Centre charts loss route for IA
Novices talk away trade gains
Jaitley hints at entry of foreign print media
Digital lockers for herbal heritage

 
 
CENTRE CHARTS LOSS ROUTE FOR IA 
 
 
FROM JAYANTA ROY CHOWDHURY
 
New Delhi, Jan 23 
Loss-laden Indian Airlines (IA) is under renewed political pressure to purchase six French-made 52-seater ATR aircraft for $ 100 million in a deal the carrier is convinced will saddle it with a pack of ‘white elephants’.

The BJP-led government is using carrots and sticks to sell the deal. On the one hand, it is trying to convince the airline that it will save on aviation turbine fuel (ATF) costs if it flies the turbo-prop aircraft. On the other, the need for an extension of IA managing director Anil Baijal’s term, and a proposal to reduce the retirement age of airline officials to 58 from 60, has given it enough leverage to force a decision.

“We hope the cut in ATF prices will tempt IA to buy small planes like the ATR,” parliamentary affairs minister Pramod Mahajan told a group of baffled reporters after last week’s Cabinet meeting cleared the move to sell ATF at international rates.

In the past, the Cabinet had been approached by the civil aviation ministry to supply ATF at reduced rates to planes flying to the north-east. There was, however, no proposal to extend the benefits of cheaper fuel to a special type of aircraft.

The decision to sell ATF —which accounts for 20-30 per cent of airlines’ flying costs — at a discount of 40 per cent to its current price was aimed at reducing losses suffered by carriers, including Jet and Sahara, on their north-east flights. However, as the file on the ATF price cut shuttled between the corridors of civil aviation, finance and petroleum ministries, besides the PMO and the Cabinet secretariat, the policy recommendation took on a new, more sinister, spin.

The ATF reduction was now supposed to create conditions in which airlines fly not just to the north-east but to any nebulous town where a large field would double up as a landing strip and an airport.

This meant renewed pressure on IA to buy the ATR aircraft — a decision it had successfully resisted in 1998-99 under civil aviation minister Ananth Kumar.

If IA flies small turbo-props, it can break even only if fares are jacked up by more than 50 per cent and the seat-loads remain near capacity — both difficult and unrealistic propositions to achieve.

The airline explained these problems to the new civil aviation minister, Sharad Yadav, and he agreed buying turbo-props would be pointless. However his junior, minister of state Chaman Lal, supported the purchase on the grounds that these planes would connect remote towns with the country’s mainland.

The airline spent two years resisting efforts to sell the ATRs. On his part, Kumar felt the aircraft was necessary. Chairman-cum-managing director P.C. Sen, who opposed him on the issue, was packed off. Anil Baijal, the man who replaced him, was expected to fall in line, but he did not do so.

Baijal maintains the airline’s position that planes are needed, but not small, unviable ones. The need for new replacements to the ageing Boeing 737s and Airbus 300s was more pressing, he argued.

To accommodate Baijal and IA’s point of view, the BJP-led coalition government offered to pump in Rs 325 crore as equity into the airline. The funds, it said, could be used as margin money for buying not just the ATRs, but bigger planes as well.

Not convinced, the airline still demurred. Its point was that it would cost about Rs 440 crore to buy ATR planes and an additional Rs 2,200 crore to purchase the more-needed Boeings and Airbuses. IA said the twin purchases would push it deeper in debt — already a staggering Rs 2,417 crore.

Luckily for IA, the government of the day fell and the elections put all aircraft purchase plans on ice. But then, old habits never die. Politicians rarely forget their hobby-horses.

True to fears, the ATR deal has come back to haunt IA. But, this time around, the stars are not propitious for the airline as it tries to resist the pressure and stave off the purchase plan.    


 
 
NOVICES TALK AWAY TRADE GAINS 
 
 
FROM R.SASANKAN
 
New Delhi, Jan 23 
Indian negotiators’ insufficient understanding of trade issues and the secrecy surrounding negotiations, both bilateral and multilateral, seem to have seriously jeopardised the country’s interests.

Unlike the US and the EU, which have highly specialised trade negotiators, India’s case is handled invariably by bureaucrats with inadequate background and knowledge.

During the Uruguay Round of negotiations, these officials failed to foresee the changes in the Indian economy and to strike a hard bargain to protect the interests of domestic producers.

A glaring instance of this is the zero duty on milk powder imports. India had agreed to a zero import duty on a agricultural commodities like rice, wheat and milk powder during the Geneva Convention in 1947. This was because these items were in short supply at that point of time.

The situation changed dramatically by the time the Uruguay Round of negotiations began. India is now acknowledged to be one of the largest milk producers. It is also in a position to export wheat and rice.

