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Gist of The Hindu OF FACT, PROCEDURE, AND PRINCIPLE The practice followed by the collegium of the higher courts, before a candidate is recommended for elevation and a panel of names is sent to the government for appointment, is as follows. The Chief Justice initiates a consultation with the legal fraternity. Speaking in confidence to senior advocates and fellow judges, to both the bar and the bench, a long list of possible candidates for elevation is prepared. Based on these recommendations the Chief Justice then invites the candidates to determine their willingness to be considered. If the candidates are willing then they are required to furnish details about themselves, such as their contributions to the law especially with respect to important cases, the extent of their legal practice, their annual income, their legal history, etc. These details are then processed by the court administration, during which time, I suppose, the court gets inputs from relevant investigating agencies about whether they have any legal proceedings against the candidate, etc. other inputs that may make them ineligible for consideration. Based on (i) the recommendations of the legal fraternity, (ii) the willingness of the candidate, and (iii) the hard data relating to the legal practice and public standing of the individual, the file is placed before the collegium. The collegium then scrutinises the information on record and, based on the highest standards of judicial scrutiny, arrives at a decision on whom to recommend and whom to ignore, from the names before it. Not every name that comes up through this process gets the approval of the collegium. The shortlist prepared by the collegium is then sent up to the government for its approval. This I am told is the standard process that is followed. Gopal Subramanium’s case, I suppose, went through the same process. The principle for such empanelment was enunciated by the Supreme Court in the case of P.J. Thomas, nominee for the Central Vigilance Commission (CVC), whose candidature was rejected in 2011 when it described in detail the process to be followed in the appointment to a position of authority. Appointments to the Supreme Court, I expect, fall into this category. Here is what the judgment said — (vi) The empanelling authority, while forwarding the names of the empanelled officers/persons, shall enclose complete information, material and data of the concerned officer/person, whether favourable or adverse. Nothing relevant or material should be withheld from the Selection Committee. It will not only be useful but would also serve larger public interest and enhance public confidence if the contemporaneous service record and acts of outstanding performance of the officer under consideration, even with adverse remarks is specifically brought to the notice of the Selection Committee. (vii) The Selection Committee may adopt a fair and transparent process of consideration of the empanelled officers. Assuming complete information was available to the collegium, we now have to consider the contrasting positions of the collegium and the government. Based on the same facts considered by the collegium, the government is at liberty to give an alternative reading and argue for the unsuitability of a particular candidate. This is legitimate since the

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Page 1: 2014 October Gist of the Hindu October 2014

Gist ofThe Hindu

⇒ ⇒ ⇒ ⇒ ⇒ OF FACT,PROCEDURE, AND PRINCIPLE

The practice followed by the collegium ofthe higher courts, before a candidate isrecommended for elevation and a panel of namesis sent to the government for appointment, is asfollows. The Chief Justice initiates a consultationwith the legal fraternity. Speaking in confidenceto senior advocates and fellow judges, to both thebar and the bench, a long list of possiblecandidates for elevation is prepared. Based onthese recommendations the Chief Justice theninvites the candidates to determine theirwillingness to be considered. If the candidates arewilling then they are required to furnish detailsabout themselves, such as their contributions tothe law especially with respect to importantcases, the extent of their legal practice, theirannual income, their legal history, etc. Thesedetails are then processed by the courtadministration, during which time, I suppose, thecourt gets inputs from relevant investigatingagencies about whether they have any legalproceedings against the candidate, etc. otherinputs that may make them ineligible forconsideration.

Based on (i) the recommendations of thelegal fraternit y, (ii) the willingn ess of thecandidate, and (iii) the hard data relating to thelegal practice and public standing of theindividual, the file is placed before the collegium.The collegium then scrutinises the informationon record and, based on the highest standards ofjudicial scrutiny, arr ives at a decision on whom torecommend and whom to ignore, from the names

before it. Not every name that comes up throughthis process gets the approval of the collegium.The shortlist prepared by the collegium is thensent up to the government for its approval. ThisI am told is the standard process that is followed.Gopal Subramanium’s ca se , I suppose, wentthrough the same process.

The principle for such empanelment wasenunciated by the Supreme Court in the case ofP.J. Thomas, nominee for the Central VigilanceCommission (CVC), whose candidature wasrejected in 2011 when it described in detail theprocess to be followed in the appointment to apositi on of authorit y. Appointments to theSupreme Court, I expect, fall into this category.Here is what the judgment said — (vi) Theempanelling authori ty, while forwarding thenames of the empanelled officers/persons, shallenclose complete information, material and dataof the concerned officer/person, whetherfavourable or adverse. Nothing relevant ormaterial should be withheld from the SelectionCommittee. It will not only be useful but wouldalso serve larger public interest and enhancepublic confidence if the contemporaneous servicerecord and acts of outstanding performance of theofficer under consideration, even with adverseremarks is specifically brought to the notice ofthe Selection Committee. (vii) The SelectionCommittee may adopt a fair and transparentprocess of consideration of the empanelledofficers.

Assuming complete information wasavailable to the collegium, we now have toconsider the contrasting positions of thecollegium and the government. Based on thesame facts considered by the collegium, thegovernment is at liberty to give an alternativereading and argue for the unsuitability of aparticular candidate. This is legitimate since the

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political lens of the government may be atvariance with that of the collegium. Thedisagreement, at this stage, has to be on politicalgrounds and not on facts. The procedure thenrequires the government to place itsdisagreement before the collegium which caneither restate its earlier recommendation or reviseit in the light of the arguments made.

This second stage is constitutionallysacrosanct since contained in it is the coreprinciple of the separation of powers. Thecolleg ium has to deliberat e on this contraryopinion of the government and decide whether,by accepting or rejecting it, the independence ofthe judiciary is eroded or enhanced. Both partiesmust give clear reasons for their positions so thatthe final decision taken can educate the public onthe core issue of separation of powers. Thegovernment’s reasons and the collegium’s views,as well as the facts of the matter, should be madepublic to serve, as the Supreme Court in the P.J.Thomas case said, the larger public interest.

Three basic issues for our democracyemerge from this controversy. The f irst is theissue of public attitude. Are we prepared to let itlie, to blow over because another headline hasgrabbed its place or are we prepared to interrogateit further? This is not a partisan issue, of UPAversus NDA, since it perhaps points to a growingdisregard for our constitutional culture. When theconfi dent iality of the colleg ium’srecommendation is treated lightly, wh en theintelligence reports are leaked, when thePresident’s confidenti al acti ons are publicknowledge, we have reason to be concerned aboutthe disregard for constitutional propriety. Willthose who leaked information be punished torestore the sanctity of the process? Or are wemoving toward what Paulo Friere calls the“culture of silence”?

