Export policy

India’s export of agriculture and processed food products — which accounts for 12-14 per cent of the country’s total merchandise exports — had been enjoying brawny[bro-nee(strong,मजबूत)] growth for the last five fiscals. However, it declined by 9.8 per cent to $38.6 billion in FY 2015 from $42.8 billion in FY 2014, with export to the US declining to $ 2 billion.

What are the other factors behind the poor performance of farm exports?

Export data compiled by Agricultural Products Exports Development Authority shows that export of basmati rice declined in both volume (1.6 per cent) and value terms (7.15 per cent) in FY 2015 mainly because of reduced demand from Iran and the US.

Increased shale gas production in the US has led to lower demand for crude oil. Low priced crude in turn has reduced the demand for bio-fuel, especially ethanol, thereby reducing the demand for soya, corn, mustard, sunflower, palm, sugarcane and sugar beet.

China has cut its cotton import quota to 894,000 tonnes, just nuff[núf(enough,पर्याप्त)] to meet WTO obligations. It is reported to have imported 30 per cent less cotton in the first half of 2015. China also imposes an import duty of 40 per cent, and deprives India access to a gargantuan[gaa'gan-choo-un(large,बड़ा)] cotton consuming market.

Recent de-stocking and curbs[kurb(control,नियंत्रण)] on imports of agricultural commodities in China will keep international prices depressed. That will translate into lower demand for cotton exporters like India.

India’s farm exports also face prohibitive import duties in overseas markets. For example, dairy products attract peak import duties of 511 per cent in the EU, 93 per cent in the US, and 692 per cent in Japan. Fruit and vegetables, and oilseeds attract equally high import duties in the EU, Japan and the US, with Japan being the most protective. Though there is a free trade agreement between India and Japan, most farm products have escaped any duty reduction commitments.

India’s farm exports also have to compete with highly subsidised farm products supplied by other countries. Although India has been accused of being overly[excessively,बहुत ज्यादा)] protectionist about agricultural and food products, it is China, Japan and the US which are the top farm subsidisers. According to the OECD, China spent over $165 billion in direct and indirect farm subsidies, followed by Japan at $65 billion (50 per cent of its agriculture GDP compared to less than 10 per cent in India) and the US at $ 30 billion. Besides, nearly 70 per cent of Chinese subsidies are trade distorting.

India’s farm exports also have to face a series of non-tariff barriers in top consuming markets – for example, a ban on import of mangoes by EU that was lifted in January 2015.

Instead of global demand and supply factors, India’s farmers are guided by minimum support and procurement prices fixed arbitrarily[aa-bi-tru-lee(randomly,मनमाने ढंग से)] by government. Keeping domestic prices of farm goods artificially high disincentivises export. This affects India’s ability to capture export markets.

Even Bangladesh and Pakistan are now sourcing oil-meals from Latin America rather than India.

Exports of many agriculture commodities, sugar for instance, are regulated by arbitrary quota fixation in India. Such executive actions make India an erratic[i'ra-tik(unreliable,गैरभरोसेमंद)] supplier.

The cultivation of genetically modified (GM) crops is quite common in the US.

China annually imports over 70 million tonnes of GM soybeans, but India can't supply any of it. Strangely, India does allow import of GM soyaoil and cottonseed oil.

Given the numerous[nyoo-mu-rus(many,बहुत से)] tariff and non-tariff barriers that its farm exports face in overseas markets, India needs to devise an effective strategy to counter them. India will have to take up the issues of farm subsidies, market denials and high import duties at all bilateral (FTAs), regional (e.g. RCEP) and multilateral (WTO) trade forums if it is serious about pushing its farm exports.

Among internal actions needed are long term measures to tackle the issues of low productivity, over dependency on monsoon, and lack of post harvest infrastructure that lower the net supply of agriculture commodities and leads to knee jerk[nee-jurk(natural,स्वाभाविक)] reactions in the form of export bans. It’s time India stopped over- promotion of cereals, and let demand and supply forces guide production and trade decisions.

It’s time to consider cultivation of GM crops for capturing a bigger share in global farm trade.

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Time has come

The solar power auction in Andhra Pradesh that ended earlier this month has shown that solar power is finally here to stay. This was an international auction for a commercial, grid-connected plant of 500 MW, in which 30 Indian and foreign companies participated. While the lowest bid was at Rs 4.03 per unit, it is the plethora[ple-thu-ru(richness,अधिकता)] of bids at Rs 4.60 to 5.00 per unit that shows that solar power is now fully competitive with coal-based power, especially for meeting peak loads.

But all the bids were for setting up solar photovoltaic (PV) power plants, which can deliver power only during daylight hours, and at full efficiency for only a part of those.

To be viable, the bids in the auction had to be bundled with the guarantee of thermal power from the National Thermal Power Corporation (NTPC). This is why, despite its plans for creating 1,00,000 MW of solar generating capacity by 2022, the government is also planning to more than double its coal-fired power output by setting up 455 more coal-based power plants by 2030.

Solar thermal power is the older of the two forms in which the sun’s energy is being harnessed[haa-nist(tackle,काम में लाना)] as electricity, but it has been neglected because of its higher initial cost. But, unlike PV, CSP plants can provide power day and night with little or no fossil fuel backup and, therefore, do not need to be paired up with conventional coal or nuclear power plants. The reason CSP plants can do this is that they are able to store the sun’s energy for long periods at very little cost, and with paltry[pól-tree(negligible,नगण्य)] loss.

A second advantage is that CSP plants can produce steam at well above the 593 degrees Celsius required for supercritical power stations and can, therefore, be used with the same ultramodern turbines that are being used in our ultra-mega power plants. This makes it possible to feed the power directly into the existing national grid, without having to step up the voltage. This reduces its distribution cost to a third of what it is for PV power.

This is not a theoretical proposition. As of early this year, there were 61 operational solar thermal power plants in the world, with a generating capacity of 4,228 MW. The pivotal[pi-vu-t(u)l(crucial,निर्णायक)] breakthrough came in 2011, when Gemasolar, a 20 MW Solar thermal power plant, began delivering 6,500 hours of power a year to a small city in Seville, Spain, for the past three years. This is 10 per cent more than what the coal-fired power plants have been delivering in India in recent years.

Gemasolar stores 15 hours of extra heat during the daytime to run the turbines at night and in bad weather. As a consequence[kón-si-kwun(t)s(result,परिणाम)], it keeps only a 15 per cent backup of natural gas to guarantee power on demand. By contrast, photovoltaic power can only be stored as electricity, which is a costlier alternative.

At current Indian costs and exchange rates, a Gemasolar clone set up in the Thar desert would be able to produce power at around Rs 4.50 per unit. This makes CSP appear more costly, but the appearance is deceptive[di'sep-tiv(unreal,अवास्तविक)] for two reasons: First, PV panels lose half a per cent of their efficiency for every degree of temperature rise above ambient[am-bee-unt(close,परिवेशी)] levels. This amounts to a 2 per cent fall in delivered power for every extra degree of heat. Second, PV power also needs to be stepped up to grid voltages. This increases the cost of transmission by up to three times.

All things considered, the government will be killing several birds with a single stone if it divides its 1,00,000 MW target for solar power into two sections, reserves the bulk of the extra-capacity solar thermal power generation, and issues separate tenders for each part.

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Reality is different

Parliament has been summoned[sú-mun(call,बुलाना)] to meet on November 26, 2015. The state of the economy requires more than a summons to the Members of Parliament.the economy is in hapless[hap-lus(poor,कमज़ोर)] shape. The tell-tale sign is the flat growth rate: 7.3 per cent in 2014-15, 7.0 per cent in Q1 of 2015-16, and the forecast of 7.3 per cent for the whole of 2015-16.

