WORKING FOR A NATIONWIDE HYDROLOGY DATA

India is all set to adopt a World Bank-funded hydrology project. Such a project has already
opted in the earlier two phases and has made a difference in 13 States. The project for the
whole country is estimated to cost Rs. 3,000 crore. The project found that some of the main
reasons for floods are poor reservoir management systems as was witnessed some years ago in
Western Maharashtra. Farmers sometimes face problems as they plant crops without knowing
if there is assured water from reservoirs. The project was aimed at developing monitoring
systems in the States.
Key Highlights Under the project, States will be able to generate and digitise
their own data without waiting for central help. Water quality stations have
been set up in the Ganga river at 10 locations from Hrishikesh to Kolkata, as the
part of the project. The project has completed two phases and established the
basis for a Hydrological Information System (HIS) for reliable records.
Significance The use of such data on water storage and availability can be
seen in decision support system (DSS). The project gives data which can help
release of water from reservoirs and prevent untimely floods. The operating costs
have gone down by half due to advance knowledge of water availability, rainfall
and even water quality. The data also uses satellite to help figure the amount
of snow melt, and make projections on the flows into the reservoir. This is
particularly useful in the case of the Bhakra basin. The data and real time
monitoring of water flows also helps in analysing and testing proposed projects.
CRPF: DICHOTOMY BETWEEN RIGHTS AND DUTIES
Central Reserve Police Force (CRPF) is a cadre of Central Armed Forces which
commands the 230 battalions. It is Indias largest Central Armed Police Force. It is
entrusted with various functions ranging from fighting insurgents in Kashmir, the
Maoists in Chhattisgarh, and terrorists in strife-stricken areas to acting as
troubleshooters in sensitive areas, guarding the borders of Punjab and maintaining
law and order during times of emergency. Despite the valiant services that they

perform for the nation, they hardly get a fair deal. This is evident from the law
governing and the examination of the rights conferred on them.
Info-in-Crux CRPF is governed by The Central Reserve Police Force Act, 1949
(CRPF Act). This act is a colonial inheritance of the Crowns Representative Police
Force Law, 1939. Certain provisions of CRPF Act have been retained which are
violative of fundamental freedoms like the right to equality, equal protection in
public employment, and the right to protection of life and personal liberty. The
Act provides that the extent of heinous offences are to be judged by the
Commandant of a Battalion by exercising powers of a judicial magistrate
conferred by the Central Government. All trials are to be held in accordance
with the procedure laid down in the Code of Criminal Procedure, 1898 (CrPC).
Even though CrPC 1973 repeals CrPc 1898, legislative changes have not followed
in the CRPF Act. This does not make palatable the exercise of judicial powers
by the Commandant of Battalion. The CrPC 1973 clearly separates the judiciary
from the executive in line with Article 50 that mandates this separation. The
CRPF Act follows CrPC 1898. The provisions of this code invested executive
officers with judicial powers to try as a magistrate all offences not punishable with
death. The Act provides that the Commandant, after conducting a judicial trial
for convicting and sentencing a member of the force, is also further authorised to
punish the same member of the force departmentally dispensing with a formal
inquiry on the ground of conviction on a criminal charge. The opportunity of a
hearing or the right of departmental defence has been dispensed with, without
giving any reasons as provided by the CRPF Rules, 1955. In a hypothetical
situation, a Commandant may be framing the charge as a prosecutor, convicting
and sentencing as a judicial magistrate and then punishing summarily as
departmental head, without any separate inquiry to complete the process in
closed quarters, in one or two weeks.
What the CrPC 1973 Says? The 1973 code provides for criminal trials by
judicial magistrates or duly notified special judicial magistrates. This is besides

constitutionally mandating a departmental inquiry except in certain situations.

The 41st Report of the Law Commission of India, in its report submitted in
September 1969, recommended the separation of the judiciary from the executive
on an all-India basis to ensure improvements in the quality of justice by having
judicial magistrates, who were appointed by the High Courts. The aim behind
this is to dispense with the arbitrary exercise of discretionary powers and acting in
a manner consistent with known principles of law. With the enactment of CrPC
1973, all functions relating to appreciation of evidence, imposition of punishment,
detention in custody, inquiry or trial, came to be exercised by a judicial magistrate
under this code. Consequently, all ministerial functions were left to the executive
magistrates. Since then, all judicial magistrates are appointed by the High
Courts and special judicial magistrates can be notified by the High Courts, if they
possess such qualification or experience in relation to legal affairs as the High
Courts rules may specify. However, executive magistrates can be appointed by
the State governments to perform executive functions.
Necessity of CrPC 1973 in CRPF Members of an emergency force may require
a high degree of discipline, but they do not deserve such a straitjacket procedure.
Such kind of procedure not only circumvents the law but also defies all canons
of the process of natural justice. The government cannot remain oblivious to
laws requiring equality in matters of public employment. It also cannot ignore the
mandate of basic criminal laws of the land. Leaving the current state of affairs
to the outmoded colonial position of the CRPF Act makes it an unjust, arbitrary,
unfair and discretionary process subject to bias and misuse. Members of the
force who sacrifice their lives for the nation deserve to be treated better. It would
be unfair to leave them to their fate while they serve us well. CRPF soldiers
need to be treated fairly and with a spirit of natural justice for which adoption of
CrPC 1973 in dealing with force personnel is necessary.
The Way Ahead Fundamental rights provided by the Constitution, which have
evolved over a period of time, need to find recognition in the CRPF Act. The

CRPF could consider revisiting the CRPF Act and CRPF Rules to amend them in line
with the existing provisions of the CrPC 1973 and the Constitution. Changes
can be made by creating a rank and file of judicially trained officers lettered in
law. They could constitute a separate cadre in the force to exercise special
functions. As an alternate method, a special court, such as the Security Force
Court of the Border Security Force (BSF), could be constituted. Amendments
can be made in the CRPF Act in tandem with the provisions of CrPC 1973 for the
exercise of judicial functions to suit the requirements of this special force. A
separate judicial forum can be legislatively made in the CRPF.
PLIGHT OF AGRICULTURE IN INDIA
The findings of the Situation Assessment Survey of Agricultural Households
conducted by the National Sample Survey Office (NSSO) for the 2012- 13 crop
year from July to June suggests that hardly 58 per cent of rural households in India
are engaged in farming activity. They contributes not even 60 per cent to their
average total monthly incomes. Key Findings Only 9.02 crore (57.8 per cent)
out of the countrys estimated 15.61 crore rural households were agricultural.
Net receipts from cultivation and rearing of animals accounted for just 59.8
per cent of the average Indian farming familys monthly income. The
remaining was from wage/salaried employment, non-farm business and other
sources such as remittances, interest and dividends. While barely 58 per cent
of rural households are now agricultural, over 40 per cent of income even in their
case comes from nonfarming economic activities. This makes the gap between
agricultures share in GDP relative to that of the population residing in rural areas
not as yawning as it may appear to be. Rajasthan has the highest share of
agricultural to-rural households, at 78.4 per cent. But agricultural households
even in this state derive less than 56 per cent of monthly income from farming.
FDI IN MEDICAL DEVICES GETS A BOOST
Investment rules have been eased by the government for the medical devices
industry. It allowed 100 per cent foreign direct investments (FDI) under the direct

route for both new and existing projects. Since, both greenfield and brown field
investments under the direct route has been allowed, FIPB scrutiny will now not be
required even for investment in existing projects.

Key Concerns The FDI

norms have already been misused by multinational companies which entered

India but did not set up manufacturing facilities MNCs directed their major
focus on setting up marketing and warehousing facilities only There is no
motivation to manufacture in the country. MNCs often find it profitable to import
at negligible duties of zero to five per cent Easing of FDI norms would make
small Indian medical device manufacturers more vulnerable to acquisitions by
foreign companies. Indias medical devices industry is pegged at about 30,000
crore, of which over 70 per cent is import-dependent. Relaxing the procedures
would help the sector, which needs strong infusion of international technology as
well as finances to grow. Indias medical devices industry accounts for only
one per cent of the global market, as compared to the pharma segment which
accounts for seven per cent.
UNDERSTANDING PATENT REGIME IN PHARMA What are International Norms?
Patent protection has been incorporated into domestic laws since 2005.
The TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement
provides flexibility to the Indian government to issue compulsory licences to
manufacture drugs that are deemed unaffordable to large sections of the people.
Earlier Instances In an important ruling, the Supreme Court has stalled a lastditch effort by German drugmaker Bayer to block the sale of a cheaper generic
version of cancer drug Nexavar. SC upheld the obstruction global drugmakers
efforts to hold on to exclusivity on high priced drugs. Domestic generic drug
maker NATCO was granted a patent in 2012 to sell a generic version of Nexavar at
Rs.8,800 for a months dose, a fraction of Bayers price of Rs.2.80 lakh. A
Swiss drugmaker Novartis was denied a patent for its cancer drug Glivec. The
denial rests on the ground that there was only an incremental improvement over
the existing version. It is a well-documented fact that big pharma companies
tweak the existing drug formulation to extend the life of its patent. In effect

seeking a secondary patent. The practice is known as evergreening That

means, fewer drugs will be available for generic manufacture. In turn, there are
serious implications for Indias public health programme, especially in providing
affordable drugs without in any way compromising on the treaty obligations with
other countries. Indian pharmaceutical companies have substantial expertise
in manufacturing generic drugs to cater to the vast sections which cannot afford
costly patented drugs. Major Concerns The U.S. Trade Representative (USTR)
placed India on a priority watch list of countries whose IPR regimes would be
scrutinised during the year. The saving grace was that the USTR did not
categorise India as a priority foreign country, which might have led to penal action
against India. The U.S. authorities appear to have backtracked; an out-of-cycle
review (OCR) has apparently cleared Indias IPR regime. Key Initiatives The
government has set up an IPR think tank for the first time. It is headed by Prabha
Sridevan, a retired high court judge and the chairperson of the Intellectual
Property Appellate Board. The panel will help in formulation of a National
Intellectual Property Rights policy.
WB REPORT ON HEALTH COVER IN INDIA A World Bank report titled as
Governmentsponsored health insurance in India: are you covered?suggests that
Indias public financing for health care was less than 1 per cent of the worlds total
health expenditure. This is despite of the fact that the country was home to over
16% of the worlds population. Key Findings Families meet almost 70 per cent
of their health expenses out of their own pockets, placing considerable financial
burden on poor households, often pushing them deeper into poverty. The
number of people covered by health insurance in India could be far fewer than
estimated. Only 21.62 crore people, or 17 per cent of the total population, were
covered by health insurance at the end of March 2014. The health spending
was one of the important causes of poverty in India. From 2007 to 2012,
government-sponsored schemes contributed to a significant increase in the
population covered by health insurance, at a pace possibly unseen elsewhere in
the world.

NEW STANDARDS TO COMPENSATE CLINICAL TRAIL VICTIMS A standard formula

for compensation of adverse effects due to clinical trials has been computed by
the Union Ministry of Health and Family Welfare. Earlier, a formula for deaths due
to the trials was already in vogue. However, there was no standard for injuries and
other severe adverse events (SAE) and decision was given on a case by case
basis. A committee formed by health ministry's drugs regulatory body CDSCO
arrived at the formula. It draws on the already existing one in case of death due to
clinical trial. Highlights of New Formula Under the new formula, SAE have
been divided into four categories which includes permanent disability, chronic lifethreatening disease, reversible effect and birth defect in child due to clinical trials
on parents. For 100 per cent permanent disability, 90 per cent of the
compensation that is given in event of death will be given. In case the
disability is less than 100 per cent, the extent of disability will be an important
component in deciding the compensation In case of chronic life-threatening
disease and reversible SAE, the compensation will depend on the number of days
of hospitalisation and minimum wage for unskilled labour in Delhi. A lump sum
of Rs 4 lakh will be provided for birth defects.
LIMA, A NEW LOW FOR CLIMATE ACTION The final text only underscores its
commitment to reaching an ambitious agreement in 2015 that reflects the
principle of common but differentiated responsibilities and respective capabilities,
in light of different national circumstances. It also urges developed countries
to provide and mobilise enhanced financial support to developing countries for
ambitious mitigation and adaptation actions. There was much jubilation over the
Green Climate Fund (GCF) crossing the $10 billion mark, but this is hardly a matter
for celebration since the original target was to reach $100 billion by 2020.
Countries have pledged various amounts for four years and GCF will disburse
funds for projects from 2015. The developed countries were reluctant to commit to
a year-on-year financial road map or mitigation actions to cut emissions. A lack of
transparency and equity, apart from deep divisions between developed and

developing countries was reflected in the final text.

The failure of Lima lies

precisely in not arriving at a level playing field for a new deal. It is left to each
country to come up with what it can do in its own capacity, which will not even be
subject to scrutiny of any sort.

Optimistic position India and other developing

countries, while making strong points at first, could not leverage their collective
position to demand stronger commitments. On the final text, the Indian position
was one of optimism. Even though the final agreement in Lima was against that
spirit, he expressed happiness that it had addressed the concerns of developing
countries and that the efforts of some countries to rewrite the UNFCCC have not
fructified. It gives enough space for the developing world to grow and take
appropriate nationally determined steps, he added. According to the agreement
in Lima, the UNFCCC will publish on its website the INDCs as communicated, and
prepare by November 1, 2015, a synthesis report on the aggregate effect of the
INDCs communicated by countries by October 1, 2015. This would form the basis
for the new treaty in Paris.
MAKING MAKE IN INDIA HAPPEN The theory behind Make in India is as simple
as it is compelling. India must become a manufacturing powerhouse in order to
gainfully employ its demographic dividend; there is no choice here. Fortunately,
we have many natural advantages including a big labour pool and a large
domestic

market.

In

addition,

with

Chinas

competitive

advantage

in

manufacturing eroding, India has the opportunity to take some share of global
manufacturing away from China. All we have to do to improve the ease of doing
business in India are these stop tax terrorism, improve infrastructure, reform
labour laws, invest in skills development, make it easier to acquire land,
implement Goods and Services Tax (GST) and fast track approvals.

For an

industrial policy To become a manufacturing powerhouse, India needs a

manufacturing strategy, otherwise known as industrial policy. Japan, Korea, China,
Germany have all prospered by having a clear industrial policy and vigorously
implementing it. There is a successful precedent even in India; our success in IT
services was not an accident. It was the result of clear-eyed policies driven by the

Department of Electronics, which included reducing import tariffs on hardware and

software to zero, setting up software technology parks with tax incentives, and
improving connectivity. Policy has always mattered and when it comes to
manufacturing competitiveness, India must have a clear industrial policy that
spells out priority sectors and how we will build competitive advantage in a way
that is consistent with our obligations to the World Trade Organization (WTO).
Building on advantages Indias industrial policy must recognise where we have
important competitive advantages. Here, five priority industries come to mind.
Defence, because we are the worlds leading arms importer. Localising what we
buy as a condition for all defence deals along with a willingness to allow majority
foreign ownership can turbocharge our local defence industry. The second critical
industry is electronics hardware. India imports $45 billion of mobile phones,
computers and communications hardware; by 2020, this is projected to grow to
$300 billion and exceed our oil import bill. This is unsustainable. We have to
create policy incentives to create a local electronic hardware manufacturing
ecosystem. Since most component suppliers, Original Equipment Manufacturers
and Original Design Manufacturers are Chinese, this will necessarily imply
incentivising Chinese companies to establish factories in India. The third industry
is construction. India will invest a trillion dollars over the coming years in
improving infrastructure. We need to create incentives that not only spur
investment in manufacturing materials such as cement and steel but also
construction equipment, locomotives, power generation equipment and so on.
Everything we install should be made in India. The fourth is health care. Indias
generic pharmaceutical industry is world class. We must not concede on
intellectual property rights that neutralise our advantage. India is also exceedingly
good at frugal innovation in medical devices such as low cost X-ray and ECG
machines. Finally, agro-industries. We are one of the largest agricultural nations. A
third of what we grow just rots and spoils. Investing in agro-industries such as food
processing and establishing a reliable cold chain would make a huge difference in
terms of rural employment and food security.

