Thursday, March 7, 2013

Pipelines returns, only to fade away

Kazahk-India Five nation pipeline

Shymkent is the third most populous city in Kazakhstan. Travellers once used to take rest here, to recover from tiredness caused by long journeys through ancient Silk Route. On the other hand, Atari (India) is located close to Wagah international border between India and Pakistan.

Recently, I just checked the distance between these two cities using Google maps - Its 2025 km. In the era of bullet trains and High Speed Rail, this is not a big deal. But the problem here is, this route also passes through one of the most unstable (politically) and difficult terrains (geographically). Apart from a number of CIS states, this route goes through Afghanistan and Pakistan as well. In total five states.

You may be wondering, why I am talking about the route between Shymkent and Punjab. Well, let me take you to a recent report on ‘The Hindu’,

"...proposed pipeline would cover about 1,500 kms...making it longer than the planned Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline... It will head from... Shymkent..."

I don’t understand; why we keep on proposing so many unviable hydrocarbon pipeline projects. First one was, Iran-Pakistan-India (IPI) pipeline, which sunk to the annals of history following West’s fear over nuclear Iran. Then came, ‘Turkmenistan-Afghanistan-Pakistan-India (TAPI)’ pipeline; considering the route (both politically and economically) it’s difficult to tell, whether it will ever come out of drawing paper. This newly proposed one creates one more entry in this list.

Before proposing another more pipeline projects, authorities should go through a simple checklist.

1. Are we going to delink gas prices from oil prices?
2. Will international Oil & Gas price come down once US and Canada start exporting shale gas?
3. Will a big success in Arctic drilling be able to reduce the oil & gas prices further?
4. Is there enough oil/gas in Central Asia’s fields to sustain and justify the huge cost of expenditure involved in the creation of pipe line?
5. Considering the cost of construction, will the Kazakh gas be cheap in India?
6. Who will ensure the security of pipeline in Af-Pak region? 
7. Is this pipeline route better than bringing the Central Asian gas to the Iranian port of Chabahar and then through Sea?

There are more, but let’s start with these ones.

Sajeev.

References

1. India proposes hydrocarbon pipeline from Kazakhstan - The Hindu

Two year old flyover's collapse in Kolkata and India's infrastructure dream


Recently a flyover crashed down in Kolkata (Ultadanga area - connecting ‘Eastern Metropolitan bypass’ and ‘VIP Road’) taking down a truck carrying marbles along with it. Fortunately, accident occurred at 4.30 in the morning, when traffic was low.

Are you about to blame the old infrastructure? Wait a minute; this structure was just around 2 year old – sprang up under the recent spells of investments in infrastructure.

Crumpled flyover raises many questions. Currently, we are investing billions of rupees of tax payers and private money in creating new infrastructure - new roads, flyovers, railway tracks etc. In this rush are we properly ensuring whether proper procedures, quality assurance tests etc are followed in letter and spirit?

Hope that, the sound of a crashing down flyover will wake up people and force authorities to undertake strict quality tests. Otherwise India's trillion dollar infrastructure build up will end up as trillion dollar nightmare.

Sajeev.

References

1. Truck falls into canal as portion of Kolkata flyover crashes - The Hindu

Thursday, February 28, 2013

Main points of Union Budget for the financial year 2013-14

Highlights of Union Budget 2013-14.

1. Proposal to set up India’s first Women’s Bank as a public sector bank.
2. Nirbhaya Fund to empower women…
3. Rs. 1,000 crore for skill development of ten lakh youth to enhance their employability and productivity.
4. Direct Benefit Transfer (DBT) Scheme to be rolled out throughout the country during the term of UPA Government.
5. Fiscal Deficit for 2013-14 is pegged at 4.8% of GDP. The Revenue Deficit will be 3.3% for the same period.
6. Plan Expenditure placed at Rs. 5,55,322 crore. It is 33.3% of the total expenditure while Non Plan Expenditure is estimated at Rs. 11,09,975 crore. The plan expenditure in 2013-14 will be 29.4% more than the RE of the current year i.e. 2012-13.
7. … Allocation for Rural Development Ministry raised by 46% to Rs. 80,194 crore.
8. The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore during the current year.
9.  Rs. 10,000 crore earmarked for National Food Security towards the incremental cost.
10. Education gets Rs. 65,867 crore, an increase of 17% over RE for 2012-13.

