Posts tagged ‘Arun Jaitley’

28/10/2014

Banyan: The enablers | The Economist

NOT since Indira Gandhi has a prime minister of India been as dominant as Narendra Modi. His clout comes from the big electoral victory in May of his Bharatiya Janata Party (BJP) after a remarkably personalised campaign; from a hyperactive prime minister’s office that makes Mr Modi look presidential; and from an opposition Congress party in tatters. But even the mightiest cannot rule alone, and Mr Modi relies on two old allies, both crucial. One, Amit Shah, engineers the electoral victories that give Mr Modi his authority. The other, Arun Jaitley, must take that authority and out of it craft policies and decisions that will launch the economic recovery which Mr Modi has promised and by which he will be judged. These two men are Mr Modi’s enablers.

Now the BJP’s president, Mr Shah is a master of the dark political arts—indeed, his hooded eyes give him the air of a pantomime villain. He has served Mr Modi for nearly three decades. The pair collaborated in the state of Gujarat, where Mr Modi won three elections and ruled for a dozen years. Mr Shah had charge of ten state ministries, including home affairs.

Long an outsider in the urbane circles of Delhi’s national-level politics, Mr Shah is uncomfortable in English and rarely gives interviews. When he makes an exception, as he did after state-assembly elections this month in which the BJP seized control of Maharashtra and Haryana, he mostly uses the time to extol his boss. Of himself, he says merely: “Sometimes you get more credit than you deserve.” Mr Shah is too modest. He ran both state campaigns, just as he crafted the BJP general-election success in India’s most populous state, Uttar Pradesh (UP). That victory was at the heart of Mr Modi’s national triumph in May.

Mr Modi stirs voters, but the alchemy of Mr Shah, who turned 50 this week, is to convert popularity into power. In UP the BJP’s share of the vote was 42%, compared with Congress’s 7.5%. That translated into 71 out of 80 of the national seats from the vast state, a golden return. Imbalances between vote share and seats are normal in first-past-the-post electoral systems, but achieving victory in India takes more skill and stamina than elsewhere. Mr Shah makes minute analyses of millions-strong constituencies, imposing candidates and recruiting volunteers early, often from the Hindu-nationalist RSS organisation, where he and Mr Modi were once leaders. He tailors messages according to the audience. He has, variously, presented Mr Modi as a bringer of good economic times, a Hindu strongman and a figure of humble caste. Mr Shah has turned Hindus against Muslims (notoriously, he told Hindu Jats in UP to take electoral “revenge” following communal riots in late 2013). But he has also taken advantage of Shia Muslim antipathy towards Sunnis (in Lucknow, UP’s capital). Mr Modi’s campaigning certainly helps. He led 38 rallies in the recent state elections. Congress’s Rahul Gandhi showed up for only ten.

via Banyan: The enablers | The Economist.

22/10/2014

Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ

India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say.

India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things.

The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps.

“It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank.

HSBC estimates that the diesel deregulation will drop fuel subsidy bill to around 0.4% of gross domestic product, half of the 0.8% of GDP it paid last year.

“Our estimate is that over the next few years, fuel subsidies should remain contained,” said Prithviraj Srinivas, an economist at HSBC.

Diesel subsidies cost India close to $50 billion over the last five years, economists say. If India sticks to its guns and lets fuel prices meander with global markets, it will no longer have to foot that kind of unproductive expense. Instead, it can now choose to lower its fiscal deficit or spend more on infrastructure development or social development programs.

Analysts say the government’s fiscal deficit target of 4.1% of GDP this fiscal year – a level that many analysts had thought optimistic – now looks within reach.

via Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ.

21/10/2014

India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek

India stepped closer to ending a four-decade-old government monopoly on mining and selling coal as Prime Minister Narendra Modi seeks to tackle fuel shortages.

India Coal Mine

The government approved a decree enabling it to permit commercial mining in future, Finance Minister Arun Jaitley said at a briefing in New Delhi yesterday, without giving a timeline. The ordinance also allows auctions of coal mines to private companies for their own use, he said.

