THE TRIBUNE
CHANDIGARH | TUESDAY | 17 JULY 2018
Economy faces tough outlook
Inflationary pressures are mounting due to external factors like high crude oil prices and domestic issues like rise in MSP,
rupee depreciation and industrial slowdown.
Sushma Ramachandran
Senior financial journalist
A
PPEARANCES are deceptive,
they say. It is so true of the econ-
omy right now. To all intents and
purposes, there are signs of hope
and cheer, the most headline-catching
being a soaring Sensex. The fact is, how-
ever, the economic outlook for the coming
year is far from rosy. Some green shoots of
recovery are evident, with auto and con-
sumer sales showing an uptick, but there
are far more worrying indicators. These
are bound to be problematic for a govern-
ment that has to face general elections
after a year.
Inflation a key concern
The first and key concern is inflation.
Retail prices rose to a five month high of
five per cent in June as compared to 4.87
per cent in the preceding month. This has
been a prime issue highlighted by the cen-
tral bank which has already raised the
repo rate by 25 basis points for the first
time after four years at its last meeting. If
the consumer price index does not show
signs of slowing down, there is a possibili-
ty of another rate hike in August. The tar-
get of keeping inflation at four per cent by
the Reserve Bank of India seems a far cry
at this stage, with the latest decision to
steeply raise the minimum support prices
for a wide range of grains.
The monsoon will play a critical role in
this regard. Though the Meteorological
Department has projected a normal mon-
soon, media reports say so far there is an
Substance abuse is a psycho-socio-medical problem. REUTERS
A spirit of helping people
affected by drugs, not
punishing them, is
needed to deal with the
drug problem in Punjab.
Coordination between
sectors helping to
reduce the supply and
demand of drugs as also
spreading awareness of
their harmful effects is
the key to the issue.
on this day... 100 years ago
Lahore,Wednesday, July 17, 1918
Special Bengal Conference
It will have been seen from a telegram published in these
columns yesterday that the Special Bengal Provincial Confer-
ence held on Sunday last expressed its disapproval of the Mon-
tagu-Chelmsford scheme. The Conference was of the opinion
that “the scheme is disappointing and unsatisfactory and does
not present any real steps towards responsible Government.”
As the text of the resolution is not given it is not quite clear
whether the resolution is purely destructive, or has any con-
structive element in it, whether it merely condemns the
scheme or it suggests improvements in principle and in
details. One thing is clear. The two wings of the national par-
ty in Bengal have for the first time all the appearance of being
hopelessly divided.
Further Power of Deportation
While the public attention is riveted on the question of constitu-
tional development important powers are being taken by the
executive Government under the Defence of India Act to deal
with persons believed to be acting in a manner prejudicial to pub-
lic safety or the defence of India. An addition to the rules issued
under the Act provides that where in the opinion of a local Gov-
ernment there are reasonable grounds for believing that any per-
son has acted, is acting or is about to act in a manner prejudicial
to public safety or the defence of British India, the local Govern-
ment may, by order in writing, direct that such person shall
remove himself from British India in such manner and by such
route and means as may be specified in such order and shall not
return thereto.
PROBLEMATIC: Firm indicators point to the economy not being on an even keel.
eight per cent rainfall deficit in the north-
western and eastern parts of the country.
This has already reduced the area sown
during the kharif season by about 10 per
cent. In case this is not made up by the
end of the month, it will impact output
and, in turn, lead to more food inflation.
Rising fuel prices hurt
The second issue giving policymakers a
headache is fuel prices. These are rising
relentlessly at the retail level as a result of
the deregulated policies that enable oil
marketing companies to raise petroleum
product prices in line with global rates.
