Selected Articles from Various News Paper: Civil Services Mentor Magazine - February 2015

Selected Articles from Various Newspapers & Journals

Development as a people’s movement

Development was a key issue in the 2014 Lok Sabha election. In his very first speech after taking over as Prime Minister, Narendra Modi asserted that his government is committed to carrying on development as a people’s movement. This, he has asserted, will draw upon India’s democratic, demographic and demand dividends. But are we genuinely moving towards organising development as a people’s movement while building on these strengths? To cater to India’s massive population of consumers, people should have adequate purchasing power, such as that enjoyed by people employed in the industries or services sector. Unfortunately, as the malnourishment statistics indicate, a vast majority of Indians are poor, with barely 10 per cent employed in the organised sector. We are being convinced that vigorous economic growth is generating substantial employment. But this is not so.

When our economy was growing at 3 per cent per year, employment in the organised sector was growing at 2 per cent per year. As the economy began to grow at 7-8 per cent per year, the rate of growth of employment in the organised sector actually declined to 1 per cent per year since most of the economic growth was based on technological progress, including automation. At the same time, the increasing pressure of the organised sector on land, water, forest and mineral resources has adversely impacted employment in farming, animal husbandry and fisheries sectors. People who are being pushed out of these occupations are now crowding in urban centres. This is in turn leading to a decline in the productivity of the organised industries and services sector. Evidently, the ship of our development is sadly adrift.

Undoubtedly, people aspire for development. But what is development? Joseph Stiglitz, a recipient of the Nobel Prize in Economics and one-time chairman of Bill Clinton’s Economic Advisory Council, offers an insightful analysis, asserting that development should result in an enhancement of the totality of a nation’s four-fold capital stocks: the capital of material goods, natural capital such as soil, water, forests and fish, human capital including health, education and employment, and social capital comprising mutual trust and social harmony. Our current pattern of economic development is by no means a balanced process resulting in the overall enhancement of the totality of these stocks.

Thus, for instance, mining in Goa has severely damaged the State’s water resources and caused high levels of air and water pollution. The ever-increasing content of metals in drinking water reservoirs has adversely impacted health. When thousands of trucks were plying ore on the roads of Goa, the resulting chaos in traffic and accidents seriously disrupted social harmony. Evidently, the single-minded focus on industrial growth is not leading to sustainable, harmonious development, but merely nurturing a money-centred violent economy.

In Chandrapur and Gadchiroli districts of Maharashtra, both of which are Naxal-torn, there are hopeful examples emerging of how development may be nurtured as a people’s movement. A number of tribal and other traditional forest-dwelling communities of these districts now have management rights over Community Forest Resources under the Forest Rights Act. The state retains ownership over such resources, and these cannot be diverted to other purposes. But now these resources are being managed holistically with a fuller involvement of the people. The citizens of Pachgaon, for instance, have, through two full-day meetings of their entire Gram Sabha, decided upon 40-odd regulations. Tendu leaves are a major forest produce, but their harvest entails extensive lopping and setting of forest fires.

So, Pachgaon has decided to forego this income and instead focus on marketing the edible tendu fruit. By stopping the collection of tendu leaves, the trees are healthier and both fruit yield and income from its marketing have gone up. Incomes from bamboo harvest have also gone up manifold, and for the first time the people are moving out of the earlier precarious existence. Notably, they have on their own initiated protecting part of these forests as newly constituted sacred groves. Such community management of forest resources is the only sane way to combat extremism, and I have every hope that the new government, with its commitment to making development a people’s movement, will wholeheartedly support these initiatives.

Furthermore, Goa could revive its currently stagnating mining business through novel people-oriented initiatives such as the proposal from the tribals in Caurem village in Goa’s Quepem taluka. There, extensive community lands that harbour a large sacred grove — lands that ought to have been assigned as Community Forest Resources — have been encroached upon by palpable illegal mining, which has damaged water resources, affected farming, and created social dissonance. The mines are currently closed because of the illegalities, and the Gram Sabha has unanimously resolved that if they are to be restarted, this should be done through the agency of their multi-purpose cooperative society.

An imaginative deal

The 160-member World Trade Organization (WTO) wrote history last week when its General Council approved its first major global trade deal since its inception nearly two decades ago. The WTO got into a logjam when New Delhi put its foot down, and refused to sign the trade facilitation agreement unless a solution was found to the food stockpiling issue. The resultant impasse had even put a question mark over the very future of the WTO. Sensing the disastrous consequences of a WTO failure, Washington swiftly went into a bilateral huddle with India. Once the two sides agreed on a solution to the contentious issue, the decks were cleared for the WTO to ink its maiden trade agreement. Quarantining the public food stockpiling issue has ensured that the members’ commitment for a multilateral trading system remains intact. India and others felt that the Bali agreement put at risk their food security policies.

