1.

Decoding Indias jobless growth

RITESH KUMAR SINGH
We often say that manufacturing should take greater responsibility of job creation as
agriculture already employs over half of Indias workforce, and services cant absorb the
million youth who are joining it every month. The Centre is trying its best to push
manufacturing through the Make in India initiative. But that doesnt seem to be working,
at least when it comes to job creation. India is the fastest growing large economy,
posting a growth rate of over 7 per cent, yet jobs are not growing as fast as GDP. What
needs to be done to address the problem of jobless growth which, if not addressed, has
the potential to turn Indias demographic dividend into demographic disaster?
Killing jobs
Many think that lowering the cost of capital increases investment and that in turn
automatically creates jobs. Unfortunately thats not how it happens. Making capital
artificially cheaper promotes its sub-optimal use in a labour abundant economy like
India. It may induce adoption of labour-saving production technologies especially if
labour laws are not business friendly; so does raising minimum wages without
commensurate rise in productivity. That kills jobs. In fact, Indias rigid and often
confusing labour laws enforced by a myriad agencies have done irreparable damage to
the cause of labour by creating two classes of workers contractual workers
comprising 90 per cent whore paid low wages and have no job security, and well-paid
workers with secure jobs comprising 10 per cent of the total. Roughly half the workers in
Indias corporate sector are contractual. Nevertheless, investment remains an important
determinant of job creation, but investment is influenced more by whether the investors
will be able to recover their money with some profit for taking business risks. Cost of
capital is thus important, but its only one variable. Another but more important
determinant is availability or lack of sufficient demand. In India, one-fourth of household
savings goes into financial channels. Of that, less than 5 per cent flows into equity and
mutual funds. Roughly 50 per cent goes into low-risk fixed deposits and small savings
instruments. The balance goes into gold and real estate. Pruning interest rates on
savings either invested in FD or small savings instruments EPF/PPF will lead to
lower purchasing power (via negative wealth effect) of working class households, and
hurt business prospects from the demand side as consumption demand accounts for 60
per cent of aggregate demand. Lower interest rates will not necessarily lead to
increased private investment if theres insufficient demand either in domestic or
export markets. It will only improve business margins without increasing real investment
or add new jobs. The domestic market is flooded with competitively priced imports
(often subsidised by countries such as China) that reduce the market size for
indigenous manufacturers. This is not to argue that imports should be banned. But it
certainly calls for a serious examination into why domestic businesses are not able to
compete with imported products.
Contract enforcement
Some of the reasons may be internal that have to be dealt with by private sector
internally. But, the government cant escape the responsibility for external
mismanagement that adversely affects manufacturing cost competitiveness. Given
Indias high cost manufacturing model and ever-increasing competition from
competitively priced imports, most Indian manufacturing companies, from steel to

textiles, are bleeding. Domestic businesses, especially SMEs and first-time

entrepreneurs, are not able to compete with imported products because of high
transaction cost arising out of inefficient logistics and Indias overall poor record on ease
of doing business. Discussion on ease of doing business has largely escaped any
discussion on ease of contract enforcement (Indias rank is 178) that adds to transaction
cost. It implies that bidders in a contract have to account for risks in enforcing terms of
the contract in the form of higher (bid) prices thats extra cost for procuring firms. A good
example of poor contract enforcement is real estate: though not exactly related to
manufacturing, it has serious implications for many manufacturing industries, such as
cement and steel. Indias ill-conceived trade pacts have resulted in inverted duties
higher import duties on raw material/components and lower duties on finished products.
That discourages value addition and job creation within India. Apparels can be imported
into India duty-free while raw material manmade fibres attracts an import duty of
10 per cent that doesnt make any sense but persists. Similarly, finished products such
as laptops or cell phones can be imported more cheaply than all their parts (imported)
separately because of duty inversion.
Indias trade pacts have failed to extract real market access for its exports as they are
not able to address concerns on non-tariff barriers. There is slower or no progress on
conclusion of MRAs in FTAs such as India-Japan CEPA that hurts exports. Again,
exportables such as textiles and clothing are not included for duty reduction in IndiaMercosur PTA. Most of Indias merchandise exports agriculture or manufactured
are commodities in nature and operate on thinner margins. Thus, even a small cost
disadvantage either because of duty, power or logistics cost, makes export
uncompetitive. That largely explains why Chinese global export share in apparel is 35
per cent compared to Indias 5 per cent even if we produce most of the raw materials
while China imports them. Advances in 3D printing and robotics will further take away
Indias comparative advantage derived from possessing cheap labour.
The way forward
When trade negotiators from developed countries say wages are low in developing
countries, they fail to recognise that productivity is also very low in developing countries.
Pushing wages up without a corresponding increase in labour productivity will induce
businesses to go for labour-saving production technology that will kill jobs. Their
insistence on minimum labour standards is nothing but a disguised form of trade
protectionism that needs to be resisted by developing countries. More employed
workers even at lower wages are a better option than less employed workers at higher
wages. This is not to argue that wages shouldnt be allowed to go up. The Government
should focus on productivity-enhancing skills upgrade measures rather than fixing
minimum wages. Rise in labour productivity will increase labour demand and push
wages up automatically. Cross-subsidisation of corporates by savers la China will not
work in India as India is not China and the world has changed too much for the China
model to work anymore. Realistic interest rates reflecting the scarcity value of capital
along with a prudent macroeconomic policy will bring in more FDI that will aid job
creation if major concerns on the demand and supply sides are addressed.
Unfortunately thats not seeing much action.
2. A national market for electricity
Vinayak Chatterjee

At an energy conclave recently, Power Minister Piyush Goyal said, " the government's mission
is to have one nation, one grid, one price". He could not have put this issue in perspective more
succinctly. Echoing a similar call, Chief Economic Advisor Arvind Subramanian, in a wellargued chapter titled "Powering One India" in the 2015-16 Economic Survey (ES), outlined
seven ground realities that suggest prioritising this task. One, in 2014-15, the addition to
generation capacity was 26,500 Mw, much higher than the average annual addition of around
19,000 Mw over the previous five years. However, this ability to produce more power has not
been matched with the ability to lift more power. Power plant load factors are at historic lows of
around 60 per cent due to the stressed financial situation of discoms. Two, it is for the first time
in the country that transmission grid expansion, grid-linking and grid upgrade are allowing
power to be transmitted across the country. The ES makes the point that on December 29, 2015,
"no congestion was observed in the electricity grid and a single price (Rs 2.30/kwh) was
discovered
on
the
power
exchange
IEX".
Three, recalcitrant discoms are being pushed and persuaded to significantly reduce AT&C
(aggregate technical and commercial losses) from their current embarrassing highs to a relatively
more acceptable level of 15 per cent by 2019, under the Ujwal Discom Assurance Yojana
(UDAY) scheme. Four, the Open Access (OA) policy introduced under the Electricity Act, 2003,
allows consumers with electricity load above 1 Mw to procure electricity directly from electricity
markets. The ES observes that " at its core, OA provides an aggregation of the countrywide
supply and demand on the same platform. Therefore, this constitutes a first step towards
discovery of a single market price for power around the country". It goes on then to ruefully
observe that "some states, however, have imposed significant barriers to OA". Five, already,
limited moves are underway to shape a national market for power. Indian Railways, the country's
largest single customer of electricity, has been allowed to shift its purchases to an OA regime.
Six, according to the ES, the complexity of tariff schedules prevents economic actors from
responding sufficiently to price signals. (In fact, the ES points out with barely restrained humour,
that tariff segmentation has reached hilarious levels in some states - specific tariffs for poultry
farms, pisciculture, wetland farms, mushroom cultivation and rabbit farms to name a few
segments off a much longer list). Seven, the growth rate of captive power generation between
2006-07 and 2014-15 is 9.3 per cent compared to 4.6 per cent for electricity procured from
utilities. This trend could be exacerbated in the coming years, as the decline in oil prices and the
cost of renewable energy alternatives may prompt a further shift to captive power. Most
important, the ES underlines the political challenge noting that " it must be borne in mind that
reforms in this sector are more challenging than in many others due to the clear demarcation in
the roles and responsibilities of the states and Centre under the Constitution". So, the message
from both the power minister and the chief economic advisor is the same. If there was a right
time for some bold political moves to fashion a national market for power, it is now. And this is
not just necessary for a neater power sector architecture, but crucial if the three powerful
ambitions of the National Democratic Alliance government are to see fruition through the
following: power for all by 2021; Make In India, enabled by competitive and reliable power
supply; employment generation, where the availability of quality and affordable power creates
opportunities for self-employment and growth of small and medium enterprises.
Indeed, it is clear now that having 29 separate markets for power, as in each state, is a hugely
debilitating and dysfunctional system. Contrast this with petrol and diesel where there is a
national price, tampered with by local taxes only. Also, if there is unanimity that India needs to
be yanked to a common national market by a goods and services tax regime, surely there is an

even more compelling case for the power market. It also needs to be borne in mind that the
structure of the distribution market itself will be changing with "carriage and content" geared for
a split. A recent report by the Forum of Regulators has laid out a three-stage implementation
plan, which is likely to take five to seven years to roll out. Indian industry, a long sufferer, has
been over the years calling for a national power market. Members of the Confederation of Indian
Industry have submitted several representations to various governments at the Centre urging the
following: i) A new legal architecture for making independent regulators truly independent
(including the Central Electricity Regulatory Commission). ii) Examining the concept of state
regulators being replaced by a smaller number of effective regional regulators. iii) Setting up of a
National Power Distribution Company (NPDC) that begins to effectively challenge the
hegemony of state-owned discoms. The NPDC can equally well fulfil other pressing objectives
of picking up stranded capacities, price-pooling across diversified sources of supply (for energy
security, plus encouragement to renewables), providing a national pricing benchmark as well as
facilitating a rapid move towards effective OA.
3. Balancing power
Business Standard
In the Westminster system of government, theSpeaker of the legislature has considerable power
and independence. This is a cherished product of a long process to secure the legislature's
independence and fairness. However, as recent events in this country show, this important
independence depends crucially on the occupants of the office staying carefully within their
traditionally highly circumscribed role. The considerable discretion they enjoy comes with the
assumption that it will be used sparingly or wisely. However, there are at least two recent
instances in which Speakers of the legislature have used this discretion to take debatable
decisions. The first instance is from the state of Uttarakhand, which was thrown into crisis when
the Speaker of the Legislative Assembly refused to allow a division - the counting of legislators'
votes - on the state budget. The Congress-led government of the state had reportedly lost the
confidence of several members of the legislative party; it was possible that theAppropriations
Bill would have been defeated had votes been counted, and the government would thus have had
to resign since it was a money Bill. By refusing to grant a division, the Uttarakhand Speaker in
effect declared the budget passed and insulated the government from a key test of democratic
legitimacy. The second instance is at the Centre, where the Speaker of the Lok Sabha has
permitted a proposed law, the Aadhaar Bill, to be introduced in the House as a money Bill.
Whether regulatory legislation such as Aadhaar meets the definition of a money Bill traditionally reserved for proposals that alter taxation, borrowing, or affect the Consolidated
Fund of India - is doubtful. But, just as it is a Speaker's traditional right and duty to determine
when a division is needed, her decision on whether a bill is a money Bill has also traditionally
been considered to be the last word. It is worth noting that the two major national parties are on
opposite sides of the fence in terms of the debate at the state and the Centre - in Uttarakhand,
the Congress is defending the rights of the Speaker, while in Delhi it is questioning them indicating that this is possibly a problem of institutional weakness that transcends political
parties. Unfortunately, India now faces a situation where the decisions of the traditionally
independent Speaker of the House are being discussed by another branch of government, namely
the judiciary. The Supreme Court has stayed an Uttarakhand High Court judgment that rescinded
President's Rule imposed on the state after the Speaker's controversial ruling. Meanwhile, it has
asked the Union attorney general for his views on a petition filed by a Congress leader
questioning the introduction of the Aadhaar Bill as a money Bill. So the judiciary and the