International oil markets are staying at
Drugged Punjab, stained establishment
PPS Gill
Senior journalist and former
Information Commissioner, Punjab
C
URRENTLY, reports of deaths
related to drugs in the media are
causing ripples of fear and anxi-
ety across Punjab. Neither is the
menace of drug abuse new nor is its politi-
cisation. Despite change of government,
'oath and claim', apparently, the infra-
structure and apparatus of drug traffick-
ing and consumption are intact. Even reg-
istration of thousands of cases under the
NDPS (Narcotic Drugs and Psychotropic
Substances) Act, 1985, against small-time
carriers and couriers (barring exceptions),
has made little impact. The shoving of
petty addicts into rehabilitation centres
and clinics has also not helped.
Substance abuse is essentially a 'psy-
cho-socio-medical' problem. Scores of sur-
veys/ studies conducted in the past two
decades by institutions, including state's
own, have come up with causes and reme-
dies. Yet, successive governments have
taken only baby steps.
The most striking feature of these sur-
veys/studies was the manner in which the
SAD-BJP government 'rubbished' them,
including the one by the Society for Pro-
motion of Youth and Masses (SPYM), the
National Drug Dependence Treatment
Centre, All-India Institute of Medical Sci-
ences, New Delhi, conducted in collabora-
tion with the Punjab's Department of
Health and Family Welfare (February-April
2015). The then Deputy Chief Minister
dubbed the findings as a 'conspiracy to
defame' the state. Now he does not want
quick crossword
ACROSS
1 An assumed name (5)
4 Plentiful (7)
8 Tear violently (3)
9 Praiseworthy (9)
10 Distressing (7)
11 English composer (5)
13 Unnerved (6)
15 Arrive (4,2)
18 General tendency (5)
19 Coolness of manner (7)
OPED 09
not a desirable situation and the govern- being attributed largely to sluggishness in
ment will be held responsible by the elec- the manufacturing sector, though power
torate for this issue. The Finance Ministry and mining seem to be showing some signs
will have to decide whether it wants to of improvement. The RBI made a predic-
stick to fiscal discipline for which it is tion on these lines recently. It had project-
being commended by investment rating ed some slowdown in industrial growth in
agencies or whether it should reduce con- the first quarter of this fiscal in the June
sumers’ burden by cutting the inordinate- monetary policy review, citing higher input
ly high excise duty on oil products like prices and softening of demand.
diesel and petrol. Clearly the outlook for the rest of the
year is tentative at best. This assessment
Rupee depreciation worrisome seems to be completely at odds with the
TRIBUNE PHOTO: MALKIAT SINGH
The third area of worry is the rapid depreci- stock markets which have been rising to
ation of the rupee which is linked to the ear- record levels in the past week. But the ral-
lier two issues. The rupee's decline has ly has been driven partly by the positive
been hastened by the higher cost of oil effect of rupee depreciation on services
imports and has pushed up inflation. In the exports by IT majors like TCS and Infos-
current financial year, the rupee has depre- ys which have a big weightage in the Sen-
ciated by nearly seven per cent, raising the sex. In addition, the initial flow of corpo-
cost of imports and leading to a rise in raw rate results has been positive, which
material and transport costs for industry. In always bring cheer to the markets.
an ideal scenario, exports should be given a Going by firm indicators, however, the
boost by a depreciating currency, but this performance of the economy is certainly
highs of 75 dollars per barrel, much more appears to have so far helped only select not on an even keel. Inflationary pressures
than India is comfortable with for the rest sectors like engineering goods and pharma- are mounting due to the external effects of
of the year. There are indications that ceuticals. Even so, there has been a spurt in crude oil prices and domestic issues like
prices may ease, with hints that the US export growth of about 14.2 per cent in the rise in MSPs as well as rupee depreciation.
may give waivers to countries that buy oil first quarter of the current fiscal as against Agricultural growth has a question mark
from Iran like India while supplies from a rise of only 9.8 per cent in 2017-18. One can over it owing to deficiency in rainfall and
Libya may also increase soon. The US is only hope that this silver lining of rupee decline in kharif acreage. Industrial out-
even reported to be considering drawing depreciation continues to yield dividends in put is sluggish and higher growth will
on its massive oil inventories in a bid to the coming months. depend on demand in the rest of the year.
