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Kudos to GIM organisers... Sardar Sarovar – the seventy year itch South India’s 100 most valuable companies Sowing seeds of hope CAD and the emergency thereof Oh my GOLD Miles to go... A historic indirect tax reform Rail-road Rajaraman Welcome Measures. Work for 10X Change The Great Fall Why (not) abolish? Economy through the month Star of the South Policy Makers What the big B should offer? No groundnuts in groundnut oil! Breaking news or breaking credibility? You too T M Krishna? Land, land everywhere, but... Industry can’t get it from Mars, yet Need plan over the long term planning Jobs - Lost, Changed or Gained A tale of two Bihar babus Tryst with GST An eventful week with VVIPs of Delhi Welcome move to widen the tax net… Truce at Kasturi Buildings Weaving wealth of western Tamil Nadu Much can be done by us PC please be our Santa Deming awardees galore! Technology and economic development should be linked Well-administered State Focus on southern TN... When the examiner cheated... Little surplus after salaries, subsidies and debt servicing A dual GST that will protect prosperous states After all, customer is the king They add lustre to Padma Awards Cleansing Indian retail Babes In the wood-RBI North block has little clue to curb inflation Outward ho Strategic planning the missing link Pool energy prices Much ado about nothing Two welcome measures from the chief minister... INDIA keeps its date with destiny Research for survival... Public investments and welfare will surge If not Tamil Nadu, where else? Trail-blazing Tamil Nadu Babes In the wood-RBI North block has little clue to curb inflation Sustainably developing manufacturing sector… In the horns of a dilemma Make way for Make in India... Need for radical RBI reform CSR, tech revolution and bank crisis An eco-friendly commute in Mysuru The deluge and the several kindly souls Ganesh’s mantras It’s raining funds for states. Really? Wanted: decentralised financial system A gratifying record Welcome rains for damaged roads... A Fine division of responsibilities Chennai Airport-Ready for a rapid take off... Skewed Economic Zones? How will it PAN OUT 1800 parties registered with EC – Less than 60 contest elections Indian GST – Between extremes… Better relations with UK... Why throw baby with bath water? A blueprint for the future TN - so much to offer... BJP can now hasten its thrust for reforms Low profile moves Reform this licence to…kill Focus on agriculture and human resources Healthy finances of the Chennai Corporation MS Installed Tax evaders’ get out of Jail-Free Card
 
Much can be done by us
Policymakers in Delhi, including the Finance Minister, often point to global conditions as responsible for much of the ills faced by the country. But we believe that India can do a lot on her own to improve matters. Solutions for India’s problems should not be dependent on the pronouncements of the

We believe much can be done to attend to these factors through decisive, strong and intelligent action. We explain how:

Take CAD. This is caused by runaway increase in imports without a corresponding increase in exports. In regard to imports, major items include crude oil and other petroleum products including gas, followed by gold. Surprisingly, there is also substantial outgo on import of several things which, with some focus, can be avoided eg. import of edible oils, pulses, power plant equipment and the like. A firm policy can certainly help reduce substantially the outgo on these imports. We will explain some of these areas.

How US reduces crude imports...

Crude and other petroleum product imports have been ballooning. With nearly 80 per cent of demand met through imports at

present, India has little option in this area and secondly, with crude prices shooting up, the outgo on petroleum product imports has also been increasing rapidly. The United States provides a shining example of tackling this with firm policy initiatives. Hardly a decade ago, the US was heavily dependant on the Gulf countries, notably Saudi Arabia, for the import of crude oil. A conscious decision was made to reduce this and also march towards self-sufficiency. US, being the largest consumer of petroleum products, naturally had to tackle this on an urgent basis. How effectively the country has done this !

Firstly, the country decided to focus on the manufacture of ethanol from corn. Today, nearly half of US corn production is diverted for producing ethanol and this has a twin advantage: apart from ensuring a degree of import substitution, this also helped revive the agriculture sector languishing for long. This has given a big boost to corn growers in mid-west US. Several states have also made it mandatory to use ethanol as part of fuel bought at the petrol pumps.

Simultaneously, US also looked at the prospects for tapping shale gas, ie. natural gas imprisoned in shales in huge quantities. Tapping this earlier was not found economical when crude prices were low. But with crude prices shooting up, investment on this technology was found attractive. Today, shale gas production has shot up to dizzy levels and this helps US accelerate its march towards self sufficiency. In fact, there are optimistic estimates that over the next 5-7 years, US’ dependence on imports of energy in the form of crude and other petroleum products would almost grind to zero. This makes tremendous sense for a country so heavily dependant on such imports for so long. Remember, hardly four decades ago, crude was available for as low as a dollar per barrel and it has experienced a more than 100’ fold increase since!

Simultaneously, US has also been mandating improved fuel efficiency in automobiles. Since the first oil crisis in 1973, such efficiency improvements have been huge. In the aftermath of the first oil shock in the 1970s, US mandated its auto manufacturers to work on 25 miles per gallon(3.8 litres); it was achieved in quick time. Now it is driving towards 55 miles per gallon(over 20 km/litre). Contrast this with the abysmal 7km/litre by even highly branded cars in city roads. Plus the work done on hybrid engines that run on batteries plus petrol. Already Toyota’s Prius car, for instance, gives as much as 50 miles plus per gallon (3.8 litres in US), 24km/litre-much more than thrice the fuel consumption by petrol-driven compact cars in urban India.

India has a strong lesson in these successes. There was a big spurt in crude production after the discovery of oil in the Bombay High in the 1970s. For over three decades now, there has been little growth in the domestic production of crude oil. The country did experience a good deal of progress in regard to the discovery of natural gas, especially over the last 5-6 years. The policy of providing suitable incentives in the early part of this century did attract investors to explore and exploit the gas reserves.

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