Did Manappuram insider bail out just before RBI deposit ban?

The curious case of Manapurram Finance, the loans-against-gold company that was recently pulled up by the Reserve Bank of India (RBI),  keeps getting murkier.

On Monday, 6 February, the RBI barred Manappuram and a related sole proprietary firm from raising public deposits, but even before the news was out, the wife of one of the company’s non-promoter independent directors was selling shares in the company.

Sarada Sankaranarayanan, wife of independent director AR Sankaranarayanan, sold 5,00,000 shares in the market at a price of Rs 57.75 through their broker Geojit BNP Paribas on 6 February before the RBI information was put in the public domain. Sale of shares continued the next day, when the same promoter sold another 8,63,000 shares at Rs 48.17. The shares opened lower when the market came to know about the ban.

Total proceeds from the sale on the first day work out to Rs 2.89 crore while on the second day it was Rs 4.16 crore. The average price of sale for the transactions works out to Rs 51.68 and the total proceeds added up to Rs 7.04 crore. The share currently trades below the average sale price at Rs 46.40, down 6 percent.

Does this sale amount to insider trading, when a member of the board sells shares before news that can have a material impact on the share price is widely disseminated?

Meanwhile, HNN  has reported that the central bank is contemplating regulating the gold loans sector. This is could be in the form of limits on the loan that a gold loan firm can give as a percentage of the value of the loan.

The RBI may also restrict the maximum interest that a gold loan firm can charge its customers, and also the penalties that gold loan firms can impose, HNN reported.
Gold loans bubble is sure to pop sooner than later
The business of lending money at usurious rates against the collateral of gold is booming.  Banks and non-banks are currently dishing it out at the rate of 1,20,000 new loans a day – yes, a day!

At last count, the business was reckoned to be worth Rs 80,000 crore and growing at the rate of over 70 percent for non-bank finance companies and around 35 percent for banks.

Between last year and this year, the two big boys of the gold business, Muthoot Finance and Manappuram Finance, have grown like gangbusters: the former by 96 percent, and the latter by 170 percent.

There are two reasons why this boom is showing no signs of flagging. One is the fall of microfinance institutions, which have been in a tailspin ever since Andhra Pradesh issued an ordinance last year regulating interest rates and curbing strong-arm methods of loan collection. These loans have thus gotten tougher.

Secondly, with gold prices zooming, borrowers have discovered that they can raise more money with the same collateral. Last year, around this time, international gold was just over $1,200 an ounce. On Tuesday, it was more than $1,875. That’s more than a 50 percent rise in a year – besting all other asset classes.

What this means is that if you as a borrower had raised Rs 6,000 by pledging Rs 10,000 worth of gold jewellery last year, the same pledge can help you raise an additional Rs 3,000 today.

And that seems to be what borrowers are doing. For example, Muthoot Finance, one of the market leaders, saw the average ticket size of its gold loans rise 24 percent in the past four quarters when gold prices rose 17 percent, according to a Kotak Securities research report.

Manappuram Finnance, according to Edelweiss Securities, saw gold loans rise 20 percent against an increase in gold stocks of 13 percent. This means 7 percent of the rise in loans is related to the price of the gold (or its ticket size), rather than more gold being brought in as collateral.

People are borrowing more against the same gold.

This is fine as far as it goes, but it could have a huge downside if the gold price suddenly starts falling. Remember, the US sub-prime crisis had its roots in people who borrowed more from banks when the values of their properties were rising before the 2008 crisis. When the real estate market collapsed after the Lehman bust, banks were stuck with huge bad loans – and borrowers with unserviceable debt.

Nothing like that may happen with gold, since everyone is bullish on the metal against the backdrop of the uncertainties over global growth, and worries about the future of the dollar and the euro. Gold is the only safe haven left.

But every surge in gold prices inevitably leads to a fall at some point when the rise has to be digested by the market. When gold prices zoom, many people also cash in. India has 15,000 tonnes of private gold — or maybe even twice as much. There is no guarantee that some of that gold won’t be sold to book profits, thereby bringing prices down.

The short point is this: while the long-term trajectory of gold is up, the short-term cannot be predicted. And gold loans are anything but long-term. According to Edelweiss, over 52 percent of gold loans are taken for less than three months. Only 13 percent is longer-term (above one year).

There are six reasons why the gold loans business needs to start getting cautious from now on.

One, gold prices could peak anytime, and when it starts falling – as it surely will at some point – loan defaults will start rising. Since the average loan size for Manappuram is around Rs 70,000, quite clearly the borrowers are not the rich. Muthoot says its average ticket size is Rs 30,000-35,000. They probably come from the middle and lower middle classes, where vulnerabilities are higher.

Two, the industry is too concentrated in the south. Some 75 percent of Manappuram’s business is in the south. The microfinance business hit a speedbreaker precisely because it had put all its eggs in one basket – Andhra Pradesh. The gold loans business is not so bad, but concentration in the south is still too heavy for comfort.

Three, growth rates will start slowing down progressively as the business grows. Rates of 100-200 percent are more or less over. Muthoot is likely to see its annual rate drop from 96 percent last year to 43 percent in 2011-12, says Kotak.

Four, competition is growing. Interest rates are high since gold lenders are essentially competing with money lenders. At lending rates of 20-22 percent for non-banks and a bit lower for banks, the margins are simply too mouth-watering. Almost all finance companies are planning to get into gold loans, with Mahindra Finance being a recent entrant last year. Indiabulls is another.

Five, there is a possibility of greater regulatory intervention. Given the scale of the business, the Reserve Bank is keeping a wary eye cocked on this business. Earlier this year, it said that bank loans to non-bank finance companies given against the collateral of gold will not be treated as priority sector lending. This pushed up interest rates by 1-2 percent immediately. More regulatory action may follow, if the central bank starts worrying about the possibility of a gold loan bubble building up in the system.

Six, private companies lend against lower margins. Unlike banks, which lend 55-65 percent of the value of gold mortgaged, private companies give out higher proportions of 70-80 percent. This means the safety margins are thinner for them. Moreover, with the RBI getting into the action, they are having to borrow from the market at higher costs to fund their loan-books. Muthoot Finance is currently in the market to raise non-convertible debentures at 12.25 percent.

At Rs 80,000 crore and growing, the gold loan business has reached a stage where growth will slow down, competition will thin down margins, and the risks grow steadily higher.

In Andhra it only took a couple of suicides among the poor to earn the wrath of the government and bring the business down crashing. Recoveries are now less than 20 percent among microfinance lenders.

Gold is different, but it too cannot defy the laws of economics forever. The loan bubble cannot continue to build indefinitely.

