KI

IWEPW March
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Notes by vineetpunnoose on www.kiwipaper.com
Content
Ukraine's Conflict and Resolution 1
The Next Internet Bust? 2
Course Correction 3
'Pepper Spray MP' 4
Off-target on Monetary Policy 5
A Law for Street Vendors 6
The Street Vendors Bill 7
Rajan's Target: Inflation or the Poor? 9
RBI Report on Financial Inclusion: A Review 10
Thinking about the 21st Century Indian City 11
Holding Up Half the Sky 12
The Ukrainian Crisis 13
MGNREGA and Biodiversity Conservation 14
Break the 'Special 301' Big Stick 15
India's Green Industrial Policy 16
Easing Unbearable Pain 18
Interstate Water Disputes 19
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Ukraine's Conflict and Resolution
Sat, Mar 22, 2014
ukraine, EPW, international,
Russian President Vladimir Putin said that the use of force to save the Russian-speaking
nationalities in southern and eastern Ukraine would only be the "last, very last resort".
Russia has legally signed bilateral agreements with Ukraine that gives it obligations
and rights in Crimea and grants it a lease for a naval base in Sevastopol on the Black
Sea that is critical for the Russian naval fleet. The presence of Russian soldiers is not
new in this region but such aggravated tension certainly is.
The European Union (EU) huddled into emergency talks even as Russia said that it
would impose counter sanctions on Western countries. Moscow even talked to China
and other countries, and the Western media started the rhetoric of a "New Cold War".
There are multiple reasons for the current crises. The Ukrainian economy is in dire
straits. It needs $35 billion to stay afloat. $13 billion are due as debt repayment this
year. Besides it has huge gas bills to pay Russia. Ukrainian regime was faced with two
options. One option was provided by the EU-US-International Monetary Fund (IMF)
troika. This loan would have come with conditionalities including the devaluing of the
Ukrainian currency, cutting subsidies for gas and energy, besides transparency in
governance.
The second option was offered by Russia in December 2013. This included a $15 billion
loan, besides concessions on the desperately needed gas supplies to this gas-deficit
region.
President Viktor Yanukovych rejected the EU plan that would have imposed harsh
austerity on an already impoverished Ukraine. He accepted a more generous $15 billion
loan from Russia in addition to natural gas on concessional rates. This decision sparked
protests in the capital city of Kiev which falls in the western part of Ukraine.
But the economy is not the only reason for such polarisation. The Ukrainian Parliament,
some time back, eliminated a law to protect the use of minority languages, particularly
the use of Russian as an official language in those sectors of the country where it is
spoken.
The chaos that followed the violence, the flight of the president, and installation of an
acting president, who appeared to represent only the Ukrainian-speaking western-oriented
mass, led to increased threat perceptions in the south and east, especially in Crimea.
Crimea has a semi-autonomous status, earlier within the Soviet Union, now within
Ukraine.
Putin took sanction from the Russian Duma to mobilise troops along the Russia-Ukraine
border and in Crimea on 1 March, in the belief that the Russian-speaking nationalities
in Crimea and eastern Ukraine were under siege.
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Any intervention by one country into another is a violation of international law. But in
the case of Crimea, several historical factors need to be weighed in. Russia and Ukraine
have special treaties on multiple subjects and one of these requires Ukraine to ensure
linguistic and other minority rights within Ukraine, particularly in Crimea, and there
would be Russian obligations.
From the Russian perspective, the North Atlantic Treaty Organisation's (NATO)
expansion into former Warsaw Pact nations has gone on unilaterally. Also, at the time
of the Soviet break-up, George Bush Sr and James Baker promised Mikhail Gorbachev
that the West would never expand to Russia's borders. But NATO started wooing
Ukraine by 1995 and then the EU started considering Ukraine for EU membership. The
"Orange Revolution" of 2004 deposed an elected but discredited president and brought
in Yulia Tymoshenko as two-time prime minister. She was later jailed, has now been
freed, and will add to this melee.
Ukraine itself is a Soviet construction, and there is no single Ukrainian people. The
state was made up by putting together different nationalities at different historical
periods. This began during the prolonged feudalism under Catherine "the great", extended
to Lenin's reorganisation in 1922 of the eastern part of the country, with largely Russian
speakers.
If Putin is violating international law by sending Russian troops into Crimea after a
violent coup spearheaded by neo-Nazis militias, what about Iraq and the weapons of
mass destruction (WMD) claims by the US and its allies? Or drone attacks in Pakistan
led by the US? Putin has recalled the experience of US in Iraq, Libya and others, when
the US acted without UN Security Council sanction. If sanctions against Russia over
Crimea then why not sanctions on Israel over Palestine, others have asked.
The Next Internet Bust?
Sat, Mar 22, 2014
EPW, economics, internet,
First, as in the years before 2000, firms that have no clear revenue model are being
valued at billions of dollars. So long as a firm is able to attract a large number of users
(as in the case of apps) or viewers (as in the case of websites) it is being considered a
potential revenue earner, even if the route to such revenues is unclear. Second, any
start-up winning attention becomes the object of attraction for a number of potential
acquirers, leading to a bidding war that makes the valuation even more difficult to
explain. Finally, at the end of the game, valuations are at levels where they imply
astronomical and irrational price-earnings (P/E) ratios that are difficult to justify.
