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Monday, May 24, 2010
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Monday, May 10, 2010
Friday, May 7, 2010
MAOIST BUTCHERS OF PAINTER SUBHAPRASANNA BHATTACHARJEE SLAIN INNOCENT VILLAGER ORPHANING HIS WIFE & DAUGHTER IN THE NAME OF REVOLUTION
WIFE AND DAUGHTER BESIDE THE DEAD-BODY OF HARIPADA SINGHA ON BASANTPUR ROAD IN DAHIJURI VILLAGE OF JHARGRAM, WEST BENGAL ON 05-05-2010. HARIPADA SINGHA WAS BRUTALLY MURDERED BY THE PERVERTED AND INSANE MAOIST COMRADES OF ARUNDHATI ROY, MAHASWETA DEVI, MEDHA PATKAR, “PEOPLE’S UNION FOR CIVIL LIBERTIES” (PUCL), “PEOPLE’S UNION FOR DEMOCRATIC RIGHTS”(PUDR), ASSOCIATION FOR PROTECTION OF DEMOCRATIC RIGHTS (APDR) AND OTHER SO-CALLED INTELLECTUALS AND HUMAN RIGHT ORGANISATIONS AND CORPORATE MEDIAWednesday, May 5, 2010
INDIA BECOMING VICTIM OF DOLLAR-CARRY TRADE
ONE MORE SURGE - C P Chandrasekhar
OPEN doors to foreign financial investors have known to generate currency instabilities and crises in most developing economies. While India has side-stepped crises of this kind since 1990, it has periodically faced difficulties in managing the rupee and retaining policy autonomy because of such flows. This seems to be true currently as well. The significant appreciation of the rupee in recent months, driven by a surge in foreign portfolio capital inflows, has revived old and generated new problems for macroeconomic management. This signals once again that the need is not for further capital account liberalisation as the government is contemplating but for the imposition of additional controls on the cross-border flows.
INDIA BECOMING VICTIM OF DOLLAR-CARRY TRADE
The Indian rupee stood at a robust Rs 44.4 to a dollar at the beginning of the second week of April. At that level the rupee had appreciated by more than 13 per cent vis-à-vis the dollar over the preceding 13 months. This suggests that the Reserve Bank of India has not intervened in the market and bought up surplus foreign exchange to the extent required to relax the upward pressure on the value of the rupee and stall its appreciation. This reluctance could partly be because, given the relatively high level of already accumulated foreign exchange reserves, the central bank is finding it difficult to match the surge in capital inflows with new purchases.
The surge in capital inflows is explained largely by developments on the supply side, with India being chosen as one of the favoured destinations by financial investors seeking to exploit the cheap liquidity that developed country governments have pumped into the system in response to the financial crisis. Further, like many other emerging markets, India is becoming a victim of the dollar-carry trade, in which international players borrow in dollar markets, where liquidity is ample and interest rates are low because of anti-crisis measures, and invest in equity, debt and real estate in emerging markets, where returns are much higher, in order to profit from the differential between the cost of debt and the return on investment. This is a game that seems to especially attract international financial firms seeking to quickly recoup the losses they suffered in the recent recession.
That this kind of game is currently popular with respect to India as well, is clear from the fact that the rupee’s appreciation is associated with a boom in equity markets, driven largely by foreign institutional investment, as a result of which the Sensex is courting the 18,000 level once again. Balance of payments data recently released by the Reserve Bank of India indicate that net portfolio investment inflow during April-December 2009 amounted to 23.6 billion dollars, as compared with an outflow of 11.3 billion during the crisis months of April-December 2008. The accumulation of reserves during the April-December 2009 period amounted to 31.5 billion dollars. While valuation changes contributed to an increase in dollar reserve figures, the importance of portfolio inflows and central bank intervention in currency markets cannot be denied.
ADDITIONAL RETURN & SPECULATIVE SPIRAL
This process has since continued. According to figures from the Securities and Exchange Board of India, as of April 11, net investments by FIIs in debt and equity markets amounted to an additional 10.1 billion dollars during 2010. Seen in this light, the reluctance of the RBI to intervene adequately to absorb these inflows is understandable.
This trend, reflective of the dollar-carry trade, feeds on itself for two reasons. First, it is well known that despite post-liberalisation buoyancy the Indian stock market is still both narrow and shallow. Narrow because there are relatively few listed companies whose stocks are actively traded. And shallow because the proportion of “free-floating” shares in these companies not held by promoters and available for regular trading is limited. As a result, whenever there is even a minor surge in foreign institutional investment flowing into these markets, the demand they generate at the margin is enough to drive stock prices up quite quickly, widening the differential between the cost of borrowing and the return on investment and attracting further investments. This tends to generate a self-reinforcing and often speculative spiral of investment.
Secondly, the expected return to the investor is even higher than this differential because as and when she decides to sell financial assets to book profits and repatriate capital to clear debts incurred at home, the appreciation of the rupee yields more dollars than would have been the case at the exchange rate when the investment was first made. This provides an additional return that justifies even more the speculative spiral and leads to further appreciation of the rupee.