‘Despite backlash, Akbar Owaisi won’t be apologetic’

When MIM MLA Akbaruddin Owaisi boarded a flight for London early Christmas day with his family, little was he to know that what he had uttered a few hours earlier at Nirmal in Adilabad district would kick up a national outrage and lead to several new cases being slapped against him, including that of waging a war against India and promoting enmity between classes. 

    
In fact, not only would the legislator himself be surprised over the development, so would those who know him well. For what he said was nothing new. He has been making such ‘hate’ speeches for several years but the only difference this time was that it became scandalous, thanks to the rising power and reach of the Internet and social networks like YouTube and Facebook. “If you think he would be apologetic about the whole thing, you would be terribly mistaken,” claimed a person who said he knew him for the last two decades. 
    
Rebel with a cause, is how many describe Akbaruddin. Born into the politically powerful family of Salahuddin Owaisi in 1970, he studied till Class X in Hyderabad Public School, then the only elite and up-market school in the city. After completing Intermediate in St Mary’s Junior College in Himayatnagar, the Owaisi scion went to Gulbarga to pursue medicine but during his second year of MBBS in 1992-93, answered the call from his family and abandoned studies to begin a career in politics. 
    
But very soon, the rebel in Akbaruddin got the better of him. In what is considered virtually impossible in even today’s Hyderabad’s Muslim society, Akbaruddin fell in love with a Christian girl and insisted on marrying her. Despite stiff opposition from his father Salahuddin, Akbaruddin went ahead and married the girl in 1995 who began a new life under the name Sabina Farzana. But the son was not forgiven by Salahuddin and had to spend the next two years in wilderness. 
    
However, in 1998, the failing health of Salahuddin forced a rapprochement between the father and the son and Akbaruddin returned to the family fold to take on arch rival Amanullah Khan from Chandrayangutta assembly constituency and began his electoral career with a bang by defeating him in the 1999 polls. From then on, there was no looking back for Akbaruddin. Firmly in command, the Akbar as we know today blossomed. “I will convert Lal Darwaza into Hara Darwaza,” he thundered on one occasion. Lal Darwaza was a Hindu stronghold in the Old City and spawned many leaders like BJP’s A Narendra. In 2007, he threatened to carry out the fatwa issued against author Salman Rushdie and behead writer Taslima Nasreen if she sets foot in Hyderabad. “See what happened to Taslima and P V Narasimha Rao. They were forced into oblivion for hurting the sentiments of the Muslims,” the MIM MLA said at the Nirmal meeting on December 24 even as the crowd chanted ‘Sher-e-Deccan’. 
    
In April 2011, Akbaruddin survived an attempt on his life by a group led by rival Mohammed Pehalwan. “If my enemies want to eliminate me, they should trying using a cannon,” he said at the Nirmal meeting. It remains to be seen how the rebel, fiery and rabblerousing self-declared champion of Muslims would take the public outcry and handle the slew of cases that await him when he returns to the city in the next few days.

Police sitting on arrest warrants against Owaisis

A case (crime number 130/2005) with severe charges including sections 147, 153-A, 353, 290, 295-A, 186, 341, 504 and 506 of the IPC and section 7 of Criminal Law Amendment Act was booked against Akbaruddin and Asaduddin Owaisi along with other MIM leaders at Patancheru police station in April 2005 for obstructing revenue officials from carrying out demolition of a place of worship to facilitate road extension at Muttangi village. Akbaruddin and others were accused of hurling abuses at then Medak district collector Anil Kumar Singhal. 
    
In this case, Patancheru police have filed a chargesheet and the trial is on. But as both the Owaisi brothers did not appear before court, non-bailable warrants were issued against them two years ago, but till date, the cops did not even execute the warrants. “We tried on several occasions to execute the warrants but the legislators were never available at their house,” was the lame reasoning given by a Patancheru police official. 
    
In 2006, Hussaini Alam police booked cases against several MIM leaders including Akbaruddin Owaisi (crime number 27/2006) under sections 147, 427, 109, 114, 295, 153-A r/w 149 of the IPC, sections 3 &4 of PDPP Act and Criminal Law Amendment Act in relation to violence pertaining to protests over anti-Islam cartoons published in a Danish newspaper. Akbar was charged with inciting the mob to resort to violence through provocative utterances. However, the MIM leaders including Akbar secured anticipatory bail and never spent a single day in jail. Referring to the case, Hussaini Alam inspector J Venkat Reddy said the chargesheet was filed in 2007 and trial began only recently. 
    
A case was again booked against Akbar under section 506 (criminal intimidation) of the IPC at Punjagutta police station in 2007 for threatening Bangladeshi writer Tasleema Nasreen to never return to Hyderabad again. Givingthe status of this case, Punjagutta inspector Tirupati Rao said the chargesheet has been filed and the case is pending trial. Recently, based on SC directions, in October 2012 Chandrayangutta police booked a murder case against Akbaruddin and others in relation to the murder of Ibrahim Bin Yousuf Yafai, who was shot dead at Barkas in April 2011. 
    
So, given this record, people are apprehensive about any proactive police action even in the Adilabad and Nizamabad cases.

 Several days after the incendiary speeches made by MIM MLA Akbaruddin Owaisi in Adilabad and Nizambad districts, the state cops went into an overdrive on Friday and slapped notices at his Banjara Hills residence seeking his appearance and also registered another case of promoting enmity between classes even as a local court referred a complaint against the MLA to the cops for investigation. 
    
The two notices, served on the Road No 12 Banjara Hills residence of Akbaruddin by Adilabad and Nizambad police, stated: “Under 41 (a) of CrPC, in exercise of power conferred on me, I hearby inform you that during the investigation of crime 1/2013 under Sections 153 A and 121 of IPC registered in Nirmal town, it is revealed that there are reasonable grounds to question you about the facts and circumstances. Hence, you’re hereby directed to appear before me.’’
    
It was signed by the respective investigative officers of the two districts. While Adilabad police directed Akbaruddin to appear before investigating officer A Raghu at Nirmal Rural police station on January 7, Nizambad police summoned the MLA before IO Mohammed Asif of II Town police station on January 8. 
    
In the meantime, Osmania University police on Friday registered an FIR against Akbaruddin on the directions of the IVth additional chief metropolitan magistrate based on a petition by S Venkatesh Goud. The MLA was booked for promoting enmity between classes. OU police said that a notice will be served on Akbaruddin shortly to make an appearance before them. Meanwhile, II Metropolitan Magistrate in Ranga Reddy district directed the LB Nagar police to register a First Information Report (FIR) against Akbaruddin following a private petition moved by S Janardhan Goud, an advocate.”I filed the petition against Akbaruddin Owaisi for his inflammatory speech against Hindu religion. The court directed the LB Nagar police to investigate and file a report by February 2,” Janardhan said. 

