The Trumping of Marrakech

The 22nd Conference of Parties (COP) to the UNFCC negotiations at Marrakech have barely been in the mainstream Indian news simply because it is hard to find the media space between the withdrawal of the Rs.500 and Rs.1000 notes and the U.S Presidential elections. The COP 22 negotiations were to represent the optimism of a hard fought climate deal and design the implementation strategy for the Paris Deal. However, they have been largely overshadowed in light of contemporary geopolitics.

On November 4th, the outcome of the 2015 Paris negotiations came to fruition as 176 countries (the largest number to sign an international instrument since UNCLOS) deposited their instruments of signature at the United Nations. India had jumped on the bandwagon by ratifying the climate deal on the symbolic date of Gandhi Jayanti.

Multilateral negotiations for the climate deal saw India change its stance from a disrupter to a norm follower- a stance it has echoed in other multilateral negotiations including nuclear proliferation and the WTO negotiations. India had resolutely refused to sign any climate deals that did not involve Western nations in pulling their weight. Indian diplomats had claimed that in order to allow their citizens dignity of life through economic development, they could not commit to energy cut back of the scale required and insisted that countries responsible for the emissions take the lead.

However, this was not a viable position for long. Once China, the world’s largest contributor to carbon emissions joined with the US to cut down on emissions, India would have found its disruptive stance an even more unpopular and isolated position. India has shifted its stance and declared its Intended Nationally Determined Contributions (INDC). However India’s new stance also stresses on its reliance on the rest of the world in bridging its energy needs through technology and help. Over the last year, steps have also been taken within the country to support its stance at the COPs. By streamlining its civil aviation rules and signing the CFC cutdown treaty, India has shown its willingness in combating climate change.

However, all of that now stands to change. The biggest shadow over the Marrakech COP is the US Presidential elections. While hyperbole has shown anti-Trump supporters protesting even at Marrakech, Donald Trump’s record on climate change shows little promise. He has repeatedly dismissed climate change and global warming as hoaxes and even gone on record to state that climate change was a conspiracy pioneered by the Chinese to reducing American manufacturing potential. Trump has stated that he would roll back the Paris Agreement. But speculation about Trump’s potential climate policy will lead us down a road that goes nowhere.

The Paris Agreement was ratified by President Obama on the sidelines of the G20 summit. In a show of US-China alignment, leaders of both countries deposited the Paris deal together is Hangzhou. The Paris Agreement also does not allow countries to withdraw from it for a period of three years. Therefore, there is little danger of Trump rolling back the Paris deal.

However, it is important to remember that INDCs are, at the end of the day, voluntary mechanisms based on good faith. They are non enforceable and bear little penalties in international law though the effects of climate change may seem apparent to everyone but Trump supporters. What is possible is that Trump will not prioritise the INDCs or fund the Clean Energy Plan, the brainchild of the Obama Administration. This is particularly important in terms of signalling for other countries. Countries like Saudi Arabia whose economies depend on conventional sources of energy could take the lethargy of the United States as a signal to disregard the Paris Deal. This would mean that the hard won negotiations of the last seven years have come to nought. Trump’s disregard for climate change will also stir the Chinese to take the lead on the issue. Already, Chinese officials have stated that they are committed to their climate change declarations despite political changes in other countries. China has also set up its national carbon emission trading market and has reportedly reduced its carbon intensity by 20% between 2011 and 2015.

What does this mean for India? India directly faces the effects of climate change as much of its agriculture is contingent on the monsoons. It has shifted its stance from norm disrupter to norm follower as a way to break out of the climate chakravyuh. However, if the United States will not stick to its INDC and China will, which path will India choose? Several commentators are already questioning India’s stance considering its close ties with the US. However, a comprehensive definition of security would require India to stick to its INDCs as the country is vulnerable to the effects of climate change. India needs to exercise its strategic autonomy and continue with tackling its INDCs.

Hamsini Hariharan is a Research Scholar with the Takshashila Institution and tweets at @HamsiniH

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Politicisation of armed forces to collect funds is deplorable

Recent announcement of donating Rs 5 Cr. to Army welfare fund by bollywood producer-director Karan Johar cannot be repentance for sins of commission and omission by political parties 

By Guru Aiyar (@guruaiyar)

In one of the most brazen forms of extortion witnessed in recent times, a political party in Mumbai extracted a promise of donating Rs 5 Cr to the Indian Army from Karan Johar. The reason for asking this kind of money was for penance by Karan Johar for casting Pakistani actor Fawad Khan in his yet to be released movie Ae dil hai Mushkil. The capitulation of Karan Johar and Maharshtra state Chief Minister Devendra Fadnavis, who brokered the deal has been one of ultimate cravenness in the face of unreasonable demands. Politicisation of the army in this manner reeks of selfishness to further the short term goals of the party in question.

There wouldn’t have been any issue if the donation was voluntary. It gained salience only because the director was threatened with violence. The scheduled release on October 28 was put on hold because the party workers of Maharashtra Navnirman Sena (MNS) had orchestrated protests. A party that managed to garner only a single seat in the assembly elections of 2014 in Maharashtra saw this as a perfect opportunity to capture public mindspace.