executive will now discuss a decision that has traditionally been the sole prerogative of the
Speaker of the legislature. The elements of a full-blown constitutional crisis are visible. What is
needed is to get ahead of the problem. Perhaps the tradition of the Speaker being notionally
completely independent of the other branches needs to be revisited. Rather than letting things
deteriorate and forcing the judiciary to get involved, the legislature itself should consider what
checks and balances can be imposed on the Speaker's discretion in order to ensure such situations
are not repeated.
4. Bring back DDT
Deepak Lal
Another horrific mosquito-borne disease, Zika, is now decimating South and Central America. It
leads to brain-damaged babies; the World Health Organizationclaims it is now "spreading
explosively", and will proliferate to every continent and become widely and deeply embedded in
populations. There is no known cure for it and it could take decades to find one. It now joins
malaria, dengue and chikungunya as another scourge spread by mosquitoes. The only solution is
to exterminate the mosquitoes that spread these diseases by pesticides. The most potent of these
is DDT. The US National Academy of Sciences estimated DDT had saved 500 million lives
from malaria by 1970. In India, effective spraying had virtually eliminated the disease by the
1960s, so much so that the mosquito nets which were ubiquitous in my childhood had
disappeared from urban houses by the time I was at university in the late 1950s. The indoor
residual spraying of DDT decreased the cases of malaria from 100 million a year in 1953 to
150,000 by 1966; deaths due to malaria, which were nearly a million a year in the 1940s,
decreased to about 1,500 a year in 1966. Then in the 1970s, largely as a result of an
environmental scare promoted by Rachel Carson's book Silent Spring, US President Richard
Nixon's Environmental Protection Agency under William Ruckelshaus banned DDT - against all
the expert advice he had been given. Foreign aid agencies and various UN organisations began to
take a jaundiced view of DDT, and the use of DDT declined. Not surprisingly, the mosquitoes hit
back and endemic malaria returned to India. By 1997, UNDP's Human Development Report
2000 estimated there were about 2.6 million malaria cases. So why did DDT fall out of favour
despite its demonstrated merits? Rachel Carson in 1962 started the DDT hysteria with her claim
that its use had devastating effects on bird life, particularly those higher up the food chain. It was
also claimed that DDT causes hepatitis and cancer in humans. Numerous scientific studies
showed these fears to be baseless. It was shown to be safe to humans - causing death only if
eaten in the size of pancakes! In 1971, in defense of its use, the distinguished biologist Philip
Handler, then president of the National Academy of Sciences said: "DDT is the greatest chemical
that has ever been discovered". Commission after commission, expert after Nobel Prize-winning
expert has given DDT a clean bill of health. (See E M Whelan, Toxic Terror, 1993, and for India,
K N Mehrotra, 'Use of DDT and its Environmental Effects in India', Proceedings of the Indian
National Science Academy, 1985, and for a recent survey: "Use of DDT in fighting
malaria", www.appopedia.org.). But this evidence had no effect on environmentalists, whose
misanthropic views were summarized by Alexander King, co-founder of the Club of Rome, who
in 1990 said, "My chief quarrel with DDT in hindsight is that it has greatly added to the
population problem". Paul Ehrlich said this about India: "I came to understand the population
explosion emotionally one stinking hot night in Delhi The streets seemed alive with people.
People eating, people washing, people sleeping, people visiting, arguing and screaming. People
thrusting their hands through the taxi window, begging. People defecating and urinating. People
clinging to buses. People herding animals. People, people, people." Whilst another has argued:

"It may be unkind to keep people dying from malaria so that they could die more slowly of
starvation". Whilst yet another has said: "Some day anti-malarial vaccines will probably be
developed, which may even wipe out the various forms of the disease entirely, but then another
difficulty will arise: important wild areas that have been protected by the dangers of malaria will
be exposed to unwise development." (Cited in R Tren and R Bate,When Politics Kills: The
political
economy
of
malaria
control,
2001).
These misanthropes are fortunate to live in once-malarial countries in Europe and America
where DDT had done its life-saving work three decades before the ban. Following the US EPA's
ban, the environmentalists succeeded in getting all developed countries to ban the chemical for
all uses. Many developing countries followed suit by banning the pesticide in agriculture, and
some for all uses. USAID and the WHO, who had been at the forefront of the mosquito
eradication programmes based on house spraying with DDT, turned their backs on DDT. USAID
has maintained that, as DDT is not registered by the EPA for use in the US, foreign assistance is
not available for programmes that use DDT. Thus the WHO - whose Malaria Expert
Committee had earlier ruled that DDT is safe and effective for malaria control - in 1979 began
championing a strategy which ignores the causal link between decreasing numbers of houses
sprayed and increasing malaria, by emphasising curative and de-emphasising preventive
measures. The decline in house spraying created DDT-resistant mosquitoes. Nevertheless,
whenever DDT was vigorously used - as in Mexico - malaria rates declined despite the increased
resistance of mosquitoes. Recent research has shown why. It has been found that DDT is "highly
effective at repelling mosquitoes that are resistant to it". Thus DDT not only kills mosquitoes not
resistant to it but also repels mosquitoes which are resistant. "If the house wall is sprayed with
DDT, the mosquitoes will stop entering," says Donald Roberts, professor emeritus of tropical
diseases at the Uniformed Services University of the Health Sciences. "If they don't enter, they
can't touch people while they sleep. In terms of disease control, it works beautifully." ('DDT's
ability to repel mosquitoes trumps resistance', Nature Medicine, 2007.) In 2004 the Persistent
Organic Pollutants (POPS) Stockholm Convention was signed by 170 countries, restricting the
use of DDT to vector control, thus permitting its public health use. The WHO, which had
removed its ban on DDT use for public health, was however charged to reduce and ultimately
eliminate DDT. India continues to produce and use DDT for public health purposes and has
rightly opposed the POPS proposed deadline of 2020 for a DDT ban. But India no longer seems
to be using DDT to kill or repel mosquitoes through house spraying, as it did in the National
Malaria Programme of 1953 and then through the National Malaria Eradication
Programme (NMEP) in 1958. DDT remains the cheapest and most effective means for
controlling mosquitoes. The time has come to start a massive programme of DDT house spraying
to kill or deter mosquitoes in a new MMA - Macchar Maro Andolan.
5. Retail licence Raj
Business Standard
Recent news reports have claimed that Apple Computers might soon be allowed to open a chain
of single-brand retail stores across India without fulfiling the standard regulatory requirements.
The consumer electronics giant has reportedly made a pitch to the Department of Industrial
Policy and Promotion, or DIPP, asking for a waiver in the requirement of local component
sourcing. Consumers will be delighted if this occurs, since Apple's stores have raised the bar in
terms of display, design and quality of customer service. A chain of Apple branded stores across
India should also result in better technical support and quicker maintenance, repair and parts
replacement for iPhones, Macs and iPads. But all the lobbying, and presentations asking

the DIPP to invoke clauses for exemptions ought to have been unnecessary. The regulations
governing retail are much too complicated and restrictive, and the discretionary clauses can often
be invoked subjectively. Other manufacturers of consumer electronics will be unhappy if Apple
receives such a waiver and they do not. Several such proposals are said to be pending and held
up due to rigid regulations. For instance, Xiaomi and LeEco are direct competitors to Apple and
both have made applications to set up single-brand stores in India. Current policy allows 100 per
cent foreign direct investment or FDI in single brand retail, but permission is required if the FDI
holding exceeds 49 per cent. The company must also commit to sourcing at least 30 per cent of
components locally. The "escape clause" (introduced in November 2015) allows for a waiver in
the 30 per cent sourcing requirement if "state-of-the-art" and "cutting-edge technology" is
employed. Apple is said to be asking for such a discretionary clearance, since the local sourcing
requirement is one that neither Apple nor other high-end electronics manufacturers can meet in a
hurry - the only thing Apple makes locally is the charger for some products. LeEco is said to be
looking at setting up a manufacturing facility; but India lacks an ecosystem for manufacturing
electronic components at the massive scale necessary to be cost-effective. The ongoing tax issues
that led to the shutdown of Nokia's Chennai factory have made global manufacturers wary. If
manufacturing is to be encouraged, such issues need to be resolved. Arm-twisting companies that
wish to retail domestically is not the way to do it. To be sure, it is not in the consumers' interest
to keep Apple out. In any case, the products are widely sold and serviced via distributors. But it
is also not in the consumers' interest to keep out Apple's competitors. Exemptions pertaining to
"state-of-the-art" and "cutting-edge technology" are open to subjective interpretation. Of course,
Apple is innovative and state-of-the-art - but so are many of its competitors. It would be a
complex process and a waste of time to set up criteria to judge "state-of-the-art" and "cuttingedge technology" across thousands of different categories of products. Indeed, the regulations
pertaining to retail hark straight back to the era of the Licence Raj. Successive governments have
tied the retail sector up in knots and done consumers a big disservice by setting up all these
barriers. Ideally, such restrictions on retail should be removed. At the least, these must be
reviewed to avoid discrimination between competitors in the same space.
6. A drought of action
JEAN DRZE
Droughts in India used to be times of frantic relief activity. Large-scale public works
were organised, often employing more than 1,00,000 workers in a single district. Food
distribution was arranged for destitute persons who were unable to work. Arrangements
were also made for debt relief, cattle camps, water supply and more. The drought relief
system was best developed in the western States of Maharashtra, Gujarat and
Rajasthan, but the basic framework was much the same elsewhere even if its
implementation often fell short. This year, nothing like the same sense of urgency can
be observed, despite 256 districts being declared drought-affected. To some extent, of
course, peoples ability to withstand drought on their own has increased: incomes have
risen, the rural economy is more diversified, and water supply facilities have improved.
Also, a semblance of social security system has emerged in rural India, with permanent
income support measures such as the Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS), the Public Distribution System (PDS), midday meals
and social security pensions. This also reduces peoples dependence on special relief
measures in drought years. None of this, however, obviates the need for active
intervention in a drought situation. Despite rapid economic growth and some

entitlements, the rural poor in India continue to live in conditions of appalling deprivation
and insecurity. And in some respects, notably water scarcity, the impact of drought may
be worse than before. Recent reports from Bundelkhand and elsewhere confirm that
without emergency support, drought continues to plunge millions of people into
intolerable hardship. To some extent, the nature of the required interventions has
changed. The simplest way of preventing starvation in a drought situation today is to
intensify the permanent income support measures mentioned earlier, for instance by
expanding employment under MGNREGS, providing special food rations under the
PDS, and arranging for improved school meals. That may not be enough, but it would
be a good start.
The MGNREGS funds crunch There are, however, no sign of this happening.
According to official data, the MGNREGS generated 230 crore person-days of work in
2015-16. This essentially restored MGNREGS employment generation to the level it
had reached before crashing to 166 crore person-days in 2014-15, when a new
government took charge at the Centre. However, the Finance Minister had not provided
for this recovery. The result was a mountain of arrears at the end of 2015-16 more
than Rs.12,000 crore. Yet the Finance Minister continued the unspoken policy (initiated
by the previous government) of keeping the MGNREGS budget more or less constant in
money terms year after year. If last years employment level is to be maintained this
year, the Central government would need to spend at least Rs. 50,000 crore, rising to
more than Rs. 60,000 crore if arrears are to be cleared a legal obligation since
MGNREGS workers have a right to payment within 15 days. Yet the allocation for
MGNREGS in this years Budget is only Rs. 38,500 crore. Unless the Central
government accepts the need for a large injection of funds, MGNREGS employment is
all set to contract again, or wage payments will be postponed both would be a
disaster in a drought year as well as a violation of peoples entitlements under the law.
Slipping up on food security It is arguable that the PDS is even more important than
MGNREGS as a tool of drought relief. Monthly food rations under the PDS are more
regular and predictable than MGNREGS work. They also cover a much larger fraction of
the rural population 75 per cent under the National Food Security Act (NFSA). A wellmanaged PDS is a major safeguard against hunger and starvation. It is no accident that
the worst reports of food deprivation come from Uttar Pradesh, which is nowhere near
implementing the NFSA. No Indian State has more to gain than U.P. from the NFSA.
Before the Act came into force, barely one-fourth of the rural population in U.P.
benefited from the PDS under the below poverty line (BPL) category. The rest
received nothing as the above poverty line (APL) quota was routinely sold in the open
market by corrupt middlemen. Further, even BPL cards were often in the wrong hands.
The NFSA is a chance for the government of U.P. to clean up this mess and cover 80
per cent of the rural population under an improved PDS, as many of the poorer States
have already done to a large extent. Unfortunately, recent reports on the status of the
NFSA in U.P. are most alarming. Rapid investigations conducted recently in
Moradabad, Rae Bareli and Lucknow districts (the last one just 23 km from the State
Assembly) all came to the same conclusion: NFSA ration cards are yet to be distributed,
many people are not even aware of the Act, and the same flawed system continues
much as before. So much for Chief Minister Akhilesh Yadavs upbeat statement (made
twice, on record, on April 7, 2016) that we have implemented the Right to Food Act.