The corollary of such rupee appreciation is of course a weakening of India’s export competitiveness because the dollar values of the country’s exports rise as the rupee appreciates. It is to prevent or moderate that outcome that central banks have to manage the exchange rate through open market operations, involving in this case the purchase of dollars and an increase in reserves. But if this increase in the assets of the central bank is not neutralised or sterilised through the sale of government securities, for example, then money supply to the economy increases. In the past the Reserve Bank of India had resorted to this option to retain its control over the pace of expansion of money supply. But with the inflow of capital having risen sharply and been quite high in most years of this decade, its ability to do so depended on rebuilding its depleted stock of government securities through special schemes, like the Market Stabilisation Scheme, which create their own problems. So the reluctance to intervene may be because of a decision to retain some degree of control over the monetary lever ignoring (at least for some time) the fall out for the rupee.
Whatever be the explanation for that reluctance, it is material only because as of now dealing with the source of the problem, which is the embarrassingly large and unneeded inflow of foreign capital for what are speculative investments, is not an option for the government and the central bank. Some other countries, like Brazil, have sought to deal with the recent surge with measures, however limited, that are directed at curbing speculative inflows. Since this would go against the grain of the ideology influencing economic reform, which includes the belief that maintaining a freer and more open capital account is the best option, the Reserve Bank of India that wants control over the monetary lever and is faced with a surge in capital inflows would have to tolerate rupee appreciation.
THE NEED IS TO CURB SPECULATIVE INFLOWS
But it is clear that the central bank cannot continue with this stance for long. India’s balance of payments statistics point to high and persisting trade and current account deficits in recent quarters, and those deficits would only widen if international oil prices continue to rise. In these circumstances, even if the protests of exporters are dismissed, a process that renders exports more expensive in dollar terms and imports cheaper in rupee terms cannot be ignored. That is “success” on the capital account of the balance of payments cannot, beyond a point, be at the expense of a weakening of the current account and the domestic economy.
Further, rising inflation is forcing the Reserve Bank of India to turn its attention to what has always been its primary brief: using the monetary level to moderate price increases. One way in which it is expected to do this is by raising interest rates and reducing the offtake of credit to cool an overheating system. But raising domestic interest rates would only encourage further those investors exploiting international interest rate differentials and engaging in the carry trade. Being relevant on the price management front may make the central bank an even greater failure with regard to exchange rate management.
The real option is, therefore, one of dealing with the source of the problem and using measures to control the inflow of financial capital, especially speculative capital. There are many policy options at hand to achieve this end. What is required is that a government that had perceived the surge in capital inflows and the accumulation of reserves as being indicators of economic success admits that even in its own framework this is proving to be too much of a good thing.
Source: People's Democracy dated 18-04-2010
'GOVTS RESPONSIBLE FOR HPV VACCINE RELATED DEATHS'
CPI(M) Polit Bureau member and Rajya Sabha member Brinda Karat has held both the AP state government and the UPA government at the centre responsible for the reported deaths of four young tribal girls due to administration of HPV vaccine in Andhra Pradesh recently. She demanded a thorough inquiry into this affair and fixing of responsibility.
As part of her tour of tribal areas in the state, she visited Khammam district recently. She focussed on knowing about the ill-effects of the human papilloma virus (HPV) vaccine as also the implementation of NREGS, Tribal Forest Rights Act etc.
An American NGO, taking the services of health department of the government of Andhra Pradesh, administered HPV vaccine to nearly 14,000 girls aged between 10 to 14 years. These girls belonged to ST, SC and Muslim communities and are studying in tribal welfare and social welfare residential schools. This vaccine was given on a trial basis to these girls in three successive doses. It is intended to prevent cancer of cervix in adult age. The administration of vaccine or a drug to minor patients inevitably needs prior consent of parents. But in this case it was not taken. Moreover, around 5 per cent girls suffered with headache, body pains, rash, vomiting and mild fever as side effects. It has been alleged in the print media that four girls died due to this vaccination. The government of Andhra Pradesh allowed the American NGO to make use of staff of government health department in Khammam district to hold the campaign of vaccination. They gave three-day training to the health staff in the district. They said that this vaccine would prevent the cancer of cervix, and would be given free of cost as a charity to these poor girls. They said the total cost of the vaccine is Rs 9000 i.e Rs 3000 for single dose.
Brinda Karat spoke to the victims and their family members to know the details of the issue. She was accompanied by AIDWA leaders Swarupa Rani, Hymavathi, and Renuka, district CPI (M) leaders P Sudharshan Rao, B Ravi Kumar and S Rajaiah and state secretary of AP Girijana Sangam, Midiyam Babu Rao. She visited Yerragattu village of Bhadrachalam rural mandal where she consoled Sode Mudharaju and Maramma whose daughter Sodde Saiamma studying in class 9 allegedly died due to vaccination. The people of this remote village were surprised to see a national level political leader coming down to them and enquiring about the death of a girl. She also visited Anjipaaka village of Dummagudem mandal to enquire about the death after vaccination of Kudumala Saritha, again a class 9 tribal student. She visited the tribal welfare girls hostel at Lashminagaram village where Saritha was vaccinated. Here, the hostel warden himself signed the informed consent forms of all the girls without bothering to inform the parents of the girls. A total of 287 girls were vaccinated here.
