Tag Archives | West Bengal

Devolution of Power from Centre to State

By Ratish Srivastava (@socilia13)

States in India can play a bigger role in foreign policy formulation with active engagement in pursuing global economic opportunities, resource management, security issues and environmental issues. However, does that mean the centre will lose power to states as they push for greater autonomy?

The devolution of power from the centre to state need not translate to a lesser role for the centre. The centre could use this devolution to their advantage in a number of ways.

The current NDA government created the States Division in 2014 under the Ministry of External Affairs (MEA) for efficient management of centre-state relations. However, this division only provides economic freedom to states by allowing them to engage in global economic opportunities.

The structure proposed by NDA only allows for economic development, investment promotion but not aspects of security. The central government needs to realise the role a state can play in security and improving ties with other nation-states. The best example would be India’s relation with Israel.

India has historically supported the Palestinian stance, and any major diplomatic move with Israel could upset India’s energy ties with Iran and the Gulf states. But, a number of chief ministers of states have gone to Israel, mostly for learning new agricultural practices, as agriculture in Israel is a highly developed industry. Visits from the then CM of Rajasthan Ashok Gehlot in 2013 and Maharashtra CM Devendra Fadnavis in 2015 show that states can help improve ties with other nation-states.

These low-key measures, which go under the radar are extremely important for India to build stronger ties with a nation-state as it allows greater manoeuvrability in formulating foreign policy. India, however, needs to tread carefully as a tilt towards Israel could be counter-productive to its move for a permanent seat on the UN Security Council. India requires strong support from the Arab states that form a large group in the General Assembly. The Modi government must be careful as it looks to preserve its strategic, economic and energy interests in West Asia.

The centre will also become effective in conducting neighbourhood diplomacy if it can coordinate with peripheral states, which share borders with other countries, for example, India’s relation with Bangladesh. The relation between the two countries was weakened over disputes over the Teesta River. The Manmohan Singh-led government in 2011 failed to reach an agreement with Bangladesh, which allowed an equal share of the river. This failure can be attributed to the CM of West Bengal, Mamata Banerjee, who pressured the centre to break the agreement.

The reason for the the move’s opposition lies with the fact that the centre did not involve West Bengal, which would be impacted the most by this deal.

On the other hand, India signed the Land Boundary Agreement (LBA) with Bangladesh in 2015. This agreement will rehabilitate people in their respective enclaves in India and Bangladesh. It will improve the domestic situation in both countries but more importantly, this move showed how involving West Bengal helped smoothen the deal.

The central government assured the government of West Bengal that it will be provided with adequate financial support to help rehabilitate people coming from the former Indian enclaves in Bangladesh. The state government has also taken a set of reasonable relief measures through its Cooch Behar district administration with financial assistance from the centre. The centre and the state in this situation worked together, and it resulted in a historic deal being signed between India and Bangladesh, which has been a concern since 1974.

The current central government has suggested the Centre-State Investment Agreement (CSIA), which could potentially help the central government implement a bilateral investment treaty with any foreign country. CSIA creates a platform for states to engage in the management of foreign direct investment flowing into the country.

In addition, with states focusing on improving their economic performance, it allows the centre to focus on other issues like acting in accordance to international law and set environmental goals while the states can help bring globalisation to India through its trade deals and by attracting FDI.

Ratish is a research intern (@socilia13) at Takshashila Institution

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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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