Energy Crisis: ‘Replace, Improve, and Reduce'

However, in some other cases, moderating the extravagant lifestyles of the rich is essential, because certain activities consume much greater energy than others. A two-way flight from Delhi to Washington, once a year, consumes as much energy as 35 km of daily car driving round the year! And one 35-km journey by car consumes as much energy as running an LED tube-light for four hours every day for an entire year!
The Indian economy faces tougher energy challenges than some other large economies because a majority of the population has started using modern energy only recently, and their need for energy to lead a dignified life is bound to increase the demand substantially. However, our domestic energy resources are limited, and we are already importing 85 per cent of our oil and 15 per cent of our coal requirements.
These energy imports amount to 8 per cent of the national income, and are poised to claim a share beyond 10 per cent soon. This percentage is twice that of China, the US, and the EU. For every rupee of tax paid to the government, we give half a rupee to other countries which goes out of our economy — this certainly isn't a happy situation. If energy imports are reduced by half, 4 per cent of GDP would remain within our economy, increasing GDP growth by 1 per cent.
The failure to understand this phenomenon is a primary cause for concern. The sale of air-conditioners and air travel is doubling every four to five years, while the sale of cars is doubling every seven to eight years. This rapid increase in energy-guzzling activities by a small section of the elite is unsustainable and cannot be simply seen as a sign of development.


India Will Continue Gas Ties With Iran

Nice to see that we've finally grown up.  

India intends to keep importing oil from Iran and it appears that Indians, and even Chinese, will explore paying Tehran ''with gold, the Japanese yen or even in part with their own national currencies'', said a Pakistani daily.
An editorial in the News International Monday said that the US wants Pakistan to drop the Iran-Pakistan gas pipeline project altogether. 
"It has stepped up efforts to lobby Pakistan to abandon not only the IP gas pipeline project but also liquefied natural gas purchases from its western neighbour in return for cheaper gas from the US," the editorial added.
India, which imports 12 per cent of its oil from Iran, will not scale down its petroleum imports from Tehran despite US and European sanctions against the Islamic republic, Finance Minister Pranab Mukherjee has said.
"It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them," Mukherjee told reporters here.
Speaking at the end of a two-day visit aimed at wooing US investment, Mukherjee yesterday said: "Some other countries, Saudi Arabia, Nigeria, the other Gulf countries they also contribute but Iran contributes substantially."
"We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite US and European sanctions on Iran," the finance minister said.

"Wildlife laws ignored for religious event at Bandipur"

Ex-CMs, ministers, legislators to take part in jatra at tiger reserve.   
Lakhs of devotees are expected to throng the tiger reserve at the Bandipur National Park during the 108 shiv ling pratishtapana mahotsava and jathra on Monday at Mahadeshwara temple in Beladakuppe. 
Former chief minister B S Yeddyurappa is scheduled to inaugurate the foundation-laying ceremony for the shiv ling temple which is being constructed in the prohibited area. District in-charge minister S A Ramdas will lay foundation stone for the Mahadeshwara Swami temple, which is a violation of the Wildlife Protection Act, 1972.
Forest Minister C P Yogeeshwar, former chief minister H D Kumaraswamy, MLA Chikkanna, Opposition Leader Siddaramaiah, Housing Minister V Somanna, pontiffs of various mutts are expected to witness the “illegal” act.
The safe haven for the big cats is facing a threat due to religious programmes which begin in the ‘karthik masa’ in November. 
Over a lakh people from various parts of Chamarajnagar district visited the forest in November last year to make their offerings to Beladakuppe Mahadeshwara. 
Hundreds of trees were felled to make way for vehicles, through Aralahalli, Bankahalli, Marigudi and Baragi - all prohibited areas. 
Though trespassing the reserve forest is prohibited under Section 27 of the Act, hundreds of vehicles plied during the religious events. 
Tranquility disturbed
Two blaring generators, entertainment programmes like ‘harikatha’ and bhajans, disturbed the tranquillity of the forest, though they are prohibited by the Wildlife Protection Act. 
The Bandipur National Park, which has also the best tiger density in the country, and a good number of elephants, has been encroached upon by over 10 temples. Local elected representatives supporting the events to mobilise votes turn the area into a hub of commercial activities during religious programmes every year. Stalls and hotels crowd the forest area where agriculture implements are displayed and cattle are sold.  
No arguing with faith and all that, but why cut down trees and break laws?