Q2 (June to September) 2015 was the third successive quarter in which net sales of all firms shrunk by 5.3 per cent over Q2 of 2014-15. The manufacturing sector did worse, with net sales shrinking by 12 per cent. For one-fourth of all non-financial firms, operating profits in Q2 were less than interest expenses. Businesses are in the doldrums[dówl-drumz(inactivity,मंदी)] .

In the first half (April to September) of the current financial year, the index of industrial production grew at 3.94 per cent. If we look at manufacturing alone, it was abominable[u'bó-mi-nu-bu(worse,ख़राब)], growing at 2.64 per cent. Core sector industries grew at 2.33 per cent in the first half compared to 5.07 per cent in the first half of last year.

The worst performer is exports. At end-September 2015, merchandise exports had declined by 17.7 per cent over last year. The global slowdown is indeed a major cause, but the rate of decline is perturbing[pu'tur-bing(worrying,चिंताजनक)] because it has happened even as the value of the rupee has depreciated by 6.6 per cent against the dollar.

At the Delhi Economic Conclave, the Prime Minister made four claims:

1. GDP growth is up and inflation is down.

There is no evidence yet of the former. About the latter, while WPI inflation is down, CPI inflation has inched up since July (3.69 per cent) until October (5.0 per cent). Moreover, food inflation has increased from 2.15 per cent at the end of July 2015 to 5.25 per cent at the end of October 2015, and is expected to rise further.

2. Foreign investment is up and the current account deficit is down.

The Government is celebrating the increase in FDI from $36 billion in 2013-14 to $44 billion in 2015-16 as well as the 18 per cent increase in the current year. Between 2005 and 2007, FDI had quadrupled[kwó'droo-pul(four time,चौगुना)] from $9 billion to $37 billion. In 2011-12 it was $46.5 billion. FDI inflows have remained range bound at $36 to $46 billion and there is no perceptible[pu'sep-tu-bu(Clear,स्पष्ठ)] bounce. The current account deficit is low because prices of crude oil and gold are at a historic low.

3. Revenues are up and interest rates are down.

The 36 per cent increase in indirect tax collections is due to the hike in excise and customs duties. Net of the additional taxes, the increase in collections is only 11.6 per cent, which is normal. Regarding interest rates, RBI itself has expressed disappointment that the cuts are not being passed on to borrowers. If interest rates are really down to bewitching[bi'wich-ing(attractive,आकर्षक)] levels, why is credit growth low?

4. The fiscal deficit is down and the rupee is stable.

If the Government is confident of containing the fiscal deficit, it should restore the target date of 2016-17 to achieve a deficit of 3 per cent. The rupee is not exactly “stable” — it has depreciated against the dollar but has appreciated against the euro and the yen. Besides, there is no particular virtue in a “stable” rupee, what is needed is an appropriate exchange rate.

Unless there is an international crisis, India’s new “normal” for GDP growth seems to be 7 per cent, and the Government is struggling to achieve that. A sedate[si'deyt(calm,शांत)] growth rate will not put more money in people’s pockets, it will not create additional jobs (over and above replacements), and it will not throw up additional resources to tackle the age-old problems that plague[pleyg(suffer,त्रस्त)] infrastructure, delivery of education and healthcare, and providing drinking water, sanitation and housing.

In order to break away from the new “normal”, the Government must summon the vision and courage to do bold structural reforms (a la 1991-92) as well as the grace and humility to engage the Opposition and accommodate their views.

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Economic rivalry

For nearly two years, Chinese President Xi Jinping has been dazzling[da-zu-ling(amazed,चौकाना)] the world with his One Belt, One Road (Obor) initiative.

As countries ranging from Britain to Brunei and Tanzania to Tajikistan jumped on Xi’s Silk Road bandwagon, Japan, the other Asian giant[jI-unt(big,बड़ा)] and the world’s third-largest economy, watched warily[weh-ree(watchful,सतर्कतापूर्वक)] .

The unfolding economic rivalry between China and Japan is great news for Prime Minister Narendra Modi, who will be able to mobilise unprecedented[ún'pre-si,den-tid(New,अभूतपूर्व)] support from China and Japan.

Even more important, Japan’s new activism will allow Delhi to mitigate[mi-ti,geyt(lessen,कमी)] some of the perceived threats from China’s growing economic presence in the subcontinent and beyond. If China is seen as limiting Delhi’s room for manoeuvre[mu'noo-vu(tactic,युक्ति)] in the subcontinent and the Indian Ocean, Japan promises to create new opportunities for leading regional economic integration in its neighbourhood.

As Xi put his personal and political prestige on the belt and road initiative, India found itself between a rock and a hard place. Given its historical rhetoric[re-tu-rik(high flown words,शब्दडाम्बर)] against Western financial institutions, Delhi was quick to join the AIIB and helped found the BRICS bank. But when it came to Beijing’s proposals to develop infrastructure linking the subcontinent to China, Delhi was deeply discomfited. It was also reluctant[ri'lúk-tunt(unwilling,अनिच्छुक)] to accept Chinese funding to develop major infrastructure projects in India.

Modi has altered some of this by becoming more open to Chinese investments and asking them to undertake a feasibility[fee-zu'bi-lu-tee(possibly,संभावित)] study on a high-speed train corridor between Chennai and Delhi. If the essence of India’s economic ambivalence[am'bi-vu-lun(t)s(uncertainty,अनिश्चितता)] towards China endured, Abe might now be able to put Delhi out of its strategic misery.

Last May, Abe announced that Tokyo will invest $110 billion to promote “quality infrastructure” in Asia over the next five years. Japanese officials believe that the quality of Chinese infrastructure is inferior[in'feer-ee-u(cheap,घटिया)] to that in Japan.

They also argue that the hidden costs of Chinese proposals will come to haunt many of the projects being launched under the Obor initiative.

In a series of visits to various regions across Asia, Abe has been pitching for Japan’s project exports. While it has lost some big deals to Beijing, Tokyo has begun to edge out Chinese competition elsewhere. In Indonesia, it lost a bid to develop a high-speed rail line between Jakarta and Bandung. In Bangladesh, Japan won a port at the Matarbari island on the southeastern coast.

Refusing to join the China-promoted AIIB, Japan is trying to rejuvenate[ri'joo-vu,neyt(regenerate,पुनर्जीवित)] the Asian Development Bank that it has led for many decades.

While China is relatively new to infrastructure development beyond its borders, Japan has been at it for many decades. Japanese technology and finance have been at the forefront of building road and rail corridors and airports, including in China. Japan’s overseas assistance arm, the Japan International Cooperation Agency (Jica), has supported many such projects in India, including the Delhi Metro and the Delhi-Mumbai corridor. While Jica’s activity has been expansive, Tokyo lacked a larger strategic framework to guide its infrastructure promotion. But Japan’s traditional development aid has now acquired a strategic dimension under Abe, as he tries to fend off China’s drive to expand its economic and political influence in Asia.

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Opportunity and challenges of ASEAN

Eight long years in the making, the Association of South-East Asian Nations’ (Asean’s) economic community is finally a reality: A free-trade zone, larger in geographical area than the European Union and, with a combined GDP of $2.57 trillion, the world’s largest single market. Experts estimate the economic community could lift aggregate output by 7 per cent by 2025, and create 14 million new jobs. The agreement, member states hope, will kickstart intra-Asean trade, which has remained stuck at some 24 per cent of combined GDP for several years now, though tariff barriers have, in practice, been eliminated. For the economic community to succeed, Asean will need to remove non-tariff barriers, and ensure enhanced transport connectivity across the region. The most important tests of the economic community’s success will be freer movement of adept[u'dept(skilled,कुशल)] workers, trade and capital for the region’s more than 600 million people. Asean leaders have committed to accepting each others’ professional qualifications, but problems remain.

