If Kerala has to emerge, empower Panchayat Rajs

If Kerala has to emerge, it needs to empower Panchayati Raj without spending Rs 1/- from its exchequer?

Kerala had emerged as a Trading post, 2000 years ago when Arabs, Egyptians, Mesopotamians, Chinese and many well trenched economies before Christ sent their dhows and boats to this Coast in search of various products like pepper, spices, ginger, herbs, etc paying in gold coins which has been unearthed from time to time from ancient historical ports of the past and the overstretched hinterland. Emerging Kerala inaugurated by Indian Prime Minister on 12 September was to hearld the born again covenant of kerala’s trade Past to a New Age future of industrial economic growth. It appears that the present day bureaucrats, who were in charge of a movement, forgot Kerala’s history when they planned Emerging Kerala which has already emerged, evolved and endured as a State where retail trade was their economy!

Kerala is one state where retailing thrives. There are no industries; hence, there is no industrial economy. FACT, Shipyard and Naval Base and Refineries cannot be catalogued as industrial development projects for spin-off economic growth. The infrastructure project, Cochin port which is worth the entire jewellery sold in India for a year or more as its wealth is inexhaustible, remains lusterless as Tuticorin port formed in 1985 has overtaken Cochin port by miles. We have in our possession, the Jewel in the Crown in the form of Cochin port. It is mainly a Port that caters to import rather than to export. Its marketing prowess is limited. Kerala and its hinterland is not export centric.  Has Government thought any plans to boost its revenue so that allied services and economy of service sectors will grow in leaps and bounds? We have no Plan at all to develop Cochin port. Every ambition of Sir Robert Bristow,  who is the architect of Cochin port(read Cochin Saga), has been thrown to the Vembanad waters, thereby the Queen of the Arabian Sea remains an old damsel having lost her charm The dilapidated and uncared Vathurthy and vendurthy bridges are typical examples of this neglect. The reclamation in Ernakulam which submerged lands to the extent of miles, which raked for GCDA Crores of Rupees made Arabian Sea furious and she in turn grabbed many miles of inland land from Fort Kochi to Veli and much more. Nobody has bothered about the coastal erosion which is systematically taking place submerging precious lands. Sir Robert Bristow had cautioned that any activity on the peripherals of the Cochin bay will cause tidal uprising. But who reads history when everybody wants a role in history making? And along with that the notional loss on submerged land!

Kerala is a land of literacy. It has a developmental model not created by any Economist, but emerged on its own. There was no need for any catalyst to design a model, because it was sayambu. Educational institutions and educational facilities provided in the state helped the people to be top brats who with their immaculate knowledge could be the bench mark of perfection. This attitude came up from dependence of these educated people with other people, as no opportunity is available for these great brains here. Keralian is everywhere with his superior intellect, excellent mannerisms, hard work, except in Kerala! Don’t blame Kerala or its education or its Politics for it. It is a trait, a grit that came from nothing from hard work. Treated worse than David Copperfield, these destitute need care, and protection. When no body offered, they became anti thesis of exemplary work. That agitation resulted in Attimari, Nokkukuli, etc. Kerala workers are the best, intelligent, hard working lot. They work as long as they are wanted to finish the work. They work independently. They do not need a supervisor to guide them. Their fertile imagination is better than that of his supervisor. These are hall mark of greatness. But you don’t see them, anywhere in Kerala, and on account of this, there was no economic or industrial development. The money order economy and remittance to Banks made many Managers to get elevated posts. It was not because of their ability. It was because the hard working expatriate send his money to these banks, and they transferred this sum to the neighbouring states of their bank’s branches so that those states prospered in leaps and bounds with kerala remittance money. Every application received from an entrepreneur was consigned to a closed file with the remark” technically not feasible, nor economically viable. Units of similar category have become Non performing Assets. Hence reject”. Period.

Now, with the Emerging Kerala revolution already on, industries are pouring into Kerala. It is a good sign. That a Government at least makes a symbolic gesture to publicise its strong points. THE embassies were represented by the respective Ambassadors. There emerged lot of opinions. Comments. Desires.  Some people refined their thoughts. Many decided that it was a new dawn. A new era. New Kerala emerging. Banquet of opportunities. Global connect with Kerala.