"In U-turn, RIL wants say in gas pricing"

Less than three years after Reliance Industries Ltd. told the Supreme Court that the Krishna-Godavari basin gas is a “national resource” over which it had “no unfettered rights” in terms of price or quantity, and that it was “bound by the terms of the production sharing contract [PSC] and the policies and directions issued by the government from time to time,” the Mukesh Ambani-owned company has done a U-turn — serving a 90-day ultimatum on the Petroleum and Natural Gas Ministry to “amicably settle” a new gas price revising formula.
In 2009, when RIL did not want to supply gas at a previously agreed low price to NTPC and the Anil Ambani group, it took the plea that only the government had the right to decide at what price a “national resource” like natural gas could be sold. In the ‘Radia tapes' — recordings made by the IT Department of Niira Radia's conversations with journalists during that period — this is the line the former PR representative of RIL is heard pushing. But with that battle behind it and global gas prices spurting, the company now wants a say in the price-setting process.
Nice.  Also,
Interestingly, Communist Party of India (Marxist) MP Tapan Sen has charged RIL with deliberately scaling down production from the KG D6 gas blocks in order to force prices up. “It is expected of the contractor [RIL] handling the natural gas reserve to scale down the production of gas in KG D6 as pressure tactics for achieving premature price rise from the government,” he had written to Prime Minister Manmohan Singh earlier this month.
That sudden mysterious drop in production is a bit less mysterious now.  


"Rights groups fronting for Maoists, says IB"

Rights groups fronting for Maoists, says IB
Indian intelligence agencies have suggested that the Union government take steps to limit activities of leading human rights organisations.
In their advice to the Ministry of Home Affairs (MHA), the agencies have alleged that some rights organisations are “actively helping spread the Maoist ideology.”
The activities of rights groups raising issues of illegal detentions, custodial tortures and death, and fake encounters have extended their reach to those areas which help spread Maoists ideology, intelligence agencies preparing a fresh dossier on the issue said.
Can't they see it?  A lot of people who are against "illegal detentions, custodial tortures and death, and fake encounters" may be in "those areas" to stop those things from happening there.

And this is interesting too:
The IB has prepared a database of individuals and organisations. The database has been submitted to the Home Ministry.
The IB data base has some known names, which, according to the intelligence agency, not only helped “the ideological spread to spread but also functioning as the points persons for Maoists”. This allegation is similar to that been made against noted rights activist Binayak Sen in Chhattisgarh.
Big brother watches.


Law-Making In The Richest Democracy

I quickly learned that our elected officials are not demigods solely focused on the collective good — they’re just people. To inflate them into anything else trivializes their real accomplishments at best, and blinds us from the reality of Congress at worst. Lawmakers may have their own parochial interests or lofty causes, but first and foremost they're always looking for votes. To get votes, they need attention and money -- something that corporate lobbyists can dish out in abundance. The end product of this system is lawmaking that's less about making good public policy and more about appeasing the hands that feed — as a result, powerful corporations with deep pockets gain unparalleled access to members of Congress, and they help set the agenda. That agenda is why bills like SOPA and PIPA gain such traction — they were delivered to Congress in return for money and votes.
You don't even have to dig deep into the history of SOPA and PIPA to find blatant conflicts of interest: According to Politico, Allison Halatei, former Deputy Chief of Staff to House Judiciary Chairman Lamar Smith, and Lauren Pastarnack, a Senate Judiciary Committee Senior Aide, just accepted jobs with two of the lobbying firms backing SOPA and PIPA. Halatei and Pastarnack helped write the bills. Halataei is now the National Music Publisher's Association chief liaison to Congress, and Pasternak is now the director of government relations for the MPAA.
It gets worse: Chris Dodd, who served as a senator for thirty years, is now the Chairman and CEO of the MPAA. As a senator, Dodd swore he'd never take money from lobbyists, but he now reaps a $1.5 million base salary and a $100 million lobbying budget. Lobbying is one art form the entertainment industry doesn’t mind investing heavily in: SOPA’s 32 co-sponsors received four times more in campaign contributions from the entertainment industry than from the tech industry. We shouldn’t be surprised that SOPA is as bad as it is; we should be surprised it’s not worse.
No wonder policy/law-making is likened to sausage-making - you really don't want to know how it is done.