There is nothing wrong in wanting to respect the army and the sacrifice of its soldiers. To find common cause in a soldier guarding the nation’s frontier should be a matter of pride for any citizen. What runs counter to common sense logic is why to mix the issues of Pakistani artistes working in Indian movies and the army? The issue of granting visas to Pakistani artistes must have been taken only after deliberation by the central government.

Fortunately, the defence and Information and Broadcasting ministers have slammed this deal. That was to clearly demonstrate to the public that the central government does not appreciate this act of coercive donation. The army too has refused to accept this money. But the centre could have gone further. Mere condemnation is not enough. It is time to ask as to why should the rule of law be subverted? Why should any government give in to this form of thuggery? Now since the issue is deemed to be settled, should we expect the workers of the MNS to get back to their daily life? Of course, no. We can certainly expect some other kind of protest over seemingly inane issues.

Guru Aiyar is a Research Fellow in geostrategy programme at Takshashila and tweets @guruaiyar.

Featured Image: PM Modi pays homage to martyrs of Indian army at Badami Bagh in Srinagar courtesy creativecommons.org

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To keep the money where you raise it

Tax Increment Financing is amongst the many public financing methods that the cities in India need to explore further.

The City of Chicago, the third biggest city in United Sates of America, evidently requires a large revenue source to maintain the needs of a growing population of two million plus. It is in this attempt that there are various innovative financing methods used by the Chicago government to raise revenue. One of the methods that stands out is the Tax Increment Financing (TIF) method. It refers to a funding tool that allows the extra property tax to be used in the region itself.

TIF is generally used for a given region, whereby the taxes collected in the region are called base revenue and any amount collected above the base revenue is captured by the region itself. The taxes above the base revenue, incremental revenue, is used for economic development in the region earmarked under the TIF. It is usually spent on the public work or to attract private businesses in the region. TIF is usually used in regions that are declared “underdeveloped” and are considered to be dependent on the public expenditure for growth.

This method of funding have been supported by experts in urban planning like Donald C Shoup. The basic argument being that the citizens tend to pay more taxes if they can see tangible changes from their contributions. In his paper The High Cost of Free Parking, Shoup makes the case that the curb side parking revenue could be used to fund the Business Improvement Districts just like TIF is used for redevelopment projects from the increases in property tax revenues. TIF, therefore, acts as a pool of fund that can be used by the given region to attract business and economic opportunities based on the contributions by the population directly benefitting from it.

Although it may sound like a good idea, TIF has been severely criticised for being biased towards the business units and acting like a subsidy for the rich businesses. In their attempt to attract higher private investments, the regions tends to give large subsidies to the businesses. Thereby, diverging money away from the basic requirements like improving and maintaining infrastructure in the region.

The other major complaint regarding TIF is that it leads to development in the regions that do not need it as much. As TIF is collected from the funding made over and above the basic property tax, it is inevitable that regions with high income populations tends to collect higher funding as compared to poorer neighbourhood. Hence, TIF tends to limits the distribution of resources in a given region rather than help distribute it.

Having said that, TIF is an interesting tool that can be used to raise the local revenue and to incentivise higher tax collection in various wards in the city. The ward members can be made responsible for the use of the amount raised. The representatives being elected from each ward  will ensure that the members are directly accountable to the local population.

With Indian cities still struggling to find sources to raise revenue, TIF is at least a good option to explore.

Image: http://indypolitics.org/wp-content/uploads/2016/02/TIFS.jpg

Devika Kher is the Program Manger of Takshashila’s Graduate Certificate in Public Policy course and a policy analyst at Takshashila Institution. Her twitter handle is @DevikaKher.

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Regulating Fintech: A Proactive Approach

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Image courtesy of Forbes

By Nitin Malik (@nitinmalik86)

Financial Technology or Fintech sector needs a proactive and stable financial regulation policy environment to grow. Fintech can have a potentially transformative impact on economy in the future, and as such, Indian regulators need to carefully nurture a policy regime which promotes innovation and growth of fintech companies.

Fintech encompasses a broad range of technological innovations in the areas of block chain, financial advisory, digital currency, payments, financial inclusion, peer to peer lending, among others, which are disrupting traditional financial services. Not only do fintech innovations increase efficiency and lower costs, they also help increase access to financial services. For example, innovations like P2p and social data based lending is enabling people without formal credit histories to get faster and easy access to loans. In Kenya, M-Shwari uses call data and recharge history of customers to determine their credit worthiness. This has made it possible for millions of mobile subscribers to get loans in just a few minutes.

The Indian Fintech sector is estimated to be $1.2 billion in 2015 and is projected to touch $2.4 billion by year 2020, as per a NASSCOM study. Globally the sector is estimated to touch $45 billion by 2020. A recent McKinsey study estimated that digital financial services can help governments in developing countries to save around $110 billion annually.

