Events & Issues

New Delhi, 13 January 2024

National Rail Plan

WIDER EXPANSION CRUCIAL

By Dr. Oishee Mukherjee 

Amid the decade when there is a cry the world over to lower emissions, it is but necessary that more attention to be given to railways. Its recent plans have evoked much interest. As there is a crisis in getting a confirmed ticket in the place and class of one’s choice, there is an imperative need for wider expansion of the railway network in India. 

It was heartening to hear that there has been a decision to run 3000 additional mail, express and passenger trains in the next four-five years to tackle the huge problem of wait-listed passengers who cannot undertake their journeys. Obviously, it is expected that the expansion would be in the routes where there is lot of congestion, mainly in the metros of Mumbai, Delhi, Bangalore, Kolkata, Hyderabad and various tourist centres. Currently, around 500 crore passenger trips are undertaken annually and this is likely to touch 1000 crore in the next five years.   

The second major development follows from the first, i.e. to increase the number of trains, there are plans to augment track capacity. In fact, recently Prime Minister Modi flagged off 6 Vande Bharat Express trains and 2 Amrit Bharat trains. The railways proposed a Rs 4.2 lakh crore mega plan for multi-tracking of seven high density corridors – Delhi-Howrah, Mumbai-Howrah, Delhi-Mumbai, Delhi-Guwahati, Delhi-Chennai, Howrah-Chennai and Mumbai-Chennai – for introduction of faster passenger trains and quicker movement of freight. This is, necessary as the speed of trains is quite slow compared to global standards and very slow compared to the Western nations.  

The Railways Ministry from 2024-25 to 2033-34, plans to lay third and fourth line on different stretches of these corridors according to the traffic demand. The plan also includes construction of flyovers and underpasses, among plans to introduce more modern trains like Vande Bharat with sleeper facilities that have a maximum design speed of 220 kmph. In all 233 projects have been identified that need to be undertaken on these corridors, which have breached the saturation point and 200 such works will be completed in the first phase—in next three years. 

Union Railway Minister, Ashwini Vaishnaw, outlined the transformative impact of seven multi-tracking projects valued at Rs 32,500 crore, which received Cabinet approval. These would propel the Railways into a new era of efficiency and capacity expansion, with combined length expected to add 2,339 km to the existing rail network. 

The envisioned outcomes are not limited to mere expansion but extend to relieving congestion and enhancing operational efficiency, across 35 districts, spanning States of Andhra Pradesh, Bihar, Gujarat, Jharkhand, Maharashtra, Odisha, Telangana, Uttar Pradesh, and West Bengal. Apart from the infrastructure enhancements, these projects are anticipated to augment freight capacity significantly, accommodating approximately 200 million tonnes of additional freight traffic annually. 

Though in tune with the National Rail Plan (NRP) for India, 2030, overall capacities are being augmented, both in passenger and freight traffic, there is need to think about affordability of all sections of the population. Indian railways has a huge network but the average speed is one of the slowest in the world. The need for faster trains can’t be doubted but fare structure must be such that it’s affordable, at least to the middle-income sections. The fare of Vande Bharat trains is higher than those of the Shatabdi and the dynamic fare system makes it still higher. 

Under the Rajdhani pricing system, the base fare jumps by 10% for every 10% seats booked, with a ceiling of 50% hike above the base fare. Unless the dynamic fare structure is changed, travel by faster train will remain high and beyond the capacity of a large section of people.  Thus, in planning more mail and express trains, there should be faster trains like Amrit Bharat Express trains that are affordable to the lower income sections and EWS facilitating their travel to their native villages. 

It can be admitted that a major milestone in the journey of the railways is the development of automatic electronic block signalling systems at railway stations. The automatic signalling system has been installed in 530 kms during 2022-23, as compared to 218 kms during 2021-22, registering an increase of over 143 per cent. This takes a lot of care in increasing line capacity and safety measures on tracks. 