Modi made curbing blackouts a priority after sweeping to office in May on a pledge to revive growth in Asia’s third-largest economy from near the slowest pace in a decade. State-owned Coal India Ltd. (COAL) has missed output targets in at least the past four years, and easing its grip may allow companies such as Sesa Sterlite Ltd. (SSTL) and NMDC Ltd. (NMDC) to profit from the world’s fifth-biggest reserves.

Enabling private companies to mine and sell coal would be “one of the key game-changing reforms,” said Sonal Varma, an economist at Nomura Holdings Inc. in Mumbai. “Fuel availability has been a big concern for the economy.”

Opening up the coal industry risks stoking protests by some of Coal India’s about 325,000 workers and executives, at the same time as the government prepares to sell a 10 percent stake in the company that would fetch about 228 billion rupees ($3.7 billion).

Coal India accounts for more than 80 percent of the country’s production. The government wants to spur competition in the industry, Jaitley told the NDTV 24×7 television channel today.

via India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek.

03/09/2014

Jaitley’s biggest tasks lie ahead: big-bang reforms and restructuring the Finance Ministry

The finance minister has had to tackle inflation, India’s stance in the WTO and easing regulatory hurdles. That was the easy part.

Even before the general election ended in May, it was clear that if the Narendra Modi-led Bharatiya Janata Party formed the government, Arun Jaitley would head one of the important ministries on Raisina Hill, the area of Lutyen’s Delhi that houses some of the most important government buildings.

But Jaitley’s move to North Block, the part of the Hill housing the finance ministry, was not easy. Contesting his first Lok Sabha election, he lost the race in Amritsar to the Congress candidate by nearly one lakh votes, raising questions within the party about his eligibility to be granted a key ministry. Jaitley, who has also been given charge of the defence ministry, is a man with as many detractors as admirers in New Delhi and within his own party.

Often teased in Delhi circles as the only Congresswala in the BJP, Jaitley was seen by many as an obvious choice for the crucial portfolio of finance. He got the job because he has a shrewd strategic mind and knows how to work Delhi. In addition, the BJP needed someone who had the nerves to handle a ministry that was practically in the ICU despite valiant, though sometimes questionable, efforts by his predecessor and friend, the Congress’s P Chidambaram.

Both Prime Minister Narendra Modi and Jaitley had only a few days to present their first budget to a Parliament and nation that had been promised big-bang economic reforms. As Jaitley presented the Modi government’s first budget on July 12, many who had expected major reforms were left disappointed even though some praised it for pointing in the right direction.

As a member of the Federation of Indian Chambers of Commerce and Industry said, this was a “benefit of the doubt” budget because of the short period in which Jaitley and his team had to think things over. The real test will come in 2015.

Huge challenges

A change in government is not the only factor that drives ministerial reform. The bureaucracy also needs to endorse the new policies. In getting the bureaucracy on board, Jaitley’s team in North Block has faced plenty of challenges, such as the minister’s inability to address the thorny issue of retrospective taxation.

Other things that kept Jaitley busy as soon as he took over were controlling inflation, India’s stance on subsidies at the WTO and making it easier to do business by removing regulatory hurdles. But the enormity of reforms needed to transform the Indian economy and pushing its growth rate to more than 6% require willpower and the stomach to take politically unpopular measures, especially in sectors such as power.

“There are three or four sectors where we just cannot continue doing business as usual,” said Pratap Bhanu Mehta, president of the New Delhi-based Centre for Policy Research. “In areas such as energy we are too dependent on imports and on carbon-intensive energy sources. If we are not on an alternative energy path soon, which means low carbon and technologically efficient [forms], we could be out of the development game in 15 to 20 years.”

It is the support system for business that requires key changes. Foreign industry remains bullish on India but has made its displeasure known over the slow progress on issues such as foreign direct investment, land acquisition and retrospective taxation.

On the domestic front, many industrialists have asked for a revitalised subsidy regime, one in which the government gives subsidies wherever required instead of using them as a populist measure to get votes. At the same time, as a vital component of the global economy, India could find it increasingly difficult to persist with its subsidy regime even if it makes sense on the domestic front.

