Opposition days

Let the Opposition set the agenda for a few days every session, so that it does not disrupt the whole of it.

Democracy is majority rule. Whoever has the majority in the Parliament forms the Government. If all key decisions are taken by a majority vote, how is the Parliament (which the Government controls) supposed to provide oversight and reprimand the Government for its excess and wrongdoings? The Government can sit smug on its benches and tell the Opposition to first “go get the votes” and then we will talk.

This, like most introductions, is an over simplification of facts (done to grab attention, mostly by less accomplished writers like myself). But we have to concede that in a system based on majority vote, the parties in minority find it very difficult to get their voice heard, let alone getting their demands met.

Opposition Day is a day when the opposition parties in the Parliament, set the agenda. Any session of the UK Parliament has at least 20 Opposition days. In Canada the number is 22. It might seem a procedural thing at first, but it is so much more than that. Being able to control the agenda gives the Opposition a much better shot at cornering the Government into discussions and debates that it is trying to avoid. If these days are divided up amongst the Opposition parties, even smaller parties will get a chance to make the Government answer its concerns. In a media driven democracy like ours, the Opposition needs to also ‘look’ like it is opposing the Government. Routine protocols like Question Hour, Calling Attention Motions and raising motions under Rule 377, though important, are not very effective tools to play to the gallery. And let us be clear, playing to the gallery is not some superfluous thing which can be ignored, it is a necessary and critical part of a politicians job profile.

There are other interesting customs like Questions to the Prime Minister, where the PM is required to answer the questions himself (Tony Blair is said to have feared the House of Commons, thanks to it). The effectiveness of such conventions is difficult to ascertain, but without a doubt they provide the Opposition with a legitimate way, if nothing else, to vent its anger. And who knows? Maybe this can lead to a little less chaos and adjournments and little more of sane debates on critical legislations.

(This line of thought came about in a post-lecture discussion about the workings of the Indian Parliament with MR Madhavan of PRS Legislative Research)

Siddarth Gore is an electronic systems engineer, closet politician and a student of economics, He blogs at ‘a posteriori‘.

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The Plans of Mice and Men

On the Know Your Climate blogPriya Ravichandran writes about Hurricane Sandy and Cyclone Nilam, and how we reacted to the both of them. 

The Plans of Mice and Men

Starting a few days before late October from when Hurricane Sandy was to hit the eastern coast of the United States, the state governments, specifically in New York and New Jersey had started preparing for the storm that was forecast to be the biggest ever to hit the north eastern seaboard. With a sharp forecast, the focus was on who needed to evacuate, who needed to stand by to evacuate, the shoring up of supplies, emergency drills, emergency routes in case of flooding, and preparations for all other possible worst case scenarios. Information on whom to approach, where to go and when to go were all detailed out over radio, news, state and local websites, social networks. Police, fire, medical personnel, and other emergency workers were kept on stand by and information kept flowing, updating people on the nature, the breadth and the impact of the storm. Weather channels went into overdrive with the mapping and explanation of how strong and serious Sandy was shaping up to be. Mayors and government officials held press conferences informing, warning and assuring people. The hurricane made a landfall on October 29th.

A day before Sandy hit land; an atmospheric depression started gaining strength in the Bay of Bengal, off the south eastern seaboard of India. The depression was officially declared as Cyclone Nilam on the 30th of October was to hit the eastern coast of India specifically the southern coastal states of Tamil Nadu and Andhra Pradesh. Low-key warnings on the Indian Meteorological Department’s website, which then reached people through the announcements in the weather sections of regional TV news programmes. Much of the national media however, including most English news channels had heavy programming focusing on evacuation, emergency preparedness, the potential aftereffects and worst case scenarios… not for Cyclone Nilam, but for Hurricane Sandy. Yes. Hurricane Sandy.

 

Hurricane Sandy hit produced high winds up to 175 kilometres per hour (110 miles/hr) while Nilam hit the coast with winds just under 80 km/hr (50 miles/hr). The death toll for Sandy in the US alone is close to 130 and might increase. Nilam has so far taken close to 56 lives. Both numbers remain a conservative estimate, given that the delay of recovery is resulting in more fatalities.  The economic damage from Sandy is predicted to approximately $50 billion USD to $56 million USD for Nilam. Most generic comparisons of the impact of the two storms remains specious because of the differing scale of both weather events. Hurricane Sandy was dubbed as a “Frankenstorm”, and became the largest ever Atlantic hurricane in size in recorded history. Nilam, while no pushover, is the strongest cyclone to have hit the Indian coast since Cyclone Jal in 2010.

The purpose here is to use this coincidence of large storms hitting the United States and India simultaneously – and learning what public officials and governments could have done in India and what we can learn from the preparations for Hurricane Sandy.

A lot of Sandy’s preparation learnt from what went wrong when Hurricane Katrina hit New Orleans. Several critical analyses of the havoc caused by Katrina were available and all the measures carried out where announced through every media outlet possible to ensure enough people got the message and got out or took precautions. As the NPR reported, the federal Disaster Management Agency had its paperwork in order and close to $3.6 billion ready for temporary housing even before Sandy hit.