BJP: Do As I Say, Not As I Do

In an extraordinary judgment that must count among the sharpest indictments ever handed out to any State government, the Gujarat High Court has upheld Governor Kamla Beniwal's appointment of Justice R.A. Mehta as the Lokayukta over objections by Narendra Modi and his Council of Ministers. The single judge bench of Justice V.M. Sahai ruled that, although the Governor was otherwise required to act on the aid and advice of the Council of Ministers, she had become obliged to exercise her discretionary powers in this case, because it fell in the rarest of rare category where a “spiteful” Chief Minister and his “brazen” and “irrational” Council of Ministers had put democracy in peril by obstructing the appointment of the Lokayukta. The Gujarat government has expectedly moved the Supreme Court against the judgment. Regardless of the final outcome, what clearly emerges is the divergence between the Bharatiya Janata Party's strongly argued theoretical position in favour of a powerful and independent anti-corruption ombudsman, and the wilful disrespect shown to the same institution by one of its own Chief Ministers — a man showcased as a model chief executive at that.
The Gujarat Lokayukta has been headless since 2003, thanks to a protracted battle over the choice of nominee that saw Mr. Modi ranged against the Governor and the Chief Justice of the High Court. Mr. Modi not only insistently contested the primacy of opinion implicitly granted to the Chief Justice by the Gujarat Lokayukta Act, 1986, but remained stuck on a single name: Justice J.R. Vora, who figured in the panel initially proposed by the Chief Justice, but who subsequently rendered himself ineligible by virtue of his May 2010 appointment as a director of the Gujarat State Judicial Academy. The Chief Minister's intransigence unavoidably led to a situation of confrontation with the Chief Justice, who, after factoring in the State government's objections to Justice Mehta, concluded that he was a better choice for the office. 


This Too Is Grassroots Democracy

http://www.craigslist.org/about/SOPA.  No fasting involved.

India No To US' Iran Sanctions - Why So Late?

After kow-towing to the US for the better part of UPA-I and II terms, we seem to have suddenly decided to go against its wishes.  India rejects US embargo, to import oil from Iran
NEW DELHI: Even as China cuts down drastically its oil imports from Iran, which is soon likely to run into fresh sanctions from the US and the EU, India on Tuesday declared it will continue to import crude oil from the country. 
Brushing aside US sanctions that prevent financial institutions from doing business with Tehran and its central bank, foreign secretary Ranjan Mathai stated that India will only accept sanctions imposed by the UN. 
Refreshing, but what took us so long?  And can we get going on the Iran-Pakistan-India gas pipeline while we still have the gumption?

Oh, Bring Back The Elite

In short, the IAS, which today can in no way be compared with the elite ICS of the British period, will have to be reformed substantially from within and without, before it comes to be identified publicly as the main wrecker of the vision of a vibrant India.
Italics mine.  So many wishes in that small sentence - policy-making by the elite, nostalgia for the British period, 'reforms', a deregulated 'vibrant' India.


Where Are The Indian Innovations?

Why seek retail FDI for cold storage?
The region is home to a third of Nigeria's population of over 150 million people. The people are mostly small farmers and cattle-rearers. The area suffers from poor roads and power shortage, making cold storage difficult (a description that applies to vast tracts of India).
Consequently, farmers had to sell their produce at low prices, since they could not hold the produce.After studying the problem in depth, Mohammed Bah Abba, an enterprising lecturer at the Jigawa State Polytechnic, Dutse, came up with a unique solution. Hailing from a family of potters, he invented the pot-in-pot system of cooling (calledzeerin local language).
The pot-in-pot technology consists of two earthenware pots of different diameters, one placed inside the other. The space between the two pots is filled with wet sand that is kept constantly moist, thereby keeping both pots damp. Fruit and vegetables are put in the inner pot, which is covered with a damp cloth. The phenomenon that occurs is based on a simple principle of physics: the water contained in the sand between the two pots evaporates towards the outer surface of the larger pot where the drier air is circulating.
The evaporation automatically produces cooling, causing a drop in temperature of several degrees in the inner container, extending the life of the perishable foods inside. In tests conducted, the temperature in the inner pot was reduced by 6-8 degrees C in 12 hours, and could be maintained by keeping the sand moist.
The shelf life of the produce improved significantly, as shown in the table.
The impact of the pot-in-pot was a reduction in the wastage of fresh fruits and vegetables. Farmers could hold the produce longer and sell on demand at higher prices. The cost of a pot-in-pot unit is around $5 (less than Rs 300).
So where are the innovations in India?  What are our hug business conglomerates doing to help the common people?