Creating ecosystems Another

critical strategic question is this: where do we want to make things? It is difficult to

make a country the size of India into a uniformly attractive manufacturing

location.
NEED OF LAW TO RECOGNIZE VALIANT SERVICES The Central Reserve Police Force
Act, 1949 (CRPF Act), an Act that provides for the constitution and regulation of an
armed CRPF, is a colonial inheritance of the Crowns Representative Police Force
Law, 1939. Despite 67 years of independence and the framing of our own
Constitution, certain provisions have been retained in the CRPF Act which are
violative of fundamental freedoms the right to equality, equal protection in
public employment, and the right to protection of life and personal liberty. These
ought to be granted to members of the CRPF in course of their duties and service
to the nation. Fundamental rights provided by the Constitution, which have
evolved over a period of time, need to find recognition in the CRPF Act. According
to the Act, the extent of offences is to be judged by the Commandant of a
Battalion by exercising powers of a judicial magistrate conferred by the Central
Government. All trials are to be held in accordance with the procedure laid down
in the Code of Criminal Procedure, 1898 (CrPC). Even though CrPC 1973 repeals
CrPc 1898, legislative changes have not followed in the CRPF Act. CrPC 1973
clearly separates the judiciary from the executive in line with Article 50 that
mandates this separation. However, the CRPF Act follows CrPC 1898. The
provisions of this code invested executive officers with judicial powers to try as a
magistrate all offences not punishable with death. The 41st Report of the Law
Commission of India, which was submitted in September 1969, recommended the
separation of the judiciary from the executive on an all-India basis to ensure
improvements in the quality of justice by having judicial magistrates, who were
appointed by the High Courts. After being discussed by a joint select committee
and being approved by both Houses of Parliament and the President, CrPC 1973
came into force. Dilemma in authorisations The dilemma in the CRPF Act is
further compounded by the fact that the Commandant, after conducting a judicial
trial for convicting and sentencing a member of the force, is also further
authorised to punish the same member of the force departmentally dispensing

with a formal inquiry on the ground of conviction on a criminal charge. To be

given the opportunity of a hearing, a departmental inquiry, or the right of
departmental defence, has been dispensed with, without giving any reasons as
provided by the CRPF Rules, 1955. Revisiting the Act: Key Points The CRPF
could consider revisiting the CRPF Act and CRPF Rules to amend them in line with
the existing provisions of the CrPC 1973 and the Constitution. Legal practices
adopted by the BSF, the Indian Army, the Navy and the Air Force, which all meet
the test of time and are in consonance with the prevailing provisions of law, can
be emulated without compromising on the need for an independent disciplinary
procedure. A separate judicial forum can be legislatively made in the CRPF.
Leaving the current state of affairs to the outmoded colonial position of the CRPF
Act makes it an unjust, arbitrary, unfair and discretionary process subject to bias
and misuse. Members of the force who sacrifice their lives for the nation
deserve to be treated better. It would be unfair to leave them to their fate while
they serve us well.
SEPARATION OF POSTS IN STATE-RUN BANKS Two Reserve Bank committees,
headed by AS Ganguly in 2002 and PJ Nayak in 2014, had recommended
separation of the posts of Chairman and Managing Director (CMD). In a bid to
improve governance, the Centre has separated the posts of Chairman and
Managing Director (CMD) in nationalised banks. It has also appointed Managing
Directors (MD) for four banks, and they will also be designated as Chief Executive
Officer (CEO).
RAILWAYS STEP TOWARDS DECENTRALIZATION A significant step in context of
decentralization of powers was taken recently by the Railways Ministry which
delegated decision-making powers for contracting railway works and services to
field officials to facilitate speedier implementation of projects. It has been decided
by the Ministry that all the cases for acceptance of works and stores tenders,
which as per extant delegations are to be referred to railway board by zonal
railways and production units, will now be dealt with and finalized by zonal

railways and production units. General managers at the zonal level and director
generals of production units will be the tendering authority.The decision comes
within just over a month of the E. Sreedharan committee for delegating tendering
and commercial powers for railway projects to lower levels of bureaucracy. KEY
POINTS: The move is aimed at reducing corruption and fast-tracking of the
decision-making process. It will also entail that the lower level officials now
empowered with tendering powers will be accountable for their decisions. The
committee has to suggest a set of procedures to be followed in tendering
processes so that transparency and accountability are ensured. While most
tendering powers have been delegated to the lower level bureaucracy, a different
procedure has been prescribed for tenders that the railway board invites, usually
tenders for inducting new technology or new initiatives for railways as a whole.
For such projects of upto Rs. 500 crore, a tender committee consisting of
concerned executive directors will invite tenders and a tender accepting authority
consisting of concerned additional members will accept these tenders. For
tenders valuing more than Rs. 500 crore, the tender committee will have
additional member level officials and the tender accepting authority will comprise
of the concerned board member.
SWACHH BHARAT, THE CSR WAY The government has sought to use legislation to
involve India Inc. in its Clean India project. The latest amendment to Schedule VII
of the Companies Act 2013 brings corporate contributions to the Central
Governments Swachh Bharat Kosh within the purview of Corporate Social
Responsibility (CSR) activities. B-schools could apply the mantra of catch them
young

through

well-planned

and

well-executed

experiential

programmes.

Community-centred experiential learning can help future leaders perceive social

responsibility differently. THE
BURDEN OF CRIMINAL NEGLECT CABINET NOD FOR MINERAL AUCTION The
government has decided to promulgate an Ordinance to amend the 57-year-old
Mines and Minerals (Development & Regulation) Act. The amendment seeks to
facilitate auction of hundreds of mining leases for minerals like iron ore, copper,

bauxite and limestone. With this, the process of auctioning captive coal block,
which was initiated, gets complete. The blocks were cancelled by the Supreme
Court. The court has instructed the government to adopt the policy of allocation of
natural resources, as far as possible, only through auction. Impacts of Amendment
Auction would ensure transparency in coal allocation It would boost the
revenue of the government The proposed changes in mining policy are also
investor-friendly. So it would enhance investors confidence. It would allow
transfer of mining leases and other rights between firms It would also simplify
and speed up the procedures for granting concessions Key Highlights of Ordinance
The ordinance will enable provisions of the pending Mines and Minerals
(Development and Regulation) Amendment Bill, 2014, to take effect. All
mineral concessions will only be granted through the auction route, and direct
auction of mining leases for bulk minerals. There will be a prospecting licence
for deepseated minerals. The lease period will be for 50 years, and on expiry,
there will be an auction. The transition period will be for a minimum of 15
years for captive mines and five years for non-captive mines. There will not be
a sudden stoppage of mining as a result of the amendment. It also says that all
pending applications at the State level will be cleared except a few. It
empowers the Central Government to fix deadlines for various processes and also
issue binding directions to States. The Centre will frame separate rules for
leases to public sector undertakings, with continuation of reservations. There
is for higher penalties and jail terms for offences. If required, Special Courts will be
formed Creation of a district mineral fund for the welfare of people in areas
affected by mining In order to attract private investment and foreign direct
investment there is a provision for easy transferability of leases obtained through
an auction.
NEW IPR POLICY TO WIDEN PATENT REGIME The new policy on National
Intellectual Property Rights seeks to change the patent regime of India to facilitate
the patenting of products which are not covered under current regime. The draft
stresses the need to create a new IP law that can facilitate the patenting of the

large number of innovative utilitarian inventions that have been invented or are in
use in India. There are hundreds, even thousands, of such innovations and
inventions. None can be patented under the current Intellectual Property regime in
India. The new system, known as Utility patents or protection of grassroots
innovation, have been an established system in many other countries, including
developed economies. They form a key part of the scientific and economic
development. India ranked 76th in the annual Global Innovation Index (GII) survey
for 2014. India has slipped from 66th (2013) and was the worst performer among
BRICS nations (Brazil, Russia, India, China and South Africa). China was the best,
at 29, an improvement of six places. Impact of New Policy Patenting
innovations will help India improve its score in global innovation indices. It will
help identify the actual, potential and untapped areas of creativity and innovation
It will facilitate preparation of focused strategy to channelize efforts and
financial resources where they are needed.
Major Initiatives to Boost Green Energy v The government approved
amendments to the Electricity Act, 2003 with several provisions to boost the
generation and use of renewable energy. v The cabinet has cleared a scheme to
set up 25 solar parks, with a capacity of 500 MW or above each. v The
government is pushing for Renewable Generation Obligations (RGOs). It will force
power producers to generate a part of their electricity through renewable energy.
v Efforts are being made to boost domestic production of PV cells and units.
EXPLORING THE ELUSIVE PARTICLE The Union Cabinet of Government of India has
approved the India-based Neutrino Observatory (INO) project. This follows the
approval of the 30- metre telescope which will be located in Hawaii. The decision
will cause India to step into big fundamental science. India is a pioneer in the field
of neutrino science. India was a world leader in 1965. With the closing of the Kolar
Gold Fields, in the mid-1990s, which was the site of the experiments, experimental
neutrino research in India came to a halt. The INO is expected to revive the lost
advantage. Neutrinos are of three types. They were initially thought to be mass-

less. Now it is believed that they have a small mass. This was shown by
observations of neutrino oscillation. This is a phenomenon by which one type of
neutrino transforms into another. There is a hierarchy among the masses of these
three types of neutrino. The experiments at the INO are likely to study this mass
ordering using a magnetised iron calorimeter (ICAL). The ICAL is a massive
detector which will be made of iron. The project will be housed in the 63 acres of
land, about 2 km away from the settlement, in the Bodi West Hills about 100 km
from Madurai, Tamil Nadu. The reason for deployment of such a massive detector
and for underground drilling is that the neutrinos interact very weakly with the
surroundings. All being are washed by a stream of neutrinos every passing minute
as they just pass through them without leaving a trace. Due to this weak
interaction, detecting them over other interactions is impossible. We need to have
a barrier of at least 1 km of earth to block out other radiation and particles, such
as muons from cosmic rays. Hence the scientists will construct a tunnel at a depth
of 1,300 metres below the peak and which is 2 km by 7.5m by 7.5m. This will lead
to a chamber that will house the detector. The experiment is like making a 2-inch
hole to insert a pipe through a 10-foot-high wall. It will not affect the stability of
the hills and mountains. The experiments around the world are being set up in the
South Pole, on top of mountains and even in outer space. Big basic science
projects are still new in India.
INDIA TO INDUCT FIFTH GENERATION AIRCRAFT Key Features v Intercept Radar
(LPIR) has low portability v Air frames having high performance v Avionics features
are much advanced v Computer systems are highly integrated and are capable of
networking with other elements within the theatre of war for situational
awareness
CAN INDIA CATCH UP WITH CHINA? The average Indian was slightly better off than
the average Chinese in the initial years after Indian independence. But Chinas
approach to development has varied markedly over the last 40 years and has
been so successful that it now ranks as the second most important economy in

the world. India has made good progress but is still substantially behind China.
Few people in 1978 could have imagined the monumental economic progress that
China would make because of the economic reforms pushed by Deng Xiaoping.
India has an excellent chance of catching up with China if it can increase its labour
force participation rate (particularly women), increase the average level of
education, improve the quality of its labour force through special training
programmes, reduce impediments to let foreign capital participate in its
development process, design policies to cultivate a culture of entrepreneurship,
and reduce corruption at all levels. The problem in India has always been
implementation.
RESOLVING THE NUCLEAR LIABILITY DEADLOCK The Civil Liability for Nuclear
Damage (CLND) Act, 2010 which contains a speedy compensation mechanism for
victims of a nuclear accident has been deemed responsible for this deadlock.
Specifically, provisions on recourse liability on suppliers (Section 17(b)) and
concurrent, potentially unlimited liability under other laws (Section 46) have been
viewed as major obstacles in operationalising nuclear energy in India and bilateral
relations with key supplier countries. A question of recourse Under Section 17(b),
a liable operator can recover compensation from suppliers of nuclear material in
the event of a nuclear accident if the damage is caused by the provision of
substandard services or patent or latent defects in equipment or material. This is
contrary to the practice of recourse in international civil nuclear liability
conventions, which channel liability exclusively to the operator. However when the
global norm itself is inequitable, there are justifiable reasons to depart from it. The
inclusion of Section 17(b) recognises historical incidents such as the Bhopal gas
tragedy in 1984 for which defective parts were partly responsible. The paltry
compensation paid to the victims was facilitated by gaps in legislation and an
extraordinarily recalcitrant state machinery. This is not a peculiarly Indian
phenomenon accidents such as Three Mile Island occurred partially due to
lapses on the part of suppliers. More recently, forged quality certificates were
detected for parts supplied to nuclear plants in South Korea. That Section 17(b)

incentivises supplier safety and reduces the probability of a recurrence of such

instances is equally undeniable. However in pursuing the safety of supply, Section
17(b) goes too far in keeping liability for suppliers entirely open-ended. If liability
on suppliers is unlimited in time and quantum, the possibility of getting adequate
insurance cover will reduce. Even if such insurance is available, it could make
nuclear energy economically unviable. To address this, Rule 24 of the CLND Rules
dilutes the right of recourse conferred by Section 17(b) by limiting compensation
payable by suppliers to a specified amount and for a specified time period.
Though the end that Rule 24 seeks to achieve is justifiable, the means adopted
are questionable. Rule 24 arguably violates Article 14 of the Constitution of India
because there is no specific power in the CLND Act to limit liability in the manner
that Rule 24 does. Further, the terms of the contract potentially dilute Section
17(b), which gives operators an untrammelled right to proceed against the
supplier by way of recourse. It is a basic principle of law that a contract cannot
violate the provision of a statute if it does so, it is opposed to public policy. For
these reasons, Rule 24 should be deleted. The limitation on time during which the
supplier can be held liable should be inserted by means of a provision in the main
Act. This will ensure that not just the end but also the means of limiting liability
are legally tenable. While provisions for the creation of a domestic insurance pool
for operators exist in Sections 7 and 8 of the Act and Rule 3, they need to be
made explicit and amended to include suppliers in order to prevent the
pyramiding of insurance premiums. This is particularly relevant to Indias domestic
nuclear suppliers who would otherwise need to individually take out coverage,
which would be prohibitively expensive. In order to access international
reinsurance pools, the Central government could utilise the provisions in Section
43 and 44 of the CLND Act (Power to Call for Information from Operators) to
establish a satisfactory inspections regime.

Section 46 provides that nothing

would prevent proceedings other than those which can be brought under the Act,
to be brought against the operator. This is not uncommon, as it allows criminal
liability to be pursued where applicable. However, in the absence of a
comprehensive definition of the types of nuclear damage being notified by the

Central Government, Section 46 potentially also allows civil liability claims to be

brought against the operator and suppliers through other civil law such as the law
of tort. While liability for operators is capped by the CLND Act, this exposes
suppliers to unlimited amounts of liability. Obtaining insurance coverage for any
future liability costs on account of claims by victims in such a case would be next
to impossible. Section 46 should thus be limited to criminal liability, and should
clarify that victims who suffer on account of nuclear damage can institute claims
for compensation only under the CLND Act and not by recourse to other
legislations or Courts.
ASER COMPLAINS OF POOR LEARNING OUTCOMES
The 10th Annual Status of Education Report (ASER), 2014, released by the
Pratham Educational Trust a few days ahead of the government starting
discussions on a new education policy, flags gaps between input and outcome in
elementary education.
Key findings of the report are:
The proportion of Class V children who can read Class II level texts has
marginally increased from 46.8 per cent in 2012 to 47 per cent in 2013 and
48.1 per cent in 2014;
The proportion of Class IV children who can read Class I level texts has
marginally increased from 55.7 per cent in 2012 to 56.3 per cent in 2014;
Enrolment of children between six and 14 years in schools has been over 96
per cent in the last six years.
DEVELOPMENT THROUGH EIGHT KEY ACTIONS
good government policies comprising eight key actions:

 The first key to success is high-quality infrastructure. Without

adequate power, roads and ports, investment from both domestic and
foreign sources is difficult and industry cannot develop. Infrastructure also
gives people access to basic services such as healthcare and education.
Second, investments in human capital education and health are vital.
While many countries across Asia now have high primary school
enrolment rates, the quality of teaching at secondary and tertiary levels
often disappoints. Countries also need to improve their technical and
vocational education and training to match the needs of industry with the
skills of the next generation.
The third condition is good economic policies. Double-digit inflation,
excessive government spending and high interest rates deter savings and
investment.
Openness to investment and trade is the fourth ingredient. Countries that
hide behind closed doors will not advance.
Fifth is governance. Corruption is fundamentally unfair. It also diverts the
energies of the people from productive endeavours, thereby damaging
growth.
Equality of access to incomes and other opportunities is the sixth
condition. A wide gap between the rich and poor prevents shared efforts
for development. It also erodes the quality of a countrys workforce, as
the poor are deprived of incentives and opportunities to acquire the
necessary education and skills. To make growth more inclusive and
sustainable, countries need to create quality jobs and plug gaps in access

to education, health, and financial services. Sustainable growth also

requires policies to tackle climate change and manage disaster risks.
The seventh point is the importance of a clear vision for the future. The
successes of Singapore and South Korea are testament to this.
Governments have a responsibility to plan for their countrys future based
on careful analysis of its comparative advantages and the evolving global
economic landscape.
Finally, growth is underpinned by security and political stability. Conflict
disrupts development, and ending it can yield tremendous benefits.
Myanmars emergence from isolation has allowed it to attract private
investment and assistance from multilateral and bilateral donors.

What is a smart city?