Police are expected to register the FIR under Sections 121 (waging war against nation), 153 A (promoting enmity between classes), 285 (hurting religious sentiments) of Indian Penal Code (IPC).Meanwhile, controversial Telugu Desam Party (TDP) Mangalhat corporator Raja Singh, who was earlier involved in several communal related cases, moved a private petition against MIM leader Akbaruddin Owaisi in XVI Additional Chief Metropolitan Magistrate, Nampally court, for his hate speech in Nizamabad and Adilabad. The magistrate will record Raja Singh’s statement on January 7, in the court. In another case, a BJP leader Satish Agarwal moved a petition in Malkajgiri court seeking the filing of a criminal case against both Akbaruddin and MIM President Asaduddin Owaisi. `Akbaruddin is making the defamatory statements against Hindu religion at the behest of the conspiracy hatched by Asaduddin,'' Satish said. 

Analysis: Highs & Lows of 'Majlis Party' of Hyderabad

DGP V Dinesh Reddy has said that the Interpol will be alerted if MIM MLA Akbaruddin Owaisi does not return to the city, but this may not be necessary at all. For the general feeling among people in Hyderabad is that Akbaruddin will return from London soon and face the new charges that have been slapped against him in his absence for his rabble-rousing speeches in Adilabad and Nizamabad recently. 

    
In the meantime, there have been increasing demands to disqualify Majlis-e-Ittehadul Muslimeen (MIM) and ban Akbaruddin from contesting elections. 
    
The MIM has been embroiled in controversies since its birth in 1927. The founder president of the party was Nawab Mahmood Nawaz Khan who was succeeded by Bahadur Yar Jung in 1938. Initially espousing socio-cultural causes of the Muslims, the party slowly donned political colours much to the discomfiture of the last Nizam of Hyderabad Mir Osman Ali Khan. The last president of the MIM before Hyderabad state was merged with Indian Union was Syed Qasim Razvi. His militia of Razakars or volunteers became one of the most controversial groups with its excesses against the civilian Hindu population. 
    
Razvi was arrested, tried and imprisoned. He was set free in 1957 by the government on the condition that he migrate to Pakistan. The government also gave tacit approval to the revival of the MIM. When it was reconstituted in 1958 it swore allegiance to the Indian Constitution. Abdul Wahed Owaisi, the grandfather of Akbaruddin, became the first president of the MIM in post-Independence India. While Abdul Wahed Owaisi busied himself in organizing the party, his son Salahuddin Owaisi became his first lieutenant. It was the time when the only main opposition to the Congress in Andhra Pradesh was the Communist Party which also enjoyed a strong presence in Hyderabad. The MIM took on the mighty Congress and the Communist Party in 1960 elections to the municipal corporation and won 24 of the total 64 seats. Two years later Salahuddin entered the Legislative Assembly by winning the Pathargatti seat. When all attempts by the Congress to finish off the MIM proved counter- productive in 1967 as the party had increased its strength to three in the Assembly, the Congress changed its tack. It began wooing the MIM. 
    
After the 1967 elections the party received its first shock when two of its MLAs—Khaja Nizamuddin and Ahmed Hussain—deserted it. It was perceived that the MIM would not recover from this setback. The party recovered once again in 1972 elections and later survived several desertions. The 1978 elections saw the number of MIM legislators rising to four and in the following elections, to five. In 1984 Salahuddin Owaisi won the Hyderabad Lok Sabha seat. 

The MIM was hit by the most serious crisis in 1993 when Mohammed Amanullah Khan, a senior party leader, split the party and floated his own MBT. This party won two Assembly seats in 1994 leaving only one seat for the MIM. It was believed at that time that the MIM would not be able to regain its strength. But inherent resilience in the party brought it back to the forefront in 1999. It made friends with the TDP and carried on until 2004 when Y S Rajasekhara Reddy of the Congress offered an olive branch and roped in the MIM. Reddy became the first Congress chief minister to declare in public his alliance with the MIM. 

The 2004 elections also saw Salahuddin Owaisi bowing out of electoral battles and deciding to send his eldest son Asaduddin Owaisi to Lok Sabha. At the same he made Akbaruddin the floor leader in the Assembly. 

Even as the party was settling down for good, two leading Urdu newspapers—Siasat and Munsif—decided to oppose the MIM. Siasat editor Zahed Ali Khan stood against Asaduddin from Hyderabad Lok Sabha seat on TDP ticket in 2009 and lost. The newspapers and their editors are still opposed to the MIM and there are reports that Khan will oppose Asaduddin again in 2014 elections. 

There are many who loathe Akbaruddin because of his unrestrained attacks on his opponents and consider him a demagogue. At the same time in the MIM he is considered ‘the star orator’ who has no equals. His followers in the Old City treat him as a celebrity and go into a frenzy whenever he addresses them in public rallies. Carried away by the public response, Akbaruddin attempts to fly higher, disregarding norms of public and political discourse. This time around in Nirmal, he went too far denigrating religious icons, daring the police and challenging the state again and again. 

Observers believe that MIM will survive the ‘Nirmal effect’ but with difficulty. The prevailing political system will give the MIM the leverage required to overcome the crisis. There are also chances that with the all-round incessant attack against Akbaruddin, his core followers could grow in numbers. 
   
If Akbaruddin has crossed the Lakshman Rekha, it means that our electoral system is allowing it to happen. Therefore, it is the electoral system which needs to be overhauled, nothing less.

Owaisi hate speech: Faux pas or prelude to Operation Polarisation?

If this is the route the All India Majlis-e-Ittehadul Muslimeen (AIMIM) wishes to take to spread its wings beyond the Old city of Hyderabad, we might all have to run for cover. Caste politics has its uses, politics based on religion has none. MLA from the MIM party Akbaruddin Owaisi came in for a lot of criticism on social networking sites like Twitter after an incendiary speech during a set of public gatherings organised in Andhra Pradesh. And expectedly the reactions ranged from the outraged to those demanding action against the MLA for his speech. Result: several criminal cases slapped across the country with a stage set for his arrest.

The former places the traditionally exploited, marginalised and unprivileged sections of the society on a platform from where they can bargain hard for what is their due in a competitive democracy. At the core of it are positive superior values – justice, fairness and equality. The core of the politics of religion is composed of raw emotions – anger, hate and malice. It is destructive, because it is intrinsically devoid of any idea of construction.