While in the village, the CPI (M) leader also assessed the implementation of Tribal Forest Rights Act and REGA. She sat with beneficiaries, mainly tribal women, in an interactive session to find out the facts. She visited the work place and enquired about their remuneration, working conditions and facilities provided etc.
Source: People's Democracy dated 18-04-2010
As part of her tour of tribal areas in the state, she visited Khammam district recently. She focussed on knowing about the ill-effects of the human papilloma virus (HPV) vaccine as also the implementation of NREGS, Tribal Forest Rights Act etc.
An American NGO, taking the services of health department of the government of Andhra Pradesh, administered HPV vaccine to nearly 14,000 girls aged between 10 to 14 years. These girls belonged to ST, SC and Muslim communities and are studying in tribal welfare and social welfare residential schools. This vaccine was given on a trial basis to these girls in three successive doses. It is intended to prevent cancer of cervix in adult age. The administration of vaccine or a drug to minor patients inevitably needs prior consent of parents. But in this case it was not taken. Moreover, around 5 per cent girls suffered with headache, body pains, rash, vomiting and mild fever as side effects. It has been alleged in the print media that four girls died due to this vaccination. The government of Andhra Pradesh allowed the American NGO to make use of staff of government health department in Khammam district to hold the campaign of vaccination. They gave three-day training to the health staff in the district. They said that this vaccine would prevent the cancer of cervix, and would be given free of cost as a charity to these poor girls. They said the total cost of the vaccine is Rs 9000 i.e Rs 3000 for single dose.
Brinda Karat spoke to the victims and their family members to know the details of the issue. She was accompanied by AIDWA leaders Swarupa Rani, Hymavathi, and Renuka, district CPI (M) leaders P Sudharshan Rao, B Ravi Kumar and S Rajaiah and state secretary of AP Girijana Sangam, Midiyam Babu Rao. She visited Yerragattu village of Bhadrachalam rural mandal where she consoled Sode Mudharaju and Maramma whose daughter Sodde Saiamma studying in class 9 allegedly died due to vaccination. The people of this remote village were surprised to see a national level political leader coming down to them and enquiring about the death of a girl. She also visited Anjipaaka village of Dummagudem mandal to enquire about the death after vaccination of Kudumala Saritha, again a class 9 tribal student. She visited the tribal welfare girls hostel at Lashminagaram village where Saritha was vaccinated. Here, the hostel warden himself signed the informed consent forms of all the girls without bothering to inform the parents of the girls. A total of 287 girls were vaccinated here.
While in the village, the CPI (M) leader also assessed the implementation of Tribal Forest Rights Act and REGA. She sat with beneficiaries, mainly tribal women, in an interactive session to find out the facts. She visited the work place and enquired about their remuneration, working conditions and facilities provided etc.
Source: People's Democracy dated 18-04-2010
WHY BSNL EMPLOYEES ARE RESORTING TO INDEFINITE STRIKE? - V A N Namboodiri
A NATIONWIDE indefinite strike of around three lakh public sector telecom company BSNL employees is set to begin from April 20, 2010. This strike is happening at the call of the Joint Action Committee of BSNL Associations/Unions which cover both the executives and non-executives of the company. A one day massive dharna was successfully organised on March 26, 2010 to focus the demands and in preparation for the indefinite strike.
The following demands have been put forth in the strike notice served on BSNL management on March 23, 2010. They are very important issues connected with survival and development activities of BSNL as can be seen below:
1. No Disinvestment / No Privatisation of BSNL
2. No Retrenchment / No VRS
3. No Unbundling of Last Mile Copper & Other Infrastructure
4. No Outsourcing
5. Settlement of ITS absorption
6. Immediate Procurement of Mobile Lines
7. Ensure IDA Pension Revision to BSNL Retirees
2. No Retrenchment / No VRS
3. No Unbundling of Last Mile Copper & Other Infrastructure
4. No Outsourcing
5. Settlement of ITS absorption
6. Immediate Procurement of Mobile Lines
7. Ensure IDA Pension Revision to BSNL Retirees
BACKGROUND
Bharat Sanchar Nigam Limited (BSNL) was carved out from the Department of Telecom Services (DoTS) and corporatised in October 2000 as part of the neo-liberalisation policy of the central government with the intention of disinvesting and ultimately privatising this public sector company. Despite several hurdles created by the government, MNCs and private telecom companies, BSNL expanded and continued as the number one telecom company till 2006. This was not to the liking of the vested interests. Through a conspiracy between the government and the private telecom companies, BSNL's plan for huge expansion through a mega tender of 4.5 crore mobile lines was defeated, thus creating a sharp crunch of mobile lines to BSNL. Devoid of mobile lines, the expansion, revenue generation as also the market share of the company came down sharply. By 2008-09, BSNL lost its overall first position. It came down to 4th position in terms of number of mobile lines. The profits of the company which were over Rs 5000 crore fell sharply to Rs 574 crore in the year 2008-09.
