Open Forum

New Delhi, 16 March 2011

Global Nuclear Disarmament

URGENT EFFECTIVE STEPS NEEDED

By Dr Venkateshwaran

Sr Lecturer, Dept of Geopolitics & Intl Relations, Manipal University

In a major speech in Prague in April 2009, US President Barack Obama outlined his vision of a world free of nuclear weapons by calling for a global summit on nuclear security by forging new partnerships.

Subsequently, the US and Russia signed the Strategic Arms Reduction Treaty in March 2010 to reduce deployed strategic nuclear warheads to 1,550 in seven years and deployed long-range missiles and bombers to 700 in an effort to demonstrate Washington and Moscow’s leadership on arms control and represent a tangible start to implementing a comprehensive nuclear security agenda.

The latest call for disarmament becomes significant in the context of the emergence of two contemporary threats to the international security environment. The first is the increasing possibility of nuclear weapons falling into the hands of non-State actors. The second is the persistent efforts by a number of countries to acquire fissile materials and attendant technology.

Importantly, the growing political and economic instability in countries like Pakistan, Afghanistan, Iraq, and the other Arab countries has further threatened the international security environment. Increasingly, countries have begun to perceive nuclear potential as adding to their great power status.

With the strategic nuclear ideology of mutual deterrence for maintaining peace and order gaining increasing credibility, it has in turn become an insurmountable obstacle towards achieving global nuclear disarmament.

Hence, is general and complete disarmament a realistic pre-condition for reorganising international life on more civilized principles?

Interestingly, if ever there is a crucial gateway towards kick starting disarmament efforts, it is Asia. The region has two conflicting nuclear powers in India and Pakistan. Add to this, the increasing competition across different spheres between a rapidly growing India and China.  

Further, Pakistan, Iran and North Korea are reported to be pro-actively looking to acquire more fissile materials. What role does India envisage for itself in this environment?

India can lay strong claims to leading global disarmament efforts. Disarmament was one of the core principles in the evolution of New Delhi’s foreign policy in 1947. India’s non- alignment policy during the Cold War helped it to emerge as a leader of the Third World.

Today, India is growing at a rapid pace with its cheap labour, democratic values, political stability, impressive economic growth and a huge market that is attracting the developed world. Therefore, it stands in a unique diplomatic position of a country, which has emerged from the developing group, poised to take a leap into the developed group.  

Crucially, nuclear disarmament continues to be an issue of vital importance for India with a nuclear Pakistan, politically and economically unstable, and an unpredictable China in its neighbourhood. Recently, Pakistan has secured approval from the International Atomic Energy Agency (IAEA) for setting up two more nuclear reactors in the Chasma nuclear facility.

The development is significant since it confirms the strengthening of ties between Islamabad and Beijing, which will supply nuclear reactors to Pakistan. The IAEA gave its nod to Pakistan overlooking the objections raised by India that the China-Pakistan deal for setting up two nuclear reactors violated the Nuclear Suppliers Group (NSG) guidelines, which restrict the transfer of such technology to nations that run a strategic nuclear programme.

Pertinently, recall that India got an exemption from the NSG in view of its civil nuclear deal with the US and other countries. Thereby, also announcing its emergence as a de facto nuclear power.  

Besides, complete disarmament does not appear a realistic pre-condition today. If India is harbouring any intentions of emerging as a global player in the near future; it will be called upon to play a pro-active role on disarmament. Thus, New Delhi’s efforts, in the short run, must be concentrated towards partial and phased disarmament to reduce nuclear weapons around the globe. This will, at least, decrease the chances of nuclear technology falling into the wrong hands in the immediate future.

Additionally, in the medium run, it should push hard diplomatically for a universal “no first use policy” which will further provide minimum mutual deterrence. The key focus, in the long run, however, must be to create an effective regime and a strategy through the Nuclear Weapons Convention (NWC) that strengthens mutual trust and political will among countries to ensure non-proliferation. Here, it must take a cue from President Obama’s Prague speech to enlist the US as an active partner to lead global disarmament efforts.

In a “real politik” world, if the process towards partial and phased disarmament needs to achieve realistic success, India will have to ensure that the five Permanent members of the United Nations Security Council (UNSC) work under the umbrella of the United Nations.  