The economic community is peachy[pee-chee(good,अच्छा)] for Asia. Though the importance of regional groupings has long been recognised, this is the first echt[exht(real,वास्तविक)] step forward. Asean leaders had avowed[u'vawd(declared,घोषित)] that their 2009-15 roadmap consisted of three key elements — economic, now realised, political-security and socio-cultural. Translating the trade deal into a foundation for a regional strategic initiative, though, will be pugnacious[,púg'ney-shus(tough,कठिन)]. Asean, unlike the EU, is politically diverse. Its members range from one-party communist-ruled Vietnam to quasi-military ruled Myanmar, the increasingly Islamist-leaning kingdom of Brunei and the raucously[ro-kus-lee(harsh,उग्र)] democratic The Philippines. Though several of its members share concerns over the rising power of China, with which they have locked horns over its polemical[pu'le-mi-kul(controversial,विवादस्पद)] policies on the South China Sea, consensus[kun'sen-sus(agreement,सहमति)] has eluded[i'lood(escape,बचाना)] them.

For India, the rise of a unified Southeast Asian market represents special opportunities — and challenges. The grouping is India’s fourth largest trading partner. India, in turn, is the sixth largest trading partner for Asean. Trade between the two amounted to $76.52 billion in 2014-15, with India’s exports worth $31.8 billion and imports $44.7 billion. Though the agreement will benefit Indian competitors like the Philippines and Vietnam, India is negotiating a trade agreement with the Asean states and their partners, scheduled for completion by 2016. New Delhi, whose negotiations with trade blocks like the EU are stalled[sto(postpone,स्थगित)], needs to make sure its Asean deadline is met.

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Know about corporate bonds

The country’s nascent[ney-sunt(beginning,शुरुवाती)] corporate bond market has seen extremely limited retail investor participation till now. In a bid to reverse this trend, the RBI is considering a slew of options that include encouraging issuance of zero coupon bonds, providing clarity on taxation issues, including the provision of special quota for retail investors in debt issues and providing reduced transactions costs for retail investors.

A well-developed corporate bond market is widely seen as a means of addressing the travails[tru'veyl(effort,प्रयास)] of the existing bank-dominated financial system.

In India, total issuance last year was worth less than 3 per cent of GDP, which places the country below most of its Asian peers with the sole exception of Indonesia.

What is corporate bonds

Corporate bonds are debt securities issued by private and public corporations. Companies issue corporate bonds to raise money for a number of purposes, such as setting up a new plant, buying equipment, or investing in organic growth of the business. When investors buy a corporate bond, they effectively lend money to the issuer, or the company that issued the bond. In exchange, the company promises to return the principal amount on a specified maturity date. Until that date, the company usually pays a stated rate of interest, generally semi-annually.

In recent months, the corporate bond yields[yee(-u)ld(return,मुनाफा)] have seen a hardening trend despite growing expectations that the RBI will continue to maintain an accommodative monetary policy stance. A downgrade of Jindal Steel and Power Ltd followed, creating more turmoil[tur,moyl(violent disturbance,खलबली)] in the corporate bond market.

Apart from these short-term worries, continuing lack of activity in India’s bond markets stem from the fact that a majority of new bond issuances are concentrated in the 2-5 year tenor.Reissuance of bonds has not picked up and the lack of functional trading platform with Central Counter Party facility like NDS-OM — a screen based electronic anonymous order matching system for secondary market trading in Government securities owned by RBI — impedes[im'peed(block,बाधित)] the growth of secondary market.
RBI Deputy Governor Harun R Khan, in an October 27 address at a FICCI event in Mumbai was emphatic in his assertion that the development of an efficient and robust[row'búst(strong,मजबूत)] bond markets was a challenge globally and only a few jurisdictions can claim to have genuine local currency bond markets.

Steps such as putting in place an efficient trading platforms for corporate bonds could make a difference in increasing the penetration[pe-ni'trey-shun(entry,प्रवेश)] of these instruments. But that, by itself, may not be adequate[a-di-kwut(enough,पर्याप्त)]. NSE, for instance, has developed a dedicated trading platform for privately placed corporate bonds but there is trifling[trI-f(u-)ling(negligible,नगण्य)] activity on this platform.

On the positive side, the RBI is already working on addressing some of the market infrastructure issues, including development of an electronic platform for repo in corporate bonds. ‘Market making’ in corporate bonds, according to Khan, has proved to be a challenging issue, particularly the funding of brokers

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Views of raghuram rajan

China's nuisance[nyoo-sun(t)s(painव्यथा)] of economic slowdown is India's too, RBI Governor Raghuram Rajan said contradicting government assertions that India will not be affected by deceleration of Chinese economy.

"The Chinese slowdown is a concern for the whole world. There is a lower demand for some of our exports to China. But circuitously[sur'kyoo-i-tus-lee(indirectly,अप्रत्यक्ष)] too, many of the countries are not exporting to China as much as they did and they are buying less from us," Rajan said in an interview with Hong Kong-based South China Morning Post.

"But India being a commodity importer, has been helped a bit by cheaper commodities. So the impact has not been as bad as it could have been. Still, on the whole, we have been adversely affected by the Chinese slowdown because China's slowdown has impacted global growth and India is very well integrated into the global economy," Rajan said.

Finance Minister Arun Jaitley had told a gathering at Columbia University last month that India is "not impacted" by the slowdown as it is not part of Chinese supply chain and India could become the "additional shoulder" the global economy needs to stand on as China slows.

Some comments from India that China's pain is India's gain has drawn strong reactions from the Chinese media.

Rajan was in Hong Kong yesterday to receive honorary doctorate awarded by the Hong University of Science and Technology.

In his interview Rajan also pointed to "growing interdependence" between India and China.

"The prime minister has clearly laid out a path for improving relations with neighbours. The focus is on the East, rather than the traditional emphasis on the West. Whether it is through the Asian Infrastructure Investment Bank or through China's Silk Road initiative, we will have greater engagement with China and Chinese projects. This will also feed well into China's interests in expanding its engagement in the region," he said.

Rajan said he hopes India will emulate[e-myû,leyt(follow,अनुकरण)] China's growth rates and the country would like to learn from things China got right.

"We would like to learn from its manufacturing success, how it built up its infrastructure, how it encouraged its village enterprises and how it manages FDIs in such enormous[i'nor-mus(big,बड़ा)] quantities. A lot of Indian businesspeople who travel to China also keep coming back with stories of why it works better than India", he said.

"But I also stress we cannot blindly follow the path that China followed as it has already been on that path and has changed some of the conditions. We have to determine which path we follow so that there is room for both of us. Would it, for example, make sense for India to specialise in industries that China has already specialised in? In some cases there is room for both, in some maybe not", he said.

Rajan also rooted for a greater global role for the Chinese currency yuan and rubbished claims that Beijing started a currency war with its recent devaluation.

"I do not know what the ultimate requisites[re-kwi-zit(requirements,आवश्यकता)] of the International Monetary Fund (IMF) are and how much of these China has met. But the IMF does need to accommodate currencies of large economies with strong positions in global trade and finance, and clearly China has made a lot of progress on both counts", he said.

Rajan also said it is "very unfair" to blame Beijing for the competitive devaluation among emerging markets, contrasting the shrill[shril(sharp,तीखा)] anti-Chinese voices common in a country seen as China's regional rival.

"Multilateral bodies like the IMF and the World Bank are increasingly paying more attention to emerging markets. This has to continue and there needs to be changes in governance in multilateral institutions", he said.

His comments came amid[u'mid(among,के बीच)] reports that yuan may enter the IMF's Special Drawing Rights (SDR) basket of reserve currencies at a lower weighting. The IMF is expected to decide this month on whether to add the yuan to the elite[i'leet(specific,विशिष्ट)] currency club that now includes the US dollar, euro, pound sterling and the yen.

