ET2018 ⁽¹²⁾

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The Narendra Modi-led government has set the stage by inviting applications for 10 joint secretary positions for terms lasting three to five years.Read full article In an article published in this newspaper in September 2000, ‘ Bringing Competition to Bureaucracy’, I had argued that increased complexity of policymaking required opening up of the top bureaucracy to outside specialists. I recommended, “Positions at the level of joint secretary and above should be filled by fully open competition. To ensure fairness in the process, the UPSC (Union Public Service Commission) can be entrusted with the task of administering the selections. When outside individuals are chosen, they may be brought on fixed terms of a suitable length.” Two decades later, the government has set the stage for this important reform. It has invited applications for 10 joint secretary positions for terms lasting three to five years. Surprisingly, however, the majority of news stories have taken a sceptical view of the GoI announcement. A key criticism has been that this is nothing new; lateral entry, most prominently of economists, has been a feature of our…

The steps taken so far are not enough, in the longer run full modernisation of the banking sector will require further structural reforms, Panagariya says.Read full article The banking sector, a major engine of growth, has been greatly underperforming in India. This is an inherited problem for the present government. Experts in finance had known for some years that the vast majority of the “restructured” loans would eventually turn into non-performing assets (NPAs). But the finance ministry and Reserve Bank of India (RBI) were slow to move towards a solution. Luckily, both of them have moved to take the NPA bull by the horns during the last year. Armed with the Banking Regulation (Amendment) Act, 2017 and subsequent authorisation by the government, RBI has issued definitive directions to banks for time-bound resolution of stressed assets including through the Insolvency and Bankruptcy Code (IBC), 2016. An impressive 40% of NPAs are now under the IBC process. Three other important developments towards strengthening the banking system have taken place. First, the finance ministry has moved decisively to recapitalise the banks. This is already…

A new generation of babus seems to have now replaced its more enlightened predecessor. It is about to erect the wall of protection all over again, Panagariya said.Read full article When GoI raised custom duties on a number of products in December 2017, as an eternal optimist, I took the view that this had been done for revenue reasons. But increases in duties on a long list of products ranging from kites and footwear to cellular mobiles phones and motor vehicles in Budget 2018 have ended that optimism. Indeed, revenue secretary Hasmukh Adhia has explicitly stated that the duties have been levied, not to raise revenue, but to provide protection to micro, small and medium enterprises (MSMEs). Adhia adds, “We have a phased manufacturing programme in electronic manufacture industry for which increasingly we will be putting more duty on the final product, then on second level of spare part and third level of spare part.” The Great Wall of India The clear message from the revenue secretary: stay tuned, more tariff hikes are on the way. For those of us old…

The Economic Times February 5, 2018 Read full article As the Parliamentary Standing Committee deliberates the National Medical Commission (NMC) Bill, 2017, fog around it must be cleared. Vested interests have deliberately created some of this fog. Corruption, low quality and slow expansion have been the hallmarks of medical education under the current Medical Council of India (MCI) regime. With a small self-interested and self-perpetuating clique of doctors controlling the MCI for decades, the top scholars and practitioners of medicine have simply quit playing any role whatsoever in shaping medical education. Therefore, the NMC Bill makes a conscious effort to bring the best in the profession to the centre stage of regulation. The Bill proposes that a committee of unimpeachable integrity headed by the Cabinet Secretary select the members of the National Medical Commission and its four boards. One hopes that the guiding lights of the disciplines are ready to step up to the plate. The Bill proposes to place quality in medical education at the centre of the regulatory process. Under the MCI, regulation has focused solely on enforcing strict infrastructure and personnel norms, which…