The WTO General Council has now agreed to keep the negotiations for a permanent solution on public stockholding for security consideration independent of the outcomes on talks on other issues. It has also decided to let the peace clause, agreed in Bali, to remain in force until a permanent solution is found. The agreement clearly addresses India’s concerns. The WTO has set for itself an accelerated time frame of December 2015 to arrive at a lasting solution to the issue. A stricter deadline reflects a sense of seriousness in not letting the issue linger indefinitely. In a way, it also assures the developed world that its concerns over the trade-distorting food subsidies remain a priority focus. With the General Council adopting the Protocol of Amendment, the process of implementation of the Trade Facilitation Agreement has finally begun. Essentially, it is aimed at modernising the trade infrastructure and easing regulations to smoothen global trade.

Since the Doha Round, the WTO has been struggling to be relevant in the midst of diverse interest blocs. It is hoping to shore up its image with the less-ambitious but procedurally significant trade facilitation agreement. The public stockholding issue almost spoiled the party for the WTO but now there is no need to redo Bali. Significantly, the WTO General Council has also given itself a deadline of July 2015 to agree on a work programme to implement the Bali Ministerial Decisions. If it reveals a prudential compromise, the historic deal also underscores the acute anxiety among members to work towards strengthening the multilateral trading system. Surely, the deal must spur member-nations to discover ways and means to deliver fast on the Bali decisions. The moot question, however, is: will the deal embolden the WTO attempt liberalising the more sensitive areas of trade as was intended by the Doha Round?

No closure for Bhopal

For thousands of residents of Bhopal, the disaster began the night they choked on the air which smelt of burnt chillies, and it hasn’t ended yet. The survivors got a pittance as compensation, thanks to an out-of-court settlement by the Indian government, and the late Warren Anderson, then chief executive officer of Union Carbide India Limited (UCIL), was not extradited for trial in India. Justice seemed remote then, and 30 years later even more so. Bhopal will be remembered for the horrors of industrial negligence and the havoc caused by methyl isocyanate gas and other chemicals, and equally so for its aftermath of apathy and criminal callousness. Recently, survivors appealed against a court ruling to reverse the decision that a U.S. firm could not be sued for ongoing contamination from the chemical plant. According to official estimates, 3,787 persons died and over 550,000 were injured, while unofficial estimates put the death toll much higher. The affected population continues to suffer from severe long-term health impact. The plant, which has tonnes of toxic waste, is yet to be cleaned up, and various agencies are still wrangling over whose responsibility it is and who will pay. UCIL’s plant manufacturing the pesticides Sevin and Temik was dumping waste on 6.4 hectares on the premises. Tests of the groundwater and waste dumps have shown the presence of mercury and other toxic substances, and chemical contamination has made water in the tubewells around the plant unfit for drinking.

According to the law of the land, UCIL was fully responsible for the wastes and for the clean-up. The question of criminal liability was never really settled, though in the minds of the people there was no doubt about it. Andersen and the company were spared a trial while thousands of survivors continue to lead a life of pain and trauma. Some UCIL employees and its former chairperson Keshub Mahindra were convicted of causing death by criminal negligence and sentenced to two years in prison in 2010, but they were released on bail. If anything, the disaster should have taught some important lessons in environmental protection and law, compensation and criminal liability, but it didn’t.

Bhopal was not a tragedy, it was a disaster waiting to happen. What is tragic is the predictability of events even after the gas leak: the lack of sensitivity and concern for the survivors, not even bothering to clean up the mounds of toxic waste, not attending seriously to the health issues, and making people run around for years for their rights. It is farcical that the government should enhance compensation for the survivors after having shortchanged them in the first place. Thirty years on, it is time for some serious reflection on the sensitivity of the state to such disasters.

An economic blueprint for Mr. Modi

Topping UPA’s robust growth would mean bettering the performance of the preceding UPA government. It was by no means insignificant. The UPA period saw the highest GDP growth rates in India’s history. The annual growth rates of close to 9 per cent between 2005-06 and 2007-08 have been exceeded only once — in 1987-88, when growth shot up because the previous year had seen an unprecedented drought. During UPA’s decade in power, national income almost doubled; income per head went up 69 per cent. These figures are supported by the rise in consumer durable ownership shown by National Sample Survey. The boom witnessed under the UPA’s tenure has ended; growth in the past two years has been under 5 per cent a year. Industrial growth has collapsed. Even to achieve respectable growth, the NDA government will have to do something, which politicians like to call reforms. But they will be nothing like the reforms of 1991-93. The economy was hobbled with such controls then that all Narasimha Rao had to do was to remove them. “Nara-indra” Modi has no such easy option. He needs to think out of the box.