One wonders whether he knows that elections are coming up next year in U.P., and
whether he thinks that this is the way to win them. Opposition parties, it seems, are
equally blind to the situation.
In other States, the status of the NFSA varies a great deal, from dismal (e.g. in
Rajasthan) to reasonably promising (in many of the eastern States). Alas, these
developments are receiving very little attention. Few issues are more important at this
time than the successful roll-out of the NFSA, yet it seems to be off the Central
governments radar. The Finance Ministers recent Budget speech, for instance, did not
make a single reference to it, or for that matter to nutrition in general. In fact, the Central
government (led by the Prime Ministers Office) is making things worse by pushing for
Aadhaar-based biometric authentication of PDS beneficiaries. This wholly inappropriate
technology has already caused havoc in Rajasthan, and is all set to disrupt the PDS
across the country if the Central government has its way.
For the first time, India has a lasting infrastructure of public support that can, in
principle, be expanded in drought years to prevent hunger and starvation. Business as
usual, however, seems to be the motto. The price is paid by millions of people who are
not just exposed to intense hardship but also losing valuable human and physical
capital, condemning them to further poverty in the future.
7. We Have a Lot to Learn from Southeast Asia
By B Vinod Kumar

I have just concluded a 10-day visit to Singapore, Malaysia and Indonesia as part of a
10-member Parliamentary Goodwill Delegation headed by Mukhtar Abbas Naqvi. These
Southeast Asian countries have geopolitical significance for us and are vital to our
countrys Act East policy. They are also highly developed and there is a lot we can
learn from them. In the field of water management, Singapore has much to offer. It is a
small country, around the size of Hyderabad. It has very few water resources and
imports water from Malaysia under the 1961 Johor State Water Agreement. This has
forced it to optimise its water management and it has done so admirably. Today,
Singaporeans have universal and round the clock access to water which is of such high
quality that it can be drunk straight from the tap.
Singapore has four main water sources which it calls the Four National Taps. These
are: i) water imported from Malaysia; ii) local catchment; iii) desalination; iv) NEWater.
The last is the most interesting and consists of advanced recycling technology that uses
microfiltration, reverse osmosis and ultraviolet disinfection to treat waste water. This
treated water is of such high quality that it has passed 13,000 scientific tests and
exceeds drinking water standards set by the World Health Organisation and the US
Environment Protection Agency. The output capacity of NEWater plants is 50 mgd and
meets 30% of Singapores total water demand. To maximise its local catchment, a
barrage called the Marina Barrage, was built on the main river in the city (the Marina
Channel) to prevent water from flowing into the sea. This has resulted in a 10,000 ha
reservoir. Singapores water management strategy is guided by three principles. They
are: i) capture every drop of rain that falls on Singapore; ii) collect every drop of used
water; iii) recycle every drop more than once. This clear and simple strategy has been

meticulously followed. The PUB, Singapores national water agency, undertook two
important steps. The first was that it completely separated rain water and used water
infrastructure, to ensure that rainwater does not get polluted. The second was that it
created a Deep Tunnel Sewerage System (DTSS) where all the used water is centrally
stored and treated. These steps enabled integrated, holistic and forward-looking
planning, leading to greater efficiency and addressing demand before a crisis hits.
Indian water management is far too fragmented and such an integrated approach is the
need of the hour. Singapore also invests heavily in research and development. Unlike in
India where a lot of scientific research is abstract and has little practical value, the
research there is geared towards problem-solving and has actually brought down the
costs of desalination plants and recycling technology. In this regard as well Indian
scientists and engineers have a lot to learn. Singapore also has an excellent skill
development educational system known as the Institute of Technical Education (ITE).
These are just like our Industrial Training Institutes (ITIs). After students finish
secondary education, they can opt for vocational education here. The ITEs provide 2-3
year career and technical education and provide modern skills such as engineering
design and manufacturing, IT, multimedia, aerospace and marine technology,
mechatronics, business and event management, nursing, hospitality services,
accounting, human resources, etc. These skills are demanded by the market and the
students benefit a lot. Also unlike in India, there is no irrational cultural stigma to
working with ones hands and taking such education is not looked down upon. The ITEs
were set up around the same time as Indian ITIs. However, unlike the ITIs, they
changed with the times to remain relevant to Singapores knowledge intensive and
innovation-driven economy. Our own ITIs have remained backward, largely
dysfunctional and out of sync with modern needs. They are still in the framework of the
1960s when industry was expected to be a major driver of employment and industrial
labour skills were required. They must be updated and brought in sync with modern
times. Half of Indias population is below 25. They must be given a relevant education
and made job-ready. For this, the ITIs will play a key role and their transformation is the
need of the hour. The curriculum should be updated so it is relevant to what the job
market needs. The Ministry of Skill Development and the Ministry of Labour and
Employment should take the state governments on board and prepare a relevant
curriculum at the earliest. Coming to the field of housing, Singapore has a scheme
known as Selective En Bloc Redevelopment Scheme. This is to upgrade public housing
colonies. The housing board selects colonies for demolition and reconstruction. Once
selected, residents are informed. The rest of the process demands special attention.
With utmost respect, the residents are carefully explained each and every detail by
government officials. They are given the option to purchase a new flat in public housing
colonies coming up elsewhere. The Singapore government acknowledges the
importance of social ties and residents are also given the option to jointly select a flat

with their neighbours, so they will continue to live by their side when they relocate. The
existing flat is then valued by a private valuer on the basis of which compensation is
made. The package is generally enough to purchase the new flat and if not, other
financing options are available. In this manner relocation is generally a smooth affair.
The next leg of the journey was to Indonesia, the country with the largest Muslim
population in the world. We visited the capital, Jakarta, and the largest island Bali. It is a
country with deep influence of Hindu and Sanskritic culture. This is because of trade
with India as well as rule by the Tamil Cholas, whose empire extended to Southeast
Asia. The national airline is called Garuda and Muslims commonly have names like
Rama and Lakshmi and there are ballads and dances based on the epics Ramayana
and Mahabharata. The ancient culture of the subcontinent is alive in Indonesia and for
them, religion and culture are two separate things. Malaysia was a country that gained
independence 10 years after India, in 1957, but is now several decades ahead of us in
terms of development. They have fully embraced the market economy and many
multinationals have set up base there. The iconic Petronas Towers, once the tallest in
the world, are a symbol of Malaysias ambition and progress. We visited their new
capital Putrajaya, which was marvellous. Like Indonesia, Malaysia is also a Muslim
majority country with lots of cultural influence from India. In fact, the Malaysian Prime
Minister is known in the local language as Perdana Mantri and the third PM, Dr
Mahathir Mohammad, was of Indian origin. Our Southeast Asian neighbours have much
in common with us. They have a similar culture, similar colonial legacy but have
developed wonderfully. We have much to learn from them and should further strengthen
our partnerships and people to people relations.
8. Anti-farmer sarkar
SHARMISTHA MUKHERJEE
Prime Minister Narendra Modi in his latest Mann ki Baat called for a movement to save
water. He said, To fight the drought and water scarcity, the governments will do their
work. But I have seen people also make their own efforts. Mr Modi needs to be
reminded gently that the people of India are innovative and proactive; they do make
their own effort even without a nudge from the Prime Minister. But its high time Mr
Modis government made some serious, sincere efforts to address the plight of the poor
in rural India. Mr Modis words belie his governments actions. In 2013-14, in the last
Budget presented by Congress-led UPA-2, the allocation for rural water was Rs 9,700
crore. In 2016-17, when the country is facing the worst drought since 1986-87 and
severe water crisis, the Modi government has reduced it to Rs 5,000 crore, a drastic cut
of Rs 4,700 crore. Instead of chanting Congress-mukt Bharat, Mr Modi should draw a
lesson from the magnificent performance of the then Prime Minister Rajiv Gandhi for
managing, perhaps, one of the most severe droughts of the previous century. Efficient
drought management not only mitigated the sufferings of millions of people, but also
boosted the economy with a 10% plus GDP growth in the next year. In a recent
Supreme Court hearing, the Centre submitted that a staggering 33 crore people, about
25% of Indias total population, are facing drought, severe water crisis and agricultural
distress. About 2.55 lakh villages in 254 districts are affected by drought. This figure

could be higher as the Centre strangely remained quiet about Gujarat though the state
has admitted that more than 637 villages are facing acute water shortage. Farmers
suicides have reached an all time high. In Maharashtra alone, 3,228 farmers committed
suicide in 2015, of which the state government found only 1,841 cases eligible for
government aid. This is not surprising considering the attitude of the BJP government
whose senior leaders didnt think twice before terming farmers suicides a fashion or
saying that farmers who commit suicide are cowards. The Union minister for
agriculture said farmers commit suicide due to love affairs and impotence. The antifarmer attitude of this suit-boot ki sarkar was evident from the very beginning. Within a
few months of assuming office, the government tried to first bulldoze, then bypass
Parliament by re-promulgating, thrice, the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill
2015, as ordinance. While the government had to finally drop the bill due to vociferous
protests of the Opposition led by the Congress both inside and outside Parliament, the
proposed amendments clearly reflect the pro-corporate, anti-farmer mindset of the
government. Dilution of the consent clause, removal of five-year time stipulation, dilution
of social impact assessment and ease of acquiring multi-crop irrigated land are all
indicative of an insensitive governments indifference towards farmers. The anti-farmer
attitude of the present government is a legacy of the previous NDA government. A
paper by Ashok Gulati, former chairman of the Commission for Agricultural Costs and
Prices, points out that while real farm wages grew at an average annual rate of 3.7% in
the 90s, they fell at an annual average rate of 1.8% between 2001-02 and 2006-07.
After UPA-1 assumed office in 2004 and took a couple of years to do damage control,
the real wages grew at an average of 6.8% per annum between 2007-8 and 2011-12.
This was possible primarily due to Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA). The flagship programme of UPA-1 not only guaranteed
100 days of employment to rural poor, but by fixing guaranteed minimum wage from the
government it saved rural labour from the exploitative labour market and enhanced rural
purchasing power, thus boosting the economy and checking distress migration from
rural to urban areas. MGNREGA contributed towards rural sanitation, construction of
irrigation channels, rural connectivity, creation of water harvesting and water
conservation structures. It also acted as an impetus for womens empowerment by
providing them opportunity for paid work in the vicinity of their homes, reservation of
one-third employment for women and ensuring equal wage. MGNREGA is one of the
most effective to-ols for socio-economic transformation in rural India. Mr Modis
repeated mockery of MGNREGA, by calling it a programme for digging holes, ridiculed
the efforts of millions of Indians who contributed towards the task of nation-building
through hard labour. Naturally, the axe came in the very first year of the Modi
government when the payouts fell to Rs 22,000 crore in 2014-15, from Rs 34,000 crore
in the previous years. Now, of course, having been in power for two years and realised
its importance, Mr Modi has changed his stance. From a monument of failure,
MGNREGA is now hailed as national pride. The BJPs anti-farmer approach is even
more evident in its policy towards fixing minimum support price (MSP). Its pre-poll
promise of fixing MSP at cost plus 50% turned out to be just another jumla. UPA-2 had
increased the MSP by 15%, whereas the Modi government raised it by a mere 3%.
While farmers are caught in a vicious circle of debt, crop failure and government