A 'smart city' is an urban region that is highly advanced in terms of overall
infrastructure, sustainable real estate, communications and market viability. It is
a city where information technology is the principal infrastructure and the basis
for providing essential services to residents. There are many technological
platforms involved, including but not limited to automated sensor networks and
data centres. Though this may sound futuristic, it is now likely to become a
reality as the smart cities movement unfolds in India. In a smart city, economic
development and activity is sustainable and rationally incremental by virtue of
being based on success-oriented market drivers such as supply and demand.
They benefit everybody, including citizens, businesses, the government and the
environment.
LENDING AUTONOMY TO PUBLIC SECTOR BANKS

The problem: meaningful governance reforms in public sector banks will have
to be institutionalized so that they do not depend on the good intentions of a
few people in government. How is that to be done? First, the government should
distance itself from day to day functioning of the banks by repealing the Bank
Nationalisation Acts of 1970 and 1980, the State Bank of India (SBI) Act and the
SBI (Subsidiary Banks) Act. In turn, all banks should be incorporated under the
Companies Act, and a Bank Investment Company should be constituted.
Second, the key reason why state-owned banks struggle is that their boards are
disempowered because the selection process is severely compromised by
political interference. The process must be made more professional along the
detailed guidelines suggested in the P.J. Nayak committee report last year.
Third, the government must create a levelplaying field for public sector banks to
compete in the market. These include removing the dual regulation (by the
finance ministry as well as the Reserve Bank of India), and obviating the
external vigilance enforcement though the Central Vigilance Commission and
Central Bureau of Investigation as well as limiting the onerous requirements
under the Right to Information Act.
THE FUTURE LIES IN MANUFACTURING
he share of manufacturing in Indias GDP has remained static at about 16 per
cent for over 30 years now. The National Manufacturing Policy (NMP) 2011 aims
to increase the manufacturing sectors contribution to 25 per cent of the GDP by
2022 by growing at 12-14 per cent in the medium term, and creating 100
million new manufacturing jobs by 2022. The NMP gives special focus to
industries that are employment-intensive, produce capital goods and have
strategic significance, including micro, small and medium enterprises (MSMEs)
and public sector enterprises. The NMP also seeks to promote manufacturing by
creating national investment and manufacturing zones (NIMZs).

The first

priority is to address the regulatory and procedural hurdles impeding business.

India ranks an abysmal 142 out of 189 in the World Banks Doing Business
survey. This requires concerted efforts by both the Centre and the State

governments to implement a single window clearance mechanism to facilitate

starting a business and rationalising compliance or inspection processes.
Special courts can be set up to fast-track adjudication of industrial disputes. A
nationwide rollout of GST is essential to harmonise indirect taxes which, coupled
with reduction in minimum alternate tax, will lead to a lower tax burden for the
industry. The duty structure for raw materials and components must be reduced
vis--vis

finished

manufacturing.

goods

to

help

strengthen

domestic

value-added

Growth enablers Flexible labour regulations encourage the

expansion of formal employment without reducing labour market vibrancy,

which is essential for the manufacturing sector to thrive. flexible labour laws
can strike a balance between workforce welfare and industry interests to boost
income and employment opportunity.

The Land Acquisition Act has to be

revisited to allay industry concerns with some aspects of the Act. Stalled power
projects can be prioritised to augment existing grid capabilities as well as
stimulate production in allied sectors such as coal, iron and steel, power plant
equipments and so on. Assured power supply from the grid determines the
sustenance of SMEs that cannot afford to set up captive sources of power. Road,
rail and port connectivity can be improved through a robust PPP architecture
which can help attract private sector capital for the planned $1 trillion
investment in infrastructure. FDI policy has to be relaxed to promote overseas
investments and build Indian manufacturing expertise in the long run. The new
foreign trade policy should be integrated with Make in India to promote
industry segments with high domestic value addition such as textiles and
electrical goods, and strengthen the manufacturing base.
HIGH TIME FOR SEARCH ENGINES NOW
ordered the three search engines to forthwith withdraw online advertisements,
currently being hosted or published, on pre-natal sex determination facilities,
clinics or centres in violation of Section 22 of the Pre-Conception and Pre-Natal
Diagnostic Techniques (Prohibition of Sex Selection) or PC-PNDT Act, 1994.

THE NEW INTENTS WITH THE U.S

No less important is the commitment of President Obama and his team to
support Indias membership of international export control regimes, including
the Nuclear Suppliers Group, the Wassenaar Arrangement, the Australia Group,
and the Missile Technology Control Regime that will help to further mainstream
Indias nuclear programme. Given that similar promises have been made in the
past, it is important that India uses the goodwill of the Obama visit to ensure
that Washington presses for this to happen as soon as possible despite the
obvious reluctance of some members of these regimes.

Legal indemnity for

suppliers creates a moral hazard encouraging suppliers to take excessive

risks since they dont have to pay for the consequences. The case of GE not
strengthening the Mark I containment is not an exception. The Presidential
commission appointed to study the 1979 Three Mile Island disaster, which saw a
partial nuclear meltdown, pointed out that the supplier, Babcock and Wilcox,
was already aware of design defects that contributed to the accident, but never
bothered to resolve them. The law channels primary liability for an accident to
the operator the public sector Nuclear Power Corporation of India and caps
it at Rs. 1,500 crore. This overrides the absolute liability judgment of the
Supreme Court, passed after the Bhopal gas leak disaster, which had no such
limit. The cap is about a thousand times smaller than estimates of the damage
that a serious nuclear accident could cause. Therefore, the law is designed to
protect the financial interests of the operators and the supplier; victims or the
taxpayers will simply have to bear costs beyond this cap. No tangible benefits
The most baffling feature of the current agreement is that it holds no tangible
benefits for India. The United States has offered to sell two reactor designs
both of which are expensive and untested. The Westinghouse AP1000, which
has been chosen for Mithi Virdi (Gujarat) is not in commercial operation
anywhere and has encountered difficulties wherever it is being built.
THE TWIST IN THE GROWTH STORY

The slowdown has been attributed to supply side bottlenecks, price shocks and
weak investment demand. Agricultural output declined in 2009-10. Coal output
fell and the output of iron ore also fell, partly because of certain court decisions.
International commodity prices, particularly that of oil remained high, despite
the poor performance of the advanced economies. The investment sentiment
was affected by various factors including non-economic. Perhaps one policy
action which affected investors was the decision to apply certain tax laws with
retrospective effect. The stability of the tax system became a cause of concern.
Moreover, many good decisions of the government were either delayed or
postponed. The energies of the government were also absorbed in dealing with
issues such as graft. All these created an element of uncertainty in the minds of
investors. in the short run, speedy completion of projects by itself can raise the
growth rate. In the medium term, we however need to ensure that the
investment rate goes up and the productivity of capital remains high. Only then
can the country get back to the high growth rate path. Speedy completion of
projects requires attention at the micro and at the policy levels. While every
effort should be made to remove administrative bottlenecks, issues relating to
the environment and land acquisition also need attention. The concerns relating
to environment and land acquisition are genuine. They cannot be wished away.
We need to work out an acceptable compromise between the compulsions of
growth and the concerns relating to environment and land acquisition. A
process of consensus building needs to be initiated. Sustained high growth
requires macroeconomic stability which has three dimensions low inflation,
low current account deficit and modest fiscal deficit. In one sense, all the three
are interrelated.
INDIA ACT EAST TAKES SERIOUS HIT
India is responsible for two big projects Kaladan multi-modal transport
project and India- Myanmar-Thailand trilateral highway. Both projects, controlled
by MEA, have fallen behind schedule drastically. The projects reflect India's
opportunity to show that it was putting its Look/ Act East policy on an overdrive.

A bigger problem is one of management which involves interministerial

coordination and that too has slipped up.

The trilateral highway starts from

Moreh in Manipur and ends at Mae Sot in Thailand. India has completed a little
over 132 km of the road work, leaving close to 30 km undone. As part of the
Kaladan project, India is building Sittwe Port on BOT (build, operate and
transfer) basis. It is also supposed to build jetties at Paletwa (in Myanmar) on
the Kaladanriver. India has also offered to upgrade/build Chaungma-Yinmabin
section in Myanmar as well as the Yinmabin-Pale- Lingdaw section. These
projects

were

India's

showpiece

initiatives

which

blended

the

Indian

government's mantras of connectivity and the bigger strategic vision to balance

Chinese power. China has, meanwhile, powered ahead, building connections
throughout south-east Asia to integrate it more closely to the Chinese growth
engine. India is way behind, but there was the hope that it would push its
system to catch up.
WBs AID FOR CLIMATE CHANGE MITIGATION
An agreement was signed between India and the World Bank for an assistance
of $8 million to take up various adaptation measures in rural areas to deal with
the threat of climate change. The

money will be used to implement special

projects to improve adaptive capacity of the rural poor, engaged in farm-based

livelihoods, to climate change in Bihar and Madhya Pradesh. The assistance
fund, under Sustainable Livelihoods and Adaptation to Climate Change (SLACC),
will be for projects that will help community institutions of the rural poor,
particularly women farmers, to foster improved resilience in the production
system in collaboration with government programs such as MGNREGS. The
National Rural Livelihoods Mission (NRLM) is the implementing agency of these
projects. This fund is in addition to what the government had set up last year as
`National Adaptation Fund' and set aside Rs 100 crore for taking up agriculture
adaptation measures. The environment ministry has initiated the process to
select agencies for implementing climate change mitigation and adaptation
projects using the Green Climate Fund (GCF) -a global fund meant to assist
developing

countries

in

promoting

lowemission

and

climate-resilient

development. Rich countries are supposed to contribute to the GCF that has a
little over $10 billion. The fund targets to be $100 billion by 2020. Developing
countries are supposed to identify projects that can be implemented using the
fund, set up under the United Nations Framework Convention on Climate
Change (UNFCCC) in 2010. Once India identifies its NIE, it will be accredited by
the GCF Board. India is one of the 24 GCF Board members.
A NEW MENU
ONE of the late R.K. Laxmans best cartoons from the mid-1960s portrays a
smiling food minister looking out of a window at a heavy monsoon downpour
saying, This year we can tell the Americans to go to hell. Fifty years ago, a
good monsoon meant that that year, India was not dependent on food aid and
wouldnt have to go hat in hand to the Americans for food under the PL-480
programme. What a different world we are in today. Our agriculture is not as
vulnerable to the monsoon and we have mountains of grain we maintain
costly buffer stocks of more than twice our needs. But while the world has
changed, our food policy is stuck in a 50-year-old mindset. Back in the day, we
set up the Food Corporation of India (FCI) to procure grain from farmers at
prices set by the Commission for Agricultural Costs and Prices in order to
encourage production, subsidised agricultural inputs such as fertiliser, pesticide,
water and electricity, and provided cheap food to consumers through fair price
shops. This helped India get rid of its dependence on food aid, made it selfsufficient in grain production and brought about a Green Revolution. But today,
our needs are different and the world has moved on. Shanta Kumar Committee
report - The proposed reforms would make our food policy more consistent with
the rest of the world and avoid unnecessary wrangles at the WTO. The report
makes five sensible and practical suggestions.

First, get the FCI out of the

business of procurement in grain-surplus states like Punjab, Haryana, Madhya

Pradesh, Chhattisgarh, Andhra Pradesh and Odisha, and shift its focus to
eastern Uttar Pradesh, Bihar, Assam and West Bengal. The FCI can purchase
grain above its NFSA needs from surplus states, but the actual purchasing

should be handled by the states themselves. Second, the report pushes for a
national warehousing system under a PPP model to reduce wasteful storage and
transport costs. Farmers can deposit their produce at these warehouses and
receive up to 80 per cent of the MSP value of this produce from banks and
then sell it later at market prices. This will be a major improvement as it would
reduce storage costs and wastage.

Third, the panel suggests that state

bonuses be the responsibility of the states and levies be made uniform at 3 per
cent. This would help avoid the costs of huge bonuses paid by the states and
financed by the levies they charge the FCI to procure from their farmers.
Fourth, the panel moots shifting to cash payments for inputs like fertilisers and
rationalising the price of urea so that the NPK mix, which has been distorted by
urea pricing, is reversed. Smuggling to neighbouring countries and other
distortions caused by urea pricing would also be removed. Huge productive
investments in the fertiliser sector are needed but have been held back by the
absurd pricing system, which has made India even more dependent on fertiliser
imports.

Fifth, the panel suggests amending the NFSA and reducing the

subsidised population to 40 per cent instead of the current 67 per cent. It also
suggests BPL consumers get more subsidised grain 7 kg vs 5 kg but that
the issue price be linked to MSPs, except for the very poor. Further, in cities that
have a population of more than one million, fair price shops should be replaced
by DBTs. If implemented, these recommendations would provide more food for
the poorest population, reduce FCI costs, bring private trade back into the
system and give poor urban consumers greater choice in their food basket. This
would hugely reduce the massive leakages and corruption in the food chain.If
India can implement these reforms in the coming years, it would also avoid
unnecessary battles at the WTO.
INDIA NEEDS A VIBRANT NATIONAL PORT POLICY
Indias major ports urgently need thorough organisational restructuring with a
view to transforming them into viable business entities. Indias 7,500-km
coastline is served by a dozen major ports, about 200 notified non-major ports

in nine maritime States and Union Territories. While the major ports fall under
the administrative control of the Ministry of Shipping, the non-major ports come
under the administrative jurisdiction of the respective State maritime boards or
governments. Of the major ports, only Ennore has been constituted under the
Companies Act, while the rest are administered and governed by the provisions
of the Major Port Trusts Act 1963. The administration of non-major ports differs
from State to State. Hardly any development The major ports have functioned
under the trust system for periods varying from 25 to 144 years. They have not
been able to function as vibrant commercial enterprises. The boards of port
trusts do not seem to have succeeded in taking timely decisions and making
investments in infrastructure due to administrative and bureaucratic delays.
Therefore, the ports have failed to develop into major infrastructure entities to
promote international trade.

To cite an example, the private operator Adani

Ports at Mundra in Gujarat crossed the cargo mark of 100 million tonnes in
2013-2014 within a span of 20 years, whereas Kolkata, Mumbai and Chennai
which were declared major ports in 1870, 1873 and 1881 respectively, could
handle only 41, 59 and 51 million tonnes respectively in the same year. Kandla,
declared a major port in 1954, could handle only 87 million tonnes in 20132014. The performance of this port suggests that major ports will be able to
perform better if they are corporatised. Provisions in the new Companies Act
2013 will enable Indian major ports to evolve into good organisational outfits
and make them commercially productive and operationally efficient. They
should also be given greater financial autonomy. Parliamentary approval will be
needed to repeal the Major Port Trusts Act 1963 to convert the major ports into
public limited companies. This will help them access private capital, give them
flexibility in managing affairs, take them out of the control of the tariff authority
for major port trusts and allow them to compete effectively. Government must
facilitate All the major ports should be governed under the new Companies Act
2013; there should be no distinction between major and non-major ports. All
port companies should reflect a national character and they should function
either as public limited companies or as private limited companies. Canada has

a nationwide port system by which Transport Canada exercises general control.

In Japan, there is greater involvement of local municipalities and corporations.
In the US, the federal government is involved in capital and maintenance
dredging of approach channels on a cost-sharing basis with the concerned
ports. India can draw from these examples.
A BREAKTHROUGH THAT IS NO BIG DEAL
Liability and cost the Civil Liability for Nuclear Damage Act of 2010 itself capped
all liability to 300 million Special Drawing Rights (SDRs) ($420 million or
Rs.2,610 crore). The figure was arrived at in 2010 after much debate, but it
would have been far higher today, given two events that followed. First, in
March 2011, a tsunami off the coast of Japan led to a technical fault and a
meltdown at the Fukushima nuclear reactor plant. Second, in September 2011,
the U.S. governments joint investigation team on the BP Deepwater Horizon
oil spill off the coast of Mexico found that not only was the operator BP liable
for the damages, but also Halliburton, that carried out the construction of a
faulty well.
MEDICINES IN INDIA, FOR INDIA
January marked an important breakthrough in the fight against tropical
diseases. Researchers and the International Centre for Genetic Engineering and
Biotechnology (ICGEB) in Delhi found a drug candidate that prevented TB and
malaria pathogens from infecting human blood cells.

It is not just that this

cutting edge research took place in India, but it also addresses Indian
challenges whose solutions have global implications. It also happened thanks to
a combination of a United Nations facility set up decades ago, attracting top
global research talent to come back to India and work here. And the research
was funded not just through international sources, but also a Grand Challenge
Programme on vaccines set up by the Department of Biotechnology,
Government of India. Much of this success is the delayed fruit of a
biotechnology push in India that started in the mid-1980s, and that has gained

in strength over time. First steps forward ICGEB researchers have attempted
rational drug design, where they have not only found a drug candidate, but
have done so while identifying what protein target it interacts with in the body,
and the mechanism it uses to prevent disease. The first steps forward for all
interested researchers in the field will likely be to study further how the peptide
drug candidate works, what its structure is, what the key biochemical
interactions are, and how its target proteins behave. It is after this that preclinical trials start on promising compounds, from tests in mammals to finally
humans. Phase I clinical trials are typically about testing safety among healthy
people. Phase II consists of small trials of efficacy among patients. The last and
the most expensive Phase III involves large, double-blind tests to determine
both safety and efficacy among large groups of people. The entire process of
drug development is one of attrition, where a hundred lead compounds might
trickle down to one or two medicines. It can take a decade or more, and cost in
the order of a billion dollars, or more than Rs.6,000 crore.