Back to the drawing board

Globalisation and climate change will become central to India’s economic story. The Asian Developmental Bank concluded in a recent report that South Asian economies such as India could lose 1.8% of their GDP by 2050 and 8.8% of their GDP by the end of the century to climate change.

via Scroll.in – News. Politics. Culture..

01/09/2014

Independence for Intelligence Bureau, tackling Maoism are Home Ministry’s biggest challenges

The Home Ministry is possibly the most crucial cabinet portfolio after the prime minister’s seat. Under Narendra Modi‘s leadership, veteran Bharatiya Janata Party stalwart Rajnath Singh bagged the coveted spot on Raisina Hill, an appointment that was widely predicted during post-poll speculation in the capital, New Delhi.

Singh played the part of Modi’s right-hand man for much of the former Gujarat chief minister’s gruelling campaign. But Singh did much more than help with Modi’s election trail; he was effectively Team Modi’s chief executive, managing the power games and personality clashes erupting in the party and, above all, placating the old guard’s resentment toward Modi’s popularity and apprehension about their status.

For many days after the BJP-led National Democratic Front swept the election, Singh said that he would be glad to continue as the party president and was not angling for a cabinet berth. Yet he got possibly the most important cabinet position, besides the prime minister’s, and accepted it with great alacrity.

But many people did advise him against moving to Raisina Hill’s North Block, where the ministry is located, and to stay on as the party president, a position they said was more powerful than a cabinet berth. But Singh has his own political ambitions and the cabinet berth certainly has greater national prestige.

Today, it’s unclear why exactly Modi’s right-hand man is in the government, especially after Singh’s outburst last week following reports that his son had been upbraided by the prime minister for allegedly accepting bribes in exchange for arranging police postings. The battle for that primacy is between Singh and Arun Jaitley, the finance minister who is doubling up as defence minister, both wily politicians who know how to navigate the BJP and its various spheres of influence.

via Scroll.in – News. Politics. Culture..

22/08/2014

India to Unveil First Warship to Deter Chinese Submarines – Businessweek

India will unveil its first home-built anti-submarine warship tomorrow in a move to deter China from conducting underwater patrols near its shores.

CHINA-MILITARY-NAVY-ANNIVER

Defense Minister Arun Jaitley will commission the 3,300-ton INS Kamorta at the southeastern Vishakapatnam port. The move comes a week after Prime Minister Narendra Modi introduced the largest indigenously built guided-missile destroyer and vowed to bolster the country’s defenses so “no one dares to cast an evil glance at India.”

India is playing catch-up to China, which built 20 such warships in the past two years and sent a nuclear submarine to the Indian Ocean in December for a two-month anti-piracy patrol. The waters are home to shipping lanes carrying about 80 percent of the world’s seaborne oil, mostly headed to China and Japan.

“As China grows into a naval, maritime power, it will be more and more active in the Indian Ocean,” Taylor Fravel, a professor at Massachusetts Institute of Technology who studies China’s ties with its neighbors, said by phone. “Of course, it will not be due to some hostility or targeted at India, but because of its economic interests in the Indian Ocean, as a lot of trade passes through. Such a presence will certainly raise questions in India, but it need not necessarily be a cause of major conflict.”

Warship Plans

India has lacked anti-submarine corvettes in its 135-warship fleet for more than a decade now, with the decommissioning of the last of the 10-ship Petya-class of 1960s-vintage Soviet corvettes in December 2003. It plans to build 42 more warships, including three more anti-submarine corvettes, over the next decade, according to Rear Admiral A.B. Singh, an Indian navy official.

About 90 percent of Kamorta’s components are local, with the hull developed by Steel Authority of India Ltd., medium-range guns by Bharat Heavy Electricals Ltd. (BHEL) and torpedo launchers by Larsen & Toubro Ltd, India’s largest engineering company. The ship is two years behind schedule, according to Commodore B.B. Nagpal, the navy’s principal director for naval design.

via India to Unveil First Warship to Deter Chinese Submarines – Businessweek.