Instead of helping this behemoth PSU to restore to its pre-eminent position, the unhappy situation was utilised by the government to carry out its agenda of privatisation. It appointed a committee under Sam Pitroda, advisor to prime minister and an ardent advocate of privatisation. The other members of the committee were P J Thomas, secretary, DoT and Deepak Parekh, chairman of private sector bank, HDFC.
The recommendations of the committee were just as the government wanted. It recommended 30 per cent disinvestment of BSNL, retrenchment of one lakh workers through VRS, unbundling of copper cables and outsourcing of jobs, all of which were being totally opposed by the BSNL workers. It was clear that these measures were all priority works before handing over this PSU to private companies.
The recommendations of the committee were just as the government wanted. It recommended 30 per cent disinvestment of BSNL, retrenchment of one lakh workers through VRS, unbundling of copper cables and outsourcing of jobs, all of which were being totally opposed by the BSNL workers. It was clear that these measures were all priority works before handing over this PSU to private companies.
It is in this context that the BSNL workers under the leadership of the Joint Action Committee of all BSNL unions decided to go on an indefinite strike from April 20, 2010. An examination of the demands will show that they are intended to save BSNL and its workers from privatisation, retrenchment and also for development and expansion of the company.
NO TO DISINVESTMENT AND PRIVATISATION
The recommendation of Sam Pitroda Panel to disinvest 30 per cent shares of BSNL is unwarranted and is completely against the interest of the PSU and its workers. This is nothing but implementation of the anti-worker neo-liberal policy of the government. The argument that disinvestment is being done to augment necessary funds for expansion has no basis, since BSNL is now having more than Rs 35,000 crore reserves stacked up in banks. Further, the disinvestment amount will directly go to government coffers and not to BSNL. In January, 2006 when the employees gave notice for strike, a written assurance was given by the government that BSNL will not be privatised or disinvested. The government should honour its commitment given to the workers and not resort to disinvestment and privatisation to hand over the public asset to private.
NO RETRENCHMENT, NO VRS
Pitroda Committee has recommended that Voluntary Retirement Scheme (VRS) be implemented in BSNL with the target of retrenching one lakh workers. To justify its recommendation, the committee has compared BSNL with the private telecom companies like Bharti Airtel where the workforce is about 35,000 only whereas it is about three lakhs in BSNL.
But it is conveniently forgotten by the committee that the large workforce in BSNL exists due to historical reasons and is closely interlinked with the change in technologies, the need to cover the entire country with its lakhs of villages as also the government policy of increasing job opportunities in the pre-1980 period. Moreover, the committee has also ignored the fact that more than sixty thousand employees will retire from service in normal course in the next five years.
These are the workers who have laid lines and cables going through forests, hills, rivers and deserts in the country braving many hazards and difficulties. Many of them have been given regular jobs only after continuing as casual workers for a long period. The government and the management had tried twice to send out 50,000 and 20,000 workers respectively in 2005 and 2008, but the united strength of the workers could defeat their plans. Now also the workers will not allow this attack to succeed.
The workforce is an asset to any organisation. It is the responsibility and duty of the management to utilise the existing workforce effectively and gainfully to expand, develop and improve the services. The unions have given various suggestions in this connection, but unfortunately none of them has been given any serious consideration by the management, since their intention is only to reduce the existing workforce.
NO UNBUNDLING OF LAST MILE COPPER
The last mile copper wire connecting the main cable with the subscribers place is very precious and important for providing value added services like broadband internet connection, IPTV etc. BSNL has lakhs of km of such copper wires, which no other private telecom company has. The private companies have been pressurising the government to compel BSNL & MTNL to share these last mile copper with them. It will give those private companies access to BSNL cables to provide their value added services. Further, the main strength of BSNL having this valuable infrastructure will be lost. This is the case with mobile towers also, which are have also been recommended to be sold out or shared with private companies.
We are completely against this unbundling of last mile copper as also towers and other infrastructure of BSNL which will be a big disaster for the company.
PROCUREMENT OF MOBILE LINES
It is well known to all concerned that the present downfall of BSNL has been mainly due to the capacity crunch of mobile lines. The reduction of 4.3 crore GSM lines to half in 2007 has cost the company dear. It was only due to the one day complete strike of BSNL employees on July 11, 2007 that at least half of the original tender was procured, which the government wanted to cancel on flimsy grounds. But even this was completely inadequate in the cut-throat competitive situation. While each major private company was providing more than 20 lakh mobile connections in a month, BSNL was struggling to provide between five to ten lakh connections, resulting in losing its market share and falling to the fourth from its second position. Had the purchase order been not reduced to half, BSNL could have even gone up to grab the number one position in terms of subscribers.
Again, the conspiracy to cut the wings of BSNL has succeeded. The government, CVC, private companies and the Pitroda Committee has ensured that BSNL Board scraps the 9.3 crore tender which was very much required to restore its position in market share.
