Gist of The Hindu

Gist of
The practice followed by the collegium of
the higher courts, before a candidate is
recommended for elevation and a panel of names
is sent to the government for appointment, is as
follows. The Chief Justice initiates a consultation
with the legal fraternity. Speaking in confidence
to senior advocates and fellow judges, to both the
bar and the bench, a long list of possible
candidates for elevation is prepared. Based on
these recommendations the Chief Justice then
invites the candidates to determine their
willingness to be considered. If the candidates are
willing then they are required to furnish details
about themselves, such as their contributions to
the law especially with respect to important
cases, the extent of their legal practice, their
annual income, their legal history, etc. These
details are then processed by the court
administration, during which time, I suppose, the
court gets inputs from relevant investigating
agencies about whether they have any legal
proceedings against the candidate, etc. other
inputs that may make them ineligible for
Based on (i) the recommendations of the
leg al fraternit y, (ii) the willingn ess of the
candidate, and (iii) the hard data relating to the
legal practice and public standing of the
individual, the file is placed before the collegium.
The collegium then scrutinises the information
on record and, based on the highest standards of
judicial scrutiny, arr ives at a decision on whom to
recommend and whom to ignore, from the names
before it. Not every name that comes up through
this process gets the approval of the collegium.
The shortlist prepared by the collegium is then
sent up to the government for its approval. This
I am told is the standard process that is followed.
Gopal Subramanium’s ca se , I suppose, went
through the same process.
The principle for such empanelment was
enunciated by the Supreme Court in the case of
P.J. Thomas, nominee for the Central Vigilance
Commission (CVC), whose candidature was
rejected in 2011 when it described in detail the
process to be followed in the appointment to a
positi on of author it y. Appointments to the
Supreme Court, I expect, fall into this category.
Here is what the judgment said — (vi) The
empanelling authori ty, while forwarding the
names of the empanelled officers/persons, shall
enclose complete information, material and data
of the concerned officer/person, whether
favourable or adverse. Nothing relevant or
material should be withheld from the Selection
Committee. It will not only be useful but would
also serve larger public interest and enhance
public confidence if the contemporaneous service
record and acts of outstanding performance of the
officer under consideration, even with adverse
remarks is specifically brought to the notice of
the Selection Committee. (vii) The Selection
Committee may adopt a fair and transparent
process of consideration of the empanelled
Assuming complete information was
available to the collegium, we now have to
consider the contrasting positions of the
collegium and the government. Based on the
same facts considered by the collegium, the
government is at liberty to give an alternative
reading and argue for the unsuitability of a
particular candidate. This is legitimate since the
political lens of the government may be at
variance with that of the collegium. The
disagreement, at this stage, has to be on political
grounds and not on facts. The procedure then
requires the government to place its
disagreement before the collegium which can
either restate its earlier recommendation or revise
it in the light of the arguments made.
This second stage is constitutionally
sacrosanct since contained in it is the core
principle of the separation of powers. The
colleg ium has to deliberat e on this con trary
opinion of the government and decide whether,
by accepting or rejecting it, the independence of
the judiciary is eroded or enhanced. Both parties
must give clear reasons for their positions so that
the final decision taken can educate the public on
the core issue of separation of powers. The
government’s reasons and the collegium’s views,
as well as the facts of the matter, should be made
public to serve, as the Supreme Court in the P.J.
Thomas case said, the larger public interest.
Three basic issues for our democracy
emerge from this controversy. The first is the
issue of public attitude. Are we prepared to let it
lie, to blow over because another headline has
grabbed its place or are we prepared to interrogate
it further? This is not a partisan issue, of UPA
versus NDA, since it perhaps points to a growing
disregard for our constitutional culture. When the
confi dent iality
colleg ium’s
recommendation is treated lig htly, wh en the
intelligence reports are leaked, when the
President’s confidenti al acti ons are public
knowledge, we have reason to be concerned about
the disregard for constitutional propriety. Will
those who leaked information be punished to
restore the sanctity of the process? Or are we
moving toward what Paulo Friere calls the
“culture of silence”?
The second issue concerns the doctrine of
separation of powers. By segregating the names,
did the President give primacy to the executive
over the judiciary? Was this a question of political
expediency trumping constitutional principles?
With whom should the final decision, on who
should be elevated, lie? The executive or the
judicial fraternity? Since the Emergency, when it
had touched its nadir, our democracy has been
struggling to restore the balance between the
executive and judiciary.
We hope that the moment has not passed
for the collegium to enunciate on the principle of
finality. Mr. Subr amanium’s withdrawal also
highlights one of the knottiest problems of
political philosophy. Should he have been
pragmatic, and withdrawn to fight another battle,
or principled, since a foundational principle was
at stake? Is the cost of standing up for the
principle too high, undermining other values that
are also important, or is it necessary to stand up
for them regardless of the cost since it would take
society to new and higher morality?
The Polar Satellite Launch Vehicle (PSLV),
in its twenty-sixth consecutive successful flig ht
and the fourth wholly commercial launch, put the
French earth observation satellite, SPOT-7, as
well as four tiny satellites from Germany, Canada
and Singapore, into orbit with characteristic élan.
On hand at Sriharikota to witness the launch was
Prime Minister Narendra Modi. In a forceful
speech immediately afterwards, the Prime
Minister lauded the space programme and held it
up as an example of what the country could
achieve, observing that “our space scientists have
made us global leaders in one of the most
complex areas of modern technol ogy.” India
must, he said, share “the fruits of our
technological advancement with those who do
not enjoy the same .” He calle d for the
development of a “SAARC [South Asian
Association for Regional Cooperation] satellite”
that would provide useful applications and
services to neig hbouring countries. China, it
should be noted, already uses its space
capa bilit ies for soft -power diplomacy, one
example being an agreement with Brazil to jointly
build earth observation satellites. Mr. Modi
clearly intends to deploy India’s space technology
as part of the country’s diplomatic outreach.
However, before turning the prime ministerial
suggestion into hardware, ISRO would do well to
get inputs from the other South Asian nations
about their pressing needs that could be
effectively addressed with space technology.
The Indian space agency is well-placed to
provide the sort of assistance that the Prime
Minister envisages. From its inception, the raison
d’ê tre of the Indian space programme has been
the harnessing of space technology to meet the
day-to-day necessities of a developing nation.
Today, India is able to build and launch satellites
for met eorolog y, earth observati on and
communications. Mr. Modi paid a tribute to the
vision with which the space programme was
established, pointing out how modern
communications, space imaging and disaster
management capabilities provided by Indian
satellites had benefited the common man and
transformed policy planning and implementation.
The Prime Minister was emphatic about
enhancing these capabilities, as well as
maximising their utilisation for governance and
development. Apart from developing more
advanced satellites, he wanted to see India
become “the la unch servi ce provider of the
world.” Turning these goals into reality will not
be easy; at present, the country is able to cater to
only a small segment of the international launch
market and must launch its own heavy
communications satellites abroad. But ISRO has
risen to challenges before, and can do so again.
It is well-known that the BJP lays great
importance on national security, of which nuclear
policy forms an important component. Sooner or
later the new government will undertake, perhaps
quietly, a review of our nuclear doctrine. The
current official nuclear doctrine, released by the
Cabinet Committee on Security on January 4,
2003, summarises our nuclear policy in eight
succinct points. Of these, only a few of them
really call for significant modification, because in
recent years things have been relatively stable on
the South Asian nuclear front.
This is despite the fact that both India and
Pakistan continue to produce weapons-usable
Plutonium at the Dhruva reactor and the
Khushab reactors respectively. Pakistan may also
be continuing to produce some weapons-grade
Uranium at its centrifuge plants, despite its
overall Uranium ore constraints. All this fissile
material is presumably being assembled into
warheads. So both arsenals have been growing, as
have all the attendant dangers of maintaining a
nuclear force. Nevertheless the situation has, by
and large, just been “more of the same.” Therefore
there is no call for any radical change of our
nuclear doctrine. But a few features do need to be
clarified and others underlined.
No First Use
Maintaining a doctrine of NFU, apart from
being generally in tune with India’s nonaggressive ethos, has considerable diplomatic
value. After our 1998 nuclear tests elicited the
anticipated international opprobrium, the
inclusion of NFU thereafter in the 1999 Draft
Nuclear Doctrine helped soften the criticism,
especially in comparison to Pakistan, which till
today retains the option of a first strike.
However, although NFU has moral and
diplomatic value, there should be no illusions
about its impact on hard strategic decision
makers on the other side. What matters to them
is not any statement of intentions (like NFU) but
the actual capabilities of the adversary. Pakistani
colleagues one meets in Track II invariably say
they set little store in our NFU. It makes no
operational difference in their nuclear plans.
What matters more for nuclear confidence
building is the actual state of alert. India has been
sensibly following a system of keeping its
warheads de-mated from their missiles and
delivery aircraft . This introduces a minimum
built-in delay in launching an attack after the
decision to do so has been made. It greatly reduces
the risk of an accidental or hastily decided launch.
The new government should continue our policy
of a de-mated de-alerted posture. One clause
currently in the Doctrine merits some revision. It
states that “ ....[our] nuclear weapons will only be
used in retaliation against a nuclear attack on
Indian terr it or y or on Indian for ces
anywhere...retaliation to a first strike will be
massive.” Now, threatening retaliation “against a
nuclear attack on Indian territory” is one matter.
It is the basic component of nuclear deterrence
and should apply whether the attack on our
terr itor y is small or big , as long as it is nuclear.
However, a battlefield nuclear attack will
place India in a dilemma. Having threatened in
our Doctrine to inflict a “massive ” nucle ar
retaliation, can we really go ahead and kill lakhs
of their civilians in response to a much smaller
attack, that too on their own soil? It would be a
disproportionate response, which would go
against our national sensibilities and attract
widespread criticism from around the world.
Surely, there are more proportionate non-nuclear
ways of inflicting punitive retaliation. Yet, if we
do not counter attack after having threatened to
do so, that would invite derision that we are “a
soft state” incapable of hard nuclear decisions and
would erode the credibility of our future
deterrence, not only against Pakistan, but also
against China.
It may therefore be better to limit massive
nuclear retaliation only against nuclear attacks on
our country and say nothing in the Doctrine, one
way or the other, about attacks “on Indian forces
anywhere.” Should the latter take place, we always
have the option of some appropriate, measured
Next, consider the characterisation in our
Doctrine of our nuclear force as a “credible
minimum deterrent (CMD)”, where the
requirement of “minimum” has been spelt out as
what is needed to “inflict unacceptable damage”
to the adversary. These represent a very judicious
choice of words selected, in fact, by the last BJP
administration. It is designed in part to temper
over-zealous weapon enthusiasts from going on
an endless spree of building nuclear bombs. It
recognises the dangers of possessing an
unnecessarily large arsenal of nuclear weapons,
beyond what is essential for deterrence. The new
government must ensure that the agencies
concerned respect CMD in spirit and substance.
Unfortunately, our arsenal of nuclear bombs
has already gone way over the minimum required
to “inflict unacceptable damage” on any rational
government, be it Pakistan or China. (Should
Pakistan someday be taken over by irrational
extremists to whom death of lakhs of civilians is
“acceptable”, then no arsenal, however large, will
deter them anyway. With respect to China, what
deterrence needs is not more bombs than what
we already have, but longer range missiles capable
of reaching major Chinese cities.)