Mature people and mature societies learn to grow beyond religious identities and grievances, and focus on the aspirational and the productive. There are indications that India has matured over the last one decade. Inter-religious tension has been substantially low, communal hate-mongering has reduced and people are hitting the streets with demands that are completely secular. Political leaders are sensing the mood and even the most communal among them are busy recasting their image to fit in.

However, some leaders don’t get the message that people have moved on.

If Akbaruddin Owaisi, leader of the Majlis-e-Ittehadul Muslimeen (MIM), thought he has impressed the members of his community with his Adilabad hate speech, he should read the sense of disgust in the members of his own community who have been speaking to the media in Hyderabad and elsewhere. Yes, he received applause from the large gathering while making the speech, but let’s not read too much into that. People always appreciate a good performance. They don’t bother so much about the content.

Speeches like these are designed to stoke communal violence. That no communal violence has been reported from Andhra Pradesh after the event is proof that people have learnt to be indifferent to what people like Akbaruddin dish out.

It’s also heartening that the speech achieved little beyond generating a lot of curiosity in the media, particularly the online media. If he expected a polarising effect from his drama, there was not any. Why is this guy talking rubbish? How can he get away with such a speech? Who’s this character? – these were the dominant reactions. Of course, we had the routine government bashing riding on it. The reactive anger was conspicuous by its lack of intensity.

Did the police slip up in Owaisi case?
After the uproar in the social and mainstream media over the hate speech delivered by Akbaruddin Owaisi in Adilabad district in Andhra Pradesh on 22 December, the district police have discovered that its sleuths were not sleeping. They had also apparently recorded the entire two-hour long speech by the MLA of the All India Majlis-e-Ittehadul Muslimeen (AIMIM) legislature party. When asked why no one took note of the inflammatory content, each police source had a different version to offer.

One said none of the intelligence officers present at the meeting could follow Akbar’s Urdu. Another said as the speech was delivered in chaste Urdu, it took time to get it translated into Telugu and English before it could be submitted to senior officers.

Yet another said the intelligence cops had submitted a report to the higher-ups but had done a poor job in highlighting the more offensive portions. They had reportedly stressed on the fact that the crowd was very appreciative of Akbar’s oratory and that Owaisi junior had touched upon the demolition of the Babri Masjid in his speech. No one therefore took a second look at a speech that was only talking about a 20-year-old issue.

A fourth version, that looks more closer to the truth is that it was only when the BJP lawyer went to court on 28 December and the issue hit the headlines that the Adilabad police woke up and realised that they had slipped up badly.

So late on the night of 2 January, the Nirmal police in Adilabad filed a case under Section 153A, charging Owaisi with promoting enmity between two religious communities. Neighbouring district Nizamabad, where Akbar had reportedly spoken in a similar vein on 8 December, also filed a case against him yesterday evening. Meanwhile, a city court in Hyderabad on Thursday asked the city police to file a case, based on a complaint by a local.

All this proved that Bollywood was always right. That the police reach only at the end.

Chief Minister Kiran Kumar Reddy has been on silent mode on the hate speech in which there were several barbs directed at him, except to say that law will take its own course. In this case, by taking a 10-day course, the Andhra Pradesh police’s image has taken a beating.

That is a view shared by many senior IPS officers who have worked in communally sensitive hotspots like the Old city of Hyderabad. Privately, they admit that by taking a long time to ensure the law of the land prevails, the police looked as if it was totally unaware of what had happened under its nose. “The police should have taken suo motu action instead of waiting for someone to file a case,” says an officer who has spent many years in the state intelligence department. “By keeping quiet, the police looked as if we were not keen on taking action.”

This is a charge Andhra Pradesh police chief V Dinesh Reddy denies. He says seeking legal opinion on the sensitive speech took time, arguing that the police have to be careful when dealing with a case involving public representatives.

What he leaves unsaid is that the legal opinion was taken only after 28 December. But since a BJP person had gone to court, it meant the police had to be careful that it was not just another case of political tu tu mein mein. It also had to study thoroughly the legal provisions under which Owaisi could be booked, lest it fall between two stools.

“The interpretation is very important in such cases. Whether the speech’s contents could lead to people getting instigated to indulge in violence,” explains MV Bhaskara Rao, former Director General of Andhra Pradesh police. “The police has to check every controversial sentence and examine if it is not transgressing on the individual’s freedom of speech. The malafide intention has to be established.”

But to reduce this case to just another police FIR, would be to ignore the significance of the umbilical cord that stays intact between different political outfits. The MIM was a Congress ally until November, and even though the Owaisis snapped ties with the party, Hyderabad MP Asaduddin Owaisi has several powerful friends in the ruling party in Delhi on speed dial. In recent months, Owaisi has emerged as a leading national Muslim leader and the Congress leadership would still want him on its side. And given his proximity to Jaganmohan Reddy, Owaisi could also help in forging political friendships before or after elections.

The YSR Congress understandably has kept mum on the controversy. The Telugu Desam has only made a feeble token condemnation indicating that with the election season approaching, the Owaisis will not be political untouchables.

On the record, the police denies any political interference. The proof of the pudding will be in the eating and it will be seen if this controversial case too suffers the fate of several other cases registered against Akbaruddin Owaisi that are gathering dust in different police stations.

Owaisi hate speech: This is not the first time
Akbaruddin Owaisi might be hogging the headlines for his  recent highly inflammatory speech but this is the not the first time that the Owaisis are courting controversy.

Asaduddin Owaisi – Lok Sabha MP from Hyderabad and Akbaruddin Owaisi – MLA are known for routine inflammatory speeches in and outside their respective constituencies. Watch the video above for a quick round of their controversial speeches.

Akrabuddin recently went on a tirade against the Hindus in a speech full of hatred in Adilabad. But even before this the Majlis Ittehadul Muslimeen MLA has incited hatred. In this video, he said “We in Hyderabad want to behead this woman according to the fatwa,” when Bangladeshi writer Taslima Nasreen had come to Hyderabad.

His elder brother, Asasuddudin is not to be left far behind. Though he has toned down after becoming an MP, it did not stop him from declaring that Salman Rushdie should be arrested for writing books that seemingly desecrate the sanctity of Islam.

All over YouTube, so why is Cong not pulling up Owaisi?
The hate speech of Akbar Owaisi of the MIM party at Adilabad has generated a lot of controversy but there is yet to be any severe action taken against him. In fact, his one-time ally Abid R Khan, General Secretary, APCC almost ended up defending his action calling it an aberration.

There is however ample instances of Owaisi giving incendiary speeches on several ocassions, including a fatwa to behead Bangladeshi writer Taslima Nasreen.