Inclusion in the SDR would boost Beijing's efforts to internationalise its currency and cement its status as a global power.

Beijing drew flak for 'starting' a currency war after it resorted to nearly four per cent devaluation of yuan in August which led to a sharp sell-off in emerging-market currencies, including the rupee.

Rajan said: "Currencies elsewhere were already depreciating in a large way even before the Chinese move because of the unconventional monetary policies adopted by some countries.

"It is not reasonable to say the Chinese move precipitated the trend. Second, given the miniscule[mi-ni,skyool(small,छोटा)] scale of the Chinese devaluation, it cannot be blamed for a currency war", Rajan said.

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Seventh pay Commission

In the heyday[hey,dey(peak,जमाना)] of Indian socialism, the perception of government was benign[bi'nIn(kind,दयालु)].In today’s climate of liberalisation, the government is viewed with hostility[hós'ti-lu-tee(unfriendly,विरोधी)].That must explain the negative reaction both in the media and amongst the public at large to the increases in pay for Central government employees recommended by the Seventh Pay Commission (SPC).

The pay hikes are modest —  Do we want to run the government — which comprises not just civil servants but the police, armed forces, nurses, doctors, regulators and academics — at all? Or have we persuaded[pu'sweyd(convince,मनाना)] ourselves that all of the government is simply money down the drain?

The SPC’s figures has a rigorous[ri-gu-rus(exact,सही)] basis for setting pay in government. It arrives at a figure for minimum pay in government with reference to norms laid down by the 15th Indian Labour Conference (ILC) in 1957. The ILC had said that the minimum wage should cover the basic needs of a worker and his family, that is, a spouse[spawz(partner,साथी)] , and two children who are below the age of 14.

Based on these norms, the SPC arrives at a minimum wage of Rs. 18,000 for a government employee. This is 2.57 times the minimum pay in the Sixth Pay Commission. The increase over the projected pay on the current basis as of January 1, 2016 is 14.3 per cent. This is the second lowest increase recommended by any Pay Commission since the first one, and it is way below the 54 per cent increase following the last one.

So far as the impact on government finances is concerned, the SPC numbers provide a stream of good news. First, the impact of the pay hike on the Central government (including the railways) will amount to 0.65 per cent of GDP. This is less than the impact of 0.77 per cent of GDP on account of the Sixth Pay Commission.

Second, the impact on the Central government (excluding Railways), which is what matters when it comes to the Union budget, is 0.46 per cent of GDP. This is a stringently[strin-junt-lee(strictly,सख्ती)] one-off impact. The correct way to view it, therefore, would be to amortise it over a period of, say, five years. The annual impact then is 0.08 per cent of GDP. The impact on the fiscal at the central level is barely discernible[di'sur-nu-bu(noticeable,सुस्पष्ठ)].

Pay, allowances and pension (PAP) as a proportion of government expenditure has been declining sharply. In 1998-99, PAP was 38 per cent of revenue expenditure. The SPC estimates that this figure has fallen to 18 per cent in 2015-16. (It will go up to 22 per cent in 2017-17 consequent[kón-si-kwunt(resultant,परिणामस्वरूप)] to the SPC award, but will decline thereafter, as pay grows at a lower rate than government expenditure).

Even in terms of numbers, India’s central bureaucracy (including the Railways but excluding the armed forces) has neither been increasing in recent years nor hugely bloated in absolute terms. The number of employees grew to a peak of 41.76 lakh in 1994. It has declined since to 38.9 lakh in 2014.  Excluding security and commercial functions, the total central employment is just 4.18 lakh. “The ‘core’ of the government…”, the SPC report notes, “is actually very small…”
The number of personnel per lakh of population in India was 139 in 2014, way below the figure of 668 for the U.S. India’s bureaucracy needs not so much downsizing as right-sizing — we need more doctors, engineers, IT specialists, tax experts, judges, and so on.

This time round, the Finance Ministry insists that it will stick to its fiscal deficit target for 2016-17 after providing for the SPC pay hike. If it does so, the reduction in fiscal deficit will be contractionary[kun'trak-shun(compression,shortening,संकुचन)] . Hence, the pay hike will not lead to economic expansion in the aggregate.

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Story of musk deer

The Indian policymaker seems to suffer from the musk deer syndrome. The musk deer is a rare species that produces musk in its own body. But it does not realise this and searches endlessly for the source of the aroma.

India faces a similar dilemma[dI'le-mu(doubt,दुविधा)]. On the one hand, the country is producing foodgrain at historical surplus levels, and on the other farmers are giving up their lives owing to the farm crisis, poor monsoon and inappropriate policies.

A case in point is Madhya Pradesh. It has one of the highest levels of malnutrition in the country. One in three children in the State is underweight and over 40 per cent are stunted[stún-tid(undevelop,अविकसित)] , whereas the national average is 29.4 per cent. Despite various nutritional schemes and efforts put forward by the government, the State’s malnutrition level is comparable to that of African countries. Yet, the State has bagged the Krishi Karman Award for the third time in a row.

Despite being a leading producer of wheat and soybean oil seed, farmers continue to struggle and the people are reeling under acute[u'kyoot(sharp,तीक्ष्ण)] malnutrition. Foodgrain production in the State has posted double-digit growth making it the new wheat granary of India. With the highest soyabean production in the country, Madhya Pradesh is also known to be the soyabean bowl of India. It accounts for 60 per cent of the total production of soybean in the country.

Soyabean farmers are facing a rough time with central and State governments offering little rate incentives and weather playing spoilsport. Since the harvesting of the crop this year, there have been cases of suicide every day. Ironically[I'ró-ni-k(u-)lee(satirical,विडम्बना)] , the Madhya Pradesh government has initiated some preliminary discussions on advising farmers to take up alternative crops.

A crop that was the cash cow for 25 years seems to have suddenly become a problem. This may have negative repercussions[ree-pu'kú-shun(indirect result,अप्रत्यक्ष परिणाम)] on the incumbent[in'kúm-bunt(current,पदस्थ)] BJP government in the State as the majority of farmers in the Malwa region, a strong BJP belt, grow soyabean. To discontinue soyabean farming will increase dependency on imported edible oil.

RS Paroda, a noted agricultural scientist, recently said: “To tackle increasing malnutrition levels in children, the government should promote production and consumption of protein-rich soybean products like tofu and soya milk.”

The government should pilot a programme to distribute either soyabean mixed with wheat grain or fortified[for-tu,fId(strong,मजबूत)] wheat flour to the beneficiaries of the PDS system. With successful results, this can be ramped up nationwide. This will improve the health indicators, indirectly saving 2-3 per cent of GDP due to loss of productivity and expenses on various nutritional programmes.

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Know about UDAY Scheme

UDAY, easily the best designed scheme thus far, falls well short of addressing the real malaise[ma'leyz(unease,बैचेनी)] . Blaming power distribution companies alone or raising tariffs to eliminate their revenue gaps will simply compound the problem as demonstrated by experience since the first restructuring of 2002-03.

The average price of bulk power in India is among the highest in the world and India’s average consumer tariff is easily the highest worldwide when corrected for capacity to pay.

UDAY is the first financial restructuring scheme that implicitly[im'pli-sit-lee(clearly,स्पष्ठ)] recognises this malaise and includes measures to reduce bulk power prices through reductions in the delivered cost of coal and potentially higher capacity factors in generation. Bulk power in India should be at least 30 per cent cheaper.

High bulk power prices severely constrain the scope for creating surpluses in power distribution. The distribution segment also lacks concentrated creamy mega projects. The consequent[ kón-si-kwunt(result,परिणाम)] neglect and disproportionately low investment in distribution has and continues to plague[pleyg(suffer,त्रस्त)] the Indian power sector.