As to credibility, larg e arsenals, beyond a
point, do not enhance it. What does is a show of
determination and toughness on other nonnuclear fronts, such as terrorism or border
Abu Bakr al-Baghdadi welcomed this
Ramadan by declaring the formation of the
Caliphate, with him as the Caliph — namely the
successor of the Prophet Mohammed. It is the
first return of a Caliphate since Kemal Atatürk’s
Turkish National Assembly abolished it in 1924.
Al-Baghdadi, the nom de guerre for the leader of
the Islamic State of Iraq and al-Sham (ISIS), has
now announced that borders inside the dar alIslam , the world of Islam, are no longer
applicable. He has been able to make this
announcement because his fighters have now
taken large swathes of territor y in northern Syria
and in north-central Iraq, breathing down on
Baghdad, the capital of the Abbasid Caliphate
Al-Baghdadi’s declaration comes after ISIS
threatened to make its presence felt outside the
terr itor y it now controls. Bomb blasts in Beirut,
Lebanon, hinte d at ISIS ’ rea ch. Jord anian
authorities hastened to crack down on “sleeper
cells” for ISIS as soon as chatter on social media
suggested that there would be a push into Zarqa
and Ma’an. Private Kuwaiti funding had helped
ISIS in its early stages, but now Kuwait hinted
that it too is worried that ISIS cells might strike
the oil-rich emirate. When ISIS took the JordanSyria border posts, Saudi Arabia went into high
alert. There is no substantive evidence that ISIS
is in touch with al-Qaeda in Yemen, but if such
coordination exists (now that al-Baghdadi has
fashioned himself as the Caliph) it would mean
Saudi Arabia has at least two fronts of concern.
“All necessary measures,” says the Kingdom, are
being taken to thwart the ISIS advance.
While it is true that Assad’s government
released a number of jihadis in 2011, there is no
evidence to suggest that he created ISIS. ISIS is a
product of the U.S. war on Iraq, having been
formed first as al-Qaeda in Iraq by the Jordanian
militant Abu Musab al-Zarqawi. Deeply sectarian
politics, namely an anti-Shia agenda,
characterised al-Qaeda in this region. Funded by
private Gulf Arab money, ISIS entered the Syr ian
war in 2012 as Jabhat al-Nusra (the Support
Front). It certainly turned a civic rebellion into a
terrorist war. Political support from the West and
logistical support from Turkey and the Gulf Arab
states allowed it to thrive in Syria.
The West has been consistently naive in its
public assessment of events in West Asia. U.S.
policy over Syria was befuddled by the belief that
the Arab Spring could be understood simply as a
fight between freedom and tyranny — concepts
adopted from the Cold War. There was a refusal to
accept that the civic rebellion of 2011 had
morphed quite decisively by late 2012 into a much
more dangerous conflict, with the radical jihadis
in the ascendancy. It is of course true, as I saw
first-hand, that the actual fighters in the jihad
groups are a ragtag bunch with no special
commitment to this or that ideology. They are
anti-Assad, and they joined Jabhat al-Nusra or
Ahra¯r ash-Sha¯m because that was the group at
hand with arms and logistical means.
The West’s backing of the rebellion
provided cover for Turkey’s more enthusiastic
approach to it. Intoxicated by the possibility of
what Turkey ’s Forei gn Minister Ahmet
DavutogØlu favoured as “neo-Ottomanism,” the
Turkish government called for the removal of
Assad and the emergence of a pro-Istanbul
government in Damascus. Turkey opened its
borders to the “rat-line” of international jihad ,
with planeloads of fighters from Libya and
Chechnya flying into Turkey to cross into Syria to
fight for ISIS and its offshoots. ISIS spat in
Turkey’s salt. ISIS struck Turkey in 2013 with car
bombs and abductions, suggesting to Ankara that
its policy has endangered its citizens. In March,
the Governor of Hatay province, Mehmet
Celalettin Lekesiz, called upon the government to
create a new policy to “prevent the illegal
crossing of militants to Syria.” His repor t was met
with silence.
Saudi policy vis-à-vis Syria and Iraq repeats
the Afghan story. Funds and political support for
jihadis in the region came from the Kingdom and
its Gulf allies. Saudi Arabia tried to stop its youth
from going to the jihad — a perilous mistake that
it had made with Afghanistan. On February 3, the
King issued a decree forbidding such transit. But
there is no pressure on Saudi Arabia and its Gulf
allies to stop their tacit support of ISIS and its
cohort. Nor is there pressure on it to stop its
financing of the harsh repression in Eg ypt, sure
to fuel more conflict in the near future. The Arab
world, flush with hope in 2011, is now drowning
in a counter-revolution financed by petrodollars.
Meanwhile, sectarian lines are being
hardened in the region. The battle now does not
revisit the ancient fight at Karbala. This is not an
age-old conflict. It is a modern one, over ideas of
republicanism and monarchy, Iranian influence
and Saudi influence. Shadows of sectarianism do
shroud the battle of ordinary people who are
frustrated by the lack of opportunities for them
and by the lack of a future for their children. What
motivates these fights is less the petty prejudices
of sect and more the grander ambitions of
regional control. Al-Baghdadi has announced that
his vision is much greater than that of the Saudi
King or the government in Tehran. He wants to
command a religion, not just a region. Of such
delusions are great societies and cultures
A significant visit
French Foreign Minister Laurent Fabius has
concluded a substantial India visit which can
help lift some of the barriers that may be blocking
the emergence of a full-blown strategic
partnership between the two countries. Free from
verbiage, Mr. Fabius’ visit had a hard-nosed
businesslike feel to it. Cash-strapped France
seemed focussed on trading some of the blue-chip
kernels of its hi-tech industry. India, on its part,
looking to bolster its military preparedness,
energ y security and international profile, was
prepared to calibrate a hard bargain. The
recognition by New Delhi and Paris that a winwin outcome was indeed possible seemed to have
yielded significant progress during the visit
towards clinching the multibillion dollar Rafale
aircraft deal, and the stalled contract for two
French nuclear reactors. With a capacity to
generate 1,650 megawatts of power each, a
breakthrough in the deal for the two reactors
could clear the path for the establishment of four
additional reactors of similar capacity at the
Jaitapur site in Maharashtra. An installed
capacity of nearly 10,000 megawatts would not
only boost French nuclear commerce, but also
make a vital contribution to satisfying India’s
energ y hunger.
In dealing with the French, the Indian side
has made it clear that it is not interested in a pure
buyer-seller relationship with France in the hitech domain. As a result, complex negotiations are
under way — both on the Rafale and the
European Pressurised Reactors (EPR) — that
would not only give India the final product, but
also impl ant fronti er technolog y within the
country throug h transfers of state-of-the-art
know-how. The inducti on of the 126 Rafale
fighter jets would also help cement the airdominance doctrine of the Indian Air Force (IAF),
which has already benefited from the inductions
of the Russian Su-30 MKI multi-role planes and
other advanced platforms. Mr. Fabius’ arrival in
New Delhi has provided an opportunity to quickly
finalise the Indo-French nuclear deal, which is
possible if the two parties arrive at a formula that
would lower the costs of atomic power generation
at Jaitapur. During talks, India has demanded
g reat er “localisati on,” which would expand
involvement of domestic industry in the project,
as well as provide greater scientific and technical
exposure to Indian personnel to Light Water
Reactor (LWR) technology that the French have
mastered. At a political level, the Minister’s visit
has provided New Delhi an opportunity to
advance its ties with continental Europe, which
revolves around a Franco-German core. This is
significant, as Europe, despite undergoing a rapid
political and economic transition, would
continue to remain a major player in a multipolar
world, which India needs to engage vigorously.
Onion prices more than doubled in the last
two weeks and retail food inflation rose to 9.5
per cent in May as against 8.64 per cent in April,
giving the new government more reason to worry.
As the urban working class bears the brunt of the
r ising and f luctuat ing food pr ices, Finance
Minister Arun Jaitley quickly announced
measures to stem the price rise of onions. These
included fixing a minimum export price (MEP) of
U.S. $500 per MT, distributing onions through the
Public Distribution System, and advising State
governments to delist fruits and vegetable from
the Agricultural Produce Market Committee
(APMC) Act.As much as these short-run measures
are necessary, the problem is more deep-rooted.
Several interrelated determinants such as low
agricultural productivity and yield, global price
changes, scarcity of resources such as land and
water, domestic price policies such as Minimum
Support Prices, and stocking and trade policies
(both international and domestic) have played a
role in the increase of prices.
Food pr ice infla tion in India cl early
underscores the need for understanding the
heterogeneities across food commodities. This
knowledge could be important to inform
macr oeconomic policy. For example , the
assumption in standard macroeconomic models
— that changes in relative prices of food and fuel
represent supply shocks — may not hold for
many commodities as we see them rig ht now.
Further, with a persistent upward trend in
inflation, taking a long-term view rather than
focusing only on recent inflation episodes seems
imperative. In all this, one thing that is
reasonably clear is that it may not be sufficient to
identify the sources for high prices at a broad
le vel. Both macro p olicies like mone tary
tightening by the RBI as well as commodityspecific measures implemented by different
branches of the government (trade policies and
domestic interventions in food markets) have to
be used to deal with inflation.
Faced with the current scenario, what are
the remedial options? For one there seems to be
little reason to not liquidate excessive wheat and
rice stocks. In distributing released stocks, the
government should think about an incentive
overhaul along the lines of what was done in
Chhattisgarh. The small State is a leading
example of a well-functioning PDS system where
leakages have been checked because of measures
like colour coding of transport vehicles and
raising the commission of PDS shopkeepers.
Over time, there must be a gradual movement
toward a cash transfer system. This depends on
development of backend facilities such as bank
In food items with a high value, a case- bycase approach is needed. While onions could be
facing a problem of excessive hoarding due to
expectations of inf lati on, in commodities like
milk the cost push might be playing a role. Dairy
products such as oil cake and molasses are
increasingly being diverted to alternative uses or
markets. Milk has been the prime driver of
inflation for many years and though its demand
has been rising substantially (different estimates
show that it is the food item with the highest
income elasticity), there are supply side issues
that need to explored for finding the right policy
Given the current government’s paradigm
of accepting short-term pains to incur long-term
gains, it should seize this opportunity of high
food prices. Investing in the private sector in cold
chain or processing units needs to be encouraged.
This will create rural jobs that are not farmrelated, and create more efficient value chains,
giving a better deal to farmers and consumers
alike. Over the long run, streamlining wholesale
markets under Agricultural Produce Market
Committees, reducing limitations on privatesector procurement and storage, and checking on
double taxation in interstate movement, need to
be considered.
Finally, as a weak monsoon is being
predicted, we must think of the long run. It is
about time we gear up toward climate-smart
agriculture (drought-resistant crops, conservation
agriculture, etc.) to increase yields and income of
farmers. This will increase farmers’ productivity
while providing the much-needed price stability
to consumers. The promise of acche din for
consumers and the agricultural industry need not
be a far cry.
The controversy over the removal of
Governors has receded into the background only
because the issue which has hogged the limelight
recently is the government’s rejection of the name
of Mr. Gopal Subramanium, recommended by the
Supreme Court collegium for appointment as a
judge of the Supreme Court, on account of adverse
reports by the Intelligence Bureau.
The Governor is appointed by the President
of India on the advice of the Council of Ministers
for the period of five years. Unlike the President
of India, there is no procedure for the
impeachment of a Governor, but he/she could be
removed by the President on the advice of the
Prime Minister on grounds of gross delinquency,
namely cor ruption, bribery and violation of the
Constitution. But the practice has been different
from what is laid down in the Constitution;
Governors have been removed only due to a
change of government without citing any
substantial reason. There is precedent. Even in
the past, Governors appointed by previous
governments have been removed by the new
government on assuming office after elections.