Robust research

ecosystem For this process to happen, you need to have a robust research
ecosystem, adequate funding, and good pipelines that ensure minimum friction
in the development of drug candidates and lead compounds into medicine that
you can buy at the corner shop. The challenge in India is that tropical diseases
have often been neglected by pharmaceuticals because the size of the drug
market is smaller, with people having lower incomes in tropical countries.
Further, companies are uncertain about Intellectual Property Rights on essential
drugs, unsure about whether they can recover high sunk costs in this inherently
risky proposition. It is no surprise that big Indian corporations have stayed away
from pharmaceutical R&D, finding more secure avenues for a return on their
investment. Policymakers in India will need to strike the right balance between
public funding and the role and return on private investment on drug
development. Greater clarity on Indias eminent domain and compulsory
licensing positions could make foreign-patented drugs more costly for India, but
might spur R&D on tropical and endemic diseases in the long run. Further, the
unwritten compact in developed countries on drug development is that a thick

layer of public funds pay for the basic research up to and including drug
candidate discovery. It is over and above this that private pharmaceuticals
come in, patent drugs and develop them.
INDIAS COAL-BASED THERMAL POWER PLANT MOST INEFFICIENT India's firstever environmental rating of coalbased power plants has found that the
country's thermal power generating units are among the "most inefficient" in
the world in terms of compliance of pollution norms, use of resources and
overall operation efficiency. The study, done under CSE's Green Rating Project
(GRP), analyzed and rated 47 coal-based thermal power plants from across the
country on a variety of environmental and energy parameters.

Key Points:

The study done by experts of the Centre for Science and Environment
(CSE), noted that Delhi is home to one of the most polluting power plants Badarpur Thermal Power Plant of the NTPC - of the country. It certainly
contributed to turning the Capital into the most polluted city in the world.
The objective of the study was to give a clear picture of the environmental
performance of the sector. Though the private sector thermal plants in the
country perform better than the government-owned ones, there is an immense
scope for improvement in almost all the units so that they can pollute less and
generate more electricity with efficient use of available resources.

The

country's thermal power plants are estimated to withdraw around 22 billion

cubic meter of water, which is over half of India's domestic water need. It also
noted that 55% of the units were violating air pollution standards which are
already extremely lax. The performance of the NTPC, the largest coal-power
producing company in India, was found to be below par. The plants were
rated on around 60 parameters covering everything from coal and water use
and plant efficiency to air and water pollution and ash management. Local
community views and impacts on them were given due weight-age along with
the plants' compliance record and environment policies. The ratings involve
comparing the performance of the plants against the best practices.

Key

recommendations include: 1. Monitoring by regulators should be strengthened -

they should be given more powers to enforce compliance. 2. Ash policy should
support higher usage of ash. 3. Incentives to ensure improvement in capacity
utilization. 4. Old inefficient plants should be closed at an aggressive pace. 5.
Clearances for enhanced capacities should be based on best achievable water
consumption.
INDIA, OMAN TO REVIVE TALKS FOR UNDERSEA PIPELINE
A project that was considered unviable till a few years back, India discussed
with the Turkmenistan leadership, the prospects of sourcing gas from the
central Asian country by an undersea pipeline project from Iran. While talks on
the TAPI pipeline are intended to keep the issue alive, an under-sea pipeline
could make the Iran-Pakistan-India gas pipeline irrelevant. The offshore route
proposal envisages transporting Turkmen gas to northern Iran and a swap
arrangement would bring gas from southern Iran via the proposed SAGE
(South Asia Gas Enterprise Pvt. Ltd.) pipeline to India. The SAGE project
envisages a Middle-East natural gas gathering system connecting gas sources
to the coast of the Arabian Peninsula. From there, the SAGE family of pipelines
plan to follow a route surveyed 15 years back and declared unviable at that
time as techniques of deepwater pipe-laying and manufacturing had not
matured. The new plan proposes to transport oil and natural gas through deep
sea pipelines via Oman in a process where Iran, and even Turkmenistan and
Azerbaijan energy can feed the pipeline for an ever-growing Indian market.
INDIA COMES UP WITH NEW ACCOUNTING STANDARDS
India has come up with a completely new set of accounting standards, taking a
big step towards convergence with IFRS. The Corporate Affairs Ministry issued
39 new Indian accounting standards (Ind-AS) and notified the roadmap for their
adoption by companies in India. However, companies in the financial sector,
banks, insurers and NBFCs have been kept out of this.

There are numerous

benefits that will come the way of India Inc from the latest move. It will further
strengthen Indias ability to attract foreign capital through inbound investments

or through access to global capital markets.

India can now claim to have

financial reporting standards that are contemporary and virtually on a par with
the best global standards. This will in turn improve Indias place in the global
ranking on corporate governance and transparency in financial reporting.
ADVANCED MEDIUM COMBAT AIRCRAFT
India is all set to kick-off its own fifth-generation fighter aircraft (FGFA)
development project this year to build on the expertise gained in the long
developmental saga of the indigenous Tejas light combat aircraft. According to
sources, the preliminary design stage of the futuristic fighter called the
advanced medium combat aircraft (AMCA), with collaboration among IAF, DRDO
and Aeronautical Development Agency, is now over. The aim is to fly the first
twin-engine AMCA prototype by 2023-2024, which will be around the time
deliveries of Tejas Mark-II fighters will be underway. IAF is slated to get its first
Tejas Mark-I in March this year, over 30 years after the LCA project was first
approved in August 1983. But the Tejas Mark- II jets, with more powerful
engines, will start to come only by 2021-2022.

A swing-role FGFA basically

combines advanced stealth, supercruise (capability to achieve supersonic cruise

speeds without use of after-burners), super-manoeuvrability, data fusion and
multi-sensor integration on a single fighter. But the 20-year long development
of the American F/A-22 "Raptor", the only fullyoperational FGFA in the world
today, has shown that such a project is an extremely complex and costly affair.

BURYING A MOUNTAIN OF CO2

At a drilling rig at the CarbFix site in Iceland, researchers recently tested
whether gaseous carbon dioxide can be turned into rock as a way of keeping it
out of the atmosphere. In a test that began in 2012, scientists had injected
hundreds of tons of water and carbon dioxide gas 1,500 feet down into layers of
porous basaltic rock.

Now the researchers are looking for signs that the CO2

had combined with elements in the basalt and become calcite, a solid

crystalline mineral. The work is part of a $10 million project called CarbFix,
which is developing an alternative way to store some of the carbon dioxide
emitted by power plants and industries. When that carbon dioxide is released
into the atmosphere, it traps heat, making it the biggest contributor to global
warming. So to help stave off the worst impacts of climate change, experts say,
billions of tons of CO2 may have to be captured and stored underground.
Boundary Dam and the other projects operate roughly the same way: Carbon
dioxide gas, highly compressed so that it acts like a liquid, is injected into a
formation, usually sandstone and often an old oil or gas field. Impermeable rock
layers above the storage zone should, in theory, keep the CO2 trapped
indefinitely, but because the gas remains buoyant, there is a risk that it will
move upward through cracks and eventually bubble back into the atmosphere.
The CarbFix project differs from this conventional approach by using water
along with carbon dioxide, and by injecting them into volcanic rocks. The
technique is designed to exploit the ability of CO2 to react with the rocks and
turn into solid minerals. In the CarbFix process, the injected water and CO2 mix
inside the well as if it were a giant geological soda machine. The resulting
carbonated water, which is acidic, helps break down the rock, releasing calcium
and other elements that combine with the carbon and oxygen from the CO2.
Injecting huge amounts of water along with the CO2, 25 tons of liquid for each
ton of gas adds to the cost.
BAND-AID SOLUTIONS FOR HEALTH PROBLEMS
The Draft National Health Policy of 2015 released by the Ministry of Health and
Family Welfare, Government of India, is a comprehensive document. The latest
health policy speaks about a wide variety of issues that plague our health-care
system low public health expenditure, inequity in access, and poor quality of
care. It also suggests a variety of ways to address them, mainly focussed
around increasing government spending on health and expanding the public
delivery system. However, the health policy fails to tackle head-on the core
problem of the Indian health system its management, administration and

overall governance structure, without which the measures it suggests are

merely symptomatic treatments, akin to putting a Band-aid on a corpse.
Within India too, the draft policy notes that States with better capacity have
utilised the National Rural Health Mission (NRHM) funds more effectively, while
States with poorer initial conditions have been left with worse outcomes. The
fundamental difference lies in management and governance structures.
Criticality of administration Globally, research findings have highlighted the
criticality of administration in improving health outcomes. corruption indicators
are negatively correlated with child and infant survival, attended births,
immunisation coverage and birth weight. Governance structures The weight of
evidence clearly suggests that if we want our health outcomes to improve, the
Indian health policy needs to focus on how its health system is governed and
managed. While our people are among the best and brightest, long years of
neglect and misgovernment have vitiated our public management systems.
Governance

structures

need

to

balance

responsibility,

flexibility

and

accountability (Feldman and Khademian, 2001) in order to carry out their

functions. It is clear that our systems today, at best, fix responsibility, but do
not provide flexibility and accountability managers/bureaucrats need to do
their jobs. A useful, and not entirely radical, model to consider would be the one
pioneered in India by the Tamil Nadu Medical Services Corporation. It is a
registered corporation set up by the Tamil Nadu government to procure drugs
for the public health system. It is accountable to an independent board of
directors which includes the health secretary. The corporation has an IAS officer
as its managing director, and professionals and academics are hired or taken on
deputation as deemed necessary. The model has proved so successful in
improving drug supply in Tamil Nadu that several other States, including Kerala,
have adopted it as the basis of their own governance structure. Whether or not
this specific type of model is adopted for healthcare delivery in India, the more
fundamental point is that governance and management of any health system is
a core determinant of its effectiveness.

A FLAWED APPROACH TO FOOD SECURITY

In the short run, the committee recommends that the National Food Security Act
(NFSA) 2013 be curtailed. In particular, the NFSA entails providing subsidised
food to about 67 per cent of the population, and the committee recommends
that the coverage be brought down to 40 per cent. In the medium run, the
committee recommends that the current public distribution system (PDS) be
replaced by a cash transfer system. This will mean that the state will no longer
have to be responsible for distributing food to vulnerable sections of the
population. Hence, the state will no longer need to procure food from farmers,
and

store

it.

Since

the

current

system

of

procurement,

storage

and

transportation is primarily managed by the FCI, the medium term vision of the
HLC implies that the FCI can, in due course, be folded up. Changed situation
The first set of arguments of the HLC relates to changes in the situation in the
country as regards food production and consumption since the crisis period of
the mid-1960s. Today, India produces more food grains than it consumes, even
exporting substantial amounts to the world market. It has a large public
stockholding of food grains and is comfortably placed as regards foreign
exchange reserves. All this is in stark contrast to the situation in the mid-1960s.
Moreover, consumption patterns of households have displayed a shift away
from cereals. This changed situation, in the opinion of the HLC, calls for a
change in the role of the FCI. The HLC, however, has ignored the fact that India
continues to be plagued by large scale hunger and malnutrition. Data from the
National Sample Survey (NSS) shows that in 2009-10 the vast majority of the
population was consuming less than the 2010 Indian Council of Medical
Research calorie norms. Fulfilling its objectives A more sensible route would be
to use increased domestic production to directly address the problems of
hunger and malnutrition. In this strategy, the FCI is bound to play a more rather
than less important role. The second set of arguments given by the HLC as
justification relate to the claim that the FCI has not been fulfilling its three key
objectives in recent years: providing price support to farmers, delivering food
through the PDS, and reducing volatility of food prices (and addressing food

security) through public stockholding. According to the HLC, failure to meet the
objective of providing price support.

The fact that only six per cent of

agricultural households sold paddy or rice to any procurement agency in 201213 is really striking. The Situation Assessment Survey of Agricultural Households
conducted by the National Sample Survey Organisation during the 70th Round
(2013) of the NSS the data source that allowed the HLC to compute the figure
of six per cent shows why. The NSS data reveals that the vast majority of
agricultural households were not aware of the existence of minimum support
price (MSP), and an even larger proportion were not aware of procurement
agencies. The second claim of the HLC is that the PDS is a failure because of
massive leakage. But, what do we know about the extent of leakage, its spatial
and temporal patterns? The existing literature on PDS in India has highlighted
three important patterns. First, there is a secular decline in leakage over the
past decade. Second, there is a large variation in the extent of leakage across
states with some States like Andhra Pradesh, Himachal Pradesh, Karnataka,
Kerala and Tamil Nadu consistently reporting low leakage. Third, and more
interestingly, many States like Bihar, Assam, Chhattisgarh, Jharkhand and
Uttarakhand, have improved considerably over time with respect to leakage
from the PDS. The conclusion that would be consistent with the findings of this
literature is not that the system needs to be dismantled but that the strategies
adopted by successful states are replicated in the other States. The third claim
of the HLC is that the FCI has ended up with excess stocks of food grains. Since
storage of food grains is costly, it represents a waste of resources that could
have been used elsewhere and in more productive ways. We agree with this and
would go further to argue that excessive stocks of food grains on the one hand,
and

prevalence

of

widespread

hunger

and

malnutrition

on

the

other

immediately call for an expansion of the PDS operations.

BRIGHTENING THE FUTURE WITH THE SUN AND WIND
The Renewable Energy (RE) Global Investors Meet inaugurated by Prime
Minister Narendra Modi on February 15 invited participation in funding Indias

RE growth ambitions, which include almost 1,00,000 MW of growth in solar

power in just seven years (about 40 per cent of todays total installed capacity)
and some 50,000 MW of wind power. This is bold and ambitious to say the least.
Renewables in India are different from renewables deployed in the U.S. and
Europe, and understanding the differences is the key to viable policies. The triad
of usual challenges of renewables remains in India, such as: intermittency/
variability; location-specific potential (concentrated in areas sometimes away
from consumers or the grid); and higher costs. However, there are specific
differences and needs that demand deeper analysis for the long-term viability of
renewable energy. In India, our peak demand is mostly in the evening, and the
sun surely isnt very bright at 7 p.m. Storage technologies are niche and
expensive today, so solar power helps with energy (kilowatthour) needs, but not
with our capacity needs. Wind is not much better, given its seasonality. India is
different because its grid is very weak and unstable, and instead of having a
reasonable reserve margin (which is typically 15-20 per cent in the West), there
is a shortfall in the grid, officially in the range of 5 per cent or so, but actually
much higher. The grid is kept afloat through massive load-shedding (feederlevel cut outs of supply). There are other technical reasons why the Indian grid
is weak, including lack of ancillary services (systems designed to keep the grid
stable, instead of just pricing kilowatt-hours).

Making RE sustainable

Renewables can and should play a greater role in our sustainable energy future,
but we need proper accounting and specialised effort to understand their grid
implications and scalability.

Brookings India identified a number of policy

imperatives for making RE sustainable. While the technical details need working
out, especially in terms of regulations, support and incentive mechanisms, grid
management, etc., we also identified a need to ramp up skills and innovation.
All solar cells are imported today this shouldnt remain so. The first step
towards making RE sustainable is a nuanced examination of the issues and
trade-offs, and dialogue among all the stakeholders, especially state utilities,
which ultimately deliver electricity to consumers. Renewables have a bright
future, and must play a leading role in Indias power security and growth. They

arent a silver bullet, but a vital tool in the broader spectrum of Indias energy
future. Most importantly, renewables should not be viewed in isolation, as a
drop-in supply-side solution, but rather as part of a transition if not
transformation of the grid, which includes variable and dynamic pricing,
distributed generation, storage technologies and smart grids. If RE is referred to
as the energy source of the future, that future is well-nigh
SOME FRESH GIAN
the governments of the United States and India have pledged to collaborate
through Indias Global Initiative of Academic Networks (GIAN) to facilitate shortterm teaching and research programmes by up to 1,000 visiting US academics
in Indian universities.

American president welcomed Indias proposal to

establish GIAN under which India would invite and host up to 1,000 American
academics each year to teach in Centrally recognised Indian universities, at
their convenience. GIAN is an ambitious initiative and promises to connect
Centrally recognised institutions, notably Central universities, IITs and IIMs
with the best scholars and institutions in the US. The governments position is
that, among other things, GIAN will be beneficial for the adoption of new
methods of pedagogy, boosting research in cuttingedge technologies and
building stronger academic networks between both countries.