The immediate requirement is to procure adequate mobile lines so that BSNL is able to provide large number of mobile connections and restore its market share and improve its financial condition, failing which the downfall will be irreversible.
PENSION REVISION OF BSNL RETIREES
At the time of corporatisation in 2000, government assured payment of pension to the BSNL absorbed DoT employees and amended Pension Rules through Rule 37A of CCS (Pension) Rules. Accordingly BSNL retirees are getting pension on IDA scales.
After Sixth Central Pay Commission, the central government pensioners got their pension revised w.e.f. January 01, 2006, the date on which pay revision was effected. BSNL executives have already got their wages revised from January 01, 2007. Non-executive employees wages also will be revised from the same date. But the revision of pension on IDA for the BSNL executives and non-executives who retired before January 01, 2007 has not been done. Even 50 per cent merger of IDA was denied earlier. This is a great injustice to BSNL pensioners. We demand that this gross injustice be undone by immediate issue of necessary orders.
In conclusions, BSNL as a public sector company is a valuable asset of the nation and the people. It is the source of livelihood for three lakh families. In the name of competition and parity with new generation private companies, the government and the BSNL management has no right to destroy the company for the benefit of private corporate sector and MNCs.
So, it is time to fight hard to save and improve BSNL, and to safeguard the interest of the nation, the people and the employees. With this noble objective, the workers are moving forward jointly to make the indefinite strike from April 20, 2010 a grand success. We seek the full support of the people in this struggle to save BSNL.
(The writer is general secretary of BSNL Employees Union)
Source: People’s Democracy dated 18-04-2010
The immediate requirement is to procure adequate mobile lines so that BSNL is able to provide large number of mobile connections and restore its market share and improve its financial condition, failing which the downfall will be irreversible.
PENSION REVISION OF BSNL RETIREES
At the time of corporatisation in 2000, government assured payment of pension to the BSNL absorbed DoT employees and amended Pension Rules through Rule 37A of CCS (Pension) Rules. Accordingly BSNL retirees are getting pension on IDA scales.
After Sixth Central Pay Commission, the central government pensioners got their pension revised w.e.f. January 01, 2006, the date on which pay revision was effected. BSNL executives have already got their wages revised from January 01, 2007. Non-executive employees wages also will be revised from the same date. But the revision of pension on IDA for the BSNL executives and non-executives who retired before January 01, 2007 has not been done. Even 50 per cent merger of IDA was denied earlier. This is a great injustice to BSNL pensioners. We demand that this gross injustice be undone by immediate issue of necessary orders.
In conclusions, BSNL as a public sector company is a valuable asset of the nation and the people. It is the source of livelihood for three lakh families. In the name of competition and parity with new generation private companies, the government and the BSNL management has no right to destroy the company for the benefit of private corporate sector and MNCs.
So, it is time to fight hard to save and improve BSNL, and to safeguard the interest of the nation, the people and the employees. With this noble objective, the workers are moving forward jointly to make the indefinite strike from April 20, 2010 a grand success. We seek the full support of the people in this struggle to save BSNL.
(The writer is general secretary of BSNL Employees Union)
Source: People’s Democracy dated 18-04-2010
Monday, May 3, 2010
PARLIAMENT MUST ASSERT ITS SUPREMACY - Dipankar Mukherjee in Rajya Sabha
PETROLEUM TAXES: THE UNTOLD STORY
“We have been criticised. Why have you enhanced the excise duty? Why have you enhanced customs duty on petroleum crude? Most respectfully I would like to submit that I have not introduced a single new tax. All these taxes were in vogue in 2008-09. What has happened that when the crude price reached as high as 112 dollars per barrel, the five per cent customs duty on petroleum crude was withdrawn. The one rupee excise duty per litre of petrol and diesel was withdrawn. I did not tamper with that for the full year 2009-10. But when I find that price has come down today around 73 or 74 or 75 dollars per barrel perhaps, this is the time when we can absorb it” said Pranab Mukherjee in Rajya Sabha while replying to the budget discussions.
WHAT HE DID NOT SAY
Yes, he is correct that all these duties were in vogue not only in 2008-09 but also much earlier. But he did not say that these duties and taxes were more or less stable and dependent only on trade volumes independent of fluctuations in international crude oil price. It was only after 1991 when Dr Manmohan Singh became finance minister that the duty structure was changed and has been rising in tandem with rise in crude prices as they were made ad valorem i.e., duties were linked with crude price instead of being specific in Rs./litre. What has been the result? Central excise duty on petrol was Rs 5.32/litre and on diesel Rs 2.55/litre in 2000-01 when the crude price was 23 dollars per barrel. Today the excise duty on petrol and diesel is Rs 14.75 and Rs 4.75 per litre. If the crude price has increased 3 times to 70 dollars per barrel during the last decade, the central duties have also not lagged behind. Still the finance minister of “Aam Aadmi ka Sarkar” coolly says “we can absorb it”. So “Aam Aadmi” has to absorb both the international price rise as well as the tax hike together. Pranab babu says government is benevolent as it has not introduced any new tax. Is it necessary when the tax is increased by 200 to 300 times during a decade?
