Sunday Reading

New Delhi, 26 May 2009

Tourism Industry

OPENING HOME TO TOURISTS

By Radhakrishna Rao

The concept of home stay is slowly but surely gaining popularity in the tourism industry. It could be explained as a fall out of the cultural and ecological degradation associated with the conventional sightseeing and leisure industry. Not only is home stay more affordable in comparison to an accommodation in a rated hotel, but exerts less pressure on the environment around. Besides, it also makes for a far more enjoyable and memorable experience.

According to industry wizards, the concept of home stay is rapidly catching up in India and is becoming popular with both the domestic and international tourists. With business looking good, by the end of the year, a big tourist company is planning to bring in around 1,000 houses across the country into the “home stay” network. The concept will offer a unique package of a vast range of activities ranging from yoga, ayurvedic treatments and massages, backwater rafting in Kerala to exploring tiger trails in Periyar tiger reserve.

In the gorgeously beautiful Kodagu (formerly known as Coorg) district of Karnataka, known for its magnificent mountain ranges, bubbling water streams and flourishing coffee plantations and orange orchards, many enterprising coffee planters, who have inherited ethnically vibrant traditional houses, have entered into the home stay business in a big way by making use of their assets.

Similarly, in the historically-vibrant north-western Rajasthan, former princely rulers dotting this desert State have converted their sprawling and beautiful palaces and residences into
heritage home stays. Not to be left behind “God’s Own Country” as the ever-green Kerala is known in the tourist blurb has popularised the home stays in a big way by falling back on the bounties of nature.

Significantly, many small farmers in the hilly Waynad, in northern part of Kerala have taken to home stay following crop failures in the region. In fact, the extra income they now earn has helped them see through the bad days. The popularisation of home stay here is thanks to the sustained efforts’ made by local non-profit organization called Uravu, which in Malaylam stands for spring.

As part of its plan Uravu has adopted a village, Thrikkaipet, where farmers are being encouraged to convert a part of their houses for home stay   “Our aim is to make the village a self- sustaining one as through home stays, a large part of the income goes to the locals. A visitor here will be the guest of the village” says Uravu’s T. Sivraj. Significantly, tourists from Europe including Italy, Switzerland, Germany and France have merged as patrons of home stays in this non-descript village in the mountainous north Kerala.

Way back in 2002, the ice-covered Ladakh entered the home stay map with the active encouragement of California-based Snow Leopard Conservancy, an organisation that strives for conservation of natural resources through the active involvement of the local community. Before home stay was introduced, tourists used to travel to Leh and make day trips to Ladakh. However, with the home stay gaining in popularity, travelers to this once forbidden icy region can explore the ravishing beauty of the region by going in for home stays. And for the local population the change is more than welcome as it implies additional income from a booming tourism industry.

In Palghat district of Kerala, known as the rice bowl of the State, many traditional houses standing in the midst of flourishing paddy fields have been converted into home stays which offer local culinary delights and cultural programmes for both the Indian and foreign tourists. Similarly, a once unknown island village off Kochi in Central Kerala has become a thriving tourist destination following the introduction of Home stay.  

Interestingly, local fishermen in the village of Kumbalangi run home stays with a high degree of professional acumen. These home stays offer not only local delicacies, but also an insight into the local way of living and culture. Initially, the locals were skeptical of tourism, but it has clicked, according to the Great Indian Tourism Planners and Consultants International.

Apparently, even well-heeled tourists who normally prefer to stay in star hotels are now plumping for home stays, for “the heck of it”. A spokesperson of the travel and leisure industry says that home stay has now become one of the biggest crowd pullers, making it one of the most dynamic sector of the travel industry. Home stays were earlier popular with foreign tourists but nowadays there has been a huge interest evinced even by Indians too” says Mayura Balasubramaniam, a project support officer for tourism programme with the United Nations Development Programme (UNDP). The UNDP has tied up with Tourism Ministry to promote rural tourism in 36 villages across 20 States.

Apparently, home stays vary from the so-called basic home stays with a rural family or a tribal hamlet for Rs.100 a night to luxury or heritage stays within havelis, mansions or plantations and estates, the charge for which is anything above Rs 5000. In addition, there are around 10,000 home stays with an environmental theme.

The benefits of home stays clearly include staying with the locals (owners of the property), eating local cuisine and taking part in various traditional and cultural activities including mehandi artistry and weaving coil baksets etc. As of now, Kerala, Karnataka, Himachal Pradesh and Rajasthan are in the forefront of popularizing home stays in the country. The change is also an indication that these days most urban middle class and upper class Indians are aware and well-traveled. They want to experience their own country.

