|Just a swallow ... or spring?|
|Saturday, 17 September 2011 00:00|
After months of getting it wrong, and then taking one mis-step after another in the Anna Hazare-2G matters, the government appears to be finally taking some good decisions. On Wednesday, HRD minister Kapil Sibal announced that he planned to hike IIT fees a stunning fourfold—the increased fees, though, were to be recovered from employees over a period of time—suggesting the government intended to take a serious look at deserving and undeserving subsidies. On Thursday, this was followed up by a R3 hike in petrol prices—petrol prices have risen 39% since June 2010—and it was announced that a Group of Ministers would be looking at how to restrict subsidies on domestic cooking gas cylinders. And after more than a year of dithering on it, the government finally decided to act on the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), a gamechanger when it comes to India’s urban dreams. The decision to allow India Inc to borrow in yuan was also a welcome one.
With plans to develop 24 cities over 5,500 sq km, DMICDC is something India badly needs—with 260-280 mn additional persons projected to move into urban areas by 2030, India needs many new cities. Though DMICDC is more of an industrial cities project, its importance lies in the novel structure of its financing and the nature of planning involved in making these cities ‘smart’ in every sense of the term. The problem with DMICDC, however, was that while the government was providing the land and the money for the cities, and the guarantee for the Japanese-government funds, the government did not control it—it had a 49% stake as against IL&FS’s 41% and IDFC’s 10%. With the Cabinet deciding the private firms are to be bought out by government-led institutions, this aspect has been taken care of, though the government needs to clarify as how it will ensure DMICDC takes off like the Delhi Metro instead of going the way of most government projects.
The problem with taking decisions late, of course, is that events overtake them. So, in the case of the oil sector, though petrol subsidies are now zero, the under-recoveries are still very high on diesel, kerosene and LPG—the decision to limit LPG subsidies was put off yesterday—and estimated to be over R1 lakh crore. Perhaps why Ficci secretary general Rajiv Kumar reacted to the Cabinet decisions by saying one swallow didn’t make a summer.