The new governments have expended energy on
removing Governors and appointing their own
men as new Governors.
The practice of dismissing Governors with
the change of guard at the Centre began in 1977
when the Janata Party came to power after
routing the Congress and took a decision to
replace Governors appointed by the previous
re gime. Inci dentally, in 1977, the decision/
recommendation of the then Prime Minister,
Morarji Desai, and his Cabinet to dismiss
Governors was sent back by then acting
President B.D. Jatti without signing it. Though
the government managed to remove the
Governors, as the acting President Jatti was
constitutionally bound to sign the order when it
was again sent back to him, it came as an
embarrassment for the Janata Party government
which had just assumed office.
After coming to power in 2004, the United
Progressive Alliance (UPA) government initiated
the process of removal of four Governors, Vishu
Kant Shastri (Uttar Pradesh), Babu Parmanand
(Hary ana), Ki dar Nath Sahani (Goa) and
Kailashpati Mishra (Gujarat), which BJP leaders
Mr. Lal Krishna Advani and Mr. Atal Bihari
Vajpayee opposed and forced a discussion in the
House under Rule 193. The UPA’s move wa s
described by Mr. Va jpaye e as a “bi g bl ow to
democra cy ” while Mr. Advani called it
“dangerous.” Now, Union Home Minister Rajnath
Singh is keen on the removal of Governors
appointed by the previous UPA government. Is
this not a blow to democracy? Is this not
unethical? We know that there is a change in
generation, from Mr. Advani to Mr. Rajnath
Singh, but does such a generational change also
mean a change in the party ’s ideology? If this is
the case, why is the removal of Governors being
done using the backdoor approach rather than the
government being actively involved in this
Five-judge bench of the Supreme Court,
headed by Chief Justice K.G. Balakr ishnan, in
May 2010 on the issue of the removal of the
Governor of a State. The judgment emphasised
that “The Governor cannot be removed on the
ground that he is out of sync with the policies and
ideologies of the Union government or the party
in power at the Centre. Nor can he be removed on
the ground that the Union government has lost
confidence in him.” It is tru e tha t the same
judgment also provided an exception that the
government can initiate the process of removal of
the Governor by first building a case file citing
reasons for the removal of the Governor.
Does the new BJP government want to use
that clause of exception to remove a Governor? If
the government wants to exercise this exception
clause, the least it would have to do is to write to
the President spelling out the reasons for
wanting his/her (Governor ’s) removal. But it
seems the government is try ing to bypass all
these steps, remove the Governor by an indirect
method and initiate moves to come out clean in
case there are issues over the move, as no letters
have been exchanged or notices sent. But I am
sure there is still potential for the government to
face embarrassment as such a file/request for the
removal of the Governor can be sent back by the
President to the government in the first instance
though, the President is bound to sign it if the file
is re-sent to him — as it happened in 1977.
Though most previous governments have
indulged in such practice, the new BJP
government could have easily refrained from
such a move and set an example of good
governance. It has certainly missed a golden
opportunity to present itself before the people as
being a government with a difference.
One reason why important facts tend to be
forgotten is that they are at odds with the
mytholog y of social policy cultivated by some
sections of the media. This mythology involves a
number of fallacies. First, India is in danger of
becoming a nanny state, with lavish and
unsustainable levels of social spending. Second,
social spending is largely a waste — unproductive
“handouts” that don’t even reach the poor due to
corruption and inefficiency. Third, this wasteful
extravaganza is the work of a bunch of oldfashioned Nehruvian socialists and assorted
jholawalas who led the country down the garden
path during the United Progressive Alliance
(UPA) years. Fourth, the electorate has rejected
this entire approach — people want growth, not
entitlements. Fifth, the BJP-led government is all
set to reverse these follies and rollback the
welfare state.
These five claims have acquired an aura of
plausibility by sheer repetition, yet they have no
factual basis. Let us examine them one by one.
The idea that social spending in India is too
high would be amusing if it were not so harmful.
Accor ding to the latest World Development
Indicators (WDI) data, public spending on health
and education is just 4.7 per cent of GDP in India,
compared with 7 per cent in sub-Saharan Africa,
7.2 per cent in East Asia, 8.5 per cent in Latin
America and 13.3 per cent in OECD countries.
Even the corresponding figure for “least
developed countries,” 6.4 per cent, is much higher
than India’s. The WDI database does not include
social security spending, but the recent Asia
Development Bank report on social protection in
Asia suggests that India is also an outlier in that
respect, with only 1.7 per cent of GDP being spent
on social support compared with an average of 3.4
per cent for Asia’s lower-middle income countries,
5.4 per cent in China, 10.2 per cent in Asia’s highincome countries and a cool 19.2 per cent in
Japan. If anything, India is among the world
champions of social underspending. The view
that social spending is a waste has no factual
basis either. The critical importance of mass
education for economic development and the
quality of life is one of the most robust findings
of economic research. From Kerala to Bangladesh,
simple public health interventions have brought
down mortality and fertility rates. India’s midday
meal programme has well-documented effects on
school attendance, child nutrition and even pupil
achievements. Social security pensions, meagre as
they are, bring some relief in the harsh lives of
millions of widowed, elderly or disabled persons.
The Public Distribution System has become an
invaluable source of economic security for poor
households, not just in showcase States like Tamil
Nadu but even in States like Bihar and Jharkhand
where it used to be non-functional. Of course,
there is some waste in the social sector, just as
there is much waste in (say) universities. In both
cases, the lesson is not to dismantle the system
but to improve it — there is plenty of evidence
that this can be done.
The expansion of public services and social
support in India, such as it is, has little to do with
any nostalgia of Nehruvian socialism. It is a
natural development in a country with a modicum
of democracy. A similar expansion, on a much
larger scale, happened during the 20th century in
all industrialised democracies (with the partial
exception of the United States). It also happened
in communist countries, for different reasons.
Many developing countries, especially in Latin
America and East Asia, have gone through a
similar transition in recent decades. So have
Indian States where the underprivileged have
some sort of political voice, such as Kerala and
Tamil Nadu. Many other States, including Gujarat,
are now learning from these experiences at
varying speed.
Coming to the fifth claim, there is little
evidence that a rollback of social programmes is
part of the BJP’s core ag enda. As menti one d
earlier, many BJP leaders (including Mr. Modi as
well as the new Finance Minister, Mr. Arun
Jaitley) have vociferously demanded a more
ambitious National Food Security Act. Some of
this is posturing of course, but the BJP’s
willingness to support food security initiatives is
already well demonstrated in Chhattisgarh.
Nothing prevents it from doing the same at the
national level. Similar remarks apply to the
National Employment Guarantee Act: some BJPled State governments did a relatively good job of
implementing it, and the late Gopinath Munde
clearly expressed his support for the Act as soon
as he was appointed Minister for Rural
Having said this, there are also ominous
signs of a possible backlash against these and
other social programmes. Some overenthusiastic
advisers of the new government have already put
forward explicit proposals to wind up the
Employment Guarantee Act and the Food Security
Act within 10 years, along with accelerated
pr ivatisation of health and education services. As
if on cue, Rajasthan Chief Minister Vasundhara
Raje recently sent a letter to the Prime Minister
questioning the need for an Employment
Guarantee Act. The corporate sector also tends to
be hostile to social spending, if only because it
means higher taxes, or higher interest rates, or
fewer handouts (“incentives” as they are called)
for business. Corporate lobbies, already
influential under the UPA government (remember
the person who said that the Congress was his
dukaan ?) are all the more gung-ho now that their
man, Mr. Modi, is at the helm. Even a casual
reading of recent editorials in the business media
suggests that they have high expectations of
devastating “reforms” in the social sector. That is
what the my tholog y of social policy is really
This is not to deny the need for
constructive reform in health, education and
social security. If one thing has been learnt in the
last 10 years, it is the possibility of improving
public services, whether by expanding the right to
information, or introducing eggs in school meals,
or computerising the Public Distribution System,
or ensuring a reliable supply of free drugs at
primary health centres. But these small steps
always begin with an appreciation of the
fundamental importance of social support in poor
people’s lives.
The forthcoming budget is an opportunity
for the new government to clarify its stand on
these issues. Without enlightened social policies,
growth mania is unlikely to deliver more under
the new government than it did under the
previous one.
Personal laws ought to be administered by
the regular law courts and cannot be enforced in
derogation of fundamental rights by religious
courts that lack legal sanctity. This is the broad
import of the Supreme Court’s thoughtful ruling
on the legality of Dar-ul-Qazas, or Sharia-based
courts, established in different parts of the
country to adjudicate disputes among Muslims.
Fatwas issued by Sharia courts are not legally
binding on individuals averse to submitting to
their authority, the Court has ruled. However, it
has declined to ban these adjudicatory bodies,
holding that Muslims desirous of obtaining the
expert opinion of Islamic scholars in Dar-ul-Qazas
can continue to invoke their jurisdiction
voluntarily. The ruling ha s thus clarified the
correct status of these Sharia courts. They can
exist and issue opinions, but are limited in their
scope and applicability to individuals who
approach them voluntarily, and not at the instance
of third parties to a dispute. These rules will
hopefully protect individual Muslims, especially
women, from possible persecution through
controversial adverse orders, often issued
without regard to their fundamental rights.
Fatwas on religious issues are acceptable, but no
fatwa that violates fundamental rights may be
issued; they may not be issued at the instance of
third parties on issues that concern individuals,
and more importantly, they must not be issued to
punish the innocent.
Th e Supr eme Court ha s preserved the
religious character of these Sharia courts, noting
that they do not constitute a parallel judici ary,
but an “informal justice delivery system with the
objective of bringing about amicable settlement
between parties.” It is important that the Supreme
Court’s interventi on, at the instance of a
petitioner who wanted Sharia courts to be
banned, is understood in the correct perspective.
The All India Muslim Personal Law Board
(AIMPLB), which has set up most of these Darul-Qazas, has a duty to regulate their functioning
and restrain them from issuing edicts that violate
fundamental rights. It is true that in the Imrana
case, one of the three instances the Supreme
Court has referred to, the controversial fatwa
dissolving a marriage and ordering a woman to
leave her husband after she was raped by her
father-in-law was not issued by a Sharia court but
by a Muslim panchayat. However, an Islamic
seminary endorsed the fatwa initially, and the
AIMPLB claimed that the incident of rape did not
occur at all. In some parts of the country, Muslim
women have formed women’s Sharia courts for
themselves, contending that orders of Sharia
courts are invariably adverse to women. It is up to
bodies like the AIMPLB to reform the
functioning of the Sharia bodies.
The Economic Survey 2013-14, the flagship
annual document of the Ministry of Finance
which reviews the performance of the economy
over the previous 12 months, released a day before
the Union Budget, facilitates a better appreciation
of the mobilisation of resources and their
allocation in the Budget. Experience suggests that
the Surve y, while fl agg ing the key econ omic
issues of the day, can offer advice and
suggestions, which the Finance Minister may or
may not incorporate in the Budget. The point has
also been made that it is for the first time that
the Surve y ha s been prepared wi thout the
guidance of a Chief Economic Adviser. For all its
limitations, however, the Economic Survey 201314 has done a commendable job in delineating the
contours of an economy that has been struggling
for more than two years to grow at more than 5
per cent. A change in government has certainly
brought about a sharp variation in sentiment, but
it is too early to assess the impact on the real
economy. Joining the Reserve Bank of India and
many professional forecasters, the Survey expects
GDP growth during the current year (2014-15) to
be above 5 per cent. However, poor monsoons, a
deteriorating external environment, persistent
inflation and a poor investment climate pose
major risks to growth and macroeconomic
stability. In the event, GDP growth is likely to be
at the lower end of a 5.4 to 5.9 per cent band.