The second issue concerns the doctrine ofseparation of powers. By segregating the names,did the President give primacy to the executiveover the judiciary? Was this a question of politicalexpediency trumping constitutional principles?With whom should the final decision, on whoshould be elevated, lie? The executive or thejudicial fraternity? Since the Emergency, when ithad touched its nadir, our democracy has beenstruggling to restore the balance between theexecutive and judiciary.

We hope that the moment has not passedfor the collegium to enunciate on the principle offinality. Mr. Subramanium’s withdrawal alsohighlights one of the knottiest problems ofpolitical philosophy. Should he have beenpragmatic, and withdrawn to fight another battle,or principled, since a foundational principle wasat stake? Is the cost of standing up for theprinciple too high, undermining other values thatare also important, or is it necessary to stand upfor them regardless of the cost since it would takesociety to new and higher morality?

⇒ ⇒ ⇒ ⇒ ⇒ LAYING OUT SPACE GOALS

The Polar Satellite Launch Vehicle (PSLV),in its twenty-sixth consecutive successful flightand the fourth wholly commercial launch, put theFrench earth observation satellite, SPOT-7, aswell as four t iny satellites from Germany, Canadaand Singapore, into orbit with characteristic élan.On hand at Sriharikota to witness the launch wasPrime Minister Narendra Modi. In a forcefulspeech immediately afterwards, the PrimeMinister lauded the space programme and held itup as an example of what the country couldachieve, observing that “our space scientists havemade us global leaders in one of the mostcomplex areas of modern technol ogy.” Indiamust, he said, share “the fruits of our

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technological advancement with those who donot enjoy the same .” He calle d for thedevelopment of a “SAARC [South AsianAssociation for Regional Cooperation] satellite”that would provide useful applications andservices to neighbouring countries. China, itshould be noted, already uses its spacecapa bilit ies for soft -power diplomacy, oneexample being an agreement with Brazil to jointlybuild earth observation satellites. Mr. Modiclearly intends to deploy India’s space technologyas part of the country’s diplomatic outreach.However, before turning the prime ministerialsuggestion into hardware, ISRO would do well toget inputs from the other South Asian nationsabout their pressing needs that could beeffectively addressed with space technology.

The Indian space agency is well-placed toprovide the sort of assistance that the PrimeMinister envisages. From its inception, the raisond’être of the Indian space programme has beenthe harnessing of space technology to meet theday-to-day necessities of a developing nation.Today, India is able to build and launch satellitesfor met eorology, earth observati on andcommunications. Mr. Modi paid a tribute to thevision with which the space programme wasestablished, pointing out how moderncommunications, space imaging and disastermanagement capabilities provided by Indiansatellites had benefited the common man andtransformed policy planning and implementation.The Prime Minister was emphatic aboutenhancing these capabilities, as well asmaximising their utilisation for governance anddevelopment. Apart from developing moreadvanced satellites, he wanted to see Indiabecome “the la unch servi ce provider of theworld.” Turning these goals into reality will notbe easy; at present, the country is able to cater to

only a small segment of the international launchmarket and must launch its own heavycommunications satellites abroad. But ISRO hasrisen to challenges before, and can do so again.

⇒ ⇒ ⇒ ⇒ ⇒ MINIMUM DETERRENT ANDLARGE ARSENAL

It is well-known that the BJP lays greatimportance on national security, of which nuclearpolicy forms an important component. Sooner orlater the new government will undertake, perhapsquietly, a review of our nuclear doctrine. Thecurrent official nuclear doctrine, released by theCabinet Committee on Security on January 4,2003, summarises our nuclear policy in eightsuccinct points. Of these, only a few of themreally call for significant modification, because inrecent years things have been relatively stable onthe South Asian nuclear front.

This is despite the fact that both India andPakistan continue to produce weapons-usablePlutonium at the Dhruva reactor and theKhushab reactors respectively. Pakistan may alsobe continuing to produce some weapons-gradeUranium at its centrifuge plants, despite itsoverall Uranium ore constraints. All this fissilematerial is presumably being assembled intowarheads. So both arsenals have been growing, ashave all the attendant dangers of maintaining anuclear force. Nevertheless the situation has, byand large, just been “more of the same.” Thereforethere is no call for any radical change of ournuclear doctrine. But a few features do need to beclarified and others underlined.

No First Use

Maintaining a doctrine of NFU, apart frombeing generally in tune with India’s non-aggressive ethos, has considerable diplomaticvalue. After our 1998 nuclear tests elicited theanticipated international opprobrium, the

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inclusion of NFU thereafter in the 1999 DraftNuclear Doctrine helped soften the criticism,especially in comparison to Pakistan, which tilltoday retains the option of a first strike.

However, although NFU has moral anddiplomatic value, there should be no illusionsabout its impact on hard strategic decisionmakers on the other side. What matters to themis not any statement of intentions (like NFU) butthe actual capabilities of the adversary. Pakistanicolleagues one meets in Track II invariably saythey set litt le store in our NFU. It makes nooperational difference in their nuclear plans.

What matters more for nuclear confidencebuilding is the actual state of alert. India has beensensibly following a system of keeping itswarheads de-mated from their missiles anddelivery aircraft . This introduces a minimumbuilt-in delay in launching an attack after thedecision to do so has been made. It greatly reducesthe risk of an accidental or hastily decided launch.The new government should continue our policyof a de-mated de-alerted posture. One clausecurrently in the Doctrine merits some revision. Itstates that “ ....[our] nuclear weapons will only beused in retaliation against a nuclear attack onIndian terr it ory or on Indian forcesanywhere...retaliation to a first strike will bemassive.” Now, threatening retaliation “against anuclear attack on Indian territory” is one matter.It is the basic component of nuclear deterrenceand should apply whether the attack on ourterr itory is small or big , as long as it is nuclear.

However, a battlefield nuclear attack willplace India in a dilemma. Having threatened inour Doctrine to inflict a “massive ” nucle arretaliation, can we really go ahead and kill lakhsof their civilians in response to a much smallerattack, that too on their own soil? It would be adisproportionate response, which would go

against our national sensibilities and attractwidespread criticism from around the world.Surely, there are more proportionate non-nuclearways of inflicting punitive retaliation. Yet, if wedo not counter attack after having threatened todo so, that would invite derision that we are “asoft state” incapable of hard nuclear decisions andwould erode the credibility of our futuredeterrence, not only against Pakistan, but alsoagainst China.

It may therefore be better to limit massivenuclear retaliation only against nuclear attacks onour country and say nothing in the Doctrine, oneway or the other, about attacks “on Indian forcesanywhere.” Should the latter take place, we alwayshave the option of some appropriate, measuredretaliation.