Why regulating fintech is different?

Rapid innovations in fintech sector makes it a difficult sector to regulate. The objective of Fintech firms is to disrupt banking and financial services which are traditionally heavily regulated. Sometimes these regulatory costs create high capital requirements on startup firms and pose barriers to innovation in the initial growth phases.

This is why regulations of fintech is so critical, one that enables and not stifles innovation. Globally, regulators have had to walk a thin line between over and under regulation. Since understanding of risks posed by fintech firms is limited, regulators have come up with different approaches to understand and regulate this sector. Countries like UK, Singapore, the US and Australia have been at the forefront of these regulatory innovations.

How others are doing it?

UK’s Financial Conduct Authority and Monetary Authority of Singapore have created regulatory sandboxes for fintech firms. These sandboxes are like contained experiments, where fintech firms are allowed to innovate without the burden of regulatory permissions. FCA in UK through its project innovate scheme has invited fintech firms to innovate. These firms are provided with regulatory feedback and a safe house to build on their innovations and experiments.

Another approach, advocated by Omidyar Network, is the minimal approach to regulations called lean regulation – a term borrowed from the lean startup philosophy by Eric Ries. The spectacular growth of Kenya’s M-PESA and Philippines’ GCash mobile money services owe a lot to minimal regulations in the initial stages by central banks. Under the lean approach, regulators collaborate with players in their incubation phase and keep the regulatory requirements to a minimum. Rules are developed gradually as the market matures and there is better understanding of risks involved. This approach has proved highly successful for both countries, as they have become global leaders in providing mobile financial services to their citizens.

Recently, PayPal has also come with a paper on performance based standards for regulating payments industry. It advocates setting smart governance models by governments using data analytics and feedback loops to advance payment business models. This is still at ideation stage.

In summary, the overall arc of regulations should move from a rule based approach to principles based approach. Regulators should be active participants in market development rather than bystanders. They should encourage pilots, trials of innovations and engage with both incumbent players like banks, NBCFs and new startups.

India can spearhead the change

In last few years, India has taken a lead in emerging markets in embracing financially innovative regulations and policies, especially in finding innovative ways to promote financial inclusion. Despite this, we still don’t have pervasive mobile money services for the poor like Kenya and other east African countries. But the government along with RBI has been proactive with initiatives like award of differentiated banking licenses, development of India Stack, unified Payments Interface and laying out of JAM architecture. RBI has even issued a paper on P2P lending providing much needed clarity to the regulatory grey area.

India’s traditional software strengths and large internet consumer market places it an optimum position to be a leader in fintech sector globally. It is important that RBI, SEBI and other regulators continue to embrace the growth of fintech and make India a global hub of fintech innovation.

Nitin Malik is a financial inclusion consultant working in Myanmar and a participant of the 14th cohort of the Takshashila GCPP. His twitter handle is @nitinmalik86

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Smart or dumb: Cities should be safe

Bhubaneswar emerged as the top candidate among the 20 cities chosen to be part of the Government of India’s Smart Cities Mission. One hopes that the plans of turning the city into a smart one will include strengthening risk resilience, particularly in places that are supposed to ensure safety and health of the citizens.

By Nidhi Gupta (@nidhi1902)

Image credits: NAVFAC (Monthly Safety Stand Down) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Image credits: NAVFAC (Monthly Safety Stand Down), via Wikimedia Commons

A major fire that broke out earlier this week in the SUM Hospital in Bhubaneswar took lives of over 20 people and caused injuries to over 100. The fatalities caused were mostly patients who were on ventilator support in the ICU ward. One was immediately reminded of the fire that broke out at Murshidabad Medical College and Hospital in August this year and the one at the AMRI Hospital in Kolkata in 2011. Given the large number of hospitals that the country has, these incidents of fire may seem statistically insignificant. However, some places of safety (like the hospitals, police stations, etc.) are expected to not only have zero tolerance for human negligence and errors, but also a foolproof disaster management plan. Incidents such as these point to our society’s stubbornness to not learn from history and to our Government’s callous attitude towards loss of life and property.

A healthcare facility in Odisha is governed by the Odisha Clinical Establishments (Control and Regulation) Act, 1990, which lays down standards relating to fire safety. However, it has been reported that only 3 hospitals out of the 568 in Odisha currently have the clearance from fire department and most of the hospitals lack the basic fire-fighting equipment. Moreover, SUM Hospital did not follow fire safety norms and overlooked an advisory that was issued to them by the fire department in 2013. While the hospital management at the SUM Hospital has asserted that owing to diligence shown by its staff the casualty number was low, it can be argued that there should have been no casualties in the first place.