India Burning

They walked in a single file. Some were bare-chested, their shirts used to tie their hands behind their back; many nursing bruises from fibreglass batons wielded by policemen. All 36 men were picked up on January 7 and marched six km to a police station on the outskirts of the coal mining town of Korba in northern Chhattisgarh after a public hearing, held to assess the environmental impact of a thermal power plant, turned violent.
Large projects in predominantly tribal areas (called Scheduled Areas) must comply with a two-step process of public consultation: a public hearing to assess the environmental impact of the project and a crucial village-level consultation – called a Gram Sabha – where villagers and government representatives agree on the terms and conditions of land acquisition.
Yet, documents obtained by The Hindu reveal how officials in Chhattisgarh treat the Environmental Impact Assessment Notification of 2007and the Panchayat Extension to Scheduled Areas Act (PESA) of 1996 as mere formalities and routinely overrule gram sabhas to acquire lands on behalf of industry, prompting a withdrawal of the ‘public' from public hearings. In the past, the Planning Commission and Rural Development Minister Jairam Ramesh identified the non-implementation of PESA as a factor in increasing tribal disaffection and the rise of the CPI (Maoist).
In Korba, the villagers were protesting against the planned expansion of a 1,320 MW power plant set up by Lanco Amarkantak. “Earlier, we gave our land willingly on the condition that the company would provide us with jobs,” said Laharam Murao, a village leader from Imilibhata. Mr. Murao said the company had acquired 1.5 acres of his land in 2005, but he had neither received any compensation and nor had anyone in his family gained permanent employment at the plant. “This time we said ‘we will not give any land, no public hearing shall take place,'” Mr. Murao said.
District Collector R.P.S Tyagi arrived at about 3 p.m. and, according to the villagers and policemen interviewed, set up a table 50 metres from the crowd and announced that the public hearing had begun.
“We refused to approach the table,” said Shyam Kumar Chauhan, a villager, “but a few people allied with the administration gave their opinions.” Twenty minutes later, Mr. Tyagi said that the hearing was complete and tried to leave when the crowd grew agitated and sought to stop him.
“All the legal formalities of the public hearing were complete. If even one project affected person gives his opinion…the legal requirements are fulfilled,” said Mr. Tyagi in an interview, adding that 24 people had participated in the hearing.

Of UPA-I and II and Coalitions of The Willing

D Raja of the CPI analyses the workings of UPA-I and UPA-II

“The biggest weakness of the present coalition, according to him, is the lack of a co-ordination committee and a Common Minimum Programme (CMP). Nobody knows how and why allies joined hands with Congress to form the government without either of these.
UPA I had both. The Left parties decided to support it on the basis of the CMP, which led to formation of a co-ordination committee.
Then, policy matters used to be sorted out within the parameters of CMP. The Left criticised the government when it deviated from the CMP, as in the case of its decision to disinvest from BHEL. We stayed away from meetings. UPA chairperson Sonia Gandhi finally took up the hive-off issue and it was put in abeyance. Again, when the government took up other issues such as FDI in retail, opening up of insurance, banking sectors etc, we opposed. But then all these were first discussed at the meeting of co-ordination committee. Importantly, we opposed them because they were not part of CMP.
Many good things too happened. Many progressive legislation such as rural job scheme, Forest Rights Act, Prevention of domestic violence bill were framed during UPA I. Even the Women's reservation bill was passed in one House of Parliament.
We quit UPA when the government took up the nuclear deal with US. Still we discussed, there were several meetings. Finally, there was no meeting ground and we decided to move out. 
The committee used to hold dignified , serious discussions. We never indulged in one-upmanship.  Thats why ÚPA-I was stable. It could enact positive legislation. 
As for today’s major scams dating back to UPA-I, I would like to say we did not interfere in the day to day work of the government. We discussed only policy matters. We were not part of the government. Towards the end, Congress wanted to have its own agenda. There were signs of drift from CMP. Scams started during this period. We became critical of the drift of UPA. When the committee fell, the government fell morally too.
What I remember is the Left being blamed for bunging a spanner in the works of 'reforms' constantly during UPA-I.  Authority without responsibility.  Also, the glee when the Left was routed in the 2009 elections.  Hurray for 'reforms'!  No more millstone around the UPA's neck!   