Economic growth during 2013-14 was
dragged down by industry, which grew at just 0.4
per cent. A deceleration in manufacturing output
and contraction in mining activities have been
primarily responsible for the sluggishness.
Reversing the serious downward trend in
industry ha s been a top pr i or it y for the
government. The budget is sure to take note of
ongoing initiatives and also bring in new ones in
this vital area. Inflation has come down but is still
above the RBI’s comfort zone. Food prices have
shot up very recently. The balance of payments
position has improved considerably on top of a
vastly improved current account. However, much
of the improvement in the matter of the trade
deficit is due to lower imports of non-petroleum
products, a sure sign of the slowdown. A bigger
challenge lies in the area of fiscal consolidation.
The Survey has sug gested a new FRBM legislation
as well as rationalisation of subsidies, among
other measures. The previous UPA government’s
claims of pegging the deficit at 4.5 per cent in
2013-14 and targeting an ambitious 4.1 per cent
for the current year have become controversial,
and at the very least cast doubts on the quality of
fiscal estimates. These are pitfalls which the new
Finance Minister will do well to avoid.
⇒ A
There are reports that the Department of
Industri al Policy and Promoti on (DIPP) is
pushing to allow 49 per cent FDI without
transfer of technology, 74 per cent with transfer
of technolog y, and even 100 per cent in cases
involving the transfer of state-of-the-art
technology and equipment, while the Defence
Ministry would like it to be restricted to 49 per
cent. This debate is sterile because merely
liberalising FDI will not help. What is needed is
an appreciation of the characteristics of the
defence industry and coordination among the
multiple stakeholders who drive, and have often
distorted the decision-making process.
The twin objectives of self-sufficiency and
self-reliance have been articulated, sometimes
interchangeably and at times separately, since the
early 1950s. In 1947, India inherited the Ordnance
Factories (OF) Organisation, which today
consists of 41 OFs, nine Defence Public Sector
Undertakings (DPSU) and 50 or so defence R&D
laboratories under the Defence Research and
Development Organisation (DRDO). The model
followed was “production of technologies
conceptualised by the DRDO; projects nominated
by MoD [Ministry of Defence] after consulting
the Services; and assembly and production of
platforms under licence from foreign OEMs
(Orig inal Equipment Manufa cturers).” A task
force set up in 1998 concluded that the public
sector alone could not deliver; licensed
production had fostered neither indigenisation
nor innovation; and frequent blame games
between the Services, the DRDO and the DPSUs
were leading to delays in acquisition.
The first instance of opening up of the
defence sector came in 2001, with the domestic
private sector being allowed to produce defence
items with FDI up to 26 per cent, subject to
industrial licensing and security clearances. This
was followed by the announcement of a Defence
Procurement Procedure in 2002, a Defence
Offsets Policy in 2006, a Long Term Integrated
Perspective Pl an (LTIPP) in 2009, a Defence
Production Policy in 2011, and eight committees/
task forces set up to look into various aspects of
national defence, including defence production
and self-reliance, since 2000. Clearly, the issue
remained a priority for various governments, but
the outcome has been meagre. Certainly, some
responsibility rests with former Defence Minister
A.K. Antony’s tendency to avoid decision-making
if it could be postponed, but there are underlying
structural reasons too. Consequently, forward
movement during the last decade has lacked
Since 2001, the total FDI received in the
defence sector is below $5 million. Meanwhile,
India’s defence expenditure has been growing
every year; today, India has the eig hth largest
defence budget in the world, accounting for 3 per
cent of global defence expenditures and, in recent
years, has also emerged as the largest defence
importer, with nearly 10 per cent of global
defence imports. With growing obsolescence and
a 10 per cent annual rise in the capital budget for
equipment procurement, a conservative estimate
indicates that India will spend nearly $100 billion
over the next eight years to modernise and equip
its armed forces. During the 12th Five Year Plan,
the defence capital account budget is expected to
go up from $15.9 billion to $25.6 billion. By the
end of the 14th Five Year Plan, the cumulative
capital expenditures over 2012–27 are projected to
exceed $235 billion. Assuming that 80 per cent is
meant for platform acquisitions, of which 60-70
per cent is earmarked for committed liabilities,
this still leaves 30-40 per cent for new schemes.
To meet the target of 70 per cent self-reliance by
2020 requires an indigenous defence industry
worth $80-$100 billion, with a direct employment
potential of 1.25 lakh skilled workers and indirect
support to a workforce of another five lakh.
In addition are investments via the Defence
Offsets Policy. This policy, announced in 2005,
requires the foreign company to invest 30 per
cent of the indicative cost in the request for
proposals when the indicative cost is Rs.300 crore
or more. Initially, the offsets were for the defence
sector, but in 2009, the policy was diluted to
permit offsets to civil aviation and internal and
coastal security sectors too. Its objectives are to
improve the domestic defence R&D base; develop
an internationally competitive defence industry,
and an industrial base covering dual use
technologies (i.e. having both civilian and
defence applications). Offsets are implemented by
raising domestic procurement, generating
exports, bringing FDI into related services and
building local supply chains, transferring
technology/equipment to Indian entities, etc.
In the Defence Procurement Policy, special
incentives to encourage the domestic private
sector, including government R&D funding for
product development, were announced. Some of
the larger enterprises (including TCS, Tata Power,
Godrej, HCL, L&T, Mahindra, Kirloskar) are to be
classified as Raksha Udyog Ratnas to enable them
to be treated on a par with DPSUs. In addition
there are about 6,000 Small and Medium
Enterprises (SME), many of whom feel that they
are nimbler and better suited to innovate in niche
areas. In fact, they oppose limiting FDI to 49 per
cent, the position supported by domestic majors
and the MoD.
To make a new beg inning, the Modi
government needs to take charge by setting up a
na tional defence industry committee which
should resolve turf battles between various
government agencies, reconcile competing
interests of SMEs and industry majors, set targets
(including for SRI, intellectual property rights
(IPR) generation, integration of SMEs,
technology acquisition through offsets), monitor
implementation, and coordinate policy approaches
by: a) creating uniform lists of defence products
and related technologies; b) enabling the
harmonisation of Indian lists with the
Munitions List and Dual Use Technology List of
the Wassenaar Arrangement, with the eventual
aim of securing India’s membership. An enabling
framework alrea dy exists with India’s Special
Chemicals, Organisms, Materials, Equipment and
Technologies (SCOMET) export control lists; c)
amending the Industries (Development and
Regulation) Act to bring defence and dual-use
technology-related Industrial Licensing into sync
with the above; d) amending the terms of the
production licence for defence items to ensure
that control of the entity cannot be transferred
without Government of India (GoI) approval,
that all exportable items and services will be
available domestically, and that exploitation of IP
generated will not be denied in India. These
conditions would render the debate of FDI levels
irrelevant; e) promoting the clustering of SMEs
with industry majors through targeted policies; f)
changing the role of the Department of Defence
Production, whose structure limits it to a mere
administrative unit for OFs and DPSUs; g)
integ ra ting the working of the LTIPP wi th
defence R&D, production, procurement and
offsets policies; h) providing a degree of
continuity and predictability in the policy
framework for the next 10 years instead of the
annual revisions that have afflicted the sector in
recent years.
Go for it now
The target year of 2015 that was fixed to
achieve universal primary education will not be
met, the United Nations said at the recently held
second Global Partnership for Education
Replenishment Pledging Conference in Brussels.
An estimated 58 million children, a large
proportion of them from sub-Saharan Africa, are
still out of school. The announcement merely
confirms Unesco’s own admission last year on the
odds ahead in the task of realising this
Millennium Development Goal. That admission
was based on its finding that the top six donors
had substantially cut back on their aid
commitments since 2011. Two of the donor
countries slashed their allocations in this sector
by 30 per cent; reductions made by the European
Union were to a similar extent. Unesco observed
that the momentum with respect to achieving
this target was lost since 2007, implying that as
in the case of several other basic human
development indicators, the global economic
meltdown may have contributed to the situation.
But the movement to improve rates of retention
in schools and to enhance quality of teaching
seems to be gathering steam again, as most of the
donor states promised at the Brussels conference
to step up spending. But more significant, as
many as 60 developing countries that were
present in Brussels — India was not among them
— agreed to boost allocations in their domestic
budgets for pr imary education.
Abolition of tuition fees, cash transfers,
teaching in the local language, increased financial
outlays and appropriate curriculum are among
measures that have helped developing countries
reduce the out-of-school population among
children, according to the Education For All
report. Clearly, then, there are diverse ways and
means to realise the goal of universal education.
Governments found wanting in the requisite will
to invest in the future of their youngsters may be
complicit in allowing children to be weaned away
by armed militias that have already wreaked much
economic havoc and caused political instability in
many regions. A welcome new dimension to the
Replenishment Pledging Conference is the focus
on the needs of disabled children. Addressing this
segment is both a moral and practical imperative,
considering tha t 15 per cent of the world ’s
population has some for m of disability, as per
figures from a 2011 report on disability brought
out jointly by the World Health Organization and
the World Bank. Around the world, about a third
of those that are not in school have a disability,
says the Global Campaign for Education UK.
Given such a large proportion of such children,
the relevant goal cannot be accomplished without
special provision being made to achieve it. Thus,
there is a case to set separate targets factoring in
disability in the post-2015 development agenda.
The government has provided Rs.7,060
crore to build 100 smart cities as satellite towns
on the outskirts of large cities to accommodate
the burgeoning urban population. Foreign direct
investment norms have been relaxed to attract
investors to build them. Indian cities are in need
of investment and innovation, and the
government’s attenti on to these issues is
welcome. The question is whether smart satellite
cities would offer a panacea for urban ills and
whether the money allocated is adequate.
There is no firm definition of what
constitutes smart cities. The broad agreement is
that places that mobilise information and
communication technologies to deliver better
services, reduce carbon foot pr int , cre ate
sustainable environments and improve living
conditions are considered intelligent. Many cities
abroad, realising that existing urban systems
cannot cope with new challenges, have already
taken this route. As a result, they are far ahead in
terms of innovation.
Rio de Janeiro has invested about U.S. $14
million to monitor the city in real time. Data from
30 agencies stream into an operation centre from
where responses to emergencies and accidents are
efficiently coordinated. Madrid plans to invest
about U.S. $20 million in a technology platform to
manage a range of public services such as street
maintenance, lighting and waste management.
Using a sophisticated supplier management
model, it pays each service provider according to
the level of services provided. Many cities have
focussed on reducing energ y consumption and
offering convenient transport service. Some like
Tokyo are experimenting with technolog y to help
the visually challenged to move safely. Special
white canes with embedded sensors, which pick
up signals from electronic tags and markers
placed at strateg ic places in the ci ty, help the
disabled navigate.
Such smart city programmes require large
investments and a thorough integration of
various systems. Industry and cities have to come
together and introduce innovative products.
Against these complex demands, how will the
proposal to set up smart cities fare?