Passing the buck around or offering some monetary compensation does little to console the victims’ grieving families. Reactionary measures like suspending hospital staff (as in the case of SUM Hospital) or board of directors (as in the case of AMRI hospital) cannot be substitutes for ensuring the structural and operational resilience of hospitals. It is of utmost importance that the healthcare facilities in our country are regularly audited for compliance with safety standards and that the staff is periodically trained on safety and evacuation. It is also imperative that the management of facilities found with dubious certificates are heavily penalised. The National Disaster Management Authority (NDMA) of India has issued very comprehensive guidelines for hospital safety, including those for fire safety in hospitals. While these guidelines are not binding, it is expected that hospitals implement these in earnest and be prepared to handle any disasters and be optimally functional immediately afterwards in order to respond to the medical requirements of the affected community.

Bhubaneswar was ranked first in the Smart City Challenge competition held by the Government of India earlier this year and is one of the 20 cities each of which will receive Rs 1000 crore of funding from the Centre and the State Governments. One sincerely hopes that the emphasis being laid to improve “quality of life” for the citizens will also include measures that ensure that the lives of the said citizens are first protected.

Nidhi Gupta is Head, Post-Graduate Programmes at the Takshashila Institution and tweets at @nidhi1902

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GST Bill: A Successful Exercise of Consensus-Building in Democracy

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Image courtesy of The Indian Express

Bhavani Castro is a Fellow of Indian Studies, Getulio Vargas Foundation in São Paulo

The first half of 2016 was marked by several setbacks for democratic institutions and liberal values all over the world. From the Turkish government’s repressive response after the failed military coup to the rise of radical parties in Europe, a controversial impeachment process in Brazil and the rise of Donald Trump in the United States, it seems that democracy has recently been under significant pressure. Intense animosity and partisan divisions are challenging the way democracy works and its core values, undermining decision-making processes in parliaments, blocking key reforms, and leading to authoritarian administrative measures. However, in the midst of many worrying examples of flaws in democratic regimes in different parts of the world, it is possible to identify one case of significant success when it comes to democracy’s capacity to overcome division and build consensus: the passage of a groundbreaking tax reform by the Indian Parliament.

Goods and Services Tax Bill (GST) was passed in August in the Upper House of the Indian Parliament, the Rajya Sabha, and approved by President Pranab Mukherjee on 8 September. The GST, now turned into law, creates a single tax system in India, and represents a significant breakthrough that in practice will transform the Indian states into a common market. This notable success generated little reaction in the international media, especially in emerging and developing countries; however, it holds important lessons on how game-changing reforms can be implemented in a democracy.

The world should look at the ratification of the GST law as a substantial example for effective democracy for a variety of reasons. First, it shows the capacity of a messy, multiparty parliamentary system. Since the 1990s, the Indian government needs to recur to coalitions to rule at the national level, as the increasing number of national and state parties make it impossible for a single party to rule alone. This means often making deals and negotiating not only with the opposition, but also with strong regional parties that seek policies that benefit only – or mostly – their local constituencies. Similar phenomena are visible in other large democracies like Brazil, where large coalitions make governing extremely difficult.

An increase in polarization usually means fewer laws pass in Parliament. For emerging countries like India, where there is a necessity of progressive reforms to manage the economic transformation and push for social improvements, political fragmentation and a lack of consensus building can have devastating effects. To avoid setbacks, the strategy adopted by the Indian government was to engage and include strong regional parties in the discussion, rather than coercing and embracing a combative tone. At the same time, the biggest opponent, the Congress Party, was slowly isolated and eventually, faced by the risk of having its image damaged, had to accept the bill and enter the negotiation. Consequently, opposition parties contributed to changes in the bill, while the ruling coalition yielded to demands and offered concessions in the final written version. The process was not simply an exchange of favours as it is usually observed in multiparty democracies, but instead a conciliatory process of political commitment by all parties involved.

Moreover, the GST, when implemented, will go against an ongoing international trend of isolating peoples and markets – the new tax system has even been called a “reverse Brexit”. While the European Union is going through one of its biggest crises – with rise in partisanship and the exit of an important economic member – India is showing the world that democracies can do better. The new tax system will replace dozens of different tariffs that made selling a product to another Indian state as hard as selling products abroad. That means connecting 1.2 billion people in a European-style market and an expected increase of 1-2 per cent to the country’s GDP growth rate.

Finally, it is important to consider the dimension of this tax reform. The GST was designed along the lines of the value-added tax (VAT) model from OECD countries, and it is considered a key reform for restructuring economies. For India, it is one of the biggest institutional reforms since its independence in 1947. Most countries still struggle to enact legislation that will lead to this type of revolutionary work, as it can negatively affect some industry sectors and interest groups. Brazil, another populous democracy, has been trying for years to design a tax reform to substitute its inefficient system; however, it never even managed to produce an initial project for a new tax scheme. India’s lessons on the GST law-making process could be extremely valuable for countries like Brazil, which could follow India’s steps: first creating a highly skilled committee to design a uniform tax system, and then submitting the initial proposal to the legislative for a comprehensive discussion and adjustments between all political parties.