Speaking to HNN, Abid Rasool Khan said, “We have already started the preliminary investigation that went on for the last 10 days and then if he is found guilty then the law will take its course.” It is however, extremely difficult to believe that the investigation took so much time when the video of the hate speech was circulating in YouTube in the matter of an hour.

When asked if the party was hesitating in raising their voice against the issue, he said, “They were a post-election alliance with the UPA. They have done a lot of secular work including electing a Dalit mayor in Hyderabad.”

However, given the timing of the speech (with impending General election in 2014) was the speech communal or political?

Sandhya Jain, columnist with The Pioneer feels it is certainly political. She said, “The timing of the speech is very political as Narendra Modi has just won an election.” According to her, the speech becomes really communal in the country where the ground situation should be communal.

She said, “The ground situation allows the situation to become volatile.” Such speeches also largely encash the insecurity of the minority community and that makes it difficult for parties to act against them as they fear risking their election prospects.”They are treated with kid gloves because they are seen as political vote banks,” she added.

Leaders like Akbaruddin fail to realise that returns, political or otherwise, from such speeches have started diminishing all over India. People are tired of the language, the tone and the tenor. They want politicians to articulate their ambitions and promise things concrete, not impress them with empty rhetoric. The audience at Adilabad would not be unaware that the speech was a self-serving one, aimed at consolidating MIM’s vote bank. If politicians presume that people cannot read motives in what they utter and do, they have to be stupid.

The world around is getting increasingly impatient of empty rhetoric. It wants constructive action from its leaders. Communal politics would be good if it ensured better quality of life for the members of a particular community. However, it invariably turns into hate politics. This has been India’s experience over the last many decades and the consequence of such politics has been disastrous.

The MIM leader offers a good opportunity to the government to press home the point. Swift and exemplary action against leaders like him would serve the purpose.

BJP leader Varun Gandhi is facing the music for his intemperate speech at an election rally. Leaders like Gujarat Chief Minister Narendra Modi have ensured that the communal hate peddlers keep their mouths shut. There’s no reason why the likes of Akbaruddin should go unpunished.

This is the opportunity for the Congress leadership to prove to the world that it is awake to the aspirations of the new India and that it also wants to move beyond stale, uninspiring rhetoric of communal leaders.

What’s missing in govt’s fight against gold?

There is a curious thing about Indians’ penchant for gold. When the prices rise, they buy expecting the prices to go further up. When the prices fall, they buy for obvious reasons.

But the government is resolved to fight this. And so gold has come under attack again.

According to Finance Minister P Chidambaram, had the gold imports been half of the actual level, that would have added $10.5 billion to the country’s foreign exchange reserves.

So he proposes to increase the import tariff of gold to push up the prices, which he hopes will deter the consumers from buying the yellow metal.

In tandem is the Reserve Bank of India. A panel, which was constituted to look into gold imports, has suggested higher import duty on gold import. This is precisely what is on the government’s mind.

The panel has also suggested introducing other products like inflation-indexed bonds to wean away the investors from gold.

It is beyond doubt that Indians’ attraction towards gold has to be curbed. And the RBI panel’s recommendation seems to be on the right track.

For example, while recommending an increase in import tariff it has also cautioned that if raised beyond a level, the move will only increase smuggling. (This has already happened after the government increased import duty in the last Budget)

Another suggestion from the panel is to document gold sales and purchases.

But implementation of these measures will bear fruit only if the government plays its role.

One reason for the increase in investment demand for gold is inflation. So, to curb demand for gold, the first step should be to control inflation. The RBI is already doing its bit on this front, while it is for the government to take steps to address the supply side issues.

Secondly, the government has to introduce steps to make financial assets more attractive than real assets like gold and real estate.

The RBI has expressed its dismay over the decline in the household savings in financial assets.

In FY10, the household savings in financial instruments were 12.2 percent. It fell to 9.3 percent in FY11 and then to 7.8 percent in FY12.

The trend has rung alarm bells and the government, for the first time this year, announced steps purportedly aimed at ploughing back household savings back to stocks and other products.

Sebi has also simplified mutual fund investment procedures.

But these are yet to give the intended results. For, despite a rally and all-round optimism after the so-called reform steps, retail investors are absent from the equity markets.

Moreover, there are signals that demand for gold is only likely to increase this year. According to a report in the Economic Times today, dealers in gold and jewellers see demand rising 10-15 percent this quarter as sales in rural areas are expected to increase.

The rising demand has a pointer to the failure of the government policy in understanding and addressing the cultural reasons for Indians’ penchant.

The yellow metal’s status as an investment in India is almost new found. For most Indians, it is just jewellery, which is by and large linked to social status.

Gold is also an important part of the dowry (psst!!) in most part of the country.

So, how far will the government’s initiatives and the RBI panel’s suggestions be effective in addressing such issues? Very little.

As long there are no steps to tackle such traditional and conservative customs still prevalent, gold will remain key for Indians.

On top of all these is the issue of black money. The main attraction of the real assets is that they are an important avenue for those looking to channel their black money.

On the government’s resolve to curb the black money flow, less said, the better.

Gold is money: Why can’t UPA’s thinktank understand this?
In an interview, Dr C Rangarajan, Chairman of the PM’s Economic Advisory Council (PMEAC), explained the rationale as to why Indian citizens should not be buying copious quantities of gold. It appears he was a bit oblivious to the reasons why Indians buy gold and so I thought it would be worthwhile to point out the same. Before I explain the economic reasons behind why citizens buy gold, it’s perhaps indicative of the state of affairs that interviews by our economics team provide more entertainment value than an educational one.

In fact, I have been scratching my head to pinpoint the last interview by any bureaucrat or a politician on the subject of economics that made sense. I am yet to come up with one – and this inspite of the soft-ball questions that are asked of them by the media. Adam Smith would be turning in his grave if he were to listen to these interviews.

With that little digression, here are the reasons why Indians buy gold.

Historical price record: In the last 40-plus years of history in which gold has functioned as a freely traded commodity, there has never been an extended period of five years or more in which gold has not delivered a positive return in rupee terms. Even during the infamous “gold cliff” period of 1981-2000 in which gold prices declined by more than 70 percent in dollar terms from $850 to a little over $250 an ounce, gold prices more than doubled in rupees.

Currency debasement has been an unwritten policy goal of the Reserve Bank of India and the government and citizens understand that very well. So when Rangarajan says a “certain amount of gold demand is built into the Indian psyche”, the culprit for the same is the RBI.