Is Emerging Kerala, a meet designed to engage in business carriage vis-à-vis entre nous? And how does B2G (Business-to-Government) terminology though euphonious fit in inter alia B2B (Business-to-Business) meet? KSIDC says it has received 140 proposals at B2G meet. Investment and starting of industries, bringing capital, introducing new technology etc cannot in any context be defined as Doing Business with Government. What Government is doing is one of its charters- ushering in industrial growth by publicizing Kerala’s assets. It is not Business to Government, as vouched by the KSIDC spokesman!

Just as they discuss any issue, the newspaper fraternity found many areas to criticize. The opposition boycotted the function. Many others who always had a dominant role in extolling the ‘doom’ theory just propelled it. There was controversy over Trade mark of the event. Plagiarism. In the summing up Press Conference, CM said one figure while Industries minister gave another figure while the Government Press note gave a third figure.

Now, there are many, who are asking this question, “Who choose the event Partners?” Day in and day out, our indigenous Chambers of commerce is breathing fire- suggesting various bits and pieces on industrialization? Why were they ignored? What is CII to Kerala? NASSCOM is a specialized body, whose services we do not require, because we have a country cousin of that organization in our own Techno Park. We are waiting for the arrival of which industries? What is our menu? We can plan for setting up of industries. But that cannot be at the cost of depriving patches of agricultural lands, as commented by one Planning Lord, because Malthusian theory will operate and is already operating in kerala.   

The Meet discusses projects having colossal costs, educational institutes of excellence, tourism, infrastructure, metro rail etc. When Vallarpadam Transshipment Container terminal is finding it difficult to put its foot properly with asking amendment to Cabbotage Law and with emerging strong competition from Colombo and Singapore, who are strongly entrenched hub Ports, would Vizhigam Transshipment Container make a viable story.? Adventure, eco, holistic sports and parks have economic sparks. But will they sparkle? Kerala’s Roads, especially Ernakulam roads, Broadway which is the narrowest way was a broad road by existing standards then. 70 feet Mahatma Gandhi road otherwise MG Road was another. When Roads with narrow footpath and crowded commercial shops dotting both the sides, where can one acquire land? It is high time, satellite towns, with all pharafernia need to be created where modern gadgets and modern hi-fi form of transportation can be developed so that it will take congestion off present day Ernakulam. Caveat that new buildings can come up only in the satellite town and counter magnet Cities adjoining Ernakulam  having the highest facilities.  Housing has come up in the most haphazard way, and has been unplanned, the causality being the civic amenities. Electricity and Water, the two essentials planning has gone awry, because of uneven growth.   Planning of industrial parks, which are neither Greenfield, nor dedicated, has created denial of the common facilities to the most of the units. KINFRA had a very queer agenda of industrial growth- its planning and location of industries needed a higher proficiency in terms of planning and locational advantages  . Setting of the First Apparel Park in Trivandrum instead of at kannur was a Himalayan blunder.

It was disclosed that in the Emerging Kerala meet projects worth 10 K Cr was mooted, Kollam 3K Cr, Trivandrum, Kasargode, Malapuram 2 K Cr and Kozhikode 1 K Crwhile Alapuzha 0.5K Cr), Kottayam (0.12 K Cr), Wayanad(0.15 K Cr), Kannur 0.03 K Cr), while Thrissur, Palakkad, Idukki, Pathanamthitta meager offering. Government talks in terms of Kochi-Palakkad corridor when enough interest has not been shown by the investors in a congruous manner. If this promised investment pours in, it is most welcome as it will re-draw Kerala’s industrial landscape.

Kerala’s industrial Policy is staid. It has a discontinuous programme which does not take off from one Policy to the next because of distortion, inequality and proper allocation.  Kerala does not have an Export Policy, even though from time of history, Kerala was a mercantile trade spot. The sea trade brought Kerala Gold, and almost all powers of the trading world then had succeeded in developing ties with Kerala. It was a harmonious relationship lasting at least 2500 years. Spices, black pepper, cinnamon, ivory, were all Kerala’s Unique selling Preposiition. The New Age brought afresh wave of European traders for spices, cashew, marine products, coir,   coconuts, tea, coffee, etc. Today, a bunch of Commodity Boards, wayward and isolated as they are, have been able to notch up little improvement in trade, commerce, export without the support of the Kerala Government which has no proficiency in exports. There was a body called KERAXIL. It got the boot.  KINFRA is supposed to be the nodal agency for ASIDE Scheme, and ask them their contribution to exports?  . The Policy makers have not fulfilled the aspirations of the Policy seekers by going for export options of the existing products and going in for new products. Creating the right infrastructure, right climate with expedious clearance.