11. ICDS gets Rs. 17,700 crore. This is 11.7% more than the current year.
12. Drinking water and sanitation will receive Rs. 15,260 crore. Rs. 1,400 crore is being provided for setting up water purification plants to cover arsenic and fluoride affected rural areas.
13. Health and Family Welfare Ministry has been allotted Rs. 37,330 crore. National Health Mission will get Rs. 21,239 crore which represents 24.3% over the RE.
14. … JNNURM will receive Rs. 14,873 crore… against RE of Rs. 7,383 crore in the current year.
15. Defence has been allocated Rs. 2,03,672 crore.
16. Rs. 3,511 crore … to Minority Affairs Ministry, 60% higher than RE for 2012-13.
17. The Government will encourage Infrastructure Debt Fund (IDF) and allow some institutions to raise tax free bonds up to Rs. 50,000 crore which is 100% more than the current year.
18. India Infrastructure Finance Corporation (IIFC), in partnership with ADB will help infrastructure companies to access bond market to tap long term funds.
19. Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh to Rs. 12 lakh.
20. First home loan from a bank or housing finance corporation up to Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 lakh.

21. Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation.
22. On oil and gas exploration policy, the Budget proposes to move from the present profit sharing mechanism to revenue sharing. Natural gas pricing policy will be reviewed.
23. On coal, the Budget proposes adoption of a policy of pooled pricing.
24. Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this category.
25. Refinancing capacity of SIDBI raised to Rs. 10,000 crore.
26. Technology Upgradation Fund Scheme (TUFS) for textile to continue in 12th Plan with an investment target of Rs. 1,51,000 crore.
27. Rs. 14,000 crore will be provided to public sector banks for capital infusion in 2013-14.
28. A grant of Rs. 100 crore each has been made to 4 institutions of excellence including Aligarh Muslim University, Banaras Hindu University, Tata Institute of Social Sciences, Guwahati and Indian National Trust for Art and Cultural Heritage (INTACH).
29. New taxes to yield Rs. 18,000 crore.
30. A surcharge of 10% on persons (other than companies) whose taxable income exceeds Rs.1 crore have been levied.

31. Tobacco products, SUVs and Mobile Phones to cost more.
32. Relief of Rs. 2000 for the tax payers in the first bracket of 2 to 5 lakhs.
33. ‘Voluntary Compliance Encouragement Scheme’ launched for recovering service tax dues.
34. Rs. 9,000 crore earmarked as the first installment of balance of CST compensations to different States/UTs.
35. The Backward Regions Grant Fund (BRGF) has been allocated Rs. 11,500 crore.
36. Plans for seven new cities have been finalized for industrial corridors and work on two new smart industrial cities at Dholera (Gujarat) and Shendra Bidkin (Maharashtra) will start during 2013-14.
37. Two new ports will be established in Sagar (West Bengal) and in Andhra Pradesh.
38. New outer harbour will be developed in the VOC port at Thoothukkudi (Tamil Nadu) through PPP at an estimated cost of Rs 7,500 crore.
39. Grant of investment allowance at the rate of 15% to manufacturing companies that invest more than Rs. 100 crore in plant and machinery during the period 1.4.2013 to 31.3.2015
40. Rashtriya Swasthiya Bima Yojana, which cover 34mn families below the poverty line, will now be extended to other categories such as rickshaw, auto-rickshaw and taxi-drivers, sanitation workers, rag pickers and mine workers.

Courtesy: Ministry of Finance, GOI.

'RE' stands for Revised Estimates

Sajeev.

