Events & Issues

New Delhi, 12 May 2010  

2^nd Green Revolution

THE WAY OUT FOR FARMERS?

By Dhurjati Mukherjee

There is much talk in recent times about the need for a second green revolution as the country will have to increase its agricultural output by over 340 million tonnes by 2020 in the face of an increasing demand by a growing population. Recall, that the first green revolution was limited to only five crops with the main focus on wheat and that too in a few areas of the country, mainly Punjab, Haryana and western Uttar Pradesh. Studies have revealed that the cost-intensive green revolution helped the rich farmers while the small and marginal farmers did not receive the desired benefits and their conditions showed a decline.

In this backdrop, the government visualized a four-pronged strategy, the most important being the extension of the green revolution in the eastern region – comprising Bihar, Chhattisgarh, Jharkhand, eastern UP, West Bengal and Orissa. A sum of Rs 400 crores was allocated but experts believe it may be too meagre to really make a dent in these States, which are lagging behind in production and productivity. 

This apart, it has been proposed to organize 60,000 “pulses and oilseed villages” in rain-fed areas during 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health to enhance the productivity of the dryland areas. This is significant as with the per capita availability of water declining, the dryland areas could resort to pulses and oilseeds production, both of which are heavy in demand and the output needs a boost, for which Rs 300 crores allocation this current year appears reasonable.  

Additionally, there is need to sustain the growth achieved in the green revolution areas by improving soil health, water conservation and management. Climate resilient agriculture, field research and experimentation are vital. An allocation of Rs 200 crores is apt but much depends on the work of the agricultural scientists and extension officers to ensure implementation of the steps suggested.    

However, whether these proposals would be able to reach the small farmers and make a dent to the whole of the agricultural sector remains to be seen. The focus on agricultural research has to be field-oriented so as to ensure efficient use of resources and conservation of soil, water and ecology on a substantive basis along with introduction of newer technologies, encouraging production and use of bio-fertilizers and application of bio-genetics for improved plant and horticultural products. Then only can the second green revolution can become a reality.

Even the 11^th Plan emphasized on certain measures for taking agriculture to a higher trajectory of 4 per cent annual growth. For this to become a reality, the budget has rightly emphasized on making technology and credit available to the small farmer at the grass root level. The steps outlined in the Plan are: improving water management, rainwater harvesting and watershed development; reclaiming degraded land for cultivation and focusing on soil health; bridging the gap through effective extension at the grass root level;  diversifying into high-value outputs, fruits, flowers, medicinal plants, bio-diesel etc.; providing easy access to credit at affordable rates; and improving the incentive structure and functioning of markets.

Former President, Dr. A. P. J. Kalam, realized the potential of Indian agriculture and highlighted this in various forums. While there is unanimity that the spread effect of the second green revolution must reach the farthest centres of the country, some have rightly said that it should ensure financial inclusion of the small and marginal farmers, whose numbers continue to grow over the years.

Certain other aspects such as agri-marketing in a globalized environment, frontier areas of research and development and technology transfer and extension, irrigation and water planning, food processing and diversification of agricultural products need to be given attention. It is significant that the problems of small and marginal farmers, who constitute the major segment of the farming community and who are neglected, need the help and support.

The promotion of agro processing centres in the rural areas is an imperative need. It would result in the minimization of post-production losses and production of value-added products for consumers at affordable prices. The question of reducing wastages and the improvement of storage has also been stressed as the second element of the agricultural growth strategy. If necessary, private sector participation would need to be ensured, specially in developing agro processing in a major way. It cannot be denied that the private sector has played a significant role as developers of new crop varieties, specially hybrids, and providers of high quality seeds. It is now necessary for the government to encourage and provide incentives for collaborative research for developing products.

Agricultural development could be possible through the following measures: new and innovative technology for enhancing production and for resource conservation; encouraging farmers’ cooperatives as is being done in Gujarat and Maharashtra; massive skill training and entrepreneurship development; value addition of agricultural products, at the farmers’ level and good marketing network, including development of future market. It is understood that the Indian Council for Agricultural Research (ICAR) has set up around 200 experiential learning units at 43 agricultural universities in different parts of the country to impart such training. 

