August 14, 2013

State of the Indian economy

Transcript | Speech in Parliament on the state of the Indian economy | August 13, 2013

Sir, one year - they say - is a long time in politics. Or eleven months is a long time in politics, but we, Sir, from the Trinamool Congress were actually walking the talk, and making our actions speak louder than
our words, because eleven months ago, we walked out of this government and left the Congress to run a minority led UPA. And it is interesting that with this subject today, we are discussing the state of the economy, because when we left the government eleven months ago, we also had some very serious issues on the state of the economy. The core issue was the price rise, especially - we will come to that later, but there were also issues of fertilizer hike, there were issues of LPG cap, petrol and diesel.

Sir, but it pains me, that even after eleven months, even after we moved out, and now more people believe what we said eleven months ago, the Congress party is still living in denial.

Sir, internationally, The Economist has an index which they call the Big Mac Index. The Big Mac Index, Sir, is an index which gives you purchasing power parity when you look at the price of a hot dog or a hamburger in different countries of the world, you get to know what the local currency is in response to the dollar.

Forget about the Big Mac Index. In India, our belief is, there is an even more important index which is called the API – which is the Aloo Pyaaz Index. This Aloo Pyaaz Index is something which this government has never understood one year ago; they do not even understand it today, Sir. The Aloo Pyaaz Index is basically price rise in agri-commodities.

Sir, two clear views here, Sir. One is, we believe, there has been a total negligence on capacity expansion; and the second one – a total lack of increased production.

Sir, for onions specifically, we understand and we appreciate that rainfall could be one of the reasons. But the second one – and the more important one, is the lack of logistics, and not anticipating the problem before it comes.

Now in case we mention something like this, the excuse is always that ‘you know, the opposition parties --- they didn’t allow Walmart…’ – we are looking for good governance. We are not looking to outsource our problems to Walmart, Sir. When it comes to anticipation, let me give you a small example of my own state.

In Bengal, in June 2012 – knowing something like this could happen, a task force was set up by the Chief Minister of West Bengal, headed by the Secretary, Agriculture, and it had people from agri, horti, vendors, retailers, together, and that is why today, Sir, in Bengal, there are still ten markets with mobile vans – where onions are available for Rs 35 to 45 today. There were still fruit markets in Bengal during Ramadan – through these same mobile vans, where fruits were available at decent prices. I am not saying that is the only solution, but the point I am trying to make is that there was some anticipation before the problem arose.

Sir, the Prime Minister keeps talking about a global economy. I am actually beginning to believe him now, because nowadays, even in the price of onions, we are paying global prices. We are paying $1.50 cents for a kg of onions. Sir, the Congress party proved again today – the erudite speaker Mr. Mani Shankar Aiyar obviously is still in denial, because he selectively quoted the growth rates of the US, and said the US is 1.4, the UK is 1.2, so we are doing very well – we are doing 4.7. But, Sir, two points here. One is, what is the base, on what base are we talking about – that these economies are growing at 1.2 and 1.4; and the second point here, Sir, is look at Indonesia – 6%. Look at Philippines. Look at Sri Lanka. Look at Vietnam.

Now the Congress party decides to keep quoting selective figures then, Sir, it really is a problem. The Finance Minister is here, and I have some pointed questions, which I hope he will address in his reply.

Sir, the LPG cap – that is one of the issues (the Trinamool Congress gave up one cabinet minister, six ministers of state). Sir, how much have you saved in terms of real rupees from the time of this LPG cap you have fixed at 12 and now 9? Sir, how much have you done for fertilizer prices, where fertiliser prices – the world knows, the biggest scam is gold plating, and now instead of being self-sufficient we are still having to pay for imported fertilizers. So my specific question is what steps have you taken in the last one year for gold plating of fertilizers?

The previous speaker spoke about gas prices, and I want to take that one further. Gas prices are going up – substantially, but what is the magic date, Sir? Please enlighten us - about April 1, 2014. Why not October? Why not November? Some people would believe that by April 1, 2014 you would not only have played  a cruel joke on the nation, but you may not also be in government – but that is another story, Sir. That is on the fertilizer prices.

Sir, I would like to take a minute to share four figures to tell you how my own state is doing. For GDP - National Average 4.96 – just four figures. Last year – National Average 4.86, Bengal 7.6. Industry growth – National Average 3.12, Bengal 6.24. Agriculture – National Average 1.79, Bengal 2.56. And the most significant one - and that is why the economies like the Philippines are growing so much, for Services – National Average 6.5, Bengal 9.48.

Sir, I want to go back to the story of the onion, because there is a lot of pride with the phrase the aam aadmi – I am quite sure that I know who the aam aadmi is, but there is a sense, and there is a belief that the Congress also knows who the aam aadmi is, but that aam admi is in the grocery shop of Khan Market. Otherwise we would not have had these figures of Re 1 to Rs 100 - you can get a meal in some state, depending upon your state of your mind, or Rs 12 rupees in Bombay, or Rs 18 somewhere else, Sir.