The government in the past few years also focussed on doubling of tracks with the purpose to reduce or minimise train traffic. In budget 2023-24, Indian railways has allotted Rs 30,749 crore just for doubling of railway tracks. This has not only improved operational efficiency but also allowed for smooth movement of trains.  

In building the much-needed infrastructure, huge financial requirements are necessary for which resource generation needs to be found. In this regard, upgradation of stations and giving space to the private sector has been a major initiative. With over 400 redeveloped railway stations, these spaces are now mostly congestion-free with non-conflicting entry and exit points. As per figures available, Andhra Pradesh has 72 stations for transformation, Bihar 86 and Gujarat 87 railway stations for upgradation among other states. Another source of generating revenue is upgrading the retiring rooms, with deluxe facilities, and increasing their number so that both people on official work as also tourists can use these. 

Though there could be a rise in passenger and freight fares, which have already happened, there is a need to look into amenities, which are much below standards. The unclean toilets of mail/express trains, specially in the sleeper coaches, not to speak of the unreserved ones, has to be improved with proper maintenance to ensure adequate supply of water during the full course of the journey. 

A more disturbing development is the occurrence of frequent accidents, which even after a lot of progress in automatic signalling has not been curbed. Special efforts need to be given in ensuring that accidents do not happen, and the unmanned tracks cannot be allowed to continue. 

Finally, modernisation and expansion of railways in the country is imperative and has the potential to boost up economic growth and bring about social integration. The priority given to railways has been a right decision of the ruling dispensation and it is expected that the network, performance, speed, passenger facilities and safety measures would be taken care of in the coming years.  ---INFA 

                   (Copyright, India News & Feature Alliance)

REWIND

New Delhi, 11 January 2024

Opposition Is Coming Alive

By Inder Jit

(Released on 21 October 1980) 

New aspects of our national life have caused thinking democrats greater concern in recent months than the state of the Opposition. Mrs Gandhi, many have felt over the months, was lucky in getting a massive majority in the Lok Sabha on a minority mandate. But she has been luckier having on Opposition which is not only divided and in disarray, but to quote a veteran observer, is “stupid and impotent”. Happily for these democrats, the situation is beginning to change and look up. It is no longer as hopeless. After months of distressing inactivity and despair, the Opposition is showing signs of coming alive again. Moves are afoot for joint action against the Congress (I) “misrule and abuse of power”--- and Mrs Gandhi’s failure to provide a Government that works. Simultaneously, efforts are on both openly and behind the scenes for forging some understanding among the Opposition parties. Unlike in the past, no one talks these days of Opposition unity or alliances. The emphasis is now on realism and pragmatism --- at least in talk. 

Mrs Gandhi showed between March 1977 and the end of 1979 how an Opposition leader and party could function. The 1977 poll cast her in the dumps. She was written off by almost all the party leaders, political analysts including myself, and the people at large. Even prominent Congress (I) men quietly went along with the assessment. But Mrs Gandhi determinedly rode back to power with a bang. Many were bitterly critical when following her defeat she turned up unannounced at an Arab national day reception in response to an invitation sent as a matter of courtesy. In retrospect, however, the message she put across was clear --- a message which eventually helped her to win back the support of the Muslims at home. (Remember, the banquet hosted in honour of Mrs Gandhi by the Saudi Ambassador in New Delhi on the eve of the Lok Sabha poll.) Not a few ridiculed her visit to Belchi atop an elephant and her efforts to woo the Harijans. Here again she proved right and the others wrong. 

Many scoffed at Mrs Gandhi’s decision to split the Congress early in 1979 and felt that this would hasten her end politically. But here, too, her strategy yielded rich rewards. Few then saw the real purpose behind her surprise move. It, no doubt, cut her strength in the Lok Sabha to less than half and ended her party’s pre-eminence as the official Opposition. But it gave her a well-knit and committed task force. (“What counts in a fight ultimately”, analysed a Congress (I) leader, “is the strength of the stick, not its length”.) Thereafter, she utilized every opportunity in Parliament to hit at the Janata Government. Mr C.M. Stephen’s disenchantment with the Congress (U) was exploited to get for her group one of the Lok Sabha’s most effective Opposition leaders ignoring the fact that he had strongly supported her expulsion from the party. Much else followed and Mrs Gandhi shrewdly got a great deal of mileage out of both the Kanti affair (thanks to the tactless Morarji-Charan Singh correspondence) and her expulsion from the Lok Sabha -- and imprisonment. 