Next, consider the characterisation in ourDoctrine of our nuclear force as a “credibleminimum deterrent (CMD)”, where therequirement of “minimum” has been spelt out aswhat is needed to “inflict unacceptable damage”to the adversary. These represent a very judiciouschoice of words selected, in fact, by the last BJPadministration. It is designed in part to temperover-zealous weapon enthusiasts from going onan endless spree of building nuclear bombs. Itrecognises the dangers of possessing anunnecessarily large arsenal of nuclear weapons,beyond what is essential for deterrence. The newgovernment must ensure that the agenciesconcerned respect CMD in spirit and substance.

Unfortunately, our arsenal of nuclear bombshas already gone way over the minimum requiredto “inflict unacceptable damage” on any rationalgovernment, be it Pakistan or China. (ShouldPakistan someday be taken over by irrationalextremists to whom death of lakhs of civilians is“acceptable”, then no arsenal, however large, willdeter them anyway. With respect to China, what

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6 VOL–22 GIST OF THE HINDU

deterrence needs is not more bombs than whatwe already have, but longer range missiles capableof reaching major Chinese cities.)

As to credibility, large arsenals, beyond apoint, do not enhance it. What does is a show ofdetermination and toughness on other non-nuclear fronts, such as terrorism or borderincidents.

⇒ ⇒ ⇒ ⇒ ⇒ THE GEOPOLITICS OF THEISLAMIC STATE

Abu Bakr al-Baghdadi welcomed thisRamadan by declaring the formation of theCaliphate, with him as the Caliph — namely thesuccessor of the Prophet Mohammed. It is thefirst return of a Caliphate since Kemal Atatürk’sTurkish National Assembly abolished it in 1924.Al-Baghdadi, the nom de guerre for the leader ofthe Islamic State of Iraq and al-Sham (ISIS), hasnow announced that borders inside the dar al-Islam , the world of Islam, are no longerapplicable. He has been able to make thisannouncement because his fighters have nowtaken large swathes of territory in northern Syriaand in north-central Iraq, breathing down onBaghdad, the capital of the Abbasid Caliphate(750-1258).

Al-Baghdadi’s declaration comes after ISISthreatened to make its presence felt outside theterr itory it now controls. Bomb blasts in Beirut,Lebanon, hinte d at ISIS ’ rea ch. Jord anianauthorities hastened to crack down on “sleepercells” for ISIS as soon as chatter on social mediasuggested that there would be a push into Zarqaand Ma’an. Private Kuwaiti funding had helpedISIS in its early stages, but now Kuwait hintedthat it too is worried that ISIS cells might strikethe oil-rich emirate. When ISIS took the Jordan-Syria border posts, Saudi Arabia went into highalert. There is no substantive evidence that ISIS

is in touch with al-Qaeda in Yemen, but if suchcoordination exists (now that al-Baghdadi hasfashioned himself as the Caliph) it would meanSaudi Arabia has at least two fronts of concern.“All necessary measures,” says the Kingdom, arebeing taken to thwart the ISIS advance.

While it is true that Assad’s governmentreleased a number of jihadis in 2011, there is noevidence to suggest that he created ISIS. ISIS is aproduct of the U.S. war on Iraq, having beenformed first as al-Qaeda in Iraq by the Jordanianmilitant Abu Musab al-Zarqawi. Deeply sectarianpolitics, namely an anti-Shia agenda,characterised al-Qaeda in this region. Funded byprivate Gulf Arab money, ISIS entered the Syr ianwar in 2012 as Jabhat al-Nusra (the SupportFront). It certainly turned a civic rebellion into aterrorist war. Political support from the West andlogistical support from Turkey and the Gulf Arabstates allowed it to thrive in Syria.

The West has been consistently naive in itspublic assessment of events in West Asia. U.S.policy over Syria was befuddled by the belief thatthe Arab Spring could be understood simply as afight between freedom and tyranny — conceptsadopted from the Cold War. There was a refusal toaccept that the civic rebellion of 2011 hadmorphed quite decisively by late 2012 into a muchmore dangerous conflict, with the radical jihadisin the ascendancy. It is of course true, as I sawfirst-hand, that the actual fighters in the jihadgroups are a ragtag bunch with no specialcommitment to this or that ideology. They areanti-Assad, and they joined Jabhat al-Nusra orAhra¯r ash-Sha¯m because that was the group athand with arms and logistical means.

The West ’s backing of the rebellionprovided cover for Turkey’s more enthusiasticapproach to it. Intoxicated by the possibility ofwhat Turkey ’s Forei gn Minister Ahmet

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DavutogØlu favoured as “neo-Ottomanism,” theTurkish government called for the removal ofAssad and the emergence of a pro-Istanbulgovernment in Damascus. Turkey opened itsborders to the “rat-line” of international jihad ,with planeloads of fighters from Libya andChechnya f lying into Turkey to cross into Syria tofight for ISIS and its offshoots. ISIS spat inTurkey’s salt. ISIS struck Turkey in 2013 with carbombs and abductions, suggesting to Ankara thatits policy has endangered its citizens. In March,the Governor of Hatay province, MehmetCelalettin Lekesiz, called upon the government tocreate a new policy to “prevent the illegalcrossing of militants to Syria.” His report was metwith silence.

Saudi policy vis-à-vis Syria and Iraq repeatsthe Afghan story. Funds and political support forjihadis in the region came from the Kingdom andits Gulf allies. Saudi Arabia tried to stop its youthfrom going to the jihad — a perilous mistake thatit had made with Afghanistan. On February 3, theKing issued a decree forbidding such transit. Butthere is no pressure on Saudi Arabia and its Gulfallies to stop their tacit support of ISIS and itscohort. Nor is there pressure on it to stop itsfinancing of the harsh repression in Egypt, sureto fuel more conflict in the near future. The Arabworld, flush with hope in 2011, is now drowningin a counter-revolution financed by petrodollars.

Meanwhile, sectarian lines are beinghardened in the region. The battle now does notrevisit the ancient fight at Karbala. This is not anage-old conflict. It is a modern one, over ideas ofrepublicanism and monarchy, Iranian influenceand Saudi influence. Shadows of sectarianism doshroud the battle of ordinary people who arefrustrated by the lack of opportunities for themand by the lack of a future for their children. Whatmotivates these fights is less the petty prejudices

of sect and more the grander ambitions ofregional control. Al-Baghdadi has announced thathis vision is much greater than that of the SaudiKing or the government in Tehran. He wants tocommand a religion, not just a region. Of suchdelusions are great societies and culturesdestroyed.

