Open Forum

New Delhi, 28 January 2025

City Development

HOLISTIC VIEW CRITICAL

By Dhurjati Mukherjee 

Urbanisation in India has emerged as a big problem as most cities are expanding in an unplanned manner, adding to congestion and pollution. It is understood that the urban population is poised to grow to 600 million by 2030 and the estimated contribution of urban areas may be over 70 percent to the country’s GDP. In fact, big cities in the country have among the largest population density per sq. km in Asia and decongesting these remains a big challenge. 

As India marches towards urbanisation, it is estimated that around 416 million people will be added as urban dwellers in the country between 2018 and 2050. The urban system consists of 7933 settlements, comprising statutory towns and census towns, mostly governed by municipal corporations or municipalities. There are around 3892 census towns which are classified as urban as they meet the criteria of minimum population of 5000, at least 75 percent of the main workforce engaged in non-agricultural activities and a density of population of at least 400 persons per sq. km. But most of the towns have been expanding in an unplanned, unscientific manner and though some may have master plans to guide growth, these are not implemented due to the financial crunch of the municipalities. 

Against this backdrop, at a recent review meeting of the Ministry of housing and urban development, Prime Minister Modi is understood to have suggested more focus on creating facilities, amenities and better transportation networks in zones in cities which naturally attract people and businesses, rather than developing new cities that push horizontal growth.  Certain areas or zones in existing cities that have potential for growth need to be better connected. According to him, connectivity was more important than building new cities. Following these suggestions, the ministry will start work on a better framework for transit-oriented development (TOD) for cities. 

Thus, the emphasis would be on vertical development through transit corridors and ensure decongestion to create open space. However, with population growing in metros and big cities, areas have extended and horizontal growth too is clearly manifest. Mention may be made of Hyderabad, Delhi and Kolkata in this connection. But experts feel that strengthening the transport corridor is very important at this juncture. 

While a lot depends on states as land use is under the State List, the Centre is expected to formulate the policy framework and be prepared to give funds for making this a reality. Apart from this, there will be need to permit higher floor area ratio (FAR) for vertical growth when development takes place. Big metros like Stockholm, Hong Kong, Tokyo and Singapore have followed this model years ago where TOD has been deployed effectively. In India, also all the metro cities have metro rail connections to facilitate travel. 

However, the question is how much money the Centre can give to the states to establish a strong transport network. In most of the big cities, government buses are on the decline and the private sector has taken over. But most of the private buses are not well maintained, causing much pollution to the city, with Kolkata being one such example. Whether state governments subsidise private transport or increase number of government buses remains to be seen. However, it requires urgent attention to get a viable solution. 

Air pollution has been hitting headlines as it’s a major concern in the metros and even suburban cities. Despite various efforts made at reducing such pollution, the results continue to be dismal. The national capital, Delhi, leads in air pollution but Kolkata and Mumbai have equally dangerous levels. It may be mentioned here that air pollution has also kick-started a vicious circle of poverty as research by the Proceedings of the National Academy of Sciences found that children exposed to high levels of pollution are less likely to escape poverty in adulthood, as the environment factor impacts their future earnings. 

It is in this context that city development calls for upgradation of slums and slummish type settlements. In formulating any policy for city development, the most important is the need for slum renovation so that the basic facilities of potable water and sanitation are available to them. The government could also start a programme of upgradation of the settlements that are in a dilapidated condition by providing loans at very cheap rates, say around 4 percent per annum so that the residents could repair and upgrade their tenements. Sanitary toilets need also to be built both in recognised and unrecognised slums. 

The upgradation of slums in cities and ensuring a pollution-free atmosphere in these places is of utmost importance. And while there’s a lot of discussion on providing houses in rural areas, there is no scheme of upgrading slums in metros and big cities. Can one deny the necessity of upgrading slums in a phased manner, rehabilitating those who live in slummish type settlements or near railway tracks in suburban areas? Planners and urban development bodies need to investigate the matter on a priority basis to make the city a clean place to live in. 