To start with there is a belief that the second green revolution should be made possible in the rain-fed areas so as to improve the income levels of the distressed farmers. The main challenges obviously lie in reaching new technologies to such farmers, providing them necessary credit and improving their incomes through better infrastructure and marketing strategies. Positive steps are necessary and these are: strengthening the existing Krishi Vigyan Kendras (KVKs) and setting these up in all the blocks of the country to reach all sections of farmers in boosting production, facilitating adoption of improved knowledge on production, value addition and marketing and extending all types of help through adoption of improved knowledge on production, value addition and marketing.

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But the crucial aspect is that returns from agriculture have to be monitored so that the farming community is not put in a precarious situation and mounting debts do not lead them to suicide. Even in Punjab, where the average farm size is 3.8 acres which in 2.5 times the average size of Indian farms, the farmers income is far less than the starting salary of a Class IV government employee. The big question is: how will farmers continue to be involved in cereal production with dwindling incomes, more so with the ongoing controversy on fertilizer and electricity rates on the increase? Thus, there is an imperative need to enhance subsidies and substantially enhance the minimum support price for various crops. Higher rates would ensure better returns for farmers and there is no reason to raise a hue and cry about increased food process.

In the not-to-distant future, India can definitely emerge as an agricultural power if the proposed strategy is implemented. We need to overhaul socio-economic and farm policies to remove the rural disparities and poverty or at least bring it down steadily. The face of rural India must be transformed keeping in view the need to improve the living conditions of the masses. Diversification strategies must be evolved to bring more value-addition while agricultural productivity is geared up. One may conclude with an estimate by eminent economist Dr. C. Rangarajan, in 1982, that a mere one per cent increase in agricultural output led to a 0.7 increase in national income and it may be added that most part of this enhanced income obviously reached the grass-root levels of rural India. ---INFA   

(Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 7 May 2010

Rising Rupee

GOOD OMEN FOR INDIAN ECONOMY

By Shivaji Sarkar

Is it good or bad news? The rupee is appreciating against the dollar and other major currencies. Should one celebrate or not is the big question before the citizens, the industry and the government.

The performance of the Indian rupee against the dollar has improved significantly in the 2009-2010. The rupee has shown tremendous strength against the US$ as the rupee-US$ exchange rate appreciated to Rs. 44.33 per dollar on April 16. In end-March last year it was Rs. 52.2 per dollar. In an overall estimate, the rupee has appreciated by 15 per cent in a year. According to the Economic Survey 2009-10, the main reasons for this appreciation is the significant change in the foreign institutional investment (FII) inflows, ($ 23.6 billion between April and December 2009), continued inflows under the FDI and NRI deposits, better economic performance of the Indian economy and weakening of the US dollar in the international markets.

However, there are different views. Exporters have an aversion for any raise in the rupee value. They have reasons--it affects their earnings. The exporters reasoning gets support from the industry body, the FICCI, which is in agreement with them. In contrast, the importers, including oil companies, heave a sigh of relief as the rupee rises. It lowers the import bill and helps stabilizing oil prices in the domestic market and reduces cost of operation.

Obviously there is a conflict of interests. These are, however, sectoral interests. So the next question is: Should the economic parameters be decided only by narrow vision? It cannot be. Some years ago, the former Prime Minister, Atal Behari Vajpayee, had said that he dreamt of travelling abroad with the rupee and the world market respectfully demanding it and not the dollar. This must be the vision.

Whatever the appreciation, the rupee however remains far below its value in 1996, when it was priced at Rs 35 to a dollar. Effectively this means that the rupee still has not appreciated and that its value was far higher only some years ago. In 1992, when the Indian economy was said to be gasping it was priced Rs 30.6. Thus, the hullabaloo about its appreciation is over nothing.