India still faces many problems threatening its democracy, including an ongoing civil upsurge in Kashmir, suppressed by the government, and a severe water-sharing dispute that increases tensions between southern states. However, in the case of the GST process, the government proved that it is possible to use democracy as a tool to reach potentially painful but necessary reforms in a pluralistic country. It took more than a decade to pass the GST Bill, but democracy is a slow process and does not provide fast solutions to urgent problems. India’s political system can be inefficient, polarized, disorganized and sometimes exhausting, but hopefully this experience will be a positive example for other democratic countries still struggling with much-needed institutional reforms.

Bhavani Castro is a Fellow of Indian Studies, Getulio Vargas Foundation in São Paulo

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Towards 24×7 Electricity Supply in Andhra Pradesh

The emergence of Andhra Pradesh as a power surplus state is a testament to the cooperation between the Union and State governments.

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Image courtesy of The Hindu

By Revendra (@adj_r_squared)

The AP Reorganisation Act – 2014 put the state of Andhra Pradesh at a huge disadvantage with its provisions that favoured more power supply to the state of Telangana. As a result, the state faced a capacity loss of 1,142 megawatts (MW) and an annual energy shortage of 8,700 mega units (MU). After the reorganisation of Andhra Pradesh, the state had a total generation capacity of 8,307 MW (as per power allocation), 6.9% of energy deficit and 17.6% of peak deficit units.

The major thermal power stations (Dr. N. Tata Rao TPS, Rayalaseema TPS, and Simhadri TPS) had coal stocks lower than the specified critical levels, not lasting for more than a day. The finances of the DISCOMS too did not look encouraging. The higher purchase power agreements rate and lower power tariffs led to a debt of Rs. 11,000 crores, and the capital expenditure loans and bond-related liabilities came to about Rs. 3,700 crores to the DISCOMS. The interests on these debts burden the DISCOMS with Rs. 330 crores annually. Lastly, the average per unit price was around Rs. 7.30, burdening both consumers, and the government.

Energy resources

Andhra Pradesh has negligible sources of non-renewable energy. No coal deposits exist, and the crude oil and natural gas reserves are estimated at 13.19 million tonnes and 48.44 billion cubic meters respectively. Though the sources of renewable energy estimated at 54,916MW, look promising, only 2192.6MW of this electricity produced is connected to the grid. Thus, the infrastructure is not available to harness renewable energy to produce electricity for consumption in the state.

Power for All

In addition to the lack of energy resources ailing DISCOMs and the poor state of power sector, the growing energy and peak demand are estimated to be 82,392 MU and 13,436 MW respectively by FY2018–19. Together, these issues presented significant challenges to put the State’s power sector back on track. Without dodging a bullet, both the State and Union governments got to the bottom of the issues, and jointly came up with the “Power for All” initiative to provide reliable 24×7 power to the domestic, industrial and commercial consumers, supply 9 hours per day of electricity to the agricultural consumers, electrification of all unconnected households, augmentation of generation and distribution capacity to meet the projected demand, and keep the transmission and distribution losses to a minimum.

This ambitious “Power for All” initiative requires resolve and a systematic approach from both governments to ensure fuel resources for thermal and gas-based power plants, electrification of all households in the state, and the financial turnaround of the DISCOMs.

The first challenge is to address the unavailability of energy or fuel resources. In the last two years, the coal supply to power plants has significantly improved with the coal stocks’ availability ranging from 2 weeks to 2 months of consumption per power plant. Additionally, coal reserves of approximately 930 million tonnes were allotted to the Government of Andhra Pradesh. The domestic coal suppliers have certain constraints to match the demand of thermal power plants in Andhra Pradesh. Keeping this in mind, Andhra Pradesh is permitted to import coal stocks of 3-5 metric tonnes per annum till 2019. The LNG fuel is available to generate only 500MW of the 2770MW of installed LNG based power plants in the state. These initiatives are taken by the Union to allocate gas in a phased manner to all power plants before 2019.

The second priority is electrification of un-electrified households and strengthening the systems of distribution and transmission networks, and improving the electricity access in rural and urban areas. A sum of Rs. 899.8 crores was sanctioned through the Deendayal Upadhyaya Gram Jyoti Yojana for rural areas, and Rs. 653.95 crores were sanctioned under Integrated Power Development Scheme (IPDS) for urban areas. The funds from IPDS were reserved to establish IT-enabled data, disaster recovery and customer care centres, and improve meter-based billing and efficiency in collections.

The Ujwal DISCOM Assurance Yojana (UDAY) provided benefits of Rs. 4,200 crores during the turnaround period, saving Rs. 330 crores to the DISCOMS annually. Further, the state DISCOMS will enjoy a benefit of Rs. 6,200 crores every year post-turnaround period.

Apart from these, to meet the immediate power requirements, the Union Ministry of Power is providing 525MW of power to Andhra Pradesh from the Central Generating Stations. At the power exchange, average price per unit is less than Rs. 3.00. The Andhra Pradesh government has benefitted by procuring 385MW from the power exchange.

The sustained efforts from both the governments led to 100% electrification in the state, an increase in per capita power consumption to 982 units, reduction of the transmission and distribution losses to 9%, addition of 4,265MW of installed power, and reduction of the energy and peak shortages to nil.

