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Malpractices Rampant

Malpractices Rampant Nishtar THE presidential speech delivered by Madanmohan R Ruia at the 49th annual meeting of the East India Cotton Association, Bombay, is a severe indictment of the cotton trade. By detail- ing various malpractices rampant this season, Ruia has, unwittingly, streng- thened New Delhi's hands in the proposed complete take-over of the cotton trade. (Imports have already been entrusted to a state-run corporation.) Fortunately for the trade, the Government's own record in the management of nationalised institutions and public-sector undertakings is not very clean and encouraging.

Oily Cotton

Oily Cotton Nishtar COTTON made news last week. It was not because prices registered a further sizeable decline. Nor was it because of the Forward Markets Commission's directive to further cut short the life of the non-transferable specific delivery contract to one month. Cotton made news mainly because of the reported proposal for an additional import quota of one lakh bales against specific contribution to election funds. Much as one would like not to believe the story about the "election" quota, press reports could not be easily dismissed as wild gossip. It was the Indian Cotton Mills' Federation's indiscreet letter to mills asking them to "get in touch" with their respective regional associations, about the import quota likely to be released which let the wild cat out of the bag. Never before bad the Federation been known to have adopted such a procedure

Credit Squeeze Tells

Credit Squeeze Tells Nishtar COTTON and oilseeds markets present an altogether different look. They have taken a right-about-turn and moved down swiftly. Bulls who had been dominating the scene for months and had held the markets virtually to ransom

Keep Them Low

Keep Them Low Nishtar THE cotton market has had its first big Jolt since it commenced its steep climb some four months ago. Excepting exportable Bengal Deshi, cotton prices have moved down by Rs 250 to Rs 500 a candy within less than a week, and it is most popular varieties like Digvi- jay and C02 which have suffered the worst. Several factors have contributed to last week's sharp break in prices, and the tightening of the credit screw by the Reserve Bank through enhanced margin (40 per cent instead of 25 per cent) on advances to mills against cloth stocks is perhaps the least important of them all. Credit had been gradually getting scarce and costly; mills and the trade could not have possibly ignored this factor altogether, especially when prices had reached fantastic levels.

That Was the Crop That Was

and the bureaucrat must at the same time be divorced from its influence. The politician and the bureaucrat together represent a class which Plato called the Guardians and, though we may not accept Plato's prescription all the way, it is evident that the guardians cannot guard the interests of the people unless they are themselves protected from the influence of money-power. A legitimate method of doing this is to prevent the politician and the bureaucrat from making illegitimate gains, or even where the gains are legitimate, to impress upon them the need to ensure that they are within limits of propriety. This has been attempted several times in the past, but experience shows that no closed and confidential system can be effective for this purpose. In the past, in numerous cases, the law could not break through the collusion between the three and in a few cases where it could, guilt could not he traced to its source, Therefore, a system must be devised which will be open to public gaze and scrutiny.

Stock Market No More a Barometer

Stock Market: No More a Barometer Nishtar THE stock market has opened its account for the New Year on an opti- mistic note. It has staged a sizeable recovery from its December low. That the market should not have allowed itself to be the least perturbed by political uncertainties in the wake of thedissolution of Parliament for a mid-term poll, may appear somewhat intriguing. But the stock market barometer has long since ceased to register changes in the political weather. This is evident from the behaviour of Lyons Range which has kept calm and remarkably steady amidst increasing Naxalite terrorism and a deteriorating law and order situation in West Ben- gal Quite possibly, the market might not have been able to put up such a good show if the corporate news had not been pleasing. Delhi Cloth, Indian Dyestuff, Hindustan Motors, Food Specialities and Automobile Products of India

Permit System for Cotton Movement

Permit System for Cotton Movement Nishtar FOREIGN Trade Minister Mishra's nine-point plan has not had even the slightest effect on the cotton market so far. The Indian Cotton Mills' Federation's call to mills to conserve cotton as much as possible through judicious use of existing stocks and without making fresh purchases has also gone unheeded. Scramble for cotton continues and prices have risen further by Rs 100 to Rs 150 a candy. That the market should have completely ignored the nine-point plan is more an indication of its lack of faith in the Government's ability to implement the plan than of the adequacy or otherwise of the measures proposed to deal with the situation.

Nine-Point Plan for Cotton

There need not be any uniformity of rigidity about the pattern at the intervening level of a region within the State. But as the conventions under which principal political offices were rotated or shared between the regions are becoming unworkable with the collapse of one-party domination, institutional devices for equitable dispersal of political power would become necessary.

No Satisfactory Explanation

No Satisfactory Explanation Nishtar NEITHER Foreign Trade Minister Mishra's announcement of Government's decision to import another 5 lakh bales of cotton in addition to 8.25 lakh bales originally scheduled, nor the Indian Cotton Mills' Federation' decision to resort to a voluntary/statutory 15 per cent cut in fibre consumption and a block closure for 15 days, which of course is subject to the Government's sanction, has had the slightest effect on the market. Cotton prices have, on the contrary, soared to new high levels. But this need not cause much surprise. One did not expect the market to respond quickly to the Government's decision on additional imports when even out of the 8.25 lakh bales quota announced very early in the season, nearly half the quantity has still to be issued and physical imports against the quotas already released had amounted to only a little over 36,000 bales up to the end of October. As for self-discipline by mills, it has always been honoured more in breach than in observance. It should be obvious that if the Federation were reasonably sure that voluntary restraint would work, it would not have urged the Government to authorise the Textile Commissioner to "issue necessary orders to bring about a statutory reduction of 15 per cent in consumption of all fibres by each mill". This speaks very poorly for the Federation.

The Cloth-Cotton Price Chase

Romesh Thapar INDIAN realities are too sharp for the instant slogans of Right and Left. This is becoming apparent as the ruling Congress Party at the Centre begins the plod back to an economically Centrist position. The recent excitement over controlling monopolies and denying industrial licences to the big firms is fast dissolving: all manner of polite seminars and dialogues, involving government spokesmen, are seeking to explain what was actually meant. It is convenient that we are still compelled to conduct our all- India affairs in an alien tongue, for it provides endless opportunity for re- interpretations (particularly when the level of English could not be lower!). The fact is that even the politicians are alarmed by the near-stagnation in the economy.

Record Badla Rates

Record 'Badla' Rates Nishtar THE stock market appears to be in a somewhat chastened mood. Bullish fervour is beginning to cool off. After striking a new all-time high on September 16, the market has staged a mild retreat under pressure of profit-taking. Unable to attract fresh follow-up support at higher levels, bulls have been inclined to cash profits. Selling has been quite heavy at times, particularly in the speculators' favourites, but with the overall sentiment sustained by the steady flow of encouraging corporate news, profit-taking has been absorbed without causing a break in prices. Trading has not been altogether without some bright spots but it is the hitherto neglected or less-popular counters which have been in the limelight. Net changes over the week present a mixed pattern with minus signs far outnumbering the plus signs.

Prophets of Doom Ignored

Prophets of Doom Ignored Nishtar STOCK markets have rolled further down and come quite close to the base of the mid-July offensive. Scared by their own shadow, bulls have been on the run hotly chased by bears. Bulls have still to find a haven where they could rest their weary limbs and nurse their wounds. Bears have not missed their chance and have fully exploited the opportunity provided by the ten-day settlement to speculate without having to pay any margins. The market has retraced a little more than one-third of the distance between the year's low in January and the subsequent high ic- corded in the first week of October. But it has still to regain its nerve.


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