Investors are betting on growth of a king, which is an exception rather than the rule.
he first is evidence, from the experience of companies such as Facebook or Google,
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that when revenues do begin to accrue (largely from advertising) they grow at incredibly
rapid rates, at times quickly rendering the firm comparable even in terms of revenue
size with some of the large global companies. The second is that already successful
companies may see competitive benefits in acquiring a particular start-up (such as
WhatsApp), resulting in a willingness to pay high prices for acquisition to beat competitors
(such as Google in the WhatsApp case).
Course Correction
Sat, Mar 29, 2014
EPW, foreign policy, international,
as things stand today, India's foreign policy is closer to its professed aim of seeking
strategic autonomy, promoting trade and economic linkages and, most importantly,
stability and better ties in the immediate neighbourhood.
But since 2008, UPA-I and then UPA-II sought to make some course corrections. On
a range of international issues, India has moved away from the US "bandwagon"; it
refused to vote in favour of military intervention in Libya and in Syria, and recently
voiced clear opposition to sanctions against Russia over Ukraine and Crimea.
ndia has also taken a firm stand at international climate and trade negotiations, and on
the issue of intellectual property rights, resisting pressure from the US, the European
Union and other developed countries. The US has continually complained about India's
reluctance to introduce more market reforms that would allow greater investment and
trade in its favour. Even though India has expanded security and military relationships
with the US through cooperation on anti-terror measures and arms trade, it has been
careful not to tie its strategic aims with that of the US, in particular the latter's ambition
to "contain" China. India's Look East policy has led to a deepening of relations with
south-east Asia and countries like Korea and Japan. India re-engaged with Iran, initially
through backchannel talks and has now even revived the possibility of partnering Iran
on development of the Chabahar port.
The UPA deserves credit for having resisted pressure for military measures against
Pakistan after the 2008 terror attacks in Mumbai and for not allowing tensions to escalate
after some of the border incidents were given a hyper-nationalist turn by the media.
In Nepal, India played a positive role in the early part of the UPA's tenure, facilitating
a peace agreement between the Nepali Maoists and the other democratic parties, which
paved the way for the formation of the Nepal republic. Despite a lapse into its old habit
of interfering in Nepal's internal affairs, the Indian establishment now seems to back
a policy of not interfering in Nepal's domestic politics and its torturous process of
constitution writing. The UPA also managed to initiate some significant breakthroughs
in its relations with Bangladesh on border settlements, water sharing, trade and
communications and security cooperation. However, its pusillanimity in Parliament in
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the face of national chauvinists has meant that relations are now in a bit of a limbo.
Even on Sri Lanka, the UPA government, despite some lapses, managed to steer clear
of supporting either the Liberation Tigers of Tamil Eelam or the Sri Lankan state, even
though it did not perhaps do enough to defend the human rights of the Tamil minority.
It has joined other countries in putting pressure on the Sri Lankan government to take
steps towards post-war reconciliation and devolve more provincial powers to the north
and east, both bilaterally as well as through the United Nations.
Trade and economic relations have also become central to India's foreign policy, with
the UPA using trade agreements to further diplomatic relations. It has played a proactive
role in helping Indian capital find good investment opportunities in Africa and other
places too.
The UPA tenure might well end in a resounding defeat of the Congress Party and its
allies because of unpopular domestic decisions and corruption, but in its foreign policy
the UPA leaves behind a largely positive legacy.
'Pepper Spray MP'
Sat, Mar 22, 2014
Parliament, EPW, polity,
Can the Member of Parliament Lagadapati Rajagopal be criminally prosecuted for
attacking fellow lawmakers with pepper spray in the Lok Sabha? The question needs
to be looked at in the context of the privileges and immunities enjoyed by our lawmakers
for "acts" committed in connection with the proceedings of Parliament.
MPs are normally immune from criminal prosecution for "acts" (speaking, voting, etc)
done in connection with the proceedings of the House. Rajagopal's actions therefore
raise a critical question that needs answering before he can be brought to book: does
he enjoy immunity from prosecution despite committing a "criminal" act in Parliament?
Article 105(2) clearly states that no MP shall be exposed to any civil liability or criminal
prosecution for "anything said" or "any vote given" in Parliament. I
The SC has consistently held that MPs enjoy complete and unfettered immunity when
it comes to things said in Parliament. In fact, the courts have gone so far as to hold that
the words "anything said" in Article 105(2) are of the widest amplitude, and it is not
permissible to read any limitation therein.
In the case of P V Narasimha Rao vs State , 4 certain MPs had taken bribes to vote in
a particular way on a no-confidence motion, but not all of them eventually voted on
that motion. By a majority of three is to two, the SC held that the alleged bribe-takers
who had actually voted on the motion were entitled to immunity under Article 105(2),
as their actions were related to a vote actually cast in Parliament. According to the
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majority view, those MPs who had taken a bribe and not voted enjoyed no such immunity
and could be prosecuted under Section 120A of the Indian Penal Code (IPC) for criminal
conspiracy.
The minority judgment's interpretation of Article 105(2) was that it did not grant
immunity from a liability that arose independently of the speech or vote. Thus merely
treating the commission of a criminal offence as a breach of privilege does not amount
to an ouster of the jurisdiction of the ordinary criminal courts to try penal offences, and
to claim that in such matters the courts have no jurisdiction amounts to claiming a
"privilege to commit a crime". 5
Given the actions of Rajagopal, leaving it to the discretion of the judiciary to make a
case by case determination on whether immunity is available or not is likely to lead to
more uncertainty as the police will have to seek a legal opinion on each and every
occasion. Under Article 105(3), as amended in 1978, the powers, privileges and
immunities of MPs are to be defined by Parliament, and as they are yet to be defined,
continue to be governed by British parliamentary conventions.