The bewitching beautiful Indonesian island of Bali, known for its magnificent Hindu temples and ravishingly beautiful beaches promoted home stays in a big way in the 90s, following an outcry over the negative cultural and environmental fall out of the traditional tourism.

Despite the global recession and fear of terrorist attacks, home stays in the country are moving from strength-to-strength. Kerala is one such example. The Indians go there mainly during October, April, May and December. And, surprisingly, the tourist industry there saw more than double the number of domestic tourists, after Mumbai mayhem. Not surprisingly then the Tourism department of Kerala as part of its plan to promote responsible tourism in the stay is encouraging the home stays in a big way. ---INFA

(Copyright, India News and Feature Alliance)

Round The States

New Delhi, 28 May 2009

Manmohan’s New Team

Raw Deal For Some States

By Insaf

Manmohan Singh’s team is finally in place. After three days and several rounds of hectic brainstorming, he and Sonia Gandhi have hand-picked a total tally of 78 ministers comprising 33 of Cabinet rank, seven Ministers of State with independent charge and 38 Ministers of State. Various conflicting claims based on caste, region and community have been taken into consideration. However, it has left some of the bigger states unhappy, even angry with the raw deal they have received. Andhra Pradesh is a prominent case in point. Despite sending a record number of 33 Congress MPs, the State has just one Cabinet Minister in S. Jaipal Reddy and five Ministers of State. The total strength of AP Ministers in the previous UPA Government was six and this has remained unchanged despite the State sending many more MPs. In sharp contrast, neighbouring Karnataka returned only six MPs. It has got five Ministers of whom three are of Cabinet rank. S.M. Krishna, Veerappa Moily and Malikarjun Kharga.

Equally hurt by the raw deal are UP, Bihar and Orissa. Even though UP has been given five Ministers of State, it has none in the Cabinet. UP expected to get better representation since the Congress Party’s efforts to revive itself in the State spectacularly paid off. The party, no doubt, faced a dilemma in how to pick Salman Khursheed over Sriprakash Jaiswal who has now won thrice in a row. But there was a way out. Manmohan Singh and Sonia Gandhi could have easily picked up Mohsina Kidwai, one of the senior-most Congress members and formerly a Cabinet Minister from UP. This would have given greater representation to women apart from making the Muslims happier. There is no Muslim representation in the Cabinet from UP, Bihar or West Bengal where the community voted for UPA in large numbers. A group of prominent Muslims had pleaded for at least 11 Muslim Ministers. Eight States have drawn a blank: Chhattisgarh, Arunachal, Mizoram, Manipur, Sikkim, Nagaland, Tripura and Goa.

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Mamata Focus On Bengal

Having turned the tables on the Left Front in West Bengal, Trinamool Congress leader Mamata Banerjee will not let her new responsibility as Union Railway Minister derail her bigger plans. She has made it known that she would have little time for Delhi and in fact, took charge of her ministry in Kolkata on Tuesday last, the first time a Union Minister has done so. Her focus is to end the 30-year rule of the Left Front in the State in the 2011 Assembly elections. Thus, for her the core issues are the SEZs, agriculture and industry. The TMC is thus preparing to resume the agitation against land acquisition by the State government, giving top priority to the 400 acres acquired from ‘unwilling’ farmers in Singur for the Nano car plant. As for violence-ridden Nandigram, peace seems to be returning. Mamata will be able to further test her strength in the State, with byelections  to 12 Assembly seats, which fell vacant with the MLAs getting elected to the Lok Sabha this year, and elections to the Municipalities and the Kolkata Corporation next year.

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Mindless Violence In Punjab

Punjab was set ablaze in dmindless violence by low-caste Sikhs protesting against a bloody clash over gurdwara offerings in which Sant Niranjan Das of the Jalandhar-based religious sect Dera Sachkhand Ballan was injured and his second in command killed, in far off Vienna on Sunday last. Three persons were dead and many injured in Monday’s violence. The Army had to be called out and curfew imposed in Amritsar, Jalandhar, Ludhiana, Phagwara, Phillaur and Hoshiarpur as protestors played havoc with law and order. Thousands of passengers were stranded as protestors’ disrupted traffic on the Grand Trunk Road and the Ludhiana-Amritsar rail section. The Railways had to cancel or re-route almost 50 trains as a precautionary measure after agitators set ablaze two trains in Punjab and squatted on tracks. The Election Commission had to put off polling for Nurmahal Assembly seat from May 28 to June 12. Even adjoining Himachal Pradesh was affected with the administration stopping state-run bus services to Punjab, after two buses were torched. So was the case in Haryana, which witnessed violence in Ambala. Worse, hundreds of Vaishno Devi pilgrims in Jammu and Kashmir were stranded in Katra. While Chief Minister Parkash Singh Badal convened an all-party meet condemning the Vienna incident, Prime Minister Manmohan Singh was prompted to appeal for peace. 