But that didn't quite work out for our pro-reform chattering classes and business houses, did it?


Is Modern Medicine Really Rock Solid?

Hume realized that, although people talk about causes as if they are real facts—tangible things that can be discovered—they’re actually not at all factual. Instead, Hume said, every cause is just a slippery story, a catchy conjecture, a “lively conception produced by habit.” When an apple falls from a tree, the cause is obvious: gravity. Hume’s skeptical insight was that we don’t see gravity—we see only an object tugged toward the earth. We look at X and then at Y, and invent a story about what happened in between. We can measure facts, but a cause is not a fact—it’s a fiction that helps us make sense of facts.
The truth is, our stories about causation are shadowed by all sorts of mental shortcuts. Most of the time, these shortcuts work well enough. They allow us to hit fastballs, discover the law of gravity, and design wondrous technologies. However, when it comes to reasoning about complex systems—say, the human body—these shortcuts go from being slickly efficient to outright misleading.
Over the next few decades, [the] hands-off approach to back pain remained the standard medical treatment. That all changed, however, with the introduction of magnetic resonance imaging in the late 1970s. These diagnostic machines use powerful magnets to generate stunningly detailed images of the body’s interior. Within a few years, the MRI machine became a crucial diagnostic tool.
The view afforded by MRI led to a new causal story: Back pain was the result of abnormalities in the spinal discs, those supple buffers between the vertebrae. The MRIs certainly supplied bleak evidence: Back pain was strongly correlated with seriously degenerated discs, which were in turn thought to cause inflammation of the local nerves. Consequently, doctors began administering epidurals to quiet the pain, and if it persisted they would surgically remove the damaged disc tissue.
But the vivid images were misleading. It turns out that disc abnormalities are typically not the cause of chronic back pain. The presence of such abnormalities is just as likely to be correlated with the absence of back problems, as a 1994 study published in The New England Journal of Medicine showed. The researchers imaged the spinal regions of 98 people with no back pain. The results were shocking: Two-thirds of normal patients exhibited “serious problems” like bulging or protruding tissue. In 38 percent of these patients, the MRI revealed multiple damaged discs. Nevertheless, none of these people were in pain. The study concluded that, in most cases, “the discovery of a bulge or protrusion on an MRI scan in a patient with low back pain may frequently be coincidental.”
 Remembering how close a cousin came to going under the overeager surgeon's knife for back-pain as recently as a year or so ago, it makes one really worry about doctors and modern medicine.  Of course, more and more doctors are coming out and saying that there is much uncertainty about modern medicine and its treatments for a variety of diseases.  


The Profit Motive

Over in the US, an utility in the private sector commits hanky-panky.  PG&E diverted safety money for profit, bonuses
Pacific Gas and Electric Co. diverted more than $100 million in gas safety and operations money collected from customers over a 15-year period and spent it for other purposes, including profit for stockholders and bonuses for executives, according to a pair of state-ordered reports released Thursday.
An independent audit and a staff report issued by the California Public Utilities Commission depicted a poorly led company well-heeled in its gas operations and more concerned with profit than safety.
The documents link a deficient PG&E safety culture - with its "focus on financial performance" - to the pipeline explosion in San Bruno on Sept. 9, 2010, that killed eight people and destroyed 38 homes.
 But privatisation will always work.  Yes.

Should Journalists Do Their Jobs?

NYT's Public Editor wants to know.  Arthur Brisbane and selective stenography
The New York Times‘ Public Editor Arthur Brisbane unwittingly sparked an intense and likely enduring controversy yesterday when he pondered — as though it were some agonizing, complex dilemma — whether news reporters “should challenge ‘facts’ that are asserted by newsmakers they write about.” That’s basically the equivalent of pondering in a medical journal whether doctors should treat diseases, or asking in a law review article whether lawyers should defend the legal interests of their clients, etc.: reporting facts that conflict with public claims (what Brisbane tellingly demeaned as being “truth vigilantes”) is one of the defining functions of journalism, at least in theory.