Amendment of Article 105(2)
To avoid another "pepper spray" episode, the following recommendation of the National
Commission to review the working of the Constitution must be implemented:
A logical extension of this recommendation would mean that MPs like Rajagopal,
who have conveniently retired from politics, will not be able to escape punishment for
committing offences such as "voluntarily causing hurt by dangerous weapons or means"
(Section 324 IPC), an offence punishable with imprisonment of up to three years, on
the grounds of "privilege".
Off-target on Monetary Policy
Sat, Mar 1, 2014
Monetary Policy, EPW, economics,
Disregarding international experience of recent years, the Urjit Patel Committee
recommends that the Reserve Bank of India pursue a single objective of infl ation
targeting. It focuses on the interest rate to control infl ation (by influencing inflation
expectations), though experience has shown that in India this mechanism has a weak
impact on inflation and a stronger one on output. It is a disappointing report drawing
on a textbook reading of the New Keynesian model.
To start with, the crisis questioned the belief that the United States financial system
represented the best approximation of an efficient financial market with appropriate
levels of competition and transparency - Glass-Steagall was no more the innovation-killing
monster it had been made out to be. Second, as investors who had rushed in during the
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pre-crisis boom exited developing country markets to cover losses and meet commitments
at home; open economic borders did not seem such a good idea.
Third, drawing from the Japanese experience with a long recession, and faced with the
real economy fallout of the financial crisis, governments were called upon to use the
fiscal lever to address the downturn, since monetary policy alone was inadequate for
the task. Finally, the policy measures adopted in the developed countries in the aftermath
of the crisis also had an impact on the so-called "emerging market economies" (EMEs),
in ways that made monetary management and the use of the monetary lever extremely
difficult.
The strain on the central bank was obvious. On the one hand, the removal of price
controls, the deregulation of administered prices (including that of oil) and the decision
not to curb the activities of "market players" meant that inflation ruled high, the burden
of addressing which fell on the central bank. Central banks, in turn, could only seek to
manage liquidity and manoeuvre interest rates to achieve that end.
A Law for Street Vendors
Sat, Mar 8, 2014
street vendors, EPW, polity,
Street vendors in India, estimated to number approximately 10 million, face an unenviable
situation in many ways. They cater to the need for essentials, food and other items of
daily use at affordable prices for customers across economic categories. At the same
time, given the chaotic city and town planning, they occupy precious space that pedestrians
and vehicles grudge them, leading to hostility and even law and order situations. The
recently passed Street Vendors (Protection of Livelihood and Regulation of Street
Vending) Act is set to change much of this. Its implementation will require not only a
change in the attitude of officialdom, of many residents' associations as well as of big
shopkeepers towards the street vendors.
Not only in India but in much of the developing world street vending provides the
opportunity of "self-employment" to the unemployed poor. Invariably, the design and
planning of urban spaces largely ignores their contribution and needs, leaving them
vulnerable to exploitation. India has been no exception.
The oft-repeated excuse that they do not pay taxes needs to be offset against the bribes,
protection money and daily harassment that they face. Given the limited number of
hawking zones and licenses the bulk of these vendors fall into the unauthorised category.
it is not merely their own employment that these vendors facilitate; they sustain a large
urban economy. Further, they provide convenient access to markets not just to the urban
poor but also to a large section of the middle class. Moreover, it has been observed that
women are much safer in areas with street vendors since these places tend to be well-lit
and patronised by shoppers.
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The Street Vendors Act envisages that every city municipal corporation will set up a
town vending committee which will have the municipal commissioner, representatives
of the local planning authorities, residents' associations and the street vendors. It is
this committee that will vet applications for street vending and fix locations for vendors.
Also, the Act requires the demarcation of areas for street vending which is reasonable
and consistent with existing natural markets. However, activists have pointed out that
while this Act overrides state and municipal laws, there are possibilities of centre-state
friction since municipal zoning falls within the jurisdiction of states. I
Implementation is where this Act will be crucially tested. The track record of most
municipal authorities in awarding contracts for utilisation of public spaces, building
public infrastructure and dealing with the needs of the urban poor has been far from
good.
The Street Vendors Bill
Sat, Mar 8, 2014
Street Vendors Bill, EPW, polity,
The Street Vendors Bill, awaiting the presidential assent, may hinder an otherwise
informal and flexible business model.
. The bill which is awaiting assent of the president to be an Act, 1 is being treated as a
milestone in progressive policy response to unemployment and economic displacement
of the urban poor. However it appears that in seeking to protect street vendors from
mistreatment by the civic agencies and the police, the SVB opens floodgates of a new
set of problems While the need for regulation of street vending is imperative, equally
important is the need to view and review it critically with the objective of arriving at
the best possible practice.
The National Policy on Urban Street Vendors estimates the number of street vendors
in a city as 2% of its population The street vendors routinely carry out petty transactions
in cities unmindful of vehicular congestion and pedestrian rush. Public sympathies
oscillate between periods of tolerance to anguish and intolerance.
