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Rahul must move away from his mother’s populism

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Job creation, revamping of the education system and making India the global hub of health care are the three goals which Rahul Gandhi has set for a “new, shining” Congress, as he told a convention of NRIs in Bahrain recently.

Since there’s many a slip between the cup and the lip, it is too early to say whether his hope of being in a position to fulfil these promises will come true. But as far as the Congress is concerned, the objectives which he underlined denote a shift from the party’s earlier policies which can be said to have led to its downfall in 2014.

The leitmotiv of those policies, which were the handiwork of the Left-leaning National Advisory Council (NAC) headed by then Congress President Sonia Gandhi, was populism, which cared little for either fiscal discipline or for being in tune with the economic reforms introduced in 1991 and continued by Manmohan Singh from 2004.

Nothing exemplified the absence of monetary restraint more than Sonia Gandhi’s pet project of food security, which aimed at providing subsidised food to an estimated 67 per cent of the population at an annual cost of Rs 1.25 lakh crore. There were other such profligate initiatives as well, including the rural employment programme, which were ostensibly targeted at the poor.

But they didn’t help the party. Instead, the voters turned from the lure of doles and freebies to the prospect of employment promised by Narendra Modi. The age of subsidies provided by a paternalistic, mai-baap ki sarkar was over.

If Rahul Gandhi has understood this, it is all to the good. What his emphasis on job creation, etc., shows is a welcome change of focus from his mother’s socialistic approach (which she appears to have learnt from Indira Gandhi) to an encouragement of free enterprise, which will boost growth, which was a dirty word for the NAC’s Aruna Roy who lamented Manmohan Singh’s preoccupation with economic development rather than with welfare measures.

It was the objection of crypto-communists like her which made the government of the time take its “foot off the accelerator of reforms”, as former Finance Minister P. Chidambaram subsequently regretted. The Congress is now paying the political cost of that mistake.

Rahul Gandhi’s task, therefore, is to undo that lapse of judgement. But it will not be easy because his mother is not the only “socialist” in the party. The Congress has always been uneasy about the economic reforms as it believed that they benefited only the capitalists. Rahul’s “suit-boot ki sarkar” jibe against the Modi government is a reflection of that mindset.

Yet, if he is interested in reducing unemployment, there is no option for him but to enlist the support of the suited and booted private sector in order to increase its share of investment. He will also have to encourage foreign investment. As of now, the Congress chief has not been too forthcoming with his economic views, concerned as he is with countering the Bharatiya Janata Party’s (BJP) propaganda against his dynastic lineage and his party’s supposedly pro-Muslim inclinations.

One reason why he may not have articulated his economic thinking with greater clarity is probably that the Congress will then have to come out virtually endorsing the BJP’s pro-market line with an emphasis on industrial and infrastructural development.

Indeed, there is nowadays little difference in the outlook of the various parties on this score with the earlier focus on a controlled economy with the public sector being perched on the “commanding heights”, to use Indira Gandhi’s phrase, being replaced by a preference for an open market with the private sector playing a leading role.

From whatever little that Rahul has said so far on the economy, he seems to prefer small and medium industries rather than large ones, apparently because the former can generate more employment than the large, automated factories with their component of robots.

But as long as he steers the Congress away from its 1955 goal of ushering in a “socialistic pattern” of society, he will be a true inheritor of Jawaharlal Nehru’s vision of an advanced country where dams — standing for industries — will be seen as the “temples of a new India”.

For Nehru’s great grandson, the coming months will provide an opportunity to eradicate the party’s two major mistakes which enabled the BJP to move from the margins of politics to centre-stage. These were, first, the Shah Bano episode in the mid-1980s which tended to substantiate the BJP’s charge of Muslim appeasement against the Congress; and, secondly, the stalling of economic reforms in the last two years of the Manmohan Singh government which boosted Modi’s prospects in 2014.

Even as Rahul’s temple visits aim at robbing the BJP of its monopolistic claims on Hinduism, he will also have to pick up the pieces which the Congress foolishly let fall from its hands at a time when poverty was being reduced at the fastest-ever rate, as between 2005-06 and 2011-12, by reaffirming the party’s commitment to economic reforms.

(Amulya Ganguli is a political analyst. The views expressed are personal. He can be reached at [email protected])

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Who is Murari Lal Jalan, the ‘mysterious’ buyer of Jet Airways?

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Jet Airways

New Delhi: The consortium of Kalrock Capital and Murari Lal Jalan won the bid to revive Jet Airways but not much is known about how Jalan made his riches and how he plans to revive the airline.

According to a report in Marketfeed: “According to many in the business world, Murari Lal Jalan is a very mysterious man. There is not much information about how he was able to create all his wealth.”

“He has always kept a very low profile, and is not popular among the business communities in India or abroad. Totally inexperienced in the field, he has confused a lot of people as to how he was able to enter into the airline industry,” it said.

In the 1980s, Jalan started working at his family’s paper trading business in Kolkata. He also worked as a trader for JK Paper and Ballarpur Industries, which were once big paper manufacturing companies.

In 2003, he wanted to expand his paper business, and acquired Kolkata-based Kanoi Paper and Industries. He renamed it Agio Paper, and it currently has a manufacturing facility in Bilaspur (Chattisgarh).

However, in 2010, the paper company faced a lawsuit from government agencies, for pollution-related issues, and its production activities have been suspended since then, as per the report. “So almost his whole career, his focus was on the paper industry and even that did not end well either,” it said.

Jalan then began plans to enter the real estate and healthcare sector.