Poor performance standards
Individual distribution investments are relatively small and widely dispersed[di'spurst(spread,फैला हुआ)] . Ensuring effectiveness of such outlays requires sophisticated control systems.

Much like the earlier two attempts, UDAY also sees higher distribution investments and meaningful monitoring as key ingredients of success. Like its predecessors, UDAY too relies on assumed performance improvements delivering additional resource flows to distribution companies for funding unmet investment needs.

UDAY promises additional coal at “notified” prices and “low-cost” bulk power resulting from higher capacity factors in generation to compliant distribution companies. This needs rigorous[ri-gu-rus(exact,सही)] scrutiny[skroo-t(u-)nee(examine,जाँच)] as it presumes higher coal availability for power sector at current notified prices despite shortages across several coal consuming sectors.UDAY lacks an investment component for removing infrastructure constraints and a robust[row'búst(strong,सुदृढ़)] 24x7 power system would typically have capacity factors of around 65 per cent and possibly lower with growing share of renewables.

Contrary to the government’s claim, UDAY is a bailout for the financial institutions that have knowingly funded losses of distribution utilities for years. Converting 75 per cent of their outstanding to State government bonds/loans and the balance potentially to State government guaranteed utility bonds/loans with no provisioning requirements is a recipe for continuing profligate[pró-fli-gut(wasteful,अपव्ययी)] lending practices.

While the two largest lenders to the sector are outside Reserve Bank of India’s regulatory oversight, it would be educative to understand from the independent bank regulator why the proposed book-keeping exercise negates the need for provisioning 25-100 per cent of the commercial bank exposure to these State government owned distribution companies?

It is also incorrect to say that consumers will not be burdened by the inefficiencies of the sector. State governments do not have a slush fund to pay for such past or future inefficiencies. Either way, consumers will suffer the full consequence beyond the haircut taken by the lenders through reduced interest.

UDAY proposes to restructure an outstanding of ₹4.3 trillion. This off-balance-sheet fiscal hole is a sizeable 15.8 per cent of the estimated combined total liabilities of all States as of end March 2015.

The additional interest burden on State governments from UDAY will further pressure State deficits and likely breach the limit on interest payments remaining below 10 per cent of revenue receipts. And finally, there is no market for non-SLR bonds/SDLs. The lenders will simply be asked to accept these bonds in lieu[in lyoo(instead,के बजाय)] of their outstanding.

The above facts pose daunting[don-ting(fearful,डरावना)] questions for State finances. The consequences will be dire[dI(-u)r(horrific,भीषण)] for the six most-indebted States.

Despite good intentions and a feverish[fee-vu-rish(violent,उत्तेजित)] pace, the power ministry’s capacity limitations are showing.  We can again kick the can down the road, or bite the bullet and change course to deliver a radically reformed power sector fully compliant with Electricity Act 2003.

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The arbitration amendment bill

Since Prime Minister Narendra Modi came to power last year, The Centre has set out to overhaul[ow-vu'ho(repair,सुधारना)] India’s legal system. Changes in the legal system are requisite[re-kwi-zit(essential,आवश्यक)] to attract foreign investment.

Foreign companies are often reluctant[ri'lúk-tunt(unwilling,अनिच्छुक)] to invest in India as there is a perception that the Indian legal system does not sufficiently protect foreign investment. litigating in courts in India is a time-consuming and expensive exercise, and justice usually eludes[i'lood(escape,बचना)] both parties to an action.

The Arbitration Amendment Bill, now cleared by the Cabinet and to be introduced in Parliament soon.

The arbitration community in India should ensure that an arbitrator against whom there is a shadow of diminishing[di'mi-ni-shing(decrease,कम)] integrity is rooted out from the system.

Another criticism that is often aired is that retired judges have monopolised[mu'nó-pu,lIz(full control,एकाधिकार)] the profession of arbitrators. Since they conduct arbitration proceedings along the lines of court processes, this leads to lengthy delays.

This cannot be remedied by making amendments to the law. The government should develop institutions that train individuals who aspire to practice in the field of arbitration.

There are some disputes that require an arbitrator to have a working knowledge of the sector concerned. It is easier to understand the parties and resolve a dispute if the arbitrator is well-versed with the knowledge and expertise in a particular business sector or industry.

Non-governmental bodies need to step up their efforts to help reinforce[ree-in'fors(strong,मजबूत)] the government’s reform agenda.

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Bankruptcy law

In the Bank’s latest report, Doing Business 2016, India has has moved only one place in terms of ranking for resolving insolvencies — from 137 to 136.  The average time taken for insolvency proceedings in India (according to the report) is about 4.3 years, while it is only 1.7 years in the high-income OECD member countries.

Having a robust[row'búst(strong,मजबूत)] insolvency resolution mechanism can help creditors recover a larger part of their investment faster allowing them to re-invest in other businesses.

A strong bankruptcy law, therefore, becomes a critical requirement.

For banks and lending institutions, a more comprehensive bankruptcy law would help protect their rights, promote predictability, clarify the risks associated with lending, and make the collection of debt through bankruptcy proceedings more attractive.

While there is no comprehensive and integrated policy on corporate bankruptcy in India, like in the US, along with the Companies Act, 2013, there are three major legislative Acts and several special provisions which render[ren-du(provide,देंना)] procedural guidance on liquidation or reorganisation.

As a consequence[kón-si-kwun(t)s(result,परिणाम)], four different agencies (High Courts, Company Law Board, the Board for Industrial and Financial Reconstruction, and the Debt Recovery Tribunals) have overlapping jurisdiction, which can create systemic delays and ramifications[ra-mu-fu'key-shun(complexities,जटिलता)] in the process.

Along with other benefits that a strong bankruptcy law would also help to give banks teeth to tackle the problem of stressed assets. So the draft report submitted by the Bankruptcy Law Reform Committee (BLRC) to the Finance Minister on November 4, 2015), is a positive step towards suggesting immediate reforms to the existing legal regimes governing bankruptcy in the country.

Whilst the BLRC recommendations seem to address most of the aspects relating to bankruptcy in India, there are a couple of areas where the recommendations could have been reinforced[ree-in'forst(strengthened,मजबूत)].

Additionally, given that in developing countries such as India, the litigation[li-tu'gey-shun(judicial process,क़ानूनी प्रक्रिया)] process may be used to cause delays, it is advisable to include a provision which will empower the regulator to levy fines in case frivolous[fri-vu-lus(less serious,trivial,मामूली)] adjournments[u'jurn-munt(postpone,स्थगित)] are sought.

While the recommendations by the BLRC, if accepted, shall help in reviving the economy as creditors along with the debtor company shall be assured of a speedy rehabilitation/ liquidation procedure.

It is also believed that the recommendations would ease the investment opportunity in the country.

This will help banks/ financial institutions recover dues with a fair degree of certainty as well as within a select time frame.

This in turn will help banks avoid the perils[perils(risk,जोखिम)] of a time-consuming litigation process which tend to work to the benefit of a corporate house/ promoter since it delays a bank from taking control of assets post default.

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Still long way to go

India has recently moved up in the World Bank’s Ease of doing Business by a few ranks, managing to reverse a downward trend, though it ranks a dismal[diz-mul(depressing,निराशाजनक)] 130 out of 189 countries. The country can go even higher and may break into the top 100 if it introduces some structural management and change in outdated laws.

Fundamentally, we are a risk averse[u'vurs(unwilling,अनिच्छुक)] and failure allergic country. We cannot accept failure at any level, be it our kid’s performance in school, the Indian cricket team or any business. Entrenched[in'trencht(establish,स्थापित)] in our thought process is an absolute revulsion[ri'vúl-shun(dislike,घृणा)] to failure.

This gives rise to a culture of mediocrity[mee-dee'ó-kri-tee(ordinary,साधारण)] as we do not take any perils[pe-rul(risks,जोखिम)] that might backfire.

