The second generation of reforms, according to experts, would require further freeing of sectors like insurance, banking and retail, strengthening of infrastructure, streamlining of the legal system, removal of corruption, improvement of the public delivery system and creation of credible social infrastructure
New Delhi: India's economic liberalisation initiated by the then finance minister and present prime minister Manmohan Singh 20 years ago has come full circle and the time has come to launch the second phase of the programme so that benefits could also reach the common man, reports PTI.
"We have to do more. Now is the time to give the economic reforms one more push so that the poor people of the country can benefit even more," said Ficci secretary general Rajiv Kumar in his comments on the completion of two decades of the launch of the economic liberalisation programme.
Expressing similar opinion, CII director general Chandrajeet Banerjee said, "The time has come for the next level of economic reforms. We would like to see much more happening in sectors like education, agriculture, health care and in adoption of modern technology."
The second generation of reforms, according to experts, would require further freeing of sectors like insurance, banking and retail, strengthening of infrastructure, streamlining of the legal system, removal of corruption, improvement of the public delivery system and creation of credible social infrastructure.
It was on this day two decades ago in 1991, the then finance minister Manmohan Singh laid the foundation of economic reforms in his budget speech in the Lok Sabha and announced concrete steps to decisively move away from the centralised planning regime and align India with the global economy.
Since then there has been no looking back, and the government through a series of calibrates steps opened the Indian economy allowing foreign investments even in sectors like insurance and banking, privatising public sector undertakings and freeing the financial sector.
As a result of the economic reforms, India came out of the syndrome of the Hindu rate of growth and achieved 8%-9% economic expansion to become the fastest growing free market economy in the world.
India's economic growth rate today is only second to that of China. India was growing at over 9% before the global economic crisis in 2008 and is likely to revert to the same level in the 12th Five Year Plan beginning 1 April 2012.
The country, however, has not been able to effectively deal with problems of poverty and those concerning inflation and corruption as they continue to haunt the policy markers.
Besides poverty alleviation, Assocham secretary general DS Rawat said, "The country desperately needs to improve its infrastructure sector. It is necessary to boost the manufacturing sector and generate mass employment."
Commenting on the achievements during the two decades of reforms, noted economist YK Alagh said, "Global competitiveness of Indian companies have increased and some Indian companies achieved Mahalnobis' dream by acquiring large MNCs abroad, which we could not achieve with centralised planning."
Noting that the difference between the rich and the poor has increased after the reforms, he said, "It has increased as much in China."
One of the major achievements of India's economic reform, according to Crisil's chief economist DK Joshi, "is that we have been able to achieve higher growth rate. Indian economy grew by around 7% on an average over the past two decades and by 9% by 2005 to 2007."
"Productivity of our enterprises increased. India is now the fastest growing economy after China. A lot of things happened on public private partnership. Per capita income of Indian increased several times," he added.
The government would need to expedite the second phase of reforms to achieve sustained growth, he said, while welcoming the recent decision of the committee of secretaries (CoS) of opening of the multi-brand retail to foreign investment.
"We can say the government is taking gradual steps towards economic reforms," Mr Joshi added.
The average quantum of stock-purchase activities in the days before companies announce their quarterly results has been much more than the daily average for other parts of a quarter, leading to a case for suspicion by the market regulator. SEBI has initiated a probe whether this upsurge in FII buying activities was due to any insider information about the corporate results
New Delhi: Suspecting a possible foul play by some foreign investors in the stock market, the Securities and Exchange Board of India (SEBI) is probing into a strange upsurge in their buying activities days before the companies announce their quarterly results, reports PTI.
Companies generally begin announcing their financial results after about a week of the end of every quarter and it is common for investors to base their investment decisions on these figures.
However, in a strange pattern noticed for the past few quarters, foreign institutional investors (FIIs) are embarking on an above-normal stock buying spree during days before the start of the corporate earnings season.
This buying spree generally begins about 10 days before the earnings season and stops 2-3 days before the results start coming out.
The average quantum of stock-purchase activities in these days has been much more than the daily average for other parts of a quarter, leading to a case for suspicion by market regulator SEBI, sources said.
While the investigation is in initial stage, it is being probed that whether this upsurge in FII buying activities was due to any insider information about the corporate results, they added.
There have been only 4-5 days during such periods in past one-and-a-half year when FIIs have been net sellers of stocks.
This strange trend has been noticed for past few quarters, when corporate results have not been very good due to factors like soaring inflation, economic slowdown and rising interest costs.
In this backdrop, SEBI is investigating whether FIIs are getting any prior information about the companies not being able to post a strong set of results. It is being probed that whether the shares are being purchased with an intention to sell in a pre-earnings rally, which generally builds up a day or two before the quarterly results.
A senior official said that the daily average for net purchase by FIIs so far in 2011 stands below Rs100 crore, but they have been purchasing shares worth an average of more than Rs1,000 crore during the 5-10 days before the beginning of quarterly results.
A similar pattern was noticed also for the figures for 2010, when the average daily FII inflow into stocks stood at about Rs500 crore but the last 5-10 days before the earnings season was an average net inflow of close to Rs1,000 crore.