A significant visit

French Foreign Minister Laurent Fabius hasconcluded a substantial India visit which canhelp lift some of the barriers that may be blockingthe emergence of a full-blown strategicpartnership between the two countries. Free fromverbiage, Mr. Fabius’ visit had a hard-nosedbusinesslike feel to it. Cash-strapped Franceseemed focussed on trading some of the blue-chipkernels of its hi-tech industry. India, on its part,looking to bolster its military preparedness,energy security and international profile, wasprepared to calibrate a hard bargain. Therecognition by New Delhi and Paris that a win-win outcome was indeed possible seemed to haveyielded significant progress during the visittowards clinching the multibillion dollar Rafaleaircraft deal, and the stalled contract for twoFrench nuclear reactors. With a capacity togenerate 1,650 megawatts of power each, abreakthrough in the deal for the two reactorscould clear the path for the establishment of fouradditional reactors of similar capacity at theJaitapur site in Maharashtra. An installedcapacity of nearly 10,000 megawatts would notonly boost French nuclear commerce, but alsomake a vital contribution to satisfying India’senergy hunger.

In dealing with the French, the Indian sidehas made it clear that it is not interested in a purebuyer-seller relationship with France in the hi-tech domain. As a result, complex negotiations areunder way — both on the Rafale and the

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European Pressurised Reactors (EPR) — thatwould not only give India the final product, butalso impl ant fronti er technology within thecountry through transfers of state-of-the-artknow-how. The inducti on of the 126 Rafalefighter jets would also help cement the air-dominance doctrine of the Indian Air Force (IAF),which has already benefited from the inductionsof the Russian Su-30 MKI multi-role planes andother advanced platforms. Mr. Fabius’ arrival inNew Delhi has provided an opportunity to quicklyfinalise the Indo-French nuclear deal, which ispossible if the two parties arrive at a formula thatwould lower the costs of atomic power generationat Jaitapur. During talks, India has demandedgreat er “ localisati on,” which would expandinvolvement of domestic industry in the project,as well as provide greater scientific and technicalexposure to Indian personnel to Light WaterReactor (LWR) technology that the French havemastered. At a political level, the Minister’s visithas provided New Delhi an opportunity toadvance its ties with continental Europe, whichrevolves around a Franco-German core. This issignificant, as Europe, despite undergoing a rapidpolitical and economic transition, wouldcontinue to remain a major player in a multipolarworld, which India needs to engage vigorously.

⇒ ⇒ ⇒ ⇒ ⇒ CONTROLLING RISING PRICES

Onion prices more than doubled in the lasttwo weeks and retail food inflation rose to 9.5per cent in May as against 8.64 per cent in April,giving the new government more reason to worry.As the urban working class bears the brunt of ther ising and f luctuat ing food pr ices, FinanceMinister Arun Jaitley quickly announcedmeasures to stem the price rise of onions. Theseincluded fixing a minimum export price (MEP) ofU.S. $500 per MT, distributing onions through thePublic Distribution System, and advising State

governments to delist fruits and vegetable fromthe Agricultural Produce Market Committee(APMC) Act.As much as these short-run measuresare necessary, the problem is more deep-rooted.Several interrelated determinants such as lowagricultural productivity and yield, global pricechanges, scarcity of resources such as land andwater, domestic price policies such as MinimumSupport Prices, and stocking and trade policies(both international and domestic) have played arole in the increase of prices.

Food pr ice infla tion in India cl earlyunderscores the need for understanding theheterogeneities across food commodities. Thisknowledge could be important to informmacroeconomic policy. For example , theassumption in standard macroeconomic models— that changes in relative prices of food and fuelrepresent supply shocks — may not hold formany commodities as we see them right now.Further, with a persistent upward trend ininflation, taking a long-term view rather thanfocusing only on recent inflation episodes seemsimperative. In all this, one thing that isreasonably clear is that it may not be sufficient toidentify the sources for high prices at a broadle vel. Both macro p olicies like mone tarytightening by the RBI as well as commodity-specific measures implemented by differentbranches of the government (trade policies anddomestic interventions in food markets) have tobe used to deal with inflation.

Faced with the current scenario, what arethe remedial options? For one there seems to belittle reason to not liquidate excessive wheat andrice stocks. In distributing released stocks, thegovernment should think about an incentiveoverhaul along the lines of what was done inChhattisgarh. The small State is a leadingexample of a well-functioning PDS system whereleakages have been checked because of measures

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like colour coding of transport vehicles andraising the commission of PDS shopkeepers.Over time, there must be a gradual movementtoward a cash transfer system. This depends ondevelopment of backend facilities such as bankoutlets.

In food items with a high value, a case- by-case approach is needed. While onions could befacing a problem of excessive hoarding due toexpectations of inf lati on, in commodities likemilk the cost push might be playing a role. Dairyproducts such as oil cake and molasses areincreasingly being diverted to alternative uses ormarkets. Milk has been the prime driver ofinflation for many years and though its demandhas been rising substantially (different estimatesshow that it is the food item with the highestincome elasticity), there are supply side issuesthat need to explored for finding the right policymix.

Given the current government’s paradigmof accepting short-term pains to incur long-termgains, it should seize this opportunity of highfood prices. Investing in the private sector in coldchain or processing units needs to be encouraged.This will create rural jobs that are not farm-related, and create more efficient value chains,giving a better deal to farmers and consumersalike. Over the long run, streamlining wholesalemarkets under Agricultural Produce MarketCommittees, reducing limitations on private-sector procurement and storage, and checking ondouble taxation in interstate movement, need tobe considered.

Finally, as a weak monsoon is beingpredicted, we must think of the long run. It isabout time we gear up toward climate-smartagriculture (drought-resistant crops, conservationagriculture, etc.) to increase yields and income offarmers. This will increase farmers’ productivity

while providing the much-needed price stabilityto consumers. The promise of acche din forconsumers and the agricultural industry need notbe a far cry.

⇒ ⇒ ⇒ ⇒ ⇒ GOVERNORS IN THE FIRING LINE

The controversy over the removal ofGovernors has receded into the background onlybecause the issue which has hogged the limelightrecently is the government’s rejection of the nameof Mr. Gopal Subramanium, recommended by theSupreme Court collegium for appointment as ajudge of the Supreme Court, on account of adversereports by the Intelligence Bureau.

The Governor is appointed by the Presidentof India on the advice of the Council of Ministersfor the period of five years. Unlike the Presidentof India, there is no procedure for theimpeachment of a Governor, but he/she could beremoved by the President on the advice of thePrime Minister on grounds of gross delinquency,namely corruption, bribery and violation of theConstitution. But the practice has been differentfrom what is laid down in the Constitution;Governors have been removed only due to achange of government without citing anysubstantial reason. There is precedent. Even inthe past, Governors appointed by previousgovernments have been removed by the newgovernment on assuming office after elections.The new governments have expended energy onremoving Governors and appointing their ownmen as new Governors.