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Naveen Sets Record In Orissa

Naveen Patnaik has set a record in Orissa by becoming Chief Minister for the third time in a row. With a landslide victory in the recent Assembly elections under his belt, 103 seats in a 147-member Assembly, the 62-year-old BJD chief Patnaik is expected to have smooth sailing in the House. Not only does he not have an opposition, but more importantly there is hardly a leader in its ranks who can be a real challenge to him. Most veterans from either the Congress or the BJP got defeated. Given that as it may, Patnaik has decided to reward loyalists for the commendable performance of his party. He has brought in people loyal to him, such as Suryo Narayan Patro and his advisor Pyari Mohan Mohapatra to head important ministries. He, however, has kept some key portfolios with himself, particularly the home ministry, to keep a watch on the fight against the Maoists, who have spread their base over 15 of the State’s 30 districts. Reports are that the Maoists are preparing for a phased armed confrontation and this could be Patnaik’s biggest challenge other than meeting the high expectations of his people in the State.

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Tamil Nadu’s Family Ties

In Tamil Nadu, the family triumphs over the party insofar as the DMK chief M Karunanidhi is concerned. The drama over Cabinet berths between the Congress and the DMK ended on Sunday last, with Karunanidhi coming around to accepting seven berths as against his original demand of nine posts. It now comes to light that more than the bargaining with the Congress, the DMK was caught between conflicting claims of five aspirants, all supported and blessed by different members of Karunanidhi’s extended family. While MK Azhagiri, 58-year-old son and first time MP had the backing of Karunanidhi’s second wife, Dayalu Ammal, his daughter, Rajya Sabha member Kanimozhi had the backing of her mother, and Karunanidhi’s third wife Rajathi. Grand nephew, Dayanidhi Maran apparently had Karunandhi’s elder daughter Selvi’s support. And, though former Minister for Surface Transport and Shipping TR Baalu and A Raja four-time MP and former IT Minister are not in the family, they are said to be close to Rajathi and Dayalu households respectively!---INFA

(Copyright, India News and Feature Alliance)

Round The World

New Delhi, 27 May 2009

Manmohan’s 2nd Term

VARIED DIPLOMATIC CHALLENGES

By Prof. Chintamani Mahapatra

(School of International Studies (JNU)

The verdict of the Indian electorate is downright clear. People want a stable central government. As far as the timing of this election is concerned, the internal conditions have not been as bad as the external surroundings.

India’s domestic political and economic scene has been relatively strong and stable, as indicated by the campaign speeches, election issues and political debates. But the country went for a general election in the midst of a global recession that robbed hundreds and thousands of their jobs. India’s immediate neighbourhood has never been as chaotic and dangerous as in the recent past. Political upheaval in Nepal, counter-insurgency operations by Sri Lankan Army culminating in a human disaster, anti-Taliban operations of the Pakistani Army in the midst of rising terror-related deaths and destruction in that country and much more.

Going beyond the region, New Delhi faced a diplomatic challenge from the US, reflected in President Barrack Obama’s speech at Prague where he articulated the need for India to sign the NPT; for the US Senate to ratify the CTBT; for the State Department to convince India, among others, to sign and ratify the CTBT and jump-starting of negotiations for a fissile material cut off treaty.

Now that Prime Minister Manmohan Singh is stoutly seated on the saddle for a second term in office, his diplomatic challenges are varied and many and not so easy to confront with. First of all, he has to come to terms with the reality that the new US President has less time and a distant ear to hear about India or US-Indian relations. It is more than five months since his inauguration and President Obama has yet not found a suitable person to head the US Embassy in New Delhi. For whatever reason, the new Indian Ambassador presented her credential to the US President only very recently. Compare this with the promptness with which Obama appointed a Special Envoy for Afghanistan and Pakistan.