Of course, Rangarajan did mention inflation hedge as one of the reasons why people buy gold. But in the same breath he also mentioned that Indians purchased $66 billion worth of gold last year and this was $20 billion more than in the previous year. That is a wrong way to look at gold – if you accept that gold is an inflation hedge, then one ought to compare quantities imported rather than the dollar value of the same.

If you do not understand why that’s the case ask any Indian wife who has had the experience of “dowry” and they will tell you it’s always about fixed quantities of grammage and not measured in any currency units. That’s the fundamental point about gold being an inflation hedge.

Given the 40-year track record and the fact that there is not even a remote indication of a policy change, why should we do anything else?

The economic teams doesn’t inspire any confidence whatsoever: Whenever we listen to speeches or interviews of the government’s economics team, it really reflects a very sorry state of understanding of economics by our policymakers.

Take the very simple concept of the relationship between GDP growth and inflation. Every person – and the list includes the who’s who of the so-called reforms team, from Manmohan Singh to Montek Singh, YV Reddy, Pranab Mukherjee,  Bimal Jalan, D Subbarao, and Kaushik Basu, et al – has stated over and over again that inflation is a result of the high GDP growth of the last few years. The economic truism is the exact opposite: GDP growth leads to falling prices and not increasing prices, as everybody says.

In fact, this is such a fundamental concept that an undergraduate exam in economics should have the above as the litmus test. Instead, we award such abject ignorance with PhDs and make them central bank governors, finance ministers and heads of finance commissions and planning commission.

So why do you think we should place our faith in the economics team when every objective pointer indicates otherwise?

The interest rate issue: When consumer price increases are in double-digits and the after-tax savings rate offers negative returns by a few hundred basis points, asking for a rate cut should be the equivalent of economic hara-kiri. And yet, that’s precisely what every policy maker and industrialist seems to argue for – each for his own reason and his own pretext. Rangarajan’s reason for asking it is that non-food inflation has moderated.

This kool-aid thinking, that a “rate cut would revive growth,” is as fallacious as the belief that “growth causes price increases.” Our growth bottlenecks are policy logjams and bloated government expenditures that crowd-out private investment and the Javert-like bureaucracy that stifles innovation. A rate cut at this stage, even by as much as 100 basis points, would directly result in higher consumer prices without having any impact on growth. That said, it looks increasingly likely that we will get a rate cut.

Under these conditions, what options does an average saver have?

Global economy @ tipping point: The credit crisis of 2008 should have really resulted in a major clean-up and deleveraging of the system. But predictably, when you have people who did not foresee the issues proposing the solutions, they invariably tend to make the underlying problems bigger while temporarily obfuscating the symptoms.

Economic conditions worldwide seem propitious for another blowout in 2013-14 and gold would prove to be the ultimate hedge under these conditions. With Basel III rules in place, wherein gold moves from Tier 3 to Tier 1 with 100 percent reserves status, there would be a scramble for gold by banking institutions that could catapult gold prices.

Is there any reason to believe that the underlying issues that have been driving gold prices higher have been resolved?

And, of course, gold is money: When Rangarajan, or for that matter, Chief Economic Advisor Raghuram Rajan, say that people are making a dead investment in buying gold, you couldn’t be more wrong if you tried. People are not buying a “barbaric relic with money” – they are buying “money with paper”.

Given that the government has been working over time to reduce the consumption of gold, the gold report itself that came out was not as bad as I would have expected. Just that, instead of using data from the CPM group, which is increasingly turning out to be a propaganda arm of the US Fed, I wish they had used the data from GATA and other private sources. At the very least, one should consider and use more than one source of information in such critical issues.

Of course, given where I think gold prices are headed this decade, the current account deficit (CAD) issue is only likely to get bigger and bigger over the next few years. And none of the solutions proposed by the government’s economic think tank would even provide a semblance of relief. The best is to get somebody who understands these issues to head the RBI.

In that context, may I suggest Jim Grant? No less a person than Ron Paul considered him a potential replacement for Ben Bernanke at the US Fed. Given the perilous times that lie ahead, it’s time we made some difficult-but-rational decisions on the monetary front. There’s no better starting point than getting somebody who understands the issues.

Entrepreneur's campaign targets 2 MPs, 42 MLAs accused of crimes against women

Ever since people of the country came out on the streets, lit candles, held protest marches and clashed with the police, many had made direct and oblique references to the political culture of parties turning a blind eye towards giving tickets to candidates accused under different sections of Indian Penal Code for crimes against women including rape. The clamour for the clean-up of the political class seems to be only getting stronger.

With help from his friends and associates, Srikant Sastri, a Delhi-based entrepreneur and angel investor, has started a campaign called 'Save The Republic - Resign Before Jan 26th' on Facebook and Twitter to ask two MPs and 42 MLAs, accused of crimes against women including rape, to voluntarily tender their resignations before Republic Day. The data has been culled together from the affidavits submitted by candidates to the Election Commission of India and the various state election commissions.

Of these accused, six MLAs are accused of rape. As many as three of them are from Samajwadi Party (SP): Sribhagwan Sharma, Anoop Sanda and Manoj Kumar, all from Uttar Pradesh. Mohd Aleem Khan from BSP is another such accused from the same state. The BJP's Jethabhai G Ahir from Gujarat and TDP's Kandikunta Venkata Prasad from Andhra Pradesh are the other two.

Thirty six other MLAs have declared that they have other charges of crimes against women such as outraging the modesty of a woman, assault, insulting the modesty of a woman etc. Of these, six MLAs are from the Congress, five from the BJP and three are from SP.

UP has the maximum number of MLAs (eight) who have declared that they have charges of crimes against women, followed by Orissa and West Bengal with seven MLAs each.

Two MPs, namely Semmalai S of ADMK from Salem constituency in Tamil Nadu and Suvendu Adhikari of the Trinamool Congress (AITC) from Tamluk constituency in West Bengal, have declared that they have charges of crimes against women, such as cruelty and intent to outrage a woman's modesty etc.

Speaking to HNN, Sastri said, "While we understand that being accused for a crime and being convicted are not the same, given the level of public outrage, the lengthy judicial process and the haplessly low conviction rates, we believe it's time for the political parties of the country to try to reclaim the higher ground."

The campaign, launched in the first day of the new year at 12 midnight, seeks voluntary tendering of resignations on part of the elected representatives. "We do not want confrontation, we want dialogue with the parties, we want them to take this step out of self-realisation. As part of the build-up plan, we are also trying to reach out to the youth of our country by directly campaigning in colleges apart from running the e-campaigns," Sastri told HNN.