Dakshinayana Part Nine – Chhattisgarh and Raipur

MP-CG Border

I cursed myself for waking up so late and missing the first bus to Raipur. Around 10.30, I checked out from the hotel and walked towards the bus stand. One driver told “Bus will come soon”. As S K Pottekkad told, one of the best methods to explore a city is to walk through the roads. As there was not enough time, I simply roamed around the bus stand itself.

From a nearby store, I bought ‘Patrika’ – a widely available and popular newspaper here. By this time Raipur bus also arrived at the stand. After having a glass of sugarcane juice, I boarded that white bus to Raipur. It was a big bus with sleeper facility on upper deck. Fortunately, I got a window seat. After waiting for some more time, we started our legendry voyage to Raipur – ticket charge was 220 INR.

For bus conductor, everybody is a ‘savari’ - savari to Raipur, savari to Bicchiya etc. I got a co-passenger as well - a kid studying in 10th standard.

Bus stopped in between, to take some more passengers. Conductor becomes very cheerful whenever somebody tells him Raipur!!! During one of these stoppages, our conductor bought coconut and agarbati as well.

We finally reached on the banks of Narmada – a river widely respected and worshipped here. While crossing the river, we stopped again on top of the bridge. At first, I thought there may be some road block. Parallel to our bridge at a lower level, there was one more bridge on left side. A lot of people were walking through this bridge on foot. I just watched the slowly flowing calm waters of Narmada. Suddenly conductor came out through the front door, holding coconut in one hand and agarbati in other one. He did some pooja there and finally dropped the coconut to the river. Note that, all the time we were on the bridge.

After poojas we started again, travelled rest of the bridge and crossed city limits. My co-passenger was coming from Jabalpur after attending some cultural festivals there. We slowly started our communication – about villages, roads, his school etc. Contrary to my expectation, roads was not that much bad even in those uninhibited areas. He swiftly corrected me, “here roads are ok, but after some time roads will be bad. In Chhattisgarh roads are good.” What attracted me more was his comparison of MP and CG. Finally, he summarized in two sentences. “Ab tak yahan (MP border with CG) utna pragati nahi huva hei. CG ka road dekho, vahanka mukya Raman zhabardasth hei”.

Earlier also I heard about the improvements in Chhattisgarh - in infrastructure, stopping the leakages in Public distribution system (PDS) etc. Just like many other events in these faraway places (from Delhi and Mumbai studios of media), improvements stories may also end up somewhere in the inner pages of newspapers. After all there may not be any dedicated propaganda wing working non-stop to highlight it.

We crossed some more villages. Conductor was always aggressive in making sure that all have a seat. Interestingly, all this aggressiveness evaporated when a beautiful girl boarded the bus and sat next to him. She sat there because no other seat was empty. After that, he became as soft as lotus pedal. All of a sudden his voice become very soft and started a conversation with her. It didn’t surprise me, I saw many people roaring like lions suddenly start bleating like sheep in the presence of a beautiful girls.

Slowly road became very bad, so bad that I sincerely doubted whether our bus will reach Chhattisgarh border at all. Some more girls got in and remaining bus crews also engaged in conversation with them. Finally my co-passenger told good-bye and got down somewhere close or after Bicchiya.

After struggling through that road for some more time, we entered Chilpi range. Chilpi forest range is continuous to Kanha National Park (KNP) in the West, connected with Motinala Range in the north and Dongargath-Khaara forest range in the south.  MP-CG border is situated inside Chipli range. Both sides of the road were guarded by trees, which were getting a fresh coat of paint every time a bus/ heavy vehicle passing through that area.

Delhi Gang Rape Incident

An elderly person came and sat next to me. As he was sitting idle, I had to start the conversation. He also didn’t forget to add, his share of praise to CG (Chhattisgarh) roads. Suddenly, the issue of Delhi gang rape came up. His question was simple; according to me what should be the punishment for rapists? However answering it was not at all simple. Please note that, this conversation happened on 31st December - just two days after the victim died in a Singapore hospital.

“For rape they may get a maximum of 10 years according to law”. As she died, they would be prosecuted for murder as well. He was not satisfied with that answer; for him punishment is plain and simple - ‘shoot them’.