It is interesting to note that AAP convenor and Delhi’s former Chief Minister Arvind Kejriwal has in a bid to woo voters stated recently that rival BJP would demolish all jhuggi-jhonpri(slum) colonies, if voted to power. However, as the ruling party he should be asked what he has done for improving the slums? Acquiring slum land without providing proper rehabilitation, and not far from where they live, would equally affect the poor and economically weaker sections. It’s high time that all metros and not just Delhi seriously prepare a thorough plan of action to provide houses to slum dwellers. 

The feeling of neglect amongst the poor and marginalised sections gets more pronounced as the gap between them and the rich continues to grow. For example, developers will have ready buyers for flats costing crores of rupees, but there will be people sleeping on the streets, with the sky being their only roof! While infrastructure development needs priority, the government must simultaneously develop modules for ameliorating conditions of the extremely backward and those struggling for an existence, in this development. 

Additionally, while states would have revised master plans of cities, the resource crunch would be a drawback. Therefore, the Centre should provide additional funds for overall development, not just of metros but all big cities which are steadily getting overpopulated. Urbanisation must be handled with overall development.---INFA 

(Copyright, India News & Feature Alliance)

Economic Highlights

New Delhi, 27 January 2025

FM Basket Full, Trumpism A Barb

FARM, JOBS, TRADE ARE FOCUS

By Shivaji Sarkar 

The 2025-26 budget presents a formidable challenge for Finance Minister Nirmala Sitharaman, as she grapples with pressing issues such as curbing inflation, boosting consumption, stimulating private investment, and steering India’s development amid concerns over a slowing economy. 

On the global front, she must also address potential economic headwinds from the policies of the newly-elected US President Donald Trump, which could result in higher petrol prices and a stronger dollar, adding to India’s economic complexities. 

Domestically, urban consumption—long a reliable growth driver—has weakened, and private investment remains subdued. India's growth rate has fallen to a two-year low of 5.4 percent, with annual growth estimates for 2024-25 at 6.4 percent, a sharp decline from 8.2 percent in 2023-24. Yet, the Reserve Bank of India remains optimistic, asserting that the country’s structural growth drivers are intact. 

Simultaneously, the rural economy and agriculture sector demand urgent attention. Indian farming faces a myriad of challenges, including a growing population, shrinking land resources, climate change, rising nutritional demands, labour shortages, mechanisation, pricing dilemmas, and environmental concerns. Balancing these factors will be crucial to achieving inclusive and sustainable growth. 

The government plans to increase agricultural spending by 15 percent to $20 billion in the new budget, aiming to boost rural incomes and curb inflation. The funds will prioritise developing high-yield crops, enhancing storage and supply chain infrastructure, and promoting pulse, oilseed, vegetable, and dairy production. However, the immediate impact remains uncertain, as many of these initiatives take time to deliver results. 

Agriculture continues to be the backbone of the Indian economy, necessitating targeted interventions to enhance productivity, build resilience, and create alternative income sources for small and marginal farmers. 

The Food and Agriculture Organisation (FAO) report, Regional Overview of Food Security and Nutrition 2023, revealed that 74.1 percent of Indians were unable to afford a healthy diet in 2021, slightly improving from 76.2 percent in 2020. The 2024-25 budget, however, made limited progress in addressing these challenges. 

RBI Governor Sanjay Malhotra, in the bi-annual report, expressed optimism that the Indian economy would gain momentum by the end of the current fiscal, despite global uncertainties. Deloitte India also noted cautious optimism, citing the government's focus on infrastructure development as a potential growth booster. 

The latest NSSO Household Consumption Expenditure survey highlights a stark disparity in rural and urban incomes, with average rural MPCE (Monthly Per Capita Consumption Expenditure) at just 58 percent of urban MPCE. While reforms aimed at increasing rural income have been implemented in recent years, progress has been gradual. Over the past five years, the government has allocated an average of 3 percent of total budgeted expenditure to the Ministries of Agriculture, Fisheries, Animal Husbandry, and Dairying, underscoring the need for more robust support. 