insensitivity, the BJP government in Gujarat plans to bring in new legislation that will hit
them even harder. A new land acquisition bill awaits the governors signature in Gujarat
that will make grabbing farmers land a cakewalk for corporates. If enacted, it will
virtually take away farmers rights to refuse to sell or engage in disputes over the
payment of compensation. The BJP government at the Centre is taking credit for
increaseing total Budget allocation for agriculture and farmers welfare from Rs 15,809
crore in 2015-16 (revised estimate) to `35, 984 crore (Budget estimate) in 2016-17.
However, its nothing but statistical jugglery. As pointed out by P. Chidambaram, Union
finance minister Arun Jaitley has shifted the allocation for interest subsidy for short-term
credit to farmers from the department of financial services to the department of
agriculture, cooperation and farmer welfare. Minus this shift, to quote Mr Chidambaram,
the allocation that was cut in 2015-16 has been restored to the level of 2014-15.
Allowing for inflation over two years, in real terms, the allocation may be actually less.
While industrial development is a must for economic growth, the government cannot
sacrifice the interest of millions for the profit of a few. It is time Mr Modi realised that
70% of Indias population earns its livelihood from agriculture. Instead of chanting it as
empty rhetoric, Mr Modi should follow Sabka saath, sabka vikas in letter and spirit.
9. Change the course of water wars
Shankar Roychowdhury
The likely withdrawal, around the end of 2016, of the El Nino (Christ Child) weather
system is likely to mitigate the adverse effects on the monsoon winds associated with it.
It is a matter of cautious hope for India, which has been suffering for the last three years
from prolonged drought in the southern, western and central regions. El Ninos
strongest effects on precipitation are in Southeast Asia and Western Pacific region. Of
further cheer is the recent prediction of the Indian Meterological Department that the
southwest monsoons due in June would be normal and up to the mark, with rainfall in
some cases perhaps even exceeding the normal. The ongoing drought in India has
been attributed to the creeping effect of climate change a topic that covers a host of
technical, socio-political and economic factors that are much discussed in various fora.
All these discussions have led to the unyielding bottomline that chronic shortage of
water will now be an almost normal feature of human existence over large parts of the
world, both first and third. Countries in the former obviously possess greater capabilities
to ride out the impact, while those in the latter, in many cases, remain mortally stricken
and floundering. The deepening sense of all-round crisis has been compounded by the
sense of fear and insecurity created in many parts of the world by unrelated geopolitical
factors, i.e. religious radicalisation, fundamentalism and terrorism by organisations like
the Islamic State of Iraq and Syria, Al Qaeda and their outriders in South Asia like
Lashkar-e-Tayyaba, Hizbul Mujahideen, Tehrik-e-Taliban Pakistan (TTP). India is a
good example. Not yet in First World, but nevertheless slowly pulling itself by its
bootstraps out of the third. The visual media daily brings home the grim reality of the
climatological catastrophe creeping up over the country. The images of women trekking
long distances under a blazing midday sun with headloads of metal or plastic pots to
collect a few litres of water often dirty and polluted, from dried-up wells, muddy ponds
or water tankers, which often operate at irregular intervals and to no fixed schedule
are harrowing.

The stoicism and enduring courage of Indias womenfolk in Maharashtra and other
states in this daily battle for preservation of hearth and home makes each one them true
incarnations of every warrior-goddess in the pantheon. In this context, China had
promised to release water from March 15 to April 10 to drought-hit neighbouring
countries located downstream along the Mekong river, from the network of hydropower
dams and reservoirs constructed along its upper reaches as a good neighbourly
gesture. The amount of water released by China is too low to help alleviate droughtstricken Southeast Asia. This is of tangential significance to India because India and
China are at best uneasy neighbours. They share common riverine water resources of
the Yarlung Tsangpo river, which originates on the high plateau of Tibet and flows into
China, with a major channel branching off into India where it flows through both India
and Bangladesh as the mighty Brahmaputra-Jamuna-Meghna river system, and flows
through the Sunderbans Delta into the Bay of Bengal. In this instance, both India and
Bangladesh are the lower riparian countries and ultimately dependent on the Chinese
goodwill for access to the Brahmaputra waters. As in India, where several states like
Maharashtra, Andhra Pradesh and Telangana have been affected by drought, the
northern regions of China, mainly Inner Mongolia, Qing Hai and Sichuan provinces have
reportedly been similarly hit. This has caused losses of $1.2 billion due to crop failures.
Droughts are said to be occurring in China with increasing frequency which, coupled
with the inexorable rise of population pressure, have caused massive increase in the
demand for water, both potable and non-potable. China is casting about for additional
resources of fresh water, and international rivers like the Mekong and the Yarlung
Tsangpo-Brahmaputra, which flow through more than one country to outfall through
China have the potential of becoming future flashpoints of water wars unless these
issues are addressed in a timely and serious manner.
China has indicated future plans to construct no fewer than four run-of-the-river (a type
of hydroelectric generation plant whereby little or no water storage is provided)
hydroelectric power plants on the Yarlung Tsangpo at Zhangmu (510 megawatts), Dagu
(320 megawatts), Jiacha and Jiexu (capacities not yet known). Indias abiding concern
has been the potential utilisation of these power plants as choke-off points, should
China choose to regulate or even stop the flow of water downstream to India. Though
an unlikely contingency at present, if it happens, it will, of course, affect Bangladesh as
well. India needs to watch and address the future course of geopolitical events on the
subcontinent with balance and circumspection. But it should also remain confident,
keeping in mind the interplay of forces many of which retain their traditional institutional
biases against India. In the specific context of management of Indias national interests
in any future water-sharing arrangements relevant to the Yarlung Tsangpo-Brahmaputra
waters, the terms set out in the 1997 UN Convention on Non-Navigational Uses of
International Watercourses (which has not yet been ratified by China), should be
informally adopted by India to base its overall guidelines to ensure equitable sharing.
India, China and Bangladesh the concerned riparian states have earlier held
technical discussions in respect of sharing of hydrological and other relevant data. A
workable answer will ultimately lie in the creation of a suitably structured tripartite
Tsangpo-Brahmaputra commission, comprising representatives of the three upper and
lower riparian countries. But beyond the faade of the United Nations and international
conventions, treaties and cooperative commissions of management remains the

ultimate factor which in the end always takes centrestage, especially in an issue as
critical as water, the giver of life Indias national interests. Is India ready?
10. Assessing India's Options to Address Vehicular Pollution
K K Jain
Recently in the NCR region the pollution level has risen to a high level, resulting in the
Supreme Court banning registration of new diesel vehicles of more than 2000 cc
displacement. Other strong measures like odd and even numbered cars to be run on
alternate dates have been enforced by the Delhi government to tackle the problem of
pollution. Recently, the Supreme Court asked whether India could pre-pone the use of
Euro-6 fuels to tackle the problem of pollution. A very strong sentiment is emerging
against use of diesel vehicles. Diesel vehicles are being considered the main source of
pollution. However, it is not wise to go by feelings, especially in areas where data can
be measured and scientific comparisons can be carried out. Long-term policy decisions
need to be taken considering all the issues such as what are the items of pollution, fuel
availability and the type of pollution produced by vehicles driven by different fuels. We
also need to consider the reasons other than vehicular emissions, for high pollution in
many of the cities in India. A comparison of pollution produced by similar vehicles using
different fuels has been carried out in the UK and the results are available on the
website www.airquality.org. As may be seen from the data there, the air pollution
produced by petrol cars without catalytic converters is much higher, except when it
comes to particulate matter. The particulate emission from petrol and CNG/LPG fuels is
virtually nil. This is where the petrol/CNG/LPG engines score over the diesel vehicles. In
India, most petrol cars are not fitted with the catalytic converters. Therefore the
emission of NOx and CO from the petrol cars is much higher compared to diesel
vehicles. The CNG/LPG fuels result in not only nil particulate emission, but also result
lower CO, NOx and hydrocarbon emissions. CNG vehicles have a tendency to have
higher methane gas in the exhaust, but do not cause smog and other health hazards. In
forests, the decay of plant matter results in emission of more methane into the
atmosphere anyway. The Emission of SO2 depends on the sulfur content of the fuel. If
sulfur percent is higher, the SO2 percent is proportionately higher. This is where Euro-6
fuels would help, as these have a much lower sulfur content. The best fuels to avoid
SO2 pollution are CNG and LPG, which have no sulfur in them and hence emit no SO2.
Here it may also be pertinent to note that the wear rate of engines is proportional to
sulfur content of the fuel. Thus use of CNG/LPG would enhance the life of the engine
and reduce the maintenance costs. The pollution produced in cold start conditions is
much higher for petrol engines than for diesel engines. This point becomes pertinent in
cities where, due to start-stop traffic conditions, the engine does not generally get
warmed up to optimum operating conditions. Other Sources of Air pollution Burning of
crop remains to clear field is a major source of air pollution. This produces dense
smoke. A study carried out by IIT Kanpur indicated that 50 per cent of SPM present in
the atmosphere in the NCR region was due to such burning of crop remains in the

adjacent areas. Here again no efforts are being made to address this cause of SPM
presence in the air. Similarly, fires in garbage dumps are another source of high
pollution in cities. In Mumbai, recently a fire in the garbage dumps at Chembur, caused
very high levels of particulate matter in the atmosphere. High level of dust is another
reason for high particulate presence in the air. When vehicles pass over dust, it grinds
the dust particles to further fine particles and spreads them in the air. Choice of Fuel to
be Used The choice of fuel to be used by vehicles would depend upon what is the major
pollution issue before us. If the major problem is NOx, diesel or CNG/LPG are better
than petrol. However if the major issue is particulate emission, petrol/CNG/LPG are far
superior as they emit negligible particulate emission. The choice of fuel, would require
large investments in plants and equipment and infrastructure to make these fuels
available at the point of usage. Thus choice of fuels cannot be a court decision or on
whims and fancies of powerful spokespersons. It needs to be a well-thought out
decision and needs to be taken after discussing the issue with all partners involved
the refineries, the director of hydrocarbons and the car makers. Choices Before India 1.
Ban Diesel engines: This is really no choice, as by banning diesel engines, we would be
running more vehicles on petrol, which produces more pollution. 2. Promote use of
CNG: As the major problem of pollution in Indian cities is particulate matter and NOx,
shifting towards CNG as a major fuel for transport and private vehicles would solve both
the problems. This would require a dialogue with auto makers and also would require
policy decisions to be taken to put up more CNG receiving terminals and pipe lines for
its transmission. This would also require fresh investments in production of gas. This
would save investment in refineries as the gas can be used directly and no refining is
called for. 3. Continue with diesel engines: This would require investment of around
`40000 crores for upgrading all refineries to produce Euro-6 diesel. This would also
require investment in a new engine management system, which should become
mandatory. This system, would sense the amount of CO in the exhaust and if CO rises
beyond a pre-determined level, it would not permit further injection of fuel. This would
avoid overloading of diesel engine and result in much reduced SPM and CO emission.
The driver would then need to shift to lower gear and move forward. 4. As SPM levels
are high almost all over India, it is necessary to eliminate loose soil in all urban areas. 5.
Similarly burning of bio-mass left in the field after reaping the crop needs to be
discouraged. 6. It is also necessary to ensure that better methods of handling the
garbage dumps are evolved and implemented. Forecast for Electric Cars: Continuing
research work on electric cars is likely to bear fruit in the coming decade. Advances in
battery technology has already made it possible for electric cars to cover almost 180
kms on a single charge. In the next decade I am sure newer batteries would become
available reducing the cost of batteries substantially. When this happens, there would
be no need to put diesel or petrol engines in cars or trucks. Pollution due to private
vehicles would be addressed.