In contrast, preparations for Nilam began quite late with a weak warning and very little information available to the public. Worse, between the IMD and state governments, the cyclone was not adequately tracked after it made landfall, where an it is possible that an assumption was made that the worst was over. Though the low pressure front weakened, heavy rains fell on Andhra Pradesh well after the cyclone made landfall – resulting in much greater loss of lives, crop damage and necessitated far wider evacuations of about 68,000 people, than what was expected earlier.

The eastern coast of India is no stranger to cyclones and some of the worst natural disasters in India have occurred near coastal AP and TN. A national workshop for developing strategy for cyclone mitigation met in 2003 and came up with a list of proposals to ensure minimizing the damage from cyclones. A budget of more than Rs.1490 Crores (~$300 million) was allotted then for cyclone damage mitigation,with very little to show for the money so far.

Basic measures like radio transistors, cyclone alarms, escape routes, flood drainage, reliable, cyclone resistant, cyclone shelters, warning systems at sea, sea walls and development of mangroves were all suggested but never carried through. The lack of planning showed.

In spite of cyclone structures being available and food being arranged, there was very little instruction on how to get to those places, or information on facilities within the structures. Given the estimated strength of the cyclone, very little precautionary measures were announced for residents. While the fisher folk were evacuated and other evacuation orders for people living in low lying settlements were given, no information on emergency procedures were issued for urban dwellers. There were also no additional measures taken for the differentially abled people.

There were very little, sometimes no updates from higher officials like the mayor on storm preparedness, absolutely no information on government websites state and local, very sparse coverage by English media and over the top, sensationalist coverage by regional media that took to comparing the cyclone to the 2004 tsunami. This was in direct contrast to the regular updates by NY mayor Bloomberg who was always accompanied by a sign language translator, giving to the point updates and helping reassure the people.

A lot of damage could have been prevented had there been fairly basic preparation both on the eve of the cyclone, and in general. Unclogging storm drainage systems, covering of potholes, and warning on the hazards of driving or being out on the streets could have been handled well before Nilam started. Part of the suggestions by the workshop for cyclone mitigation called for disaster preparedness including the provision of cyclone proof infrastructure. Natural sea side vegetation like mangrove forests were strongly recommended to act as natural barriers. Very little has been done to mitigate flooding in the affected areas in spite of recommendations. Every report on handling natural disasters has usually had a committee submitting a list of recommendations, extending a budget for the states to use and the states failing to put the list into action and misusing the budget with shoddy or no implementation.

Additional measures like declaring state wide holidays, ensuring additional power for hospitals and basic resources in schools and shelters where people were evacuated to could have been carried out. The most critical part of any disaster preparation has to be for the people who are going to be affected directly to have the information well before the disaster happens and to have it from a trustworthy public source. A lower minister who has had no experience in communication being sent out to warn people in fits and measures does not inspire confidence. Indian politicians often underestimate the importance of what really good PR skills are – they are not just about taking down the opposition, but providing and projecting leadership in times of duress. Calm, prompt and precise communication goes a long way in reassuring people. With the advent of social media and 24 hour news channels, the state and other governments ought to have taken an initiative to make its presence felt.

The simple fact of the matter is that by and large, the residents of coastal Tamil Nadu as Cyclone Nilam lost much of its intensity over the sea and the impact on land was lesser than expected. Good fortune does not excuse the complacency of the officials in handling natural disasters. Naturally occurring phenomena like cyclones and hurricanes become disasters only on reaching human settlements. While we need more robust forecasts and predictions, mitigatory and adaptive measures to protect ourselves can ensure that disasters need not happen as frequently as they do.

Priya Ravichandran is a Programme Officer with the Takshashila Institution and a resident of Chennai, India. 

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India’s options for reducing risk from China-Pak alliance

R.Srikanth

While the internal debate has predictably settled down on questioning the morality of executions in a democratic republic, few questions have been asked about whether Kasab’s execution has increased or decreased India’s options with respect to its long-term adversaries in the region, China and Pakistan.

Hafiz Saeed, leader of terrorist group Lashkar-e-Toiba is being legitimised in the public space in Pakistan, as he makes a foray into Pakistani politics. Given Pakistan’s penchant for denying its hand in anti-India terrorism, it seems like poor strategy to execute Kasab at this time, as he is the only living being that was proof of 26/11. Can Indians afford to be sanguine about the mainstreaming of terrorist groups in Pakistani politics?

The central place of religion in politics is not surprising given that Pakistani Constitution and Republic and even the Army define themselves in terms of religious doctrine. The side effect of religious propaganda in the Pakistani school curriculum over the decades has resulted in religious fundamentalist groups garnering immense public support for right wing political groups. In this environment, terrorist masterminds like Hafiz Saeed are able to seek legitimacy by entering politics and making pretensions of abstaining from terrorism.  Hafiz’s actions of offering prayers for a 26/11 terrorist, but not its victims, says enough about his pretensions of seeking a life of peace.

