This refers to the columns Rotting food, rotten arguments (FE, September 4) by Surjit S Bhalla and Land Bill a mortal blow to Indias modernisation (FE, September 5) by Rajiv Kumar and Prashant Kumar. It is well known that the enthusiasm of the Congress and the near-unanimity amongst the other political parties in supporting the food security law were driven more by electoral considerations rather than real concern for the poor. While the Congress hopes the new right will be the game-changer for the UPA in the 2014 election, no political party can afford to be seen as anti-poor by opposing it. With the sorry state of Indian economy and fiscal deficit threatening to balloon, the FSL will burden the exchequer with R1,30,000 crore. Experts and economists have already labelled it a disaster for our economy. The existing Public Distribution System is almost dysfunctional due to corruption, pilferage, and mismanagement. It will be no suprise if the food security law proves to be food scam law. Surjit Bhallas article is a just rebuke to the supporters of the ill-conceived law.The new land acquisition law is also of the more-populist, less-rational school of thought. The Congress is eyeing the huge farmer vote-bank with LARR. It is true that the old law provided farmers much less compensation compared with the real price of the acquired land. But the new law represents the other extreme, being heavily tilted in favour of landowners/farmers. It has made consent of 70-80% landowners mandatory for any acquisition and provides for compensation of four times the market price of a piece of land being acquired in rural area. The adverse impact of these bills on the countrys fiscal condition, economy and new projects in industry, infrastructure and housing seems nary a concern of the political parties. Their top priority is the 2014 general election.
Dont celebrate yet
This is in reference to the report Rajan reforms to fuel $10-bn FCNR inflows" (FE, September 6), as the new RBI Governor has offered incentives for banks to raise dollar funds and in turn help bridge the current account deficit, banks have headroom to raise an additional $30 billion as part of their Tier-1 capital. As pointed out in your editorial"Don't be niggardly (FE, September 6), RBI has done whatever it could do to augment capital flows in the short-term. Bank stocks have risen and the rupee has also gained slightly. However, it is not time yet to celebrate. Gold import is still a major concern and the government has to take the necessary action to bring it to an acceptable level. Your editorial has suggested some steps to be taken like CPI indexed bonds, allowing investors to buy gold certificates through banks and so on. While the BRIC countries agree on $100 billion currency reserve fund to be set up to fight currency shocks, if the need arises, the question would be can they cooperate to reduce or contain gold price in world market