The practice of dismissing Governors withthe change of guard at the Centre began in 1977when the Janata Party came to power afterrouting the Congress and took a decision toreplace Governors appointed by the previousre gime. Inci dentally, in 1977, the decision/recommendation of the then Prime Minister,

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Morarji Desai, and his Cabinet to dismissGovernors was sent back by then actingPresident B.D. Jatti without signing it. Thoughthe government managed to remove theGovernors, as the acting President Jatti wasconstitutionally bound to sign the order when itwas again sent back to him, it came as anembarrassment for the Janata Party governmentwhich had just assumed office.

After coming to power in 2004, the UnitedProgressive Alliance (UPA) government initiatedthe process of removal of four Governors, VishuKant Shastri (Uttar Pradesh), Babu Parmanand(Haryana), Ki dar Nath Sahani (Goa) andKailashpati Mishra (Gujarat), which BJP leadersMr. Lal Krishna Advani and Mr. Atal BihariVajpayee opposed and forced a discussion in theHouse under Rule 193. The UPA’s move wa sdescribed by Mr. Va jpaye e as a “bi g bl ow todemocra cy” while Mr. Advani called it“dangerous.” Now, Union Home Minister RajnathSingh is keen on the removal of Governorsappointed by the previous UPA government. Isthis not a blow to democracy? Is this notunethical? We know that there is a change ingeneration, from Mr. Advani to Mr. RajnathSingh, but does such a generational change alsomean a change in the party ’s ideology? If this isthe case, why is the removal of Governors beingdone using the backdoor approach rather than thegovernment being actively involved in thiseffort?

Five-judge bench of the Supreme Court,headed by Chief Justice K.G. Balakrishnan, inMay 2010 on the issue of the removal of theGovernor of a State. The judgment emphasisedthat “The Governor cannot be removed on theground that he is out of sync with the policies andideologies of the Union government or the partyin power at the Centre. Nor can he be removed on

the ground that the Union government has lostconfidence in him.” It is tru e tha t the samejudgment also provided an exception that thegovernment can initiate the process of removal ofthe Governor by first building a case file citingreasons for the removal of the Governor.

Does the new BJP government want to usethat clause of exception to remove a Governor? Ifthe government wants to exercise this exceptionclause, the least it would have to do is to write tothe President spelling out the reasons forwanting his/her (Governor ’s) removal. But itseems the government is try ing to bypass allthese steps, remove the Governor by an indirectmethod and initiate moves to come out clean incase there are issues over the move, as no lettershave been exchanged or notices sent. But I amsure there is still potential for the government toface embarrassment as such a file/request for theremoval of the Governor can be sent back by thePresident to the government in the first instancethough, the President is bound to sign it if the fileis re-sent to him — as it happened in 1977.

Though most previous governments haveindulged in such practice, the new BJPgovernment could have easily refrained fromsuch a move and set an example of goodgovernance. It has certainly missed a goldenopportunity to present itself before the people asbeing a government with a difference.

⇒ ⇒ ⇒ ⇒ ⇒ ON THEMYTHOLOGY OF SOCIAL POLICY

One reason why important facts tend to beforgotten is that they are at odds with themythology of social policy cultivated by somesections of the media. This mythology involves anumber of fallacies. First, India is in danger ofbecoming a nanny state, with lavish andunsustainable levels of social spending. Second,

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social spending is largely a waste — unproductive“handouts” that don’t even reach the poor due tocorruption and inefficiency. Third, this wastefulextravaganza is the work of a bunch of old-fashioned Nehruvian socialists and assortedjholawalas who led the country down the gardenpath during the United Progressive Alliance(UPA) years. Fourth, the electorate has rejectedthis entire approach — people want growth, notentitlements. Fifth, the BJP-led government is allset to reverse these follies and rollback thewelfare state.

These five claims have acquired an aura ofplausibility by sheer repetition, yet they have nofactual basis. Let us examine them one by one.

The idea that social spending in India is toohigh would be amusing if it were not so harmful.According to the latest World DevelopmentIndicators (WDI) data, public spending on healthand education is just 4.7 per cent of GDP in India,compared with 7 per cent in sub-Saharan Africa,7.2 per cent in East Asia, 8.5 per cent in LatinAmerica and 13.3 per cent in OECD countries.Even the corresponding figure for “leastdeveloped countries,” 6.4 per cent, is much higherthan India’s. The WDI database does not includesocial security spending, but the recent AsiaDevelopment Bank report on social protection inAsia suggests that India is also an outlier in thatrespect, with only 1.7 per cent of GDP being spenton social support compared with an average of 3.4per cent for Asia’s lower-middle income countries,5.4 per cent in China, 10.2 per cent in Asia’s high-income countries and a cool 19.2 per cent inJapan. If anything, India is among the worldchampions of social underspending. The viewthat social spending is a waste has no factualbasis either. The critical importance of masseducation for economic development and thequality of life is one of the most robust findings

of economic research. From Kerala to Bangladesh,simple public health interventions have broughtdown mortality and fertility rates. India’s middaymeal programme has well-documented effects onschool attendance, child nutrition and even pupilachievements. Social security pensions, meagre asthey are, bring some relief in the harsh lives ofmillions of widowed, elderly or disabled persons.The Public Distribution System has become aninvaluable source of economic security for poorhouseholds, not just in showcase States like TamilNadu but even in States like Bihar and Jharkhandwhere it used to be non-functional. Of course,there is some waste in the social sector, just asthere is much waste in (say) universities. In bothcases, the lesson is not to dismantle the systembut to improve it — there is plenty of evidencethat this can be done.

The expansion of public services and socialsupport in India, such as it is, has little to do withany nostalgia of Nehruvian socialism. It is anatural development in a country with a modicumof democracy. A similar expansion, on a muchlarger scale, happened during the 20th century inall industrialised democracies (with the partialexception of the United States). It also happenedin communist countries, for different reasons.Many developing countries, especially in LatinAmerica and East Asia, have gone through asimilar transition in recent decades. So haveIndian States where the underprivileged havesome sort of political voice, such as Kerala andTamil Nadu. Many other States, including Gujarat,are now learning from these experiences atvarying speed.

Coming to the fifth claim, there is littleevidence that a rollback of social programmes ispart of the BJP’s core agenda. As menti one dearlier, many BJP leaders (including Mr. Modi aswell as the new Finance Minister, Mr. Arun

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Jaitley) have vociferously demanded a moreambitious National Food Security Act. Some ofthis is posturing of course, but the BJP’swillingness to support food security initiatives isalready well demonstrated in Chhattisgarh.Nothing prevents it from doing the same at thenational level. Similar remarks apply to theNational Employment Guarantee Act: some BJP-led State governments did a relatively good job ofimplementing it, and the late Gopinath Mundeclearly expressed his support for the Act as soonas he was appointed Minister for RuralDevelopment.

