wagons of drinking water to parched Latur. Modi may have failed to keep his election promise of bringing black money hoarded abroad back to the country. But his government is taking plenty of measures to raise the cost of tax evasion within the country. He is determined to regulate the sectors that shelters black money, such as property, jewellery, natural resources etc.

 He took the bold decision to allow 100% FDI in e-commerce companies thereby eliminating circulation of black money in retail and wholesale trade. He may have been opposed to some of the UPA’s schemes as Gujrat Chief Minister. But he is a fast learner. Once he realises the gains of a scheme, he doggedly pursues it. The way he is going after domestic black money and didn’t yield an inch is an indication of his well crafted strategy. He knows that he is creating an army of Modi-haters. But he had an inkling that the wheel of economy will surely turn. With RBI Governor Raghuram Rajan showering praises on him, the ACHHE DIN are not too far. Narendra Modi is not a hasty reformer. But nor was Deng Xiaobing, the maker of modern China, who said it is a good policy “to cross the river by feeling the stones”
(The author is National Editor, Lokmat group)

Wednesday, April 13, 2016

Modi brings cheers to Maha, Fadnavis smiles

by Harish Gupta, National Editor, Lokmat Group

Modi brings cheers to Maha, Fadnavis smiles
■ All 62 projects amounting to Rs. 3.53 lakh crore on track
 ■ Nitin Gadkari, Piyush Goyal, Prabhu working overtime
Harish Gupta
New Delhi, Apr. 12
Maharashtra never had it so good. The speed with which long pending infrastructure projects have been fast-tracked and being implemented in the State, was never witnessed before.

On the Centre's radar were 62 projects amounting to ` 3.53 lakh crore. Of these, 32 projects worth ` 1.09 lakh crores are now under implementation and have been taken off the PM's radar for monitoring. However, another 30 major projects amounting to `2.44 lakh crores are being directly monitored by Prime Minister's Projects Monitoring Group (PMG). The PM is directly monitoring these projects as these are inter-ministerial and inter-state issues. There are projects which have some last mile issues. Therefore, the PM has decided to keep it under the PMG as he doesn't want any time over run or cost over run.

A top official at the PMG said that these projects require constant monitoring at the PM's level because of their size and related issues. This official said barring a couple of them, most of the 62 projects will be completed during the next two to three years.

■ 32 Projects under                     Projects                    Cost
implementation                                                         (Rs.Crores)
CIVIL AVIATION                             2                           26574
PETROLEUM                                  5                       13014.37
POWER                                           9                        30170.57
ROAD TRANS. & HIGHWAYS        7                        5309.36
RAILWAYS                                      5                        13262.87
STEEL                                             1                           187.33
SHIPPING                                       2                            7883
URBAN DEVLOPMENT                 1                           12500
                                  Total            32                       108901.5

PM Monitor"s 30 projects           Projects                Cost
COMMERCE                                 2                        21300
COAL                                            1                         1010.71
POWER                                        8                         35213.02
PETROLEUM                               1                          5700
ROAD & HIGHWAYS                  9                           54965.34
RAILWAYS                                  3                          80177
SHIPPING                                   2                          1609
URBAN DEVELOPMENT            4                         44093
                                        Total   30                       244068.07

The PM's Project Monitoring Group (PMG) tracks all stalled investment projects, both in the public and private sectors. Its task is to remove implementation bottlenecks in these projects. The PMG has put 768 projects under its lens across the country. Of these, the PMG already cleared 378 projects totaling ` 13.29 lakh crore. But it's the Maharashtra which topped the rank with clearances and implementation of 62 projects totaling ` 3.53 lakh crores. Maharashtra has the distinction of perhaps the only state in the country which has received maximum support of the Modi government in project clearance and fast-tracking them.

Maharashtra chief minister Devendra Fadnavis has also been doggedly pursuing pending projects with various Central ministries & departments. 

Another reason of Maharashtra achieving its objective is that surface transport & shipping minister Nitin Gadkari, railway minister Suresh Prabhu and power minister Piyush Goyal went out of their way to help the State. All these ministers belong to Maharashtra. In addition, environment & forest minister Prakash Javadekar also helped in clearing all environment hurdles crated during the UPA regime.

The work on these projects in power, surface transport, railways, metro rail and other key areas are at the various stages of completion. It was found that at least 10 projects have been delayed for 7-12 years. Modi is determined that delays in project completion is a thing of the past and there is no cost over-run either.

Tuesday, April 12, 2016

The Panama shock

by Harish Gupta, National Editor, Lokmat Group

The "Panama Papers" calls into question some of our basic ideas about how money is earned, saved, invested and spent. The belief so far is that the world is guided by rules, and, if there are deviations, they must be exceptions. Non-disclosure of funds held in clandestine accounts abroad, when revealed, can be explosive. So was it in the last decade when Lehman Brothers, the US bank, was found falsely claiming that its books were in the pink of health by having "sold" its sub-prime housing debts, known as "toxic" debts, to offshore companies in Cayman Island, a tax haven. As its lie was detected, it came clattering down, and the worldwide recession of 2008 began.

Tuesday, April 5, 2016

Mamata burns her bridges

by Harish Gupta, National Editor, Lokmat Group

Five years back, Trinamool Congress (TMC) leader Mamata Banerjee stormed to power in West Bengal wearing her trademark Hawaii flip-flop, as a symbol of simplicity in the country's then simmering with allegations of corruption on a humongous scale. Thanks to the 2G scam and 'coalgate', booties in trillions of rupees had just become commonplace. Mamata did not have to make much effort to appear saintly, until the Saradha chit fund scandal began unfolding and one of her ministers, known as her 'bagman', went to jail. Then came a series of 'sting' videos of her party and cabinet bigwigs grabbing for wads of currencies offered to them for promise to pull strings on bribe-givers' behalf.