#pullarao pentapati

He price of oil in the international market had come down from a high of US $ 115 per barrel to about 98 US $ a barrel. This reduction has been   un-precedented in the last two decades.  India gains immensely when oil price falls. As a matter of fact, experts estimated that in the last 90 days alone, the Government saved nearly 75,000 crores in reduced oil-related subsidies due to the fall in price of crude oil.

Despite such a positive scenario, Dr. Raghu Ram Rajan chooses not to change the existing monetary policies of the RBI. Everything remained the same as it was 6 months ago. Dr. Trajan said that he was not changing anything and increasing liquidity in the economy due to two important reasons.

a. Dr. Rajan said that the Indian economy might be negatively affected by the uncertain external situation, especially on the geopolitical front.

b. There is an increased risk of inflation due to potential food price shocks, since the monsoon was not fully satisfactory.

This meant that the RBI has kept key interest rates unchanged. Industry and the government have been clamoring of a cut in rates. Whatever the merits of the views of Dr. Rajan, there has been dis-appointment in industry circles and also the government.  The huge investments expected in the infra – structure and other sectors will definitely find obstacles in obtaining adequate credit.

The question is whether such credit limits will actually reduce inflation on food items and bring down the Consumer Price Index. Why did the price of vegetables go up steeply in the last 3 months? Was it merely due to supply-side problems or is there something else in the Indian economy, which is immune to the monetarist polices of the RBI?

Though Dr. Raghuram  Rajan is  a talented  scholar, he has to bear in mind  that there are 11 crore  un-employed educated youth in the country . Low-wage jobs or doles are not the answer.

The RBI should allow the government to create employment in industry and service sector. Perhaps the un-familiarity of Dr. Raghuram  Rajan with India is one major cause  of his hesitancy. We need a better craftsman at the RBI. Puzzlingly, Dr. Raghuram Rajan gives different reasons at different times for the same policy. That is of course logical .But it also means that the evolving situation does not have any impact on him. Are all the reasons with the same leverage or weight?

In December, 2013, Dr. Rajan gave some reasons on why he is not changing the RBI monetary policy. Then on Sept. 30, 2014, Dr. Rajan makes no reference to those reasons, but un-covers new reasons for continuing the same policy.  By this track record, one can safely assume that unless the inflation rate comes down sharply, there will be no change in RBI policy. Therefore, the RBI under Dr. Rajan has become entirely predictable.

The backdrop of this intense diplomatic activity by India with Japan and China is that there has been intense hostile  diplomatic and military standoffs between China and Japan in the last 5 years. Though the Chinese Army and the Japanese forces have not actually had skirmishes, the rivalry has been  nail-biting and claims over Maritime  islands has been tense .

If one goes by geo-politics, then it is only China that should matter to India and not Japan..But since India and China have been having problems since 1962, with un-resolved tensions, the recent open  hostility between Japan and China has brought Japan into focus as an interested player in the India-China competition .

India has a long land border with China and since historic times, they have been rivals and friends . While during the Mughal times, there was little contact with China, the 19th century saw the British using India as a spring board to China for their Opium  export and business in China.

The British used opium to penetrate the Chinese economy.  Opium became a major export  to China and large swathes of Chinese population  were addicted to opium. The advent of the term “Opium-Den ” originates from the 19th century context of British opium exports to China.

India  was  an important  springboard for all British activities in China. Britain also  was very vigilant on the Indo-Tibet borders and Indo-China borders. Independent India had a very hostile relationship with China right from Independence. This bad relationships  actually restricted Indian growth in all sectors. It became worse as China grew in strength, particularly on the economic  front. Though there has been enormous increases in trade between India and China, political hostility is un-diminished.

The visit of President Xi  Jinpeng  is obviously an attempt by China to rectify the poor relationship with India. The international climate for China is not too pleasant. The Chinese enjoyed the advantage of dealing with one  enemy at a time earlier. It carefully separated its antagonists and could survive. Though it looked strong and posed that it was ready for a Multi-opponent war at the same time, the Chinese never had to face that dilemma.