Having said this, there are also ominoussigns of a possible backlash against these andother social programmes. Some overenthusiasticadvisers of the new government have already putforward explicit proposals to wind up theEmployment Guarantee Act and the Food SecurityAct within 10 years, along with acceleratedprivatisation of health and education services. Asif on cue, Rajasthan Chief Minister VasundharaRaje recently sent a letter to the Prime Ministerquestioning the need for an EmploymentGuarantee Act. The corporate sector also tends tobe hostile to social spending, if only because itmeans higher taxes, or higher interest rates, orfewer handouts (“incentives” as they are called)for business. Corporate lobbies, alreadyinfluential under the UPA government (rememberthe person who said that the Congress was hisdukaan ?) are all the more gung-ho now that theirman, Mr. Modi, is at the helm. Even a casualreading of recent editorials in the business mediasuggests that they have high expectations ofdevastating “reforms” in the social sector. That iswhat the mythology of social policy is reallyabout.

This is not to deny the need forconstructive reform in health, education and

social security. If one thing has been learnt in thelast 10 years, it is the possibility of improvingpublic services, whether by expanding the right toinformation, or introducing eggs in school meals,or computerising the Public Distribution System,or ensuring a reliable supply of free drugs atprimary health centres. But these small stepsalways begin with an appreciation of thefundamental importance of social support in poorpeople’s lives.

The forthcoming budget is an opportunityfor the new government to clarify its stand onthese issues. Without enlightened social policies,growth mania is unlikely to deliver more underthe new government than it did under theprevious one.

⇒ ⇒ ⇒ ⇒ ⇒ END TO ILLEGAL FATWAS

Personal laws ought to be administered bythe regular law courts and cannot be enforced inderogation of fundamental rights by religiouscourts that lack legal sanctity. This is the broadimport of the Supreme Court’s thoughtful rulingon the legality of Dar-ul-Qazas, or Sharia-basedcourts, established in different parts of thecountry to adjudicate disputes among Muslims.Fatwas issued by Sharia courts are not legallybinding on individuals averse to submitting totheir authority, the Court has ruled. However, ithas declined to ban these adjudicatory bodies,holding that Muslims desirous of obtaining theexpert opinion of Islamic scholars in Dar-ul-Qazascan continue to invoke their jurisdictionvoluntarily. The ruling ha s thus clarified thecorrect status of these Sharia courts. They canexist and issue opinions, but are limited in theirscope and applicability to individuals whoapproach them voluntarily, and not at the instanceof third parties to a dispute. These rules willhopefully protect individual Muslims, especiallywomen, from possible persecution through

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controversial adverse orders, often issuedwithout regard to their fundamental rights.Fatwas on religious issues are acceptable, but nofatwa that violates fundamental rights may beissued; they may not be issued at the instance ofthird parties on issues that concern individuals,and more importantly, they must not be issued topunish the innocent.

Th e Supreme Court ha s preserved thereligious character of these Sharia courts, notingthat they do not constitute a parallel judici ary,but an “informal justice delivery system with theobjective of bringing about amicable settlementbetween parties.” It is important that the SupremeCourt’s interventi on, at the instance of apetitioner who wanted Sharia courts to bebanned, is understood in the correct perspective.The All India Muslim Personal Law Board(AIMPLB), which has set up most of these Dar-ul-Qazas, has a duty to regulate their functioningand restrain them from issuing edicts that violatefundamental rights. It is true that in the Imranacase, one of the three instances the SupremeCourt has referred to, the controversial fatwadissolving a marriage and ordering a woman toleave her husband after she was raped by herfather-in-law was not issued by a Sharia court butby a Muslim panchayat. However, an Islamicseminary endorsed the fatwa initially, and theAIMPLB claimed that the incident of rape did notoccur at all. In some parts of the country, Muslimwomen have formed women’s Sharia courts forthemselves, contending that orders of Shariacourts are invariably adverse to women. It is up tobodies like the AIMPLB to reform thefunctioning of the Sharia bodies.

⇒ ⇒ ⇒ ⇒ ⇒ KEY ISSUES IDENTIFIED

The Economic Survey 2013-14, the flagshipannual document of the Ministry of Financewhich reviews the performance of the economy

over the previous 12 months, released a day beforethe Union Budget, facilitates a better appreciationof the mobilisation of resources and theirallocation in the Budget. Experience suggests thatthe Surve y, while fl agging the key economicissues of the day, can offer advice andsuggestions, which the Finance Minister may ormay not incorporate in the Budget. The point hasalso been made that it is for the first time thatthe Surve y ha s been prepared wi thout theguidance of a Chief Economic Adviser. For all itslimitations, however, the Economic Survey 2013-14 has done a commendable job in delineating thecontours of an economy that has been strugglingfor more than two years to grow at more than 5per cent. A change in government has certainlybrought about a sharp variation in sentiment, butit is too early to assess the impact on the realeconomy. Joining the Reserve Bank of India andmany professional forecasters, the Survey expectsGDP growth during the current year (2014-15) tobe above 5 per cent. However, poor monsoons, adeteriorating external environment, persistentinflation and a poor investment climate posemajor risks to growth and macroeconomicstability. In the event, GDP growth is likely to beat the lower end of a 5.4 to 5.9 per cent band.

Economic growth during 2013-14 wasdragged down by industry, which grew at just 0.4per cent. A deceleration in manufacturing outputand contraction in mining activities have beenprimarily responsible for the sluggishness.Reversing the serious downward trend inindustry ha s been a top pr i or it y for thegovernment. The budget is sure to take note ofongoing initiatives and also bring in new ones inthis vital area. Inflation has come down but is stillabove the RBI’s comfort zone. Food prices haveshot up very recently. The balance of paymentsposition has improved considerably on top of a

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vastly improved current account. However, muchof the improvement in the matter of the tradedeficit is due to lower imports of non-petroleumproducts, a sure sign of the slowdown. A biggerchallenge lies in the area of fiscal consolidation.The Survey has suggested a new FRBM legislationas well as rationalisation of subsidies, amongother measures. The previous UPA government’sclaims of pegging the deficit at 4.5 per cent in2013-14 and targeting an ambitious 4.1 per centfor the current year have become controversial,and at the very least cast doubts on the quality offiscal estimates. These are pitfalls which the newFinance Minister will do well to avoid.

⇒ ⇒ ⇒ ⇒ ⇒ A BLUEPRINT FORTHE DEFENCE INDUSTRY

There are reports that the Department ofIndustri al Policy and Promoti on (DIPP) ispushing to allow 49 per cent FDI withouttransfer of technology, 74 per cent with transferof technology, and even 100 per cent in casesinvolving the transfer of state-of-the-arttechnology and equipment, while the DefenceMinistry would like it to be restricted to 49 percent. This debate is sterile because merelyliberalising FDI will not help. What is needed isan appreciation of the characteristics of thedefence industry and coordination among themultiple stakeholders who drive, and have oftendistorted the decision-making process.