Sir, the Egyptians worshipped this something because it had concentric circles, Sir. The Greeks - athletes took this to eat, because they thought they would perform better. The Roman gladiators rubbed the juice from it on their muscles – Sir, I am talking about the onion. But, for the Indian housewife, it does nothing of this Sir, it only brings tears to her eyes. I want to finish, Sir, now by going back to my story about the API - which is the Aloo Pyaaz Index.

Sir, in 1998 (and before that in 1980) this Aloo Pyaaz Index benefitted the Congress Party, gave them Delhi, Rajasthan and Madhya Pradesh. I am not an astrologer, Sir, but the people of this country - who have been cursed by this shameless minority government insisting on staying on even when they are not wanted - by 2014 or before that, Sir, on this same Aloo Pyaaz Index will send the Congress where they duly belong.

Thank you, Sir.

August 05, 2013

Business meet was momentous

What was the implication of chief minister Mamata Banerjee's meeting with business leaders in Mumbai this past week?

Apart from being the most successful interaction between a chief minister from Kolkata and a top-flight representation of corporate India in living memory, what did it suggest?

As somebody who has watched and worked with Mamatadi for over a decade now, the event was momentous. It marked the inauguration of phase two of her public career and commitment to West Bengal.

Phase one had begun on January 1, 1998, when Mamatadi founded the Trinamool Congress.
History was not on her side. Her viability as an independent politician as well as her ability to unseat the CPI(M) were mocked.

Twice previously, Congress politicians from West Bengal had broken away.
Ajoy Mukherjee did it in the 1960s and became a short-lived chief minister but then went into oblivion.
Pranab Mukherjee founded a regional party in the 1980s. It contested all 294 assembly seats but won zero. Soon afterwards, Mukherjee returned to his parent party.

Congress rebels elsewhere had mixed success.
In 1996, G K Moopanar and P Chidambaram founded the Tamil Maanila Congress but were back in the Congress in a few years.
Sharad Pawar's NCP has sustained itself for 15 years but still has to share power in Maharashtra.

Mamatadi has outdone all of them.
She triumphed in the 2009 Lok Sabha election and, two years later, won an absolute majority in the state assembly.
From September 2012 she has ruled West Bengal on her own, unencumbered by the Congress alliance.
On July 29, 2013, she took her 40-year struggle to a closure by sweeping the panchayat elections and establishing Trinamool's grip in rural Bengal.

No breakaway leader from the Congress has achieved so much in eastern India since Biju Patnaik.


From political activism, Mamatadi has subtly shifted gears to governance and economic development.

A telling example of this was her visit to Mumbai.
Hitherto the business capital of India had been a transit point; for the first time, it became a destination. Business leaders seemed to recognise this. Trinamool's repeated electoral successes had established it as unchallenged in West Bengal, helming a stable government.

Mamatadi herself was seen as a transparent and well-meaning problem-solver, heading a flat structure in government and willing to help.

It caused Chanda Kochhar, chief of ICICI Bank, to say, "We have seen your passion on television; today we felt it in person."
Mukesh Ambani of Reliance Industries is rolling out his 4G telecom venture in West Bengal ahead of most of the rest of India. As he put it in Mumbai, "Forty-eight hours after a big election victory you are here in the business capital. That means you mean business."

This prompted ITC's Yogi Deveshwar, a fellow Calcuttan whose stake in West Bengal's economic revival is second to none, to quip: "Chief Minister, you have won the day... Mukesh has committed, so now many more will follow."

ITC has invested Rs 3,000 crore in a food processing facility in Uluberia.
This project was stuck for 10 years because of land issues.
Mamatadi called for the papers and said, "Let's sort it out."
Without fanfare, she cut the red tape and released the 26 acres to ITC.


West Bengal's economy is looking up. Statistics bear this out.
The state GDP grew 7.6 per cent in 2012-13, as opposed to the national figure of 4.96 per cent.
Growth in industry, agriculture and services all outpaced national growth rates.
According to the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, between January and July 2013, West Bengal attracted investment worth Rs 1,331 crore.
Investment for the entire year was Rs 632 crore in 2009, Rs 1,163 crore in 2010, Rs 325 crore in 2011 and Rs 962 crore in 2012.

There are still five months to go in 2013. Forty-one investment proposals worth Rs 1,744 crore are pending. This year will break records.

So much is happening:

  • The Sajjan Jindal Group's steel plant - even though confused policies by the central government have caused an iron ore shortage
  • Anil Ambani's Rs 600 crore cement venture in Raghunathpur (Purulia)
  • The JV between Singapore's Changi Airport and Bengal Aerotropolis for a new airport in Andal (near Durgapur) is to get its final clearances in a few weeks

The big story in the coming months will be the disinvestment in Haldia Petrochemicals.
Six bidders - three from the public sector and three from the private sector - are participating in an auction conducted by Deloitte.

It is a thoroughly professional arrangement. The politicians are not interfering. The chief minister is not showing undue interest. There is not even a hint of cronyism.

This is what business wants. This is what business is getting in West Bengal. This is what business is coming to appreciate about the Trinamool government.

The reception Mamatadi got in Mumbai was evidence.