"We wanted to fix the date for January 26 not just because it is our Republic Day but also because a lot of people believe that attitudinal changes towards women is a time-taking process and are bogged down by a sense of helplessness. We wanted to put a time-frame to this to also let the political parties have a chance to show the people that they could act swiftly and decisively," Sastri added.

Incidentally, political parties gave tickets to 260 such other contesting candidates in the Legislative Assembly elections held in the last five years who have declared that they have charges of crimes against women such as outraging the modesty of a woman, assault, insulting the modesty of a woman etc.

Out of the 260 candidates who declared that they have been charged with crimes against women, 72 are/were independent candidates, 24 have been given tickets by the BJP, 26 by the Congress, 16 by the SP and 18 by the BSP.

Maharasthra has the maximum number of such candidates (41), followed by Uttar Pradesh (37) and West Bengal (22).

In the 2009 Lok Sabha elections, political parties gave tickets to six candidates who declared that they have been charged with rape. Out of these six, three are from Bihar, one from Delhi, one from Uttar Pradesh and one from Andhra Pradesh.

Thirty four other contesting candidates from the 2009 Lok Sabha elections declared that they have charges of crimes against women.

Maximum cases of crimes against women are against candidates from Bihar (9), followed by Maharashtra (6), and Uttar Pradesh (5).

Does Indian higher education system need an Ombudsman?

In the beginning of 2012 the former Union Minister for Human Resource Development, Kapil Sibal had initiated a debate by mooting the idea for appointment of Ombudsman for higher education institutions under the grievance redressal system. The Ministry passed executive order for the centrally funded institutions which includes central universities, IITs, IIMs and NITs, and deemed universities. As per the order every institution is required to have an ombudsman – a person with judicial or legal experience.

The Ombudsman will have the power to instruct the institution to take corrective measures on complaints of students regarding denial of admission, non-observance of declared merit in admission, with-holding of documents and non-refund of fees in case of withdrawal of admission. Few months back former Minister of state for HRD, D. Purandeswari in Rajya Sabha answering to the question of appointment of Ombudsman has stated that, “University Grants Commission, All India Council for Technical Education and National Council for Teacher Education have been requested to establish a grievance redressal mechanism for students and applicants for admission in higher educational institutions under their regulatory control. This mechanism includes appointment of Ombudsman also for redressal of students’ grievances.” 

Though, the order was passed by the Ministry it is still to get Parliament approval and thus has not been implemented on ground. India Education Review discussed the issue with some of the heads of institutions on the need for an Ombudsman and his role. 

Need for an Ombudsman: The need for an Ombudsman is being felt for the higher education system in India is because of its tremendous growth in terms of number of institutions just to increase the gross enrolment ratio. In doing this we forgot about quality, relevance and excellence and this lead to massive commercialisation of education which has lead to a scenario in which anybody with money can buy degrees while those with talent and qualification have to run from one institution to other to get admission.

Prof. PB Sharma, Vice Chancellor, Delhi Technological University talking to India Education Review said, “The purpose of education is not merely to award the degrees but to create an army of capable men and women who shall possess besides capabilities, human values for development of the society. This noble objective requires that the institutions and universities should be established and managed by people of letters and of high moral and ethical wisdom. It is expected of them to desist from any deviation from ethical and moral foundation of education, no matter how compelling the circumstances or situations may be, but we find the just opposite in most cases.”

“Institutions and universities especially under the disguise of public-private partnership or under private ownership have been allowed to be set-up by those who could muster financial and political support. This has created the present unhealthy and unfair environment in higher education in the country. We all know very well that once we allow the rot to set in, it creates an environment for mediocrity to flourish. We can have an Ombudsman provided we are able to specify the domains and duties to the Ombudsman for his exercise of controls, even preventive measures to stop the growth of mediocrity and establishment of sub-standard institutions,” added Prof. Sharma.

There are many government run institutions that are against the idea of appointment of Ombudsman over themselves as they feel that they have very transparent system and they feel that it is needed in case of private institutions. They also feel that central government of any of its agencies will not be able to frame rules and guidelines for it as different institutions have their own issues, history and serving different segment of society.

Dr. MM Salunkhe, Vice Chancellor, Central University of Rajasthan is of the view that, “the topic has not been debated properly and there is need to debate upon it in detail as it is a very wide topic. As far as government run universities are concerned, particularly the central universities we follow a very transparent system at each and every step. Ombudsman is required for private institutions as they flout and twist the norms. The other problem is who will make the rules and define the role of Ombudsman because every university is different and unique in itself and what rule will be good mine will not be good for some other universities. Thus, I am not very much in favour of this post for the universities until the role of Ombudsman is clearly defined.” 

Whom to appoint? There is also huge debate on the topic that who should appointed to this post as a section of educationist feel that the person to be appointed for the post should be from education fraternity as any outsider will not have the understanding of the huge education system that India has. While the other section feels that the person should be from judicial background as he would be less biased with least vested interest. The concern of both the section is genuine and but the ministry has chosen the second option to appoint a person with judicial or legal background. The institute would have to appoint him from a panel suggested by the affiliating university in case of technical and management institutions and the Central Government in case of deemed universities.

According to Prof. PB Sharma “The man of iron will with the highest credentials of scholarship, administrative capabilities, a vision and commitment to build quality higher education for his motherland. He should also understand that it has not mere teaching or coaching that makes higher education, rather an environment in which education, creative and innovative abilities and opportunities to recognize the value and worth of knowledge and capabilities, technology and knowledge incubation, innovations and new-product development are nurtured is that what should make higher education of today and surely of tomorrow.”

“The tenure of an Ombudsman should be of five years to give him a reasonable time frame to implement the reforms or changes as envisaged. Such an Ombudsman be invariably be appointed by a coliseum comprising of a former Chief Justice of India, an Outstanding present or former Vice Chancellor, an outstanding Civil Servant and an outstanding industrialist,” Prof. Sharma added further.

Prof. R. Lalthanluanga, Vice Chancellor, Mizoram University, is of the view that, “as far as ombudsman is concerned, I do not think that there is any need for government run higher educational institutions like central universities etc. which are self regulated through its ordinances/regulations as per the guidelines of UGC (University Grants Commission) or MHRD. It may be required for private institutions as they do not have very clearly defined regulation. UGC may appoint Ombudsman for such institutions for a period of three years.”

It seems that the Ombudsman is the need of the hour for the vast education system that India has and with arrival of foreign institutions it is even more required. It will only make the Indian institutions rise up to the occasion. The checks and balances and fine tuning can be done by the institutions at their own level along with following the guidelines of MHRD. Ombudsman is seen as a system for grievance redressal of the students while there are provisions in the already existing system it can be further strengthened to make it more transparent. People against this move also feel that one redressal system will lead to another making it a vicious cycle.