The ruling of the SC marked a shift in the perception about street vendors as a nuisance
disturbing public order to one in which they are accepted as contributors to the economic
situation and as providers of goods and services to the people at their convenience. The
SVB provides a sense of victory to the vendors as it marks a watershed moment in their
prolonged struggle to secure dignity and freedom from harassment at the hands of civic
authorities and the police.
The SVB is preceded by the National Policy on Urban Street Vendors, 2009 which
aimed at creating a social and economic environment that is conducive to the pursuance
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of street vendors' livelihood.
The SVB provides for setting up a town vending committee (hereafter TVC) in each
local authority. 2 The TVC would be chaired by the municipal commissioner or the
chief executive officer. Street vendors will comprise at least 40% of the members elected
from among themselves. 3 The SVB states that the number of other members, as may
be prescribed, would be nominated by the government representing the medical officer
of the local authority, the local authority, the planning authority, traffic police, association
of street vendors, market associations, traders associations, non-governmental organisations,
community-based organisations, resident welfare associations, banks and such other
interests as it deems proper. 4
The TVC will be entrusted with tasks of (i) maintaining updated records of registered
street vendors, publishing street vendors' charter, and carrying out social audit of its
activities; (ii) conducting survey of all street vendors once in five years; and (iii) issuing
certificates of vending and identity cards to all street vendors with preference to scheduled
castes (SCS), scheduled tribes (STS), Other Backward Classes (OBCS), women, persons
with disabilities, minorities, etc
The SVB in its present form is well intended, particularly in its provision of allocating
space to street vendors so that they are not asked to move away from a congested area
and then await an opportunity to get back
Regulating street vendors, or offering promotion and support, requires interactions
between dozens of local officials and thousands of vendors, with enormous potential
for misunderstandings, avoidance and deception. In the absence of such a rigorous
exercise, attempts at regulating street vending may not end up benefiting vendors much.
While for some, street vending is a part-time activity which they pursue only for a few
hours in a day, for others it is a day-long activity, and yet others engage with street
vending occasionally. While there are street vendors who have been selling at the same
place for a long time and in that sense are stationary, there are also those who are on
the move most of the time following a single route or changing it occasionally or
frequently, as the desire or need to.
Following the SVB, the issue of certificate of vending under categories of a stationary
vendor, a mobile vendor or any other category specified in the scheme laying down the
timings and place of vending category is likely to curtail the freedom of street vendors.
It will foreclose the opportunity of switching from one way of operating to another and
changing place of selling according to one's own will, situation, circumstances and/or
business acumen. These may well create various opportunities for harassment
The first is that many street vendors will be forced to abandon their best-suited selling
spaces because they could not make it in the draw of lots.
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Street markets have given gainful employment to the urban poor with low skill sets
and to the displaced (Bhowmik 2010), and in doing so has helped them emerge as
important nodes of economic growth. What makes street markets a viable place to carry
out transactions is the informality of work and working conditions that broadly allow
individual street vendors to sell at places of their own choice and schedules of selling.
The SVB tends to overthrow the benefits of informality as it makes street vending a
kind of formal enterprise by way of regulating it in ways that are detrimental to the
vendor.
Rajan's Target: Inflation or the Poor?
Sat, Mar 29, 2014
EPW, economics, inflation,
India has been witnessing significantly high rates for inflation since mid-2009 and,
except for some blips here and there, inflation has continued to remain quite high. This
obviously hurts those whose income is not indexed to inflation.
The way IT works is that it is assumed that there is a trade-off between inflation and
output; so to bring inflation down one needs to reduce the level of output (thereby the
level of employment too gets affected). Output can be brought down with a higher rate
of interest, which would adversely affect two of the most important components of total
output, private investment and credit-financed consumption.
While the index of industrial production (IIP) has seen a declining trend in growth over
the period of a continual hike in interest rates, inflation has hardly abated except in the
rise in prices of commodities where the monsoon has played a supportive role
This brings us to the question of why inflation has been so stubborn over the past few
years. The answer to this question lies in looking at the cost rather than the demand
side. Kalecki, a Marxist economist, had proposed that while prices of industrial
commodities are cost-determined, those of primary commodities are demand-determined.
So it is obvious that inflation which has entered the system with the rise in prices of
the latter, cannot be controlled by bringing down the production of the former. Moreover,
inflation because of a rise in prices of critical imported inputs like oil (because of an
increase in dollar prices and/or depreciation of the rupee) also cannot be controlled by
bringing down production and employment. What the government needs to do then is
not follow a conventional IT approach but attack the real sources of inflation by (a)
countercyclical taxation of oil and related items (increase tax rates when their prices
in rupee terms are low and vice versa); (b) improvement and investment in storage
capacities across the country; (c) controlling the futures market; and (d) cracking down
on commodity hoarders.
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RBI Report on Financial Inclusion: A Review
Sat, Mar 1, 2014
EPW, economics, financial inclusion,
It is debatable if the report of the Reserve Bank of India's committee on comprehensive
fi nancial services - the Nachiket Mor Committee - offers practical solutions for
extending banking services to the poorer sections of society and small businesses.
The following recommendations about priority sector lending (PSL) in Chapter 4.8 are
worthy of adoption: (a) all loans to landless labourers and small/marginal farmers
should be counted as part of PSL; (b) investment by banks in bonds of institutions must
qualify for PSL, where wholesale lending to the same institutions already qualify for
PSL; (c) non-fund based (NFB) limits to priority sector should be included under PSL,
subject to the total credit of a bank, also including NFB. This would reckon exposure
levels instead of amounts lent; (d) PSL targets should be computed on a quarterly basis;
(e) banks should purchase bank-wide portfolio insurance to guard against natural
calamities affecting a region/nation.