When an entrepreneur sets up a business, we throw all sorts of obstacles[ób-sti-kul(problem,बाधा)] in their path from official paperwork to a hostile[hós,tI(-u)l(unfriendly,विरोधी)] banking system.

For example, an entrepreneur cannot get a bank loan without a personal guarantee
The easy way out is a personal guarantee and collateral. It is a huge hindrance[hin-drun(t)s(obstacle)] for anyone to take up entrepreneurship knowing that not only will he lose his company if he makes a mistake but also most of his wealth.

There are people who have taken loans and used it for some other purposes or embezzled[em'be-zuld(misuse,गबन)] the funds so everyone gets hit with these onerous[ó-nu-rus(heavy,भारी)] rules. These few bad apples spoil the barrel due to lack of proper judicial remedies.

Another key issue due to judicial delays is not prosecuting IP violations fast enough. Employees, partners often start copycat companies with same products with impunity[im'pyoo-ni-tee(free from punishment,दण्डमुक्ति)] as they know that they will never get caught.

The third big obstacle is the power vested with state-level and multiple organisations to audit and shut down companies. For example, the IT department has a TDS audit, a Transfer Pricing audit, a regular audit for multiple years all going on at the same time and asking for the same information.

The solutions for these problems have to be tackled across all levels but the root lies in addressing the judicial process.

If that can be fixed through separate courts or something similar to lok adalats, we will end up addressing a lot of issues. Another suggestion is for government to step in as a guarantor for startups and other small and medium companies.

The bureaucratic nightmare can be solved by exempting companies of a certain size or certain years in existence from audits and holding the accounting firms that audit them responsible for any lapses taking the onus[ow-nus(load,भार)] away from entrepreneurs. Also, for companies that get picked for scrutiny[skroo-t(u-)nee(examine,जाँच)] let there be one audit across all departments so that the company can present all papers at one go and get on with running their business.

Finally a big change required is the attitude of people towards entrepreneurship and failure. We have to celebrate failure and stop treating business people with suspicion.

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Know about RIA

Governments the world over are asking the same questions: What is a good law? Why do laws fail? When is a law needed? How, exactly, should a law be designed?

The Indian federal government has no systematic method to answer these questions. But there is such a method. Since 1980, regulatory impact assessment (RIA) has become a global phenomenon in response to widespread pressures for more trenchant[tren-chunt(effective,प्रभावी)] and efficient legal governance.

Some 18 US States have also espoused[e'spawz(adopted,स्वीकार)] RIA. The Australian government uses RIA at federal level and in all States. Today, over 65 countries have adopted some form of RIA in making new laws and rules.

RIA is a method of estimating the likely impacts of government policy ‘before’ it is adopted, and comparing different policy designs to determine which produces the best consequence[kón-si-kwun(t)s(result,परिणाम)]. The impacts calculated in RIA are the benefits and the costs .
RIA is based on both a process and a method.

The process of RIA ensures that the assessment is open and pellucid[pu'loo-sid(transparent,पारदर्शी)], that the information used is reliable and not biased[bI-ust(partial,पक्षपातपूर्ण)].
The method of RIA is highly flexible. Over 20 different methods are used in RIAs around the world to examine various economic, social, and environmental impacts.

Benefits of RIA

The economic benefits of better regulation are substantial, since in countries similar to India the annual cost of government regulation accounts for 10-20 per cent of GDP. This means even
miniscule[mi-ni,skyool(small,छोटा)] improvements in regulatory efficiency can have large payoffs in national income.

The REACH regulation from the European Commission would have imposed €10 billion in costs on the European chemicals industry, as it was first written. The regulation was revised to make it easier to comply, without significantly changing benefits. The final cost was €2 billion. The RIA cost the Commission about €1 million, producing a social return on investment of 8,000 to one and saving thousands of jobs.

The benefits are likely to be similar or even larger in India than in the US or the EU because the negative effects of high regulatory costs, risks, and entry barriers are likely to be higher in India.

The World Bank has pointed out that “smart regulation” tools seem particularly relevant for developing countries where businesses compete in thin capital markets; face fierce[feers(violent,उत्तेजित)] price competition in exports and pressures from low-cost imports, among other reasons.

RIA is new to most regulators in India, and time is needed for full implementation. RIA is a transformational reform, which aims to affect how regulators think about their role, introduce new actors into policy procedures, and foster[fós-tu(devlop,विकसित)] more open and competitive policy dialogue.
To reach a sustainable level of RIA quality, India will need a clear strategy: clear targeting strategies, development of multi-level consultation strategies, more attention to data collection and quality, investment in training, effective quality control through central RIA units and ministerial accountability, better use of scarce[skehrs(hardly,अपर्याप्त)] scientific resources, and technical RIA manuals.

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What will be strategy of india?

As nations prepare to meet in Paris to strike a long-term climate deal, the gap between what the science say? The Fifth Assessment Report (AR5) has pointed out clearly that there is only a specific cumulative amount of greenhouse gases that humanity can emit[i'mit(give out,निकालना)] into the atmosphere, to keep the rise in global average temperature below a specified level, for a given level of uncertainty.
What is the amount left for the future? The Synthesis Report of the AR5 provides two values for different probabilities. For a less than 33 per cent chance of a global temperature increase of 2 C, the cumulative emissions between 2011 and 2100 of carbon dioxide specifically must stay below 1,000 billion tonnes.if we take account of non-carbon dioxide gases too, the total emissions lie within 1,192 to 2,000 billion tonnes for the same range of probabilities, though the higher end is unlikely to find much favour among the most vulnerable[vúl-nu-ru-bul(weak,कमज़ोर)] countries.

Faced with limits of this kind, one would have thought the appropriate response would be to find a fair and equitable distribution of this global carbon budget among all nations. After all, the atmosphere is a global commons that should be shared equitably. But due to the adamant[a-du-munt(inflexible,अटल)] refusal of the developed countries, we have today the exact opposite.

Indeed, in grim counter-point, the secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) has estimated that the total carbon dioxide emissions expected after the reduction from these commitments (known as Intended Nationally Determined Contributions or INDCs) amounts to 750 billion tonnes until 2030. In other words, if the budget for the future is 1,000 billion tonnes for the next 80 years, 75 per cent would be consumed in only the first 15.In per capita terms, the developed nations’ cumulative emissions so far is approximately 1.8 times what they can rightfully claim, and including other indicators only exacerbates[ig'za-su,beyt(worsens,बिगाड़ना)] this inequity.

In this situation, India, like a majority of the developing nations, with perhaps the exception of China and a few oil-producers, is in a double bind. On the one hand, an early agreement — based on a reasonably safe level of the global carbon budget that would ensure that the burden of adaptation does not become onerous[ó-nu-rus(heavy,भारी)] for the bulk of the Indian population, and indeed that of the world — is a necessity. Currently, the negotiations do not seem headed in this direction at all. On the other hand, without adequate[a-di-kwut(enough,पर्याप्त)] access to an equitable share of the global carbon budget, India’s developmental efforts would be faced with energy costs that would have no previous parallel in human history. Carbon space that is once used up cannot be recovered, since greenhouse gases once emitted persist in the atmosphere-land-surface ocean system for at least a millennium. The INDCs of the developed countries constitute a carbon grab on this scarce[skehrs(not enough,अपर्याप्त)] resource.now what india should do?

First, the so-called “red line,” of the United Progressive Alliance dispensation, that India would accept no limits whatsoever on its emissions, even in the long-term, is outdated and must be discarded.
Second, India must step forward to operationalise the concept of equity in climate negotiations and not simply use it in defensive mode. Third, with an adequate benchmark for equity, India and developing countries can adequately engage with any process of the periodic review of commitments that would emerge from the negotiations.
India must firmly avoid the temptation in Paris to view negotiations solely through the lens of realpolitik. Securing a part of India and the developing countries’ developmental future within the framework of global environmental sustainability is the challenge, and India cannot afford to drop the ball(mistake,गलती) at this juncture[júngk-chu(point,मोड़)] .