bring prices down. Even so, India remains The only bright spots appear to be auto
in a difficult situation. Higher fuel prices Industrial production slowdown sales and the recent spurt in exports.
are pushing inflation but reducing taxes, At the same time, recent data shows a Clearly there is need for reappraisal of the
which should be the logical course of fourth area of weakness in the economy economic situation. Policymakers need to
action, will make it difficult to keep the fis- which is industrial production. The index become more realistic about the path
cal deficit under check. With an election of industrial production fell to a seven- ahead and ensure that course corrections
on the way, continuing high fuel prices is month low of 3.2 per cent in May. This is are carried out before it is too late.
the fight against drug abuse to be 'politi- Social media is abuzz with the observance a 59 per cent hike in liquor consumption in
cised'. Yet, he targets Congress. If the of a 'black week' to focus the govern- Punjab between 2005 and 2010.
SAD-BJP was in 'denial mode' earlier, it is ment’s attention on the vexed problem. Even smuggling of heroin from Pakistan
now guarded in comments. Expectedly, the government's focus along the 553-km international border has
To deal with drug terrorism, the Cabi- seemingly remains on targeting the drug escalated. The Border Security Force seized
net's decision to recommend to the Centre network to reduce supply, introduce out- 377 kg of heroin in 2017, a spike of 18 per
an amendment in the NDPS Act was to patient opioid-assisted treatment and cent over 2016; it was worth Rs 1,365 crore.
add 'death penalty' for drug peddlers. This improve the conditions in de-addiction It is believed that with low returns from
provision already exists in the Act for centres/clinics, and build mass aware- farming, people living on the border with
those held guilty for the second time. How ness on drug abuse and reduce its lands across the fence, act as conduits and
deterrent and effective has this Act been demand. Will it succeed? get paid as much as Rs 2 lakh per kg.
since its promulgation? The common per- The Congress leadership is on the back In fact, from narco-terrorism in the
ception is that the establishment knows foot, defending its actions and appor- mid-1980s, heroin trafficking from across
who all are involved, yet is unwilling to act. tioning the blame for recent deaths as the border rapidly picked up in 2000. The
The establishment itself is 'stained', given much to 'adulterated' heroin (chitta), question is not of quantifying the substance
the 'dubious' role of its instrumentalities. because of turning off the main supply abuse but its cascading impact on the
The nexus between drug cartels, organ- inlets, as it claims, as on the 'misuse' of youth, affected families and the state.
ised criminals, politicians and enforce- anti-addition drugs by taking these Several factors are responsible for caus-
ment agencies has aggravated the prob- 'intravenously' to satisfy their craving. ing the drug problem in Punjab and the
lem. It is time to break the nexus between Substance abuse is not a recent phenom- Green Revolution is one. It had set high
traffickers and their supporters in the enon. Even before Partition, opium, alcohol lifestyles and living standards, but down
establishment, if the state is to shrug off and poppy husk were widely consumed. the decades, these were difficult to main-
the tag of Udta Punjab. And, post 1947, people graduated to heroin tain, as yesteryear farming crisis caused
And for public consumption, the Cabinet
has formed a 'monitoring committee' and
and became 'addicts' or, as the World
Health Organisation, says 'dependent' on
an over-reliance on cash crops while
returns dwindled and unemployment
a 'working group'. Understandably, opioid derivatives. As per the WHO, the cat- spiked. Easy availability and access to
experts have rejected these steps. Ostensi- egories of drugs other than opioid (and drugs is another factor.