It does not seem to be in India’s interest to let Pakistan get away with providing validity to groups like Hafiz Saeed’s Lashkar-e-Toiba as a legitimate political party via an election. This will result in the permanent mainstreaming of terrorist groups into Pakistani politics. However, in Pakistan, it is a truism that no matter which political party wins, the Army actually is in control. So, in that sense, not much has changed in Pakistani politics, except for the death of secular and liberal political parties. Frequent headlines in the international print media that portray the Army submitting to the civilian government of the day have always turned out to be false.

Even mainstream political parties such as the PTI and Jamaat-e-Islami are very vocal about their aggressive intent towards India, should they come to power. All these political parties have openly stated their antipathy for friendly relations with India, with constant background refrain of promising more terrorism in India unless India relinquishes Indian territory in Jammy &Kashmir to Pakistan.

Buckling down to Pakistan’s blackmailing tactics to exchange land for peace, whether in Siachen or elsewhere, are unlikely to yield results for India. This is mainly due to the Pakistani Military-Jihad Complex’s (MJC) antipathy to normalising relations with India, combined with their domineering role in Pakistani politics. Since the inception of Pakistan as a state in 1947, the Pakistani Army has always dictated terms to the civilian government in power.

In the early 80s and 90s, Pakistan was financially, politically, and diplomatically supported by the USA, China, Japan, and Saudi Arabia. Such support has waned in the recent years due to frictions between Pakistan and its donors. USA continues to finance Pakistan under strict controls and has downgraded military relations with Pakistan. Saudi Arabia still wields a lot of influence in Pakistan, though it has stopped subsidising Pakistan like it did in the past.

The only country that has made proclamations of everlasting, mutual, enduring relations with Pakistan is China.  This was evident from the fact only a journalist from Pakistan was given the privilege of being allowed to record the proceedings of the CPC. Ignoring the dubious value of the Pakistani presence in such a meeting- the showcasing of China-Pakistan relations- is a reminder that the chance of these two Indian adversaries colluding against India in the long term is a certainty. As long as the MJC wields power in Pakistan and the Communist Party wields power in Beijing, India needs to consider the likelihood of such collusion, a certainty.

Although China’s investments in Pakistan have decreased in scope and involvement over the last couple of decades, not least to the inability of the Pakistani government to secure the lives of Chinese engineers and workers implementing development projects in Pakistan. However, China has followed a strategy of proliferating weapons of mass destruction to states like North Korea and Pakistan, and there is no indication that the CCP has relinquished the use of WMD proliferation as a tool in the toolkit of Chinese foreign policy.

This is where China and Pakistan gain from their illegal occupation of Indian territory in J&K. Pakistani occupation of PoK and China’s occupation of CoK, has resulted in a physical border and land route connecting China and Pakistan. As long as this land route connects China and Pakistan, China’s capability to proliferate weapons of mass destruction to Pakistan via such a route remains in place. Proliferating such weapons by Air or Sea is a lot harder as the global commons is monitored. Thus, it is in India’s long-term interests to ensure that Chinese capability for such proliferation is neutered. Once a capability is neutered, China’s intentions towards India in that region do not matter if India regains control over all of J&K. Intentions of any geopolitical entitiy can change on a whim with no effort, but geopolitical capability needs to be gained and maintained.

Why is the completion of the accession of J&K to India necessary? Why does Indian government spend an enormous amount of revenue generated from other Indian states to sustain J&K? For one, there is a parliamentary resolution in effect today that declares India’s sovereignty over all of Jammu & Kashmir.  India retaining control would mean that India would have a border with Afghanishtan, establishing direct Indian transit into Central Asia. India has been denied land transit rights into Afghanistan and will continue to be denied such rights for the foreseeable future. Also, as explained earlier, such reclamation of control over J&K would ensure breaking a land route between two of India’s most bloody-minded and hostile adversaries, China and Pakistan. Seems prudent for India to proactively gain leverage over them in order to control events in the future that may be orchestrated by the collusion of these two hostile nations.  It should be noted that a political union of the two sides of the LoC in J&K is a logical first step towards Indian control over all of J&K.

What are India’s options with respect to Pakistan, especially given China’s significant capabilties today, to change the nature of India-Pakistan relations via WMD proliferation? India taking the initiative on foisting aggression on Pakistan is not an option, as this is exactly what the Pakistani MJC has been trying to do for a long time. Recall the 26/11 was orchestrated when the Pakistani Army was trying to prove to its American allies that maintaining a large army presence in the Indo-Pak border is essential, in order to avoid going after the Taliban in North West Pakistan.  The Army’s gambit would have worked had the Indian government reacted to 26/11 by escalating hostile intentions, thereby providing the Pakistani Army with a solid excuse to not cooperate in Waziristan.