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Production and consumption

Not too long ago, we were satisfied with quenching[kwen-ching(allay,blow out,बुझाना)] our thirst when water was available. So we waited till we got to a water source. Now, we need to carry plastic bottles with water so that the minute we feel thirsty, we can quench it. (And we can assuage[u'sweyj(quenching)] our guilt about the plastic bottle by seeking out a ‘recycle’ container in which to dispose it.)

Quick replies to email and instant messaging is the order of the day. WhatsApp and Twitter tell everybody about everything tout de suite[tawt de sweet(immediately,तुरंत)].

Consumer demand has shrunk time and space. My local supermarket stocks the same fruits and vegetables year round! Seasonality has lost its meaning and they are shipped in from across the world so our consumption desires (not needs) are satisfied.

Gandhiji wanted production and consumption to be local. His dream village was self-governing and self-sufficient for its vital needs (food and clothing).

Teresa Brennan, in her book Globalization and Its Terrors (2003), makes her position on globalisation clear right in the title! She argues that shrinking space and time facilitated by globalisation also hurts the west, not just the poorer countries since it does allow the environment time to ‘regenerate.’ Speeding up production and the need for scale has resulted in searching further and further for resources allowing less time to replenish[ri'ple-nish(fill again,फिर से भरना)] both natural resources as well as labour power. It increases stress, and stretches the working day seen from the constant attention to email.

Clearly, the US model of standard of living is unenviable[ún'en-vee-u-bu(difficult,मुश्किल)] to reproduce around the world without causing serious damage to the environment. The US levels of waste and consumption also make it less desirable. Brennan would like to shift the responsibility for the environment to the producers by keeping it local (or at least regional).

The idea is not entirely far-fetched[faa'fecht(imaginative,काल्पनिक)]. Scale is not a must for efficiency. The concept of mass customisation that the Japanese made real not just with technology but with their management practices is an example that is now mainstream. Modi’s push for villages to be power-independent through solar energy is another example.

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No more antibiotics

antibiotics are no longer as useful as they used to be in the past. At times, doctors prescribe multiple antibiotics at the start of treatment and later have to switch to other antibiotics, which are often expensive or have more side-effects. The consequence['kón-si-kwun(t)s(outcome,परिणाम)] of surgical procedures is strongly linked to the success of antibiotics. It is not uncommon to learn of instances where the surgery went off well but the patient succumbed[su'kúm(give in,शिकार होना)] to an untreatable infection.

It is now considered a grave threat to public health across the globe and in India. Simply put, when infection-causing bacteria is not killed by an antibiotic that was effective earlier, the bacteria continue to thrive[thrIv(grow,पनपना)]. Treatment options shrink further when multiple antibiotics fail to kill the bacteria. With no new class of antibiotics having been developed for the past three decades, and a pipeline which is far from robust[row'búst(strong,मजबूत)] , the future of antibacterial therapy looks grim. It is no wonder then that the World Health Organization (WHO) considers a post-antibiotic era as a possibility in 21st century.

For the first time, this year (November 16−22) is being observed as World Antibiotic Awareness Week. This article also attempts to focus on the animal side of story i.e. the (mis)use of antibiotics in food-producing animals for two reasons. First, it is less known to us in India, as also evident from latest WHO report on awareness. Second, it is regarded as a significant contributor to the overall problem.

Getting to know what leads to the emergence and spread of this phenomenon is the first step towards understanding why resistance emanates['e-mu,neyt(come out,निकलना)] from animals. An antibiotic presence puts pressure on bacteria to select for resistance, a natural process. This is akin[u'kin(similar,समान)] to survival of the fittest. The ones that adapt, survive. However, misuse of antibiotics accelerates the emergence of resistance.  The traits of resistance pass on vertically and become similar to other kinds of bacteria nearby, most often through horizontal transfer of genetic material, which adds to reservoirs of resistant-bacteria in humans and the environment.

With its policy in 2012 to contain antimicrobial resistance, India started focussing on controlling the misuse of antibiotics in people, but with limited progress. A lot needs to be done as well to control misuse in animals. A study in 2014 by the Centre for Science and Environment on antibiotic residues in chicken meat, pointed towards the rampant[ram-punt(uncontrolled,अनियंत्रित)] use of antibiotics for non-therapeutic reasons such as growth promotion and mass disease prevention in poultry.

In the end, India needs to work towards prohibiting the misuse of antibiotics. Systems for monitoring trends of antibiotic use and integrated surveillance of resistance need to be created.

Clearly, antibiotics are to be handled with care. They are a global “public health good” and need to be preserved.we cannot afford to gloss over the issue and be complacent[kum'pley-sunt(self satisfied,आत्मसंतुष्ट)].

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Pollution makes damage

New Delhi is in the news again as respirable[re-sp(u-)ru-bul(breathe,स्वसन)] particulate matter is said to have crossed hazardous[ha-zu-dus(dangerous,जोखिम)] limits. On the one hand, this is environmental damage that affects everyone, while on the other, it is damage with multiple determinants — vehicle exhaust, construction dust, Diwali firecrackers, pollution caused by the burning of paddy stumps and agricultural residue, and, of course, apathy[a-pu-thee(lack of emotion,उदशीनता)] .
While this is an important first attempt, the Bill falls short in understanding the scope, ramifications[ra-mu-fu'key-shun(complexity,जटिलता)] and extent of environmental damage.
Damage beyond pollution

Water pollution makes potable water undrinkable, soil pollution contaminates ground water or renders[ren-du(make,बना देना)] soil infertile, while air pollution exacerbates[ig'za-su,beyt(worsen,बिगाड़ना)] respiratory ailments. While pollution is an important source of damage, all damage is not just pollution.

While the Bill suggests that there are three kinds of environmental damage — substantial, non-substantial and minor —  It states that “substantial damage means damage to the environment whether by release of environmental pollutant or environmental pollution or handling of hazardous substance or any other substance.

But there are several other types of environmental damage that merit inclusion in the Bill that change the ecological integrity or character of an ecosystem. For example, land degradation can affect plant pollination and forests can turn barren.

The second major point is the role of distance as a factor in determining environmental damage, and its use in setting the extent of penalties. The Bill suggests that the costs of environmental damage, in the form of hazards and pollution, “may extend to 10 crore rupees” within a 5 km distance from a project site.

In several cases such as radiation or air pollution, proximity to the site of damage exacerbates damage and suffering. While air pollution causes grievous[gree-vus(dangerous,critical,विकट,दुख़द)] harm, the nature of the pollutant is such that it causes more harm through proximity, and not through distance.

Finally, thought needs to be given about capping penalties for environmental damage. Should such penalties have a ceiling?  As the Bhopal gas tragedy showed us, environmental damage can last for generations, and it requires long term and sustained redressal.

Perhaps what is of most interest in the Bill is the proposal to set up a two-man adjudicating[u'joo-du,keyt(judge,निर्णय)] authority to decide on pollution and whether environmental damage has been caused. Given the poor performance of pollution control boards, the question on whether environmental damage should be considered by government officials or independent courts assumes importance.

In the end, there are questions related to both science and perception. While science and laboratory tests can determine impact on health, there must be larger consensus[kun'sen-sus(agreement,सहमति)] on whether we want to go beyond the perception of pollution as constituting environmental damage.

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Right to information

The Right to Information (RTI) Act has completed 10 years of implementation. there are at least 50 lakh RTI applications filed in India every year.
RTI, in many ways, offers that measure of hope.