Well, I can understand his emotions; he may also have a daughter of same age. But what he proposed and what many other people suggested are not and should not be the choices of a modern society. We have to prosecute them, according to the law of the land and according to the process established by the law. Only the courts have the power to decide an apt sentence for them.
If we start shooting people accused of rape, then there won’t be any end. Justice should be swift, but due process has to be followed.

Rape – single or gang - was not started today or yesterday in India. Gang rapes and parading the victim naked throughout the village is happening every now and then. In all cases there will be some manufactured reasons - maybe she loved someone from higher caste, or some other gotra; may be her brother eloped with a girl from higher caste; may be social honchos want to enjoy her... reasons are always there. Which this tamasha went on unstopped in broad daylight in numerous Indian villages why the so called middle and upper class woke up to see the reality? If society liven up to its ideals at that time, probably that poor Delhi girl may live today as well.

According to the reports, none of the highly enlightened social members took them to hospital. Society can’t dump all accusations over government and simply wash their hands; they should take their share of blames. Even now, if you find an injured person bleeding on a roadside due to some accidents, will you take him/ her to hospital? Don’t say yes just to satisfy your moral consciousness.

Chhattisgarh

At Night
Slowly he moved to Gujarat and Himachal elections. By this time we crossed MP-CG border and entered Chhattisgarh. Bus stopped in front of a small dhaba. Roads were indeed good in this side of border. Chilpi Ghats are located some 20- 30 minutes away from here. But, what we don’t know was - the bus wouldn’t start again!!!

Yes, people had their tea/ coffee and came back only to see a dead bus. It didn’t surprise me; any vehicle would create problems after passing through that horrible road. In the middle of the jungle, while sun was rushing towards western oceans we had to wait for the next bus to come. Fortunately, it came and I got a seat in the sleeper - next to a movable glass window.

At Night
Chilpi Ghats


Chilpi at night.
I had to wait for some more time in that not so comfortable seat to see the ghats. Scarcity of light indeed decreased the visibility of this lengthy ghat wearing green cap. I just tried to imagine the bottom of the ghat. In between, I slipped in to a deep sleep.

When I woke up, bus was approaching Pondi. One of the next main stop was Kawardha. To my surprise, there were two road rollers working in that night to tar a road near to bus stand. Slowly but steadily number of travellers came down. I slept again for some more time. Finally we reached Raipur. I got down close to Railway station and started walking through the empty roads of the city. Minute needle was about to touch twelve - last seconds of 2012!!! Some people were already exploding crackers and celebrating the arrival of New Year - 2013. Sky was lit with fire crackers spitting multiple colours and drawing patterns in an otherwise dark blanket.

Raipur Railway Junction


Raipur Railway Station
I walked further and reached Raipur railway station. Its modern building was flooded with white lights. Finally clock stuck 12, some more explosions in the sky. Ironically, people in railway station were too much worried about their trains to celebrate new-year. Here, among these multitudes – some sitting on the floor, some others sleeping there – this 12 ‘o’ clock also end up just like any other 12. I didn’t reserve any ticket for Nagpur – for which I had to regret for rest of the night. After a lot of thinking finally I bought a general ticket for Nagpur. Train came at 2.15am; there were hardly any space in general compartments.

I got only some inches to stand, just to put my two legs on floor. Just in front, three guys were sitting in the floor. On another side, one guy was sleeping on the floor. He kept his head below the seats; his legs were below the seats on opposite side. I don’t know how he was able to take breath. On other side one lady is sleeping in sitting mode, two other guys were sleeping in the two side lower seats. Berth was filled with a lot of bags and vacant spaces were occupied by human beings. One mid-aged couple were standing in the back, always asking others to go forward and gave them some space to sit, as if train bogies were made of rubber band.

Carrying a big bag and camera increased my problems. After struggling hard, I could only find some 10 inches of space in the berth. If I put my bag there, I have to support it with one of my hand for rest of the journey. There were no other options.