If India escalates the situation on the ground, Pakistani army’s best option is to respond by claiming that various red lines have been crossed. Once this is done, what will follow is a drumbeat of “India-Pak nuclear flashpoint” from motivated third parties, mostly arms-control wonks. Such a falling out of events has never worked in India’s favor in the past. A more important reason to avoid a war with Pakistan is the effect it will have on the gap between India and China in terms of economic and military power. The already wide gap is likely to increase further, which is unwise given that there is no guarantee India can recover from such a setback post war with Pakistan. However, even if overt war is ruled out with Pakistan, the sub-conventional proxy war options that Pakistan avails is also available to India- it is a different matter that Indian political leadership seems to have failed to avail itself of such options.

Let us take a look at Pakistan today. Pakistan government’s choice to radicalise their population with religious dogma, hatred and violence in school textbooks has created multiple generations of Pakistanis that would fit the label of religious radicals or fundamentalists- people who are not averse to using violent means as a tool to further their religious-political goals. The end result seems to be that Pakistanis are increasingly vulnerable to terrorist bombings in their own country, and State of Pakistan is increasingly unable to exert control over its own territories.  This should seemingly increase India’s options, but it has not done so yet.

The Pakistani government effectively controls 3 out of 4 states in the country. The army dare not challenge militant tribes in the Northwest Frontier province that challenge the Pakistani army on the ground. Any election in Pakistan is likely to usher in a religious-minded political party in power- these parties have openly stated their concurrence with the goals of Al Qaeda in Pakistan. If such a religious party comes to power as a result of elections in Pakistan, it will legitimise anti-India terrorist groups in Pakistan, which means an increase in anti-India violence emanating from Pakistan, as it has happened in the past. When dealing with Pakistani MJC/Government it is prudent to watch what they are doing rather than what they are saying, as explained by Mr Vikram Sood.

If suggestions that Saltoro/Siachen be transformed into a “Peace Park” are taken seriously by the Indian government, then it would imply that the Indian Government has learnt no lessons from the Kargil War or has forgotten those lessons already.

R. Srikanth is a Senior Researcher at the Cyber-Strategy Studies Team at the Takshashila Institution and a GCPP alumnus.
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‘Sahay’ – A Policy to Help Needy in India via Cash Transfers

Vikas Argod

To accelerate the poverty reduction process in India, I propose a reform initiative, ‘Sahay’. It is aimed at launching a comprehensive program via cash transfers to stimulate and accelerate poverty reduction in the country. Moving away from the paternalistic mentality, ‘Sahay’ would be an unconditional direct cash transfer. Proposal includes reallocating all the funds from NREGA, PDS and deregulation of kerosene prices in next three years. As the first step toward agricultural reform, fertiliser subsidies also will be replaced with conditional cash transfer to farmers. There are ideas to reduce the cost of production of fertilisers in India by achieving the savings. The transition is expected to take three to five years. Without any changes to the current tax structure and only with the reallocation, ‘Sahay’ can raise ` 89,000 crores per annum in the next three years. The policy has comprehensive recommendations towards every step of implementation of this cash transfer. A new department called “Ministry of Social Department” will be created while Fertilisers industry will see the closure.

‘Sahay’ will use the existing infrastructure in as many places as possible and is closely linked with Aadhar. The project has clear goals for the end of three years, which will be monitored at the end of every year. Usual problems of targeting, payment options will be met with modern IT infrastructure and by enabling existing databases. Completely electronic payment option will reduce the leakage to minimum. All the possible policy dilemmas have been discussed with solutions in the policy. Agricultural reforms as well as school voucher can be augmented once ‘Sahay’ is on a stable and consistent path. There will be serious roadblocks from powerful lobbies of PDS, Kerosene and NRGEA unions.

Vikas Argod actively volunteers at IndiaGoverns Research Institute, a Bangalore based public policy data analysis organization. He works for a business data analysis company in Pittsburgh, US. Views expressed here are personal.

(The above piece was written by Vikas in April 2012, as a student of The Takshashila Instution.)

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On Cash Transfers

Abhimanyu Sanghi

Introducing a sunset clause in all central government subsidies, and holding a large-scale two-year pilot program on direct cash transfers.

In the Financial Year 2012, the total central government subsidies accounted for INR 190,015 crore of government expenditure (approximately 2 percent of GDP). This is expenditure that is used for sustaining the country, and does not contribute to the development of the country. In addition, the amount borrowed for subsidies accrues interest, which is an additional amount that is taken away from the development of the country. Subsidies are not targeted, and therefore the middle class is a large unintended beneficiary of the subsidies. India’s current fiscal deficit at 5.9 percent does not allow us the leeway to continue with the high amount of non-targeted subsidies. Food and fuel subsidies account for 49 percent of total subsidies.

Therefore, my first proposal on subsidies is to introduce a sunset clause – a ten-year progressive decrease in subsidies to zero, that is, a reduction in subsidies of ten percentage points every year for the next ten years. This proposal is bound to face opposition. To offset this opposition and have a sustainable targeted safety net program in India, my second proposal is to hold a two-year large-scale pilot of direct cash transfers to the poor in multiple states.

Conditional cash transfers have been successful in poverty alleviation in countries in Latin America and Africa. What makes it challenging in India is the high population density and difficulty in tracking conditionality. On unconditional cash transfers, the sample data points are fewer in number and the available data is less convincing. However, both programs provide a more sustainable means of social welfare than untargeted subsidies.