First, the sum allocated in the budget for the
programme — about Rs.70 crore a city — is
grossly inadequate. Unless the amount provided is
only seed money to kick-start the programme, and
more funds are to be sanctioned later, the smart
city project would be a non-starter. Second,
without the promise of good central funds, the
State governments, too, may not take this
initiative seriously. Since land development is a
State subject, enthusiastic participation of the
States is crucial. If the plan is to enable the
private sector to participate in a big way, then the
State has to put in place a detailed framework to
guide investment and demarcate responsibilities.
Funds are only one part of the problem. The key
challenge would be to overhaul urban governance
and infrastructure, both physical and digital.
If the state overlooks the existing city and
privileges new enclaves, the cities will be split
into two unequal halves, and the smart city
project would turn out to be an expensive real
estate meant to serve a few. Smart cities cannot
only be about disp laying technol og y and
delivering services; fundamentally, they have to
be inclusive and equitable places to live in.
The urban future depends on making cities
intelligent, and that applies equally to both new
and old parts of the city. Given the fact that the
existing cities, which accommodate a bulk of the
population, waste a lot of resources and are
energy-inefficient, they urgently require smart
solutions. It would be better to treat the smart
city proposal by the government as a kind of
urban experiment or a prototype, whose lessons
and experience could be used to develop cities in
The National Democratic Alliance
government, on June 5 and June 17, notified the
proposed amendments to the Factories Act, 1948
and the Minimum Wages Act, 1948. Given that
the process of amendments began in 2008 and
went through a number of expert committees, one
would have expected the amendments to be
carefully thought-out. On the contrary, they are
petty, anti-labour and poorly conceived. Given
also that these are the Narendra Modi-led
government’s first pronouncements on labour,
one can only lament the absence of a vision that
a global power ought to have: that increased
productivity comes from having satisfied
workers, who produce quality products.
The Commonwealth Games case decided by
the Delhi High Court found workers living in
conditions akin to bondage — without safety
equipment, sleeping in sheds without mattresses
and fans, and using toilets without doors and
water. This is the reality of labour in India.
So what do the amendments to the Factory
Act suggest? Instead of suggesting that in
globalised India, where workers ought to work for
eight hours as per the international norm, they
suggest that Section 56 be amended to increase
the working day to spreadover 10{+1}/{-2}hours
to 12 hours; that under Section 65(2), compulsory
overtime be increased from 50 hours per quarter
to 100 hours, and that under Section 66, women
not be allowed to work after 7 p.m., unless a
specific notification is issued qua a particular
factory that is capable of demonstrating that it
has facilities in place to guarantee the safety of
women workers.
Thus, instead of statutorily making it the
norm that men and women work equal hours,
women have been penalised. Though the Supreme
Court has laid down that storage in factories of
hazardous substances attracts strict liability or
no excuse standard for liability, Section 7(b) lays
down that the employer must ensure — “as far as
practicable” — that the substance is safe. Section
99 enables an employer to employ children.
The Minimum Wa ges Act, 1948, wa s
enacted to progressively introduce minimum
wages in a situation where industries were
gradually being established. Thus, it did not cover
all workers, but only workers in notified
industries — only a part of the workforce.
Domestic workers, for example, are not covered.
In a globalised economy one needs to shift to
universal coverage. What was needed was a
simple amendment saying that those not covered
by the existing notifications would be covered by
a residual notification. This seems to be coming
in by amendment. However, this residual
minimum wage will be the lowest of all the
minimum wages notified.
There is also nothing to indicate that the
widespread non-implementation of this Act will
be corrected, or that the endless litigation in
courts, at the end of which a petty fine is levied
for non-payment of minimum wages, will be
replaced by a different procedure. The exclusion
of contract workers, who now cover 75 per cent
of the workforce, from the minimum wages
enforcement seems destined to continue. The
failure of the Act to effectively cover home-based
and other forms of unorganised labour will also
The labour movement also has its agenda
for reform. Labourers demand the introduction of
a ‘secret ballot’ for determination of trade union
recognition. It is unfortunate that even decades
after independence, this simple democratic right
remains elusive. They also demand that their
right to go to court should not be restricted by the
requirement that they take permission from the
government under Section 10 of the Industrial
Disputes Act. Seeking such permission delays
litigation by years. They also demand that, by
amendment, the two anti-labour judgments of the
Supreme Court in the Umadevi case and the SAIL
case be reversed, so that non-permanent workers
who have put in long years in government
services are entitled to regularisation, and that
when the contract labour system is abolished by
the Board, the contract workers will be
regularised. The Supreme Court had condemned
these categories of workers to permanent
servitude. They demand that child la bour be
abolished. These are some of the long-standing
democratic reforms pending consideration of the
Boost for infrastructure
The maiden budget of the Narendra Modi
Government has allowed banks to raise long-term
funds from the market to finance infrastructure
projects. For funds thus raised, banks are freed
from requirements with respect to Statutor y
Liquidity Ratio (SLR), Cash Reserve Ratio (CRR)
and Priority Sector Lending. The move is in tune
with the recommendations of the Nachiket Mor
Committee on Comprehensive Financial Services
for Small Businesses and Low-Income
Households. The panel had suggested the gradual
pha se-out o f SLR, and recommended CRR
application only on demand deposits. The budget
proposal has a two-fold objective. For one, it
seeks to address concerns over the asset-liability
mismatch in banks’ lending to infrastructure
projects, which have long gestation periods. By
freeing banks of statutor y obligations on those
funds, on the other hand, the budget aims to
bring down the financing cost for them. With
projects facing overruns on cost and time fronts
due to assorted reasons in the wake of economic
slowdown, the banking system as a whole has
come under heavy stress. So much so that banks
have been forced to restructure a substantial
portion of their lending to infrastructure projects.
The failure of infrastructure projects on a large
scale ha s seen non-performing assets (NPA)
piling up in this sect or . A funds-star ve d
government needs private enterprises to give a
big push to infra growth. Private enterprises will
move into the infra space only if long-term funds
are available at affordable rates and near-term
worries on repayment do not weigh on them.
Viewed against this backdrop, the budget
proposal is a twice-blessed move. For, it benefits
banks as well as private enterprises.
There is, however, a huge risk in looking at
the proposal from a micro prism alone. Is nonavailability of long-term funds the sole reason for
the present predicament in the infrastructure
space? A host of factors — ranging from land
acquisition to green clearance and poor credit
appraisal — have combined to derail the
infrastructure sector. Is the monetary regulator
— the Reserve Bank of India – on the same page
with fiscal bosses on the issue of letting banks go
free on statutory obligations for money raised to
fund infrastructure projects? Even if it is in sync
with the fiscal bosses, the RBI may yet be keen to
ensure that its ability to exercise control over the
mon etary aspects of the economy is not
compromised. The RBI may do well to ensure that
such selective exemptions from statutor y
obligations do not compromise the viability of
the banking system. The budget proposal must be
taken forward in a composite way by all the
stakeholders so that infrastructure development
is facilitated.
The devastation in Uttarakhand had already
happened much before the cataclysmic events of
June 2013. The unprecedented rainfall and floods
and loss of life drew attention to the alarming
situation in a State known for its pristine forests
and rivers. It also drew attention belatedly to the
“bumper to bumper” dams in the mountains.
Construction on all dams in Uttarakhand
was halted by the Supreme Court in August 2013
and on its instruct ions, the Ministry of
Environment and Forests (MoEF) appointed an
expert body which said that 23 hydropower
projects out of the 24 it was asked to examine
would have an irreversible impact on the
biodiversity of the Alaknanda and Bhagirathi
basins and should not be constructed.
In May, the Supreme Court reiterated its
orders stopping work on the 24 hydropower
projects examined by the body. While all this
amounts to shutting the stable door after the
horse has bolted, it is a measure of recognition of
the man-made destruction wrought by unplanned
hydel power projects in a sensitive and fragile
The State of Uttarakhand is a part of the
Ganga basin and rivers suffer from several
depradations apart from dams in high places,
including extensive pollution from untreated
sewage. Despite huge amounts of money being
spent, plans to clean up the river have failed
miserably. An IIT-led consortium has been set up
to prepare a master plan for the National Ganga
River Basin Authority (NGRBA), to restore its
“wholesomeness,” as the extended summary of a
draft Ganga River Basin Management plan says.
Citing anthropogenic activities, it says dams and
barrages have snapped her “longitudinal
In its report of March 2013, the InterMinisterial Group (IMG) on Issues Relating to
River Ganga says that the development of new
hydro power projects has an impact on the
environment, the ecology, the biodiversity, both
terrestrial and aquatic, and economic and social
life. Crucially, it says that in the upper reaches of
the river — where the oxygenating abilities of
the river are the highest — there are growing
signs of contamination. This suggests that even
here, water withdrawal for hydroelectricity is
endangering the health of the Ganga.
Implementation of the 69 hydro power projects
will lead to 81 per cent of the Bhagirathi and 65
per cent of the Alaknanda getting affected. The
IMG had considered the need to have portions of
the river free of hydro projects and recommended
that six rivers should be kept in pristine form.
In the Alaknanda and Bhagirathi basins,
the report said that 17 dams have been
commissioned with a total installed capacity of
1,851 MW. Fourteen projects of 2,538 MW
capacity are in different stages of construction
and 39 projects with an installed capacity of 4,644
MW are in different stages of planning. The
expert body report said that if all the 450 dams in
the State are completed, about 252 projects will
each have an installed capacity of 5MW or more.
The vast majority of them will divert rivers
through tunnels to power houses downstream.
Their combined impact will affect the landscape
of Uttarakhand. The environment management
plans of individual projects do not address the
cumulative impacts of multiple projects in a river
With dams proposed on major rivers for
every 20 to 25 kilometre stretch, large fragments
of these rivers could be left with minimal flow as
almost all the river water is extracted for
producing hydroelectricity, the body’s report has
said. Prof. Ravi Chopra, chairperson of the body
said that tunnelling is also controversial and
leads to damage with natural springs being
diverted and homes developing cracks. The
government has only looked at the need to
generate power and not the impact on the
environment. On field visits, the body noticed
scarred landscapes, dry river beds and a complete
disappearance of riverine ecosystems due to
submergence at existing and under construction
large hydropower projects such as Tehri Stage I
and Koteshwar on the Bhagirathi basin and the
Srinagar dam in the Alaknanda basin.
Extensive deforestation and diversion of
forest land too has posed problems. The body
found that 80,826.91 hectares of forests have
been diverted for non-forest use in Uttarakhand
since 1980. The diversion for hydropower
production is 5,312.11 ha. Most of the diversion
for roads and hydropower has been in Uttarkashi,
Rudraprayag, Chamoli and Pithoragarh districts,
the areas most affected in the June 2013 disaster.
People have been agitating against dams for
years in the region, notably Tehri. In 2010-11, and
for the first time for any project, there were three
public hearings on the Devsari hydel project on
the Pinder. After two hearings, the third one was
accepted by the government, according to
Vimalbhai of the Matu Jansangthan which led
protests along with the Bhu-Swami Sangharsh
Samiti. He says this was the first major protest
after the ones against Tehri. A public hearing was
also organised where many voiced their
opposition to the dams and on the need to keep
the undammed tributary of the Ganga that way.
He referred to the pathetic status of the
catchment area, and the lack of studies on water
flows and climate change impacts. The people
displaced by the Tehri dam are still to get land
rights or basic amenities in their relocated homes,
he added.