Why Not Restructure Farmers Loans Too?

Pretty damning coming from a banker.  Why no ‘CDR’ for farm loans?
But as our public policy discourse and chat-shows are predominantly urban and corporate-oriented, these [farmer] suicides have neither shocked nor shamed the policy-making establishment. That includes even the banking sector. Anybody with anything to do with this sector ought to feel vicariously culpable in the withering away of so many lives on this issue.
This casual indifference is in marked contrast to the way corporate indebtedness is grabbing all the attention and focus, what with the travails of sectors such as aviation being played up in the media. The humdrum farm sector does not have the same glamour quotient and is, therefore, condemned to be the poor country-cousin in any national-level discussion.
The media, including the financial dailies, is no less guilty here, as there is little attempt on its part to go into the details of individual farmer suicides or see it as a reflection of the state of our agriculture.
The lopsidedness of our policy priorities comes out clearly when one looks at the kind of efforts being made at addressing financial distress in the corporate sector.
According to reports, the first half of the current fiscal alone (April to September) has seen restructuring of corporate loans totalling some Rs 34,560 crore under the Corporate Debt Restructuring (CDR) mechanism. And this does not include the mega liabilities owed by the big airline companies. 
The important thing here is that there is an established Reserve Bank of India-approved mechanism when it comes to dealing with issues of corporate loan delinquencies.
These involve extended moratoriums (during which no repayments at all need to be made), elongation of the repayment period itself up to 10 years, reduced rates of interest, provision of ‘funded' interest term loans to those unable to service even the interest component, conversion of cash losses on working capital into term loans, additional finance, and even conversion of debt to equity.
It is quite the opposite in respect of agricultural debt relief. Although there are serious systemic issues plaguing the farm sector, problems of indebtedness meet with sporadic or knee-jerk response at best. And whenever a relief package is announced, it tends to go to the other extreme of fostering or encouraging a culture of non-repayment, that too, among people with a credit morality much higher than those in the corporate sector. We have seen this happen even in the course of the Agriculture Debt Waiver and Debt Relief Scheme of 2008.
What the agriculture sector actually requires is not one-time waivers and write-offs as much as an institutionalised structure similar to the CDR mechanism, so that lenders have a regulator-approved route map ready when they deal with the problem of a farmer unable to service debt. 


The Kingfisher Scam?

I wrote about public sector banks shoveling money to the telecom operators in this post:  The 3G Scam?.  Now we read this:  Kingfisher Airlines is NPA for us, says SBI chief.
New Delhi, Jan. 5:  
The State Bank of India said Mr Vijay Mallya-promoted Kingfisher Airlines has turned a non-performing asset (NPA).
“Kingfisher is an NPA for us. They are in default,” Mr Pratip Chaudhuri, SBI Chairman, told reporters here on Thursday.
SBI is the lead bank in the consortium that has funded this private airline. The country's largest commercial bank has an exposure of Rs 1,458 crore to Kingfisher Airlines, which is in a weak financial position and struggling to service its loans.
The other banks with significant exposure to Kingfisher Airlines are IDBI Bank at Rs 727 crore, Punjab National Bank (Rs 710 crore), Bank of India (Rs 575 crore) and Bank of Baroda (Rs 537 crore).
Just add up those numbers:  Rs 4000 crores has been given by our public sector banks to one private company which has blown it away.  The biggest bank has already declared its loan as an NPA.  Is this any different from a scam?

When will RBI make it mandatory for banks to reveal the full details of their NPAs and who owes them the money?