In Chapter 4.8, the report recommends that "each district of the country should achieve
at least a 50% credit to GDP ratio" with sector and sub-sector level ratios. More
particularly, the vision statement states that each district and every significant sector
(and sub-sector) should have a credit to gross domestic product (GDP) ratio of at least
10% by 1 January 2016, which should increase every year by 10% to reach 50% by
2020. The RBI and/or government are expected to monitor the compliance of banks.
Practically, the burden of giving credit in each district in relation to GDP (largely
reflected by bank deposits) would fall primarily on public sector banks (PSBs). And,
monitoring would be done by junior government officers who would take pleasure in
hectoring senior bank officials to lend more, irrespective of risk.
(i) Universal Electronic Bank Ac counts: The committee wants each resident above 18
years to "have an individual, full-service, safe and secure electronic bank account" by
1 January 2016. The dissenting note deems it to be an aspirational goal and January
2018 to be more realistic.
(ii) Disclosure of Stress Tests: The committee has recommended that all banks should
be required to disclose the results of their stress tests both at an overall balance sheet
and segmental level, at least annually. The dissenting note is against this view. It rightly
says that "public disclosure of the results may lead to unintended consequences".
(iii) Universal Accessibility: The committee wants the number of distribution and
electronic payment access points to be expanded so that every single person is within
15-minutes walking distance from such a point by 1 January 2016. The distribution
channel would include bank branches, agents, non-bank financial companies (NBFCs),
business correspondents (BCs), ATMs, mobile phone networks, and the like.
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(iv) Payments Bank: Chapter 3.6 waxes eloquent on the concept of a payments bank
to be licensed by the RBI. Broadly, they will be similar to "narrow banks" and would
invest only in risk-free government paper with less than three months duration. (The
concept of narrow banks was examined by the authorities about a decade ago and given
up as impractical.)
(v) Equity Investments of Banks in Rural Infrastructure Companies: The committee
considers that banks should facilitate creation of rural infrastructure by investing in the
equity of companies setting them up. The dissenting note has stressed that banks should
not be asked to invest in equities, as their role is to provide debt capital. This is a valid
objection.
Thinking about the 21st Century Indian City
Sat, Mar 15, 2014
JNNURM, EPW, urbanisation, economics,
The 21st century will be an urban century with much of this urbanisation taking place
in Asian cities, especially in India and China. Ironically, however, in India since the
1980s, due to a larger rural electorate, cities have not dominated political imaginations
and from the public policy agenda. Yet in the next 20 years, it is likely that India's
economy will move from a more than 50% urban economy to an economy that is
two-thirds or even three-fourths urban. Thus, the greatest challenge today is to build
an imagination of an Indian society in which cities have a central part.
Whatever the exact definition may be, it is clear that urbanisation carries with it
tremendous potential for economic prosperity, the consolidation of middle-class
aspirational lifestyles, growth of civil society and experiments with local democracy.
But at the same time, this rapid urbanisation also presents significant challenges including
the degradation of urban poverty and inequality, the inadequacy of infrastructure, and
the ecological impact of stifling pollution and increasing carbon footprints.
there is an urgent need for attention to the urban informal sector (the source of an
estimated quarter of India's GDP) and the urban poor. The informal sector has often
been dismissed as insignificant, even though this is a sector of tremendous productivity
and potential.
And just as the informal sector has been neglected in policy discussions, so have small
towns, as the government continues to underinvest in them, even though they offer key
opportunities for job creation and economic growth. Even under the existing 74th
amendment (which guarantees statutory provisions for local administrative bodies in
urban areas such as towns and cities), K C Sivaramakrishnan of the Centre for Policy
Research argued that, "It (the 74th Amendment) has not helped small towns or megacities.
Money is distributed without attention to what is needed, and urban concerns are reduced
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only to issues of real estate." It is time for the 74th amendment to be revisited, higher
thresholds for municipal status should be considered, and governance mechanisms
should be clearly refined.
India has a top-heavy urban structure, with 23.5% of the urban population in cities with
over five million people. Thus, because existing policies and frameworks are often
limited in their scope, new visions, policies, and programmatic frameworks that can
adapt to changing realities and capture the dynamism and mobility of India's cities and
small towns are desperately needed.
"Ultimately, welfare regimes have become a zero-sum game, with welfare regimes
simply offsetting policy distortions",
Holding Up Half the Sky
Sat, Mar 22, 2014
EPW, elections, polity, women,
Perhaps the most serious charge that can be laid against almost all the parties, with a
few honourable exceptions, is that there has been no attempt to engage with women to
know their real issues or to give them the opportunities to participate and grow politically.
These range from passage of the long-pending Women's Reservation Bill to measures
to improve the child sex ratio, inclusion of women's self-help groups as part of priority
sector credit outlays and regulation of microfinance institutions and moneylending to
greater access to public services, promoting the interests of women farmers and a host
of economic, educational and gender justice categories Had the Women's Reservation
Bill been passed into law, 181 seats in Parliament and 2,060 seats in the various state
assemblies would have had to be set aside for women. Parties that support the Reservation
Bill do not show the same alacrity in fielding women candidates. Neither do women
constitute a sizeable presence in the hierarchies and decisive posts of these parties
including those headed by women leaders. More reprehensible and cynical is the fielding
of women candidates in areas/seats where the party's chances of winning are poor or
next to impossible.