Secondly, there is little fanfare in Obama Administration’s stated goal to implement the path breaking US-India civilian nuclear cooperation agreement, but more diplomatic vigour in Obama’s intention to promote his non-proliferation agenda. Indian officials have already taken note of Obama’s Prague speech and appear slightly worried about the incoming diplomatic storm in bilateral relations over the issue of CTBT/NPT. Thirdly, the new Obama Administration has already implemented his plans against outsourcing of jobs by US companies adversely affecting the Indian economy.

Prime Minister Singh, of course, need not worry too much about Obama’s non-proliferation agenda. The CTBT ratification will require two-thirds support in the US Senate. The Democratic Party does not possess these many seats and the Republican Senators are unlikely to be on board in adequate numbers. The second nuclear test by North Korea and the Iranian intransigence on the nuclear issues will make it difficult for President Obama to buy support for his CTBT ratification proposal in the Senate. The Russian and Chinese nuclear modernization efforts are incessantly moving forward and many experts in the US still feel that nuclear tests would be necessary to maintain the safety and reliability of the country’s nuclear deterrence.

On the other hand, Obama’s stated support for a global zero on nuclear weapons provides an opportunity for Prime Minister Singh to join hands with him to establish a nuclear- free world. Former Congress Prime Minister Rajiv Gandhi was the first world leader to propose a detailed plan of action for making the globe nuclear free at the United Nations. Prime Minister Singh should not have any problem in teaming up with Obama in principle on this issue.

A pledge for supporting global zero nuclear policy will not affect negatively India’s current nuclear strategy. After all, Obama has openly stated that he would continue to support and strengthen America’s nuclear deterrence capability so long as nuclear weapons exist. Singh can have a similar approach. However, the real challenge will be to steer the civilian nuclear cooperation agreement to its fruitful end in the midst of political storm that may be raised at the time of the debate on non-proliferation issues.

Likewise, the outsourcing policy of Obama is unlikely to be of a longer duration. A leader of any other nation would take similar steps to meet the challenges posed by the ongoing economic crisis. The Singh government has also put in place several packages to stimulate the economy and will be unable to bring about further economic liberalization until the current crisis is effectively tackled. The economic friction between India and the US would not be to an extent that would rupture the relationship.

The real challenge rather comes from the skyrocketing US-China economic relations. In fact, it poses a strategic challenge to India. China runs a trade surplus vis-à-vis the United States that is several times more than the total US-Indian trade. China’s leverage over the US foreign policy decisions related to our region thus has been increasing year by year. This challenge can be tackled only by increasing Indian leverage in the US—political, strategic or economic—to prevent Beijing from dictating Washington’s Asia policy in general and South Asian policy in particular.

Besides relations with the US and nuclear proliferation related issues, Prime Minister Singh will have to confront the worsening political situation in Pakistan. The war against Taliban fought by the Pakistani Army is not such a bad development. But its consequences are uncertain. The same Taliban that Pakistan used to enhance its strategic presence in Afghanistan and to foment trouble in Kashmir appears to have become an enemy of the Pakistani State. But Islamabad continues to view India as the main national security threat and thus cannot possibly antagonize those who have made common cause against New Delhi in the past. Thus, understanding the current confusing state of affairs in Pakistan and adopting an appropriate strategy to deal with positive or negative fall-out is a real big challenge for India.

The Sri Lankan government has won the civil war and the LTTE has been reportedly decimated. New Delhi’s position on the Lanka issue has been controversial in South India. How New Delhi handles its policy towards Colombo in the post-civil war phase will be an important part of evolution of India’s relations with its immediate neighbours. Same can said about developments in Nepal. An emerging global player and dynamic Asian economy and the superpower of South Asia cannot afford to see gradual decline of its influence in its neighbourhood.

Thus, the coming five years will make Singh’s foreign policy plate overflowing with issues, events and challenges. ---INFA

 (Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 30 May 2009

Agenda For FM

TIME TO PUT BANKS ON LEASH

By Shivaji Sarkar

The banking sector has come in for severe criticism by the highest authorities – Finance Minister Pranab Mukherjee and Reserve Bank of India. It is not a coincidence that the two were speaking in tandem almost simultaneously.

Mukherjee was concerned that the high-cost of banking has hurt the industry. The RBI in its report of the high-level committee to review the Lead Bank Scheme (LBS) is also critical of the high cost and several other inefficiencies of the banking sector. The report, says Deputy Governor Usha Thorat, deprecates high profit orientation, poor staffing and infrastructural support. The banks even lack telephone connectivity. This has virtually put the 40-year-old concept of lead banking – banking for social purposes and access to all particularly the poor – in jeopardy. The objective of LBS is greater banking and credit penetration for inclusive growth. This has been severely affected.