The farmers still are facing problems of small and fragmented land holdings, poor adoption of mechanisation, inadequate irrigation facilities. Some major problems faced by farmers in India include, soil fertility depletion, and inadequate access to crop insurance schemes. 

Small and marginal farmers, who constitute over 82 per centof the farming population, rely heavily on agriculture for their livelihoods. Expanding funding for allied activities such as agroforestry, animal husbandry, and fisheries can provide much-needed additional income streams. Investments in cattle farming, poultry, sheep rearing, and small-scale fisheries, including shrimp farming, can contribute significantly to rural incomes. 

Encouraging natural and organic farming through certification, branding, and the provision of bio-inputs via dedicated resource centres can further align agricultural practices with sustainability goals. Increased budgetary support for organic fertilizer production, utilising resources like cow dung, will promote self-reliance in farming inputs while reducing dependency on chemical fertilizers, a government aim. 

It's easier said but bringing down the use of urea and DAP, nitrogen, phosphate, potash has its problem, much of which is imported. Despite rise in prices, the government has announced subsidy of Rs 3850 per tonne of DAP and has put prices pinned three years ago at Rs 1350 despite actual prices of Rs 2000 for 50 kg bags. 

Agriculture employs 54 percent of India’s workforce but contributes 18 percent to India’s GVA. This highlights the need for increasing productivity in the sector. As per an IMF paper, India’s labour productivity (PPP adjusted) in agriculture is only 12.2 percent of the median productivity in advanced economies and 43 percent of the median productivity in emerging markets. Addressing the problems of farmers and contacting them for adopting new technology in remote areas has become a problem along with marketing and remunerative prices. Agriculture, totally in private sector, has to bear the vagaries of nature. Food is one item that the US has been subsidising heavily for decades. 

The government has to do balancing tricks. The debt burden is high. Infrastructure investments, including roads have benefited corporate but tolls and rise in input costs have made Indian farming difficult. Road projects have also caused loss of 50 lakh hectare of arable land. 

The government has also to address new Trumpism that is likely to put lot of pressure on the international market, petrol prices, change in alternate energy policies, Indian exports and the employment. So, it has to go beyond agriculture. The IT and AI developments are impacting Indian enterprises causing further job issues. Banks, though the RBI says are in good health, have problems of thawing deposits. 

Manufacturing and other sectors are constricted by low purchasing capacity of individuals. The Finance Minister has to think of a new policy to keep manufacturing costs low so that inflation remains under check. A relook at GST is desirable. This may remain pipedream. 

The Finance Minister has little scope to play with taxation. People want a relook at income tax since the government brought down corporate taxes to 22 percent. She may do some rejig but bringing down the rates may not be easy. The railway fares and commuting cost are rising. Would she be able to check? 

Agriculture may be the backbone of the Indian economy, but balancing its needs with those of other sectors remains a critical challenge. While the budgetary process generates significant curiosity, it is unlikely to introduce groundbreaking changes. Post-budget, the country must redefine its economic vision, focusing on becoming a low-cost, fast-growing economy. Simply boasting about achieving "trillions in record economic size" will not alter the nation’s trajectory.----INFA 

(Copyright, India News & Feature Alliance)