In today’s situation of the manufacture of motor car industry, automobile spareparts industry is growing at around 40%. Replacement Parts market manufacture can be ideal for Kerala. Textiles with a rough Rs 12,000 cr retail, is there not scope for lady tailor’s co-operatives.  In Kerala, one does not even manufacture a hand kerchief, Tie, blouse piece on a mass level.

Then needless to say, we do not grab the chances that our neighbour states do to attract funds. Let us experiment with each district or Parliamentary constituency taking it as one unit.   We have a Member of Parliament. He has a fund to develop his constituency on an annual basis. There are MLAs representing the different bifurcated Constituencies under Parliamentary constituencies. They have been granted funds for development. Let them group as one unit, with District Collector as Convenor and Panchayat President as Joint Convenor. Let this body forget Politics in this body. Decide on the Sector Plans of the Constituency. Alleppey has coir industry; Kannur has Handloom industry; Aroor has fisheries industry; Kollam has Cashew industry; Idukki has tea estates; spices are pre-dominent in Wayanad, Rubber is the forerunner in Kottayam, etc. The MPs and MLAs will ear-mark a percentage of their development quota as allotment to this corpus.   With a well written Scheme after discussing with the stake-holders, go to Delhi and apply for Rs 50 Cr Industrial Infrastructure Up gradation Scheme of the Commerce & Industry ministry, Department of Industry. Micro Small and Medium Enterprises has a Scheme known as MSE-Cluster Development programme with Rs 10 Cr as outlay; Ministry of Rural development has also a scheme known as Swarna Jayanthi Grameen Rozgar Yojana (for Rural development). If we plan and design 6 projects under various Schemes, a corpus of Rs 100 Cr will be available, with the state Government investing nothing. No allotment is required for the Panchayat from the state budget. Panchayat need not even such from revenue avenues for doing these projects. Even Waste disposal project can be undertaken. Six projects worth Rs 100 Cr in a constituency, 20 constituencies can project 20x6= 120 projects; 20x100= 2000 Cr (over a dozen year period), employment, each project 100 direct, 100 in-direct. 24,000 direct/indirect employments.  Why not we start. Somewhere, something has to begin. We have Rajya Sabha MPs as well including its Dy Chairman and No 2 in the Indian Cabinet from Kerala. They can make Kerala’s dream to emerge in an industrial Kerala. (Kerala’s Panchayathiraj Plan)

If we have to emerge, we have to Endeavour, empower, and evolve. Only then, we can merge the present Kerala with a new Kerala and emerge as a Land of new opportunity. Kerala is on the move.

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Fooling all the people all the time

Could Government have avoided charging an extra bite of Rs 5/- per litre per diesel? Every additional Rs 5/- that is priced, Rs 1.50 goes to the Government and Rs 3.50 to the oil company which suffers loss during under recoveries and need to be compensated by Government. This levy will compensate the oil companies for the loss incurred by them in the under recoveries and Government gains Rs. 1,400 Cr. Fine, let us move on.

If we need our economy to be bright, we need capital to flow. Only investment will raise capital. For that foreign flow is a must. FDI in Retail will result in infusion of capital. This will help in more money flow by way of circulation. When money circulates, there is business. And this business will create growth. Growth will cause a higher GDP. Can’t we not invite Foreign Direct Investment, with riders? Asks the Government.