Besides, the daily stock purchase by FIIs during these days has also been generally higher than the average figures for the respective months since 2010, with only exception being the days before the earnings season for the July-September 2010 quarter, sources said.
In many cases, the FIIs have turned net sellers soon after the beginning of the earnings season, after purchasing heavily during the days before the result announcements.
A recent brokerage report from Kotak Institutional Equities also said that it has noticed "a peculiar phenomenon of large FII inflows into the Indian market in the last 5-6 trading sessions of quarter-ending months."
It said that these flows were always positive and disproportionately large compared to the rest of the month, and were also significantly higher than those during similar periods in other months.
"We do not have an answer to this phenomenon but would be curious to understand the reasons for the disproportionate flows," the report said.
Kotak said that "over the past six quarters, the Indian market has seen average inflows of $1.1 billion in the last five trading sessions of the quarter-ending months (June, September, December and March)."
"This compares with about $400 million of average monthly inflows over the past 18 months and only $58 million of net inflows excluding the quarter-ending months," the report said.
"It would be too much to expect that our observation is just mere coincidence. However, we do not have an explanation for this currently," it added, while ruling out factors like low valuation for this strange trend.
After Rajat Gupta’s exit, the Public Health Foundation of India has a new chairman. This ‘public-private partnership,’ however, has been a sneaky and unaccountable organisation that has a lot to answer. This, the first part of a four-part series, discusses questions on the formation, functioning and accountability of PHFI
On 11th July, NR Narayana Murthy of Infosys, an ardent advocate of transparency, accountability and ethics, agreed to become the new chairman of the Public Health Foundation of India (PHFI), a 'public-private partnership' (PPP) that does not submit itself to the RTI Act 2005 and the audit by the Comptroller and Auditor General of India in spite of having received hundreds of crores of rupees from the central and state governments.
If you have never heard of PHFI, that is how it is meant to be.
PHFI has no public character even though it has been silently influencing public health policy, such as advising the Centre on how the National Rural Health Mission (NRHM) should be run and how the proposed 'universal health coverage' should be funded. PHFI also runs four public health schools-Indian Institutes of Public Health (IIPHs)-in Hyderabad, Delhi, Gandhinagar, and Bhubaneswar.
Privileged and unregulated
Each of the IIPHs was built through the 'PPP model', which required the state government to provide land (at least 40 acres) free of charge and incur 20%-50% of the 'project cost' of about Rs140 crore per institute, excluding the cost of land.
The IIPHs run on public money. They primarily admit "in-service candidates nominated by the government" for flagship one-year, post-graduate diploma courses and charge the government a cool Rs2.5 lakh per candidate.
That there is no merit-based system for admitting students or hiring teachers and IIPH courses are not approved by the Medical Council of India, or AICTE, or any other statutory regulator, are mere matters of small print.
They would probably constitute a big educational scam in the case of an organisation not as privileged as the one that Narayana Murthy now heads.
The PPP autarchy
Since being "launched" by prime minister Manmohan Singh on 28 March 2006, PHFI has received over Rs100 crore in financial support from the central government. Taxpayers are not supposed to know how this "autonomously governed PPP" has spent their money. In over five years of its existence PHFI has never published a report on its finances and functioning.
But then the PPP agreement, presumably signed between the public and private partners, and PHFI's memorandum of association and registration details have never been made public. The citizens are not supposed to know whether the selection of the private partners was made in compliance with the PPP guidelines, such as competitive bidding-not to mention whether granting of subsequent privileges to PHFI was in line with the rules.
They must also accept PHFI's sweeping "charter" (posted on its website: http://www.phfi.org/) which seeks to develop a "vigorous advocacy platform to effectively communicate recommendations to policymakers." That is in addition to setting up "5-7 public health institutes, a national research network of public health and allied institutions, and an independent accreditation body for degrees in public health which are awarded by training institutions across India".
(As mentioned before, it is a matter of small print that PHFI's own courses are not recognised and accredited by any regulator.)
Questions chasing PHFI
1. Since PHFI has been described as a PPP, did the government conduct any competitive bidding to select the 'private partner'? Why are the details of the PPP agreement not in the public domain?
2. Under which legislation is PHFI being run, conducting its courses, and collecting money from students?
3. Where does PHFI draw the authority to conduct consultancy with government agencies? Are consultancy assignments given through competitive bidding?
4. Is PHFI directly accountable to any statutory regulator, CAG, the Parliament, or any state legislature?
5. How was PHFI granted the privilege of receiving a steady stream of government-funded students for its courses? Was any competitive bidding conducted in granting this privilege?
6. Does PHFI conduct any merit-based tests for the admission of students to its courses? What is the role of "recommendation letters" and "bonds" in admitting students and hiring faculty?
7. Since PHFI is itself unrecognised and unaccredited, who gave it the mandate-mentioned on its website-to "establish an independent accreditation body for degrees in public health which are awarded by training institutions across India"?
(Kapil Bajaj is a freelance journalist and blogger based in Delhi. He has worked for the Press Trust of India, Business Today and other organisations. His interests are democracy and public policy. The second part will appear on Tuesday.)