Take the example of Mizoram. Women voters not only outnumber their male counterparts
in the electoral rolls (51%) but also in the actual turnouts. Yet, Mizoram's legislative
assembly does not have a single woman since 1984. Neither is the picture any better
in the fielding of candidates by parties in that state. Therefore, political parties continue
to primarily focus on the men and shift attention temporarily when an atrocity against
women dominates public and media attention. Even in a majority of such cases, the
parties tend to be reactive and regressive rather than proactive and progressive.
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The Ukrainian Crisis
Sat, Mar 15, 2014
Ukraine, EPW, international, budapest memorandum,
More than two decades have gone by since the end of the Cold War, but the ongoing
events in Ukraine (and, some would say, in Syria as well) would however suggest that
great-power geopolitics is alive and well. The Russian actions clearly breach not only
the sovereignty of its neighbour, but also the 1994 Budapest Memorandum signed by
Russia, the US and the UK. The signatories had agreed that external powers will not
use any coercion - military or economic - against Ukraine for their interests or work
against its territorial integrity andindependence. But are the Russians alone to blame
for this turn of events?
Western powers had a major role to play in pushing Yanukovych out following violent
protests that killed about a hundred people in the period. It is therefore not enough to
single out Russia's present indiscretion. The outpouring of protestors on the streets of
Kiev reflected the yearning for a closer integration with the rest of Europe in western
Ukraine. Yanukovych and his party (Party of Regions) have been far more popular and
strong in the industrialised eastern parts of Ukraine which have had a more entwined
economic relationship with the erstwhile Soviet Union, his election to the presidency
was nullified following protests in what was called the "Orange Revolution".
This time around, a coalition of forces was ranged against Yanukovych. There were
those from the middle and upper middle classes who resented the influence of the
eastern oligarchy that had propelled Yanukovych to power and who sought closeness
with the EU. One key demand from the protestors was the restoration of amendments
made to the Constitution in 2004 (and controversially rescinded in 2010) that had
drastically cut down powers of the presidency vis-a-vis the elected parliament.
A significant part of the protests was also led by ultranationalists who had long envisioned
Ukraine's destiny to be part of Europe rather than Slavic Eurasia.
As protests raged on in the capital, it soon became clear that both the EU and the US,
and, of course, the Russians were keenly guiding different forces involved in the uprising
in order tofurther their respective geopolitical goals. The US sought to use the protests
to marginalise Russian influence and as a ploy to checkmate the Russians who had
successfully prevented the Americans from launching strikes against Syriarecently.
Russia was keen on retaining Ukraine as a part of its immediate zone of influence, as
it has tried to prevent Ukraine from integrating into the North Atlantic Treaty Organisation.
Putin presidency has used a policy of carrot and stick - carrots such as the proposed
buying of Ukraine's government bonds valued at $15 billion and a cut in the price of
natural gas exports to Ukraine in December 2013 and sticks such as the use of protectionism
against some Ukrainian products following the initialling of the EU agreement in 2012
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MGNREGA and Biodiversity Conservation
Sat, Mar 8, 2014
MGNREGA, environment, EPW, Biodiversity Conservation,
The various activities being promoted under Mahatma Gandhi National Rural Employment
Guarantee Scheme such as water harvesting and soil conservations could have high
positive results on environment security and biodiversity and environment conservation.
The scheme also seeks to create durable assets to augment land and water resources,
improve rural connectivity and strengthen the livelihood resource base of the rural poor.
MGNREGS works are largely focused on land and water resources, which include
water harvesting and conservation, soil conservation and protection, irrigation provisioning
and improvement, renovation of traditional waterbodies, land development and
drought-proofing. These MGNREGS works have the potential to generate environmental
benefits such as groundwater recharge, soil, water and biodiversity conservation,
sustaining food production, halting land degradation and building resilience to current
climate risks such as moisture stress, delayed rainfall, droughts, floods, etc (Tiwari et
al 2011; MoRD 2012).
the environmental implications of the programme is less explored. The potentials of
the programme in environmental security are relatively less addressed, perhaps a
reflection of the low concern among the policymakers and think tanks on the environmental
security amidst the larger clamour for economic growth Poverty alleviation is linked
to environmental security more intricately and inclusively, and therefore, policies and
strategies need to reflect the same. The various activities being promoted under
MGNREGS such as water harvesting and soil conservations implicitly could have high
positive results on environmental security and biodiversity and environmental
conservation. In fact, protecting the environment is mentioned as one of the major
activities conceived in NREGA (IAMR 2009).
considerable environmental benefits were derived by executing various programmes
under the MGNREGS (IIS 2013). The major benefits identified are the improvement
in water resources (such as water conservation and harvesting works, drought-proofing,
irrigation provisioning and improvement works, and renovation of traditional waterbodies,
improved groundwater levels, increased water availability for irrigation, increased
area irrigated by ground, surface water sources, and finally, improved drinking water
availability for humans and livestock), environmental benefits and vulnerability reduction,
improvement in land resources (land development works such as land levelling,
conservation bench terracing, contour and graded-bunding, field-bunding, pasture
development, silt application and drought-proofing), contributing to improved soil
organic carbon (SOC) content, reduced surface run-off and soil erosion, enhancement
of crop diversity and crop yields and positive impacts on forests, plantations and fruit
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orchards.