In the last 65  years, the Chinese always had one war with only one enemy at a time. But in the last 5 Years, China has opened hostile fronts with Japan, South Korea, Philippines and Vietnam. This has also made Australia an interested  party ,as it fears the sudden and dramatic rise of China and its constant display of military prowess.

Therefore India has to take advantage of the Japan-China hostility. But India has to be careful not to be too crude in playing off Japan against China. A very  sophisticated  foreign policy is needed to ensure that India gets the best advantage from Japan and China. India  has to be friends with both China and Japan.

1. Sonia Gandhi”s faults:  Antony openly said that the main cause of the defeat of the Congress was that   “Congress slanted towards the Minorities and seemed as if it was against the majority community. This led to a total counter-mobilization of all castes and communities against the Congress“. Sonia Gandhi and the entire leadership of the Congress understood it and no one said anything against it.

2. When Antony said that the “slant towards the Minorities destroyed the Congress”, he meant that the National Advisory Council under Chairmanship of Sonia Gandhi initiated such policies. It was clearly implied that the policies of the NAC were only pro-Minorities and some castes and this created a major divide in India. He implied that such favoritism for one caste or religion will boomerang in India and resulted in “counter-mobilization “. Sonia Gandhi did not realize that such actions create “anti- Congress sentiments “amongst the majority people.

The analysis of election results showed that said Antony was correct and Congress effort to create a minority vote-bank boomeranged against it. For the first time in India, there was counter-mobilization against the Minorities.

3. Failure of Manmohan Singh: When Antony said that the Government failed to govern and there was inflation, un-employment and corruption, he was pointing the finger at Manmohan Singh. He blamed the defeat on the “failures of government “, which angered the people. Without mentioning Manmohan Singh’s name, Antony blamed the government. He said the entire government, including himself were to blame.

4. Rahul”s mistakes:  Antony said there were many mistakes in the campaign and though Sonia Gandhi and Rahul Gandhi tried and worked hard, they could not succeed.  Antony was not conducting a judicial enquiry, but an internal party enquiry. He identified 3 major causes and without mentioning names. Pro-Minority slant, bad government and a bad campaign.

It is injustice to say that Antony did not give an honest report. Antony is perhaps the present-day equal of Kamaraj Nadar, Lal Bahadur Shastri and such leaders. He became Chief Minister of Kerala in 1977 and served as chief Minister two more times.  He is perhaps the rarest of politicians against whom no corruption charges were ever made. He resigned his chief Ministership on principles in 1978. In the last 10 years, everyone including Manmohan Singh and all Congress leaders flattered Rahul Gandhi and said he must become Prime Minister.  Only A.K. Antony never said that.

Media wants a report or enquiry to be hundreds of pages, which no one will read. Antony‘s report was brilliant since it focused on 3 main issues. Very few people have heard of Italian Tacitus, who lived 2100 years ago. Tacitus. A famous Roman historian said 2100 years ago: “Victory has many fathers and defeat is an orphan”.

Congress Future:  Political parties do not die easily in India. There are no doubt Congress faces problems of survival. BJP must remember that though the Congress got only 44 MPs, it is not dead. It can be revived. In India, no party needs 272 MPs to form a government. The Congress needs to win only 150 MPs and it can be in power again.

Advantages for Congress:

a. In any state, where the Congress faces only the BJP, it has an advantage. The Congress is strong in Chhattisgarh ,Kerala, Karnataka, Telengana, Madhya Pradesh , Maharashtra, Gujarat, Rajasthan, Delhi, Himachal Pradesh, Punjab, Haryana, Assam and some North =Eastern states. These are two-party states, where only the BJP and Congress are players.  There is no other party there.

b. The BJP won the parliament elections, but has no depth in Kerala, Tamilnadu, Andhra Pradesh, Telengana, Bengal and Odisha . Presently, the BJP is ruling in 5 states in the country. The 2014 Parliament election is a victory for Modi largely. His performance will determine whether the BJP survives or not. The BJP is facing State assembly elections in next 6 months in Maharashtra and Haryana. The performance of BJP in these two states, where the Congress is its main opponent will determine the future of both Congress and BJP.

c. Congress has a huge establishment:  Having been in power for 50 years and controlling many state governments, the Congress has a huge base of resources, people and media support. For some time, this base will remain. It might be eroded, but the base will exist for sometime.