The government wants to protect milk producers by imposing an import duty on milk powder but it cannot do so without the consent of other countries it has to negotiate with, either individually or in groups.

Indian negotiators were under the impression that quantitative restrictions (QRs) would be sufficient to protect domestic producers. Now, even those are being dismantled.

The US did not agree to India’s plea that it would lift these curbs over a period of seven years.

The WTO supported the US stand, forcing the two countries to negotiate a bilateral deal. The US recently announced that the Indian government had agreed to dismantle QRs from March 2001 on 1,600 agricultural items.

The Indian government kept the agricultural community in the dark about the negotiations.

People do not know what these items are and there is no attempt on the part of the government to educate farmers to cope with the consequences of this decision.

The negotiators had several opportunities to argue India’s case for an exemption from treating export promotion schemes as subsidies.

The developing countries are entitled to such exemptions. Indian officials, however, signed the deal without preconditions, thereby admitting that the advance licensing scheme and benefits given to EPZs and EOUs amounted to subsidising exports.

In the Indian bureaucracy, former commerce secretary A.V. Ganesan was the only one in recent years who understood the intricate issues involved in the Uruguay Round of negotiations.

After he retired, the government did not set up a group of experts to conduct trade negotiations. Senior bureaucrats are not kept in one post for more than two or three years.

The government should have set up a group of experts to deal with frequent changes in the trade scenario.    


 
 
JAITLEY HINTS AT ENTRY OF FOREIGN PRINT MEDIA 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan 23 
The Centre today sent out a clear signal that the barrier to the entry of foreign print media would be lifted.

Information and broadcasting minister Arun Jaitley said the 1995 Cabinet decision blocking foreign investment has no relevance now since foreign television channels are carpet-bombing the Indian audience with entertainment and information.

“Our sovereignty is not so weak to be threatened (by the entry of foreign print media). We have to counter it by strengthening our own communication system,’’ Jaitley said while speaking at a conference on “Media Policy in the New Millennium” here.

Jaitley’s statement reinforces the anticipation that the BJP-led government is about to open up the print media to foreign investment.

Some time ago, the information and broadcasting secretary had first indicated a review of government policy.

Jaitley, who is also in charge of the department of disinvestment, said the Centre will give more emphasis to strategic sale of shares of public sector units (PSUs) as the process is quick and relatively less controversial.

He said a separate department on disinvestment was set up as the government felt the process was taking time.

He said the process of public sector disinvestment would cover as many areas as possible except for highly strategic defence related businesses.

He hinted that ordinary defence component businesses could be given away to the private sector.

The government, he said, had received dividend of Rs 9,900 crore from public sector units, over the past eight years , against an investment of over Rs 2,00,000 crore.

The minister also announced that Doordarshan, which had already launched 24-hour satellite channels, would introduce a terrestrial channel for Jammu and Kashmir on January 26 to counter the disinformation campaign launched by Pakistan TV.    


 
 
DIGITAL LOCKERS FOR HERBAL HERITAGE 
 
 
FROM NANDITA ROY
 
New Delhi, Jan. 23 
Ancient Indian wisdom is getting new protection in today’s knowledge economy. Shaken by attempted thefts of medicinal and other health properties of Indian home remedies by global patent vultures, the government is now setting up a digital library for traditional knowledge.

Work on this ambitious project has already started with the Council for Indian Scientific and Industrial Research (CSIR), ministry for industry and commerce, environment and NIC weaving a high-tech information network for the purpose. Helping these agencies put together the knowledge content for the digital bank is the Indian System of Medicines.

At present, information on these plants lie scattered in various texts and, hence, difficult to tap. This has led to a plethora of patent applications on ancient Indian herbal and plant remedies.

A database on traditional knowledge and customary practices, especially on Indian systems of medicine, will have to be made available to the patent offices abroad, so that traditional knowledge is not patented by others. Food and items with medicinal uses like jamun, karela, neem, amla, brinjal and turmeric (which was later revoked) are increasingly under the threat of being patented.

The effort now will be to classify information on all those plants and herbs in a comprehensive manner. To start with, information on 100 plants will be gleaned from various ancient texts. These will be put in one place, and information on their medicinal applications will be available on the Web. The entire process is expected to take about 15-18 months.

A format similar to a patent application is now being prepared. Once completed, it will make items, which have been in the public domain since the ancient times, retrievable, and ensure they are not patented by others.

India has been subjected to patenting of its traditional knowledge and customary practices. . Over the years, it has seen an anti-diabetic formulation, based on brinjal, bitter gourd and jamun, or an edible herbal mixture comprising karela, jamun, gurmur and brinjal, being patented in other countries.    

 

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