There is no

doubt that as an idea and a plan for action, GIAN holds great promise. Once
implemented, provided its execution is carried out with a fair degree of
competence, it will, over time, connect knowledge communities in the US and
India as well as deepen existing networks to the benefit of our higher education
and knowledge sector. there are three points worth bringing up. First, it is clear
that the success of GIAN will depend substantially on the coordination and
management capacities of the MHRD and the concerned higher education
institutions. Can they deliver effectively? Second, in the near future, perhaps
fewer than half of the higher education institutions linked to GIAN would be in a
position to utilise it fully. Many Central universities, IITs and IIMs have either not
been built or are still under construction. Several others have inadequate

infrastructure or are situated in difficult locations. Finally, there are those

institutions that, for different reasons, do not attract a sufficient number of good
faculty and/ or students.
WING AND A PRAYER
The recent spate of aviation disasters has once again focussed the attention of
global aviation authorities on Asia. If India believes it is immune from this
scrutiny, it is mistaken. Last weeks decision by the United Nations aviation
watchdog, the International Civil Aviation Organisation (ICAO), to conduct
another safety audit in India just three years after the last one (the usual
interval is six years), as well as the US aviation regulator the Federal Aviation
Authoritys move to delay reviewing its rating of Indias air safety, underscore
the need to urgently address air safety issues. The last ICAO audit had placed
India in a list of 13 worst-performing nations in terms of air safety. At that time,
the civil aviation ministry and the domestic aviation regulator, the Directorate
General of Civil Aviation (DGCA), had sought to downplay the matter by
claiming that the rating was due to certain procedural lapses and was not
necessarily a comment on Indias air safety record. The FAA downgrade also
evoked similar responses. But the issues raised by ICAO and FAA run far deeper
than mere lapses in procedures or documentation. The DGCA, for instance, has
been able to appoint only 45 flight operations inspectors, despite Cabinet
approval for 75 such personnel the minimum strength dictated by the size of
Indias civil aviation fleet. This means that the FAAs review in March is unlikely
to improve Indias categorisation. There is an acute shortage of air traffic
controllers and engineering inspectors. Routine regulatory oversight at the
airport level is mostly missing, or has been delegated to the airlines, which
leads to a clear conflict of interest. On the other hand, pilots and air crew have
been complaining of rising fatigue levels and the lack of adequate programmed
rest breaks, as underpressure airline managements struggle to squeeze the
most out of their men and machines. In a competitive market facing severe

financial stress, there will be the temptation to bend the rules, if not break
them. It is for the regulator to step in and draw the line.
BRAND INDIA THE SMALL PICTURE
The MSME sector is critical for Indias economy. Their share in GDP at around 8
per cent currently. Redefining sectors 1. Segregate the micro and small from
medium enterprises by redefining the sector so that the incentive structure is
geared to promote entrepreneurship for micro and small startups.Three distinct
categories in the MSME sector deserve outof- the-box solutions. Micro enterprise
sector : largely unorganised, consisting of artisans, village craftspersons, micro
entrepreneurs and small service operators function from cultural domains and
inherited skills and locally available raw materials. Manufacturing sector in the
micro

segment

carpenters,

cobblers,

blacksmiths,

goldsmiths

and

coppersmiths in villages. Several of these two categories are in the proven

inefficient KVIC umbrella. KVIC as intermediary financier is the biggest single
NPA in the MSE lending portfolio of PSBs. Manufacturing SMEs : These are the
core small and medium manufacturing enterprises requiring structured finance
products and export finance with banks investing time in due diligence and
careful supervision. Both, enterprise specific and entrepreneur specific credit
support is required. 2. Startup MSMEs find it almost impossible to invest in land
because of prohibitive cost. States building rural industrial townships with safe
drinking water, industrial water, electricity, packaging, testing and branding or
co-branding facilities, multi-storied residential complexes for workers, schools,
crches, playgrounds and cultural spaces would boost this sector.

3. District

Industries Centres for MSEs as a delivery window is inefficient in most States.

Restructuring DICs and skill-building are crucial. 4. Credit and guarantee
mechanisms should be made mandatory for certain thresholds for each
subsector in manufacturing micro and small enterprises. 5. All the MSEs should
be provided credit at no more than 9 per cent for meeting working capital
requirements. It should be cash flow based lending. Work order should be the
basis of lending. 6. Incipient failures should be treated expeditiously by lending

institutions. If the borrower does not cooperate, it should be treated as wilful

default. 8. Sidbi should prove its supremacy over the other primary lending
institutions and should be seen as a guide and benefactor to MSEs and small
banks. It should also be restructured to cater to sophisticated medium
enterprises and mid-corporate enterprises. Its current micro finance lending
window should be operated through a separate subsidiary. 9. The RBI should
reorder its priority sector ategorisation and modify its MIS for effective
monitoring of the growth of the MSE sector. 10. The Bankruptcy Law/Exit Law
has to be enacted immediately.
STRATEGIC PATIENCE ON NUCLEAR LIABILITY
A major factor to remember is the gloomy prospect of nuclear power itself in
the post-Fukushima world. Many countries have either abandoned nuclear
power or are in the process of reducing their dependence on it. Even today,
there is no clear estimate of the lasting damage in Fukushima or the cost of a
clean-up, because of the extreme secretiveness of the Japanese authorities.
Those evacuated from the affected areas are still in temporary shelters, without
realising that they would not be able to move back to their homes in their
lifetime. India has decided to carry on with business as usual, but it cannot but
review its position when it makes progress on alternative sources which may
become substantially cheaper. The price per unit of electricity generated with
nuclear power will increase when the insurance costs and the costs of safety are
added on account of the latest developments. The Kudankulam experience, of
operating imported reactors, is far from encouraging and the popular movement
against such reactors will only grow in the future.

Russia has already fired the

first salvo against Westinghouse (U.S.) and Areva (France) reactors by claiming
that the cost of electricity generated in the U.S. and French reactors would be
double the production cost at Kudankulam. The cost of additional investments
for

insurance

and

installation

of

safety

equipment

might

make

them

unaffordable. The nuclear picture would change by the time negotiations begin

under the new arrangement. Perhaps, Indias nuclear power policy may change
before the new rules on liability come into force.
MAKE HEALTHCARE A NATIONAL PRIORITY
Insuring health The recently announced Draft National Health Policy has the
overarching objective of ensuring universal healthcare access. In this context, it
is pertinent to note that currently, only around 4 per cent of the population in
the country has health insurance coverage. This has led to a situation where
out-of-pocket healthcare spending constitutes 86 per cent of total healthcare
spends in India. The major reason for the low penetration of health insurance is
because it is currently optional. It is also the case that most of the people opting
for health insurance have some pre-existing illnesses. This has led to a high
claims ratio in the health insurance business which makes it difficult for health
insurers to sustain their operations. To address these challenges, the
government could explore making health insurance coverage mandatory for all
citizens in a phased manner initially covering the organised sector. Employees
could be given the option of paying their ESI contribution or purchasing
insurance from any IRDA-regulated insurance company. Apart from enabling
access to healthcare, this move would also meet the urgent need for
augmenting healthcare capacity creation in the country. Tax easing Since
healthcare is of high social importance, the government should consider
granting exemption from service tax levy for property lease rentals for
healthcare service providers, including hospitals and pharmacies. This will go a
long way in alleviating the suffering of patients already suffering from the
burden of disease. The growing burden of non-communicable diseases (NCD) is
contributing to the vicious cycle of poverty in developing countries such as ours
and poses a severe challenge to economic development. Very capital intensive
Further, the healthcare business by its very nature, is highly capital intensive
given real estate costs and the need to make continuous investments to
upgrade existing capabilities, apart from having a long gestation period. It is,
therefore, imperative to look at exempting the healthcare sector from the

Minimum Alternate Tax (MAT). Given the urgent need to augment the existing
healthcare infrastructure, the existence of the MAT regime acts as an
impediment to initiatives focused towards achieving this objective. Last but not
the least, corporate social Responsibility.

BANKRUPTCY LAW REFORM NEEDED

reform in bankruptcy laws as a key priority, envisaging legal clarity and speedy
processes that will ultimately ease doing business in India. The connection between
better insolvency laws and economic growth is straightforward: stronger bankruptcy
laws protect the rights of borrowers and lenders, promote predictability, clarify the risks
associated with lending, and make the collection of debt through bankruptcy
proceedings more attractive. These factors ultimately facilitate credit and thus a higher
flow of capital in the economy. But as per the recent Doing Business, 2015 Report, India
is ranked 142 on the ease of doing business and at 137 for resolving insolvencies. This
is why the Interim Report of the Bankruptcy Law Reform Committee released in
February 2015 is welcome. The Committee set up by the Ministry of Finance in August
2014 will be crucial to the new legislation promised in the Budget. The Committee sees
the early recognition of financial distress and timely intervention as key features of
efficient rescue regimes and believes that the degree of viability of a company must be
the central consideration for allowing it to be rescued, and that an unviable company
should be liquidated as soon as possible to minimise losses for stake-holders. They
recommend that secured creditors be allowed to file an application for the rescue of a
company at a sufficiently early stage, rather than wait for the company to have
defaulted on 50 per cent of its outstanding debt, as currently provided for in the
Companies Act, 2013. The Committee suggests that unsecured creditors representing
25 per cent of the debt be allowed to initiate rescue proceedings against the debtor
company. The report also focusses on individual insolvency, a crucial area covering sole
proprietorships and small and medium enterprises in India. Therefore, a new
bankruptcy law coupled with practical changes, removing the judicial bottlenecks and
delays, will be crucial to the reform process.

NEW DEAL FOR STATES

Consider the Rashtriya Krishi Vikas Yojana (RKVY), till now a fully Centrally funded
scheme that many recognise as having played a useful part in boosting Indias
agricultural growth to 4.3 per cent a year during the 11th Five Year Plan (2007- 12),
from the earlier 2.5 per cent average. The budget has made it a partially state-funded
scheme, with the Centres allocation slashed from Rs 9,954 crore to Rs 4,500 crore.
Given that a primary motive behind introducing the RKVY was to reverse the states
own declining investments in agriculture, it is a moot point whether they would rush to
compensate for reduced Central funding for the scheme. A more sensible approach
might be to slash the total number of Central schemes, ensuring 100 per cent funding
for the few that remain. There are many areas, from railways and highways to basic
research, irrigation and even agriculture, where the Centre can make decisive
interventions by drawing on expertise and resources that states may lack individually.
Identifying these areas and designing schemes for them is what a body like the NITI
Aayog can deliberate on. But at the end of the day, adequate funding commitment is
fundamental to successful programmes.

PUTTING THE UNIVERSAL IN HEALTHCARE

But there are two entirely different meanings of universal in universal health
coverage. One is universal across all people that every citizen has access to
coverage. The other is universal across health conditions. A health insurance contract
could be universal in that it reimbursed the insured for all medically effective
treatments of all disease conditions. Since India cannot afford doubly universal health
coverage, there has to be an explicit discussion about how much of what type of
universality should get priority. One approach is to make insurance with a nearuniversal list of conditions covered available for free to targeted citizens. This is the
Rashtriya Swasthya Bima Yojana approach that has been emulated by several states
and even the Centre. This approach limits the governments fiscal commitment by
covering only some individuals. There are two difficulties with this approach. First, even
in this situation, without careful control costs will explode, both through increased use
and increased costs per use. Second, this creates better health coverage for the poor
that the middle class, who cannot afford private insurance, too would demand. The
other approach is to achieve universal coverage of a limited number of conditions. Any
UHC plan should, as envisaged in the high-level experts group report, combine public

production and public provisioning of private services. It should assure a positive list of
essential services for all citizens. This provisioning could be done through various
channels like direct contracting with private providers, the insurance model or
capitation-based approaches. However, the temptation to go with a nationwide model
should be resisted. Local conditions should determine its design. India needs prudent
compromises to achieve its UHC goals assured and affordable access for all Indians
to a cost-effective positive list of assured healthcare services. First, the UHC objectives
should acknowledge its fiscal and personnel constraints. It also needs to leverage all
available resources, public and private, formal and informal. Finally, given the
enormous diversity across states, it should avoid embracing one-size-fits-all models
and allow enough flexibility for local design experimentation within an overarching
national UHC plan.

ADO 2015
The Asian Development Bank (ADB) released
the Asian Development Outlook (ADO) report titled
Financing Asias Future Growth. The ADO report
projected that India will overtake China in terms
growth rate in Financial Year (FY) 2015, and
2016

NATIONAL SUPERCOMPUTING MISSION: BUILDING CAPACITY

AND CAPABILITY
The Mission envisages empowering our national
academic and R&D institutions spread over the
country by installing a vast supercomputing grid
comprising of more than 70 high-performance
computing facilities. These supercomputers will also
be networked on the National Supercomputing grid
over the National Knowledge Network (NKN). The
NKN is another programme of the government
which connects academic institutions and R&D labs
over a high speed network. Academic and R&D
institutions as well as key user departments/
ministries would participate by using these facilities
and develop applications of national relevance. The
Mission also includes development of highly
professional High Performance Computing (HPC)
aware human resource for meeting challenges of
development of these applications.
The Mission implementation would bring

supercomputing within the reach of the large

Scientific & Technology community in the country;
will provide significant qualitative and quantitative
improvement in R&D and higher education in the
disciplines of Science & Technology; and enable
the country with a capacity of solving multidisciplinary
grand challenge problems.
The Mission has been conceptualized and
evolved keeping in view the ever increasing
computing demand of the scientific and academic
community in the country, international technology
trends and roadmaps of leading countries in the
area, strategic importance and emergence of
supercomputing as a benchmark for Scientific &
Technological advancements. DeitY and DST will
be implementing the mission jointly through the
Centre for Development of Advanced Computing
(C-DAC) and the Indian Institute of Science (IISc),
Bangalore.

FOR AN APPROACH ORIENTED TO PATIENTS

The truth is that TB is Indias silent epidemic,
neglected by politicians and bureaucrats, now a
virtual ticking time-bomb. Unless we create a
nationwide movement against TB and drugresistant
TB, we will continue to create widespread
suffering and deaths by neglect.
Curing TB requires more than appropriate
diagnosis and treatment. A majority of the TBinfected
in India are poor and lack sufficient
nutrition, suitable housing, and have little
understanding of prevention. TB then devastates
families, makes the poor poorer, particularly affects
women and children, and leads to ostracisation
and loss of employment.
The truth is that even if TB does not kill them,
hunger and poverty will. Another truth is that deepseated
stigma, lack of counselling, insufficient access, expensive treatment and lack of
adequate
support from providers and family, coupled with
torturous side-effects, de-motivate patients to
continue treatment with disastrous health
consequences.
For patients, the most important aspects are

the economic, social and familial dimensions of this

disease. In an ideal scenario, every Indian must be
aware of the symptoms of TB and should be able
to go to the public or private sectors for free
diagnosis. This must include a drug sensitivity test
to ensure that drug-resistant TB is detected and
treated early. If found infected, the patient and his
or her family must be provided counselling and
support immediately. Irrespective of where they
seek care, patients must have immediate access to
free and similar treatment in both the public and
private sectors.
Patient families must also be provided with
sufficient nutrition and economic support through
development programmes for the treatment period
when they cannot work. Simultaneously, a targeted
and well-planned campaign and effective
community engagement programmes are essential
to ensure that communities come together to
prevent and address TB, reduce stigma and create
support for TB patients.

MISSING THE BIG PICTURE IN TB CONTROL

The rampaging and terrifying face of
tuberculosis in India today with a thousand deaths
every day has a complex history.
They turn a blind eye to historical experiences
which reveal that in much of the advanced world
today, TB was controlled through enhanced
nutrition, better housing design, socio-economic
advancement opportunities and cleaner
environments.
APPROACH AND KEY COMPONENTS OF E-KRANTI : NATIONAL E-GOVERNANCE
PLAN 2.0
The objectives of 'e-Kranti' are as follows:
i. To redefine NeGP with transformational and
outcome oriented e-Governance initiatives.
ii. To enhance the portfolio of citizen centric
services.
iii. To ensure optimum usage of core Information
& Communication Technology (ICT).
iv. To promote rapid replication and integration
of eGov applications.
v. To leverage emerging technologies.
vi. To make use of more agile implementation

models.

A GREENPRINT FOR REFORM

First, refocus the relevant laws. We have a
plethora of laws, some dating back to the middle
of the 19th century and a clutch of them passed
after 1947. At the moment, dozens of laws
contradict each other and the interpretations by
our judiciary are complex, to say the least. We need
the best minds in this field in India to sit and write
one law for forests, wildlife and forest people, and
another for the environment. Both must be easy to
understand and short.
Second, remodel the federal structure. The
ministry of environment, forests and climate change
(MoEFCC) needs to be revamped and bifurcated, if
not into two ministries, at least two departments.
Third, there is the matter of financial
independence. The Compensatory Afforestation
Fund Management And Planning Authority, started
in 2002, has nearly Rs 35,000 crore accumulated
from user agencies of forest land. We need to lay
down a new plan to use these funds to protect
forests. The best minds, both within and outside
government, should be involved. The impact of such
a plan could be game changing.
Fourth, restructure the Indian Forest Service
(IFS). With nearly 2,00,000 men under its
command, the IFS needs to be a crack service
focused in the states. Today, it is in decline and
field forest staff are demoralised. Its working
mechanisms must be equal to those of the police
and the army. State-of-the-art training is essential
for the personnel and officers.
Fifth, some attention needs to be paid to wildlife
and heritage towns. Millions of people live in large
towns adjacent to national parks and sanctuaries
Sawai Madhopur, Bharatpur, Chandrapur,
Chickmagalur and Jabalpur, to name just a few.
Under the Swachh Bharat Abhiyaan, these places
should be converted into model green towns with
the best waste recycling processes and renewable
energy. Their heritage value warrants preservation.
Their impact on the environment must be low so
that forests are protected better. Rajasthan has just
taken up the idea to remodel such towns.