CESS
Further look at the cess charged by government on crude oil produced by ONGC and OIL (only public sector oil producers, not the private ones) which was Rs 900/tonne in 2000-01. The NDA government in 2002 doubled it to Rs 1800/tonne and the “Aam Aadmi Sarkar” in 2006 increased it to Rs 2500/tonne.
Only on this account, the government collected Rs 81,106 crore since 1974. How much they have given to Oil Industry Development Board, which was supposed to invest this money in oil sector PSUs? Only Rs 902.04 crore. The Parliamentary Standing Committee on Petroleum and Natural Gas in its report laid in parliament on May 22, 2006 stated:
“…The Committee, in their original Report, had emphasised that there was no justification in levying cess on indigenous crude oil if the amount generated from it was not being utilised for the oil sector and had recommended that a Price Stabilisation Fund should be created by using the money collected from cess to bring in stabilisation in the prices of petroleum products. They had also desired that a part of the cess amount should be utilised to provide subsidy on kerosene and LPG. The Ministry of Petroleum and Natural Gas has agreed that there is a case for establishing a 'Price Stabilisation Fund' with funding from the cess on indigenous crude as the oil prices have been extremely volatile in the recent past and the oil companies have not been able to pass on the full burden to the consumers resulting into under recoveries. The Planning Commission has also supported the proposal ‘in principle’ for utilisation of cess for the purpose of oil industry/operating the Price Stabilisation Fund. However, the Committee are unhappy to know that the Ministry of Finance has not agreed to the proposal for setting up the Price Stabilisation Fund. They strongly disapprove of the negative approach of the Ministry of Finance to such a vital issue.”
The approach remains still negative. Price Stabilisation Fund has not been created. The cess collected is not being utilized for the oil sector. After all who bothers about a Parliamentary Committee even if it was chaired by a Congressman like N Janardhana Reddy and included Congress heavyweights like Ahmed Patel, Rajeev Shukla etc. For “Aam Aadmi Sarkar” expert committees of Rangarajan and Kirit Parikh are more sacrosanct than the Standing Committee constituted by the parliament. Incidentally Rangarajan Committee recommended a cess of Rs 4800/tonne!
WHO SUFFERS?
Pranab babu in the course of his reply further said “I do know that when prices go up, common people suffer, poor people suffer. It is not an unknown fact” What is unknown is that while the excise duty on petrol and diesel is Rs 14.78 and Rs 4.75 per litre respectively, the same on Aviation Turbine Fuel (ATF) used in Aircrafts is Rs 3.60/litre. Obviously the suffering of air travellers is more in the eyes of the government than those who travel in buses, two wheelers or the farmers who use diesel.
Pranab babu justifies the customs duty hike saying “you cannot ignore the fact that when you are to import certain commodities at high prices, it will have to get reflected somewhere.” But where? On the common man or on those who are importing huge quantity of crude for refining and exporting the refined product at huge profit after getting “duty drawback incentives” In 2008-09 petroleum product worth Rs 85,000 crore was exported by private refineries. Why the reflection did not come in terms of cut in incentive on these ‘billionaires” Aam Admi instead of Rs 1.20/litre reimposition of custom duty on crude for the “suffering” Aam Admi ? What did the Parliamentary Committee headed by N Janardhan Reddy say in the above report laid in parliament ?
“The Committee in their original Report, had recommended that the government should withdraw the duty drawback incentive to exporting companies for export of petroleum products. In its Action Taken Reply, the government has, inter-alia, stated that under the EXIM policy, the duty drawback benefit in the form of advance licensing enables duty free import of inputs required for export production to encourage exports that earn valuable foreign exchange for the country. The committee had recommended that the customs duty waiver given to the exporting companies on part of their crude imports should be discontinued and the revenue gained by the government in the process should be passed on to the consumer by way of reduction in excise duties on petroleum products. As huge international prices alone can take care of the profits of the exporters, the Committee reiterate their earlier recommendation that the government should withdraw the duty drawback incentive for export of petroleum products”
What is the response of Pranab babu or the UPA-II government? Obviously, the incentive to the oil billionaires should continue and the so called subsidy to the “Aam Admi” should be reduced and the reiterated recommendation of the Parliamentary Committee should be contemptuously ignored.
WHO IS SUBSIDISING WHOM ?
There is a planned campaign by the succeeding governments, the petroleum corporates and their captive media – that the government is subsidising heavily the kerosene, diesel, petrol and LPG users, leading to resource crunch in public sector Oil Marketing Companies (OMCs). How far is this true? Let the figures speak. During the year 2009-10 as per provisional figure available for the period April to December, 2009, the contribution to central government exchequer by petroleum sector is Rs 56,365 crore. The subsidy provided by the government, including the oil bonds issued to OMCs during the same period, is Rs 14,058 crore i.e., 25 per cent of petroleum sector’s contribution in taxes and duties. Therefore the “Aam Admi” pays 100 rupees as taxes/duties and get 25 rupees as so called subsidy! Who is subsidizing whom? The cruelest joke is that during the worst period of inflation, the Government is reducing this ratio below 20 per cent in 2010-11 by extracting additional revenue of Rs 30,000 crore through hike in import duty on crude and excise duty on petrol and diesel. As a matter of fact, the contribution of petroleum sector to central revenues rose from Rs 46,603 crore in 2001 to Rs 93,513 cr in 2008-09. Still, the government, in Pranab babu’s words, wants the people to absorb more taxes as this is the appropriate time when prices are skyrocketing in real terms!