The Opposition has of late started planning popular campaigns to assert its identity --- individually or collectively. A six-party front has been formed at the national level comprising CPM, CPI, Forward Bloc, RSP, Lok Dal and Congress (U) for united action on three specific issues initially --- rising prices, communalism and civil liberties. The state units have been left free to formulate their own programmes and also to choose the participants in the light of local compulsions. The Front has, for instance, persuaded the Janata Party to join hands with it in Maharashtra even though it has chosen to keep aloof at the national level. More than one lakh persons have courted arrest in Maharashtra and Tamil Nadu to protest against rising prices. The Bharatiya Janata Party has, meanwhile, launched on its own a movement against the National Security Ordinance all over the country. 

Simultaneously, efforts are on among erstwhile constituents of the Janata to revive the old party as an alternative to the Congress (I). (Contrary to a popular impression, the six parties constituting the Left Democratic Front have not come together. “We are not a front or an alliance for fighting the elections or forming a government”, EMS told me. “Haste, as the Janata experience shows, can become counter-productive. We, therefore, prefer to move slowly.”) A convention of four middle-of-the-road democratic parties --- Congress (U), Lok Dal, Janata Party and the Janata(S) was held in Patna on October 7 for evolving a national alternative. An eight-man committee was formed to sound the respective party High Commands on the desirability of their merger. Significantly, it warned the four High Commands that if they failed to bring about a merger by December 31, another state level convention would be held in January to take a concrete decision. 

The outcome of the move is anybody’s guess. But it should not be dismissed out of hand simply because the initiative has been taken at the state level. Important persons, who enjoy status in their respective parties, are actively involved in the new exercise. They include Mr S.N. Sinha (Janata), Mr S.N. Mishra (Lok Dal), Mr Abdul Ghafoor (Congress-U) and Mr Bhola Prasad Singh Janata(S). Furthermore, the exercise is not isolated. Exploratory talks in the same direction have taken place in Uttar Pradesh, Maharashtra, West Bengal, Rajasthan and Karnataka. Similar conventions are proposed to be held in the other states. True, a section of the leaders in all the four parties is opposed to the move. Some even tried to sabotage it at the start. (Mr Madhu Limaye, for instance, got Mr Karpoori Thakur to stay away from the Patna convention. Mr S.N. Mishra and a few others, however, went ahead.) But the second-line leadership, by and large, is not averse to the idea. 

Most of the younger leaders in the four parties appear agreed on the broad diagnosis of the disease. The Janata, they argue, collapsed because of the clash of personal ambitions between Mr Morarji Desai, Mr Charan Singh and Mr Jagjivan Ram. Several others played the game of the three leaders in the hope of promoting their respective interests. (Most ministerial plums in free India have gone to people on the basis of who is with whom and not strictly on the basis of merit or who can handle which job.) Things, it is said, may not have come to the tragic pass they did in 1979 if only an interesting suggestion informally made by the President, Mr Sanjiva Reddy, to the three top leaders had been accepted by them. Mr Reddy, I now learn, proposed at one stage that all the three might hold the office of Prime Minister for equal periods in turn as had been done in Japan among the members of the ruling alliance on occasions. 

What of the remedy? Opinions vary. The younger leaders in the Lok Dal, Congress (U) and Janata (S) feel there should be no difficulty in their coming together with the Janata, thanks mainly to the common Congress culture, provided the “oldies” are willing to call it a day. But the latter is easier said than done. There is little likelihood of either Mr. Charan Singh or Mr. Jagjivan Ram and other top Congress (I) leaders retiring. Mr Morarji Desai alone has indicated his decision not to accept any office. This has enabled the Janata to be one up on the others and to think and plan in terms of offering itself as an alternative to the Congress (I). As a Janata leader summed up: “We have the potential, even if we lack the inherent strength today. We offer a young, collective leadership. We have a clean image. And, we are working hard to build up an organisation from the grassroots. We shall be glad to welcome back old friends and seek the cooperation of new ones on a selective basis.” 