07/08/2014

Rahul Gandhi Wakes Up to New Role as Rebel Leader – India Real Time – WSJ

There’s nothing particularly newsworthy about boisterous Indian lawmakers blocking debate on the floor of Parliament when they don’t get their way, unless one of the lawmakers is the usually-reticent Rahul Gandhi.

The typically uninvolved Parliamentary back-bencher and Congress party vice president made the front pages of Indian newspapers Thursday after he and others mobbed the desk of the lower house of Parliament’s speaker, demanding to be heard.

“Rip Van Winkle Rahul Finally Rises Out of Slumber,” read an Economic Times headline paired with a recent photograph of Mr. Gandhi nodding off during a parliamentary session.

Mr. Gandhi, who is part of a diminished Congress camp of 44 representatives in the 545-member Lok Sabha, also made a rare statement to reporters outside Parliament complaining that opposition parties were not being allowed to speak. He accused speaker Sumitra Mahajan of bias after she shot down a proposal to discuss recent communal violence.

“There is a mood in Parliament that only one man’s voice counts,” Mr. Gandhi said in an apparent reference to Prime Minister Narendra Modi.

On the campaign trail a few months ago, Mr. Gandhi had said a Modi-led government would polarize Indians and trigger religious unrest.

Mr. Gandhi’s outburst was described as “surprisingly belligerent” in the Times of India that also carried a front-page story about what they called his “new-found combativeness.”

The fourth-generation scion’s occasional public outbursts are closely covered by the national media. In October when he called an executive order by his own party’s government “complete nonsense,” his tantrum was reported, discussed and debated for days.

On Wednesday, television news channels questioned what may have prompted a reaction from a leader who in his decade-long career in Parliament has rarely engaged in debate or taken the lead on policy issues.

The governing Bharatiya Janata Party offered one theory.

Finance Minister Arun Jaitley said Mr. Gandhi’s show of aggression was a result of internal rumblings – a “palace coup” – in the beleaguered Congress that is struggling to bounce back after its worst ever electoral defeat in national elections.

The party’s dynastic leadership by president Sonia Gandhi and her son, Rahul, must be struggling and Mr. Gandhi’s actions Wednesday were an attempt “to show they are also capable of aggression,” Mr. Jaitley said.

Congress spokesman Randeep Singh Surjewala said there “wasn’t an iota of doubt or question” within his party on the Gandhis’ leadership. Some “disgruntled elements hankering for immediate power” had abandoned the Congress after the electoral defeat, Mr. Surjewala said, but added that his party had weathered numerous challenges in the past and, like before, would emerge stronger.

He said the Modi-led government couldn’t run away from a discussion on religious violence by making personal attacks against Congress or its leaders.

via Rahul Gandhi Wakes Up to New Role as Rebel Leader – India Real Time – WSJ.

06/08/2014

Insurance Bill Struggle Pokes Another Hole in the Notion of Modi Magic – India Real Time – WSJ

The new government in New Delhi is struggling this week to get an insurance-industry liberalization bill— an important part of its campaign to revamp the economy—to the floor of the upper house of Parliament.

Opening up the insurance business to more foreign investment was one of the main deregulation measures unveiled in Prime Minister Narendra Modi’s first budget last month.

But already it is bogged down. Mr. Modi’s Bharatiya Janata Party does not control the upper house and other parties want to stall a vote on the bill.

The legislative tussle is a sign of the challenges Mr. Modi faces, despite his party’s landslide electoral victory and the BJP’s lower-house majority, as he tries to push through even modest changes in the way India manages its economy.

Mr. Modi swept to power this spring on a surge of anti-incumbency sentiment and hope that the BJP could break the policy deadlock in the capital. Supporters expected Mr. Modi bring the “achche din,” or good days, back to Asia’s third-largest economy.

But India’s complicated national politics, its decentralized federal system and Mr. Modi’s own desire not to get too far ahead of public opinion in a country long used to large-scale welfare schemes and a heavy state hand in the economy, is likely to slow any change.

The new administration’s national budget, announced in July, was bland and disappointing to many. It did not include the kind of big-bang reforms many optimists had anticipated.