Sixth, any initiative to save our forests will only

succeed with the engagement of the people living
in the area.
Seventh, developing wildlife tourism. When
tourism plays a critical role in conservation, the
impact can be far-reaching, as seen in most countries
in Africa. It boosts the economy, improves the GDP
and makes a difference to the poorest.
Eighth, explore the option of public-private
partnerships. If the ministry of finance has an office
for PPPs, what stops the MOEFCC from having
the same? Forest landscapes need to be open to
this intervention. Till the best minds in and out of
government come together on such missions, little
will change.
Ninth, consider the idea of lateral inductions.
This step is vital for creative governance but
everyone shies away from it. We need to bring in
the talent to reform systems of governance that are
decaying. For the moment, it could be on the basis
of short- and long-term contracts.
Finally, the problem of climate change needs to
be addressed. The challenges in dealing with it are
huge.

REVAMPING PUBLIC PROCUREMENT

Procurement Bill of 2012
Bills
objective is too complex, which dilutes
accountability. Hence, a simpler set of objectives,
as is also a global practice, would be desirable.
This would also assist in improving the
accountability of procuring agencies, and facilitate
the task of internal and external auditing agencies.
Second, the Bills definition of the procurement
process implies that post-tendering steps such as
contract management, payment, monitoring and
so on, after the award of a contract, are excluded
from the procurement process. The definition
should be broadened to include the post-tendering
procedures.
Third, given judicial delays and the lack of
economic literacy often displayed by the judiciary,
non-judicial procurement redress committees would
be preferable. This needs to be better specified in

the Bill to prevent undue discretion by procurement

agencies and redress committees.
Fourth, the international practice is to designate
a nodal agency for procurement. Hence, we need
to clarify whether the proposed Central Purchasing
Organisation (CPO) will be such an agency.
Fifth, the Bill is not applicable to procurements
for less than Rs. 5 million, emergency procurements
made for disaster management, and procurements
for the purpose of national security. While excluding
the latter two government activities is routine, the
basis for discretion for procurements below Rs. 5
million, which is a significant amount, is not
defined. The corresponding procedures for such
procurements should also be specified.
Sixth, the Bill also permits the procuring entity
to limit competition in order to achieve other
objectives, as well as exempt certain procurements
from any of the provisions in the legislation such as
the transparency requirements in public interest.
However, in case of limited competition, certain
other requirements such as reporting requirements,
advance contract award notice, risk management
techniques should be introduced to ensure that
transparency is achieved.
there is an implementation challenge
concerning the skill sets of the officials, who will
be at the interface of public procurement. Public
procurement should be regarded as a task requiring
professional skills. Capacity building in this
direction should be undertaken urgently to ensure
appropriate skill sets and that an understanding of
business practices and logic is inculcated in the
officials and in the organisations seeking
procurement contracts.

WHAT MAKES CITIES REALLY SMART

The
National Commission on Urbanisation identified
329 cities called GEMs (Generators of Economic
Momentum), which were further divided into
National Priority Centres and State Priority Centres.
Urbanisation was expected to grow along those
corridors.

The idea of a smart city, for most of the 20th

century, was science fiction. But cities can now
integrate critical infrastructure such as roads, rails,
subways and airports; optimise resources better;
and plan preventive maintenance. Given Indias
finance crunch, any smart city we plan should focus
first on three things: urban transportation, egovernance
and land titling.
Urban transportation
For a sustainable city, public transport has to
be the main artery. With metro systems viable only
in large cities, integrated bus services will be
primary. Indias bus services continue to be
hamstrung by limited or declining fleet sizes, lossmaking
services, inadequate resources, poor service
quality and ignorance about modern vehicle
technology.
Cities should design bus routes to ensure multimodal
integration. A city-level Unified Metropolitan
Transport Authority, backed by legislation, should
facilitate coordinated planning and implementation
of transport projects. We need an intelligent
software to improve systems for vehicle location,
collecting online fares, priority signalling for buses,
and real-time bus information. Cities should also
set up Traffic Information Management Control
Centres for effective enforcement and monitoring
of traffic rules.
Better e-governance
The Indian government has experimented with
various e-governance initiatives, most of which have
failed to materialise, given poor cyber security and
significant privacy and data protection risk. But
the implementation of a secure ICT Infrastructure,
comprising wireless hotspots, wi-fi networks, and
fibre optic Internet delivery at home, remains
fundamental.
E-governance could learn from these examples.
The U.K.s Tell us Once service allows citizens to
inform public authorities about birth, death or
significant life events just once. San Franciscos
DataSF.org displays public transportation arrival
and departure times, recycle zones, crime patterns
and more.
Land titling
Providing affordable housing remains a critical
challenge. The has been exacerbated artificially by

poorly conceived Central, State and municipal

regulations, leading to land prices that are much
higher than intrinsic levels. Urban development
projects still have to undergo a lengthy approval
process developers have to spend two-three years
getting permissions from nearly 40 departments.
Titling issues and the lack of property rights
information make this worse.
A smart city would provide formal digitised
recognition of property titles, along with increasing
transparency and registered brokers, cutting down
long search times and high costs of acquiring real
estate.

MODIFICATIONS IN THE SCHEME OF INFRASTRUCTURE

DEVELOPMENT FOR FOOD PROCESSING: MEGA FOOD PARKS
The Cabinet Committee on Economic Affairs,
chaired by the Prime Minister has approved the
modification in Mega Food Park Scheme guideline
of infrastructure development for food processing.
These modifications will streamline the
implementation of the scheme and make the
implementation of the Mega Food Parks smooth.
These modifications are expected to trigger
further investment in the food processing sector
and ensure smooth implementation of the Mega
Food Parks scheme particularly, projects at initial
phases of the schemes implementation.
The Scheme will be implemented in a market
driven manner commensurate with both global and
national demands. Innovative supply chain
management will be the key to implementation of
this scheme. The project proposals for focusing on
the processing and preservation of perishable food
products will be given weightage in selection.
The modification will also bring Central
Government agencies on par with the State
Government agencies by removing the restriction
of a maximum 26 percent on their equity holding
in the Special Purpose Vehicle (SPV) and allowing
all Government agencies to become shareholders
in the SPV without any restriction on their
shareholding.
Background:
The Infrastructure Development Scheme for
Mega Food Parks aims at providing modern

infrastructure facilities for food processing industries

along the value chain from farm to market. As per
the Scheme, ownership and management of the
Mega Food Park vests with a SPV in which
organized retailers, processors, service providers etc
may be the equity holders or there may be an anchor
investor along with its ancillaries, associated
companies and other stakeholders. The Farmer
organisations are encouraged to participate in the
SPV. The Anchor Investor in the SPV holding
majority (at least 51 percent), stake with or without
other promoters of the SPV, will be required to set
up at least one food processing unit in the park
with an investment of not less than Rs. 10 crore.
However, State Government / State Government
entities and Co-operatives applying for projects
under the scheme are not required to form a
separate SPV and set up processing unit(s) in the
Park.

CABINET NODS TO COMPENSATORY AFFORESTATION FUND

BILL
The Union Cabinet recently cleared the
Compensatory Afforestation Fund (CAF) Bill 2015
which will pave the way for expeditious utilisation
of funds realised for forest land diverted to nonforest
purposes in transparent manner.
The Cabinet chaired by Prime Minister
Narendra Modi gave its approval to the Bill which
will also ensure utilisation of accumulated unspent
funds already available with Compensatory
Afforestation Fund Management and Planning
Authority (CAMPA).
The proposed legislation seeks to provide an
appropriate institutional mechanism, both at the
Centre and states and Union Territories to ensure
expeditious utilisation in an efficient and transparent
manner of amount, realised in lieu of forest
land diverted for non-forest purpose. This would
mitigate impact of diversion of such forest land.
The Bill also ensures that there is a mechanism
in place which would not put any additional
expenditure on the central government. It also
provides for establishment of the National CAF and
the state CAF to credit amounts collected by state
governments and union territory administrations
to compensate loss of forest land diverted for nonforest
purpose.
The proposed legislation will also ensure

expeditious utilisation of accumulated unspent

amounts available with the ad hoc Compensatory
Afforestation Fund Management and Planning
Authority (CAMPA).
The proposed legislation will also ensure safety,
security and transparency in utilisation of these
amounts, which currently are being kept in
nationalised banks and are being managed by an
ad-hoc body.

MORE POWER TO SKILLED HANDS

there
is a plan to repeal the Handloom (Reservation of
Articles for Production) Act, 1985, which has been
protecting traditional handloom weaves, especially
sarees, from being copied by machine-made and
powerloom competitors. It is a small, but important,
protection for handloom weavers, who otherwise
struggle to survive in a market where their yarn,
designs and markets are all under attack.
Protecting weavers
The powerloom lobby has been agitating rather
successfully for the Handloom Act to be withdrawn.
Meetings and consultations have been held, largely
without the inclusion of handloom sector
representatives.
The customers prefer cheaper
powerloom sarees. This is factually incorrect.
Obviously, the market has shifted from rural to
urban, but handlooms are growing, and there are
figures to prove it. And it is noteworthy that the
growth is despite enormous problems faced by
weavers in yarn procurement, credit, and market
access.
Over the last five years, the demand for
handlooms has actually increased.
There are an estimated 20 million
handloom workers (this includes pre-loom and postloom
processes), compared to three million in the
IT industry. Globally too, as understanding of the
eco-friendly attributes and design virtuosity of
handweaves grows, more buyers are looking to
India. Given this, it would be tragic if, instead of
investing more, we seek to destroy a sector that
promises not just revenues but also jobs in the rural

sector. All India needs to become a global handloom

hub is infrastructure, investment and planning.
Strength, not weakness
Handlooms are dismissed as cultural dinosaurs
primitive technologies irrelevant in a modern
economy. This view ignores that Indian handlooms
are not just the largest source of employment and
income generation after agriculture, but also the
one area of skill, creativity and expertise where
India is way ahead of the world.
Besides, handlooms have a low carbon footprint,
as they require minimum infrastructure, technology
and power.
The Handloom Act is toothless and seldom
enforced, but it is still a deterrent. Rather than
repeal it, we should be trying to give it more teeth.

PATENT PRESSURES
In its 2015 Special 301 Report on Intellectual
Property Rights, the office of the United States Trade
Representative (USTR) has retained India in its
Priority Watch List, noting however that bilateral
engagement between the two countries on IPR
concerns had increased over the past year. The
USTR had done an Out-of-Cycle review of India in
2014, mentioning the improvement in trade ties,
and this year ruled out another immediate review.
The U.S. wants India to bring its IPR regime closer
to norms that the former seeks and has been
uncomfortable in particular with the clauses in the
Patents Act of 2005. The Act provides for a high
standard of patentability, allows for compulsory
licensing provisions and pre- and post-grant
objection to patents. The progressive Act has been
invoked in several judgments recently in relation
to pharmaceutical patents for example, the
Supreme Court upheld the sale of a generic version
of the cancer drug Nexavar in December 2014, and
upheld the Indian patent offices rejection of
Novartiss application for a patent for its anti-cancer
drug, Glivec. It must be mentioned that patent laws
in India are compliant with the Agreement on
Trade-Related Aspects of Intellectual Property
Rights (TRIPS). The restrictive patenting laws have
protected a thriving generic pharmaceutical
industry producing low-cost drugs in India. The
industry has gradually become export-driven,

resulting in these companies becoming keen to tie

up with major pharmaceutical companies abroad
by seeking voluntary licensing arrangements. Other
countries have also looked at Indias Patents Act
as a model, with affordability of pharma products
and drugs being a key concern.

DEBATE THE DEBT - PDMA

Does it make any difference whether the
countrys public debt is managed by the Reserve
Bank of India, by the government of India or by a
separate agency?
Post the Asian financial crisis,
after Bimal Jalan took over as governor of the RBI,
the dominant belief shifted against such a
separation of powers for several reasons. First, large
fiscal deficits meant that the government borrowing
programme did impinge on monetary policy,
liquidity and the cost of credit for the private sector.
Second, higher costs did not deter governments
from borrowing more. Third, foreign exchange
market volatility had implications for debt
management. Fourth, there are also conflicts of
interest between government as owner of banks
and issuer of debt.
There is no
evidence in India to suggest that either debt
management or monetary management has been
compromised by the RBI or that, as market
regulator, its role has conflicted with its monetary
operations in the money and government securities
markets.
Globally, the conventional view on separation
has also been under challenge after the financial
crisis. In 2010, Charles Goodhart pointed out that,
with elevated debt levels, debt management could
no longer be viewed as a routine function that
could be delegated to a separate, independent body.
Further, in the coming epoch of central banking,
he argued, central banks should be encouraged to
once again take up their earlier roles as managers
of national debt. Even in the UK, there was serious
parliamentary debate on shifting the debt office
back to the Bank of England.
Issues involved:

The first is the issue of

the governance structure of the PDMA outside the
RBI and how separate it should be from the
government. To begin with, it seems desirable that
the agency take over the management of only
Central government debt and not that of the state
governments.
Irrespective of
how separate the agency is, given the size of the
borrowing programme and the stage of
development of markets, the RBI and the ministry
of finance will need to work in close coordination.
The paramount need is for the PDMA to function
professionally in order to meet its long-term
objectives. It should not be overwhelmed by
immediate compulsions if they are not sustainable
in the longer run.

DONT RUSH THE PDMA

First, the conventional conflict of interest
argument is myopic. Evidence suggests that the
smooth conduct of the governments large
borrowing programme has been facilitated in a nondisruptive
manner because the RBI, apart from
being the banker and debt manager to the
government, has a broad range of responsibilities,
including regulation and surveillance. The RBIs
endeavours in debt management have resulted in
significant improvements in the government
securities (G-Sec) market trading and settlement
system, with greater transparency, more efficient
price discovery, no settlement risk, lower
transaction costs and a level playing field.
Second, the conflict of interest argument does
not hold much water given the prohibition on the
RBIs participation in the primary market under
the Fiscal Responsibility and Budget Management
Act since 2006. Thus, the primary market interest
rates of government borrowing, solely auctiondriven,
are no longer viewed as interest rate
signalling by the RBI.
Third, the present system of managing debt has
certain synergies. It has performed well in ensuring
that debts are raised at reasonable cost and with
low risk. Contrast the eurozones burgeoning and
risky public debt structures created by its debt
offices. Denmark and Iceland have shifted debt

management back to the central bank. Post-crisis,

there was serious debate in the UK parliament to
return debt management to the Bank of England.
Fourth, independent management and issuance
of government debt could distort the sovereign yield
curve in a thin market, jeopardising monetary
signalling and its transmission. Fifth, a likely
outcome of the separation could be the emergence
of multiple debt management agencies.
Coordination among debt managers then will be
difficult and eventually lead to conflict. Sixth, as
banker, the RBI has been helpful in accommodating
the deficit and surplus modes, taking into account
the markets absorptive capacity. One is doubtful if
an independent body will have the experience to
handle cash management of such magnitude.
Seventh, in the global post-crisis environment,
there is a rethinking that debt management is again
becoming a critical element for financial stability,
as Greece has shown. The Bank for International
Settlements study (November 2010) noted that debt
management can no longer be viewed as a routine
function that can be delegated to a separate,
independent body. Instead, it lies at the crossroads
of monetary and fiscal policies. The study further
opined that in difficult times, G-Sec market
conditions are better managed by central banks.
Eighth, as regards the unified regulator, the
question is: Should we follow the so-called unified
regulator approach after the spectacular failures of
supervisors like the UKs Financial Services
Authority?
Ninth, the middle office set up within the
finance ministry may be further strengthened to coordinate and provide technical and
analytical
input to the cash and debt management committee.
Tenth, the roadmap for separation should be
gradual and calibrated, with emphasis on countryspecific
micro-market structure, progress on fiscal
and cash management by government, debt
management by state governments and liquidity
and monetary management by the RBI.

YES TO MULTI-STAKEHOLDERISM
India declared its support for multi-stakeholder
governance of the Internet at the ICANN 53
meeting in Buenos Aires and at the first Preparatory
Meeting for the U.N. General Assemblys overall
review of the implementation of the World Summit
on Information Society outcomes earlier this month.

