25th February

The right cut

The article welcomes Pranab Mukharjee’s decision to issue 2% cuts in the service tax and excise duty since the step was very much necessary to boost the ailing economy. The article also explains the political correctness of the step.

Although the cut would create an additional hole of Rs. 30k crores in the government revenue and put more pressure on the already burgeoning fiscal deficit but extraordinary circumstances demand extraordinary measures. With this rate cut the total relaxation in the form of indirect-tax cuts would reach Rs. 70k crores which is 1.5% of GDP. However, the present government had very few options to provide the boost since the general elections are on the way and the new government would be taking more measures to boost the economy further. Boost through cuts in direct taxes would require Parliamentary approval and provide the Congress allies a chance to bargain in the election time. Thus, indirect taxes are the safest bet.

Now the ball in central bank’s court to play some good game with monetary policy in the months to come as inflation marches southwards.

Bidding not an end in itself

The article argues in favor of allowing single bidding since it is the best way to get the projects done in the currently weak economic scenario.

Government is currently considering permitting single-bid projects to go through. Recently the railways sought Central Vigilance Commission (CVC) protection before allowing diesel and electric engine manufacturing projects to single bidders but then decided to do it in-house. This reflects the process of awarding projects becoming more important then the projects itself. This should not be the case. It is true that in case of single-bidder a project might not get its optimal cost but then completing project is more important. For a solution to this, government can either re-invite bids again after scrapping the first process but it will incur cost of delay as well as loss of opportunity or government can award the project to the sole-bidder itself which will only incur cost of probability of better price discovery. 

Thus, it makes sense to award the project to the sole-bidder after he agrees to pay above the reserve price since it would ensure the project will start on time and will get completed. In today’s weak economic scenario it’s important to get the work done rather then getting caught up in processes.

Slumming it out

The article talks about the hollow pride people in India have taken on the success of Slumdog. It also emphasizes to create cinema on our own terms rather than for the global audience because every country’s cinema has its own uniqueness without which there is no recognition for it.

Although the movie is based on Indian theme, with Indian star-cast, with the help in India technicians who got recognized on the international arena but one question we need to ask ourselves that is it really an Indian film? Will it really open the world to our talent that some of us has been envisaging? Is Hollywood, really our benchmark?

Every country has fastidiously been conservative while making cinema to make sure it reflects that particular country’s tradition and values and not necessarily caters to Hollywood or the global market. One doesn’t need a crossover movie to get accepted. Perhaps its our need to get recognized on international arena that makes us forcefully take pride on something which is not really our own.