Local people who have borne the brunt of
the devastati on due to dams and fl oods and
environmental groups have questioned the
feasibility of dams. By all accounts there is cause
for concern as reflected in many repor ts. Even as
the Uttarakhand government proposes to
approach the Supreme Court in a bid to get a green
signal for dam construction, it must remember
this. It has to ensure that the quest for
hydropower cannot come without a responsibility
to preserve a reg ion that is limping back to life
after a calamity aggravated by unplanned human
interventions neither scientifically assessed nor
endorsed by the people of the region.
India under the Narendra Modi government
has become the first country in the world to ratify
the Marrakesh Convention that codifies
exemptions to copyrights to benefit blind and
vision-impaired readers. The government should
now build on this momentum and enact the
comprehensive and path-bre aking law, now
before a Parliamentary Standing Committee, that
could transform the lives of millions of people
with various disabilities. This is imperative also
because seven long years have elapsed since New
Delhi ratified (it was one of the earliest to do so)
the United Nations Convention for the Disabled.
The current trea ty of the World Intellectual
Property Organization removes legal restrictions
on the conversion of published works into any
one among a range of alternative formats which
the blind and vision-impaired may access.
Ratifying countries are required to enact domestic
laws to overcome their own copyright limitations
to further this objective. The treaty also eases
hurdles for cross-country exchange of books in
different formats so as to overcome the cost of
duplication. This is a genuine concern, as nongovernmental organisations are by and large the
principal service-providers for the disabled. India
amended its copyright law in 2012 broadly on the
lines of the Marrakesh Treaty. Hence, the most
direct benefit from its ratification of the latter
would be the access to literature that is converted
overseas. WIPO has just launched the Accessible
Books Consortium to provide technical support
for the production of suitable formats and to
create a global database of such transcriptions and
to encourage publishers to participate in this
All of the above potentially add up to vast
improvements on the present situation where
published works are out of the reach of an
overwhelming majority of the blind. The
exception to this rule is the extremely limited
availability of educational material. The worstaffected are people in developing countries, which
are home to 90 per cent of the world’s blind
popula tion, accor ding to the World Health
Organization. Moreover, barely 15 countries
world-wide have copyright exemptions as per a
WIPO finding, and these are mostly in the
advanced economies. The full potential of this
convention will be realised ultimately when large
numbers of blind people have full access to
quality education, which is still a distant dream.
The treaty will not enter into force
internationally unless it is ratified by at least 20
countries. The lack of backing from the United
States from the beginning of the negotiations
could prove to be a handicap in canvassing wider
support. The world has indeed come a long way
since WIPO began to contemplate copyright
exemptions some three decades ago.
What might have been dismissed as an
impossibility just five years ago is now a reality.
Defying sceptics and critics, five countries that
between them account for 40 per cent of the
world’s population and 20 per cent of its GDP
have signed an agreement to create a development
bank to provide financial assistance to developing
countries and emerging market economies,
mainly for infrastructure projects. As its name
implies, the agreement for the New Development
Bank, signed by Brazil, Russia, India, China and
South Africa at their sixth BRICS summit in
Brazil, signals the start of a new global financial
order that aims to be more inclusive than the
Western-focussed International Monetary Fund
and the World Bank. The $100 billion bank will
have an initial subscribed capital of $50 billion.
The five members managed to iron out their
differences to agree on an equal share for each in
the bank, so no one member dominates the
institution. India and South Africa both wanted
to host the headquarters. The eventual decision
to locate it in Shanghai was an acknowledgement
that China’s is the big gest economy in the
grouping. The Bank will also have an African
Regional Centre in South Africa and India will
assume the first presidency of the bank. First
mooted at the fourth BRICS summit in New
Delhi in 2012, the Bank will certainly have an
impact on the existing arrangements put in place
by the Bretton Woods institutions, and will give
more say to smaller countries. But BRICS also
appears to recognise that the NDB cannot replace
the IMF, the World Bank or the re gi onal
development banks. Thus, the Fortaleza
Declaration describes the NDB as a “supplement
to the efforts of multilateral and regional
financial institutions for global development.”
A second financial instrument, the
Contingency Reserve Ar rangement of $100
billion, has been set up to help developing
economies tide over “short-term liquidity
pressures, promote further BRICS cooperation,
strengthen the global financial safety net and
arrangements.” In its sixth year, BRICS has a new
confidence, and it was more than apparent at the
summit. The only world grouping that is not
region, security or trade-based, its members have
come together with the determination to create a
more multilateral global order. China and Russia
have backed the other three BRICS members on
the issue of UN reform and Security Council
expansion. But the grouping needs to find a
stronger political voice. The Declaration came in
the midst of the bombardment, even if under
grave provocation, of Gaza by Israel, but it is
silent on this while calling for Israel and
Palestine to resume negotiations towards a twostate solution.
In both the railway budget and the general
budget, the BJP-led NDA government has made it
clear that Public Private Partnership (PPP) is the
preferred mode for driving major infrastructure
development projects. Finance Minister Arun
Jaitley even announced the decision to set up an
institution named 3P India with a corpus of
Rs.500 crore, to provide support to
mainstreaming PPPs. This ‘Triple-P’ mode was a
common thread in Mr. Jaitley’s speech as he went
through several proposed initiatives of the Modi
government in sectors such as urban renewal,
urban transportation, real estate, and even gas
pipelines. Railway Minister D.V. Sadananda Gowda
too held out the hope that major passenger and
consumer initiatives such as development of
railway stations, terminals, or even connectivity
to ports could be taken up through the PPP route.
To achieve the projected 8 per cent growth in GDP,
infrastructure development is of critical
importance, and this calls for huge doses of
investment across sectors. Successive
governments have tried to parcel major projects
through this route. The greenfield airports,
private ports and real estate projects have been
some of the noteworthy instances on this front.
But there has also been a chain of problems and
allegations in the implementation of such
projects, or in terms of the concessions offered to
promoters in the private sector or to foreign
No doubt, PPPs represent a valuable device
to leverage scarce public funds with private
funding to finance critical infrastructure projects.
Prime Minister Narendra Modi has been a votary
of the PPP model, and prides himself on
including a fourth ‘P’ — ‘people’. This puts the
focus on a major problem. If only the people of the
area are taken on board in its planning, much of
the opposition and hurdles will disappear. More
often than not, land acquisition and
compensation payable for it emerge as the biggest
problems, invariably leading to public agitations
or protest. Mr. Jaitley spoke of “the weaknesses
of [the] PPP framework, the rigidities in
contractual arrangements, the need to develop [a]
more nuanced and sophisticated model of
contracting and develop quick dispute redressal
mechanisms.” The other side of the issue relates
to user charges. These projects, notably those
related to national highway development, are
based on certain user projections. When the
numbers do not add up on the ground, the
investor becomes frustrated because the projected
return on investment may not materialise. The
government and its agencies must work on a new
framework for PPPs to make them attractive to
investors, and at the same time affordable to the
users or consumers.
The Juvenile Justice (Care and Protection
of Children) Act, 2000 (JJ Act) has been amended
twice: in 2006 and in 2011. More demands to
amend the Act have been in the reckoning. There
was, for instance, a public outcry demanding more
stringent punishment for the prime accused, a
juvenile, in the Delhi gang rape case of 2012.
Besides crimes committed by juveniles, violence
against them is also emerging as an important
issue which needs to be redressed by
strengthening the existing provisions. Protracted
inter-country adoption procedures in the existing
JJ Act need urgent legislative resolution. While
personal laws allow specific communities to
adopt, other persons can become guardians only
under an archaic Guardians and Wards Act, 1890.
A secular gender-neutral adoption law for all
people is required.
The apex court in a public interest litigation
decided on March 28, 2014, in Dr. Subramanian
Swamy and others v. Raju and others , refused to
read down the provisions of the JJ Act, 2000, in
order to account for the mental and intellectual
competence of a juvenile offender and refused to
interfere with the age of a juvenile accused, in
cases where juveniles were found guilty of
heinous crimes. It was held by the Court that the
provisions of the Act are in compliance with
Constitutional directives and international
conventions. The Court further stated that the
classification of juveniles as a special class stood
the test of Article 14 of the Constitution, and
that the Court should restrict itself to the
legitimacy and not certainty of the law.
In this backdrop, the Government of India
is now contemplating re-enacting a new JJ Act,
2014, for which a review committee has been
constituted under the Ministry of Women and
Child Development. The baton has been passed on
to Parliament to enact a new law.
The JJ Bill, 2014, seeks to enact a law by
consolidating and amending the law relating to
children who are in need of care and protection.
It seeks to cater to their developmental needs
through proper care, protection and treatment by
adopting a child-friendly approach in the
adjudication and disposal of matters, and for
rehabilitation through processes provided and
institutions established under the proposed new
The Women and Child De velopm ent
Ministry has posted on its website a proposed
draft of The Juvenile Justice (Care and Protection
of Children) Bill, 2014, suggesting broad
amendments. The draft states that the increase in
reported incidents of abuse of children needs
urgent legislative action; that there are inadequate
facilities, quality of care and rehabilitation
measures in private and government-run children
homes; delays in various processes under the JJ
Act ; delays in inter-country adoption process
under CARA; and inadequate provisions to deal
with offences against children, among others.
The draft incorporates the principles of the
Hague Convention on Protection of Children and
Coopera tion in Res pect of Inter-Country
Adoption (1993) which was absent in the original
JJ Act, 2000. The new JJ Bill, 2014, provides for
application of the proposed Act in: cases
involving detention, prosecution or penalty of
imprisonment; matters relating to apprehension,
production before court, disposal orders and
restoration, procedures and decisions related to
adoption of children, and rehabilitation and
reinteg ration of children who are in conflict
with law or, as the case may be, in need of care and
protection under other such law.
The word ‘juvenile’ has been replaced with
the word ‘child’ and the expression ‘juvenile in
conflict with the law’ has been changed to ‘child
in conflict with law.’ While in the JJ Act, 2000,
juveniles in conflict with the law are defined as
the ‘accused’, the draft Bill identifies a ‘child in
conflict with law’ to be one who has been found
by the Juvenile Justice Board to have actually
committed an offence. It also defines an
‘abandoned child’ as well as ‘aftercare’. Chapter
two is the most noteworthy characteristic of the
proposed Bill, providing for ‘Fundamental
Principles for Care, Protection, Rehabilitation and
Justice for Children’. It incorporates
internationally accepted principles of
presumption of innocence, dignity and worth,
family responsibility, non-sti gma tising
semanti cs, privac y and confi dent iality,
repatriation and restoration, equality and nondiscrimination, and diversion and natural justice,
among others. Institutionalisation is suggested as
a measure of last resort — juveniles are to
institutionalised only if no other family-based
care option is possible or available.
CARA has been made a statutory body vested
with functions of in-country and inter-country
adoptions. Section 58 of the draft Bill lays down
special emphasis on inter-country adoptions,
stating that all applications for adoption shall be
filed before a Principal Magistrate of the
concerned jurisdiction where the registered
adoption agency is located.
However, the proposed provision for
adoption orders to be passed by the Principal
Magistrate on the first date of hearing itself, or
within a period of two weeks, failing which it will
be construed by the higher authority of the
Principal Magistrate, “as dereliction of duty ”, does
not seem to be practical for actual
implementation. Judicial proceedings have to be
regulated by the Code of Civil Procedure and no
fast-track procedure that bypasses rules of
evidence can be proposed in contravention of law.
Likewise, transgenders need adoption rights. The
JJ Bill must encompass these issues.