In the initial years, after 1969, when the LBS was introduced, the expansion of bank branches to unbanked and under-banked areas and credit planning was pursued. Its dilution started with the process of liberalization in 1991. The number of commercial branches was 5175 in June 1969. It rose to 46550 in 1991. Till 2001, only 609 more branches opened taking the tally to 47,159. During the next six years, till 2007, a reversal of the trend was witnessed and 247 branches were shut lowering the total to 46,912. The figures include private sector banks.

The growth of the economy, if it was there, should have been seen in the penetration of the bank branches. Ironically it has just been the opposite. Along with this, banks started resorting to devious and complicated ways to prevent people from opening their accounts. The report is silent on its effect. But over the years it has also seen a rise in micro-finance, in other words penetration of the mahajans. It has made financing costlier for the poor and the unorganised sector.

What the Finance Minister says implies that the banking sector has become less efficient and is not sensitive to the needs of its users. Interest rates are high and difference between the prime lending rate and deposit rates remain wide. This increases the earning of the banks but at a tremendous social cost. It also leads to the belief that the banks are not efficient trustees of public money. The banks have forgotten that the money they lend or take for deposit is not theirs. It comes from the people and has to go back to them.

They have not been able to justify the high charges that they levy on the slightest pretext. And, over the years they have not come out with one plausible explanation for the wide spread that they have in interest rates. Whenever they projected reduction in the interest rates, it resulted in penalizing the depositors not with only lower rates, but in many cases it also meant eating into the deposits as they levied unjustified charges. They have only been penalising the people to cover up their shoddy working ways. Poorer the services have become, the banks have resorted to dumping higher charges. For instance, stopping payment on Rs 100 cheque costs Rs 80 to the issuer.

The banks have shunned from extending the services to the weaker sections even for priority sector lending, meant for the poor. The RBI committee observed that government-sponsored schemes in the total priority sector lending were only 3.88 per cent in terms of number of accounts and 0.43 per cent in terms of amount outstanding. In terms of credit to weaker sections, the share was 7.8 per cent (number of accounts) and 2.73 per cent (outstanding).

The banks have on the contrary often been blaming the priority sector lending for their so called losses. The figures exemplify that the poor have better credit rating but banking service is denied to them. The committee noted that large sections of rural population and urban poor still do not have access to banking facilities.

Another dichotomy is that LBS and banking for the poor has remained the responsibility of the public sector banks. The share of private sector banks have grown since 1991, the committee says, “There is need for them to be more involved in LBS”.

The sheer distance to banks has prevented thousands of households in 158 districts, where programmes for financial inclusion were introduced, from operating their accounts. This factor has also inhibited the use of bank accounts for distribution of government payments, particularly those under the National Employment Guarantee Act (NREGA). It is an indictment and candid admission that the benefit of the scheme is not reaching the rural workforce owing to the casual approach of the banks.

A proposal has been made to organize sensitization workshops for bank managers and staff to train them in credit counseling. The hurdles have also been noticed. The staff earmarked for such work is utilized for carrying out general branch banking activities. In reality, the banks have reduced staff to such an extent that the managers are functioning like clerks reducing the official goals to paper only. Though the Thorat committee has suggested empowering the managers in several ways it is silent on how a manager should   function with inadequate staff.

The committee wants inclusion of IT to expand banking to remote areas and introduce a weekly banking system for villages with a population of 1000. The suggestion is good but the constraint is that the IT system has not penetrated that deep.

Another flaw of the recommendations is that it does not suggest to banks how to reduce their cost burden and improve their branch to staff ratio. While its concerns are well taken, its suggestion of including State governments for extension and implementation of bank services looks less plausible. In theory, this happens, but State governments particularly in States have other concerns motivated by politics, caste and sub-regional manipulations. It needs to ponder whether it would be useful for the purpose.

Besides, the government, which is the owner of the banks, can not move everything through the RBI, which has a mere regulatory role. It has to take tough actions to put the banks on a leash. Profit is fine, but that alone cannot be the basis for functioning of PSU banks. Mukherjee has to play a more active role to bring the PSU banks out of the morass and simultaneously give more social sector responsibility to private banks. He has also to ensure that each time a procedure for streamlining is introduced it has made the banking less efficient and more expensive. The task is not difficult if only the government does not succumb to various lobbies within the system. Since the Finance Minister is well versed with the gravity, he must act fast.--INFA

 (Copyright, India News and Feature Alliance)