Indian Higher Education; Major developments of 2012, hopes from 2013

A year 2012 was a mixed year for the higher education sector as several positive and negative developments took place throughout the year. Among the highlights, newly created IITs and IIMs started their operations, the University Grants Commission (UGC) decided to give more autonomy to state universities in appointing the Vice Chancellors. To bring transparency, All India Council for Technical Education (AICTE) came up with an email service for people to lodge complaints against institutions. On the other hand, the sector also witnessed several controversies related to various education bodies like UGC, AICTE, imbroglio between teachers and Delhi University, student violence in Osmania University. The second half of the year also saw major change at the policy level with Cabinet reshuffle. Cabinet and State Ministers in the Union Ministry of Human Resource Development were changed.

With 2012 almost nearing to its end, one can only hope for a constructive and fruitful 2013 for higher education space.  The New Year will see 12th Five Year Plan being implemented and a good amount of money has already been earmarked for the sector. Though, as many as 11 higher education bills still pending in the Parliament has been a damp squib in the year gone by but with General Elections slated in 2014, Centre may push to get these Bills see the light of the day.

India Education Review interacted with some of the academic leaders from Higher Education sector to understand what in their opinion, the highlights of 2012 were and their expectations from 2013.

Best and the worst in 2012

Ajit Rangnekar, Dean, ISB Hyderabad opined, “In my opinion I do not think any major development took place this year, it was pretty normal, one big think that is yet to happen is that Shrikant Datar of Harvard went all over the country and many of us participated in discussions related to curriculum development and the requirement of new curriculum. There is a movement now to change the curriculum to make it more appropriate for the fast changing world but nothing has come out. The worst thing to happen is none of the education bills got passed by the parliament which is very crucial for the sector and I think it is crime against the whole education sector.”

Prof Pankaj Jalote, Director, Indraprastha Institute of Information Technology (IIIT) Delhi speaking about the various developments of 2012 said, “Overall talk about the need to increase research, and some initiatives from DST, on that front were good. Finally, there is an understanding that research capability is very important for future.”

Talking about the disappointments of the year Prof Jalote said,” there are many, no clarity on allowing foreign universities; no loosening of restrictions on government research grants which remain very restrictive and counter to the goals of doing globally competitive research; not much movement on autonomy of universities in general; no real thought on how to reinvigorate the affiliating university-affiliated college model, which exists nowhere by in India (and Nepal, I am told). Funding for research is still very low.”

Ashok Mittal, Chancellor, Lovely Professional University (LPU) said, “The most welcome development in the education sector in 2012 was the hike of 21.7 per cent in allocation of funds towards implementing of Right to Education - Sarva Shiksha Abhiyan and 29 per cent for Rashtriya Madhyamik Shiksha Abhiyan. We need to plough heavy funds in our elementary education set up; and it is pleasing to see that government is committed to strengthen education at grass root level.  The proposal to set up a Credit Guarantee Fund is also a reason to cheer. The fund will ensure that lack of money will not come in the way of spreading education at the school level. Furthermore, on a pilot basis PPP schemes for 2,500 schools has been announced; which is a big move in bringing the  private players  to play their role in reinforcing the strength of Indian education set up. Setting aside RS. 1000 crores for skill development of students is a step forward to incorporate the practical aspect of education, and is a well appreciated initiative.

Speaking about the disappointments, Ashok Mittal said, “There is a need to deregulate the education sector and accord greater autonomy to the players – both government and private. But it is discouraging to see that various steps are being taken by the government that limit autonomy and reinforce regulatory roles of external bodies. Yes, we understand that regulations are needed to clip the wings of arbitrary and non-serious players. But at the same time, we feel that too much of control inhibit the growth and potential of good players. This is a reason to feel disappointed.  Secondly, FDI in education is welcome; but it should be preceded with careful planning. Indian education set up is distinctly different from what is practised in other countries. Hence, what is applicable and successful in some foreign country, may not hold equally good in Indian settings.”

Prof V S Chand, IIM Ahmadabad said, “The lack of progress on the Foreign Educational Institutions (Regulation of Entry and Operations) Bill is the biggest disappointment for the whole education sector. There is need for immediate progress on it to bring clarity.”

Expectations from 2013: Passing of the impending Bills is what Ajit Rangnekar believes should be the first priority of the government in 2013. “For 2013, I am hopeful that all the Bills that are struck in the parliament get passed and become an Act; government has got good ideas and these Acts and the way in which government wants to move are moves in the right direction. If the political parties even do not allow education acts to pass it is very unfortunate and this is very wrong thing against national interest.”

While Pankaj Jalote added that increased research funding, more transperancy and autonomy in the university system would be required in 2013. “Boost in research funding; regulations to bring in autonomy and transparency of information from colleges/institutes/universities; a sound Indian system of comparing/evaluating the capabilities of institutions (ranking by magazines do a shoddy job - a much more rigorous setup is needed); allow foreign universities to set up campuses here, provided they have a strong PhD program (i.e. at least 20 per cent of their student population is PhD students) - besides this there should be no other restriction, as this restriction will ensure that they invest heavily, produce the research manpower which is desperately needed, besides doing education at the bachelor level - which is a huge attraction for many foreign universities.”

Ashok Mittal spelling out his wishlist for 2013 said, “We hope that the government will come up with policies that will provide a level playing turf for all the players in the sector.   There is a need for framing such policies that will help the private players to bloom to the fullest of their potential; and contribute to the development of the nation. It is expected that in coming year, the government will fund R&D works profusely; and will include private universities as beneficiaries also.”

“We expect that government will frame more proactive policies that will augment the Vocational training and skill development amongst the students. We hope that the government will restructure its regulatory framework in such a way that will help in more inclusive growth in literacy, education services at affordable costs and assurance of quality across the spectrum of education providers. It needs to be ensured that sub-standard education services are eliminated from the scene, for once and all,” added Mittal. 

Meanwhile, Prof V S Chand belives that sharp focus on management of elementary education in Indian districts should be a key challenge that needs immediate attention. “First, I hope to see a sharp focus on the management of elementary education in the 100 or so problematic districts in the country. Second, a new model of innovation in the public elementary education system which is more grounded in the experiences of teachers of improving quality, and is supported by policy entrepreneurship from the state.”

Though 2012 was a mixed year for the sector, 2013 seems to be a promising year which will see a sea of changes taking place in the sector and if the Bills which are pending in the Parliament get passed, they would change the face of the Indian Higher Education sector completely.