Though it has been envisaged under MGNREGS to take up works related with
biodiversity conservation and enhancement, available information indicates that
biodiversity conservation is yet to be internalised as one of the focal areas of MGNREGS.
Break the 'Special 301' Big Stick
Sat, Mar 8, 2014
special 301, intellectual property, EPW, economics,
designate India as "Priority Foreign Country" (PFC) in its 2014 Special 301 Report
which is due for release on 30 April. They have complained that India has denied
"adequate and effective protection of intellectual property rights" (IPRs) and accused
it of back-pedalling "fair and equitable access to US persons who rely on intellectual
property". They claim that the grounds on which India has issued compulsory licences
and the standards for patentable subject matter found in Section 3(d) of the Indian Patent
Act (IPA) have violated its obligations under the Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPS) of the World Trade Organisation (WTO).
Unilateral action under Special 301 was one of the big sticks that the US began wielding
in the course of the Uruguay Round (1986-93) of the General Agreement on Tariffs
and Trade. It was an effective imperialist weapon then, but what of it now, almost two
decades since the formation of the WTO in 1995?
Under the "administrative adjudications" of Special 301 the USTR merely establishes
that the countries it blacklists (the term itself has racial connotations) are in violation
of the US government's interpretations of the TRIPS agreement. India has been on the
Special 301 priority watch list all along, ever since the first Special 301 Report in 1989,
except when it was upgraded to PFC for three years. During the Uruguay Round
negotiations, India was deemed to be among the leading countries opposing the TRIPS
agreement in the making, alongside Brazil, Argentina and Egypt, but New Delhi soon
fell in line, perhaps even before 1992 when the mere threat of being designated as PFC
seems to have worked.
India's first-ever compulsory licence, that on Bayer's patent on sorafenib (brand-named
Nexavar) for the treatment of kidney and liver cancer, was essentially to combat the
ridiculous monopoly price of the imported drug, even as Bayer was given a relatively
high royalty rate of 6%. Can the US dare challenge this policy action by the Indian
government in the WTO under Section 31 of the TRIPS agreement and the Doha
Declaration on the TRIPS agreement and Public Health? Indeed, the US itself issues
compulsory licences to combat monopolistic practices.
Charging exorbitant prices all over the world Novartis has already appropriated as
private profit the gains from much of the tax-supported research investments made by
US' National Cancer Institute into the invention of cancer drugs, including Glivec.
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India's Supreme Court did well in denying it a patent under Section 3(d) of the IPA
for a mere derivative of the known substance for treating cancer that did not even
enhance the efficacy and safety of the original version.
India's Green Industrial Policy
Sat, Mar 1, 2014
environment, EPW, Green Industrial Policy, climate change,
The current global financial crisis demands swift action by governments to support,
restructure and sustain industrial activities. Simultaneously, addressing the global
climate change requires significant modifications in industrial incentives and regulations
GIP, seeking to develop new industries and adopt new technologies, involves essential
policy changes. It is different from conventional industrial policy in two ways: first, it
requires different policy instruments; second, it involves stronger state engagement in
markets. Under GIP, states seek to promote sustainable patterns of production and
consumption by pricing resource consumption and promoting efficient technologies
through market transformation.
Considering the fact that energy is a major input for industrial process and major
contributor to industrial emissions, GIP seeks to tame energy consumption and hasten
the development of low-carbon alternatives to fossil fuels. Will the alleged GIP, with
its emphasis on clean energy production and consumption, lead to green growth and
sustainable development?
Keeping with the global trend, India seems to be pursuing the GIP, particularly since
the past decade. India is not only a major emerging economy with high industrial growth
prospects, but also a major consumer of energy resources. Consequently, production
and use of clean energy have rightly been prioritised in India's GIP for achieving the
goals of green growth and sustainable development. India has been promoting renewable
energy (RE) as an alternative to fossil fuels to meet rising industrial energy demand,
and energy efficiency (EE) measures to tame the demand.
The country has set a target to raise its RE capacity to 74 gigawatts (GW) by 2022,
including 22 GW of solar capacity. With a renewable installed capacity of 27.7 GW
(13% of total installed capacity), the country is already a global leader Over the Twelfth
Five-Year Plan period (2012-17), it aims to install 30 GW of renewable capacities with
a federal outlay of around $4 billion. The private sector has a strong role to play in
executing the plan; in fact, much of RE development so far has taken place with the
private sector. Nearly one-third of the planned investment in infrastructure sectors over
the Twelfth Five-Year Plan period has been earmarked for the electricity sector; about
half of this investment is sought from the private sector.
While wind constitutes a large share (about 70%) of India's existing RE installed
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capacity, considering the potential of solar energy, the country has developed a strategy
to tap it. A national mission - the Jawaharlal Nehru National Solar Mission (JNNSM)
- has been set up to facilitate solar energy development to achieve the target of 20 GW
grid-connected and 2 GW off-grid solar capacities by 2022.