Winning Presidential Elections in the Richest Democracy

Takes a lot of money, obviously.  In fact, the guy who raises most, nearly always wins.  That, and other minor facets of American presidential elections in this piece Iowa: The Meaningless Sideshow Begins
Those numbers tell us that both parties rely upon the same core of major donors among the top law firms, the Wall Street companies, and business leaders – basically, the 1%. Those one-percenters always give generously to both parties and both presidential candidates, although they sometimes will hedge their bets significantly when they think one side or the other has a lopsided chance at victory. That’s clearly what happened in 2008, when Wall Street correctly called Obama as a 2-1 (or maybe a 7-3) favorite to beat McCain.
The 1% donors are remarkably tolerant. They’ll give to just about anyone who polls well, provided they fall within certain parameters. What they won’t do is give to anyone who is even a remote threat to make significant structural changes, i.e. a Dennis Kucinich, an Elizabeth Warren, or a Ron Paul (hell will freeze over before Wall Street gives heavily to a candidate in favor of abolishing their piggy bank, the Fed). So basically what that means is that voters are free to choose anyone they want, provided it isn’t Dennis Kucinich, or Ron Paul, or some other such unacceptable personage.
If the voters insist on supporting such a person in defiance of these donors – this might even happen tonight, with a Paul win in Iowa – what you inevitably end up seeing is a monstrous amount of money quickly dumped into the cause of derailing that candidate. This takes overt forms, like giving heavily to his primary opponents, and more covert forms, like manufacturing opinions through donor-subsidized think tanks and the heavy use of lapdog media figures to push establishment complaints.
And what ends up happening there is that the candidate with the big stack of donor money always somehow manages to survive the inevitable scandals and tawdry revelations, while the one who’s depending on checks from grandma and $25 internet donations from college students always winds up mysteriously wiped out.
Emphasis mine.  

End of Policy Making by The Elite?

The Congress has always had a centralised view of India's federal structure. When Jawaharlal Nehru was elected to power in a largely illiterate country, he believed it was his duty to tap a more educated — read Western-educated — elite for policymaking. He then used his vast political capital to push these policies through Parliament. No other Congress Prime Minister had that kind of political clout. Mrs Gandhi worked her way out of that predicament by taking the populist route of ‘Garibi Hatao'.
Mr Rajiv Gandhi tried to protect the right of the elite to make policy by distancing the policymakers from the elected representatives. Policymaking was to take the form of independent missions, led by individual icons like Mr Sam Pitroda. At the same time, the anti-defection law was brought in to ensure that once a directive was issued by the party leadership on a particular policy initiative, the MPs had to vote for it. While the rhetoric of the anti-defection law was to prevent destabilisation of governments, it was used to issue directives on specific policy initiatives.
Mr Narasimha Rao took this institutional structure forward by further distancing the elected representatives from policymaking. The entire process of economic reform was designed by Dr Manmohan Singh and some other economists, and pushed through Parliament with the stated or implicit help of the anti-defection law. In order to ease pressure from the MPs, the Local Area Development Fund was created to provide each Member of Parliament with resources that were to be spent on her constituency. With the MPs having no meaningful role in policymaking, their re-election depended primarily on what they did in their constituencies, and not really on any view that they had on policy.
This political and policy dualism worked very well, as long as the policy initiatives didn't directly affect the MPs constituents. Economic reform that led to high growth rates was all very well, as long as it provided the resources needed for programmes, like the Mahatma Gandhi National Rural Employment Guarantee Schemes (MNREGA), which the local politicians could associate with. It also helped that the reforms in, say, foreign exchange legislation, weren't a major part of the political debate in remote constituencies.
But two decades after the initiation of economic reform, this dualism is coming under severe pressure. The low-hanging fruits of reform have been plucked, and the government is being forced to move into territory that directly affects the political debate in local constituencies. FDI in multi-brand retail has been, rightly or wrongly, effectively projected as a measure that will hurt the small retailer. And since there are a large number of people from vegetable vendors to small shopkeepers who can be told their livelihood is at stake, it will be difficult to push through this measure without risking a major, even devastating, political fallout.


Yaara Metro To Grow Some More

Nothing like an idea firmly embedded in the powers-that-be's minds.  Cabinet nod to Metro Phase-2 likely today.  Nothing to beat spending someone else's money either.  Rs 27000 crores of it.

If The Water Loses Its Salt

Or its purity, where do we go?

The Comptroller and Auditor General of India (CAG) has pulled up the Ministry of Environment and Forests (MoEF) for the absence of a “specific water pollution policy”. There was no inventory of water sources or identification of pollution levels, the absence of which hampers water pollution management at all levels, it said in its report on the MoEF's performance during July 2010 to February 2011, when Mr Jairam Ramesh was heading the Ministry.
Noting the lack of planning to tackle pollution of rivers, lakes and groundwater and assessment of the risks to health and environment, the CAG called for strict enforcement of the related Acts as well as higher penalties.
It said the Ministry had not carried out any study to probe the effect of dumping of industrial effluents by paper mills, pharma, chemical, distilleries and so on.
The National River Conservation Plan (NCRP) was also flayed for focusing on “sewage and crematoria as sources of pollution of rivers. Other kinds of pollution (like industrial pollution) were not considered which had equal, if not more, adverse effect on health and environment”, the report said.
Industries are being subsidised indirectly by this lack of enforcement of the pollution laws.