Ultimately, however, the battle of the alternative, so to say, will not be won by any fresh unity or the creation of an alliance or front. The outcome will depend upon the ability of the Janata with or without the other parties, the BJP, which has homogeneity and dedicated cadres, and the Left Front representing the Communist culture to win back credibility among the masses and to function effectively as the Opposition. Parliament offers a powerful forum for exposing the Government and influencing the people. Mrs Gandhi used it to great advantage. But the Opposition has not been able to push the Government into the dock even where overwhelming facts, as against allegations, have been laid bare in various scandals. Issue after issue is raised each succeeding day by the Opposition in the two Houses. But nothing is done to pick on one or two and follow them up effectively. Not enough is being done outside either. Coming alive is fine for the Opposition and welcome. But this by itself will not do. The Opposition must plan its strategy and tactics. It has still much to learn and unlearn. ---INFA

(Copyright, India News & Feature Alliance)

Spotlight

New Delhi, 11 January 2024

Of Poverty & Inequality

POLL PROMISES DON’T USHER CHANGE 

By Dr. S.S. Chhina

                                (Senior Fellow, Institute of Social Sciences, New Delhi)                                           

The New Year demands introspection by the ruling dispensation whether the world’s largest democracy has made the progress in the right direction. Since 1952, when the first general election was held in India, the process to make promises got started. All the political parties made a number of these, mainly concerned with removing unemployment and creating social and economic equality in the society. But inequality, poverty and unemployment went on thriving, similar to the surge in poll promises. Actually, inequality of income is itself an impediment for development and prosperity. The impression is given in every election that there would be perfect equality, full employment, and prosperity after these are done. But the situation has sadly remained more or less the same as it was seven decades earlier. 

Income inequality, unemployment and poverty -- all the three factors are closely related with each other, wherever there is unemployment there is poverty and this unemployment is based on income and wealth inequality. When there are very rich, which are few on one side and large number of poor on the other, the level of effective demand is low. The rich people save much, but whatever is not spent it does not become the income of the others. The gap between total income and total expenditure went on thriving. 

When the previous goods and services do not sell, there is no need to prepare for the new ones, no need of more employment, rather there is retrenchment among the existing employed people. It leads to the vicious cycle of poverty. People are poor as they do not have employment. As the income is declining, the demand is declining, surplus production leads to unemployment. This vicious cycle is required to be broken for sustainable development, but it’s possible only if there is equality of income and wealth. 

The countries having equality of income are prosperous, there would be full employment, social security and higher rate of development along with sustainable development. But the countries having inequality are suffering from stagnation, unemployment and poverty along with other economic and social evils. In 1929, when the world was facing big depression, its cause was diagnosed as the lack of effective demand and the remedies suggested were aimed to raise the demand either through credit, instalments and generation of jobs in public works, because private entrepreneurs were not coming forward because of the declining demand. The then Soviet Union was the only socialist country at that time, but the great depression had no impact on its economy and it was developing with a satisfactory rate of growth. 

After Independence, measures were introduced to create equality of income and wealth. The Constitution prescribes establishing the socialistic pattern of society in its directive principles of State policy. Public sector enterprises were started. But inequality went on rising. According to a report in 1939-40, 1% of the population was holding 20.7% of the wealth. But at present because of the surge in inequality, 1% of the rich population is holding 58.4% of the wealth. 10% of rich population is holding 80.7% wealth of the country. In 2017, the 73% of wealth rose for only 1% of population, whereas 67 million that includes 50% more poor population, realised only 1% hike in their wealth. 