The assistance from the Union Ministry of Power has been valuable in realising 24×7 power supply to all domestic, commercial and industrial consumers in Andhra Pradesh.

[Views in this article belong to the author. It is part of a blog series tracking governance in the reorganised Andhra state]

Revendra is a Bangalore based student of Public Policy and tweets at Revendra (@adj_r_squared)

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India needs a new refugee policy

India needs an asylum policy to be able to allocate resources appropriately, to monitor the sheltering of  refugees that it hosts, and to disallow unwanted infiltrators from entering its territory. 

By Manasa Venkataraman (@nasac)

Image Credit: Human Rights Watch: www.hrw.org

Image Source: www.hrw.org

Caught off guard by millions of persecuted Syrians fleeing to safer lands, last year saw countries react differently to the sudden influx. Over the past year, many states have taken varying stances on providing asylum to refugees arriving from strife-ridden regimes. Influx, legal or illegal, by refugees or migrants seeking better opportunities, is not new to India. Although it is unlikely that Syrian refugees land at Indian shores to seek asylum (due to geographical difficulties), India has hosted refugees from Bangladesh, Sri Lanka and Afghanistan from time to time without having a central asylum regime governing the providing of such harbour.

India needs a refugee policy. The absence of such a framework in India makes it prone to inconsistent and ad-hoc reactions to refugee crises – an unsustainable solution. Although three separate bills have been tabled before the Indian Parliament to bolster the Indian asylum policy, they remain pending.

In order to frame a robust asylum granting framework, it is essential to examine the cause that gives rise to this migration – unstable political environments, insurgencies by non-state actors and the precarious footing on which feeble governments stand are principal reasons. Persistent situations like this lead people to abandon their homes and flee to safer lands. International law recognizes this plight of refugees and urges sovereign nations to follow a principle of “non-refoulement”, i.e., host countries should not refuse to shelter refugees and turn them away to the country they fled from. This principle is so inherent to the protection of human rights that it forms part of customary international practice to shelter refugees on humanitarian grounds.

While it is not a signatory to the UN Refugee Convention, 1951, India has followed the principle of non-refoulement whenever helpless asylum seekers have knocked on its doors. Nevertheless, it is essential to build regulations surrounding the non-refoulement principle that specify when the principle is to be invoked, what are the remedies for wrongful or non-invocation of the principle and how it is to be monitored.

Benchmark global practices are available for India to evaluate, before framing its own refugee policy. While Germany’s efforts earlier in 2015 opening its doors to refugees from Syria are well known, Australia has been criticized for having a controversial policy to cordon its coasts off to many asylum seekers. From providing “no benefits” to refugees upon their arrival on its coast to turning ships away to Indonesia and other South East Asian countries from international waters, Australia has undertaken several measures to create disincentives for refugees to take shelter on its territory.

India’s refugee policy must also strike a balance with its environmental and security related concerns in harbouring persons on its lands, especially via the seas. A refugee policy is only successful if India has the ability to control its borders, which in turn enables it in deciding whom it provides asylum to. As India’s coastline is vast and vulnerable, the need is felt now more than ever to create a robust and centralised coastal border patrolling and securing system.

Illegal and unregulated influx via the (already inadequately regulated) coasts are not only a blind spot in Indian national security but also interfere in the demographic makeup of the region. This affects it economically and politically as measures are framed bearing in mind the regulated persons in the region. Further, post facto regulation of immigrants becomes difficult as there was no law to regulate their entry in the first place.

As the protection of asylum seekers is a significant additional cost to the government, the refugee policy must introduce a system by which immigrants coming to India for economic or other gains are screened from persons seeking refugees. It is also advisable to place the refugees under the supervision of a Welfare or other ministry of the government rather than the military. In fact, smaller and less developed host countries (like Turkey and Jordan) are beginning to recognize the economic and infrastructural cost that is required to be borne to accord refugees the shelter they need.

Additionally, resettlement efforts must be made with the country from which such refugees arrive, after strife is over. Resettlement engagements may also be undertaken between India and other affluent countries that has better physical and economic infrastructure so that the refugee influx is better managed and does not cause a permanent strain on the resources of a less wealthy host country.

Manasa Venkataraman is a Research Associate at the Takshashila Institution and tweets from @nasac.

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Boycotting Chinese goods: Impractical and harms the national interest

The plan to boycott Chinese imports is neither practical nor is it in the Indian national interest.

By Anupam Manur (@anupammanur)

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There has been many nationalist calls for boycotting Chinese goods as a retaliation against China for blocking India’s bid at the UN to designate Jaish-e-Mohammed chief Masood Azhar as a terrorist, following the Uri attacks and the subsequent surgical strikes carried out by the Indian army. Presumably, India is tired and frustrated of China tacitly supporting Pakistan and thus, the clarion call is for consumers to boycott all Chinese products en masse, so as to hurt the Chinese economy, especially at a time when it is reeling. This has obtained mass support from not only the ordinary citizens, but is being backed by influential MPs and others from the political class.