The proposed Bill also prohibits the media
from disclosing the identity of children or
propagating any such information which would
lead to identifying them. All reports relating to
children are to be treated as confidential.
Corporal punishment and ragging, cruelty to
children, employment of children for begging,
adoption without proper procedure, and sale or
procurement of children for any purpose are all
acts that are punishable under the draft Bill.
The draft Bill therefore provides a
comprehensive mechanism to deal with children
in conflict with law as well as children who are
in need of care and protection. However, only a
stringent implementation can provide a
meaningful disposition to make it a true letter of
Is Gross Domestic Product (GDP) an
adequate measure of a country’s development
across many dimensions? This has been debated
vigorously in recent years. The discontent with
GDP stems from the fact that it focusses
exclusively on economic growth. Even there, it
does not capture the level of inequity which can
exist in a society despite overall economic
growth. The inequity can in fact even be
exacerbated by it. More importantly, it pays no
attention to the social and environmental
measures of development which are as important
as economic development. Indeed, the United
Nations has identified three pillars on which the
post- 2015 Sustainable Development Goals
(SDGs) must rest: economic, social and
Several alternative measures have been
proposed to capture the social dimension of
development, combined with or independent of
economic indices. Bhutan has embraced and
espoused the concept of Gross National
Happiness. A World Happiness Report is now
periodically published from the Columbia
University which compares self-reported levels of
happiness of people from different countries. A
composite Wellness Index was proposed by noted
economists Stiglitz, Sen and Fitoussi in response
to a request from the then President of France,
Nicolas Sarkozy, for a measure of development
that looks beyon d GDP. A Global
Multidimensional Poverty Index was developed at
Oxford to gauge inequity within and across
However, none of these has really caught
on because economists, industrialists and
politicians alike are conditioned to place a high
premium on economic development as the
measure of progress and do not like to see the
clarity of a single measure like GDP cluttered by
a host of other indicators they view as imprecise
or even irrelevant. So, an index of social progress
is needed which does not try to displace GDP (not
yet anyway) but has additive value. Such an index
can be used to remind political leaders that their
bifocal vision must accommodate both economic
and social progress as being important for a
country, recognising, of course, that these two
tracks are closely interlinked and sometimes
Such an index of social progress has
recently been created by a group of academics and
institutions constituting the Social Progress
Imperative (
This index has three major domains: Basic Human
Need s, Foundat ions of Wellbeing and
Opportunity. Each of these has several clusters of
specific indicators (as shown in the table).
The environmental dimension is partly
incorporated into the Social Progress Index (SPI)
as a cluster of indicators related to ecosystem
sustainability. While there can be debates on
which other indicators could have been included
in any of the clusters, the SPI does provide a list
of key areas which need to be tracked and acted
upon to ensure a higher level of social progress.
The index is still evolving, with validation
studies being conducted on data from different
countries. The authors have extended an open
invitation to groups from anywhere in the world
to use their data sets for validation and suggest
The designers of this index draw our
attention to three overarching findings of their
study so far: social progress is distinct from
economic development, though correlated with it;
some aspects of social progress are more closely
related to the level of economic development than
others; countries have relative strengths and
weaknesses in social progress, both across the
major dimensions and across components within
the dimensions.
Of the three domains, Basic Human Needs
is best cor relate d wi th per capi ta GDP,
Foundations of Wellbeing being intermediate and
Opportunity the least so. However, in each
domain there is variability in the degree of
correlation between the individual components
and per capi ta GDP. As the developers of SPI
affirm, the index offers a new tool to explore the
complex two-way relationship between economic
and social progress. At the same time, it provides
a metric for comparison of countries, and States
within a country.
Even as the country commits itself to move
on the fast track of economic growth, it must be
mindful of the need to invest in improving the
social indicators as well. We may continue to
measure GDP if that is still considered the
talisman of economic progress by the worlds of
politics and finance, but we must also
simultaneously measure social progress lest we
end up as a soulless society characterised by
gaping inequality and glaring social
backwardness despite gaining wealth. Let GDP
and SPI be the inseparable Gemini twins that
herald our ascent to higher levels of balanced
The promise and performance of genetically
modified crops in agriculture is once again under
the spotlight, with the sanction given by the
Genetic Engineering Approval Committee for
confined field trials of several food crops. In its
last days, the UPA government decided to end the
moratorium on trial cultivation of these
engineered varieties, and to allow experiments
aimed at generating biosafety data. The GEAC has
now taken further steps to allow field trials of
rice, brinjal, mustard, chickpea and cotton, and
import of GM soyabean oil. Clearly, there can be
no credible argument against scientific
experiments in agriculture that advance the goal
of developing plant varieties that can withstand
drought, resist pests and raise yields to feed the
growing world population. But this should be
done through a transparent regulatory process
that is free of ethical conflicts. Proponents of GM
crops funding research in agricultural universities
represents one such conflict. To aid transparency,
research findings should be made available in the
public domain for independent study. But India
has taken only halting steps towards
establishing a strong regulatory system; the
Biotechnology Regulatory Authority of India Bill,
2013, which provided for multi-level scientific
assessments and an appellate tribunal, has lapsed.
While the Central government has not
permitted the commercial cultivation of Bt brinjal
in India, the recent case of neighbouring
Bangladesh shows that regulatory mechanisms
must be put in place before such crops are grown,
whether for research or for the market — and
they must be functional. Although the licence to
produce the crop in Bangladesh required that the
GM variety be isolated from indigenous ones to
prevent genetic contamination, the condition was
not followed. Field trials in India, in which the
State governments have a say, must ensure that
there are sufficient safeguards against such
violations. If GM food is allowed to be sold to
consumers, they must have the right to know
what they are buying, and labelling should be
made mandator y. Here again, the Bangladesh
experience shows that such a condition may be
difficult to enforce. There is no consensus on the
performance of GM crops and the results have
been mixed. They have had some beneficial
impact on tillage practices and in terms of
curbing the use of insecticides, but as the Union
of Concerned Scientists in the U.S. points out,
they have created monocultures and may be
affecting birds and bees. All this underscores the
need for a cautious approach — one that fosters
scient ific inquiry, allows for scrutiny and is
underpinned by regulation. Enacting a
comprehensive law that covers all aspects of GM
crops should be a priority.
“While 2015 will be a landmark year for
sustainable development and climate change
policy, 2014 is the last chance for all stakeholders
to introspect to be able to wisely choose the world
they want post 2015.”
Th e survey con tains (for the third year
running) an independent chapter on ‘Sustainable
Development and Climate Change’, which
contains a few more pearls of wisdom like the
one quoted earlier. It recounts in detail several
goals set by the United Progressive Alliance
(UPA) government (without mentioning it of
course), especially as part of the National Action
Plan on Climate Change (NAPCC). Of significance
is the goal to reduce “emissions intensity of GDP”
quite substantially, meaning moving towards a
lower carbon emissions economy.
The budget too has a few provisions to
gladden the hearts of “sustainable development”
and “green economy” advocates, such as cleaner
energ y technologies, a big fund for cleaning the
Ganga, a boost to watershed development and
provisions for water purification in areas badly
affe ct ed by toxic wa stes. Solar energy get s
Rs.1,000 crore, including for agriculture pump
sets and water pumping stations. A doubling of
the Clean Energy Cess (from Rs.50 per tonne to
Rs.100 per tonne of coal) is aimed at financing
“clean environment” initiatives.
Unfor tunately, as in the case of previous
budg ets and economic survey s, the fe w
concessions given to securing our environmental
future are overwhelmingly submerged by what is
missing and, worse, what is contradictor y. The
survey’s chapter on ‘Sustainable Development
and Climate Change’ appears to exist in isolation
of the other chapters; indeed, if the government
was serious about “sustainable development,”
sustainability would run like a thread through all
the sectoral chapters. A few examples will suffice
to show that it does not.
Th e survey ’s chapt er on industry
acknowledges that it is a cause of “natural
resource depletion (fossil fuel, minerals, timber),
water, air, coastal and marine, and land
contamination, health hazards, degradation of
natural ecosystems, and loss of biodiversity.” Yet,
neither in this chapter nor anywhere else is there
an indication of how this is to be tackled. The
chapter on agriculture and food has no mention
of the enormous health implications of the use of
chemical fertilizers and pesticides, nor does the
‘Sustainable Development and Climate Change’
chapter say anything about the need to reduce
emissions from fertilizer use. Indeed, the Union
budget makes an increased allocation for the
fertilizer subsidy, ignoring the repeated advice
from both within and outside government to
begin moving towards organic, ecological
fertilization measures (it does have a token
provision of Rs.100 crore for organic farming in
northeast India, peanuts when compared to the
Rs.70,000 crore plus subsidy for chemical
fertilizers). Nowhere in the survey are the issues
of dryland farming or the impor tance of reviving
millets for the health of soils and people
A lot more could be said about the ecological
bankruptcy of the Economic Survey; for instance,
how can anyone gauge whether we are moving
any closer to sustainability in the complete
absence of any indicators to measure this? Tribal
welfare does get a substantial allocation, but there
is no indication whether it will be allocated to
continuing the intricate nature-culture
relationship of such peoples; thus far it has not,
and the NDA is unlikely to be any different. And
what appears to be good news on the solar energy
front pales into insignificance when one realises
that the allocation is only 0.6 per cent of the total
energy budget, with the lion’s share still going to
dirty sources like coal and big hydro and nuclear.
The “Key Features of Budget 2014-2015”
document has no section on the environment.
Mr. Jaitley’s speech mentions the environment
only in respect of coal, clean energy cess and
mining. The promise of sustainability in the
mining sector has been made for many years, but
no government has taken serious measures to
implement it. We need to see whether the NDA
does any better. It will be surprising given the
other measures it is already taking or proposing,
such as faster environmental clearances and even
self-monitoring by companies which have shown
scant regard for even mandator y provisions.
trashes the ecological pie on which all of us
depend for our very lives, appears to be of little
consequence. Not even the World Bank’s 2013
study showing that environmental damage
annually knocks off 5.7 per cent of GDP growth,
seems to have made a dent in such thinking.
The budget lays great stress on industrial
corridors. If Gujarat’s model is anything to go by,
this will mean massive amounts of forcible or
induced land acquisition and pollution. This is a
recipe for conflicts and social disruption. Early
July has seen massive farmer protests in Raigad
district of Maharashtra, against the proposed
acquisition of 67,500 acres for a part of the
Mumbai-Delhi Industrial Corridor.
The NDA’s first budg et has thrown a few
sops in the direction of the environment and the
millions dependent on it. But much like its
predecessors, in painting the big picture it
remains embarrassingly devoid of innovative
ideas on how to move India towards ecological
sustainability and justice.
The budget also initiates the River Linking
project (Rs.100 crore for Detailed Project Reports),
which has been under discussion for many years.
Mr. Jaitley’s speech lamented that India was “not
uniformly blessed with perennial rivers.” Both the
UPA and the NDA are ignoring expert opinion
that warns of the enormous ecological disruption
and social displacement that such a massive
engineering project would cause; equally
important, they are turning a blind eye to the
hundreds of initiatives that have shown how
water security can be achieved through
decentralised solutions even in the driest of
The focus is on growth through making it
easier for industry and commerce , with the
assumption that a larger economic pie will help
the poor rise above the poverty line. The fact that
despite a blistering pace of growth through much
of the 1990s and 2000s, the employment
situation worsened (latest figures show nearly 15
per cent unemployment), and 70 per cent of
Indians remained deprived of one or more basic
needs, appears lost on the proponents of such an
agenda. And the fact that such growth actually
There can be good arguments for and
against a four-year undergraduate degree. In any
case, for the time being the debate is settled, in
our very own messy sty le. Th e new National
Democratic Alliance government has used the
same steamrolling tactics to reverse the decision
that the earlier United Progressive Alliance
government had used to push FYUP. Now we have
a controversy about the Chairman of the Indian
Council of Historical Research (ICHR). Tomorrow
we can expect something else. The real issue is
how we take big decisions on higher education
that affect the future of millions of students.