PARLIAMENT MUST ACT
It is in the light of the above, that Parliamentary Standing Committee on Petroleum and Natural Gas, which it must be noted comprised members of parliament from all parties including Congress, had observed:
“..The Committee find that the governments have a tendency to bank heavily on this sector to mobilise revenues. They, therefore, reiterate their earlier recommendation made in their Fifth Report (14th Lok Sabha) that the practice of squeezing the maximum out of the sector without concern for the common man needs to be changed. The committee once again urge the government to exercise restraint and apply the policy of prudence in making earnings from the oil sector.”
The response of the government vide its letter dated 19-01-2006 was :
“…The Committee has rightly pointed out the over dependence on petroleum sector generating government revenue reveals a disturbing trend, especially when viewed against the following facts:
a) Abnormal increase in prices of crude oil and petroleum products in international market.
b) Loss incurred by oil marketing companies during the period April-June, 2005;
c) Need for substantial investment requirement in upstream and downstream oil companies.
The recommendations of the committee have been taken up with the ministry of finance and state governments.
The above assurance by the government which had been tabled in the parliament is being reversed by the government of the day through increase in existing duties for enhancing government revenue in spite of increase in prices of crude oil and petroleum products in international market vis-a-vis the prices in 2006. Parliament must assert its supremacy over the executive and the so-called expert committees, appointed by the executive. It should force the government to see reason and to withdraw the tax/duty hike as well as implement the Parliamentary Committee’s recommendations. The recommendations were unanimous. Parliamentary pressure for withdrawal of additional taxes imposed by the government should also transcend beyond party barriers.
Source: People’s Democracy dated 11-04-2010
LEFT PARTIES’ JAIL BHARO - MORE THAN 25 LAKH PARTICIPATE
THE FOUR LEFT PARTIES – COMMUNIST PARTY OF INDIA (MARXIST), COMMUNIST PARTY OF INDIA, ALL INDIA FORWARD BLOCK AND REVOLUTIONARY SOCIALIST PARTY, HAVE ISSUED THE FOLLOWING STATEMENT ON APRIL 8.
THE Left parties congratulate the lakhs of people who participated in the mass picketing and court arrest programme all over the country. They were responding to the call of the Left parties on demands pertaining to price rise, land, employment and the violence against the Left in West Bengal.
From the reports received so far, more than 25 lakh (2.5 million) people participated in the mass picketing and court arrest programme.
Delhi: The leaders of the four Left Parties, Prakash Karat, A.B. Bardhan, Debabrata Biswas and Abani Roy were arrested at New Delhi’s Parliament Street while leading a march of over two thousand protesters. The police used water cannon to disperse the protestors. One person was injured.
West Bengal: Over 10 lakh people participated in the mass picketing programmes in front of Central Government offices like post offices, railway offices, etc., across all the nineteen districts of the state. Nearly one lakh people participated in the seven hour long picketing programme in front of the Income Tax office in Kolkata.
Kerala: Over 5 lakh people participated in the mass picketing programme in the district centres in front of Central Government offices. Major mobilizations were witnessed in the districts of Kannur, Ernakulam, Alappuzha, Palakkad, Kollam and Trvandrum where around 50000 people participated in each of the protest centres.
Tripura: Over 1.5 lakh people participated in mass picketing and courted arrest in 55 centres across Tripura.
Andhra Pradesh: 1 lakh people participated in the picketing in different district centres, of which more than 40000 were arrested.
Tamil Nadu: Around 1 lakh people courted arrest across all the districts of the State.
Maharashtra: Over 1 lakh people participated in protest actions across Maharashtra.
Bihar: Over 75000 people courted arrest across all the districts of the state.
Jharkhand: Around 30000 people participated in picketing and courted arrest.
Punjab: 30000 people participated in picketing in various centres.
Madhya Pradesh: Over 25000 people courted arrest in 35 district centres.
Uttar Pradesh: Incomplete reports show that more than 20000 people courted arrest across the State.
Karnataka: 15000 people participated in protests across the State and 8000 people were arrested.
Orissa: Around 15000 people were arrested from 30 centres of the state.
Assam: 15000 people courted arrest in 46 centres.
Rajasthan: 6500 people courted arrest in different district centres.
Himachal Pradesh: Over 6000 people courted arrest across the state.
Haryana: Over 4000 people courted arrest across the state.
Puducherry: Over 2200 people participated in picketing in Puducherry, where police lathi charged the protestors injuring over 30 people.
Reports from other states are still coming in.
