values and ethics. it is thus that competence and ethics formed the bedrock of the professional. one did not exhort values in professionals - a professional without values was no professional at all. today, the world has changed. we no longer live in simple times. the cries for values and ethics in business today - the value based professional - stem essentially from a crisis of confidence. whether in medicine or in finance, confidence is the linchpin of the professional - confidence in his competence to perform and confidence in his integrity. till recently, competence was sought to be enforced through jealously guarded barriers to entry. self regulation by the fraternity laid out codes of ethics and codes of conduct. these codes and standards have evolved over the years influenced, to no small degree, by crises that affect the profession from time to time. the latest round of the crisis of confidence in the corporate sphere has been catalysed by the unexpected corporate failures of the 1980s, the 1990s and indeed the high profile collapses of new millennium. this perhaps added a new dimension in the discourse related to confidence, and this relates to confidence in the integrity of the system as a whole to subserve the needs of the market system, the stake holders and indeed society to provide reliable financial data and information on the ‘ full and fair ’ picture of a company ’ s accounts and the changes therein. post mortem reports of accounts and of administrative lapses of failed companies given by liquidators / regulators / inspectors give us an insight into accounting as well as regulatory lapses and provide a stark contrast between the ‘ true and fair ’ picture of the organisation at various points of time in its life and what it was reported to be. often times it has been perceived that practices such as balance date adjustments, deferring expenses, advancing revenue recognition and judicious or indeed creative use of complex business group structures, while conforming to the letter were sometimes intended to obfuscate and subvert the spirit of compliance. the general perception is that accounting statements have failed to inform of the drift of financial affairs of the company towards impending failure. this has catalysed debate on issues like accounting standards as well as issues of auditor independence on the one hand and the issues of integrity and personal deviance, on the other. the causal roots of the recent corporate “ misdemeanors ” are debatable. at one level, they were attributed to a swashbuckling ethos and corporate culture initially spawned and made fashionable by the investment

well known, the government holds substantial stocks of rice and wheat. while they are meant to be released into the market in situations of shortage, thus ensuring availability at reasonable prices, there is some evidence to suggest that their mere presence acts as a dampener on price volatility. slide 17 shows the relationship between cereal price movements and their stock levels over the past decade and a half. the relationship is very clear and contemporaneous. as stocks decline, the rate of increase in cereal prices accelerates. conversely, periods in which stocks have been high show relatively low rates of price increase. there has been much public discussion on the rather inefficient way in which the stocks are being maintained and some concerns expressed about their ability to actually meet food security requirements should the need arise. that is an important debate but i don ’ t want to get into it here. from the perspective of price stabilization, evidence from cereals supports the case that a credible level of stocks can actually dampen price volatility. of course, not every commodity is amenable to stocking, particularly over long periods of time. so, this particular strategy might not be applicable to the commodities that we have been focussing on in this discussion. but, perhaps the lesson from the experience with cereals is that, wherever and however possible, the ability to counter supply disruptions with short notice infusions into the market may be a useful tool to have. i want to address one final issue on the supply side before i conclude. this has to do with the performance of the monsoon over a long period of time. we are used to thinking of “ normal ” or “ deficient ” monsoons in terms of a deviation from a benchmark labelled the “ long period average ” ( lpa ). the lpa for a specific decade is the average of the rainfall over the 50 years before that decade. it is, therefore, updated every ten years, after the completion of a decade, which then gets added into the average. however, if the benchmark itself is changing, the notions of normality and deficiency do not fully capture the absolute amount of rainfall in any given year. a normal monsoon in one year may actually deliver less rainfall than a normal monsoon in another. slide 18 displays the lpa for the south - west monsoon across the country. it clearly shows a declining trend. this means that normal monsoons are actually delivering less water than in the past. this may not be of