Abhimanyu Sanghi is a Delhi-based investor and a classical liberal.

(The above piece was written by Abhimanyu in April 2012, as a student of The Takshashila Institution.)

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Growing relations between India and Canada

Olivia Gagné

The Canadian Prime Minister Stephen Harper landed in India for his longest trip in a foreign country since his election victory of 2006. This reflects the growing interest Canada has been showing towards India over the last few years, keeping in mind its objective to diversify it’s trading partners and thus secure its future prosperity.

The current bilateral relations have great potential to be strengthened in many areas. A Comprehensive Economic Partnership Agreement (CEPA) is likely to be concluded next year between India and Canada, which would help reach the annual common fixed target of $15 billion in bilateral trade from the current $5 billion.

Canadian businesses clearly size the growing Indian market as a not-to-be-missed opportunity. In turn, India considers all that Canada has to offer with respect to the several challenges it is increasingly facing. Canada is an emerging energy superpower and could start exporting oil and liquefied natural gas to an energy-deprived India as soon as the required infrastructures to do so are installed. 99 percent of the Canadian hydrocarbons are sold to the United States of America, at a ridiculously cheap price. Canada has an obvious economic advantage selling it at higher prices, closer to the international ones and India is willing to pay this price to get Canada as a reliable supplier. Nuclear energy is also on the cards as both the countries signed a civil nuclear agreement two years ago.

Apart from the Indian conquest for energy security, the education of the current and future generations of Indians is a major challenge that could find part of the solution in better cooperation with the Canadians. Last year, 13000 Indian students went to Canada for education. Canada is seriously interested in welcoming more in the coming years for their intellectual capabilities. The Canadian post-secondary education is one of the best in the world as showed in a recent OECD report. The Canadian expertise could greatly benefit the Indian authorities on planning and managing public education. Canada also has extraordinary know-how in the environment protection field from which India has a lot to learn. In sum, the Canadian private sector is looking avidly at all the infrastructure needs in India and could help in achieving the considerable government spending of this sector.

The Canada-India relationship can also be strengthened if both countries engage together in other parts of the world for joint cooperation. For example, the aid sector in Africa offers many opportunities for this. Canada seriously needs to improve its image in this region as it failed to gain a seat in the United Nations Security Council (UNSC) in 2010 partly because it lost credit with the continent over the last few years. India is similarly seeking the African support for its bid for a UNSC permanent seat, and is obviously interested in accessing the resources of the area. The share of Canada’s development experience in Africa could help make India’s “new role” as a global donor much more effective. Together they could even plan triangular cooperation projects, which are an innovative approach to development, seen as highly effective and which would benefit each of the three committed parties.

The previous items of the bilateral possibilities might be part of the agenda on the prime minister Stephen Harper’s second official visit to India from November 3rd to 9th.

Olivia Gagné is a graduate student at the Université Laval and currently doing an internship at The Takshashila Institution.

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Foreign Policy Must Power Indian Growth.

Ameya Naik

Problem: Energy Crisis (Inability to find sufficient fuel resources, or to generate sufficient electricity to meet the demands of a high-growth trajectory.)

Why this is a Foreign Policy problem: India’s national interest has broadly been defined as following a high economic growth path, which implies sharp increases in agricultural productivity, industrial productivity & international trade. The first two rely sharply on availability of electricity at critical times. Even trade can at a minimum be said to benefit in an energy surplus environment – indeed, the trade of electricity is most lucrative – besides which it remains affected by currency exchange rates, inflation rates or forex levels, which again link to both productivity & fuel prices. International relations are thus a key component of ensuring we always have the energy supply to maintain the desired trajectory, ceteris paribus, as it were.

Substantive Solution: acquire supplies of fuel which, in combination with technologies available, reliably produce enough energy to meet the demands of the desired growth trajectory. By corollary, acquire technologies that enable us to meet such demands with the levels of fuel supplies we can afford. Given that the problem is hardly unique to India, the implementation of such a solution might generously be described as an intractable problem.

Impact on Foreign Policy: Our freedom to follow strident policies towards existing or potential suppliers of fuel resources or energy generation technology is curtailed. Witness our studied silence on Saudi Arabian action in Bahrain. Hydel power generation is an important component of our negotiations with upper riparian states such as Pakistan, Bangladesh & (especially) China. The proposed TAPI pipeline is an important component of our Af-Pak policy. Maintaining a balance between oil suppliers & nuclear suppliers is a particular challenge: this was India’s dilemna when USA insisted we comply with sanctions against Iran! At the same time, we become natural rivals to nations competing with us for the same fuel resources. Nowhere is the intricacy of the balancing act involved more evident than in our choice of arguments & allies on climate change.