Source: People’s Democracy dated 11-04-2010
EDITORIAL OF PEOPLE’S DEMOCRACY - HISTORIC PROTEST AGAINST PRICE RISE. STRUGGLE WILL CONTINUE.
APRIL 8, 2010 will go down in history as one of the biggest protest actions organised in recent memory. Tens of lakhs of people, at the call of the Left parties, participated in civil disobedience programmes all across the country. Lakhs were arrested as they deliberately violated the law angrily and militantly to protest against the neo-liberal economic policies of the UPA-2 government that were imposing unprecedented economic burdens on the vast mass of our people. The focus of these protest actions was against the unbridled continuous rise in the prices of all essential commodities which is eroding their livelihood. This comes on the top of the agonies imposed by the impact of the global recession which has led to the loss of a decent livelihood for over a crore of people.
At the call of the Left parties, these volunteers of the civil disobedience movement demanded, amongst others, the universalisation of the public distribution system; a ban on all speculative futures/forward trading in essential commodities; release of the excess buffer stock of rice and wheat lying in the central government godowns (as against the required norm of 200 lakh tones of buffer stock, the government has 474.65 lakh tones); a roll back of the hike in the prices of petroleum products announced in the recent budget; and stringent action against black marketeers and hoarders. Far from accepting these demands, the central government has been brazenly defending its anti-people decisions and refusing to accept the growing misery of the vast mass of our people.
A unique justification of the government’s approach was advanced by the union home minister who attacked the Left parties saying that they were deliberately distorting the existing realities of greater burdens on the people. In particular, he questioned the Left parties for stating that 77 per cent of our people are living on less than Rs 20 a day. The Left parties were only quoting the estimates of the National Commission for Enterprises in the Unorganised Sector (NCEUS) about the number of people (836 million or 77 per cent of the population) at the end of 2004-2005 living below Rs 20 per day. The chairman of the NCEUS has since clarified that these numbers were not invented by the NCEUS but were derived from published household data of consumption by National Sample Survey (NSS). All the NCEUS did was to divide the country in terms of per capita consumption into six groups: extremely poor – upto 0.75 per cent of poverty line (PL); poor (0.7 per cent to 1 PL; marginally poor (1 to 1.25 PL); vulnerable (1.25-2 PL); middle income (2-4 PL); high income (above 4 PL)
Neither did the NCEUS invent any new poverty line. It used the official poverty line (which is grossly inadequate) as a benchmark to classify the categories of poor, only to make the data comparable over a period, for three different years of NSS survey — 1993-1994, 1999-2000 and 2004-2006.
According to that exercise in 2004-2005, the absolute number of people in category one of “extremely poor” was 70 million. In the second category of “poor”, the numbers were 167 million in 2004-2005. Taken together people below the official poverty were 237 million.
But for the next two groups, “marginally poor” and “vulnerable”, the numbers were a staggering 599 million in 2004-2005. The average per capita consumption of the fourth group, described as “vulnerable” was Rs 20 per day, which was highest among all the four groups “extremely poor”, “poor”, “marginally poor” and “vulnerable”. That is how the NCEUS calculated that 836 million (77 per cent of the population) were living below Rs 20 per day.
The Chairman of the NCEUS has since stated, “Effectively it makes clear that in spite of 10 years of high economic growth after the reforms of the earlier 90s, roughly 77 per cent of the population do not live on more than Rs 20 per day.”
There are two other major findings of the NCEUS that have not attracted much public notice. First, those groups of people, from “poor” to “vulnerable”, also account for the most socially-discriminated and disadvantaged group of the country — 87.8 per cent of the Scheduled Castes (SC) and Scheduled Tribes (ST) belong to this group, 85 per cent of all Muslims and 77.9 per cent of all Other Backward Classes, except Muslims, belong to these groups.
Further, most of the people from “poor” and “vulnerable” are not employable — 86 per cent of India’s illiterate belong to these groups as also 78.6 per cent of people with education only up to the primary level. As a result most of these people earn their living as informal workers with no security of jobs, wages, health or insurance against vulnerabilities.
In contrast, the 2009 Forbes’ India Rich (November 19, 2009 report) shows that the number of billionaires (in US dollar terms) in India nearly doubled to 52 in 2009 and their combined net worth reached $ 276 billion or a quarter of the country’s GDP. That they made these riches when the global economy was in a severe recession, when more than three-fourths of the Indian people were groaning under economic agonies, speaks volumes of the class nature of the stimulus packages and other concessions being given to the rich at the expense of the poor in the name of combating recession.
This is nothing but a resounding reconfirmation, if any such reconfirmation were ever necessary, that the neo-liberal trajectory is leading not merely to the creation but to the widening of the hiatus between the `shining’ and the `suffering’ India.
April 8 marks only the beginning of such popular mobilisations and protest actions against this trajectory of economic reforms. As we go to press, the leaders of the Left parties and other secular opposition parties are meeting to chalk out the future course of popular protest actions against these anti-people policies of this UPA-2 government.
Source: People’s Democracy dated 11-04-2010
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