USA Pushing For FDI in Multi-Brand Retail

Many people believe that the recently deceased FDI in multi-brand retail was taken purely to help India's farmers and consumers.  They should read this.

On its part, the US is expected to push for opening up of India's multi-brand retail trade to Foreign Direct Investment; raise its concern over certain proposals that could ‘curb' FDI in brown field pharma projects and the proposal for mechanism for an oversight by the Competition Commission of India to look at the impact of acquisitions; take up their complaint against the 30 per cent local sourcing requirement in India's solar power generation programme; India's restriction on US diary imports; as well as reduction of tariffs in industrial products in general.


Democracies Tend To Bankrupt Themselves

A Note on Race, Caste and Fiscal Prudence
It is a core view that I have elaborated on in prior letters that democracies with universal suffrage have a long run tendency to spend their way into fiscal bankruptcy and degrade their currencies along the way. Investors have to recognize this phenomenon. The so called advanced West has reached that point of bankruptcy now. Politicians pass measures to please the majority that elected them, regardless of whether the country can afford it or not.
This phenomenon becomes more politically complicated if there is some difference – be it race, religion or caste – that differentiates the recipients of the government largess from those who produce the wealth, pay most of the taxes and dominate the professional and entrepreneurial classes. Normally in these situations the recipients, who are of a different race, religion or caste, believe they cannot compete with the professional/entrepreneurial groups and regard the government largess as an equalizer and redress for current and past wrongs.
Indian democracy provides an interesting case study regarding this point. The so-called Indian masses tend to be from “lower” castes (India has a complicated definitional scheme to formally identify these groups) than the professional and entrepreneurial groups running the businesses and generating the wealth. The democratic process in India has become a mechanism whereby the lower castes, who constitute significant “votebanks” and regard themselves as having been oppressed for centuries, appropriate wealth to themselves through the (unfortunately corrupt) political system. This may be why Indian politicians, who presumably really do know better, cannot say “no” to fiscally irresponsible welfare schemes.
The same phenomenon is observable in other countries, including South Africa and Brazil and even in the US where the word “race” can be substituted for caste and to some extent welfare and subsidy schemes carry racial overtones. In the US, when the real brawling over cutting back government spending starts after the 2012 elections, the subject of race will come up. Things could get ugly. Economists and Wall Street analysts don’t like to talk about these things for fear of being labeled politically incorrect. But they have investment significance.
China on the other hand does not have this problem, partly of course because it is not a democracy in which politicians have to appeal to voters but also because ninety percent of its people define themselves as Han and its minority groups are on the geographic and political periphery of the country. The lower income Han do not perceive themselves as different from the professional and entrepreneurial groups which are also Han. In this case China’s relative homogeneity – which is sometimes criticized as an impediment to creativity –can be viewed as an investment plus.

"Are You Being Tracked? 8 Ways Your Privacy Is Being Eroded Online and Off"

Interesting discussion of privacy issues.  Are You Being Tracked? 8 Ways Your Privacy Is Being Eroded Online and Off, via TBP.

A Different View of APMC Mandis

Interesting insights into the role of APMC mandi system, which has been criticized for keeping the farmers from getting a fair price for their produce.  All in the name of the farmer:
A closer analysis also brings out a fundamental difference between mandis and private procurement channels. For instance, since ITC necessarily operates its choupals according to the corporation's changing business strategy, its procurement volumes change from season to season, and in some years may barely make an appearance in a particular market. Choupals also essentially function as post-harvest buying locations, procuring a single commodity at a time on the basis of variety and quality specifications. What is true for ITC is also true for government wheat procurement operations, which are limited in duration and location, and vary in volume. In contrast, the mandi stands out as the only physical marketplace currently open to all farmers around the year, dealing simultaneously with the sale of multiple commodities of variable quality by bringing together a range of licensed buyers of different sizes in an open auction.