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Business Standard
3 days ago
- Business
- Business Standard
Best of BS Opinion: India must heed the warning signs from without
Hello and welcome to BS Views, our daily wrap of the newspaper's opinion page. India's economy and technological prowess are on a steady path, but it faces external challenges in the form of both policies and nations, something that needs serious consideration. The final quarter of the financial year ended March 2025 saw a burst of economic activity, pushing GDP growth to 7.4 per cent for the quarter, and 6.5 per cent for the full fiscal. Private consumption also saw an uptick, and the central bank is expected to cut rates this cycle by 50-100 basis points, given a good monsoon and already-benign inflation. However, our lead editorial cautions, the main risk to the India story lies in the external environment, given global trade and economic uncertainties unleashed by US President Donald Trump. How the country navigates this and implements reforms to improve the business climate will shape its medium-term growth arc. India's indigenous Bharat Forecast System is a step forward in modernizing its capabilities, notes our second editorial. Given the country's diverse geography, such a system will help governments handle multiple challenges in the face of changing weather patterns and the rise of extreme weather events. More than that, accurate forecasts can radically improve the country's disaster preparedness and agricultural planning, helping farmers to make better planting and harvesting decisions. But first, the government must ensure timely dissemination of forecasts, community awareness, and last-mile connectivity, besides strengthening local institutions to act on them. Our lead columnist Ajit Balakrishnan looks back at the evolution of revolutions, and wonders if this is the time to think about a new model of technological or industrial change, one that puts the human condition front and centre, instead of pushing humans into poverty and starvation for the sake or profit. He invokes Mahatma Gandhi's exhortation at the time of the second industrial revolution, and recalls that the technological part of it was minor compared to the dehumanization of vast swathes of people, both in India, and the black slaves in north America. In short, he calls for revisiting history so that the next industrial revolution is more humane and equitable. Our columnist Debashis Basu writes on the rise and rise of China as a global power in its own right. In fact, it is no longer a prediction but a reality, thanks to sustained state ambition, disciplined execution, and a vast mobilisation of resources. In many sectors, in fact, it is already a global leader, but its technological and economic might poses challenges for India. Online, too, China is winning a propaganda war, projecting itself as a beacon of social order and techno-competence. India has the ingredients to grow like China, but lacks serious intent and goal-orientation. Perhaps India could take a page out of Xi's book, and start with a crackdown on corruption. Sanjeev Ahluwalia reviews David C. Engerman's book 'Apostles of Development: Six Economists and the World They Made', a close look at six eminent South Asian economists, all of whom graduated from Cambridge University, and shaped the region as per their own academic and political proclivities. The term 'apostles' is a riff on a 19th century secret society - the Cambridge Apostles. Lal Jayawardene of Sri Lanka, Nobel Laureate Amartya Sen, Jagdish Bhagwati and Manmohan Singh from India, Mahbub Ul Haq of Pakistan, and Sobhan Rehman of Bangladesh all find a place in the book, and how they helped shape outlooks towards economics and finance in their home countries.
Business Standard
6 days ago
- Politics
- Business Standard
Best of BS Opinion: How we manage change can turn the future around
Today's columnists assess change, and the various forms it takes - from Trump's flip-flops to changing the ideal of what a company should do, to the Indian cricket team's leadership churn Listen to This Article Hello, and welcome to BS Views, our daily wrap of the opinion page. Today's columnists assess change, and the various forms it takes - from Trump's flip-flops to changing the ideal of what a company should do, to the Indian cricket team's leadership churn, from data that throws up new realities to new realities that must force change on our borders. Read on. In our lead column today, Max Hastings argues that US President Donald Trump's dislike of Volodymyr Zelenskyy, as well as his penchant for deal-making, has given Russia's President Vladimir Putin a clear upper hand at the negotiating
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Business Standard
26-05-2025
- Business
- Business Standard
Best of BS Opinion: Should RBI cut its intervention in currency markets?