One idea he had was “Make in India”. Make what? There is an excellent new website; the government certainly knows how to make them. It opens with a contrived lion made of racks and pinions. It lists 25 sectors — 14 in industry, five in services, four in transport, and two vague ones, namely space and biotechnology — which are little different from what the old government would have prioritised. It gives pride of place to the Delhi-Mumbai industrial corridor. For the rest, it summarises industrial policy, which repeats all the convolutions of the UPA era. It is remarkable how little it has changed. There is a longing for revolution, but there is no idea of where to go next and how.

To begin with, is manufacturing worth bothering about? Before the industrial revolution, India was the world’s most industrialised nation; after the revolution, it fell far behind. That has left a longing for lost glory. But the share of manufacturing in GDP has been falling everywhere. The only exception is China, which achieved outstanding growth in the past quarter century through industrialisation. The Chinese story is complex, but some of its components are well-known. Beginning in the 1970s, China set up an efficient steel industry, which has kept its costs of engineering and construction low. It built world-class railways, highways and ports, which took its manufactures cheaply across the country and the world.

India’s Achilles’ heel is electricity: it is expensive and uncertain. My solution for it is twofold. First, the Centre owns a quarter of power generation capacity, and supplies fuel for over two-thirds of the power. It should give power only to State electricity boards that charge a single price for their power, which must cover long-term costs of generation. State governments must corporatise state electricity boards; if they want to give any consumer subsidies, they must finance them from State budgets. The same principle of long-term viability pricing must be applied to the Centre’s coal, oil and power enterprises. Second, the Centre must buy floating thermal power plants like those in the West Indies, anchor them in ports, and use them to supply power to those States whose governments corporatise their electricity boards. Finally, the Centre must abolish all imposts on coal and oil products and create a national energy exchange where they are freely bought and sold; that will minimise the costs of energy. If it must impose taxes, they must be the same per Btu for all forms of energy and only on energy consumed by final users.

The financial industry is overregulated and consequently underdeveloped. Financial institutions are poorly designed. As a result, there is too little capital for small producers and traders, and too little risk capital in general. SEBI’s enormous rulebook and its partiality towards the so-called qualified institutional investors have turned the capital market into an oligopoly; and restrictions on entry into banking and competition have led to collusion between banks and their larger clients.

This is my initial list of reforms. An economist can theorise and imagine endlessly. But policy is not a product of dreams; it emerges from a bargaining process in which an economist is only one participant. My list would give an idea of how one starts with a problem and applies economic principles to it to draw policy conclusions. Policy is made by policymakers, brought into the public sphere by media, administered by civil servants, enjoyed or suffered by common people and reshaped by democratic processes. Those who are elected may think they have arrived and only have to wave a magic wand; those who have elected them may soar with hope. But good policy requires a robust process of which elections are a small part. The new government still has to design the process, let alone implement it.

Insecure and insular in urban India

It is easy to see how in the past 20 years the idea of private ownership has had a huge debilitating impact on urban life. The city has changed from being a congenial space of shared amenities and relationships to a fearful nightmare of private strongholds and walled compounds — insecure, insular and isolated. As the boundaries of the city have expanded to take in more people, the real boundaries around residents have closed in. In Gurgaon outside Delhi, Vastrapur in Ahmedabad, or Whitefield in Bengaluru, the gated community coaxes the home owner into believing in the security of living among people like each other. The house comes now with greater realms of private facilities: private parking, private entertainment, private office, private pool, private barbecue … when the home acts as a virtual city, there is no need to go out.

In the 1970s, with little use for a car, my parents opted to share the expense of a car and driver with four other homes in the neighbourhood. Such efficient allocation ensured that the shared car was fully employed during the day within selected time slots. Five houses came together to share one car; today, each of those houses has four to five cars, mostly clogging the driveway. At the time, the local market had several lending libraries with the latest books. The system of short-term borrowing ensured that every book was happily thumbed by many interested readers, as were magazines and later, videos.

The larger thrust of the shared life also extended to living spaces within and outside the home. The absence of multiple TVs and fridges allowed the family to share time together; as did the community park, where people met in the evening. Throughout the world, cities are attempting to create optimal conditions for shared interactive lifestyles. Suburbs in Washington and Boston encourage carpooling by creating special fast lanes into the city. In a new scheme in Orlando, tight-knit town houses open out into a common garden, allowing an easy mingling of all residents. Offices in Bogotá hire shared taxis to ferry their staff into the city.