Round The States

New Delhi, 25 January 2025 

UGC Draft Rules

BREW CENTRE-STATES TUSSLE

By Insaf  

TheUniversity Grants Commission (UGC) is ruffling feathers not only among Opposition states, but apparently even NDA partners! Recent issuance of its draft (Minimum Qualifications for Appointment and Promotion of Teachers and Academic Staff in Universities and Colleges and Measures for Maintenance of Standards in Higher Education) Regulations, 2025,to overhaul process of appointment of Vice Chancellors by giving state Governors broader powers and opening the position to industry experts and public sector veterans, instead of the traditional academicians, has triggered a slugfest between Centre and non-BJP states. Kerala has joined Tamil Nadu in passing a unanimous resolution in its Assembly on Tuesday last,urging New Delhi to withdraw these, which Chief Minister Vijayan said were ‘against federal principles,’ and part of ‘a Sangh Parivar agenda in higher education’!Earlier, DMK President and TN Chief Minister M K Stalin had too charged UGC’s move as against federalism and state’s interest. Remember, their governments, as well as Mamata Banerjee’s in West Bengal are in arunning battle over top academic appointment process with their Governors, who serve as chancellor of state universities. This apart, academics and education experts are voicing concern as appointing non-academics as university heads would further given a boost to commercialisation of education and impact academic integrity. 

Interestingly, while concern is simmering among NDA partners as reported in the media, they choose not to speak out openly. For example, though JD(U) national spokesperson Rajiv Ranjan Prasad is quoted: ‘Every political party has a roadmap. Higher education is an important part of that. By limiting role of elected governments in VC appointment, efforts of state government in education field will be largely discouraged. We haven’t read the draft regulations, but things appearing in media show that some amendments to that may be needed,’ in a few hours later he said these were his ‘personal views.’ The TDP in Andhra Pradesh says it doesn’t wish to politicise the issue and ‘if we have any reservations, we will rather communicate them to people concerned internally…’ Likewise, LJP (Ram Vilas) has responded saying the issue ‘should be discussed in Parliament.’Be that as it may, the draft rules have stirred up a hornet’s nest and it is feared these may lead to not just protests, as voiced, but a protracted battle over state governments powers being usurped. The issue needs to be closely studied, literally!

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Assam Foreigners’ Issue

BJP-ruled Assam’s system of detaining and deporting foreigners has invited severe criticism from Supreme Court. On Wednesday last, hearing a plea dealing with deportation of persons declared foreigners and facilities, such as hygiene and food quality at detention centres in the northeast state, the top court not only termed government’s affidavit for detaining 270 foreigners at Matia transit camp ‘defective’, but directed Chief Secretary be present through video conferencing on next hearing and explain non-compliance. Said it: “The affidavit doesn’t give any justification for detaining…steps taken to deport are not set out. This is gross violation of this court’s orders…” Besides, it disagreed with state counsel’s plea the affidavit be ‘confidential and remain sealed,’ as there was ‘no valid reason for it’. Importantly, while the counsel spelt out steps how foreigners were being detained, the moot question is: why detentions were continuing without deportation process even being initiated! This as the court was made aware that foreigners were languishing in detention centres for something like over two years, with no proof of possible deportation in near future! Surely, a comprehensive system must be in place, at the earliest. Right now, it’s akin to putting the cart before the horse!

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Manipur JD(U) Conundrum

Manipur continues to get a raw deal. Support for Biren Singh government is a concern, notwithstanding the Centre not considering change in leadership, which is desired. On Wednesday last, its NDA partner, JD(U), put a question mark on it. Does it support the ruling dispensation or doesn’tit, as the party’s state president KshBiren Singhwrote to Governor Bhalla saying it doesn’t support BJP-led NDA government in the state and that itslone MLA Abdul Nasir be treated ‘as an Opposition MLA in the House!’Interestingly, Nasir says he hasn’t withdrawn support and the party’s top leadership is sticking to its existing stand of supporting the state government, and that Singh has been removed from his post over charges of ‘indiscipline’. Delhi needs to clarify the situation. More so, as two months earlier anotherNDA constituent, Meghalaya’s NPP had expressed ‘deep concern” and announced withdrawal of its support to the government over its failure to “restore normalcy” in the state, hit by ethnic violence since May 2023. Sadly, the nagging uncertainty makes matters worse.