Hello and welcome to BS Views, our daily wrap of the editorial page. The Reserve Bank of India has been generating higher surplus on account of, among other things, higher interest income and foreign exchange gains. Our lead editorial notes that higher surplus transfer to the government will help ease liquidity conditions, which, at the time of monetary policy easing, help transmission. Additionally, the RBI perhaps doesn't need to intervene excessively in the foreign exchange market. While a stable currency has its merits, excessive intervention by the central bank can weaken incentive in the private sector to hedge its exposure, besides leading to overvaluation. It can also push the private sector to raise money from overseas sources, increasing the burden on the central bank to intervene. This cycle must be avoided. The central bank can intervene at times of excess volatility, but in the normal course, it should allow the private sector to handle it. Our second editorial points out that today's Kolkata port is a logistical nightmare, partly due to the its geomorphological characteristics. Given the lack of a deep draught there, as well as at Haldia port further south, large ocean-going container ships cannot navigate up. Such a situation cannot be allowed to continue indefinitely, given that the geopolitical situation has turned adverse. A deep-sea port that allows container ships to arrive without lightening, and which connects seamlessly with road and especially rail, must be a priority. Investment will certainly be needed, but the higher priority is political will and clarity. Payments is an important industry of the modern world, one that is primarily a technology business, not a financial business. Our lead columnist Ajay Shah writes on how 'agency architecture' can be used to reshape the payments industry in India, pointing out changes at the Reserve Bank of India. The first solution in redefining the payments universe is in clarifying the core activities of regulation, while the second lies in governance arrangements. A specialised board to govern the work of payments regulation within the RBI would help. Last week's Gazette notification does that, creating a path for three independent directors to join three RBI employees on a board for payments regulation. Given the absence of these sections of law in the extant legislation, the role of the Payments Regulatory Board will have to evolve through good sense and norms. In today's second column, Surinder Sud points out that India is the second-largest global producer of fruit and vegetables after China, and even leads in several important items. In fact, horticulture has emerged as one of the key growth engines of Indian agriculture. Horticultural crops are also typically more productive and remunerative than food crops. However, wastage ranges from 15 per cent to as high as 40 per cent, and is largely because of a deficit in produce-management infrastructure. Exporters, too, face several challenges, including non-tariff trade barriers, such as arbitrarily fixed food-safety standards and stringent sanitary and phytosanitary norms. Such issues need to be addressed to sustain and boost this sunrise sector. Tim Wu reviews two books that consider the challenges with artificial intelligence, as well as its advocates, primarily Sam Altman of OpenAI. The reviewer posits that the AI industry may be facing a 'paper clip' problem, one in which both the product and producers are fixated on a solution that edges out all other activity. In 'Empire of AI', Karen Hao argues that the pursuit of an artificial superintelligence has become its own figurative paper clip factory, while 'The Optimist', by Keach Hagey, posits that the seemingly innocuous paper clip maker who ends up running the world for his own ends could be Altman himself. Wu points out that if the aim is not to help the world, but instead to just get bigger and better, then our problems around AI might just get bigger too.
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Business Standard
17-05-2025
- Business
- Business Standard
Best of BS Opinion: How we manage change can turn the future around
Hello, and welcome to BS Views, our daily wrap of the opinion page. Today's columnists assess change, and the various forms it takes - from Trump's flip-flops to changing the ideal of what a company should do, to the Indian cricket team's leadership churn, from data that throws up new realities to new realities that must force change on our borders. Read on. In our lead column today, Max Hastings argues that US President Donald Trump's dislike of Volodymyr Zelenskyy, as well as his penchant for deal-making, has given Russia's President Vladimir Putin a clear upper hand at the negotiating table. Witness how Trump refused to show up for the peace talks because Putin wasn't going to be there. The Russian president is probably gambling that if he hangs on, the transactional US president will sooner or later walk away, because he sees nothing in Ukraine for himself, allowing Russia to eventually become the hegemon in the region. In today's National Interest, Shekhar Gupta notes that Pakistan and its proxies are prone to a predictable seven-year itch. In other words, India gets about seven years of deterrent capability after each terror attack. Will this near-war, India's strongest military response so far, buy India another seven years of deterrence? While it was a formidable punitive package, the facts and history, are yet to convince that an Indian deterrence against use of terror as state policy has been established. To do this, he writes, after this is over, India must look generations ahead and invest in one front only. A big economy with faith in its future needs defence that isn't just impregnable, but deters at least one of its two adversaries. Done right, this one front will cease to matter. R Gopalakrishnan considers the old debate about family-managed versus professional-run companies and comes away convinced that the future belongs to 'professional entrepreneurial managers', a mix of efficiency and startup thinking. Nonetheless, he remains committed to so-called 'deergha ayush' (long lived) enterprises because of their social as well as economic value as long as they remain purposeful. As a cautionary tale, he points to a technically deerga-ayush company, Credit Suisse, that proved it is expensive for society to extend the life of a company that is no longer capable or purposeful. Devangshu Datta looks to an unlikely source of data to understand underreporting of Covid fatalities and its impact, and over-reporting of Maha Kumbh visitors: Indian Railways. The number of passengers on IR is yet to reach it's pre-Covid levels, he points out. The undercounting of deaths has knock-on effects such as insurance payouts as well as allocation of health resources. Similarly, he finds that Railways data doesn't really register a jump during the Maha Kumbh, suggesting that the state government's claims of a revenue windfall may not hold water. Vishal Menon notes that Australian tours appear to have a decisive role in concluding the careers of Indian batting greats. In 2012, a good 13 years ago, India's calamitous tour of Australia ended the careers of Rahul Dravid and VVS Laxman, he recalls, and draws a parallel to the current exits of stalwarts Rohit Sharma and Virat Kohli. With no clear frontleader for the top job, the job now must fall to Gambhir to instil the virtues of playing Test cricket in a generation of players raised on an IPL diet. In essence, he says, Gambhir has a stiff task ahead: Turn boys into men.