“In 2015, he approached Dr. Naresh Trehan and Associates Health Services. He went on to acquire a stake in the company for Rs 75 crore, through a secondary share sale transaction. A secondary sale means that Jalan bought-out the shares from an existing stockholder. Around the same time as the acquisition, Dr. Trehan’s Medanta Hospital had plans to establish a hospital in Dubai, with the help of Jalan. Unfortunately, this plan was not implemented,” Marketfeed reported.

Once Jalan moved his base to the UAE, he quickly expanded to sectors such as real estate, mining, fast-moving consumer goods, and construction. He was chairman of the Agio Image group, which sold and distributed photographic and consumer products of well-known companies such as Sony, Panasonic, and Konica.

He also established a real estate development company, MJ Developers. The firm has its headquarters in Dubai, but its main businesses span over countries such as Russia, Brazil, and India. MJ Developers is currently engaged in developing residential and commercial properties in Uzbekistan.

Jalan had partnered with his own family relatives to set up Patanjali India Distribution Ltd. The report says that documents from the Ministry of Corporate Affairs state that this company would be involved in trading, export, distribution, and marketing of milk products and health foods. The list of products also included herbal medicines and ayurvedic cosmetic items.

“Regardless of these claims, the company never opened, and the founders never looked back on it. We do know that Patanjali Ayurved is owned by the yoga guru, Baba Ramdev. However, it is not clear whether the two companies are linked in some way,” the report said.

Some may question as to why there was a sudden need for Jalan to enter into the airline field. Many have suspicions whether this deal would really help the airline to bring back its former glory, the report said.

Jalan, however, said: “Jet Airways is a renowned Indian aviation company with a strong legacy. The aviation sector underwent substantial correction on account of Covid-19 and created an opportune time to enter the sector. Our vision for Jet Airways is to operate the carrier as a full-service airline, both domestic and international.”

But, as per the report: “The point to be noted here is that Jalan has no expertise in this particular sector. However, the management team of Kalrock does have the essential experience from cargo and logistics management through past deals.”

“But now, a major doubt remains to be answered – how was Jalan able to create all this wealth and expand his business to such a large magnitude? We have seen that his initial business in the paper manufacturing industry had failed. Also, when Jalan moved to the UAE, he was not able to contribute effectively towards the implementation of projects in the healthcare sector. He created a company in India that was never launched. Moreover, the fact that most business people don’t know about him, makes everything all the more suspicious. All these facts make us feel very unsure and doubtful about his new deal with Jet Airways,” it said.

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Will work with JPC to set record straight on data privacy: Amazon

Google and Paytm too have been asked to appear before the committee on October 29.

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Jeff Bezos Amazon CEO

New Delhi: Amazon, which has refused to appear before a joint parliamentary committee (JPC) next week, said on Friday that its position on the Personal Data Protection Bill 2019 has been “misconstrued” and the e-commerce giant would work with “the JPC to set the record straight”.

The online retail giant is scheduled to appear before the committee on October 28.

In a statement shared with IANS, an Amazon spokesperson said that they have the utmost respect and regard for the important work being done by the JPC on the PDP Bill.

“We have already offered our written submissions for consideration of this august committee. We will continue to engage in any way the JPC considers fit,” the spokesperson said.

“The inability of our experts to travel from overseas due to travel restrictions and depose before the JPC during the ongoing pandemic may have been misconstrued and led to a misunderstanding,” the spokesperson added.

Sources suggest that the committee, which has 20 members from the Lok Sabha and 10 from the Rajya Sabha, is of the unanimous opinion that if Amazon representatives indeed fail to show up on October 28, “appropriate actions” can be initiated against the US business giant.

However, there is no clarity so far, as far as the nature of “appropriate actions” is concerned.

Apart from Amazon, companies such as Twitter and Facebook have also been summoned.

Google and Paytm too have been asked to appear before the committee on October 29.

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Urgent need to rationalise weights under retail inflation: Report

“Clearly, the inflation numbers based on a broken CPI methodology hides more things than it reveals and RBI will be constrained in its policy decisions, an irony in itself!”

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Inflation

New Delhi, Oct 23 : There is an urgent need to rationalise the weights under retail inflation, a SBI Ecowrap report said on Friday.

According to the report, inflation numbers based on a broken CPI methodology hides more things than it reveals.

Consequently, the headline inflation constrains the RBI in its policy decisions.

“With the recent changes in CPI (IW), we again raise questions on the validity of continuing with existing weights in Headline CPI,” the report said.

The weighting pattern of food items in CPI, at 45.86 per cent, is based on 2011-12 Consumer Expenditure Survey (CES).

This is significantly different from the share of food and beverages (30 per cent) in the ‘Private Final Consumption Expenditure’ published by the National Account Statistics (NAS).

“Against such a backdrop, we again reiterate there is urgent need to rationalise the weights under CPI,” the report said.

“If we provisionally calculate the new CPI by looking at revised weights of CPI (IW) with 2016 as the base and logically assuming the same trend in CPI, we find that the weights of food in CPI could decline by at least as much as 6 per cent, thus shaving of 50 basis points from current headline CPI at 7.34 per cent.”

Such rebasing of CPI, the report pointed out, also finds mention in MPC minutes.

“However, the weights of services could jump by at least 7 per cent through the postulated increase in service consumption pushing up the weighted contribution of miscellaneous inflation by 42 basis points,” the Ecowrap said.

“Thus, the overall impact will depend on the strength of food and services, though the bottomline is the revised hypothetical CPI is more representative of demand pressures as weights of services and food could be almost in equal proportion.”

However, the report cited that CPI is drawn from “CES and such survey is still pending since 2017”.

“Adding to woes, the Oct’ 20 CPI inflation will be more than 7 per cent due to unexpected rains in major part of the country,” it said.

“Clearly, the inflation numbers based on a broken CPI methodology hides more things than it reveals and RBI will be constrained in its policy decisions, an irony in itself!”

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