The state has made several policies to mandate and incentivise RE production at national
and sub-national levels. Renewable Purchase Obligation (RPO) is a key policy to create
demand for RE. Each sub-national electricity regulatory commission has set a specific
RPO for the utilities in their respective states. The national target was set at 5% for the
financial year 2009-10 and was to be increased by 1% each year for the next 10 years,
with the aim to procure 15% of consumable electricity from RE sources by 2020. The
policy also makes a provision for solar-specific RPO set at 0.25% in 2012, to be raised
to 3% by 2022. The Renewable Energy Certificate (REC) programme is being implemented
to penalise the utilities that fail to meet their RPO; they have to compensate by purchasing
equivalent RECs (Charnoz and Swain 2012).
To encourage private sector engagement, the state has made provisions for capital
subsidy and interest subsidy for setting up RE production units. RE generators have
the choice to trade electricity at a preferential tariff or to trade RECs separately after
selling the electricity at a competitive tariff. In addition, the state is providing tax
benefits to both generators and manufacturers on import of RE technology (e g, solar
panels) and additional support on R&D. Simultaneously, the state has enforced local
content requirement (LCR) - raised to 75% in the second phase of the JNNSM - to
promote growth in domestic manufacturing.
India has an equally ambitious target for EE, with a target to save 10 GW by 2014-15
and, thus, avoid 19 GW of additional generation capacity. The National Mission on
Enhanced Energy Efficiency (NMEEE) has been set up to facilitate the process with
mandatory provisions and incentive mechanisms. The perform, achieve and trade scheme
targets energy-intensive industries, which account for 60% of India's total primary
energy consumption, and are required to meet a certain level of EE in a specified time
period. Those who achieve EE gains beyond their target are rewarded with energy
saving certificates (ESCerts); those who fail to meet their target can buy ESCerts to
make up the difference, or pay a penalty (ibid).
The Way Forward
India's GIP holds good promises for green growth and sustainable development.
Achieving the JNNSM target will result in mitigation of 95 million tonnes (Mte) of CO
2 e annually by 2022. Simultaneously, NMEEE has potential to achieve mitigation of
98 Mte of CO 2 e annually. While promoting dynamic clean energy industries, GIP is
expected to reduce carbon intensity of Indian industries. Clean energy-based industrial
growth is expected to be inclusive by promoting regional development, employment
generation and improved energy access.
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two fundamental challenges weigh upon India's GIP, viz, finance gap and lack of
market transparency. While access to private finance is crucial for development of the
clean energy industry, current interest rates remain too high and financing institutions
remain reluctant to invest. Prevailing lack of market transparency in the sector may
result in rent-seeking and market distortion.
Addressing these challenges, which are not insurmountable, will largely depend on
state-business relations, private sector capacity, bundling of interests and policies, and
creative manoeuvres taken by the state. Much depends on the extent to which the private
sector shares the state goals, and the way they are organised and their capacity for
collective action.
Easing Unbearable Pain
Sat, Mar 15, 2014
social, EPW, palliative care, health, narcotics,
The passage of the Narcotic Drugs and Psychotropic Substances (NDPS) (Amendment)
Act, 2013 means that for the first time since 1985, cancer, HIV/AIDS patients and
others suffering excruciating pain will have proper access to opioid medicines. Among
the most effective and inexpensive of these is morphine that can make a humongous
difference not only to the estimated 24 lakh cancer sufferers (15 lakhs at the unbearable
pain stage) but also to the terminally ill among the 16 lakh HIV/AIDS patients in India.
Patients in severe pain also often suffer from depression and suicidal thoughts accompanied
by extreme anxiety, resulting in further deterioration in their quality of life. Introduced
in the face of real and speculative fears about the misuse of narcotics and psychotropic
substances, the 1985 law saw hospitals and medical colleges preferring not to stock
narcotics meant for medical use.
Health activists consider access to palliative care to be an issue of fundamental human
rights. Thanks to the unrelenting pressure by doctors appalled by the sufferings of their
patients, and M Rajagopal of the Indian Association of Palliative Care, in particular,
the central government directed all state governments to follow modified rules from
1998 onwards.
Now the newly amended NDPS Act will ensure that the different regulations in each
state and union territory will become uniform regarding opioids. The central government
will hold the right to amend these rules, and, more importantly, instead of a number of
departments and bodies giving the licensing nod, it will now only come from the drug
controller.
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Interstate Water Disputes
Sat, Mar 1, 2014
Inter state Water Disputes, EPW, polity, federalism,
The politicisation of interstate water disputes in India is an inevitable fallout of the
historical and structural conditions that obtained at the time of forming the Indian union.
The Government of India (GOI) notified the Cauvery Water Disputes Tribunal (CWDT)
award on 19 February 2013, just short of six years after it was awarded on 5 February
2007. This followed an exasperated and angry fiat by the Supreme Court (SC). While
setting the deadline for its notification, the Court admonished the central government
and accused it of "flouting the law" of the Interstate River Water Disputes Act, 1956
(IRWDA 1956).
Mainstream political parties are increasingly using interstate water disputes as avenues
for pursuing their political goals. The engagement of political parties in other recent
disputes such as Mullaperiyar and Bhabli has been no different.
Politicisation is an inevitable and ineradicable feature of interstate water disputes because
of certain historical and structural conditions that existed at the time of forming the
Indian union.
The current dispute has its roots in supposed violations of earlier agreements of 1892
and 1924 between the erstwhile Madras presidency and Mysore princely state, and it
was inherited by the states of Tamil Nadu and Karnataka, respectively, in independent
India. The GOI tried resolving the dispute through mediations and negotiations for
several years before constituting the CWDT in 1990 under the provisions of the IRWDA
1956 for adjudication.