bly, such laws and acts are no deterrent for tobacco and alcohol) that may also cause The SPYM report stressed it would
offenders because quick and effective dependence are cannabis, sedatives, hallu- require a healthy mix of short and
implementation is missing. Otherwise, cinogens, cocaine, amphetamine type long-term strategies and inter-sector
there would not have been a chain of Nirb- stimulants and inhalants. coordination among stakeholders,
haya episodes after incorporating 'death'
for rapists. Rattled by the drug deaths — 23
Punjab has the dubious distinction of hav-
ing as many liquor shops as there are pri-
besides a spirit of 'helping affected peo-
ple', not 'punishing them'. Coordination
in June alone, in just five districts of Fer- mary schools: in the bracket of 12,000- between sectors involved in helping
ozepur, Tarn Taran, Amritsar, Ludhiana
and Faridkot — the director-general of
14,000, each. Liquor fetches handsome
revenues. In fact, Punjab's reluctance to
reduce the supply and demand of drugs
and spreading awareness of their harm-
police has held a review meeting, even as treat the drug situation as a full-blown crisis ful effects is necessary. All these three
the Special Task Force's efforts remain
'work-in-progress'. That the high court is
is partly because of the state government's
dependence on revenue from alcohol. The
approaches have their distinct role to
play. Over-relying on any one of the
seized of the issue is a different story. Comptroller-General of India had reported three is likely to be detrimental.
su do ku forecast
YESTERDAY’S MEDIUM SUNSET: TUESDAY 19:26 HRS
SOLUTION
SUNRISE: WEDNESDAY 05:31 HRS
Across
1 Ball of fire, 8
8 2 9
Brook, 9
Sultana, 10 6 8 5 Sunny Partly Cloudy Cloudy
CITY MAX
Rainy
MIN
Foggy
Science, 11
Chandigarh 32 26
Greed, 12
Ethics, 14 All for, 3 5 6 New Delhi 35 28
PUNJAB
17 Baton, 19
Antenna, 21
Lyrical, 22
5 9 4 3 Amritsar
Bathinda
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32
28
28
Peach, 23
Balustrade. 8 9 Jalandhar
Ludhiana
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27
25
Patiala 32 26
Down
2 Abolish, 3 9 2 8 6 HARYANA
Liken, 4 Foster, 5 Ambala 33 26
Illegal, 6 Evade, 7
Balderdash, 8 3 1 2 Bhiwani
Hisar
33
33
28
28
Basketball, 13 Karnal 30 26
Cynical, 15
Finland, 16
2 7 1 Sirsa 34 28
Naples, 18 Throb,
HIMACHAL PRADESH
20 Toper. 8 1 5 Dharamsala
Manali
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21 Manager of royal 5 Upstart (7) Nahan 30 18
household (5-4) 6 Globe (3) Yesterday’s solution calendar Shimla 23 16
23 Falsehood (3) 7 Contemptuous 9 3 4 2 8 7 5 1 6 July 17, 2018 Tuesday Solan 30 19
24 Rushing stream (7) remark (5) 1 6 7 3 5 4 9 2 8 ■ Vikrami Samvat 2075 JAMMU & KASHMIR
25 A rendezvous (5) 12 As a rule (9) 2 5 8 6 9 1 4 7 3 ■ Shaka Samvat 1940 Jammu 35 26
■ Aashadh Shaka 26
4 7 6 9 1 5 3 8 2 Leh 33 20
14 Approve openly (7) ■ Shravan Parvishte 2
■ Hijari 1439 Srinagar 32 20
DOWN 16 Specious excuse (7) 5 9 2 7 3 8 6 4 1 ■ Shukla Paksha Tithi 5,
UTTARAKHAND
1 Pertinent (7) 17 To test (3,3) 8 1 3 4 2 6 7 9 5 up to 4.20 pm
■ Vari Yog up to 2.04 pm Dehradun 34 25
2 Confidentially (2,7) 18 Entice (5) 7 4 5 8 6 2 1 3 9 ■ Purvaphalguni Nakashatra
Mussoorie 24 17
3 8 1 5 4 9 2 6 7 up to 9.28 am
3 A school’s teachers (5) 20 Insufficient (5) ■ Moon enters Virgo sign Nainital 23 17
4 Good-looking (6) 22 To grate (3) 6 2 9 1 7 3 8 5 4 at 3.07 pm TEMPERATURE IN OC