For this, the first step would be to credibly establish the impartiality of the UN decision making process globally. The expansion of the UNSC by providing permanent seats to countries like Brazil, India, Japan and Germany will go a long way in kick starting the first step towards nuclear disarmament.  ----- INFA

(Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 24 March 2011

Bihar Leads Way

INDIA’s NEW BREAD BASKET

By Shivaji Sarkar

Bihar, not so long ago was supposed to be a laggard, most un-innovative, lacking will to take new initiatives, but today it may become the leader in setting new trends in agriculture and create food safety for the country which the Centre has failed to do.

The State is trying to show that agriculture, the largest employer could be profitable and add to the people’s lifestyle. Indeed, it has almost posed a challenge to the Planning Commission and the UPA Government’s contentions that agriculture is a drain on economy. The State aims at doubling farm production in the near future. It also has estimated that the employment situation would phenomenally improve.

Significantly, two developments are taking place. One, the Biharis' as seen in the Nalanda district are breaking away from the past by growing new kinds of crops. Two, the Bihar Chief Minister Nitish Kumar has taken up the cause of farmers in opposing the Seeds Bill as tabled in Parliament.

Another event that has not caused much stir is the visit of the Microsoft Chief Bill Gates, now heading his philanthropic foundation with his wife and Foundation Co-chair Melinda to the State this month. Whereby, they announced to partner the State in the agriculture sector. Recall, the Foundation invested $ 80 million worth partnership in the health sector during Gates last visit to Bihar in May last year.

Endowed with good soil, adequate rainfall and ground water availability the State has now realized its agricultural potential. Till date, its agricultural productivity is one of the lowest in the country, leading to rural poverty, low nutrition and migration of labour.

The change in the political culture and improvement in the law and order situation has started reversing the process of migration of skilled farm labourers, who had turned Punjab and Haryana into the country’s granary. Nitish Kumar believes that Bihar’s hungry bowl would turn into the bread basket of the country.

He feels the Seeds Bill, as drafted now, is too favourable to the multi-national genetically modified seed producers and “is brazenly anti-farmer”. In a communication to the Prime Minister Manmohan Singh and Agriculture Minister Sharad Pawar he asserted that the Bill in its present form would lead to unrestricted commercialisation of varieties in public domain and would make seeds expensive with doubtful qualities.

He advocated the cause of the public sector which states that its seeds are not only affordable but also scientists take keen interest in inter-acting with farmers to improve the seed quality and farm output. “The cost of private sector seeds runs into hundreds or several thousands rupees in case of hybrid seeds while public sector seeds are affordable,” he added.

Further, taking up the cause with Bill Gates who visited some villages in the State and met farmers, the Chief Minister averred, "The Foundation has shown interest in seed improvement in the agriculture sector. Wherein, this new road map aimed at triggering processes of development in agriculture and allied sectors.

The State is trying to revolutionise the farm sector by creating self-help groups (SHG), many being led by women. Nalanda has emerged as the pioneer. The District Administration and the Agriculture Ministry have also come forward to help farmers in finding markets for their produce. Many multi-national marketers (MNC) have show interest in bulk purchase of vegetables and fruits from the state.

The SHG workers have been trained by the Rajendra Agriculture University, Pusa in Samastipur in raising new kinds of crops, which have table value in big cities and they are also trained to think in innovative ways. In a pilot project at Nalanda’s Anantpur village women have taken to mushroom cultivation after getting training. They also have become trainers for other villagers.

Another village Sohdih has taken to organic farming of potato, onion and other vegetables. Many marketers have booked their products even before the crops matured. Also, pprivate and cooperative sectors are being encouraged to establish markets, enter into buy-back arrangements and purchase directly from the farmers.

Farmers are being organised along the enterprises to establish economy of scale and to act as a collective voice to safeguard their interest. This includes excursions into processing and marketing centres of excellence in the country, formation of farmer interest group and federating them at the various levels.

This is not all. Co-operative marketing is being introduced in the area of fruits and vegetables on lines of milk or dairy. Efforts are also being made to make farmers aware of the market demand of agricultural commodities. To counter the MNCs, seed production under the public sector is being revived. Seed-village programme has been introduced for seed production through farmers’ direct participation.