In the world of democratic politics, people face the bleak[bleek(hopeless,निराशाजनक)] scenario of political, economic and social promises being twisted to serve personal profit.

the RTI has begun to do just that. Without debating the hierarchies[hI-u,raa-ku(classified,वर्गीकृत)] of who can ask questions and who must provide answers, the Act has begun to encourage a culture of asking questions. We are far from being an open society, but the RTI is opening our minds to what such a society might be.

It’s not often that one can see the impact of a law in terms of its social and philosophical implications. The RTI is a process of dismantling[dis'man-tu-ling(break,तोडना)] illegitimate concentrations of power. We can expose the lies and the cheating, not merely in monetary terms.

The RTI is messy, untidy, incomplete, and, of course, imperfect. But that is its strength: It can help us escape from policy paralysis, and build a more informed, equitable and robust[row'búst(strong,सुदृढ़)] decision-making process.

A bureaucrat friend, not particularly enamoured[i'na-mud(attract,मोहित)] by the RTI, reluctantly[ri'lúk-tunt-lee(unwillingly,अनिच्छुक)] conceded to us, “There is one thing I must acknowledge — when any government servant picks up a pen to write on a file, he or she has RTI on their mind. This is one of the best forms of deterrence[di'te-run(t)s(prevention,निवारक)] against wrongdoing we can have.” That was an acknowledgment of incredible universal impact covering everyone at all times. If we want to usher[ú-shu(show,दिखाना)] in a paradigm of transparency, it is clear that bureaucrats must have the friendly ghost of the RTI implanted in their psyche.

Let’s imagine for a moment that India had not passed the RTI a decade ago. What would it be like today? Not just a less accountable, more corrupt, opaque[ow'peyk(unclear,अस्पष्ठ)] government, but also a far more discouraging and despairing country. Despite what the sceptic[skep-tik(doubter,संशयवादी)] said in Beawar 20 years ago, India has passed a strong RTI law. The people of Beawar held a meeting to celebrate ten years of the RTI, and said they had not dreamt how far this would go in 20 years. Subsequently, the Municipal Corporation of Beawar passed a unanimous[yoo'na-nu-mus(complete agreement,सर्वसम्मति)] resolution to build a memorial at the spot at Chang Gate where the 40-day dharna took place in 1996, launching the RTI movement in India. Its foundation stone was laid on October 13 this year. To have a city celebrate a law and identify itself with it is a sign of strong and sustained citizen activism.

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Sabka sath sabka vikas

Slogans are pet political tools. They also reveal the direction in which the political masters of the day want the country to move. But unless slogans are backed with appropriate strategies and perseverance, they often fizzle out[fi-zul awt(failed,असफल होना)] without delivery, remaining only as showbiz.

Late Prime Minister Lal Bahadur Shastri raised the slogan “Jai jawan, jai kisan” in the mid-1960s, Even today, that slogan resonates and inspires.

Late PM Indira Gandhi’s most famous slogan was “Garibi hatao”, in the early 1970s. She took several socialist steps to eliminate poverty, including the takeover of wholesale trade in wheat and rice, only to be given up after a major fiasco[fee'as-kow(failure,असफलता)]. Has garibi vanished[va-nisht(disappear,गायब)] over all these years? UPA 2, on its last legs, was still counting whether the poor constituted 21 per cent, 30 per cent or 67 per cent of the population — the poor they wanted to provide highly subsidised food through the National Food Security Act, 2013.

But no past political master can match our present PM, Narendra Modi, in coining new slogans and catching the imagination of the masses. Who won’t like slogans like “Sabka saath, sabka vikas”, “Swachh Bharat”, “Make in India”, “Per drop, more crop”, JAM (Jan Dhan-Aadhaar-Mobile), and so on? Each is well intentioned, with a lot of showmanship. The lion of Make in India is now widely visible in every effort to woo[woo(look for favour,समर्थन मांगना)] investors. But in a number of recent meetings I’ve had with India’s top investors, one question that most had on their lips was, “Slogans are fine, but where is the commensurate strategy to turn it into reality?” And that’s worrying.

Let me dig a little deeper into at least one slogan And that’s “Sabka saath, sabka vikas”. It was meant to work across the spectrum of parties, states, socio-economic and religious groups. But where’s the strategy to make it a reality?
But I’m definitely concerned with “sabka vikas”, and it’s here that I feel the government’s strategy is getting increasingly skewed in favour of those who are already better-off. We hear a lot about FDI, Make in India, smart cities, bullet trains, etc,But we don’t hear, at the same pitch and frequency, what the government is doing to tackle deepening rural distress, the increasing water scarcity[skehr-si-tee(not enough,अपर्याप्तता)] , including drinking water, etc. Why do we boast of our overall growth rate of 7-8 per cent, when agricultural growth was just 0.2 per cent.

We are concerned about this because almost half the workforce and about 60 per cent of the population is dependent on agriculture. If their growth is less than even their population growth, it should be a matter of serious concern, if not shame. The danger signals are clear: During November 2014-October 2015, tractor sales collapsed by 23 per cent over the corresponding period the previous year; fertiliser consumption — 141 kg per hectare (ha) in FY11 — has come down to 130 kg per ha in FY15. This sagging[sa-ging(loose,ढीली)] rural demand doesn’t auger well for industry.

What are the two or three big-ticket things the PM can do in the agri-food space to ensure “sabka vikas”? First, he needs to resurrect[re-zu'rekt(reborn,पुनर्जीवित)] the crop insurance system urgently,Next, the PM needs to turn to direct benefit transfer (DBT) of food and fertiliser subsidies. These subsidies exceed Rs 2,50,000 crore today. Converting them to DBT will help plug massive leakages, reach the poorest, and still save at least Rs 40,000 crore per annum, which can be used for augmenting[og'ment(increase,बढ़ाना)] and better managing agricultural water resources. This will, in turn, help in drought-proofing the agri sector.

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UNEP report on plastic

Plastics labelled “biodegradable” are not quite so innocuous[i'nók-yoo-us(harmless,अहानिकर)] after all, and can add considerably to the physical and chemical pollution of marine ecosystems, a newly-released UN report says.

Some ‘biodegradable’ plastics need industrial composters and exposure to temperatures over 50°C to completely disintegrate- says the United Nations Environment Programme (UNEP) report titled “Biodegradable Plastics and Marine Litter: Misconceptions, Concerns and Impacts on Marine Environments”.

Every year, around 280 million tonnes of plastic are produced globally, of which 20 million tonnes enter oceans, choking coral reefs, entangling[en'tang-gu(entrap,mire,उलझना)] marine wildlife, and when breaking down into microplastic (plastic particles of 5mm or less) then ingested by sea birds, fish and other marine organisms.

In marine environments, oxo-degradable plastic can take up to five years to degrade, during which time it continues to pollute the ocean. “The fate of these fragments (microplastics) is ambiguous[am'big-yoo-us(unclear,अस्पष्ठ)].
Another report released last year by UNEP estimated that plastic waste cost marine ecosystems $13 billion in damages every year.

The new UNEP report says that there is, ironically[I'ró-ni-k(u-)lee(satirical,विडम्बना)], some evidence to suggest that “labelling a product as ‘biodegradable’ will result in a greater inclination[in-klu'ney-shun(tendency,इरादा)] to litter on the part of the

Poor waste management and even deliberate release has led to “the ubiquitous[yoo'bi-kwi-tus(present everywhere,सर्वव्यापी)] presence” of plastic in oceans, spelling significant physical or chemical pollution of marine ecosystems. Another study published in December 2014 in the journal PLOS One estimated that “at least 5.25 trillion plastic particles weighing 268,940 tonnes are currently floating at sea”.

However, biodegradable polymers, although considerably costlier, do have their uses, says the UNEP report.

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