By April 2002, it had touched Rs 48.9 per US dollar. From 2002, the rupee reversed direction and appreciated every year, except in 2006, till it reached Rs 40 to a dollar in April 2008. Over 2008-09, as the global financial crisis unfolded, the rupee depreciated sharply to 50 to the dollar by April 2009. In comparison, the Indian trade account (oil plus non-oil) has been systemically negative over the past three decades from 1980-81 till 2010. The current account - goods and services business - has also been consistently negative from 1980-81 to the first nine months of 2009-10, except for the three-year period from 2001 to 2004.

The rupee’s gain should be a matter of pride, though there could be some hiccups. The world, including the erstwhile most powerful nations such as the US and the UK, is looking towards India for their own revival and sustenance. After all, someone has to lead the next global charge? The majority of the developed economies are either bogged down in the substantial quantities of debt that they desperately need to pay off, or weighed down by those elderly populations, such as Germany and Japan, who are weakening the consumption growth and leading to export dependence.

The consumers given the high poverty level are still found in India. It is understood that no economic growth can be sustained by exports alone. Domestic consumption boosts the process. While the US economy had that strength, India needs to bolster it.

Importantly, the country needs to take care of its low-value exports for sustaining some jobs. But the entire international trade is limited to 15 per cent of the GDP and has a mere two per cent share in the world trade. So its strength would not be judged on it. Instead, there is need to concentrate on other issues.

If India wants to be a super power, it can never achieve this dream if its currency lacks the strength. The concern remains simply because not all parameters are as strong as these seem to be. The current account deficit veers around 3 per cent at $ 12 billion. But that would remain so unless the country takes steps to strengthen the manufacturing side and go into high value exports.

It is also not appropriate to say that high rupee value affects exporters. It has helped the exporters as input costs have come down. Many Indian export businesses such as gems and jewellery depend on imports add value and re-export. Both the garment and textile business face some problems as prices are set in advance. In a global business, the country has not created the strength that it needs to. This weakness has to be overcome through policy changes.

Contrast this with the gain of fast-moving consumer goods (FMCG) companies’ benefits owing to raw material costs. Prices of many key ingredients of items such as soaps, detergents and hair oils and materials for packaging have increased in the international market by a whopping 34 to 40 per cent. A rising rupee would negate the impact of cost increases such as palm oils, used for making toilet soap.

Indeed, the gain possibly of a rising rupee is more in the long run rather than a short one. It also affects the Indian MNCs whose overseas subsidiaries lose notional value for the time being. But these are accepted as part and parcel of the business risk. These could never be fully hedged and should not be an argument for keeping the rupee value low.

Those seeking the Reserve Bank’s intervention forget that it has many ramifications. If it buys dollars it releases more rupees and this may add to the inflation. If it increases the interest rate it invites dollar deposits and that too further appreciates the rupee.

The dollar has to lose its shine as the US economy continues its downward journey. The rupee cannot be kept at an artificial low for long. It would rise against all international currencies. In sum, it should be treated as a welcome sign for the Indian economy.—INFA

(Copyright, India News and Feature Alliance)

Open Forum

New Delhi, 10 May 2010

A Letter To Every Indian

WHY ARE WE SO NEGATIVE?

By Dr. A.P.J. Abdul Kalam

(Former President of India)

Why is the media here so negative? Why are we in India so embarrassed to recognize our own strengths, our achievements? We are such a great nation. We have so many amazing success stories but we refuse to acknowledge them. Why?

We are the first in milk production. We are number one in Remote sensing satellites. We are the second largest producer of wheat. We are the second largest producer of rice. Look at Dr. Sudarshan, he has transformed the tribal village into a self-sustaining, self-driving unit. There are millions of such achievements but our media is only obsessed in the bad news and failures and disasters.

I was in Tel Aviv and I was reading the Israeli newspaper. It was the day after a lot of attacks, bombardments and deaths had taken place. The Hamas had struck. But the front page of the newspaper had the picture of a Jewish gentleman who in five years had transformed his desert into an orchid and a granary. It was this inspiring picture that everyone woke up to. The gory details of killings, bombardments, deaths, were inside in the newspaper, buried among other news.

In India we only read about death, sickness, terrorism, crime. Why are we so NEGATIVE? Another question: Why are we, as a nation so obsessed with foreign things? We want foreign TVs, we want foreign shirts. We want foreign technology.