The Bihar Rajya Beej Nigam and Pusa Seed Society have taken up buy-back seeds scheme. Private seed companies have been told to ensure availability of latest technology to the farmers and also to ensure fair competition with public sector seed companies for the benefit of the farmers.

The existing Krishi Vigyan Kendras (KVK) have been made main centres in view of their utility as centre of excellence in spreading agricultural knowledge to the rural masses. They have been asked to cater to post harvest handling of the agricultural products and develop entrepreneurial skill among the rural youth. The KVK’s will function in five “mission modes” on honey bee, seed production including seed villages, conservation agriculture, integrated farming and vermi-compost.

The Chief Minister is also inviting investments in agro industries.  His aim is not only to make the State a prime farm cultivation place but also create job opportunities to check migration from the State. His aim is to make Bihar the backbone of national economy.

The State has 56.03 lakh hectares net cultivated area and the gross cultivated area is 79.46 lakh hectares. About 33.51 lakh hectare net area and 43.86 lakh hectare gross area receive irrigation from different sources. The State is formulating plans to utilise the optimum area to increase production of traditional crops like paddy and wheat to many cash crops and table vegetables. Organic farming is to be promoted in a big way.

The State produces 152 lakh tonnes of food grain and 131 lakh tonnes of non-food (cash) crops. It estimates that with some correction in management of farm sector it could be increased by over 50 per cent. As it stands, Bihar farmers still lead in khaadi production. This gives additional income to at least 25 per cent of the farmers. This area is also to be intensified.

Undoubtedly, the Bihar experiment has much potential. If it succeeds it would change the basic economic concepts the country has been pursuing for the last 20 years. ---- INFA

(Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 18 March 2011

Power  Situation May Turn Critical

URGENT ENERGY SECURITY PLAN NEEDED

By Shivaji Sarkar

The tsunami has brought nuclear catastrophe to Japan but it is likely to take India several decades back in its energy security plan. Thus, it calls for a new power policy with stress on de-centralised renewable energy.

Importantly, nuclear energy has never been either a safe or economic option. The Fukushima tragedy has effectively proved it. Clearly, as the nuclear energy policy has to go for a review, limited availability of coal could trip mega power plans. An acute shortage of domestic coal is threatening to destabilise new power generation projects in which developers have already invested about Rs 75,000 crore.

The country has not shown much interest in creating clusters of renewable energy projects except for cosmetic purposes. It has reduced allocation for renewable energy research by Rs 42 crore from Rs 119 crore in 2010-11 to Rs 77 crore in 2011-12. The allocations on this head have been measly always.

The Labour Government in the UK has recently faced severe criticism for jettisoning alternative energy programmes and trying to promote large nuclear programmes largely on the coasts. The Government has been accused of collusion with large firms to promote nuclear energy at the cost of public safety. It has been blamed of sabotaging offshore alternative energy projects.

Though the Government in India has not done anything like that, yet its unwillingness to promote renewable energy sources on the plea that whether solar photo-voltaic or wind are not viable economic options raises questions about the intentions of the Government.

The thermal and nuclear power lobbies are strong enough to pressurise the Government to formulate policies in their favour. Plan after plan, the country has missed targets for creation of installed capacity. The Eleventh Plan would not be an exception and even it would be far from the target in the Twelfth Plan. By 2012, the Government has set a target of capacity addition of 78,000 MW. The addition would be less than half of it.

The country’s policy of reliance on large capital-intensive power projects is questionable. Many power projects are unable to meet their plant load factor (PLF). The overall PLF of thermal power stations during April-December 2010 at 71 per cent was less than what was achieved in 2009 at 76 per cent. A major reason has been the constriction on coal supply.

The new capacity of 15,000 mw is likely to be stranded for want of coal. Coal India Ltd (CIL) promised to supply 92 million tonnes of (mt) of fuel to these projects. Most of these were expected to be operational over the next one year. The CIL now says it can deliver only 13 mt. The available coal which needs to be blended with imported coal could produce barely 3000 mw of power.

The Central Electricity Authority (CEA) has told the power developer that it could not help them out. Even the import of coal would not be of much help. Domestic coal production could not increase as the Environment Ministry has not cleared 15 mining projects that could produce 210 mt.