The twin objectives of self-sufficiency andself-reliance have been articulated, sometimesinterchangeably and at times separately, since theearly 1950s. In 1947, India inherited the OrdnanceFactories (OF) Organisation, which todayconsists of 41 OFs, nine Defence Public SectorUndertakings (DPSU) and 50 or so defence R&Dlaboratories under the Defence Research andDevelopment Organisation (DRDO). The modelfollowed was “production of technologies

conceptualised by the DRDO; projects nominatedby MoD [Ministry of Defence] after consultingthe Services; and assembly and production ofplatforms under licence from foreign OEMs(Orig inal Equipment Manufa cturers).” A taskforce set up in 1998 concluded that the publicsector alone could not deliver; licensedproduction had fostered neither indigenisationnor innovation; and frequent blame gamesbetween the Services, the DRDO and the DPSUswere leading to delays in acquisition.

The first instance of opening up of thedefence sector came in 2001, with the domesticprivate sector being allowed to produce defenceitems with FDI up to 26 per cent, subject toindustrial licensing and security clearances. Thiswas followed by the announcement of a DefenceProcurement Procedure in 2002, a DefenceOffsets Policy in 2006, a Long Term IntegratedPerspective Pl an (LTIPP) in 2009, a DefenceProduction Policy in 2011, and eight committees/task forces set up to look into various aspects ofnational defence, including defence productionand self-reliance, since 2000. Clearly, the issueremained a priority for various governments, butthe outcome has been meagre. Certainly, someresponsibility rests with former Defence MinisterA.K. Antony’s tendency to avoid decision-makingif it could be postponed, but there are underlyingstructural reasons too. Consequently, forwardmovement during the last decade has lackedpurpose.

Since 2001, the total FDI received in thedefence sector is below $5 million. Meanwhile,India’s defence expenditure has been growingevery year; today, India has the eighth largestdefence budget in the world, accounting for 3 percent of global defence expenditures and, in recentyears, has also emerged as the largest defenceimporter, with nearly 10 per cent of global

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defence imports. With growing obsolescence anda 10 per cent annual rise in the capital budget forequipment procurement, a conservative estimateindicates that India will spend nearly $100 billionover the next eight years to modernise and equipits armed forces. During the 12th Five Year Plan,the defence capital account budget is expected togo up from $15.9 billion to $25.6 billion. By theend of the 14th Five Year Plan, the cumulativecapital expenditures over 2012–27 are projected toexceed $235 billion. Assuming that 80 per cent ismeant for platform acquisitions, of which 60-70per cent is earmarked for committed liabilities,this still leaves 30-40 per cent for new schemes.To meet the target of 70 per cent self-reliance by2020 requires an indigenous defence industryworth $80-$100 billion, with a direct employmentpotential of 1.25 lakh skilled workers and indirectsupport to a workforce of another five lakh.

In addition are investments via the DefenceOffsets Policy. This policy, announced in 2005,requires the foreign company to invest 30 percent of the indicative cost in the request forproposals when the indicative cost is Rs.300 croreor more. Initially, the offsets were for the defencesector, but in 2009, the policy was diluted topermit offsets to civil aviation and internal andcoastal security sectors too. Its objectives are toimprove the domestic defence R&D base; developan internationally competitive defence industry,and an industrial base covering dual usetechnologies (i.e. having both civilian anddefence applications). Offsets are implemented byraising domestic procurement, generatingexports, bringing FDI into related services andbuilding local supply chains, transferringtechnology/equipment to Indian entities, etc.

In the Defence Procurement Policy, specialincentives to encourage the domestic privatesector, including government R&D funding for

product development, were announced. Some ofthe larger enterprises (including TCS, Tata Power,Godrej, HCL, L&T, Mahindra, Kirloskar) are to beclassified as Raksha Udyog Ratnas to enable themto be treated on a par with DPSUs. In additionthere are about 6,000 Small and MediumEnterprises (SME), many of whom feel that theyare nimbler and better suited to innovate in nicheareas. In fact, they oppose limiting FDI to 49 percent, the position supported by domestic majorsand the MoD.

To make a new beginning, the Modigovernment needs to take charge by setting up ana tional defence industry committee whichshould resolve turf battles between variousgovernment agencies, reconcile competinginterests of SMEs and industry majors, set targets(including for SRI, intellectual property rights(IPR) generation, integration of SMEs,technology acquisition through offsets), monitorimplementation, and coordinate policy approachesby: a) creating uniform lists of defence productsand related technologies; b) enabling theharmonisation of Indian lists with theMunitions List and Dual Use Technology List ofthe Wassenaar Arrangement, with the eventualaim of securing India’s membership. An enablingframework alrea dy exists with India’s SpecialChemicals, Organisms, Materials, Equipment andTechnologies (SCOMET) export control lists; c)amending the Industries (Development andRegulation) Act to bring defence and dual-usetechnology-related Industrial Licensing into syncwith the above; d) amending the terms of theproduction licence for defence items to ensurethat control of the entity cannot be transferredwithout Government of India (GoI) approval,that all exportable items and services will beavailable domestically, and that exploitation of IPgenerated will not be denied in India. These

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conditions would render the debate of FDI levelsirrelevant; e) promoting the clustering of SMEswith industry majors through targeted policies; f)changing the role of the Department of DefenceProduction, whose structure limits it to a mereadministrative unit for OFs and DPSUs; g)integra ting the working of the LTIPP wi thdefence R&D, production, procurement andoffsets policies; h) providing a degree ofcontinuity and predictability in the policyframework for the next 10 years instead of theannual revisions that have afflicted the sector inrecent years.

Go for it now

The target year of 2015 that was fixed toachieve universal primary education will not bemet, the United Nations said at the recently heldsecond Global Partnership for EducationReplenishment Pledging Conference in Brussels.An estimated 58 million children, a largeproportion of them from sub-Saharan Africa, arestill out of school. The announcement merelyconfirms Unesco’s own admission last year on theodds ahead in the task of realising thisMillennium Development Goal. That admissionwas based on its finding that the top six donorshad substantially cut back on their aidcommitments since 2011. Two of the donorcountries slashed their allocations in this sectorby 30 per cent; reductions made by the EuropeanUnion were to a similar extent. Unesco observedthat the momentum with respect to achievingthis target was lost since 2007, implying that asin the case of several other basic humandevelopment indicators, the global economicmeltdown may have contributed to the situation.But the movement to improve rates of retentionin schools and to enhance quality of teachingseems to be gathering steam again, as most of thedonor states promised at the Brussels conference

to step up spending. But more significant, asmany as 60 developing countries that werepresent in Brussels — India was not among them— agreed to boost allocations in their domesticbudgets for pr imary education.