Such a move is neither practically feasible in order to obtain the desired result, nor will it be in our national interest to do so. Let us examine the feasibility angle first.

India is the biggest importer of Chinese consumer goods and the trade deficit of India with China is one of the biggest between two significant trading partners. India imports almost seven times more from China than it exports to it. The range of goods that we import from China is massive: consumer durables such as electronic products, mobile phones, plastic items, industrial goods, vehicles, solar cells, essential pharmaceutical products, including tuberculosis and leprosy drugs, antibiotics, among many others.

Impractical, at best. Impossible, in reality

Even if we wanted to, it is nearly impossible to keep China out of our daily lives. There’s a little bit of China in every product we consume. Ironically, the laptops and mobile phones that we use to forward the message to boycott Chinese goods are made in China itself. The modern day production process is complex and interconnected. Every good that we use has different components from various countries. Take the mobile phones: it will have some rare earth elements from China, uses the labour and land from China, has investment and capital from the US or an European country, has entrepreneurship from Japan or Korea, and it finally, might use software made in India. Thus, it is impossible to isolate any country and boycott its products.

It is also important to understand that this kind of consumer boycott movements is hardly new or unique. It has been tried and it has failed many times in the world previously. China itself tried to boycott all Japanese products in the early 1930s to protest against Japanese colonisation. The US consumer forums tried to boycott French goods in 2003 to protest against France declining to send troops to Iraq post 9/11. Ghanians boycotted European goods; Jamaicans boycotted goods made from Trinidad and Tobago; Russians boycotted European agricultural products, etc. The list goes on. The only common thing between all these various events is that none of the boycotts were successful in their mission. It all failed and dissipated within a few weeks and the reason for that is always simple: economics. To understand why the boycott movements started, we have to understand why the countries imported these goods in the first place. We have to realise why India is so heavily dependent on China for imports.

Comparative Advantage

Why does India rely so heavily on China for its imports? The answer lies in practical economics. China can produce many of these goods cheaper and more efficiently than India can. Thus, the average consumer, who is price conscious, does not really care whether the products are made in China or in Eritrea, as long as he gets the best goods for the cheapest price. The only practical way to boycott Chinese goods is to deploy an import-substitution method and produce alternatives at home, which is far from ideal. If we as a nation would want to boycott Chinese goods, we would be traveling back in time to the autarkic nation that we were post-independence and this would effectively harm overall social welfare. We tried import substitution methods in the 1960s and 1970s and our rate of economic growth was low and stagnant for a long period. Basic economic theory tells us that each nation will produce the goods that it has a comparative advantage in and then trade it for goods with other countries.

If India were to try and make all the products that we currently import from China at home, it would involve a considerable reallocation of our resources from productive to unproductive uses. Immediately, the range of products available as a choice to the consumer would diminish, the quality of the products would be worse and the prices would be higher. The welfare gains from trade would be wiped out and the cost of all the products would become considerably higher and the retailer and the consumer who relied on cheaper imports would suffer.

What is India’s national interest?

The important thing here is to distinguish what is in India’s national interest. If we define our national interest as the greatest good (higher income) for the greatest number of people, then import substitution would just not work. Imported products allows consumers from all income levels the ability to consume these products at lower prices and retailers to maximise on their sales.

How do you respond to the Chinese actions in the UN, then? It is a political problem and largely needs a political resolution. If we were to impose trade sanctions against each country that has mildly annoyed India in the geopolitical realm, we would be left with no one to trade with. The US has traditionally given monetary aid to Pakistan despite Pakistan’s unwillingness to curb home grown terrorism. Can we afford to not trade with the US? Saudi Arabia and other middle Eastern economies fund Pakistan’s terrorism directly or indirectly. Can we afford to stop importing oil from these countries?

Harming one’s own citizen’s in order to extract revenge on another country seems to be an ill-advised move. Each citizen can take a call on what they want to buy or not. If Chinese made plastic diyas during Deepavali is not to your liking, don’t purchase it. But, that’s no reason to call for a universal boycott on Chinese imports.

Finally, is this dependence on China for imports good? Perhaps not. As of now, we do not have a comparative advantage in producing the goods that we import from China. However, with the right policies, we can produce some of these items or contribute a greater amount in the global production value chain. For that, we need to improve our productivity, free up labour laws, reform land acquisition policies, fix our credit system, and so on.

Anupam Manur is a Policy Analyst at the Takshashila Institution.

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Colombia’s Path to Peace

REUTERS/John Vizcaino

REUTERS/John Vizcaino

By Swati Sudhakaran

The historic collapse of an almost-historic peace accord

A mere formality gone wrong?

The citizens of Colombia just voted out what could have been an historic peace accord to end the war ravaging their country for the last 50 years. The plebiscite was supposedly just another box to be ticked in the checklist to get the peace accord in action – a fait accompli. The result however, makes one question if the aggressive selling of the plebiscite is what led to its defeat. The dismal voter turnout –less than 37%– and the ‘No’ camp’s victory by a slight martin says a lot about people’s perceptions on the decision making process and its execution in the country.