At the time of independence 75% population of India was engaged in the profession of agriculture but there was the ‘Zamidari’ system. There were landlords holding thousands of acres of land on the one side and the land-less tenants on the other side. The Zamindari system was abolished and the ceiling on the upper limit of land holding was imposed ostensibly with two objectives, one to create social equality and second to make the best use of land. But was equality in respect of ownership of land created? No, the situation presented by Punjab shows that the objective of equality could not be realised by this act and similar is the situation in other States. 

Punjab is the dominant farm state. In all 33% of the holdings possess less than five acres of land, but this number of holdings are having only 2.36% area of the State. On the other side there are only 5.28% of the holdings which have their farms above 25 acres of land but they possess 21.68% area of the State. The aspect of inequality of wealth is palpable in the ownership of the land holdings. The large holdings do not belong to the peasants  but with the persons who are engaged in other professions than farming. It also vindicated the concept that imposing of ceiling on land could not yield the desired results. 

When the upper ceiling on land holding was imposed, it was suggested by many social reformers that ceiling on urban property should too be imposed, but this suggestion could not be approved on the plea that it would adversely affect the industrial growth, where India was already lagging much behind. 

But this yielded another form of inequality in the country. Some of the residential houses are sprawling in acres, whereas there are four/five families living in 100-yard plots. There are 80 million people in the country that do not have any house, and are spending their lives in huts on the roadside. They have no reach to purchase the land and the prices of these plots are thriving because of the fact of inequality in income and wealth. 

The situation explained above makes it clear that entrepreneurship in Indian population has its constraints because of inequality. Everybody can not venture to start his enterprise even if he/she is capable with his/her abilities. Inequality in income, minus the large number of able entrepreneurs to contribute for the development of the country and welfare of society. The entrepreneur is mainly interested in securing his interest and protect himself from any financial risk, where regular sale of his product is the most crucial factor. But the low effective demand discourages new entrepreneurs. Number of times the concessions for the foreign investment are announced, but it had been observed that the response of the foreign investors is dismal only because of the low demand for number of products which are beyond the purchasing power of the large number of consumers of the country. 

As inequality of income hampers the employment opportunities it generates the number of social problems also like drug addiction, child labour, exploitation of women, cheating and theft and snatching. All such evils are stalemates in the interest of the new entrepreneurs. Child labour is a big menace in the country. There are about 30 million child labourers and the number is further thriving. Unemployment , poverty, debt, illness of the parents are the causes for this menace. Thus, child labour cannot be called employment, rather it is a crime. Nowhere in the developed countries such child labour is visible, as it’s due to equality in income. There is a need of statesmanship, to galvanise a proper economic system that may assure the alleviation of inequality. Only then will the other reforms follow automatically. Promises are only hollow. ---INFA 

(Copyright, India News & Feature Alliance)

Open Forum

New Delhi, 10 January 2024

Economic Concerns 2024

FOOD PRICES, POOR PVT INVESTMENT

By Dhurjati Mukherjee 

The economy is always a matter of debate and the new year has started with concerns expressed by members of Reserve Bank of India’s monetary policy committee about volatile food prices. The vegetable price inflation has been manifesting since November and this is expected to continue in the months ahead. As Michael Patra, RBI Deputy Governor rightly pointed out that food prices in India “are the underlying component of inflation” and this is expected to continue in 2024. Moreover, climate will remain a key influence on food production and inflation as El Nino conditions are expected to continue.  

Another important factor is that debt has been increasing fast and the International Monetary Fund stated that it may reach “100% of debt to GDP ratio” by the year 2028. However, the Finance Ministry clarified that the roll-over risk is low for domestic debt and the exposure to volatility in exchanged rates tend to be on the lower side. Reports indicate that the government will have to either trim expenditure or target higher revenue for the current fiscal as the nominal GDP is estimated to grow slower. Moreover, the fiscal deficit may reach 6% of GDP. Also, high interest rates, fiscal consolidation and slowing global growth are not quite favourable.     