This, in combination with the governments efforts

at consultative policy-making in the context of net
neutrality, may signal the beginning of a more
discursive approach to communication policy.
Countries such as the U.S.
and Germany have advocated a multi-stakeholder
model that consults governments, industry, civil
society and technical community while making
decisions that affect the Internet. This is consistent
with these countries domestic approach to
communication policy, which includes independent
regulators that conduct wide consultations and
frame policy after accounting for the concerns of
various stakeholders. India has opposed this point
of view in the past, favouring the multilateral
model in which national governments make
decisions through an equal vote, arguing that this
is the most equitable model. This has been consistent
with Indias domestic command-control
communication policy, which has tended to confine
citizen participation in governance to the casting
of the vote.
The change in Indias stand globally signals
potential openness to consultative policy-making.
Since multi-stakeholder governance is an
ambiguous term , the governments approach to
domestic communication policy may be a good
indicator of its intentions for the Internet. In this
context, it is worth taking a close look at how the
net neutrality policy is being made. A clear effort
has been made at consultation and responsiveness.
It is a promising start and may be the beginning of
consultative decision-making that gives citizens
more avenues to discuss the best way for them to
access information.
Consultative approach
Before publishing the net neutrality report this
month, the Department of Telecommunications
conducted a series of consultations. Although these
consultations were closed and only for invited
parties, the committee reached out to a wide range
of experts and stakeholders. Reading the report
makes it apparent that many perspectives were
invited and incorporated but that we need to work
towards documenting public input better. It is
necessary to find a way to reflect different concerns
within a post-consultation report.
Consultative governance of Internet policy will
mean significant changes both in the process

followed and in our deep-seated attitudes towards

governance. If the government has to develop the
uncomfortable habit of being more immediately
responsive and accountable for decisions, we the
stakeholders also need to take responsibility for our
own communication policy.
Governments and other stakeholders of the
world disagree about what multi-stakeholder
governance means. This governance model has its
roots in the phrase enhanced co-operation, a
compromise text inserted in the Tunis Agenda after
prolonged negotiation. The meaning of this term, and the role played by NGOs in
making decisions
about the Internet remains elusive after years of
international debate.
Commendable steps
The recent net neutrality consultations are a
step in the right direction. The departments
decision to call for public comment and response
to the report is commendable, especially since the
department is under no legal obligation to do this.
If India is serious about consultative decisionmaking,
it will be worthwhile to build the more ad
hoc processes followed for the net neutrality report
into a constantly-improving system. The TRAI has
experience with inputs from public consultations,
and we have a lot to learn from other democracies
that do this on a regular basis.
Indias fears about multi-stakeholder
governance have always had their roots in its
concerns about decision-making being dominated
by corporations, especially U.S.-based corporations.
This is why our government has consistently
supported the traditional Westphalian governance
model based on reasoning that a multilateral
conversation between governments is likely to be
more equitable than one in which international
companies that are larger than most countries can
dominate. It is good to see that the Indian
government is interrogating this standpoint. This is
in keeping with this governments overhaul of
systems to modern decision-making and
accountability systems. India will still need to work
out details and build on existing efforts like the net
neutrality consultation and the multi stakeholder
advisory group. We will need to carefully craft our
policies to ensure that the process goes beyond
giving industry a voice, and encourages

independent inputs that effectively safeguard

citizens rights.

TIME TO ABOLISH THE MRP

The maximum retail price (MRP) that is printed
on all packaged commodities that consumers
purchase was introduced in 1990 by the Ministry
of Civil Supplies, Department of Legal Metrology,
by making an amendment to the Standards of
Weights and Measures Act (Packaged
Commodities Rules) (1976). It was meant to
prevent tax evasion and protect consumers from
profiteering by retailers. Before the amendment,
manufacturers could print either the maximum
retail price (inclusive of all taxes) or the retail price
(local taxes extra). When producers opted for the
latter method, it was found that retailers often
charged more than the locally applicable taxes.
Thus, the amendment was made to introduce the
compulsory printing of MRP on all packaged
commodities.
While the intention to protect consumers in a
pre-liberalised India can be lauded, continuing the
system today does not make any sense. The practice
of MRP in India is unique, archaic and
dysfunctional. India is perhaps the only country in
the world to have such a system, where it is
punishable by law to charge a price higher than
the printed maximum retail price. In most countries,
the system of having a universally enforceable
printed price is viewed as being akin to price fixing
and is thus prohibited as being anti-competitive.
Dysfunctional system
More often than not, the rule of MRP is
breached rather than honoured. First, the MRP
applies only to commodities and not services.
Second, most essential commodities are not
packaged and, thus, do not fall under the MRP
rule. Fruits, vegetables, rice, pulses, and so on are always sold loose and the retailer
thus has the
freedom to choose the price, based on his costs and
the demand and supply for those commodities.
Third, even packaged commodities are not usually
sold at MRP. It is not uncommon to pay a price
much higher than the MRP in movie theatres, highend
restaurants, tourist locations, airports and
railway stations. Fourth, many shops charge for
services that are not covered by the MRP, for
instance, you often have to pay a premium, a
cooling charge, when you buy cold bottled water

or soft drinks. Fifth, producers sometimes print an

MRP so ridiculously high that the product can be
sold at an actual price that is up to 90 per cent
discounted, thereby making the printed MRP
redundant in its ability to signal value. Firecrackers
and automobile spare parts are the most obvious
example of this.
The onus of checking whether products are
being sold at a rate higher than the printed MRP
lies with the state legal metrology department
officials. There have been a few instances of muchpublicised
crackdowns in various cities, but
normally, it leads to rent-seeking among these
officials.
Not so fair
The MRP, by providing a focal point for retailers,
becomes a de facto uniform price and creates retail
price collusion. Thus, MRP often ends up hurting
the very consumers it sought to protect.
One justification that is often given in defence
of MRP is that it is meant to protect consumers in
remote locations who do not have the choice to go
to different stores in search of the right price. While
MRP aims to establish uniform prices, irrespective
of whether it is in a commercial urban area or a
remote village in the Western Ghats, the result is
often damaging to both retailers and consumers.
Retailers in remote locations and in villages often
have to bear high transportation costs, which they
cannot pass on to the end consumer, since they are
legally not allowed to charge a price higher than
the MRP. They, therefore, end up making losses. In
order to avoid this, they choose not to stock many
products, thereby reducing the choice available to
consumers in these locations. If, however, they were
allowed to determine their own price, they would
factor in the transportation costs and charge a
slightly higher price than what the MRP presently
dictates. Eventually, seeing that there is a demand
for these products and that a retailer is making
super-normal profits, more shops will open up in
that area. When the demand from retailers
increases, wholesalers and manufacturers will
create better facilities for distribution.
Another important defence for maintaining the
MRP system is that it eliminates information
asymmetry and provides a benchmark to illiterate
consumers. However, with increasing penetration
of Internet-enabled smart phones, it is not hard to
imagine an app that can collate different retail

prices from a particular location. In the beginning,

the government can devote some of the huge
resources it currently spends on enforcing MRP to
develop a mechanism for dissemination of
information. Gradually, given its utility, many
private players will develop apps that will provide
information on different retail prices.
Finally, it has to be asked whether it should be
the right, or even the duty, of manufacturers to set
the price at which a product will be sold to the
end user. In doing so, the manufacturer gets to
decide the profit margins of the retailer, which is
essentially contradictory to a free market system.
Just as a consumer has the right to buy a
product at a particular price, the retailer should
have a right to sell his product at any price. If he
charges a higher price, the customer is free to go to
another store. Retail density in India is high enough
for the market mechanism to function properly, as
the OECD 2007 Report on India notes. Even in
places that do not have high retail density, if
retailers charge very high prices in the absence of
an MRP, other retailers will soon enter the market
and the resulting competition will eventually reduce
prices.
The MRP system has existed in India without
being questioned for too long now. It is time to
give free markets a chance.

HARNESSING THE STRENGTHS OF EACH STATE

The problem with the European Union (EU) at
present is that it has built a monetary union without
a corresponding political union. In India, on the
other hand, the political union has been fairly
successful, but there remain significant
improvements to be made in becoming an economic
union. Having a common currency is not adequate
for an economic union. What is required is a free
trade area within the Union of India.
Indias internal trade, which amounts to less
than 15 per cent of GDP, is much lower than that
of the EU (20 per cent of its GDP) and the U.S. (40
per cent of GDP). In the quest for achieving a larger
share of the global market, our policymakers often
forget that India has one of the biggest markets
within its own boundaries. With 1.2 billion people,
India should concentrate on increasing inter-State
trade, and allowing manufacturers in India to take
advantage of its large market.
The 29 States and 7 Union Territories in India

are geographically diverse, possessing a diverse

wealth of natural resources and human capital. As
a first step, it is necessary to encourage States to
develop an agricultural and industrial policy
framework that can promote their comparative
advantages.
The biggest barrier to inter-State agricultural
trade today is the market-distorting rules and
regulations, of which the Essential Commodities
Act (ECA) and the Agricultural Produce Market
Committee (APMC) Act are the prominent ones.
The ECA empowers the government to declare any
commodity as essential and thereby impose
restrictions on stocking and selling it in the free
market. The APMC forces farmers to sell their
agricultural produce to the government-regulated
local mandi s, which robs them of their freedom to sell their produce in better paying
areas that might
lie outside the State boundaries. There was some
scope for improvement on this front when there
was a proposal to introduce The Agricultural
Produce Inter-State Trade and Commerce
(Development and Regulation) Bill, 2012, which
would integrate the individual domestic markets
for farm produce into a single national market.
However, the Bill did not make it through. It is
imperative for the present government to consider
reviving this legislation.
In the case of manufactured goods, the biggest
impediment is the plethora of tax regimes and
varying rules and regulations in different States.
Much of this can be solved by the implementation
of a well-designed Goods and Services Tax (GST)
to replace the existing system of multiple taxes such
as VAT, CENVAT, Central Sales Tax and Octroi.
Further, there is service tax to be paid on
transportation charges apart from the varying
compliance costs. There are also various inter-State
regulatory requirements that involve detailed
documentation like permits, waybills, tax invoices
and delivery notes. Add to this the poor road
infrastructure and it can be easily seen how Make
in India requires a lot more work. Finally, in order
to increase inter-State trade, it is important for each
State to have its own specific industrial policy that
is consistent with its comparative advantage.

FROM FARMER TO BUSINESSMAN

In the ongoing debates on the new land

acquisition bill, the potential of agribusiness to
address agrarian distress has not been explored.
There are several domestic agriculture companies,
both listed and private, that are doing extremely
well amidst an increasing number of farmers
suicides.
The classic case is of suicides by cotton farmers.
Of late, share prices of textile companies are
performing extremely well and attracting huge
private investment, but cotton farmers continue to
be in distress. Even in staples such as pulses, rice
and wheat, food companies do well but the farmers
are in trouble. It is significant that all these foods
are processed, but not by the farmer. The money is
clearly in the market, and not merely in production.
Recognising this, several farmer-owned
producer companies and new types of self-reliant
cooperatives, broadly called Farmer Producer
Organisations (FPOs), have recently been set up.
They aggregate, sometimes process, and then market
agricultural produce. The best example of such an
FPO is Amul Dairy. Along with other National
Dairy Development Board (NDDB)-promoted dairy
cooperatives, they have brought millions out of
poverty.
In this context, a cold, hard look is required at
how agribusiness operates, and at the policy
measures, if any, that need to be put in place to
enable FPOs to thrive. However, non-dairy
agriculture is far more difficult to handle. Prices
and supply are volatile and vary at times by over
100 per cent unlike in the case of milk. This not
only makes farming difficult, but agribusiness as
well.
A look at the listed successful companies in food
processing, if we exclude multi-national companies
that focus entirely on semi-ready or ready-to-eat
foods, shows the following: for listed rice and pulse
mills, whole wheat, plain flour and semolina
producers, and edible oil companies, net profit
margins are low at less than 5 per cent but interest
costs are often twice the profits. Debt-equity ratios
are hovering at around 200 per cent. Taxes are
over 50 per cent of net profits.
Most important, such companies, unless backed
by deep pockets, take years to establish, based
initially on promoter capital, and later, capital from
the share market. Rice mills and processing units
listed on the stock exchanges usually take 10 years

or more to become successful with high market

valuations, profits and dividends. Thus, we largely
see private unlisted companies in this sector, outside
the purview of public accountability.
What does this mean for farmers and the several
hundred FPOs that have already been set up? First,
the low margins do not really matter. If we take
the profits not on the total value-added sales, but
on the value of raw produce, the margins are much
higher. For the farmer this is a significant increase
in income, and is sometimes the difference between
poverty and prosperity.
Capital constraints
However, there are several barriers that have
to be overcome. First and foremost is the capital
constraint. FPOs are initially not able to raise share
capital from their member-farmers. They also
cannot go to the share market to raise capital unlike
the privately-owned food processing companies.
We protect the FPOs from hostile takeover by
not allowing shares to be traded. However, this
effectively blocks them from raising capital from
the share market, which even wealthy private
promoters need.
The next barrier is working capital. FPOs have
to buy in cash as their member-farmers need the
money desperately at harvest time to repay crop
loans and run their households. They initially cannot
demand cash from the buyers who often take a
few months to pay. So FPOs need higher working
capital than the private sector. This is where dairy
cooperatives score since milk is produced and
consumed daily and farmers can sometimes wait
for a few days to get paid. Given current banking
norms, non-dairy FPOs are simply unable to raise
loans, as they lack an equity base and cannot
provide collateral.
The third barrier is managerial capability. It is
unreasonable to expect farmers to run the everyday
business operations in an FPO, just as it is
unreasonable to expect shareholders to run a listed
company. As in the private sector, FPOs can hire
well-paid professionals if they reach a certain scale
as Amul and several other, large, successful
cooperative dairies have done.
So what is the way out? While initial share capital from farmers is very difficult to
mobilise, it
can be raised over three to five years as profits

come in. But meanwhile there are fixed investments,

working capital and interest costs, and costs of
professionals.
Finance options
Bridge financing is required. An interesting idea
followed in other countries allows cooperativecorporation
joint ventures and different classes of
share capital. Allowing trading in closed circles,
clear exit clauses and allowing buy back by FPOs
of outside investor shares, may help raise initial
capital.
Unfortunately, joint ventures permitted in the
Indian Producer Company Act allow very little
outside share capital. Hence, innovative ways of
providing working capital to FPOs are urgently
needed. The highly successful collateral-free, self
help group-bank linkage programme needs to be
adapted for FPOs, based on a case-by-case business
analysis and cash flows, rather than on collateral.
The RBI is willing to categorise lending to FPOs
as a priority sector, but banks are not willing to
come forward without collateral. An alternative is
a special fund outside the banking system. Finally,
the huge interest burden on FPOs needs to be
reduced. Unlike in microfinance, if interest costs
are halved, profits are doubled in agribusiness.
Finally, there are taxes and regulations. While
farm gate sales are tax-exempt for the farmer, FPOs
with processing units have to pay VAT on the entire
sales proceeds, effectively on the purchase of raw
material as well. Hopefully, the proposed GST Bill
will iron out this anomaly.
The combined effect of interest rate reduction
and tax breaks can make these FPOs triple their
profits and thus mobilise large numbers of farmers
quickly perhaps even faster than Amul did. The
regulatory burden at the grassroots is far too
cumbersome needing more than 20 permissions,
each taking time and facing several obstacles. It
effectively kills the growth of this sector. These need
to be waived by giving SEZ type privileges to FPOs.