Problems for Congress:

a. Basically, people are tired of dynasty rule. In Europe, Kings have survived only in those countries, where royalty became humble and invisible. Norway, Sweden, Denmark and Holland have kings. But they are invisible. The English dynasty was nearly washed away with bad publicity created by princess Diana.

b. The Congress is stuck in 1970s and Vote Bank politics and gives little importance to governance, corruption and middle classes. Narendra Modi tapped into that middle classes and poorer people who want to join the middle classes. If Narendra Modi turns around the economy, creates jobs, controls inflation, then he will surely defeat the Congress again. Luck seems to be favoring Narendra Modi. Oil prices are coming down and economy has picked up.

The Congress has a big hope that the BJP makes mistakes.  Leaders avoid advice, centralize power, talk too much, encourage sycophants and take all the decisions

Aside from market psychology being used by Naidu and advisers, the people of Andhra think there is “Real Estate” logic behind the idea of Guntur as Capital. Even light-weight Jairam Ramesh, former Minister accused his own Congress leaders of buying land for speculative reasons in Guntur. Media has reported that land prices have gone up 50 times since they expect Capital to be in Guntur.

We have 3 new states which were formed in 2000 and each had taken different approach when selecting a Capital. chhattisgarh selected Raipur simply because it was the largest city in Chhattisgarh. Ranchi was similarly the largest city in Jharkhand. But in Uttaranchal, there were problems within the new state as Kumaon and Garhwal were like Coastal Andhra and Rayalseema with different histories and rivalries. Both wanted the Capital. They settled on an empty space called Gairsain, which was geographical middle of the two regions. But for convenience, Dehra Dun was selected as temporary capital of Uttaranchal since it was the biggest city and had an airport and railway station.

To satisfy Kumaon region, government in Uttaranchal located High court in  Naini Tal. The tussle for the capital is going even after 15 years after the state was formed. There are agitations and strikes. To reduce  tensions,  State Government recently located State assembly and other buildings in Gairsain. So Uttaranchal has Secretariat in Dehra Dun, Court in Naini Tal and State Legislature in Gairsain . Remember, Uttaranchal is a very small state as compared to Andhra Pradesh. When a small state can have 3 capital cities, why not Andhra Pradesh ?

Kashmir has two capitals. In winter, it is Jammu and in summer, it is Srinagar. This takes care of different demands of the regions of Kashmir. In Uttar Pradesh, the Capital is Lucknow and High Court is at Allahabad, which is also the center of education in Uttar Pradesh. In effect, there are two major centers in Uttar Pradesh. In Maharashtra, while Bombay is the capital, Nagpur has Legislature sessions every year.

The reason that Chhattisgarh and Jharkhand did not have such troubles is that they straightaway selected largest cities. In Uttaranchal, just like Andhra Pradesh, there are deep divisions of caste and region. The proposed selection of Guntur  will let loose caste feelings. The talk is already there that Guntur is being selected for narrow reasons and this will be a very big stigma for Telugu Desam government. History tells us  that a bad capital will cause serious problems.

In 1571, the great Mughal Emperor Akbar selected Fatehpur Sikri, which is 30 miles from Agra, as his Capital. After 20 years, Akbar abandoned his capital. But he wasted 20 years of time by making a poor selection of Fatehur Sikri and the most powerful Emperor of India had to admit his mistake. A modern day Chief Minister in India is nothing compared to a powerful Mughal emperor. Yet, Akbar bowed to demands from his people who felt Fatehpur Sikri was a bad choice. A huge city was abandoned.