Recently, Trinamool Congress leader, Derek O’Brien, stated that “from 2014 to 2023, the price of rice has gone by 56%, wheat by 59%, milk by 61% and tur dal by 120%”.  According to him, 21 lakh workers from West Bengal have not received wages for the last two year under the MGNREGA. Around 150 farmers are committing suicide every day and India has 28 crore poor people, ‘the highest for any country’. 

In spite of all this, optimistically speaking the overall economic signs are quite encouraging with the year-to-year data rise in the stock market estimated at over 18% while the increase from October may be around 14-15% and the growth momentum maintained. Forecasts have been quite positive with the IMF prediction that India is expected to grow above 6% over the next five years, driven by strong investment, strong economic fundamentals, digitalisation-driven productivity gains despite widespread global uncertainty. The IMF, in its article IV consultation report observed a robust public capex agenda, which will support India’s wide-ranging infrastructure needs, is expected to boost growth while crowding-in private investment and growth is projected at 6.3% in both FY24 and FY 25. 

“Noting that India is one of the fastest growing economies globally, the directors called for continued appropriate policies to sustain economic stability and for further progress in key structural reforms to unleash India’s significant potential”, as per the report. Further it pointed out that India’s economy showed robust growth over the past year though headline inflation has, on average, moderated although it remains volatile. But what is surprising is that whether high GDP growth can be considered the index of true development though urban-based economists are always found to glorify the high rates of growth? 

An important point that needs to be mentioned here is the lack of private investment and the economic strength is manifest only from public sector investment. It is intriguing that in spite of various incentives given by the present government, private investment has not picked up to the desired scales and is much lower compared to the other emerging economies of the world.  

This apart, assessing economic growth is just not the incomes generated but the job potential of the investment made. In this connection, one may refer to the central bank’s December round of consumer confidence which reveals that consumers lowered their expectations of employment and prices as they expected a change in the scenario. It is difficult to foresee or forecast any perceptible change unless there is a surge in investment by the private sector in 2024. There is also need to give a renewed thrust on manufacturing though a number of initiatives have been undertaken by the present government. 

It cannot be denied that while attempts to strengthen the economy are in full swing, there is a need to analyse whether the benefits are reaching all segments of society. The moot question at this juncture is whether convictions along with the positive settings will encourage businesses to take risk and come out with substantial investments. It is well-known that the long-term weakness in India has largely been due to the shyness of the private sector, specially in manufacturing, though we see enough investments in safe sectors such as health and education. Even after the pandemic, investment by the private sector has not picked up to the desired extent. Moreover, employment-oriented industries are more or less ignored by the corporate sector. 

To attract private investment, one may suggest that areas in backward regions should be earmarked for private entities with `necessary infrastructure to facilitate setting up of employment-oriented factories, which could not just open up job opportunities for the skilled youth but also help change the complexion of the area. This is indeed crucial for overall economic growth because unless the youth are gainfully employed, the concept of true development is lost. 

The disturbing fact is that the focus of the economy is on the urban sector which, directly or indirectly, is benefiting the rich and the middle class. This resulted in consumption increase but most economists believe consumption demand has indeed been problematic with the top 40% of households going for excessive expenditure. This points to the fact that the lower 20% of the population is facing financial crisis due to stagnant income and is not in a position to increase even its basic consumption, that is, of healthy food for themselves and their family. This can be viewed from the fact that agriculture grew at a mere 1.2% in the second quarter and full fiscal growth is likely to remain subdued as kharif food production is estimated to fall and rabi crop faces stress. 

In fact, an economic analysis of per capita allocation of resources would reveal that the rural sector, specially the backward regions, inhabited by scheduled tribes and lower castes has been grossly neglected. As suggested earlier, some of these areas could be transformed into industrial hubs for small-scale manufacturing or even tourist attraction centres. There needs to be a plan which should be prepared at the panchayat level and sent to the Centre via the state government for infrastructural support. Both objectives of backward area development and employment generation could be achieved through these initiatives. A fresh look is required. ---INFA 

(Copyright, India News & Feature Alliance)