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Farmers’ struggle forced Centre to hike MSP: Yogendra Yadav

“It is not the price promised by PM Modi in hundreds of election meetings and contained in the 2014 election manifesto of Bharatiya Janata Party (BJP).”

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Yogendra Yadav

New Delhi, July 4 : Swaraj India leader Yogendra Yadav on Wednesday said that a “historic struggle” by the farmers “forced” the government to hike Minimum Support Price (MSP) for Kharif crops, though it is “not the price” what Prime Minister Narendra Modi had promised before 2014 Lok sabha elections.

“The MSP announcements of Kharif 2018-19 is a small victory for farmers. In this election year, the Modi Government has been forced to partially act, at least on paper, on the promise of remunerative MSP that it had made before the previous election,” Yadav said in a statement.

Finding flaws with the MSP announcement, he said that the announced MSP has not been “computed at 50 per cent above comprehensive cost (C2) being demanded by farmers’ organisations.

“It is not the price promised by PM Modi in hundreds of election meetings and contained in the 2014 election manifesto of Bharatiya Janata Party (BJP).”

He also raised concern over implementation of the decision, saying: “It is not an immediate relief to farmers, it is merely a promise, the fulfilment of which depends on government procurement and intensive support, something that has been lacking till now.”

Stressing to make MSP as a legal right, he said that unless MSP is prepared as a legal right, for enforcement, it remains “discretionary” and farmers will be left at the “mercy” of the next government.

Drawing a comparison between the UPA II and NDA governments, Avik Saha, National Convenor of Jai Kisan Andolan, in a statement said: “There is nothing historic or substantial about the MSP hike – it is in fact lower than the hikes given by UPA II government, in respect of almost all crops. For paddy, while the average hike provided by the UPA II was 69 per cent, the Modi government’s hike is only 41 per cent.”

Business

Chidambaram slams government over ‘economic mismanagement’

“After 5-month-high inflation and 7-month-low industrial growth comes the news of soaring trade deficit.”

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New Delhi, July 14 : Senior Congress leader P. Chidambaram on Friday slammed the government over its poor management of economy, saying inflation is at five-month high, industrial growth at five-month low and the trade deficit has soared.

Chidambaram, a former Finance Minister, said in tweets that exports were lower in June compared to May and the imports higher.

He said despite the higher trade deficit, the government would continue to say that all is well.

“After 5-month-high inflation and 7-month-low industrial growth comes the news of soaring trade deficit.”

“June exports lower than May. June imports higher than May. June trade deficit higher by $2 billion. But the government will say all is well,” he said.

Chidambaram said the Congress leaders had estimated that demonetisation would lead to a cut in growth rate by 1.5 per cent and the outgoing Chief Economic Advisor Arvind Subramanian has said that purging high currency notes in November 2016 led to a definite slowing down of economy.

The official data showed on Thursday that retail inflation in India touched the 5 per cent-mark in June, compared to 4.87 per cent in May, even as industrial output in May grew at 3.2 per cent compared to the same month last year but declined as compared to rise of 4.9 per cent in April mainly on account of a decline in manufacturing.

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India

Online hiring for government jobs fell 20% in June: Report

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New Delhi, July 5: Online recruitment activity for government services, including public sector enterprises and defence sector, declined by 20 per cent in June on a year-on-year basis, a monster.com report said here on Thursday.

Overall online recruitment in June 2018 fell by three per cent on a year-on-year basis and eight per cent compared with May 2018, the Monster Employment Index for June 2018 said.

“Printing and packaging sector witnessed the steepest decline — 27 per cent year-on-year basis and 15 per cent month-on-month basis,” the report said.

In the agriculture-based industries, online hiring declined by 19 per cent in June 2018, compared with June 2017.

However, the production and manufacturing segment registered a 49 per cent rise in online recruitment. Home appliances segment registered a 27 per cent fall.

“Production and manufacturing (up 49 per cent) led all monitored industry sectors by the way of long-term growth for the third month in succession,” the report said.

IANS

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Analysis

A view through an infrastructure investor’s prism

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

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investment returns

Perspectives on infrastructure assets vary widely: While investors focus on investment returns, policymakers analyse both financial and socio-economic benefits. It would be worthwhile for policymakers to view things through an investor’s investment prism because an understanding of the critical factors that shape investment decisions will help frame better policies to expedite Indian infrastructure creation.

The “raw value” of an infrastructure project is what a potential investor evaluates first. For example, in a renewable energy wind project, the wind potential of a site is what an investor evaluates. For a transportation project, the investor evaluates the potential passenger traffic. This so-called “raw value” is a huge determinant of the financial viability of a project.

Segregating infrastructure sectors and projects by such “raw value” can help government and industry alike to work towards directing infrastructure capital more optimally. Additionally, such analysis helps in framing policies for those sectors that deliver very substantial social and economic value but are not financially viable on their own.

A robust framework that helps determine “raw value” can aid all the stakeholders, especially the government, to work with investors and multilateral trade agencies to find financing solutions for such socially and economically relevant projects. Eventually, India needs to create an information repository of sorts that provides the global investor base information and access by asset type and investment potential.

Once the “raw value” of a project is determined, an investor tries to gauge what is called its “scarcity value”. Take, for instance, transportation projects. If the transportation potential of connecting City “A” with City “B” is attractive, then is building an airport to connect the two cities the most optimal infrastructure asset? That is, in spite of the traffic potential, is an airport a “scarce” enough asset to deliver attractive returns?

The investor will gauge whether the airport is likely to face competition from a competing train network or a highway. Being cognizant of the long-dated nature of infrastructure assets is important. Hence investors will have to gauge the “scarcity value” of the asset to determine the attractiveness of the asset over the long investment horizon and, therefore, eventually decide on their willingness to invest in the asset.

It is essential for the government to find a balance between allowing investors to make returns commensurate with the risk taken and allowing the public to have access to a well-priced and high-quality infrastructure asset. The twin objectives of consistency and transparency in policy are crucial in this regard.

The government’s ability to formulate and communicate the strategy effectively regarding not just sectors but individual assets is vital. To indeed expedite infrastructure creation, granular policy across industries will be needed, more so for much-needed greenfield infrastructure projects.

Apart from “raw value” and “scarcity value”, an investor considers a third factor: The quality of the underlying contracts signed for the asset. Investors look for high-quality counter-parties with whom to sign contracts. More importantly, the government’s ability to deliver a robust legal system for contract-enforcement, as also a more efficient system for conflict-resolution, will attract more significant investments.

Lowering the risk perception for Indian infrastructure assets is essential not merely to attract more investments but also to attract investments at lower financing costs. Reducing the cost of capital is going to be a significant driver of infrastructure projects through their improved financial viability.

Another area that merits attention is the possibility of the government working even more closely with Export Credit Agencies of various countries to offer foreign exchange hedges, while “importing infrastructure investments”. Solutions that not only reduce the legal risk in investments but also partially eliminate the foreign exchange risk can help boost investments significantly.

Active policies to address the three issues revolving around the value, scarcity and contract enforcement that investors utilise to determine both investments and the required rate of return can help make policies useful.

Policy frameworks can potentially be refined using these three key factors that shape investment decisions. Most importantly, one does not need to improve concurrently on all three fronts for all infrastructure sectors; incremental improvement on one element can provide a significant fillip to infrastructure investments.

(Taponeel Mukherjee heads Development Tracks, an infrastructure advisory firm. Views expressed are personal. He can contacted at [email protected] or @Taponeel on Twitter)

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