The amendment to India’s nuclear law to facilitate US companies do business here is in their interest only. Being out of business in their home country, the Indo-US nuclear deal provided them a life-saving device. If New Delhi allows them to go ahead with light water reactors (LWR) of the Fukushima kind, it should remain prepared for the repeat, possibly a worse one, of the Bhopal-type tragedy caused by the US company, Union Carbide.

A major objection to such reactors has been their high requirement of water. It has been one of the reasons for erecting nuclear plants near the sea. But the risks that sea-side reactors like Fukushima face from natural disasters are well-known. Indeed, this became evident six years ago, when the Indian Ocean tsunami in December 2004 inundated India's second-largest nuclear complex, shutting down the Madras power station (MAPS). Even plants in Britain are situated just a few metres above sea level.

The nuclear plants are also not eco-friendly as they are touted to be. The huge quantities of water that LWRs consume for their operations become hot-water outflows, which are pumped back into rivers, lakes, and oceans raising water temperature telling heavily on aqua life.

Besides, the fuel, uranium, is in short supply from domestic sources. And international prices are high. Thus, its operation cost is higher and not low as the nuclear industry propagates. Another perpetual cost is managing the waste for at least 5,000 years. A difficult proposition that Fukushima blasts has exposed. Much of the Fukushima radiation is from the exposed waste dumps.

Indian nuclear operations so far are limited, whether in research or power projects. Further, these are operated by Government agencies, which adhere to high safety norms. The foreign companies compromise on these aspects for raking in high profits.

In the present Budget, there has been moderate rise in allocation to Rs 7602 crore from Rs 6534 crore. But the raise is mostly for research purposes. No proposal for generation has been made. It has to come, as per Government plans, from foreign investors along with all its risks.

As of now a thaw is certain. The thrust in the course of time has to be new energy sources. The claim that renewable alternatives are an illusion is at variance with facts. Germany has installed more wind power capacity than the entire current UK nuclear capacity and is adding to it at a rate equivalent to more than one new reactor a year. In 2009 alone Germany installed solar photo-voltaic systems with capacity equivalent to approximately four nuclear reactors, and it looks like the 2010 figures will be much higher.

India needs to learn from proper quarters and need not succumb to US pressures to formulate its power policy. The lack of thrust is preventing the alternative energy sector from thriving. Large companies and distributing agencies would of course not like the new energy concept as each housing cluster could create their own system and ultimately democratize the power sector.

This could also give rise to local level small service industries. This would again be an anathema for large monopoly houses. Limitation of natural resources, be it coal or uranium has to force mankind to look for dependable non-toxic energy options. The cartels may delay the process as they are doing in UK but they cannot prevent it.

In sum, India may remain a laggard again as it has been in many developments, if it does not learn from the experiences of countries like Germany. ---- INFA

(Copyright, India News and Feature Alliance)

Events & Issues

New Delhi, 28 March 2011

Spectrum Scam

TRANSPARENCY VITAL

By Col. (Dr.) P. K. Vasudeva (Retd)

The media report about the peculiarly one-sided contract between the Indian Space Research Organisation (ISRO) and a private entity called Devas, wherein satellite transponders and a wide swathe of frequency spectrum were leased out for a fraction of the latter's current commercial value, once again brings into sharp focus the need to constitute an body that will oversee the allocation/leasing of spectrum.

The Comptroller and Auditor General (CAG) is asking questions from the Department of Space in this regard. It believes, on a presumptive basis, more than Rs 2 lakh crore might have been foregone by the exchequer as a result of the contract. Eventually figures might vary, but the revenue loss cannot be overlooked. Notwithstanding the Government annulled the contract and the Defence Ministry asked why it wasn’t consulted on this serious security issue. Such losses have to be prevented in future.

Importantly, in purely economic terms, wireless spectrum is no different from oil or gas field, coalmine or even plain Government land. The common feature is Government ownership and the constantly changing commercial value. For example, the S-band frequency used to have some value, this dropped to almost nothing when the technology changed but, with another change in technology, it has once again acquired value.