Why this obsession with everything imported. Do we not realize that self-respect comes with self-reliance? I was in Hyderabad giving this lecture, when a 14-year-old girl asked me for my autograph. I asked her what her goal in life is. She replied: I want to live in a developed India. For her, you and I will have to build this developed India. You must proclaim: India is not an underdeveloped nation, it is a highly developed nation.

Do you have 10 minutes? Allow me to come back with a vengeance. Got 10 minutes for your country? If yes, then read; otherwise, choice is yours.

You say that our government is inefficient. You say that our laws are too old. You say that the municipality does not pick up the garbage. You say that the phones don’t work, the railways are a joke. The airline is the worst in the world, mails never reach their destination. You say that our country has been fed to the dogs and is the absolute pits. You say, say and say. What do YOU do about it?

Take a person on his way to Singapore. Give him a name – ‘Yours’. Give him a face – ‘Yours’. You walk out of the airport and you are at your international best. In Singapore you don’t throw cigarette butts on the roads or eat in the stores.

You are as proud of their underground links as they are. You pay $5 (approx Rs 60) to drive through Orchard Road (equivalent of Mahim Causeway or Pedder Road) between 5 pm and 8pm. You come back to the parking lot to punch your parking ticket if you have over stayed in a restaurant or a shopping mall irrespective of your status identity…. In Singapore you don’t say anything. Do you?

You wouldn’t dare to eat in public during Ramadan, in Dubai. You would not dare to go out without your head covered in Jeddah. You would not dare to buy an employee of the telephone exchange in London at 10 pounds (Rs.650) a month to, ‘see to it that my STD and ISD calls are billed to someone else’

You would not dare to speed beyond 55 mph (88km/h) in Washington and then tell the traffic cop, ‘Jaanta hai main kaun hoon (do you know who I am?). I am so and so’s son. Take your two bucks and get lost.’

You wouldn’t chuck an empty coconut shell anywhere other than the garbage pail on the beaches in Australia and New Zealand. Why don’t you spit Paan on the streets of Tokyo? Why don’t you use examination jockeys or buy fake certificates in Boston? We are still talking of the same you.

You who can respect and conform to a foreign system in other countries but cannot in your own. You who will throw papers and cigarettes on the road the moment you touch Indian ground. If you can be an involved and appreciative citizen in an alien country, why cannot you be the same here in India?

Once in an interview, the famous ex-municipal commissioner of Bombay, Mr Tinaikar, had a point to make. ‘Rich people’s dogs are walked on the streets to leave their affluent droppings all over the place,’ he said. ‘And then the same people turn around to criticize and blame the authorities for inefficiency and dirty pavements. What do they expect the officers to do? Go down with a broom every time their dog feels the pressure in his bowels?

In America every dog owner has to clean up after his pet has done the job. Same in Japan.

Will the Indian citizen do that here? He’s right. We go to the polls to choose a government and after that forfeit all responsibility.

We sit back wanting to be pampered and expect the government to do everything for us whilst our contribution is totally negative. We expect the government to clean up but we are not going to stop chucking garbage all over the place nor are we going to stop to pick up a stray piece of paper and throw it in the bin. We expect the railways to provide clean bathrooms but we are not going to learn the proper use of bathrooms.

We want Indian Airlines and Air India to provide the best of food and toiletries but we are not going to stop pilfering at the least opportunity. This applies even to the staff, who is known not to pass on the service to the public.

When it comes to burning social issues like those related to women, dowry, girl child,  and others, we make loud drawing room protestations and continue to do the reverse at home. Our excuse? ‘It’s the whole system which has to change, how will it matter if I alone forego my sons’ rights to a dowry’. So who’s going to change the system?

What does a system consist of? Very conveniently for us it consists of our neighbours, other households, other cities, other communities and the government. But definitely not me and you. When it comes to us actually making a positive contribution to the system we lock ourselves alongwith our families into a safe cocoon and look into the distance at countries far away and wait for a Mr Clean to come along & work miracles for us with a majestic sweep of his hand or we leave the country and run away.