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 Jammu Mystery Deaths

The mysterious deaths of 17 persons in a village in Rajouri have left both Jammu and Kashmir government and Centre stumped. On Wednesday last, new steps were taken including moving 200-odd people from Baddal village to Nursing College in Rajouri, their monitoring 24×7 by a dedicated team of doctors, strict curbs on movement of those who remain in the village in containment zones, and installation of CCTV cameras for surveillance, to get answers since the deaths, over a month-and-a halfago after a wedding.While officials suspect a baoli (water reservoir) with traces of pesticides could be a cause, three more minors from one of the families affected were admitted to government hospital in Rajouri with similar symptoms of fever and vomiting, deepening the mystery. Those at the village, nearly half of the 1,800-odd people are in containment zones and have been told to stay home, cook using only provisions provided by administration three times a day and use only bottled water provided. Importantly, the CSIR toxicology laboratory in Lucknow has indicated toxin presence in bodies of those deceased, and there’s hope the mystery may be solved soon. Till then, there should be solace people have not been left at mercy of local authorities alone. With a state government in place, even Union Home Minister is engaged, rather concerned. Thank God for small mercies. ---INFA

(Copyright, India News & Feature Alliance)

Political Diary

New Delhi, 21 January 2025

My Subsidy, Your Revadi

ECONOMIC COSTS BE DAMNED!

By Poonam I Kaushish 

The stage is set with a perfect electoral cake rolled out by Parties to strains of ‘Vote For Me,’ iced with luscious lip-smacking freebies galore for everyone in the run-up to Capital Delhi’s high-octane poll tamasha on the assumption that populist hand-outs yield better electoral rewards than reasoned policies and sustainable programmes. All in their reckless quest for the silly chair called Delli Raj Gaddi whereby sound economic sense has been surrendered to political gamesmanship. Who cares? After all, Government money is nobody’s money!

Amidst poll cacophony of money talks and cash works, witness how BJP, AAP and Congress aggressively embrace freebies raining populist schemes to win over women voters comprising 46% merrily converting political sops into vote percentages wherein social and economic upliftment is weighed on vote-bank political scales. Specially post BJP-led Mahayuti’s landslide victory was partly due to its cash handouts under the Ladki Bahin Yojana and Ladli Behna Yojana in Madhya Pradesh.

BJP ‘Sankalp Patra’ again makes a pitch for women votes by promising Rs 2,500 monthly aid to counter AAP’s Rs 2100, Rs 21,000 and six nutrition kits for pregnant women, Rs 500 LPG cylinders for poor, increased senior pension for 60-70 years citizens from Rs 2,000 to Rs 2,500, and from Rs 2,500 to Rs 3,000 for 70-plus citizens, widows, divyangs and destitute to serve as  foundation for  “developed Delhi” to rival AAP's welfare-focused governance model.

AAP counteres by accentuating social justice and economic parity as its focal points with 60-plus citizens to receive free treatment in Government-private hospitals, give Resident Welfare Associations money to hire private security guards, guarantees for auto drivers including Rs 1 lakh for daughters' marriage and life insurance worth Rs10 lakh, Rs 18,000 monthly stipend to mandir-gurdwaras priests-granthis, scholarships for Dalit students.

Congress too advocates narrative of societal equity and justice by promising 300 free units of power, subsidized Rs 500 LPG cylinders, free ration kits, Rs 2,500 monthly for women, complimentary ration kits -- with rice, sugar, cooking oil, grains, tea leaves to offset price rise, health insurance coverage of Rs 25 lakhs for all residents and Rs 8,500 monthly stipend for educated, unemployed youths.

Questionably, where do netas get monies to fund these doles? Obviously, by taxing people. Should our hard-earned tax money be used to boost a Parties electoral votebanks?  Shouldn’t leaders or their Parties pay for it from their pockets or funds? Should loans be waived? Is freebie different from subsidy? Are they good and bad hand-outs? Who decides?

“People’s power”, is Congress President Kharge’s response. Really? You could have fooled me. Another coos, “Why blame us? In February 2018 Prime Minister gave Rs 25,000 to working women, covering 50% of a two-wheeler cost and PM Kisan Yojna of Rs 6,000 a year to every farmer”. Echoes a BJP leader, “When rich rip-off the banking system, with huge NPAs and write-offs alongside a rent-seeking bureaucratic culture, can we say the poor are too pampered with these freebies? Call it the ‘endowment effect’.”