PLATE TO PLOUGH: THE HANDS THAT FEED US

As India celebrates its 68th year of
independence, it is time to pause and look back at
the major challenges we have faced since
Independence and how they were overcome, as
well as at the mistakes and follies we committed so
that we dont repeat them.
In 1947, undivided India had a population of

390 million. But overnight, on August 15, India

was responsible for the destiny of 330 million people.
The other 60 million went to Pakistan 30 million
in West Pakistan and another 30 million in East
Pakistan, now Bangladesh. A majority of these 330
million people were rural, quite poor, illiterate, and
had a very short life expectancy.
Gandhi rightly said that India lives in its villages,
and feeding people well was the biggest challenge
to ensure healthy and happy lives for them. But
we also wanted to transform our society fast,
develop modern industrial goods and outlook. So,
after a few initial years of absorbing the shock of
Partition and stabilising society, Jawaharlal Nehru
led India on to a socialist path with a mixed
economy framework. Heavy industrialisation under
state ownership was the darling of development
policy and a symbol of modernisation. For food,
however, India relied on supplies from the United
States under Public Law 480 (PL-480) against rupee
payments, as India did not have much foreign
exchange to buy large quantities of food in
international markets. The folly of this set-up
became apparent in the mid-1960s, when the US
suspended wheat supplies temporarily (due to some
political differences) at a time when India was
facing back-to-back droughts and the country was
literally living from ship to mouth. But the folly
of state-led heavy industrialisation and import
substitution, which kept India trapped in what the
late Raj Krishna called the Hindu rate of growth
of 3.5 per cent for decades, is still being debated.
India was quick to learn from its PL-480
mistake and neglect of agriculture. It realised that
its political freedom could be imperilled if it was
not self-reliant in basic food production. But all of
Indias foreign exchange reserves in the mid-1960s
could not buy more than eight million tonnes (mt)
of wheat in the international market, while it was
importing 10 mt under PL-480. So, India did not
have much of an option but to become selfsufficient
in the production of basic staples. India
imported 18,000 tonnes of high yielding varieties
(HYV) of wheat from Mexico in 1966, and ushered
in the Green Revolution.
Where does India stand today in terms of its
agriculture? While the population has grown from
330 million in 1947 to almost 1.25 billion, that is by
almost 3.8 times, our wheat production has increased by almost 15 times (from about
6.5 mt in

1951 to 96 mt in 2014). Rice production has gone

up by more than five times (from 20.6 mt in 1951
to 106.5 mt in 2014), maize production by more
than 14 times (from 1.7 mt to 24.4 mt), milk by
eight times (from 17 mt to 137 mt), fish by 12 times,
and potatoes by 26 times. Cotton production has
also increased from three million bales in 1951 to
37 million bales in 2014, an increase of more than
12 times.
India is not only self-sufficient in agriculture,
but also a net exporter of agri-produce. In 2014-15,
agri-exports were $38 billion against imports of less
than $20 billion. During the last three years, India
has exported a total of 61 mt of cereal, nothing
short of a wonder for a country that lived from
ship to mouth in the mid-1960s. Today, India is
the largest exporter of rice in the world, and the
second-largest exporter of beef (buffalo meat) and
cotton.
India is the largest producer of milk, and the
second-largest producer of fruits and vegetables,
rice, wheat and sugarcane. This is a matter of great
satisfaction and relief for policymakers. An idea of
the progress made can be gauged by looking at
how just the price of onions makes them nervous
today. Think of what would have happened if there
were all-round shortages as in the mid-1960s.
Whom should we salute for such a turnaround
in Indias agri-fortunes? Several stakeholders have
played a role in achieving this. There have been
policymakers like C. Subramaniam, who steered
the political debate to import HYV seeds in the
mid-1960s despite the massive opposition from leftwing
parties in Parliament and ushered in the
Green Revolution. There are scientists like the late
Norman Borlaug, who invented these seeds, and
M.S. Swaminathan and Atwal, the first ones to
adapt them to Indian conditions. But when
Subramaniam was asked whom the credit for the
Green Revolution should go to, his reply was to
the farmers who took the risk of adopting new
technologies. He saluted the Indian farmer.
Indias milk story is the story of the Milkman of
India, Verghese Kurien, who nurtured the
cooperative movement in the country and made
Amul (Anand Milk Union Limited), an utterlybutterly
name in every household.
There is an important lesson from this grand
success of agriculture. New technologies (HYV
seeds, water, fertilisers) and innovation in

institutional engineering (as in the milk sector) have

been the real catalysts of change. These seeds can
come from outside the country (as was the case
with the HYV seeds of wheat and rice, and now
with Bt cotton seeds from large private-sector
companies such as Mahyco Monsanto), or take birth
on Indian soil, as was the case with Pusa basmati
and several hybrids of maize, introduced by both
multinationals and domestic companies as well as
government. But it is the farmer-entrepreneur who
takes the risk in adopting these seeds and
technologies, puts in his/ her best efforts, and the
nation reaps a rich harvest to feed its citizens.
It is time to salute our farmers for these heroic
accomplishments. But it is also time to ask, what is
it that the country has given back to them? Are
they prosperous and happy? There is no doubt that
several pockets of peasantry have experienced
prosperity, but the overall picture, as per the latest
situation assessment survey, is not rosy. So, the
next challenge for all of us is to ensure a smile on
their faces as well. This calls for a major re-orientation
of farm policies. Its time to ring the cowbell.

The new Great Game in Asia

Two strategic agreements currently being negotiated by the worlds trading giants will likely determine
the global balance of economic power for years to come: the Trans-Pacific Partnership (TPP) and the
Regional Comprehensive Economic Partnership (RCEP). The TPP and RCEP are not radically different
instruments they are both free trade agreements (FTAs) designed to lower tariff and non-tariff
barriers to trade between countries that conduct the bulk of global commerce.
The TPP negotiations are led by the U.S. and involve 11 other nations that share a Pacific Ocean
coastline. Seven of those countries Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, and
Vietnam are also party to RCEP negotiations. RCEP comprises the ASEAN nations and six others:
India, China, Japan, Korea, Australia and New Zealand. In addition to trade in goods and services, both
agreements cover the critical area of intellectual property rights. RCEP is the more modest of the two,
seeking to implement and build on World Trade Organization (WTO) commitments incrementally.
Committing

beyond

WTO

TPP seeks to frame a new agenda for global trade, requiring countries to commit beyond their existing
multilateral obligations under the WTO as well as the agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS). TPP negotiations broke down earlier this month, after countries
were unable to find common ground over IPR protections the U.S. sought to introduce, especially in
cyberspace.

In contrast, RCEP negotiations have seen progress, albeit haltingly. The Press Trust of India reported
last week that ministerial delegations from RCEP member countries will meet in Malaysia in August to
finalise modalities. RCEP is an important agreement for India, as it involves many, if not all, of the
countrys major trading partners.
Their basic nature aside, both agreements reflect a competing political dynamic. The Trans-Pacific
Partnership has become the centrepiece of U.S.s Asia policy, with the Barack Obama-led administration
investing considerable political and diplomatic capital in it.
Revealingly, Singapores Foreign Minister K. Shanmugam, in his visit to the U.S. in June, also agreed
that the TPP had little to do with economics and Singapore was pushing it although it had a free trade
agreement with the U.S. for strategic reasons.
RCEP is not a China-led process, but involves Beijing as a key player. China is acutely conscious of
RCEPs political significance earlier this year, Commerce Minister Gao Hucheng suggested China will
continue to unswervingly push forward and quicken the pace of Chinas free-trade agreement strategy.
If such a comprehensive regional agreement were to be inked ahead of the TPP regime, it would be a shot
in the arm for China.
The RCEP story would underline three crucial conclusions: first, that China is willing to engage actors
within a pluri-lateral setting, and set aside competing political interests, especially around South China
Sea concerns, for overall economic gain. Second, that Beijing leadership is capable of absorbing
multilateral instruments into domestic law to secure regional interests even if it goes against established
economic policies, especially on IPRs; third, and most important, China is comfortable with conceiving
and implementing international norms while it emerges as a hegemon in the Asia-Pacific. These
conclusions, if affirmed, would signal a decisive shift in the regional locus of power from the U.S. to
China.
What does this political narrative mean for India, with its renewed ambition to Act East? Regrettably,
the discussion around FTAs and mega-regional agreements in India has focused solely on their economic
aspects, with scant attention paid to the underlying strategic dimensions. The TPP has invited reflexive
criticism for rewriting rules of global trade.
As highlighted in the infographic, the RCEP is different, but no smooth ride either. Keen to protect their
digital economies, Japan and South Korea have sought strong IPR protection measures. India,
meanwhile, has dug its heels in, suggesting it would not budge from the bare minimum that is required
for TRIPS compliance. This is a commendable position to take but does not serve any strategic purpose.
Indian government is yet to articulate a strategic vision for the Asia-Pacific region that combines
economic and political interests.
On the foreign policy front, it has moved closer to the U.S., but wants to remain invested in RCEP. At the
same time, it does not want to be seen as being too close to China, whose IPR and cyber policies leave a
lot to be desired. If this reflected a multi-alignment policy, Indias negotiating line in RCEP would have
been calibrated to respond to specific concerns from across the table, but the draft text does not seriously
evaluate whether domestic IPR policy can accommodate RCEP provisions.

IPR protection in cyberspace, as highlighted through the infographic, is one of the most important
themes and a major source of disagreement in both TPP and RCEP. TPP provisions would require a
major restructuring of Indias IP enforcement framework, and may not be immediately feasible. But
Japans prescriptions suggest that it is possible for India to find a middle ground in RCEP. Many of
Japans concerns relate to legal standards how Internet applications should be classified, the nature of
procedural guidelines on intermediary liability, the scope of technology protection measures, and the
range of penalties imposed.

The spectre of dengue

Dengue, a vector-borne disease about which little was known prior to the 1990s, has now
become endemic to the country, particularly the national capital region of Delhi. It breaks out
with almost unfailing regularity during the monsoon season. Yet, hardly any attempt has been
made to evolve a long-term strategy to combat it. This year's spread of dengue is by far the
worst since 1996. Of over a dozen states that have been affected by it, Delhi alone has
recorded over 3,800 confirmed cases and 19 deaths. States like Karnataka, Kerala, Tamil Nadu
and Maharashtra are not far behind. The actual tally is bound to be higher as many cases go
unreported and even unconfirmed since the facilities for conducting the reliable ELISA test are
available

only

in

few

government

or

private

hospitals.

The reasons for the dengue menace getting out of control this year are many. For one, the civic
authorities have been too slow to react to the emerging threat. Though the warning signals of
the dengue outbreak were available as early as in July, anti-larval operations were initiated only
when people actually began to die. Besides, co-circulation of more than one strains of the
dengue virus has worsened the situation. Normally, only one or two serotypes, usually Type-I
and Type-III, of the four serotypes of dengue virus are noticed in a season. When the dominant
strains remain unchanged over a period, a significant section of the population tends to develop
immunity to them. But this time, all the four types of virus, including the relatively more virulent
Type-II and Type-IV, have become active. These virus strains cause haemorrhagic fever with a
severe drop in platelets that can lead to organ failure and death. The worrying development is
that Type-IV has been noticed almost for the first time. Not much scientific work has gone into
finding

the

control

of

these

viruses.

Moreover, ever since a ban has been enforced on cheap and highly effective pesticides like
endosulfan and dichlorodiphenyltrichloroethane or DDT, the mosquito-control programmes

have suffered as their alternatives are too costly for the fund-starved civic bodies to use and
stay within their budgets. This has contributed to the surge in the incidence of dengue and
other vector-borne infections, such as malaria, chikungunya and encephalitis in different parts
of the country. The health care budgets of the Centre and states, therefore, need to be stepped
up

significantly

to

stave

off

such

disease

epidemics.

This aside, in the absence of any commercially available vaccine for dengue, its prevention by
controlling mosquitoes and limiting exposures to bites is the only way to keep this dreaded
disease under check. Unfortunately, stereotype approaches like pesticide sprays and fogging
are still the main instruments for combating vector-borne diseases. These operations fail to
produce satisfactory results unless undertaken regularly. Several new and unconventional
approaches have been tried out with a fair degree of success in some other countries. Mexico,
Venezuela and some African countries, for instance, have found good results with insecticidetreated curtains and mosquito nets. Vietnam has effectively used biological methods to control
larvae in water bodies, including household tanks. Indonesia has experimented with devices to
trap insect eggs to prevent pest multiplication. It is time India learnt from their experiences and
adapted some of their methods to local conditions to keep dengue-like health contingencies at
bay.
>>>> However, observing that the government cannot do everything and be

everywhere, he stresses that people should not be casual or passive about their
own health. Households, offices and villages need to do some things to prevent
creating conditions for larvae to breed. These, put simply, are preventing water
collection in planters, tanks, coolers and the like, and covering water pitchers
with cloth.
The medicos point out that a grave challenge is the lack of specific medication
whereas malaria has proper medication, such as chloroquine, quinine,
primaquine, and newer ones like artesunate. Dengue infection necessitates
repeated blood tests to monitor blood counts and platelets, a costly exercise.
Treatment needs to be supportive, and maintenance of the patients body fluid
volume is critical in serious cases. The doctors are sceptical about the efficacy
oftraditional remedies such as avoiding solid food, plentiful intake of water,

consuming tulsi and coriander leaves, papaya juice, application of neem leaves
and oil and so on.
Dr Dang highlights the medias role: educating people before the onset of the
monsoons on the importance of preventing water accumulation, when to visit a
doctor, correct diagnostic tests and measures to arrest platelets fall. Dr Gupta
recommends keeping surroundings and building interiors clean, and use of
window screens, mosquito repellants and clothes that cover the body.
Clearly, prevention is better than cure.

Power from the sea

The Centre may have approved the National Offshore Wind Energy Policy, but
the wind industry, beset as it is with problems onshore (land acquisition,
inconsistent state policies, etc.), has practically dismissed it with an indifferent
shrug. Who would worry about an unknown entity called offshore wind power,
particularly when it appears that it may well price itself out of the market?
However, it would be unwise to discount offshore wind as a viable source of clean
energy because of fears of costs and technology issues. Neither of these is
insurmountable, but it calls for a shove by the government. Today, offshore wind
power is estimated to cost 12-17 per kilowatt-hour but this i s based on
European prices of products and services. Indigenisation offers visible scope for
cost reduction but, obviously, local manufacture will not happen unless
supported by scale. Given the recent experience with solar, where energy prices
have come down from 15.3 a kWh in 2010 to less than 6 today, the Centre
would do well to take the same route support industry with incentives initially,
in order to spur action and spawn scale. The Centre also needs to do a bit of
handholding. The extant rules require an offshore developer to obtain clearances
from as many as 16 government agencies. The promised National Offshore Wind
Energy Authority could be made the single window for all clearances, if
sufficiently empowered. The wind industry, on its part, should shed its offshore
apathy and proactively talk to marine technologists to seek means of cost
reduction. The wind industry knows wind and energy, marine knows sea and
materials. Here again, the government has a role in brokering such a

collaboration. Of course, all this will come to naught, if the core issue faced by all
power producers the parlous state of finances of the largely state-owned power
distributors is not fixed. Further, since renewables like wind and solar are
strongly dependent on geo-climatic factors, strengthening transmission
capacities and improving grid connectivity is essential, so that power can be
wheeled efficiently and at low cost from production to consumption centres.
Offshore wind offers many goodies land acquisition is not a problem, wind
speeds (and consequently, generation) are far higher than onshore, machines can
be much bigger as it is no big deal to ship long blades across the waters to the
sites and so on. The Scottish Development International, an investment
promotion body of Scotland, estimates that the seas of southern Tamil Nadu
alone can accommodate 2GW of wind power. It would be a pity if this rich source
of energy is not tapped. With a coastline extending over 7,500 km, India has the
potential to become a global offshore energy superpower. But for this to happen,
the Centre needs to shift into mission mode.

A wider ambit
The merger of the commodities market regulator, the Forward Markets Commission (FMC),
with the capital market watchdog, the Securities and Exchange Board of India (Sebi), is a
game-changing move at a time when the trend, globally, is to have more sector-specific
regulators.Sebi is a far more powerful regulator than the erstwhile FMC, which was merely a
toothless appendage of the consumer affairs ministry earlier and the finance ministry later on.
With the unification of the two, the commodities market, which has seen wide fluctuations in the
prices of even minor commodities, is expected to see better monitoring and regulation. But that
would also test the managerial skills of Sebi and its ability to introducecommodity market
reforms that have been long overdue. Futures trading can perform its expected functions of
ensuring price discovery and, to an extent, price stability only under totally free-market
conditions. This, sadly, is not the case with the commodities, many of which are controlled by
the government through mechanisms like minimum support prices, stockholding limits and
controls on their exports, imports and inter-state movements. Even some non-agricultural

commodities, such as gold and oil, are subjected to frequent government interventions. Such
moves that distort markets would need to be completely eliminated or initiated only on rare
occasions.
Moreover, commodity trading is also governed by various laws promulgated from time to time
by the Union and state governments, which can come in the way of introducing the muchneeded reforms in this sector. By making the FMC-Sebi amalgamation a part of the Union
Budget and the Finance Bill 2015, which has duly been approved by Parliament, some of these
legal hurdles have been either removed or circumvented. But some more action may still be
needed to let Sebi effectively regulate this highly diversified and complex sector. Many of the
needed reforms were sought to be introduced through the Forward Contracts Regulation
(Amendment) Bill, which has remained in limbo since 2006.
However, regardless of such good intentions, the task of Sebi to ensure free and fair trading
through the commodities exchanges is unlikely to be easy for many other reasons as well. Sebi
will now have to deal with two entirely different kinds of entities financial stocks and
commodity derivatives which require wholly different kinds of expertise and approaches to
oversee their transactions. The commodities, unlike the stocks, are physical goods, whose
production, consumption and marketing take place at different places and are guided by
different sets of parameters. Besides, commodities also require physical stocks to be held in
the warehouses from where these can be delivered, if such a need arises. As the commodities
regulator, Sebi will, therefore, have to expand its infrastructure substantially to effectively
oversee each of the traded commodities. Otherwise, it may suffer from the same kind of
regulatory infirmities that had hobbled the FMC.