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Business Standard
12-05-2025
- Business
- Business Standard
Best of BS Opinion: India must push through multiple headwinds
Hello, and welcome to BS Views, our daily wrap of the Business Standard opinion page. Today's edits and columns offer a path forward for India in multiple areas - military, diplomacy, trade, and climate change. How it deals with each of them will frame the future for its citizens. Read on. On Saturday, India and Pakistan reached an understanding to stop military action against each other after almost four days of an intense stand-off. While the situation is expected to stabilize, India cannot afford to let its guard down, notes our first editorial. India's fight against terror will continue, give Pakistan is unlikely to give up supporting terrorism. Also, India will face challenges as long as the Pakistan military calls the shots instead of Islamabad. However, India has economic ambitions, and terrorism and the fear of military conflict affect the business environment, so it needs to be ready at all times to foil terror attacks and respond swiftly. India's new draft 'Climate Finance Taxonomy', launched with the aim of directing capital flows toward sustainable and climate-aligned activities, is a much-needed framework during these critical times, says our second editorial. India is already feeling the financial strain of climate adaptation, given that developing countries are left to bear most of the cost on their own. This is where the green taxonomy framework will help in attracting alternative funding, while making sure all stakeholders adopt ESG safeguards. However, India must also put in place robust disclosure mechanisms to prevent so-called greenwashing, or false marketing of investment as being environmentally friendly. Ajay Shah and Susan Thomas argue that how government procurement of goods and services is conducted should be a central concern of public finance, instead of being used as a tool for political patronage, pursuing industrial policy, or for protectionism. They say that protectionism in the form of blocking foreign companies weakens competition and hurts the Indian citizen. The principles guiding public procurement, they say, should be the same that we use at home: frugality and thoughtfulness in a tough, transparent, and competitive market. However, there are nascent signs of a rebalancing in the many bilateral agreements, signaling a recognition that greater competition can be beneficial. But this needs to be complemented by systemic reforms of India's domestic procurement, along with some other steps. Globalisation, which really took off in the Nineties, has always been a game of finding the bottom, writes Sunita Narain. As pollution levels in industrialised nations grew, they simply dumped their production, and pollution, on poorer ones. In this free-market world, she says, the cost of labour and environment is discounted to stay competitive, but it has everyone hooked to its benefits despite the blows to climate change. The bubble burst when Brexit happened, showing the whole global trade machinery is about jobs. Now, with Trump's protectionist rhetoric, disengagement will come at huge costs. How a new system is designed will determine the nature of future global trade. In our book review section today, Jennifer Szalai delves into 'EMPTY VESSEL: The Story of the Global Economy in One Barge' by Ian Kumekawa, an enlightening book about a most drab object - the shipping barge, which the book's author describes as 'a dumb pontoon without voice, personality or drive". And yet, this metal box is often what girds global trade. Kumekawa, a historian at Harvard, highlights its many uses - as a 'floatel' for oil rig workers, a barracks for British soldiers, even a jail for New York City inmates - but also uses its unglamorous beginnings to trace the journey of globalization and to give it a visceral identity.