11. Pak's Recalcitrance Meant Talks Ill-fated

By Express News Service nie

As Pakistan continues to be in denial on the terrorist attack on the Pathankot airbase,

little could have been expected from the recent meeting of foreign secretaries of the two
countries. Indian foreign secretary S Jaishankar and his Pakistani counterpart Aizaz
Ahmad Chaudhry met on the sidelines of a multilateral Heart of Asia meet hosted by
India. Beyond the niceties, nothing concrete seems to have been achieved. In fact, as a
wag put it, all the meeting yielded was a Twitter exchange which began even before the
meeting ended. The lack of a clear agenda and the inability to draw up a follow-up
action suggest the logjam continues. The foreign secretaries were supposed to meet in
January but the meeting was postponed indefinitely following the Pathankot attack.
India has done everything possible to convince the Pakistani leadership that it was the
handiwork of Jaish-e-Mohammed, whose leader Masood Azhar claimed credit for the
strike. Pakistan promised to inquire into New Delhis complaint and punish the guilty.
For the first time India allowed a Pakistani inquiry team, which consisted of a member of
the dreaded Pakistani Inter-State Intelligence (ISI), to visit the spot where the attack
occurred. They were showed the Pakistani items, including weapons, the terrorists
carried. In a travesty of justice, the team on returning to Pakistan claimed it had not
been given any evidence. Meanwhile, no action has been taken to bring Azhar to justice
and redeem the promise made to India. Pakistan instead used its ties with China to
have a UN proposal to ban the JeM chief vetoed. In doing so, it has disappointed those
that wanted to isolate JeM and deprive it of funding and logistic support. Islamabad
does not seem serious about restoring its relations with India to pre-Pathankot levels,
the highlight of which was PM Modis surprise visit to Lahore to wish his Pakistani
counterpart Nawaz Sharif on his birthday. Pakistan is also duty-bound to let the National
Investigation Agency investigating the attack to visit Pakistan and conclude its work. In
retrospect, the foreign secretary talks were ill-fated, given Islamabads recalcitrance on
Pathankot and other instances of cross-border terrorism.
12. Bankruptcy Law Has House Panel Green Light, says FM
The New Indian Express
The Narendra Modi government inched closer to yet another reform as the Joint
Parliamentary Committee gave its green light to the Bankruptcy Bill paving the way for
its discussion in the current Budget session of Parliament. The much-awaited
Insolvency and Bankruptcy Code, which was introduced by Finance Minister Arun
Jaitley in Lok Sabha in December 2015, aims to speed up liquidation of ailing firms,
improve the ease of doing business and attract more investment. The Code will help
Indian firms to exit an ailing business while banks stand to gain as they can recover
their dues in time. Addressing the second meeting of the Consultative Committee on
non-performing assets, Jaitley said the government is taking various steps, including
introduction of Bankruptcy Law in the Lok Sabha to deal with mounting NPAs. The

government has taken various measures to revive the stressed sectors which mainly
include steel, textiles, power and roads among others. He said that the government has
also done recapitalisation of banks by providing Rs 25,000 crore in the Budget 15-16 as
well as in this years budget. Jaitley said that wherever it was observed that number of
cases in which action taken by the banks against guarantors for recovery of defaulted
loans is insufficient, the government has advised banks to take action against
guarantors in the event of default by borrowers under sections of SARFAESI Act, Indian
Contract Act. Members suggested that there is need for bringing more transparency in
the system and list of all defaulters whose loans have been written off by the PSBs be
made public. They also suggested that there should be no employment cut due to
merger of banks.
Anirudhan Sampath, Baijayanta Jai Panda, Dilip Kumar Mansukhlal Gandhi, Kailkesh
Narayan Singh Deo, Ram Charitra Nishad, Supriya Sadanand Sule, Anil Desai,
Digvijaya Singh, Satish Chandra Misra, Kumari Selja attended.
13. 15-16 Sees Highest Capacity Addition in Wind Power
The New Indian Express
Wind Power capacity addition was the highest ever in 2015-16, with the industry adding
3,472.15 mega watt (MW), beating the previous record high of 3,196.66 MW installed in 201112. According to the Indian Wind Turbine Manufacturers Association, the capacity addition was
fuelled by wind-friendly policies in Madhya Pradesh, which alone added a whopping 1,291.90
MW or 37% of the years added capacity. The main factors driving the record capacity addition
in the state was the push in government policies toward more favourable tariffs rates and investor
friendly policies, said D V Giri, Secretary General, IWTMA. Prime Minister Narendra Modis
Renewable energy target for 2022 envisions 60 giga watt (GW) from wind power. The current
installed capacity for wind is 26,915 MW across India. This is similar to what happened in
2011-12, the previous highest capacity added. Tamil Nadu drove the figures then through the
same mix of policy pushes and favourable tariff rates, he said. Other states that have done well,
include Rajasthan at 687.90 MW and Gujarat at 385.65. In terms of manufacturers, the highest
numbers came from Gamesa (1003.70 MW), Suzlon (900.10 MW), Inox (790 MW) and ReGen
(313.50 MW). The industry is also highly confident of continuing growth in capacity addition for
the next few years. According to Giri, IWTMA expects numbers to cross 4,000 MW in the next
period (2016-17). If we are given favourable policy impetus like last year, theres no reason
why this number cannot be achieved, he said. States like Andhra Pradesh and Telengana, which
are already pushing for capacity additions and opening up the environment for investors, are
likely to be the major drivers of this growth. Apart from some wind states which are expected to
do well, the reduction in Accelerated Depreciation (AD) and possible sunset clause on
Generation Based Incentive (GBI) are expected to contribute to the higher numbers next year.
14. Spiritual business
Business Standard
That the yoga teacher and entrepreneur "Baba" Ramdev has the highest of ambitions was evident
from the "India ka growth icon" banner behind him at Tuesday's press conference to announce
Patanjali Ayurved's 2015-16 financial results. There were no regulatory requirements for a public
disclosure of the results, as Patanjali is an unlisted entity, but it is a reflection of Mr Ramdev's
confidence in the success of his business empire that he chose to do so anyway. His confidence

certainly wasn't misplaced: From Rs 446 crore in 2011-12, Patanjali's revenue jumped to Rs
2,006 crore in 2014-15, and around Rs 5,000 crore for the year ended March, 2016. Mr Ramdev
announced that Patanjali will cross Rs 10,000 crore by March 2017. That's scorching growth by
any standards and gives the established multinational giants in the fast-moving consumer goods
space a real run for their money. Indeed, if Patanjali achieves its revenue target for 2016-17, it
will be ahead of Nestle, Colgate-Palmolive and Procter & Gamble. Brokerage IIFL Capital has
estimated that Patanjali's sales would increase to Rs 20,000 crore by 2019-20. Mr Ramdev has,
in fact, made defeating multinational corporations a central part of his corporate communication.
And in true corporate style, the Hardwar-headquartered behemoth has roped in two top
advertising agencies to step up its growth. If ayurveda got a booster shot when Patanjali burst
into the FMCG market, "Sri Sri" Ravi Shankar's Art of Living has also been quick to merge
business with spirituality. Earlier this month, newspapers had full-page advertisements for
Ojasvita, a malt drink from Sri Sri Ayurveda, prompting analysts to start talking of that company
as the new disruptor in the FMCG market. To close the gap with Patanjali's distribution, Sri Sri
plans to more than quadruple its offline stores - called the Divine stores - from 600 now to 2,500
by 2017. But questions will now begin to be asked about how well businesses like Mr Ramdev's
or Mr Shankar's conform to the overall regulatory framework. There are still many grey areas.
As argued in this newspaper earlier this month, most of these businesses run by spiritual gurus
have crowd-sourced their funds from followers even though the law on "collective investment
schemes" (defined as any collection of funds to the extent of Rs 100 crore) would deter crowdfunding for a business idea that openly says it is a business seeking money. That's the reason
perhaps why Mr Ramdev has been silent on his profit figures, stressing revenue growth instead.
Then there is the issue of related-party transactions. A majority of Art of Living's FMCG
products are made by the Sumeru group of companies which is run by Mr Shankar's close
relatives, including his nephew. Sumeru's software company is responsible for Art of Living's
digital presence, its realty company is involved in Art of Living's construction projects, and so
on. The law is tough on related-party transactions and imposes tough compliance conditions.
There are also many open questions about whether current food and drug regulations can deal
with consumer products from companies like Patanjali. The spiritual gurus running these
businesses would do well to note that the aura of spiritualism might not shield them from the
regulatory structure for too long.
15. Hallmark complications
Business Standard
The government's plan to make hallmarking gold jewellery mandatory by Diwali has its merits,
but could lead to many complications unless necessary spadework is completed before its formal
enforcement. Most big jewellery houses in large towns have already begun to get their products
hallmarked for those discerning consumers who do not mind paying a bit extra to get ornaments
of standard purity and fineness. Nearly 80 per cent of India's annual gold consumption of around
900 to 1,000 tonnes is in the form of jewellery. However, short-changing consumers by
misrepresenting the purity of gold is rampant in this sector. Besides mixing more alloy than is
specified for different carats of gold, liberal use of soldering alloys is a common malpractice.
Standardisation and tests-based quality marking of high-value gold products, therefore, would
definitely protect buyers' interests. Such quality assurance can also help boost domestic
investment in gold and may also contribute to the success of the gold monetisation scheme. The
government has already taken some statutory measures deemed necessary for making
hallmarking compulsory. The Bureau of Indian Standards (BIS) Act, 1986, has recently been

amended to give the government powers to specify the goods that will need to compulsorily
carry the standards mark. The amended law empowers the BIS to cancel licences, punish
offenders
with
fines
and
order
product
recalls
if
found
substandard.
So far, gold hallmarking has been optional. However, to make it mandatory, the government
would need to expand the infrastructure for assaying gold ornaments. Arrangements would also
need to be made to supervise the hallmarking process. At present, there are only around 375
recognised gold hallmarking centres. About half of these are located in the southern region
where a substantial chunk of jewellery trade is in the organised sector. Some states have no more
than one or two hallmarking units. The number of such assaying centres may need to be raised
manifold to around 4,000 to cope with the anticipated increased workload. This may require
outsourcing to designated private agencies. The jewellery business is largely informal and
designs, sizes and shapes of gold jewellery vary. Assaying as well as stamping each item is
easier with machine-made ornaments than with hand-crafted items from goldsmiths in the
cottage sector - a sizable chunk of the business in rural areas. The real challenge will be in the
case of thin ornaments such as nose-pins, gold wire earrings and slim gold chains where putting
the quality mark on each article may not be feasible. There will be difficulty also in assaying the
quality of ornaments made by rural goldsmiths from gold scrap sourced from large jewellery
houses. Many of these craftsmen have neither the facilities nor the skills to refine the scrap to
remove added alloys before moulding it into new items. Ways and means will need to be
conceived to assure the quality of such jewellery to safeguard the interests of rural consumers,
many of whom buy gold products as a replacement for other forms of social security.
16. A trade policy agenda for India - I
Rajeev Kher
These are difficult days for trade policymakers. The global economic scenario stays insipid,
significantly impacting the trade environment. Despite a steep decline in oil and commodity
prices, manufacturing has remained tepid. India has lost its manufacturing competitiveness in
several product areas and the fact that efficiency in delivery of services can lead to
manufacturing competitiveness seems to have missed the adequate attention of policymakers.
India came out with an elaborate foreign trade policy statement the first of its kind last year.
Global developments thereafter have only accentuated the need for a more persuasive agenda on
international trade. The December 2015 ministerial meeting of the World Trade Organization
(WTO) was a disappointment for India, which could not secure all that it set out to do. It also lost
the sheen from its high position of leadership of the developing world in the WTO, which
continues to be relevant for most of the developing world, more so for India, which has been
punching well above its weight in global trade at the WTO. India has provided useful leadership
to developing and least-developed countries. Nairobi, however, is reported to have dented this
image. We need to take stock of our stance: Should we only pursue our self-interest or provide
voice to many others who lack it? Some have advocated the former approach, completely
ignoring that it is not just the need of less provided members which persuades India to take up
leadership in the organisation but it is Indias own wide diversity of positions on almost all issues
on the agenda that necessitates seeking support from a large number of members. In the process,
India must secure the goodwill of as many members of the developing world as it can. India also
needs to review its approach to the post-Nairobi work programme. There can be no doubt that
our defensive interests in areas such as agriculture compel us to pursue some of the issues less
palatable to the developed world, such as the reduction of agriculture subsidies in developed
countries. These can only be raised in a multilateral setting and remain relevant at all times. We