One of the  world’s most despised government is Burmese government. For thousands of years, Burma had either Mandalay or Rangoon as its capital. But military government of Burma, suddenly decided to shift the capital to a place 9 hours  from Rangoon called NAYPYIDAW. With money from sales of oil, gas, minerals,timber and having absolute dictatorship for last 65  years, the rulers built a huge city. The highways linking Naypyidaw to other cities are 16 lanes. Everything is there except people. Government servants were forced to shift to the new city. But people did not follow them. Burmese government offered free land and buildings to all Embassies. But not a single country moved to the new capital. Sooner or later, it is expected that the new capital will be abandoned. Burma is a laughing stock of the world for its new capital.

a. There need be  no rush to select a capital in Andhra . Constitutionally, there is a minimum period of 10 years with Hyderabad as capital. Parliament can extend this period indefinitely.The future is un-predictable. There is every chance that the people of Telengana and Andhra will live harmoniously, even though politicians are trying to continue hatreds. There is absolutely no rush to vacate Hyderabad.

b. The selection of a capital in Andhra Pradesh will create controversies since various castes and regions have ambitions of their own. The selection of Guntur will satisfy only one caste. By selecting Guntur, it means that Rayalseema and North Andhra will be dominated forever. There are different social castes there and the new government must keep that in mind. Minor castes, though dominant, cannot dominate the state.

c. Developing only Guntur as the Capital means that as in Hyderabad, only one city will be developed. It is necessary to spread out development and avoid social tensions again. The caste tensions are very alive in Andhra and TDP government should avoid stoking such fires.  Winning an election does not mean giving a Vakalat to take unilateral decisions. Selecting Guntur as capital is a Unilateral  decision. If we go for one capital, it means anger all across Andhra Pradesh.

d. A logical decision of State government would be to select the most well-developed place and that would be Visakhapatnam. No well qualified IAS or IPS officer will come to work in a jungle.  80% of the IAS and IPS officers wanted to stay in Telengana simply because they wanted to stay in Hyderabad. If the capital is some un=-developed backwater, Andhra Pradesh will become the last choice for civil servants and other experts. The last rankers in the civil service will come to Andhra Pradesh.

e. Rayalseema also has a demand. They want Kurnool as the capital. In the new state, we should have one Rayalseema town as a capital.

Capital can be fluid and multi-city:

a. There must be at least 3 cities which have major activity of government. Visakhapatnam, Guntur and Kurnool can definitely have equal share of government and infra-structure.  Anything less would create conditions for future conflict within the state. Any attempt to impose a capital through tricks will create a backlash against the state government.

b. Visakhapatnam has 20,000 acres of surplus land in the Visakhapatnam Steel plant.  The Steel Plant has a total of 23000 acres of land. The central government is duty bound to return to Andhra Pradesh at least 15,000 acres of land which can take care of any sized-capital. There is no need to acquire even one acre of land. Visakhapatnam has an international profile, an airport and port and is on the national highways and rail line. There is a huge cosmopolitan population who have come to work in the Navy, private industry and public sector units. It is a worthy place for a court and secretariat. The

weather

is good. There is no shortage of  water. Visakhapatnam cannot also be ignored since it represents the entire north Andhra from West Godaveri to  Srikalaulam. It also the center of tribal population in the State .

Madras in Tamilnadu, Bombay in Maharashtra, Tiruvanthapuram in Kerala are all State capitals and like Visakhapatnam they are at one end of the State. If they can all be capitals, why not Visakhapatnam?

c. Guntur can definitely be the center of the state assembly. But to select Guntur as state Capital will be un-acceptable  and will create tensions. To manipulate people and situations to select Guntur will ensure that Chandra Babu will be viewed with suspicion by many communities.