Impact on global capacity: India is seen as a key player in global economic stabilisation & growth. This demands a stable energy supply in India, which in turn means certain concessions have to be made to us. Similar arguments apply with effect to China. Where Indian & Chinese claims come into competition – the recent OVL South China Sea adventure, or as regularly occurs in MENA – a diplomatic impasse is likely. Given relatively limited supplies as well as the linear relation between thermal power generation & carbon emissions, global concerns over energy security & climate change in the coming decade will probably rely on India & China as test cases. The inability to manage demand from the two largest consumers of energy can only lead to increasing global instability. In the simplest terms, if India continues to be energy starved for want of purchasing power, many other developing (or “global South”) nations have little hope of finding supplies.

Time Constraints: In questions of productivity, every day of underutilisation of capacity is deadweight loss. The one state in India that currently seems able to manage these demands is Gujarat; it is possible to see electoral returns in this. In other words, the current government would want to address this issue before the next general election, or risk conceding an important electoral  plank to the opposition. On the other hand, even if this is leveraged into a new mandate by the opposition, it would become a central parameter for assessing their accomplishments when in power. (Note that the current disputes on dispensation of coal in India is precisely along party lines between states.) In other words, the latest time window to solve this issue would be the general  election after next – 2019. Failure to do this would condemn India to a lower growth trajectory than what is currently postulated for the decade 2020-30, with a corresponding retarding effect on the global economy.

Impact on Global Standing: The question is a tautology: how does the global distribution of power affect the global distribution of power? The more stable, diversified & sustainable our energy situation, the greater our pre-eminence in global politics as well. The less we are beholden to any one nation or cartel for our energy needs, the greater our autonomy with respect to allowing other criteria to dictate our policy to them. Indeed, India’s greatest scope to distinguish itself from China is to become a high productivity/high growth energy surplus state, given that we are likely to remain net importers of fuel resources. This requires some adroit diplomacy as well as multiple power sector & policy reforms in the domestic arena, but if successful would position us with diplomatic capital enough to counter the sheer volume of the Chinese political-economic juggernaut. The opposite scenario could see us approach the precarious situation East European states face with respect to Russia – held hostage for daily heat or power over every annoyance their supplier state may face or imagine!

Ameya Naik is a student of International Law and Foreign Policy , living and learning in New Delhi.

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Farmers Suicide in West Bengal

Aditya Dash

Around 25 shrimp farmers committed suicide in West Bengal.

They did not end their lives due to a drought or other calamities leading to the destruction of their crops. Their calamity was that there was no one to sell to and the market price for shrimps had crashed. Most others are currently selling at 30 percent below their cost of production.

The reason for this market outcome is that there has been an increase in global supply compared to last year while the global demand has decreased. Last  year, global supplies were hit by various calamities such as floods in Thailand and Vietnam and disease outbreaks in Vietnam and Indonesia. This was the main reason why a lot of shrimp farmers in India made extra money, as more shrimp was sourced from India. This year, no such disaster occurred in any major shrimp producing area and hence there has been a steady increase in the supply of shrimp. As far as the demand is concerned, most developed markets have high inventories from last year so the demand has been fairly low possibly due to the global economic slowdown.

For West Bengal things have been particularly bad. Majority of the produce is meant for export and specifically to Japan. Shrimp processors in West Bengal did not think about hedging their exposure to a single country of origin. Some of you might have read about the rejection of Indian origin shrimps in Japan due to the presence of Ethoxyquin. Ethoxyquin apart from being an unappealing term to be found in a food item is a food preservative used as an anti-oxidant in fish meal and fish feed to prevent rancidity. We feel that this year the detection of Ethoxyquin might have been due to the usage of imported shrimp feed of Malayasian and/or Vietnam origin. What is curious about the Japanese regulations is that the tolerance level of Ethoxyquin for shrimp is 0.01 PPM while the tolerance level for fish is 1 PPM. So as per Japanese regulations, it is acceptable for fish to have 100 times the amount of Ethoxyquin as shrimp. All the containers that have been detained in Japan are in compliance with WHO’s CODEX standards.

Although shrimp is not an integral part of the Indian diet, at such low prices clearly an arbitrage opportunity exists. However arbitrageurs will be constrained by the availability of cold chain infrastructure. Most shrimp processors have already bought plenty of raw materials and have no space left. Maybe things would have been better if there was 100 percent FDI in retail. Walmart and other similar entities would have leaped at this opportunity and stocked up on frozen shrimp.

Apart from the demand constraints one should also focus on the West Bengal shrimp farmer. Their cost of production is higher compared to the farmers of Odisha and Andhra Pradesh. The primary reason for that is the lack of awareness and education amongst the farmers. They tend to indiscriminately use Probiotics and other chemicals for maintaining adequate water conditions. Feed is given in a non-scientific manner which leads to higher Feed Conversion Ratios (amount of feed required for 1Kg of growth). Part of the blame lies on feed and shrimp farming input manufacturers and their marketing tactics. We have mostly illiterate and ignorant farmers operating in a highly technical field without any knowledge about quality parameters and basic economics. State governments should invest in translating and disseminating freely available technical information amongst the farming community. Steps should also be taken so that technical knowledge could be imparted at the matriculate level. West Bengal’s infrastructure is not as good as Andhra Pradesh, which has produced a record high number this year. Better road connectivity combined with regular electricity supply would drastically reduce their cost of production and improve product quality too. Conditions in Andhra Pradesh and Odisha are not very good either, however since the cost of production was highest at West Bengal the first round of suicides took place there. Although the financial strain will be felt by Odisha and Andhra cultivators, due to their lower cost of production things should not get that desperate.