also need to take up a progressive agenda of our own, which the Nairobi declaration allows us to
do. There is no reason why we should not table an ambitious market access and trade facilitation
agenda in services. In 2008, we signalled a very ambitious set of market-access offers. We can
appropriately revive it. There are a large number of service-providing and consuming members
outside the Trade in Services Agreement membership. An attempt to get them together may not
be a bad idea. A proposal to facilitate trade in services behind the borders, similar to the Trade
Facilitation Agreement for merchandise trade, may be equally attractive to a large number of
developing countries. Given the demography, temporary movement of professionals will
continue to be our mainstay but we should enlarge our agenda to include several other sectors,
across all modes. Indian businesses have made big investments in developed and developing
countries in the recent past, suggesting the need for us to pursue a comprehensive services and
investment agenda. This external action will have to accompany reforms in all potential services
sectors to unleash our competitive strength. Services contribute 60 per cent to our economy.
They play a significant role in improving export competitiveness of manufactured products and
deserve corresponding attention of the policy establishment. We should also develop a trade
agenda around the UN Sustainable Development Goals adopted last year. No member will risk
disrespecting such an approach. Much has been said against free trade agreements (FTAs). The
success of a trade agreement depends on several factors; prominent among them are the criteria
for selection of the trading partner and persuasive advocacy with stakeholders. Trading partners
must complement each other. Rigour and strategy of selecting products and services for
preferential treatment is also necessary. Manufacturing for global competitiveness is organised
on the basis of capacities along the value chains. It is important to recognise mutual
competitiveness along a given value chain and to build an agreement all along the chain on the
basis of respective strengths. An entire ecosystem for trading, including the tariff structure,
regulatory ecosystem, logistics and trade infrastructure should be built around these value chains.
In the last decade, India has sealed trade agreements with Asean, South Korea, Japan and
Malaysia. Our trade partners have gained more than us. The reasons are obvious: lack of our
manufacturing competitiveness vis--vis these countries have not allowed us to harness
advantage out of the FTAs. FTA once sealed cannot be changed unless heavy compensations are
paid. In the present context, the approach for selecting an FTA partner should have the following
elements: First, keep politics out; second, pursue preferential arrangements with appropriate
members of the ongoing mega agreements, to connect with a larger market; third, expand in
growing markets such as Africa, Latin America, Eurasia; fourth, strategise focus through
Regional Comprehensive Economic Partnership (RCEP) on China; fifth, pursue a policy of
seamless South Asia to encourage production networks; sixth, identify positions of strength on
value chains and build conducive policy ecosystem around them; seventh, persuade industry and
sectoral ministries to reorganise themselves for the above objectives; eighth, discourage a
protectionist stance around Make in India, instead reorient it to develop strength around
identified value chains; and, ninth, create a well informed, fast track and competent, negotiating
architecture in the department of commerce.
17. States get more teeth to rein in sugar prices
The Hindu
To check the sharp rise in sugar prices, the Union Cabinet on Wednesday approved a proposal to
enable States and Central agencies to impose stock holding limits on dealers.
An official release said: The government has taken stock of the availability of sugar and
different factors contributing to rise in market prices of sugar across the country. This

governments latest move will empower State and Central agencies impose stock limits and
regulate supply, distribution, storage and trade of sugar to bring down its prices to a reasonable
level by curbing unscrupulous trading, it added. Sugar prices at the retail level have been rising
since late last year after a dip in production. By early this month, it had crossed 40 per kg.
Earlier this month, the Centre had asked States to impose stock holding limits under the Essential
Commodities Act. Keeping in view the sugar price trend, we have asked the State governments
as a precautionary measure to impose stock holding limits on traders to check hoarding, Food
Minister Ram Vilas Paswan had said at the time. Even as it moved on sugar, the Cabinet
meeting, however, did not take up a key proposal to allow 100 per cent foreign direct investment
(FDI) in marketing of food products produced and manufactured in India. Though the proposal,
announced in Budget 2016 with a view to lifting agriculture productivity and boost the domestic
industry, was listed on the agenda, sources said it was not taken up.
3 ,000-cr investment in BORL By another decision, the Cabinet approved a higher investment
of up to 3,000 crore by Bharat Petroleum Corporation Ltd (BPCL) in Bharat Oman Refineries
Ltd (BORL). The fund infusion will help BORL improve its balance sheet; its net worth has
eroded. The measure will also enhance the availability of petroleum products in the northern
and central parts of the country, said the release.
Farm land for solar power
The Cabinet also approved the utilisation of 400 hectares of farmland at the Central State Farm
in Sri Ganganagar (Rajasthan) for setting up a 200 MW solar power plant. In another decision
aimed at enhancing bilateral cooperation in the financial sector, the Union Cabinet gave ex-post
facto approval to the memorandum of understanding (MoU) between the Insurance Regulatory
and Development Authority of India (IRDAI) and the Insurance Authority of the United Arab
Emirates. The MoU provides for enhanced cooperation between the two authorities in the field
of insurance supervision by providing a framework for cooperation such as channels of
communication, said the release, adding that it was signed in February. The Cabinet also
approved the signing of an MoU between India and Papua New Guinea on cooperation in
healthcare and medical science.
18. Reviving real estate
The Hindu
Reserve Bank of India Governor Raghuram Rajan has yet again exhorted builders to
reduce prices, after having cut the repo rate by 25 basis points earlier this month. He
had argued along the same lines after his September 2015 rate cut of 50 basis points
essentially saying that even if home loans turn cheaper, builders must bring down prices
for the consumer to be interested and the over 40-month inventory pile-up to reduce.
Theres a flaw in the reasoning, though: builders are able to hold on to these unsold
inventories precisely because of these lower interest rates, which, along with advance
payment or interest-free credit by buyers, make their costs manageable. In other
words, the margins lost due to managing inventories are less than the possible losses
due to a drop in price. With banks heavily invested in home loans they account for
one-sixth of gross bank credit and were up over 15 per cent in 2015-16, outpacing the
7.8 per cent overall growth in gross bank credit they too would hardly like to see
prices drop. They feel threatened by the prospect of defaults and poor asset recovery:
What if overleveraged builders go belly-up and buyers lose jobs in a fragile economy?
Rajans efforts to make demand and supply meet at an affordable price, and without a
hard landing, are unexceptionable. But the answer here is to implement the Real Estate

(Regulation and Development) Bill, which was passed by Parliament a month ago but
awaits Presidential assent. That will achieve a smoothening out of prices and practices
in the sector better than Rajans pleas can. Builders may have a point when they say
that the cumbersome process of obtaining municipal approvals drives up their costs. But
it is also a fact that they change their plans on a whim, complicating the clearances. The
new law calls for full disclosure of clearances obtained before the Real Estate
Regulatory Authority to be formed at the State-level. By ensuring that 70 per cent of the
funds for a project are locked up in an escrow account, the inventory costs of other
projects managed by the same promoter are bound to rise; this will force a price
correction. Delays in project completion will also result in penalties. But for all this to
happen, the States must lose no time in setting up their regulators. A transparent
industry will reward bonafide promoters. The RBI should come up with a paper on the
intricate workings of the sector. All that is in the public domain is an unconvincing
housing index and a smattering of reports by consultants and sector experts. In the
absence of authentic data on housing inventories and prices, which banks are best
placed to provide, buyers are taken for a ride. A cleaner housing market, with a
regulatory apparatus in place, will trigger the sort of price correction that Rajan is
looking for.
19. Creating an Internet of People
TV RAMACHANDRAN
Amidst all the excitement around broadband, Internet of Things (IoT) and smart cities, the
influence of policy and regulation is not getting the attention it deserves. According to global
telecom apex body, ITU, India falls in the class of the least connected countries and suffers from
not only very low internet and broadband adoption but is also characterised by very low net
speeds. On the Global 20 IoT index, research firm IDC has ranked India at a lowly 16 in 20. The
key ingredients to successful adoption of IoT and broadband are network connectivity, cloud,
security and infrastructure and India faces huge challenges in each of these areas. We, therefore,
need to consider whether we have, firstly, the right policy and regulatory programmes to not only
address these challenges but also facilitate and catalyse this vital new development in a
harmonious and sustainable manner. One advantage is that being at a very nascent stage, and the
policymakers have a great opportunity to lead with the optimum policy to facilitate development.
Also, the Department of Telecommunications (DoT) has rightly led with formulating a
comprehensive Roadmap on Machine-to-Machine (M2M) communications and the Department
of IT (DEITy) has put out with a draft IoT Policy. These are excellent starting points. We now
need to urgently consolidate and progress to the next stage. Urgent particularly because 4G LTE
is already taking off in India and, elsewhere, it drives IoT revenues by up to 45 per cent.
Four approaches
There are four main approaches policymakers could employ regarding IoT:
Precautionary rules: Some policymakers focus on the potential risks associated with IoT and
regulate it accordingly. They believe pre-emptive regulations will increase consumer trust and
increase adoption, but heavy-handed rules impose costs, limit innovation, and slow adoption.
No intervention: Some policymakers believe the free market operating independently of
government interventions achieves the maximum possible consumer benefit. However, by
avoiding all interventions, they miss the opportunity to proactively support the deployment of
IoT.