People are watching very intensely the actions of the government in making Guntur the capital. It will only ensure that about 2 lakh people will become crorepathis in Guntur and Krishna Districts. That seems to be the objective  and also to capture the capital for generations to come. Chandra Babu should step back. His advisers might be very good businessmen. But they have no touch with people from other communities. There will be a backlash. chandra Babu must not forget how new parties are all the time coming up in Andhra Pradesh.

The attempt to hijack the future wealth of the state will have dire consequences.

When Chandra Babu was Chief Minister between 1999-2004, I wrote an article against the proposal to build a Formula 1 car racing track in Medak .Thousands of acres  of land from farmers had  to be acquired. My article stated that the race track will be used once every 3 years for 2 days and then forgotten. The  then leader of Opposition Dr. YSR spoke to me and asked whether my facts were right. YSR then raised the issue in the assembly and Chandra Babu dropped the idea. Chandra Babu behaved like a Statesmen then.

At this stage, Chandra Babu should step back from selecting Guntur as Capital. He should show statesmanship.

It is open knowledge that in the last 7 years, real estate speculators have cornered lakhs of acres in Guntur – Krishna area. Let there be a Judicial enquiry on who bought land. That will be a  shocking story and India will learn how some  people want to become billionaires when Telugu people were fighting for survival. It is the mother of all scams.

There is no rule in the world  which says that a state cannot have more than one capital. The Central government did not properly think of the consequences of the Division. Everything was done in a week. Neither Manmohan Singh or Sonia Gandhi or other political parties exercised their minds.

Even India and Pakistan had a better deal after division since there was a Mahatma Gandhi to intervene for justice. In 1947, after division, India refused to release money due to Pakistan. But Mahatma Gandhi went on a hunger strike and forced Nehru to release funds to Pakistan.

b. The Finance Minister has also stuck to the old figure of reducing Fiscal deficit to 4.1%, though he does not say how he is going to do it. He simply says that he expects the tax revenue to be more this year and will exceed the targets. Obviously, if the taxes are not upto expectations, then we can expect increases on taxes on goods sued by the common man.

c. The foreign exchange earnings of Indian workers in the Middle East and other countries is what sustains the economy of this country.  Nearly 30% of all foreign exchange earned by India is by their remittances. Yet, government has not introduced any insurance scheme or any financial benefits for those who actually sweat for our country. The big industry and business, which is now allowed to invest abroad in houses and take their wealth to foreign countries is doing so only because of Indian workers abroad. Yet, Government has been silent on their problems. . Recently, thousands of Indian workers returned in distress and suddenly from Iraq and other countries, losing their jobs and investments. The Government could have noted their plight and done something for them in the budget. But there has been only eloquent silence from our eloquent Finance Minister.  The budget is silent on the contribution of workers .Yet; we note that government will not hesitate to take up issues if it affects industry or business.

The railway budget has shocked people by this fare raise that the Minister had announced even before the Budget. But the public expected that The fare raise will mean that the railways will enhance services and put the railway on the road to modernization. But nothing happened and the Railway Minister simply said that this fare raise is for past financial problems. That was the first shock you gave the country.

Then there were fantastic things you mention in the budget:

A. The railway minister talks a lot of Bullet trains traveling at 400 Kms  per hour, when all we want are trains that travel a little faster than they did during British times. It is okay to dream. But is to correct to talk about Bullet trains when the existing state of railways is pathetic?

B. the railway minister has not announced steps regarding meeting the immediate demands for trains. He has skipped that demand totally. He has talked vaguely of bullet and Rocket trains. He has nothing for the passengers but dreams .

C. The railway minister has talked about office space on trains. Is it really necessary or is it only to fool people with cosmetics and plastic surgery? The railway minister has talked about WIFI At rao

Country       Year (2012)                  Year (2013) India             10.2%                            09.5% China            02.6%                            02.6% Korea            02.2%                            01.3% Pakistan         11.0%                            07.4% Sri Lanka        07.5%                            06.9% Indonesia      04.0%                            06.4% Malaysia         01.7%                            02.1% Thailand         03.0%                            02.2%

Pakistan had the highest rate of inflation amongst all the above countries. Yet, Pakistani inflation came down to 7.4% in 2013. China and Korea are the biggest oil and natural gas importers in the world.  Korea does not have many raw materials and is totally dependent on imports for major minerals. Yet, we find that, though China and Korea are major oil-importers, they had the lowest rates of inflation.