Other initiatives such as co-housing in Denmark support communities planned and managed by the residents who share responsibilities of child care, recreation and security along with social activities. Some new Chinese cities discourage any form of private ownership — whether house or car — so people live close to places of work in rental housing. Stockholm’s suburban ordinance even allows private gardens to be used publicly. Families without their own lawns are encouraged to use someone else’s as their own. The world’s most liveable cities are without doubt those that encourage such shared patterns in civic regulations.

Governments abroad have also made conscious and consistent efforts to eradicate the visible hierarchy of their cities, ensuring that everyone lives together, works and shares a common pool of services and facilities. Senators in Washington live in standard suburban homes and commute every morning like ordinary citizens. In the Netherlands, Queen Beatrix could be seen choosing vegetables in the local market. Warren Buffett, one of America’s richest men, still maintains his old family home in Omaha, and is often seen playing with his grandkids on the sidewalk. Naturally, a government that still follows antiquated regulations and by-laws is hardly capable of offering thoughtful solutions in this direction. Equally, it is a shameful sign of our times that builders profiting from construction, continue to lavish all their efforts where none is needed. As money and good times roll in, developers begin a steady and relentless marketing of luxury villas and townships, privatising the city further with high electrified boundaries and yet more isolation.

Why is it then that these fortress walls in suburban Delhi, Bengaluru and Pune foster such seclusion and despair, but the narrow lanes of Mehrauli and Dharavi — despite the stigma of slum living — are welcoming and unrestrained? In a society that has traditionally lived on the ideal of dependence, a return to a more egalitarian shared existence is a certain possibility. Now, more than ever, with the threat of smart cities looming large, the creation of a civic model needs careful stating, design and evaluation.

Beginning with the redesign of the middle-class home, its relation to its neighbours, the value of community over privacy, shared transport over the private car, the compaction of distance between home, workplace and recreation, the abolishing of gated complexes, the inclusion of common greens, the reduction of private commerce, the conversion of roads to parks and walking tracks, can all be directed in the thrust for a different type of city. If private builders wish to apply any such ideas in their projects, the government should allow them a slate clean of all local restrictions to make it possible.

Rethink the death penalty

As India continues to stand in favour of the death penalty, it is increasingly finding itself in the margins of world politics and international standards on this issue. On a UN General Assembly resolution to establish a moratorium on death penalty, a vast majority of the countries have voted in favour of abolishing the penalty. Although the resolution does not have binding value, it does carry considerable moral and political weight. Amnesty International reported that 114 of the UN’s 193 member-states voted in favour of the resolution and 36 voted against it, while 34 abstained. Around 140 countries worldwide have abolished the death penalty in law or practice, and the International Covenant on Civil and Political Rights is strongly against it. The International Criminal Court envisages life imprisonment even for crimes against humanity such as genocide. Customary international law does not prohibit the death penalty currently, but global opinion is rapidly moving towards an abolition.

Given this global trend, India gave the following reasons for its retentionist position: (a) the sovereign right to determine its own laws; (b) the death penalty is exercised in the “rarest of rare” cases; and (c) India guarantees ‘rule of law’ and the necessary procedural safeguards for a fair trial. But this justification is grossly inadequate. Abolition is now firmly entrenched in the human rights discourse and no longer limited to national criminal justice policy, making the ‘sovereignty defence’ much weaker. As far as the “rarest of rare” jurisprudence is concerned, the Supreme Court in Sangeeth (2013) agrees that this principle laid down in Bachan Singh (1980) has received erroneous and inconsistent interpretations in most judgments since Machhi Singh (1983).

The court concedes that the test has become arbitrary and judge-centric rather than principle-centric. In an interview to Frontline, Justice A.P. Shah said: “Clearly, the two prisoners in Ravji’s case who were wrongly sentenced to death were executed as a result of these flawed judgments, constituting the gravest known miscarriages of justice...” As far as the ‘due process of law’ is concerned, the stealthy killings of Ajmal Kasab and Afzal Guru, as well as the undue delay in handling mercy petitions, deftly spelt out in Shatrughan Chauhan (2014), reflect flawed executive action that cannot always be corrected by judicial intervention. Even if public opinion in India currently favours the death penalty, the move towards a more enlightened approach can be initiated in Parliament. As India endeavours to play a stronger role in world politics, it is time to rethink its stand on the death penalty with more clarity.

Courtesy: Various News Papers

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