Indigenous innovation: Policymakers view IoT as an opportunity to create export opportunities

for domestic firms. They may endorse policies that hinder foreign companies from competing in
the domestic market, such as adopting national technical standards rather than adopting
international ones.
Technology champions: Some policymakers have taken a proactive role in accelerating the
development and deployment of IoT, such as by funding research on sensor networks, creating
pilot projects for smart cities, preventing over-regulation of wearable health technologies, and
providing incentives for smart grid deployment. These policymakers see government as a critical
partner in promoting the benefits that come from using these technologies.
Finding a balance
India needs to find its own appropriate balance of the above approaches for optimum results. A
set of recommendations for IoT, made by the Telecommunications Industry Association (TIA),
could be eminently suitable for India too:
Policymakers approach to IoT should adhere to competition, and technology-neutrality
principles.
Policymakers should encourage and leverage voluntary, open and consensus-based standards.
Policymakers should employ regulatory approval approaches that are globally harmonised,
transparent and streamlined.
Utilise a spectrum policy that maximises a continuity of connectivity.
Promote efforts to modernise wired media for IoT applications.
Utilise a voluntary, flexible and collaborative approach to data security, based on global
standards.
Ensure flexibility and feasibility in addressing data privacy.
The challenges
That said, our policymakers face a set of challenges. Lets look at them.
No Standards: Standardisation is a form of economic self-regulation that can relieve the
government of the responsibility for developing detailed technical specifications while ensuring
that voluntary, consensus standards serve the public interest. Security and
management: Consumers are worried that a smart home security system that records
everything in their home may also be a way for hackers to override their home security system or
infringe personal moments. With IoT comes billions of new terminals, all connected via IPaddresses. Unsecured devices increase organisations vulnerability to cyber threats. Scaling
up: The first step to ensure a fit for IoT in an organisation is to start with a pilot program. This
will help determine how the actual programme will roll out and to understand the areas that
require extreme attention during execution. Customer experience: One of the key reasons of
increasing popularity of IoT is improved customer experience. IoT is still growing and there are
more than just a few hurdles before businesses can maximise benefits. But the first step to
overcome those hurdles is to identify them. Ecosystem: IoT being a platform business, it can
only be successful if different parts of the ecosystem inter-work efficiently. This creates another
layer of complexity. Till date, network and telecom operators needed to focus on just the
working on providing the best network connectivity solution, which was consumed by all
categories of customers with minimum tweaks. In IoT, the success of network providers will
depend on the sensors and the kind of data they can collect the analytics as well as the hardware
and the final solution. The ability of each aspect of the value chain to add value in the system
will decide the collective success of the ecosystem. This would necessarily need all these
disparate industry groups to develop common language, program management systems and have

a working understanding of the each other. Additionally, there needs to be understanding of

industry and domain verticals and business needs. Disparate businesses will have to work
extremely closely together to gain success as a norm rather than as projects. The security and
data sharing concerns have to be addressed urgently. IoT is global platform, so trying to create
country specific standards will be counterproductive; however, creating country-specific data
management and security regulations is critical to safeguard national interests. Policymakers
need to innovate in order to maximise the considerable promise of IoT for economic growth and
social well-being. India needs to determine its own optimum mix of possible approaches and
policy so that we achieve an accelerated deployment and adoption of IoT concurrently with the
much-needed penetration of the Internet of People.
20. Who can question authority of the Speaker, asks SC
KRISHNADAS RAJAGOPAL
How can the Union Cabinet sitting in New Delhi determine that a Money Bill was not
validly passed in the Uttarakhand Assembly and pave the way for imposing Presidents
rule in the State, the Supreme Court asked the Centre on Wednesday. Hearing the
Centres appeal against the Uttarakhand High Court judgment revoking Presidents
Rule, it extended its stay on the quashing of the Central rule. This means Presidents
Rule will continue in the State and the April 29 floor test in the Assembly ordered by the
High Court will not take place.
The million dollar question is when the Assembly Speaker said the Money Bill was
passed on March 18, how did you say it was not, Justice Dipak Misra asked the
Centre. The Centre, represented by Attorney-General Mukul Rohatgi, insisted that the
non-passage of the Money Bill would have witnessed the State slipping into chaos. But
the Assembly records show that the Money Bill was passed on March 18. If so, who is
the authority to question the Speaker? Nobody can question him, Justice Shiva Kirti
Singhobserved. The Bench scheduled the case for hearing on May 3 and said its
judgment would be pronounced before the summer vacation starting on May 16. During
the hearing, the Bench questioned Governor K.K. Pauls authority to seek video and
audio recordings of the March 18 Assembly proceedings on the passing of the Money
Bill. Is it within the Governors jurisdiction, the Bench asked the Centre.
21. The United States of Trumperica
The Hindu
The march of Donald Trump towards securing the Republican presidential nomination
has assumed an air of inevitability. The billionaire property mogul and Grand Old Party
frontrunner scored a major victory in Tuesdays primary elections in five northeastern
States. His delegate count now soars at 949, compared to 544 for Senator Ted Cruz
from Texas, and 153 for Ohio Governor John Kasich. The response of the panicked
GOP mainstream has been feeble. The idea of holding a contested convention to
thwart Mr. Trump and the plan for Mr. Cruz and Mr. Kasich to collude in the remaining
primary races do not appear to be retarding Mr. Trumps momentum. He is inching ever
closer to securing the minimum number of 1,237 delegates required for the nomination.
There is a good chance that if Democrat and former Secretary of State Hillary Clinton
wins her partys nomination, she may emerge as an insurmountable obstacle in Mr.
Trumps path to the White House. Yet her own campaign is not without risks for
example, the troubling questions surrounding the 2012 Benghazi attack and her use of
a private email server while serving as Secretary. Thus it has come to a point where

Democrats, the American people, and the rest of the world watching the spectacle of
the election may have to ponder a question that most wouldnt have dreamt of asking a
year ago: What would the United States and the world look like under the reign of
President Donald Trump? Consider his policies that would have the strongest ripple
effect globally. On trade, Mr. Trump promises to negotiate better agreements by
punishing companies that seek to offshore their operations with a 35 per cent tariff on
goods they want to sell to the U.S. This flies in the face of the laissez-faire, free-trade
model that Republicans generally support. It also risks price wars and spiralling trade
disputes that would make their way to the WTO. Relatively low-cost economies such as
India may be hit badly. Second, Mr. Trumps policies may produce instability vis-vis countries that are important to the Indian economy. His sabre-rattling towards China,
including his promise to label it a currency manipulator and to force it to end illegal
export subsidies could lead to volatility in the global markets that would exceed the
turmoil witnessed at the Shanghai Stock Exchange in 2015. Similarly, his intention to
tear up the nuclear treaty with Iran, bomb Syria and shake up ties with Saudi Arabia
could send oil prices soaring. On domestic politics, Mr. Trump has sounded hateful
about Muslims, Mexicans, women, the differently-abled and the media. Combine this
with a vow to roll back health-care reforms, loosen gun control and reinstate torture, a
Trump presidency poses the risk of heightening socioeconomic inequality and fuelling
bigotry. Internationally, no nation would be more isolated than the United States of
Trumperica.
22. The ironies of small States
NEERA CHANDHOKE
The political crisis in Uttarakhand and subsequent developments have once again
catapulted a number of rather familiar questions onto the political terrain. These range
from political instability, to what was once inelegantly called horse-trading, to the
containment capacity of the anti-defection law, to the regrettable tendency of parties
controlling the Central government to inexorably expand their writ. There is, however,
another concern that needs to be registered in this context, the readiness of State
leaders to violate their own obligations as representatives of the political public, and
vitiate democracy. The formation of three small States in 2000, Chhattisgarh,
Jharkhand, and Uttarakhand nourished hopes that democracy would be deepened.
Smaller political units facilitate contact between the government and the governed, and
enable local populations to imprint their opinions and interests onto the consciousness
of their representatives. This belief is, of course, not shared by many political theorists
of democracy. Sovereignty, wrote the great defender of direct democracy, JeanJacques Rousseau, for the same reason as makes it inalienable, cannot be
represented; it lies essentially in the general will, and will does not admit of
representation: it is either the same or the other; there is no intermediate possibility.
Yet the complexity of modern societies renders direct or face-to-face democracy a
remote possibility. Representative democracy inserts a third set of political agents to
mediate between the first two: the citizen and the state. Notably, whereas the citizen is
the primary unit of political society, the status of the representative is derivative.
Representatives are expected to proxy for the represented, obliged to further their
interests, and held accountable for acts of omission and commission. In democracies,
citizens have command over who they want to be represented by as well as the

competence to define issues worthy of representation. Outside the domain of often

obnoxious party politics lies an entire terrain of collective action through which citizens
press their collective will upon those who rule. The other reason for welcoming small
States is that in each case, demands for statehood followed struggles against injustice.
Yet, when the time came, the fight against injustice was simply disregarded. The
initiative by the National Democratic Alliance government of Atal Bihari Vajpayee was
presented as political sagacity; that to fulfil their needs, tribal and hill people require
political autonomy. Have small States managed to meet the demands of their people?
Have they learnt from struggles that have gone down in history as politically
momentous? Or have they, once constituted, gone their own way, of amassing power?
The answer to the third question is easily answered; State leaders have shown great
willingness to play into the hands of the Central government, presumably for a price. In
the process, representatives have forgotten the history of their own societies. But they
fail to recall that history cannot be disremembered, it constantly nudges us to recollect
past struggles against injustice in these States. Consider that from the late 1970s till
1991, when the visionary leader of the Chhattisgarh Mukti Morcha (CMM), Shankar
Guha Niyogi, was assassinated by the henchmen of the liquor lobby, India witnessed
one of the most transformative social movements in the country. The CMM focussed not
only on the struggle for wages, but also on alternative development strategies that
inspired radical political consciousness among the Dalits and the Adivasis. And it gave
to us an enormously creative interpretation of citizenship. A citizen of Chhattisgarh is
one who contributes to the productive resources and does not exploit people even if she
is not born in the region. Birth is as immaterial as an autonomous state. What is of
importance is democracy that gives to people dignity and control over their lives. It was
precisely this aspect of justice that went missing when Chhattisgarh was carved out of
Madhya Pradesh. Today, according to the 2011 India Human Development Report, the
incidence of poverty among Scheduled Caste (SC) and Scheduled Tribe (ST)
households in Chhattisgarh is much higher than in other social groups in the State and
the country. Chhattisgarh ranks low on Human Development Index rankings, with more
malnourished women, underweight children, and illiterate people than the national
average. People in the densely populated forests and hills of Dantewada and Bastar,
where a majority of the STs live, are the most illiterate. Ironically, Chhattisgarh is a
mineral-rich and power-surplus State. The same report tells us that Jharkhand, with vast
natural resources, accounted for 70 per cent of the Gross State Domestic Product of
Bihar before 2000. Yet it remains one of the most economically backward States of the
country. The SC and ST population constitutes around 12 per cent and over 26 per cent
of the States population. Poverty figures in these two communities are much higher
than corresponding figures at the all-India level. A higher percentage of children of the
communities suffer from malnutrition and illiteracy. It is not surprising that into the
political vacuum created by systemic injustice in both States have stepped the Maoists,
with their ideology of a new world geared towards the interests of the poor and the
oppressed. The irony is that the demand for statehood in Jharkhand emerged from a
200-year-old struggle against exploitation. In the 1970s the Jharkhand Mukti Morcha led
by prominent communists and tribal leaders focussed on the direct delivery of justice to
exploited tribal communities in the mineral-rich areas, in agrarian districts, and in
plantations. They launched a concerted effort against displacement. The demand for

statehood was part of the demand of control over resources by tribal communities.
Today it is precisely these demands for justice that have been put on the back burner by
leaders whose own biographies are soiled by sordid compromises with national parties.
The interests of the people have been rebuffed by leaders once at the forefront of
struggles for justice, and later demands for statehood as a precondition. Uttarakhand
falls into a different category because it is inhabited by hill people, many of them
belonging to the upper castes. The region came into the limelight when in the 1970s
local communities mobilised against transfer of forest resources to commercial
companies. The Chipko movement in the Kumaon and the Garhwal regions became
famous for novel modes of protest and awareness of environmental harm. People
protested against appropriation of resources and actions that impinged upon their bare
survival. The demand for statehood on the ground of special needs was articulated by
leaders in national parties, and gained momentum in the late 1990s. A new
exploitative elite In all these three small States, struggles had mobilised for justice
more and independent statehood less. Quickly, however, some leaders realised that
identity politics is more likely to attract the attention of ruling groups than appeals to
justice. With the formation of three small States the two paths the fight against
injustice and the drive to hoard power in the name of identity have diverged. In the
process, the claims of representative democracy have been replaced by aspirations to
political power and distasteful compromises made in pursuit of profit. Going beyond
defections, attempts to topple governments and establish governments, it is time to ask,
what is the relationship between federalism, States, representative democracy and
justice? Justice follows only when the wants of people who have elected
representatives are addressed, and when these representatives recognise that their
own status is derivative. But representatives have cynically chosen to look the other
way when matters of justice are involved. They seem to have only a will to power; to be
part of a new exploitative elite. But they forget that the history of struggle is the future of
struggle. Maoism is one extreme form of struggle against corrupt appropriative and
greedy elites; there are others. And there is reason to struggle. Chhattisgarh is a rich
State but its people are poor. Jharkhand is one of the most politically unstable States,
even as its leaders cosy up to power while their own people live lives stripped of dignity.
In Uttarakhand the inhabitants of the hill districts eke out a bare living. They survive
because of remittances from the rest of the country. The chasm between the needs of
the people who struggle for survival, action and inaction by representatives, and lack of
remedial justice has compromised representative democracy enormously. The issue is
not only one of federalism; defections from one party to another indicate renunciation of
the basic obligations of representatives, even as their own people starve.
23. EU needs a reality check
SAMIR SARAN
Rumours of the death of the European project are, as Mark Twain would have put it,
vastly exaggerated. The importance of European powers and the contribution of the
European Union (EU) in recent years are indelible. It was evident that even as the
United States and Iran took binary positions, it was the EUs outreach to Iran that paved
the way for a diplomatic breakthrough. Its contested, yet continuing and valiant efforts to
absorb Syrian war refugees are seminal. And, its clever, geo-economic manoeuvres
have succeeded in effectively containing Russias sphere of influence across central