Maybe the trade diplomacy team of the Indian government will resolve this matter as soon as possible. Maybe a screening of Ikuru to Japanese health authorities might awaken them to rationalise such a norm which has had such far reaching consequences. In Ikuru a lifelong bureaucrat comes to know that he has a year to live and tries to give his life a sense of purpose. He does so by taking responsibility of a project to transform a malarial swamp into a children’s’ playground. A senior bureaucrat once explained to me that the following are given importance in descending order cereals, horticulture, diary, animal husbandry, poultry and finally aquaculture.

While the suicides have been tragic, a silver line amongst such dark clouds is that aquaculture might get some more attention from the government.

Aditya Dash is a shrimp exporter.

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Farmers as businessmen

My association with the Takshashila Institution took me on a field trip today to trace the story of the not-so-humble potato. The journey actually started last night, as we checked out potato prices at retail stores near our respective homes. And we continued the journey this morning, in reverse order as we went first to the APMC Mandi in Bangalore and then to the potato growing areas near Arkalgud, in Hassan district. As an aside, today was the first time I visited (or rather passed through) my mother’s native place Holenarasipura (the H in her initials stood for that).

When we build narratives about farmers in India, we talk about the “humble farmer”, the “poor farmer”, the “farmer dying in Vidarbha”, the farmer exploited by zamindars, and of India itself as a “nation of farmers”. The one part of a farmer’s job that never makes it to the popular narratives is his role as a businessman and entrepreneur. A farmer we met at the APMC yard at Bangalore this morning had delayed his journey from Bettadapura by four days, only to realize a lower price than what he would have got on Tuesday. Another near Arkalgud had grown tobacco late in the season, not knowing the complications that could arise due to rainfall patterns.

Back in school when I studied Hindi, I read a story by Munshi Premchand about a young man who moves to a village because he wants to be a farmer. That story ends with him returning disgruntled to the city, claiming there is more to be done by the farmer in the city than just doing his job as a farmer. That story, which I remember as being beautifully written (though I don’t remember its name), is a good primer into how much of a business farming really is.

Consider the decisions that a farmer has to make, and decide if this is closer to being a businessman or being a tiller. First he has to decide what crop to plant. Next, he has to decide what exact variety to sow, and what variety of seeds to procure. Then comes the rather big decision about the timing of the sowing of the crop, comes as it does with dicey predictions and forecasts of rain which even the Met department can’t get right. That done, the farmer has to decide on the labour he needs to employ for the sowing season, and whether he needs to hire a tractor. Then towards the end of the season, there are decisions about hiring of labour with respect to harvest, decisions on where to sell and most importantly, timing the market right in order to realize the best possible price for his crop. And the farmer is his own salesman also, having to negotiate the price at which he sells.

Commenting on the pittance that the farmer stands to make (in terms of a profit) on what he grows, one of my colleagues on today’s field trip said it was a  no-brainer – in the long line of businessmen who stand between a crop and the customer, he said, the farmer is the worst businessman, so it is no surprise that he is the one who gets squeezed the worst.

From a “corporate strategy” standpoint, the amount of management required in the farming profession suggests that it makes eminent sense to separate the roles of the farm manager (who plans inputs , labour hire, sales, crop mix, etc.) and the farmer (who does the day to day job of tending to the farm and looking after the crops). Unfortunately, the fragmented nature of land holdings in India doesn’t allow us this luxury. In fact, there is evidence to suggest that back in the days of unequal (and supposedly unfair) land-holdings, this was perhaps actually the case, with farm managers (zamindars) taking the risk and making the big decisions, while leaving the actual farming job to the specialist farmers. Unfortunately, supposedly pro-farmer initiatives such as the Land Reforms Acts and the “land to the tiller” movement served to defeat this separation of responsibilities.

The other big problem with farming is the amount of risk in the business. At one of the farms, we saw heaps of potatoes which had been cast aside because of blight (wasn’t that the same culprit that caused the Irish potato famine back in the 1800s?). In another farm, lack of timely rain had meant that potatoes hadn’t grown to the size to which they had been expected to grow, thus resulting in much lower realizations in terms of output. Even with the best possible management, exposure to the elements means there is always a significant amount of risk in farming. Current land holdings, though, don’t allow a farmer to diversify his risk by planting more than one crop.

Fragmented land holdings creates a further problem – the produce from one farm is usually way too small to make it viable to take it to the market 200 km away in Bangalore, where an auction at the “mandi” can help the farmer realize the best possible price (more on this auction in another post). Instead, the farmer is forced to sell to local aggregators and simply accept the price the latter is willing to offer (in small centers such as Arkalgud, there isn’t much choice the farmer has in who he sells to). We met a local farmer there with considerably bigger holdings than others in his area, and he told us that he had enough to make a trip to Bangalore viable, and there was no reason he would sell locally.