It was partly in recognition of this that the Government constituted a committee to advise it on spectrum pricing two years ago. It will be argued by some that such committees do not serve the purpose for which they were intended. While there is some truth in that, going by the principle of something is better than nothing, the time has surely come to dilute the absolute power of the Government in such matters --- be it a resource, under the land, over it or above it --- by introducing a system of checks.

Who knows, what's been going on in the Defence sector, which is squatting on huge amounts of spectrum? Who would have thought that the Department of Space, which is directly under the Prime Minister, would have been so careless? Under any shroud of secrecy, costly mistakes can be made, even when there is no mala fide. Secrecy cannot be compromised. The last 63 years bear ample testimony to this.

In a sense, what needs to be done is to introduce a well-regulated market for spectrum, which is the composite name for a range of frequencies that are put to different uses. Such a market will ensure reasonably accurate price discovery and it will be superior to the current system where private information, Ministerial discretion and plain negligence can and do lead to thoroughly undesirable outcomes.

The Government needs to create a well-regulated market for spectrum, which will ensure accurate price discovery. It is time India moves to a system where prices of scarce resources are determined by the market rather than by a command-control-corrupt model. 

One of the premises of the economic reforms that Prime Minister Manmohan Singh initiated when he was Finance Minister during 1991-96 was that bureaucrats would no longer manage businesses. A sub-set of this was the non-negotiable requirement that they do not set prices because, as everyone knows, price distortions are a major reason for the misallocation of resources.

But habits die hard, especially when they can be beneficial as well. So it should come as no surprise, even if it causes some dismay that the Telecom Regulatory Authority of India (TRAI) in formulating pricing of 2G spectrum, used by the current set of mobile phone companies, should have decided that prices are best left to the markets.

As a result it has not provided a long-term solution to pricing a scarce resource; nor does it address issues that queer a level playing field. What it does is to create more confusion in an industry already bogged down by various scams.

The calculations are based on a number of assumptions that leave too much room for bureaucratic interpretation. It also seems to have ignored the fact that the recent auction of 3G spectrum has firmly established that the cost of a resource such as spectrum should be determined through a market-based mechanism.

Instead of suggesting such a mechanism, the telecom regulator has stuck to linear calculations. In May 2010, TRAI said that 2G spectrum should be allocated on a pro-rata based on the 3G price. Nine months later, after a review by four external consultants, it has thrown up another figure. Perhaps another review by a different set of experts would suggest a new price. Rather than relying on some mathematical equation, TRAI should have found a way to put the spectrum in the market place.

Thus, it suggested the Government should collect a one-time fee from operators with 2G spectrum at the rate of Rs 1,769 crore per MHz of spectrum up to 6.2 MHz and Rs 4,571 crore per MHz for anything beyond that. This will cost the telecom firms about Rs 16,000 crore, according to Government estimates. Over the next few years, this could go up to Rs 40,000 crore, when the operators go for renewing their licences.

While there is no denying that spectrum should be priced at contemporary levels, asking operators to pay with retrospective effect seems incorrect. Phone companies can trade off spectrum requirements with additional investments in infrastructure such as cell sites; their assessment of how much spectrum they will seek is therefore conditioned by the price of the marginal spectrum and the marginal investments they need to make.

Arbitrary price setting, especially one that disregards these economics and dynamics, can cripple the industry and push it towards a structure comprising a small oligopoly, just three or four firms, instead of a more robustly competitive market with eight or more players. The former would encourage collusion and the consumers' happy hours would be over. It is time India moves to a system that allows prices to be determined by the market rather than a Soviet-style command-control-corrupt model.

The Government is now thinking of bringing industry top guns, prominent bankers and former regulators on board in order to amend the entire financial sector norms and also to suggest ways to fortify its supervision system for checking frauds and irregularities. The panel would be responsible for reviewing and updating the entire financial sector regulations. According to sources, lawyers will also be included in the group and a Supreme Court judge might chair it.

Looking at the growing number of scams, the need to rewrite financial sector regulations has become more relevant. Important legislations like the RBI Act, framed in 1934, Insurance Act of 1938, Public Debt Act of 1944 and Securities Contract Regulation Act of 1956 are some of the old financial rules that need to be rephrased. It is never too late to carry out reforms. ----- INFA

(Copyright, India News and Feature Alliance)