Like lazy cowards hounded by our fears we run to America to bask in their glory and praise their system. When New York becomes insecure we run to England. When England experiences unemployment, we take the next flight out to the Gulf. When the Gulf is war struck, we demand to be rescued and brought home by the Indian government. Everybody is out to abuse and rape the country. Nobody thinks of feeding the system. Our conscience is mortgaged to money.

Dear Indians, the article is highly thought inductive, calls for a great deal of introspection and pricks one’s conscience too. I am echoing J.F. Kennedy’s words to his fellow Americans to relate to Indians. …‘Ask what we can do for India and do what has to be done to make India what America and other western countries are today’.

Let’s do what India needs from us.

Forward this to each Indian for a change instead of sending jokes or junk mails.

Thank you, Abdul Kalam.

(Kalam’s lecture in Hyderabad reproduced by INFA)

Political Diary

New Delhi, 8 May 2010

MPLADS: Open Licence To Loot

VOTERS PAISA DOWN POLITICAL DRAIN!

By Poonam I Kaushish

When gold speaks all tongues are silent. This maxim held sway as the curtain rang down on the second half of Parliament’s Budget session on Friday last. Clearly, happy days are here again for our jan sevaks after the double whammy bonanza of a five-fold pay hike and the Supreme Court’s seal of approval for the MP Local Area Development Scheme (MPLADS). No matter, that it’s the aam aadmi’s hard-earned money going down the political drain!

The break-neck speed with which our netagan collectively agreed to the massive increase in their pay to Re1 more than a Government secretary, read Rs 80,001 plus unlimited freebies was simply breathtaking. Buried in the euphoria was the vocal velocity our Right Honourables had unleashed to force adjournments in both Houses and bring Parliament to a grinding halt times out of number. Be it the IPL googly, phone-tapping scandal, DMK’s Raja 2G spectrum award scam, women’s reservation Bill et al.

The MPs glee knew no bounds when the Supreme Court served the icing on their cake: A five-judge Bench upheld the Constitutional validity of MPLADS under which MPs are allocated Rs 2 crore annually for development of their constituencies. Recall, the scheme had come under judicial scrutiny after a sting operation in 2005 showed some MPs, later expelled, allegedly demanding money from contractors to award work for projects under MPLADS. It gained currency following then Speaker Somnath Chatterjee assertion that the scheme was devised to "sabotage the emergence of panchayats, which were autonomous of the weight-throwing MPs and MLAs".

Sadly, by putting its weight behind MPLADS, the Supreme Court has simply given legitimacy to a scheme that is fundamentally unconstitutional. True, the Court is correct when it asserts that mere allegations of misuse of funds cannot be a ground for scrapping it given that both Houses have standing committees to monitor the scheme along with various levels of accountability for its implementation.

But at the same time it cannot ignore the harsh truth that funds meant for public good are siphoned-off to greedy private pockets. In a country which breathes bribe no work is done without palms being greased and ‘cuts’ incorporated into the cost and commission paid to those who matter. To the tune of mind boggling crores. Year after year for over a decade since the scheme’s inception by Congress’s Narasimha Rao’s Government in 1993.

Epitomised by BSP supremo Mayawati’s  directing her MPs in 2003 to part with a part of the “commissions” they made from their MPLADS funds for party coffers. She told them: “Arre bhai sub miljul kar khao”.  Adding, that even the most honest MP makes Rs 5 lakh annually by sitting at home. Last year, singer-turn-novice Trinamool MP Kabir Suman in a tell-all revealed, “Local leaders who already control Rs 400 crore of the panchayat samiti and zilla parishad monies, want the funds and won’t let me spend Rs 1 crore of the Rs 2 crore I receive annually on installing 44 deep tube-wells in my constituency.”

Think. An MP in connivance with the DM ensures a cut out of every scheme recommended by inflating the cost and taking kickbacks from the contractors. The babu is happy and he makes the MP happier. A smart duo nets up to a maximum of Rs one crore of Rs 2 crore and an honest duo a minimum of Rs 50 lakhs. Asserted one, it is a "kind of financial rehabilitation package for the political cadre." For their “protection”, or for other “services”. Demonstrating the urgent need to scrap the MPLADS.

