Morning smiles from India

India topped global FDI rankings in the first half of 2015 after coming in at an impressive no. 5 in 2014. Good stuff. PM’s foreign visits are helping. Even if there is no link between the two (hard to believe), it is a fact that his critics would have broken out into a song and dance had the opposite been true. (ht: Dr. Vidyasagar). From a mundane perspective of growth accounting, hope these numbers show up in Gross Capital Formation even as they won’t in Bank Credit Growth which many of us follow because the data is available. That is not the full picture of funding availability in the country.

A.K. Bhattacharya of ‘Business Standard’ had a good piece on Mr. Suresh Prabhu, the Minister for Railways. Reminded of the fact that he was perhaps the first Railway Minister who announced no new railway lines or trains:

His maiden railway budget had a string of creditable firsts to it. In the history of Indian railway budgets, he will perhaps be the first railway minister not to have announced either a single new train or a new railway line. That must have taken a lot of courage. What he spurned as the railway minister was a political opportunity to nurture his or his party’s vote bank by showering goodies — one new train to connect his own constituency or a new railway track for the constituency of his boss. He did nothing of that sort either for himself or for his boss and none for anybody else. [Link]

I am really doubtful that many of us paused to think and write about this act of deliberate renunciation and good governance.

This is from MINT on ISRO achievement:

On the day of the ASTROSAT launch, Indian Space Research Organisation (ISRO) marked another landmark achievement. With the launch of six foreign satellites on Monday, ISRO’s workhorse rocket, the Polar Satellite Launch Vehicle, has put more than 50 foreign satellites in space. The latest mission also included four US remote sensing satellites—the first time ISRO has launched satellites for the US.

During the summer, India had launched five UK satellites, as I reminded David Pilling of FT here.

On the issue of the levy of Minimum Alternate Tax (MAT) on foreign businesses with no permanent establishments, the government might have scored a self-goal earlier in the year. It used the opportunity to clean up the mess and has cleaned it up well.The government appointed the Justice A.P. Shah Committee to go into the matter. The Committee recommended that the government withdraw the notices. Now, not only the notices for payment of MAT on FII are to be withdrawn but all foreign businesses which have no Permanent Establishment in India and/or which are residing in countries that have a Double-Taxation Avoidance Agreement with India. This is a good move.

A note for critics: if one does not write about both the good and the bad stuff, it is ok. If one wrote about the bad stuff, then it is basic decency to write about the good stuff. Third, if one wrote about a specific wrong thing done and if it were fixed later and fixed well, all the more obligatory to mention it, to achieve proper closure. Otherwise, there will be no credibility and objectivity can legitimately be questioned.


One thought on “Morning smiles from India

  1. Dear Ananth,

    There is a lot of good news in the air nowadays, despite the best attempts of the presstitutes to downplay and/or ignore it. Undoubtedly Mr. Modi is getting rock-star treatment not just from NRIs but also from overseas CEOs. It is surely not an accident that India has vaulted to the No. 1 position in attracting FDI during the first half of 2015.

    The big worry of course is that foreign investors are fickle and can move out as quickly as they move it. I would say that the government has NOT done very much to improve the ease of doing business in India, either for Indian or for foreign firms. Perhaps “high-level” corruption along the lines of the Jayanthi Natarajan tax is a thing of the past, but the Finance Ministry under Jaitley has vested bureaucrats with arbitrary and draconian powers — and only an idealist would believe that these powers would not be misused. There are lots and lots of saboteurs in the upper echelons of the bureaucracy; witness the encryption code introduced and then hastily withdrawn, or the mischievous line in the OROP announcement about premature retirement. Where I fault this government is not in *INSTANTLY* making an example of such saboteurs by shunting them off to the Siachen glacier. Most persons outside the government don’t understand the difference between a person’s rank and his/her administrative position. Rank is permanent but position can be changed at five minutes’ notice. A few quick “punishment” transfers would quickly send the message to such saboteurs. The present government is far too soft on saboteurs, unfortunately.

    Thanks to the spectacular rise of the social media, the presstitutes in the MSM are pretty much defanged, so we need not worry about them. But we DO need to worry about the saboteurs in the bureaucracy, which list might perhaps include the Finance Minister himself.

    Warm regards.


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