Most frightening was the length of journey. I have to stand in the same position for the next five hours - till 7.20 in the morning. My last journey in General compartment was equally horrible - Palakkad to Bangalore – 7 hours standing in the night!!! At that time I was travelling with a small bag and space was available to stand, but here it was not even possible to turn my legs. We crossed Bhilai, Durg etc and finally reached came out of that furnace at Nagpur!!!

Sajeev.

For reading rest of the articles please visit,

Dakshinayana Part One – An Introduction
Dakshinayana Part Two – Bangalore to Bhopal
Dakshinayana Part Three – Sanchi
Dakshinayana Part Four – Bhopal: The city of lakes
Dakshinayana Part Five: Ujjain – The Holy City, hearing the sounds of forefathers
Dakshinayana Part Six: Indore – Trade hub of Central India
Dakshinayana Part Seven – Jabalpur: Kalchuris, Gonds and Narmada
Dakshinayana Part Eight – Kanha National Park and Mandla
Dakshinayana Part Nine – Chhattisgarh and Raipur
Dakshinayana Part Ten: Nagpur – The Orange City
Dakshinayana Part Eleven – Sevagram: Walking with Gandhi
Dakshinayana Part Twelve – Aurangabad: The City of Gates
Dakshinayana Part Thirteen – Ellora Memories
Dakshinayana Part Fourteen – U shaped Ajanta
Dakshinayana Part Fifteen – Pune: The Maratha heartland

Monday, February 25, 2013

“Tax the rich” or “Tax the people who are earning a lot but not paying any tax”, I support the second and you?

“Tax the rich”, is one of the catchphrases we are hearing regularly in these days. This is considered as most virtuous act, a finance minister can do. If targeted people support it, then they will be celebrated as an epitome of virtues; if someone opposes it, then they will be branded as morally bankrupt, selfish, enemy of general public etc. Thanks to systematic corruption, there is a general view that people who made money are not done it in an appropriate way, and rich are supposed to bequeath a part of their wealth to public.

Well, I disagree. Taxing the rich is not the solution for all of our economic problems, even though high sound bites make it more appealing. People who are generally working for government (I am talking only about salary not the sum coming through bribes) and reputed private companies are getting a salary, in which income tax is already deducted at source (TDS). This applicable for all legal transactions in stock markets, deposits in formal bank accounts etc. It’s altogether a different matter that, options are available to reduce the taxable income in the form of HRA, House loans, insurance policies etc. There are a number of people who are paying these taxes very honestly.

If government is more interested in augmenting tax rates for people - who are already paying income taxes - than enlarging the total number of people coming under tax bracket by coming down heavily on illegal transactions like havala, black markets etc, there is a good risk that people may start thinking about - why they should pay income tax? Now itself, there is a wide spread anguish among the people that, hard earned money they are paying to government in the form of income taxes are ending up in dishonest hands.

A recent Economist article says that,

“Before... reforms in 1991, taxation meant clobbering manufacturers with customs and excise duties...Farming, which employs half of all Indians, contributes only one-seventh of all GDP and is largely exempt from tax.)...

...Much of the economy remains out of sight of the taxman. A lot of the services sector is informal and cash-based. The property market is notorious for black money. Big firms in the formal economy pay a decent rate of tax, but many smaller businesses fall under the regime for personal tax, where compliance is poor. Surjit Bhalla, of Oxus Investments, reckons income-tax receipts are two-thirds below what they should be. Just 32m people, or 2.5% of Indians, pay income tax.” 

--- "A walk on the wild side - The Economist"

Do you really believe that, only 32mn Indians are qualified for paying income tax?

Government needs to come down heavily on people who are earning good amounts but not paying any tax at all; instead of forcing the people who are already paying, to pay more. Unreasonably putting more obligations on people who are properly paying tax, will be a punishment for earning more. If government really want to come up with taxes then bring in inheritance tax, where new generation will inherit huge amounts from parents without actually doing anything other than a birth by chance. But that also should be fair and just.

Remember, when you tax super rich they will bring in a super chartered account and bring down the tax through already existing loop holes to practically small amounts.

Sajeev