Besides, the scheme is violative of Article 14 of the Constitution (Right to Equality) as it gives a sitting MP an unfair political advantage against their political rivals. As also, arbitrary powers to an MP without there being proper checks and balances, monitoring and accountability regarding the money being spent under it. In fact, arm-twisting by powerful constituents to distribute the work among favoured contractors was the norm.

Importantly, the Administrative Reforms Commission, headed by Veerappa Moily now Union Law Minister wanted the scheme scrapped as it “"seriously erode the notion of separation of powers.” Whereby it gave legislators a direct role in disbursing funds for capital projects and infringed on the rights of the local Government leading to a “conflict of interest” and serious accountability consequences.

In the present system, MPs decide how to spend the money and funds are disbursed through the district administration. Local bodies are neither consulted nor involved in the details of execution despite Articles 243G and 243W entrusting local bodies with the powers to prepare and implement plans for economic development and social justice. Questionably, should MP’s be administering funds and determining their specific resource allocation? Doesn’t it compromise the oversight function that legislators ought to play? Who should the voter hold accountable?

More. The Comptroller and Auditor-General was the first to expose the failure of MPLADS and the drain it is on the Exchequer in its two reports pertaining to 1993-97 and 1997-2000. Its 2001 report lucidly pointed out that funds were released without any correlation with their end use. The DC failed to obtain the utilisation certificate and inflated expenditure to the Ministry, based on the amount released to the implementing agencies without checking the UCs.

Many cases were found where money was sanctioned for maintenance of roads where none existed. There was underpayment of wages, fake muster rolls and bogus expenditure to the tune of 30%. All one needed was to pay a price and the money was yours for the asking. Anything was game. Shockingly, funds were used for projects prohibited under the scheme: memorials, office or residential buildings, commercial organizations, private or cooperative institutions, places of religious worship and purchase of inventory or stocks. Sadly, there is evidence of Parliament itself sanctifying violations.

In fact, the loot system has been perfected to such an extent that the CAG could detect only 13 cases of suspected fraud and misappropriation of funds in 7 States involving Rs 118.36 crore. It recommended scrapping MPLADS and wanted the funds  transferred to local Governments, as suggested by the National Advisory Council.

The most dangerous implication of MPLADS is that it offends the letter and spirit of the 73rd and 74th Constitutional Amendments which sought to create a third stratum of local Government in the country; Panchayats. State legislatures are now required to endow panchayats and municipalities ‘‘with such powers and authority as may be necessary to enable them to function as institutions of self-Government”

Look at the dichotomy. While we recognize that local Governments (Panchayats and Municipalities) are best suited to assess local needs and are better placed to respond to them than the State or Centre, they are starved for funds to perform their constitutionally assigned roles. While MPs, thanks to MPLADS enjoy the privilege of an uninterrupted yearly flow of funds to do the job of the panchayats.  Underscoring the need to devolve funds directly to panchayats rather than to the MPs.

This is not to suggest that the MP is not responsible or accountable for the development of his or her constituency. Rather, it suggests that the MP should do what he or she is best equipped to do. Instead of directly spending money on civic services an MP ought to be lobbying for funds from the Central Government to reach local bodies and pushing for appropriate policy decisions. To ensure that services reach their constituents, the MP should monitor the functioning of the local bodies and leave them to provide the civic services demanded by their constituents. Alternately, allowed to have a say in locating projects under official schemes for health centres and schools.

What next? It is time to have a serious rethink on continuing the scandalous MPLADS. Notwithstanding, the Supreme Court verdict. Morally, Parliament has to come clean on MPLADS. The public need to know how it has been (mis)used all these years and what is being planned to correct it. In sum, even as our Right Honourables rejoice over their hefty pay packets and Rs 2 crore per year to boot, it is time to apply the brakes. Cry a halt to the open licence to loot and scoot of Rs 1590 crore annually! --- INFA

(Copyright, India News and Feature Alliance)