In response to criticism of the budget, India’s new Finance Minister Arun Jaitley told a television news channel that the government is waiting for the right time to implement some changes.

“You don’t do reforms in a manner that the political system is unwilling to accept them,” Mr. Jaitley said during a July interview on Headlines Today. “The more challenging ones, you go on that course in times to come.”

Last week, Mr. Modi’s government blocked an important trade agreement that all 160 members of the World Trade Organization—including India—had agreed to in December. India demanding more freedom ratchet up market-distorting food subsidies.

“This is an inauspicious start for the new Modi government,” said Orrin Hatch, a Republican U.S. senator from Utah and member of the Senate Finance Committee in response to India’s decision.

M. J. Akbar, a BJP spokesman, says the party is happy with its progress. He said the government has focused on dealing with inflation, encouraging growth and reaching out to neighboring countries.

“On the insurance bill, the government has shown complete firmness in pushing it through,” and will use a joint-session of Parliament to vote on it if the upper house refuses, he said.

Still, the gradual deflation of the Modi bubble can be seen in the stock and currency markets. The benchmark Sensex index, has basically been going sideways for the last two months, after a sharp run up as the scale of Mr. Modi’s election win became clear.

The rupee has also been giving up some of this year’s gains against the dollar.

Of course the less excitable analysts and executives have always said the complexity of running the world’s largest democracy means that decision making will remain a slow and often painful process, even with a majority in the lower house of Parliament.

Many of the biggest challenges to improving the lives for India’s 1.2 billion citizens—such as reducing corruption, building modern infrastructure and providing hundreds of millions of good jobs–will take years, if not decades, surmount, even with the right policies and a charismatic leader.

“If a handful of people decide that (the progress so far) is insufficient, we have to ignore them and recognize that the majority of India is both relieved that the return of governance as well as the return of hope,” said the BJP’s Mr. Akbar. “Files are being cleared after ages of stagnation.”

–Prasanta Sahu contributed to this story.

via Insurance Bill Struggle Pokes Another Hole in the Notion of Modi Magic – India Real Time – WSJ.

11/07/2014

India to Spend $2.2 Billion on Water Supplies, Ganges – Businessweek

Prime Minister Narendra Modi’s new government today pledged 131 billion rupees ($2.2 billion) in spending on water projects to improve supplies and the condition of the Ganges, India’s largest river.

Ganges .. India

Ganges .. India (Photo credit: Nick Kenrick .)

Asia’s third-biggest economy will develop watersheds, build more pumping stations and start to clean the Ganga, blighted by raw sewage along much of its 2,525-kilometer (1,570-mile) route, as India endures a year of “unpredictable” monsoons, Finance Minister Arun Jaitley said.

The government will use 36 billion rupees to improve drinking supplies for about 20,000 villages and small towns affected by arsenic and fluoride contamination, Jaitley told Parliament in the minister’s annual budget speech. About 21.42 billion rupees will be spent on watershed development and 20.37 billion rupees on Ganga upgrades. About 42 billion rupees will go to developing inland waterways in the plan.

via India to Spend $2.2 Billion on Water Supplies, Ganges – Businessweek.

25/01/2014

Modi more popular than party, says Jaitley – The Hindu

The Bharatiya Janata Party on Friday accepted that its prime ministerial nominee Narendra Modi is more popular than the party itself. Commenting on the projections made by recent opinion polls, Leader of Opposition in Rajya Sabha, Arun Jaitley said the results of at least two such polls show a surge in Mr. Modi’s popularity and acceptability as prime minister after the 2014 general elections.

Mr Modi with Mr Jaitley. File photo

“The most significant factor in these opinion polls has been that Narendra Modi\’s acceptability as prime ministerial candidate is about 15 to 20 per cent higher than the BJP vote in each state. His ability to pull the party up in strong areas and contribute to its vote percentage in the non-strong areas is evident. How else can we justify the projected 17 per cent vote share in Tamil Nadu and 25 per cent in Odisha,” he said in a statement.

via Modi more popular than party, says Jaitley – The Hindu.

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