Country cannot afford RBI easing interest rates. All its efforts to tame inflation failed. Inflation is still a matter of great concern. Rupee depreciation is holding up the benefit of our trade balance. This in effect causes tight monetary effect on the country’s economy. Bank is not having enough funds for Credits. We need to bring in reforms. We cannot remain in the paralysis mode all the time. Opposition does not allow the government to perform. They do not give space to government to run Parliament. Second generation reforms cannot be introduced. Prime minister according to them is the villain. But the prime minister says, he is the victim. If subsidy is given priority in a empty balance sheet, deficit which was budgeted at 4.6% rose to 5.9%. Inflation continues to peak at 9%. No body wants sacrifice. Will anybody agree to decrease their salary? Even members of Parliament who get allowances? When production is low, how will the Index of Industrial production performance grow up?  If every state agrees to decrease their Tax on Petrol, Diesel etc, the prices will naturally slip. How many of the opposition ruled states willing to do it? Forsake revenue for the welfare of the people? Economic growth which grew to 9% slipped to 6.5%. How can we revive? If each step Government takes, you oppose, even a small step like that of Armstrong when he put one foot on the moon will make you fall from the moon, forget gravity!  We had a bilateral trade of $ 750 billion during 2011-12. Did you appreciate?

These Oil companies, are they not greedy? Do they not hide many things from us? Let us look at the truth.

Indian Oil Corporation is holding its 53^rd Annual General Meeting. Let us cast our eyes to the Balance Sheet of the Corporation. They registered a turnover of Rs 40,957 Cr. They had the highest ever crude throughput @ 55.62 million metric tones surpassing the record of 52.96 mmt recorded in 2010-11. Distillate yield touched a record level of 77.8% and the refineries achieved the lowest MBN (indicating the combined energy utilization factor). Capacity utilization, one of the benchmarks of refinery performance was over 100% for the 5^th consecutive Year. The operational performance was a Record!!!

Let us continue to look at the profit figures after tax. Profit after tax was pegged at Rs 3,955 Cr. With this huge profit, the Company Board has recommended a liberal 50% dividend coughing off a dividend of Rs 1,214 Cr during 2011-12 fiscal.

Hold your breadth. Last year, the dividend declared was Rs 9.50 per equity share of Rs 10/-. Forget the net capitation value of shares if even 55 is transferred. Cumulative dividend of Rs 20,882 Cr have been paid by the Indian oil Corporation even though the weeping Mr R S Butola, Chairman, IoC was repeatedly weeping about the so-called under recoveries.

Wait a minute. The profit after tax declared by the Company of Rs 3,955 Cr is only one side of the coin.  What has not been said by the company, but written in small point is, Rs 8,156.56 cr being the provision for payment of Entry Tax imposed by the Government of Uttar Pradesh on crude oil received at Mathura Refinery was decreased from the profit of Rs 12,111.56 Cr. That was provisioned, hence the profit is shown as Rs 3,955 Cr. The IoC went to Supreme Court and got a stay. Why do not the parties move the Court for early hearing so that the case could be disposed off.

Now, let us move to the under recoveries. Under recoveries sale of HSD, SKO (PDS), LPG (dom) in 2011-12 are compensated by Government. What the oil companies pay is the interest on working capital expenses involved for borrowing money till the compensation is received by the Government. Barring a) entry tax by UP and b) interest burden, the Report of the Board of Directors of Indian Oil Corporation says that the financial balance sheet is fine!

Another aspect of the Balance sheet. 1473 MMT petrochemical products grew by 62% Y-o-Y. Polymers and PTA were exported to the tune of 76,000 m tones.

The problem highlighted by the Company in the Balance sheet refers to high reliance on borrowings leads to high costs in the form of raising financial costs. The company instead of recycling its money through prudential norms expects 100% compensation from the Government.

Now let us ask our Dy Chairman of the planning Commission, one question: Sir, the profits of the Company, as indicated by the Balance sheet does not reflect the fact that Government’s compensation to cover the entire under recoveries is factored in it. Without factoring this, the profit has come. Add the with held profit amount due to positioning, it is Rs 12,111.56 Cr. Why do you fleet people of Rs 2 and Rs 5 when the management of the IOC with little more adroit skill can manage their finances without any government funding? IOC should be treated as a Public Limited Company. Why is the Government talking the divided from the company? Let it be made a corpus.

When people in the Government do not exercise due diligence, then errors in fiscal policy would cause an economic upheaval, as is happening in India, today. It I not enough we have Economists; we also need Accountants who will point at accounting cover ups. The Comptroller and Auditor General of India. Politicians should remember not to take Coal to Newcastle. Did I say Coal? That includes Coal from Indian mines as well!