Governments change but the ways of power do
Two years of a ringside view of big
decisions on higher education taught me
something: governance is not about procedures,
committees, rules and regulations; it’s all about
winks and nods of the powers that be. This
applies as much to ‘autonomous bodies’ like the
UGC as it does to public sector undertakings or
departments of the government. This was as true
of the UPA government as it is of the current NDA
government, or the various State governments.
The story of how FYUP was introduced and
then withdrawn serves to illustrate how power
operates. The move to shift from the
conventional three-year graduate course to FYUP
began in late 2012. Usually the university takes a
couple of years to deliberate and decide about any
major change in syllabi. Last time the DU
overhauled the syllabi of the existing three-year
course, it took about three years to do so. But this
time, the vice-chancellor wanted the entire
process — from brainstorming to the
announcement of the new course — to be
completed within six months or less. Everyone
in the academic community was aghast. Even
teachers who were willing to look at the idea of
a four-year degree favourably thought it was crazy
to push the idea at this pace.
However, the vice-chancellor was
determined to go ahead. It was said that he was
the blue-eyed boy of the then Minister of Human
Resource Development. It was also said that the
FYUP has the Minister’s nod. And everything fell
in place. All the formalities of consultation
within the university were completed with
lightning speed. Protests by teachers and
departments were set aside. Ministry officials
were keen to assist in any which way and were
unwilling to lend an ear to anyone who protested.
The President of India, the Visitor to DU, refused
to intervene. The funny thing was the alibi used:
everyon e from Minister down wards said they
were respecting the autonomy of the university.
Now the new government has nodded the
other way. Th e tide ha s turn ed, so has the
Ministry and the UGC. Interestingly, the same
persons continue to occupy key positions such as
Chairman of the UGC and Se cre tary (Hig her
Education). But they have suddenly discovered all
the arguments against FYUP that they had
dismissed last year. Those who could not bear the
thought of interfering with the autonomy of the
university are now issuing diktats and
ultimatums with 24-hour deadlines. The rolling
back of FYUP was as whimsical and arbitrary as
its rollout. The world of higher education is
divided into those who applaud one or the other.
This stor y is wor th remembering in the
days to come, as the BJP would extend its control
over one institution after another: UGC, then
ICHR, then Indian Council of Social Science
Research, and of course the National Council of
Educational Research and Training. Scores of well
meaning, secular academics will cr y foul and
protest against violation of institutional
autonomy by the BJP or the Rashtriya
Swayamsevak Sangh. Such protests will be
justified and necessary. But they would also beg a
series of questions: do we have legacy of
safeguarding institutional autonomy? Has the
academic community shown the courage to
defend its autonomy? What is our record of using
academic autonomy as and when we get it? Can
academic autonomy be equated with selfindulgence of the ivory tower, secular or
otherwise? How do we look firmly into the future,
unperturbed by nods and winks?
⇒ A
Echoes of the statutor y universal minimum
wage legislation adopted by Germany’s governing
grand coalition seem to reverberate beyond
Berlin, in the European Union and across the
Atlantic. Europe’s largest economy is to enforce a
national minimum pay of •8.5 an hour from
January. Such a guarantee would extend cover to
the millions of workers — mainly in the eastern
region — who remain outside the negotiated
wage settlement that defined post-War Germany’s
industrial model. Britain has had a national
minimum wage law since 1998. But ahead of the
2015 general election, the opposition Labour Party,
which was the architect of the legislation, wants
changes so that those at the bottom of the
workforce may share the fruits of the economic
recovery. Neighbouring France codified a legal
guarantee in 1950, amended since in 1970. But
Paris has recently floated the idea of a minimum
wage across the European Union, although a panEuropean measure may not materialise any time
soon given the legal prohibition in this area. The
idea may well influence the remaining six EU
states — founder-member Italy, Austria, Cypr us,
and the three Nordic countries — to stipulate
their respective basic floor. Although the Swiss
rejected a proposal that would have given the
country the world’s highest minimum pay, the
plebiscite in May occasioned a lively debate. U.S.
President Barack Obama’s bid to raise the federal
minimum wage was blocked by Congress. But
there is evidence of growing support among the
Republicans, who are anxious not to antagonise
The implications of a minimum-wage floor
on employment generation and growth continue
to divide opinion. This is true equally of Germany
which is set to introduce the new law in January,
or Bri tain and the U.S. which have put for th
proposals to effect an increase in the existing
amount. But growing support on this contentious
issue cutting across traditional party lines
perhaps means there is greater recognition that
minimum wages ought to keep pace with
inflation, average wages and productivity growth.
The imperative need to mitigate the impact of the
2007-08 economic meltdown on large sections of
the population in the advanced economies has
also strengthened support. A legal minimum pay
remains a vital tool for the workforce in mature
democracies, even though these are already
underpinned by vibrant trade unions and high
levels of social protection measures. However, for
the bulk of the wage-earners in the developing
world that is outside the organised sector of the
economy, a leg al guarantee of a minimum
subsistence pay seems morally non-negotiable.
This is true even from the standpoint of the
physical and mental capacities that are paramount
to enhance overall productivity.
The announcement of a new BRICS Bank
displays the desire of emerging economies to
move away from Washington D.C.-style lending
institutions. But between India’s bureaucratic
ef ficiency and China ’s indifference to
humanitarian, environmental and regional
concerns, they resemble John F. Kennedy’s tart
characterisation of the very place they hope to
leave behind. Much work lies ahead for the
creators of these new multilateral financial
institutions before the first loan can be made.
Simply reaching sufficient agreement to
announce the new BRICS Bank represents a
significant achievement for the six-year-old
BRICS group. While it may seem silly to organise
a serious international grouping based on a clever
acronym, the BRIC countries are the four largest
economies in the developing world. They have
economic heft, but do they have much in
What they most need to succeed is trust.
Russia and India have long histor ies of conflict
with China. Brazil and Russia are not famous for
being creditworthy. South Africa is a solid neutral
party, but also, frankly, a lot less significant than
the other members. So apparently their joint
desire to pl ant a fl ag on the global econ omy
sufficiently overcame mutual differences.
The preponderance of the friction on
lending policy at the International Financial
Insti tutions (IFIs) ref lects ty pical lenderbor rower conflict. Developed countries, most
often net lenders, want high standards to make
sure money is used responsibly and repaid. The
developing countries, most often net borrowers,
resent outsiders imposing conditions on the use
of money inside their own country.
Any lender must pay attention to prudential
concerns to survive. But given business practices
in the BRICS — especially where government is
involved — this cannot be taken for granted. The
BRICS governments have not always been
enthusiastic about World Bank scr utiny and
transparency in the past. They must be vigilant to
ensure that BRICS Bank money is used wisely and
gets repaid.
Developed countries have also imposed
high-minded lending values, the benefit of which
can be more reasonably debated. High
environmental standards, for instance, may feel
like a luxury that poor borr owing countri es
cannot afford. Some Western-imposed mandates
feel more like development fads. Most are
legitimate values that the BRICS should aspire to
If the BRICS are comfortable with lowering
their lending standards I do not doubt they will
find plenty of projects to fund. But if they are, it
is best that the existing IFIs are not affiliated
with it.From what has been announced, the BRICS
Bank will take a very democrati c approach to
governance by giving each member equal voting
rights. Undoubtedly there is value in such an
equal arrangement for symbolic solidarity, as well
as to avoid concerns about Chinese domination.
Despite its shortcomings, this arrangement
may be the only way to overcome their mutual
trust deficit. Mihir Sharma has already pinned the
BRICS Bank as a vehicle for the Chinese to
commandeer the friendlier public image of the
three southern BRICS as a front for China ’s
foreign economic policy. On the other hand, can
an institution survive being funded pr imarily by
China and Russia, the only two BRICS with excess
reserves, when their influence is no greater than
any other member? If adequate checks are put in
place to prevent Chinese dominance, will China
remain interested in this project?
This works as long as they see long-term
value in the institution. U.S. taxpayers would not
accept such a bargain, but China and Russia have
less need to answer to their own taxpayers. The
BRICS clearly want something tangible to
demonstrate their global prominence and the
power of non-Western values. Yet the new BRICS
Bank faces two critical tensions. The first pits the
desire to be free of Western-imposed constraints
on lending, versus the need for prudential
lending. The second sets the high-minded desire
for equality of governance against the reality that
lack of Chinese dominance may result in
institutional neglect by its pr imary benefactor.
While the BRICS Bank project was put
together in an impressively short two years, most
of the difficult questions remain unanswered.
These tensions — critical to the bank’s viability
— will not be easily resolved. I expect it will be
several years before the details are sufficiently
ironed out for the BRICS Bank to open its doors.
Keep talking Peace
The four-month extension of talks to halt
Tehran’s bid to make an atomic bomb is an
indication of the positive if limited fallout from
the historic late-2013 interim agreement. Beneath
that was well-founded and deep scepticism — in
the United States, Europe and even among the
Israeli intelligence — of any resort to brute force
as a means to restrain Iran’s pursuit of nuclear
weapons. The five permanent members on the
United Nations Security Council (UNSC) and
Germany accordingly decided to ease sanctions
worth $7 billion for six months. The readiness of
the latter to relent on Iran’s cont inuati on of
uranium enrichment up to the level necessary for
power generation was in sharp contrast to past
UNSC resolutions requiring Tehran to freeze all
enrichment. In return, Iran agreed to limit its
nuclear programme and permit vigorous
multilateral inspections of its facilities. Whereas
U.S. President Barack Obama insisted that such
relief was conditional and reversible, the
Republican hard-liners and Israel decried the
November agreement as a huge mistake. It is
significant that the International Atomic Energy
Agency (IAEA) should have acknowledged in June
that Iran was cooperating with investigations
into the so-called Possible Military Dimensions
to its nuclear programme. The IAEA had also
observed that such inspections could necessarily
proceed in a step-by-step manner — a possible
case to extend the deadline for negotiations.
There is evidently no guarantee that the
November deadline would yield the outcome that
all parties envisage. Tehran has offered to freeze
the country’s operations at current levels over the
next three to seven years and thereafter resume
uranium production as per its own requirements.
Conversely, Washington and its partners insist
that Iran dismantle major aspects of its uranium
enrichment facilities and that current restrictions
should continue for well over a decade. The real
force behind these stated positions may also be
influenced considerably by ge opolitics in the
Middle East.
A foremost factor is the election last year of
Iran’s moderate President Hassan Rouhani, which
almost coincided with the interim nuclear
ag reement. A thaw in Br itain’s relations with
Tehran could prove to be a vital channel for the
European powers and the U.S. to exert pressure on
the radical Sunni Islamic groups in Iraq and Syria.
These are factors with a strong potential to
influence the course of nuclear talks. The road to
long-term peace lies in eschewing hard positions;
one that goes to the root of the global Nuclear
non-Proliferation Treaty (NPT). Nuclear weaponstates championing disarmament ought to tread
a delicate line vis-à-vis potential aspirants in
order to strengthen world peace.