True, Parties are obliged to be seen as populist as it would be stupid to wish away symbolism and political lollipops to entice voters. But do our narcissist leaders need to act like modern-day feudal maharajas? Wherein, deprived with famished bellies and tattered clothes wait for hours for their mai-baaps to dole out money which doesn’t belong to them? Given the aam janata translate into just sterile statistics to keep the vote-bank tillers ringing. 

Alas, competition of promising freebies has gained traction among voters yet economists caution that excessive dependence on such incentives may impede sustained economic progress as revadi lead to financial strain on State revenues which could hinder development of essential infrastructure, notwithstanding Reserve Bank saying economic parameters are OK. Supreme Court too has voiced apprehension vis-a-vis necessity for increased accountability, cautioning against unchecked welfare programs that could potentially compromise a State's financial well-being.

Ironically, Parties realize the economic situation is worsening with prices rising and high inflation but the vote-pressure has given birth to a bigger irony whereby scarce fiscal resources are diverted from investments that could be beneficial to poor in long-term to boost short-term consumption which does nothing to solve the larger systemic problem of inequality.

See how Congress Himachal Government is struggling to fulfil its poll promises amid significant debt burden whereby State Ministers didn’t withdraw salaries for two months. In Madhya Pradesh the Ladli Behna scheme might have been a game-changer for BJP but Government is groaning under severe financial burden. In August it borrowed Rs 10,000 crore loan taking total debt of State to Rs 4,18,056 crore.

Ditto Punjab’s AAP Sarkar whose outstanding liabilities stand at Rs 3,51,130 crore as it is unable to abide by its poll promises and faces a burgeoning burden of Rs 17,110 crore for free electricity to farmers and households. Congress Karnataka Government also needs Rs 60,000 crore to fulfil 5 poll guarantees. It has increased sales tax on diesel and plans to borrow Rs1,05,246 crore. Telengana Congress is sailing in same boat and requires Rs 31,00 crore for farmers loan waiver. 

Consequently, with cash handouts hardwired into manifestoes Parties expose their hypocrisy ---everybody uses such schemes --- but accuses each other of doling revadi underscoring its systemic and symptomatic of India’s broken political economy than bad political intent. True,  growth has created wealth and upward mobility for a section of Indians. But a large majority is living a life of extreme poverty and precarity. Unless they reap rewards of growth, they will continue expecting fiscal palliatives in return for political support. 

Alas, successive Governments in their urge to garner voted have taken on spending commitments in areas they shouldn’t have entered if the Constitutional division of spending areas for Centre-States are followed. Resulting in squeeze on resources for strategic sectors like defence. BJP has mastered this model by using centrally-funded schemes to generate political tailwinds. Thereby, increasing insecurity of Opposition Parties which add fuel to fire by seeking political insurance from populism.

Who will bell the cat? Clearly, care should be taken to draw a distinction between welfarism and freebies. Welfarism takes into account needs of different sections of society as part of a large development framework. Freebies are guided by vote banks, not social concerns. It essentially implies granting concessions which have no economic rationale and are not part of larger economic planning as enunciated by Government.

Highlighting that free-falling gift is the reality of grinding garibi, which continues to haunt us after 78 years of Independence. Remember, hand-outs will only provide immediate succour at the expense of the entire future. It is no remedy for neglect of education, health, faulty priorities vis-a-vis industrialization and under-investment in rural areas, growth of corruption and bloated bureaucracy, over-population and apathy to greater productivity. A Government cannot afford to throw away money on populist whims.

Time our leaders concentrate on the big picture. Wherein, energies are channelized to address poverty through faster, broad-based growth, supported by well-functioning delivery mechanisms. The effort must be to reduce number of people in need of handouts. The way forward is imbibing fiscal prudence both in letter and spirit to avoid this race to the bottom. Leaders must draw a ‘lakshman rekha.’ ---- INFA

 (Copyright, India News & Feature Alliance)