There is another common factor amongst China, Korea and Pakistan. These 3 countries spend huge amounts on defense. So India cannot offer the excuse that the low rates of inflation in China and Korea are due to their lower defense expenditure.

Sri Lanka is a resource -poor nation. Ii is just recovering from a 50- year domestic war and strife.   Yet, its inflation is lower than India’s. Malaysia and Thailand have very low rates of inflation.  This is a testament to their very alert financial managers that their governments have. Perhaps, it is also because their people are very inflation- resistant and take their governments to task if there is a high rate of inflation.

In India, we find that there has been persistent inflation under the UPA Government.  Since 2008, Government    has been blaming this inflation on international factors like the high price of oil and other external reasons. The UPA Government has un-fortunately taken shelter under the excuse that the economic collapse in western countries has also affected India. If that is so, then how it is that other South Asian country have been immune to “external financial and economic factors “?

The fact is that the UPA Government has   given the country a high and persist fiscal deficit.  This has led to inflation. This has led to un-employment and a host of ills for the economy. Other countries, whether they have had dictatorships or democracies, have been more careful in NOT wrenching their economies through un-bearable pain.

For political reasons, the Indian government has bled the economy and led to inflicting pain on the poorer sections and middle classes. This is the main reason that other South Asian and similar Asian countries have been able to control inflation and India did not.  It would be fair to conclude that India had the means to control inflation and yet did not do so for political reasons.

Such disputes will never be resolved since the litigation will be endless.

The River Godavari is the longest river in India, which flows entirely only in India. The Ganga, Brahmaputra and the Indus are multi-national rivers.  But the River Godavari flows entirely in India. To that extent, we Indians must be happy that there are no controversies with other countries about the River Goadveri

We Indians must feel particularly proud of the river. Instead, we find that there are major controversies amongst different states over the River Godavari and how its water can be harnessed for public good. Any central project or dam should be so designed that every state welcomes it. When the Bhakra Nangal dam was built under Central government aegis, every state welcomed it. The intention of the Central government becomes suspect when disputes break out. It either means that the Central Government has not done its work or it has not done  “Due diligence “.

  There is also another opinion, which I do not subscribe to. That opinion says that the central Government wantonly creates   enduring disputes, so that states remain weak and have disputes with each other. Then in such instances, the central government becomes to final authority to adjudicate disputes. That seems to be happening over various disputes between Andhra Pradesh and Telengana…

  Polavaram dam and controversy:

There   is a   major controversy between Andhra Pradesh and the States of Telengana, Chhattisgarh and Odisha over the river. The basic controversy is regarding the design of the proposed   dam at Polavaram   in Andhra Pradesh.

The Polavaram dam is now under the government of India. There is a Polavaram Dam Authority.  Heavens will not fall if Government of India gets an expert opinion.  Experts can give their opinions on whether the same amount of water can be stored if the design is changed or whether there is need for another smaller dam in Telengana to prevent submersions, etc.

The original design of the dam is over 80 years old. The location was first decided at Polavaram over   80 years ago. Much has changed since then.   The Govt. of India can set up an expert panel to advise whether the design must be changed, without reducing the water storage on the River Godavari. This is what experts are for.

I also suggest that the Government of India apply the new Land Acquisition law of 2013 to all the tribal’s, poor people and farmers, who are losing their land due to Polavaram Dam. This applies to people in both the States of Andhra Pradesh and Telengana.  I understand that as Polavaram Dam is now a central project, the central laws must apply.

Lakhs of poor people are being evicted due to the Polavaram dam in both Telengana and Andhra Pradesh.