From a purely business perspective, the logical way forward for farming in India would be consolidation. Consolidation of land holdings would solve several of the problems that I’ve mentioned above, and also make it viable for the farms to appoint specialist managers. One possible way forward I see would be for a bunch of farmers with contiguous farms to get together and form a private limited company (with their respective shares being proportional to their land holdings). The farmers can continue managing their own pieces of farmland, while they appoint a professional manager to do business for them (think of it as being similar to geeks Sergey Brin and Larry Page bringing in professional CEO Eric Schmidt to run Google).

Yes, that paragraph might sound too grand and fantastical, but I don’t see any other way out for Indian farmers to do better. It is time that policymakers recognize the amount of management that goes into farming, and understand that keeping farm sizes small does no good for the lot of the farmer. A comparable example would be the Indian textile industry, where labour laws have served to keep manufacturers tiny, and has resulted in them losing out to larger competitors from the Far East (who have no such constraints, and are thus able to do better business).

So what policy interventions do we need to enable better management of Indian farming? Undoubtedly, the one decision that can potentially go the farthest in this direction is to make purchase and sale of farmland easier. So far, laws that have been designed to keep “evil capitalists” out of the noble farming profession have sought to make farm-holdings illiquid, and hard to purchase or sell (making farm land sales more liquid will also ease land acquisitions for industrial purposes and infrastructure projects). However, the fact of the matter is that there is a significant amount of management skills required to successfully run a farm, and the best way to achieve that would be to be inclusive of “evil capitalists”.

The narrative about the Indian farmer needs to change, and change in a way that recognizes him as being a businessman. The sooner our policymakers recognize the business aspect of farming, the easier it would be in making farming a viable profession in India.

Karthik Shashidhar is a faculty at the Takshashila Institution and blogs at Pertinent Observations.

 

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Why Decentralisation Might Mean Better Primary Education?

Vikas Argod

The scale is unbelievable. It is a massive network of 10 lac public elementary schools- about 80 percent of total schools in India. The budgetary allocation for elementary education in 2009-10 was at 97,255 crores. Gross Enrollment Rate has crossed 95 percent. Overall literacy rate has increased. But, the “learning levels” in government schools, especially in the north, have steadily declined and it is quite alarming. This picture is dismal because three out of four don’t learn enough to pass threshold in a year. One in three children complete lower primary, having spent 5,000 hours in school, still lacking the most fundamental of skills – reading. Obvious question, why?

According to the core concepts of Shikshana, a child needs three important resources for better performance at school: “adequate nutrition, optimal space and a dedicated teacher”. Government interventions like mid-day meals, Sarva Siksha Abhiyan have shown promising improvement on first two counts. However, teacher has become the serious bottleneck. How can we fix this? Higher salary? Tighter control? More visits by block officer? A big NO.

Answer lies in incentivising via decentralisation. Allow “decentralised decision-making” to create “government funded locally managed schools”. Currently 77 percent of education budget goes toward teachers and management, 15 percent on infrastructure. Interventions aimed directly at children account for just 7 percent. All teacher related decision making lies with education bureaucracy. In order to engage citizens, RTE mandates the creation of School Management Committees (SMCs). They are tasked with coming up with a plan based on which expenditures should be decided. But centralised delivery system has disempowered these committees giving no incentives for parents to take part.  Decentralisation of schools through SMCs should be major incentive for local people to take responsibility.

First, SMCs should get, “untied block grant structure that would enable the school to take spending decisions based on its own felt needs.” Currently SMCs can spend 5 percent of funds, but this is packaged with red-tape. If SMCs are given authority to use the money on school felt needs, rather as decided by district or block officials, it would be better spent. These ‘untied’ grants should be finalised soon after the annual budget to give adequate time to plan before the start of academic year.

Second, the teachers should be made accountable to SMCs, with periodic performance appraisal of teachers by SMCs and also option to award incentives. They could even propose disciplinary actions against teachers for failure to deliver. However, steps should be taken to avoid principal-agent problems.

Third, the SMC members should be trained for strengthening their planning capacity. RTE allocates money for training without laying down any steps to spend. So, money remains mostly unspent. For efficient use of training funds, voucher system should be followed. The members will use vouchers to get trained on community planning. They now have an incentive of personal development which in turn motivates more people to get into SMCs.

Along with these changes,  “a transparent fund tracking system holds the key to a strong, accountable, decentralised system of delivery”. Real time tracking of finances is important. The SMCs should be elected by a local election, predominantly by parents, with tenure limits of two terms. This step would avoid moral hazard, given parents would always like their children to go to better governed schools.

Incentivising the SMCs with greater control and role in the school’s development has the potential to solve many interconnected problems in education system. Given SMCs are already in place, giving them additional control, in a phase wise manner, is certainly a right step toward achieving better quality of education.

Vikas Argod actively volunteers at IndiaGoverns Research Institute, a Bangalore based public policy data analysis organisation. He works for a business data analysis company in Pittsburgh, US. Views expressed here are personal.

 

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