Onion and Cotton Prices and Government’s response

23/12/2010

Two-three years ago there was bumper crop of onion. Onion prices crashed and in spite of very good crop, the farmers could not make more money than in the previous years. The consumers had very good time. The government did not take any action to give incentives to producers to export onions to ensure that the local prices did not crash. Government kept quiet.

This year, due to heavy rains and other reasons the production has done down steeply. The prices in the local market increased and the farmers who had very poor crop had some satisfaction that the prices are high. But the government would not allow them to be happy. On the basis of consumers’ complaints against high prices, the government disallowed export of onion and allowed import of onions free of any restrictions and without duty. The prices will come down and the farmers would suffer as usual.

While the consumers have good time through out their life, the producers of onions as also other agricultural produce will have bad or not so good time through out their life.

There is no rationale in the government’s action. The argument that due to high prices only merchants profit and not the farmers is not convincing.

The same is the case with cotton and cotton yarn. If producers of fabrics and ready made garments had good time- high profits- when cotton production was high and the prices were low, why not they have low profits or even small loss when cotton prices are high?

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Reforms at UN

18/12/2010

The Agenda of United National General Assembly (UNGA) has over 150 items with many of the items having sub-items. UNGA adopts about 300 resolutions of which over 50 are adopted in the Plenary and the rest in the Committees. This gives an idea of the quantum of work done by UN. The work is so much that most of the resolutions are not discussed in detail and some of these must have been passed without any debate. The UNGA would not be able to take concrete action on many items. Where the provisions of the resolutions are to be implemented by the member countries or others, the office of the Secretary-General would not have time to pursue and enforce implementation Therefore, the first major reform of the UN system should be to reduce the number of agenda items and the resolutions.

The UNGA as also the Security Council should confine themselves to matters of world peace, security, disarmament and such important matters. Other matters like economic development, health, education, science, environment, civil aviation, food, maritime maters, trade, etc. should left to be entirely handled by specialized agencies like UNDP, UNIDO, WHO, UNESCO, UNEP, ICAO, FAO, IFAD,WFP, IMO, WTO etc. If this is done, UNGA could devote more and enough time on matters relating to international peace, security, disarmament, nuclear non-proliferation etc. and enforce implementation of its resolutions. If the concerned governments are unwilling to implement, the matter could be referred to the Security Council who could decide on the action to be taken like imposing sanctions, sending UN forces etc.

Increasing the role of UNGA, abolition of veto powers of Permanent Members of Security Council could be taken up later on.


India-2G Spectrum case

17/12/2010

From the 2G spectrum allocation case, it appears that a ministry/department in the Government can do whatever it thinks correct, even when there are objections from other ministries and that the other ministries are helpless. But this is not the case. The Government has rules and regulations and checks and balances which make it difficult for any ministry to go ahead with its decision amidst objections from other ministries.

Even when it is not a major policy issue, if two ministries have different views, the matter should be referred to the Cabinet Secretary, who may if necessary call for an inter-ministerial meeting, to sort out the differences or refer the matter to the Cabinet for decision. In the 2G spectrum case Ministries of Law and Finance are reported to have expressed views different from that of the Department of Telecommunication. Therefore the matter should have been discussed in an inter-ministerial meeting and then put up to PM/ Cabinet for approval. The Department of Telecommunication itself should have proposed the inter-ministerial meeting.

In order to avoid recurrence of such cases, it would be useful if Cabinet Secretary issues circular to all Secretaries reiterating the procedures and also call for a meeting of all Secretaries to impress on them the need to follow the procedures and the consequences if procedures are not followed. Guidelines should also be issued as to the matters on which it is mandatory for a Minister to seek approval of the Prime Minister. The Prime Minister can either take a decision or seek the views of the Cabinet.

Departmental proceedings (action) should also be initiated on those who do not follow the procedure and cause loss to the government.