and eastern Europe. These are all examples of the contemporary impact of that
geography to world affairs. However, it is undeniable that Brand EU is taking a beating.
It is time to unpack where the scepticism and perceived frailty stems from.
Patchy integration The first of the two most visible weaknesses of the project has to be
that this strong collective of European nations has achieved only patchy social
integration within its members. The states have been open to economic migrants and
welcoming distressed populations from across the worlds conflict zones in the past
(most recently from West Asia). The Gastarbeiter model adopted by several of them in
the 1960s and 1970s may have addressed short-run labour problems but may not have
been as efficient in assimilating newcomers into their society. Arguably, an immediate
consequence of this is the emergence and consolidation of radical Islamism and its
twin, racist-right-wing politics. As such, liberal EU is now grappling with two illiberal
ideologies. The second is in the economic sphere the touchstone of the European
integration project. The EU finds itself caught in the inevitable confusion that comes
from being a monetary union without being a fiscal union. The periodic eruption of the
Greek tragedy fundamentally arises from this cleavage. But besides these, there are
essentially four issues that dilute what the EU could potentially offer. To begin with, as a
brand, it is behind its time. While smaller countries and developing regions of the world
are seeking new collectives and the weight of these larger aggregations to reform the
global order, the EU and the European project are seen and presented as status quoist, primarily concerned with perpetuating entrenched interests. From reforms of key
Bretton Woods institutions like the International Monetary Fund to that of the UN
Security Council, European powers are seen to want more of the same. While some
European powers do realise that this posture may not be sustainable in the long run
witness their enthusiasm for the China-led Asian Infrastructure Investment Bank they
are either unwilling or unable to upend the existing global governance order and allow it
to be refashioned according to the realities of the 21st century.
Too Atlantic-centric The second issue seems to be Europes conception of the map
and its place in the extant geography of the world. Europe must realise that its future is
to a large extent coupled to that of Asias and Africas. Instead of a serious institutional
push towards building a common future with the powers that will shape these two
regions, Europe and the EU have functionally de-hyphenated themselves from both. For
example, Paris consults Washington for guidance on its Syria policy, but not New Delhi,
from which it may have obtained more sage advice. It is not hard to get an impression
that Europes penchant with trans-Atlanticism is a sentimental anachronism. Such
attitudes also reinforce the impression that Europe is too busy consolidating the old
boys club to realise that the geopolitical centre of gravity is inexorably moving
eastwards. Obsessed with the Atlantic Order, Europe is near absent in the great
debates of the Indo-Pacific. Europeans could, defensively, justify this trans-Atlantic
orientation in the name of values, except that the tyranny of values whether it is as
self-proclaimed champions of human rights, or of liberal non-invasive multiculturalism
has cost Europe tremendously in recent years in real political terms. Europes promotion
of norms was driven by self-interest in the past. A world remade in its own image was a
self-serving agenda from the colonial era to the Cold War, with tangible material
benefits. What Europe has engaged in since is promotion of self-determined values and
norms divorced from immediate political interests. This has led to the establishment of a

tremendously inelastic value system that seeks to enforce conformity on those who see
the world differently. Arguably Europe's problems with integrating minorities in its
national mainstream are one though not the only consequence of this social inelasticity.
All of these problems are compounded by the fact that Brand EU has a serious
marketing problem. Brussels has made very little effort to engage the world beyond the
borders of Europe in any meaningful way, and to great consequence. At a meeting
between European and Indian scholars last year, both sides bemoaned the lack of
communication initiated by the European side. EU public diplomacy has been fairly
ineffective in large parts of Asia and Africa, with the consequence that the many positive
messages that the EU could communicate to countries and regions to its east have
been muted, to be crowded out by narratives emerging from eurosceptics in Britain and
the U.S. instead. Therefore, the EU in India seems to be in the news mostly for the
wrong reasons. It is time Europe took a hard look at its messaging, the medium, and at
the concrete steps it needs to take to establish and reinvent itself among people it would
need the most in the coming years.
24. Diffusing the judicial burden
N. L. RAJAH
The Supreme Courts request to the Central government to consider the possibility of
establishing a National Court of Appeal has elicited mixed reactions from the legal
community. Bodies such as the Law Commission of India have given their considered
opinion, and from these a solution must emerge. The issue relates to access to justice,
that is at the core of our constitutional values, and thus problems related to the issue
have to be understood in their entirety and possible solutions must be deliberated upon
and discussed by all stakeholders. The problem is essentially threefold. The Supreme
Court was meant to be a Constitutional Court. However, the sheer weight of its case
backlog leaves the court with little time for its primal functions. In spite of recently
accelerated rates of case disposal in the Supreme Court (in 2015 it disposed of 47,424
cases compared to 45,042 in 2014 and 40,189 in 2013), the backlog was still a
staggering 59,468 cases as of February 2016. A substantial question of constitutional
law has to be heard by five or more judges. According to a study by Nick Robinson
titled A Quantitative Analysis of the Indian Supreme Courts workload, in the 1960s it
was common for the court to decide over 100 such cases a year. He points out that in
the past decade, because of the unreasonable workload borne by the court, the
average is now fewer than eight constitution benches a year. In effect, therefore, the
functions of the Supreme Court as a Constitutional Court have been seriously impaired.
Ease of access Geographical proximity to the court is definitely an aspect of access to
justice. The fact that the Supreme Court sits only in New Delhi limits accessibility to
litigants from south India. Mr. Robinsons study reveals that of all the cases filed in the
Supreme Court, the highest numbers are from high courts in the northern States: 12 per
cent from Delhi, 8.9 per cent from Punjab and Haryana, 7 per cent from Uttarakhand,
4.3 per cent from Himachal Pradesh, etc. The lowest figures are from the southern high
courts: Kerala 2.5 per cent, Andhra Pradesh 2.8 per cent, Karnataka 2.2 per cent and a
mere 1.1 per cent from Madras High Court. There is therefore an urgent need to find a
solution to such an inequitable state of affairs. The Supreme Court, it must be
acknowledged, has played its role as sentinel qui vive of the Constitution with aplomb.
This does not, naturally, go down well with the other organs of the state and while their

present proclivity to abide by the orders of the Supreme Court is creditable, it is but
natural that attempts may be made to curtail the constitutional powers of the court. The
problem of backlog may be a convenient handle for the other organs of the state to seek
drastic curtailment of the courts powers. Well-regarded leaders in stable democracies
have attempted this in the past. Franklin D. Roosevelt saw nothing amiss in using his
presidential powers to attempt to reorganise the American Supreme Court when it
consistently dealt death blows to many of the legislations brought in under the rubric of
the New Deal. The pendency of cases before the Supreme Court was at that time cited
as the ostensible reason for the reorganisation plans. In pursuance of the same,
Senators William H. King and Warren Austin called upon Chief Justice Charles Evans
Hughes to appear as a witness in the Senate hearing and to outline the courts ability to
deal with its docket. Chief Justice Hughes refused, and instead sent a note which
ultimately played an important role in thwarting the Presidents plan to reorganise the
court. An institution which on a daily basis hauls up several other bodies for defects and
deficiencies must place itself well above criticism of any nature. It is only such an
unassailable stature that can add to its effective functioning.
A reasoned solution In considering the issues posed by the Supreme Court to it, the
Central government has a rich repository of information which it must refer to in order to
reach a well-reasoned decision. The 229th report of the Law Commission of India
delved into this problem in depth and came up with the suggestion of retaining the New
Delhi bench of the Supreme Court as a Constitutional Court and the establishment of
Cassation Benches of the Supreme Court in the four regions at New Delhi,
Chennai/Hyderabad, Kolkata and Mumbai. The 2009 report pointed out that since
Article 130 of the Constitution provides that the Supreme Court shall sit in Delhi or such
other place or places as the Chief Justice of India may with the approval of the
President, from time to time, appoint, the creation of Cassation Benches of the
Supreme Court would require no constitutional amendment. It also pointed out how this
basic model with appropriate variations has worked very successfully in countries such
as Italy, Egypt, Ireland, the U.S. and Denmark. In coming to its conclusions and
recommendations the report had also made extensive reference to the 95th report of
the Law Commission titled Constitutional Division within the Supreme Court A
proposal for; the 125th Law Commission report titled The Supreme Court A Fresh
Look; reports of the parliamentary standing committee on personnel, public grievances,
law and justice as also the 120th report of the Law Commission on Manpower planning
in judiciary. In addition to the above, Mr. Robinsons report referred to earlier is also
available to guide the deliberations of the government. The Supreme Court has earlier
rejected suggestions to have benches of the Supreme Court in other parts of the
country. Given this fact, it is imperative we look at other options to the problem and
seriously debate the possibilities. The solution may not even be the National Court of
Appeal but a completely different idea which emerges during the course of deliberations
and is found acceptable to the government, the Supreme Court and the stakeholders. It
is, however, important that whatever may be the consensus, it must find a solution to
the problems mentioned earlier. As the saying goes, if we do not do something because
it has never been done before, we will go nowhere. The law will stagnate while society
advances, which is not good for both.
25. Beyond Governors brief: SC

KRISHNADAS RAJAGOPAL
With the Supreme Court deciding on Wednesday to maintain status quo and not
implement the Uttarakhand High Courts judgment of April 21, the floor test ordered by
the HC on April 29 will not take place. During the hearing, the Bench questioned
Governor K.K. Pauls authority to seek video and audio recordings of the March 18
Assembly proceedings on the passing of the Money Bill. Is it within the Governors
jurisdiction to ask for division of votes on the Money Bill and for video and audio of the
Assembly proceedings? The Speaker is the master of the House, and is it not his
prerogative to decide whether there should be video or audio recording of the
proceedings of the House, the Bench asked the Centre. Attorney-General Mukul
Rohatgi submitted that the Speaker had refused a division of votes on the Money Bill
despite a request from the majority 35 MLAs (26 BJP MLAs and nine Congress rebels)
on March 18. This proved that the Rawat government was already a minority from that
day. Mr. Rohatgi said that as far as the Centre was concerned, the real floor test
happened on March 18 itself, and there was no need for a further no-confidence motion.
Whether 28 or 35 MLAs is a matter inside the House. If the government was in a
minority as you claim, what follows is a floor test, Justice Misra observed. Senior
advocate Abhishek Manu Singhvi, representing the former Chief Minister Harish Rawat,
said it was the first time in India that a proclamation of emergency was a double
whammy. The emergency clouded the authority of the Speaker and prevented the
holding of the floor test on March 28. The proclamation came hardly 36 hours before the
floor test was to be held, he submitted. The Bench further asked whether a sting
operation allegedly showing Mr. Rawat horse-trading could actually be a ground for
emergency in the State. To this, Mr. Rohatgi asked whether the President was
supposed to keep mum when a Chief Minister was shown on TV openly engaging in
horse-trading. A sting operation can be socially, idealistically and morally condemned.
But can you take that as a factor for imposing Presidents Rule? Justice Misra asked.