What was the war about?

The war began as a tussle between the Colombian government and the left wing guerrilla group FARC – Revolutionary Armed Forces of Colombia. FARC rose from the remnants of La Violencia period of agrarian rural warfare that gripped Colombia in the 1920s. Although the conflict had its share of socio-political and economic factors, the aim of achieving social justice led the communist FARC to adopt gruesome tactics like drug trafficking and child soldiering, which eventually resulted in their loss of popularity.

The American government, then led by President John. F. Kennedy, established a Peace Corp to counter the civil disturbance in the country. This move became highly counterproductive as ‘volunteers’ of the Corp, who were tasked to help the natives in education and agricultural development, began collaborating with American mafia, leading to a growth of cocaine and narcotics.

The network and the will of FARC soldiers to keep the fight on however has seen significant downfall in recent years. In 2002, the number of FARC soldiers was near 20,000 but recent studies show them to have dwindled down to 6000-7000. Discontent and hope to rejoin the society is high among FARC soldiers who just want to lead ‘normal lives’ again.

REUTERS/Juan B. Diaz

REUTERS/Juan B. Diaz

The Peace Accord

The peace talks began in 2012 in Cuba, between Colombian President Juan Manuel Santos and FARC leader and negotiator Timoleon Jiminez. After going back and forth for 4 years, both parties reached consensus in 2016. They finally arrived at a 6-point plan to formalise the ceasefire, which would have confirmed that the weapons possessed by FARC would be “beyond use”.

According to the 297-page agreement, the FARC leaders had agreed to handover their weapons and be monitored by UN inspectors. Additionally, a political party would be formed which would have 10 seats assured in the Congress during the 2018 and 2022 elections.

Amnesty would be granted to FARC members who confessed their crimes i.e. instead of facing prison, they would engage in social work – helping victims, de-mining war zones, repairing damaged infrastructure etc.

So why did the people vote No?

The ‘No’ wasn’t a denial for the peace accord but for the terms under which it was being finalized. The local phrase in trend to comment on the accord was “swallowing toads”. People felt betrayed by the thought that the FARC leaders who committed grave crimes against humanity would not serve any jail time.

Former President Alvaro Uribe, leader of the ‘No’ campaign whose father was slain by the FARC, said that people wanted justice and not impunity for FARC leaders. While his military approach to deal with the rebels was the reason they agreed to the peace talks in the first place, Uribe feels that the present accord is in need of major corrections to serve the interests of citizens.

Social media also played a huge role in yielding influence. Many have blamed it for being a platform of misinformation spreading false stories that the state of Colombia, post the accord, would be much like Venezuela where narco-traffickers work hand in hand with the government or that it would usher in a communist regime in Colombia.

Homophobia and gender insensitivity could also be a reason, as many voters were supposedly against the gender provisions made in the accord, especially the LGBTQ segments. A sub-commission on gender and women issues had submitted its suggestions on reintegration methods of female FARC soldiers into society. Their points had found a place in the accord but the strong opinion circulating in the media was that these issues were not urgent and could be tackled under a separate slab.

The campaigning style of the two camps was a crucial factor. The Santos government actually put forth questions that were biased to the accord and increased pressure by retorting to statements in ads, that those voting No would be supporting the continuation of war.

The No camp could effectively communicate to people, in simple messages about the dangers of the peace accord while the Yes camp could never really portray its benefits. This goes on to show how manipulation works in modern democracy. Under the garb of political assertion of masses, leaders work the questions in a certain way to elicit certain responses.

The Nobel Twist

The announcement of the Nobel Peace Prize just days after the failure of the peace accord is a positive development for Santos. Awarded in recognition of his efforts to bring peace to Colombia, the Nobel provides much needed strength to his cause. The award is also a tribute to the victims of the conflict and to all parties that cooperated in the peace talks. The Nobel Prize also implicitly shows the support of the international community to be with the Santos government.

What Next?

As uncertainty looms over the next course of action for the Colombian government, the FARC-EP has maintained its stance on keeping peace. However, with FARC leaders thinking that they have already given too many concessions, the possibility of them agreeing for jail term for their members seems highly unlikely.

Though the Santos government is quite unpopular now, Santos still has command over the congress and can still garner support with the right strategy. The recent meeting of Uribe and Santos after almost 6 years to discuss the changes in the accord is a major step-up in the process.

Even if the renegotiated peace accord gets voted through by the people, problems for the government won’t stop there. There are numerous issues to be confronted even then such as reintegration of FARC soldiers, some of them children, into society. To make those who have only known a life of violence abide by rules and follow societal norms will be a mammoth task.

But let’s not jump the gun. This time the government must keep aside the haste and arrogance portrayed last time and work on an inclusive accord and democratically fair plebiscite.

Swati Sudhakaran is a student of the Masters in Public Policy Programme, jointly run by the Takshashila Institution and Mount Carmel College, Bangalore.

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