Abolition of tuition fees, cash transfers,teaching in the local language, increased financialoutlays and appropriate curriculum are amongmeasures that have helped developing countriesreduce the out-of-school population amongchildren, according to the Education For Allreport. Clearly, then, there are diverse ways andmeans to realise the goal of universal education.Governments found wanting in the requisite willto invest in the future of their youngsters may becomplicit in allowing children to be weaned awayby armed militias that have already wreaked mucheconomic havoc and caused political instability inmany regions. A welcome new dimension to theReplenishment Pledging Conference is the focuson the needs of disabled children. Addressing thissegment is both a moral and practical imperative,considering tha t 15 per cent of the world ’spopulation has some form of disability, as perfigures from a 2011 report on disability broughtout jointly by the World Health Organization andthe World Bank. Around the world, about a thirdof those that are not in school have a disability,says the Global Campaign for Education UK.Given such a large proportion of such children,the relevant goal cannot be accomplished withoutspecial provision being made to achieve it. Thus,there is a case to set separate targets factoring indisability in the post-2015 development agenda.

⇒ ⇒ ⇒ ⇒ ⇒ A ‘SMARTIDEA FOR URBAN ILLS?

The government has provided Rs.7,060crore to build 100 smart cities as satellite townson the outskirts of large cities to accommodatethe burgeoning urban population. Foreign direct

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investment norms have been relaxed to attractinvestors to build them. Indian cities are in needof investment and innovation, and thegovernment’s attenti on to these issues iswelcome. The question is whether smart satellitecities would offer a panacea for urban ills andwhether the money allocated is adequate.

There is no firm definition of whatconstitutes smart cities. The broad agreement isthat places that mobilise information andcommunication technologies to deliver betterservices, reduce carbon foot print , cre atesustainable environments and improve livingconditions are considered intelligent. Many citiesabroad, realising that existing urban systemscannot cope with new challenges, have alreadytaken this route. As a result, they are far ahead interms of innovation.

Rio de Janeiro has invested about U.S. $14million to monitor the city in real time. Data from30 agencies stream into an operation centre fromwhere responses to emergencies and accidents areefficiently coordinated. Madrid plans to investabout U.S. $20 million in a technology platform tomanage a range of public services such as streetmaintenance, lighting and waste management.Using a sophisticated supplier managementmodel, i t pays each service provider according tothe level of services provided. Many cities havefocussed on reducing energy consumption andoffering convenient transport service. Some likeTokyo are experimenting with technology to helpthe visually challenged to move safely. Specialwhite canes with embedded sensors, which pickup signals from electronic tags and markersplaced at strategic places in the ci ty, help thedisabled navigate.

Such smart city programmes require largeinvestments and a thorough integration ofvarious systems. Industry and cities have to come

together and introduce innovative products.Against these complex demands, how will theproposal to set up smart cities fare?

First, the sum allocated in the budget for theprogramme — about Rs.70 crore a city — isgrossly inadequate. Unless the amount provided isonly seed money to kick-start the programme, andmore funds are to be sanctioned later, the smartcity project would be a non-starter. Second,without the promise of good central funds, theState governments, too, may not take thisinitiative seriously. Since land development is aState subject, enthusiastic participation of theStates is crucial. If the plan is to enable theprivate sector to participate in a big way, then theState has to put in place a detailed framework toguide investment and demarcate responsibilities.Funds are only one part of the problem. The keychallenge would be to overhaul urban governanceand infrastructure, both physical and digital.

If the state overlooks the existing city andprivileges new enclaves, the cities will be splitinto two unequal halves, and the smart cityproject would turn out to be an expensive realestate meant to serve a few. Smart cities cannotonly be about disp laying technol ogy anddelivering services; fundamentally, they have tobe inclusive and equitable places to live in.

The urban future depends on making citiesintelligent, and that applies equally to both newand old parts of the city. Given the fact that theexisting cities, which accommodate a bulk of thepopulation, waste a lot of resources and areenergy-inefficient, they urgently require smartsolutions. It would be better to treat the smartcity proposal by the government as a kind ofurban experiment or a prototype, whose lessonsand experience could be used to develop cities ingeneral.

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⇒ ⇒ ⇒ ⇒ ⇒ MEAN ANDPETTY LABOUR REFORMS

The National Democratic Alliancegovernment, on June 5 and June 17, notified theproposed amendments to the Factories Act, 1948and the Minimum Wages Act, 1948. Given thatthe process of amendments began in 2008 andwent through a number of expert committees, onewould have expected the amendments to becarefully thought-out. On the contrary, they arepetty, anti-labour and poorly conceived. Givenalso that these are the Narendra Modi-ledgovernment’s first pronouncements on labour,one can only lament the absence of a vision thata global power ought to have: that increasedproductivity comes from having satisfiedworkers, who produce quality products.

The Commonwealth Games case decided bythe Delhi High Court found workers living inconditions akin to bondage — without safetyequipment, sleeping in sheds without mattressesand fans, and using toilets without doors andwater. This is the reality of labour in India.

So what do the amendments to the FactoryAct suggest? Instead of suggesting that inglobalised India, where workers ought to work foreight hours as per the international norm, theysuggest that Section 56 be amended to increasethe working day to spreadover 10{+1}/{-2}hoursto 12 hours; that under Section 65(2), compulsoryovertime be increased from 50 hours per quarterto 100 hours, and that under Section 66, womennot be allowed to work after 7 p.m., unless aspecific notification is issued qua a particularfactory that is capable of demonstrating that ithas facilities in place to guarantee the safety ofwomen workers.

Thus, instead of statutorily making it thenorm that men and women work equal hours,women have been penalised. Though the Supreme

Court has laid down that storage in factories ofhazardous substances attracts strict liability orno excuse standard for liability, Section 7(b) laysdown that the employer must ensure — “as far aspracticable” — that the substance is safe. Section99 enables an employer to employ children.

The Minimum Wa ges Act, 1948, wa senacted to progressively introduce minimumwages in a situation where industries weregradually being established. Thus, it did not coverall workers, but only workers in notifiedindustries — only a part of the workforce.Domestic workers, for example, are not covered.In a globalised economy one needs to shift touniversal coverage. What was needed was asimple amendment saying that those not coveredby the existing notifications would be covered bya residual notification. This seems to be comingin by amendment. However, this residualminimum wage will be the lowest of all theminimum wages notified.

There is also nothing to indicate that thewidespread non-implementation of this Act willbe corrected, or that the endless litigation incourts, at the end of which a petty fine is leviedfor non-payment of minimum wages, will bereplaced by a different procedure. The exclusionof contract workers, who now cover 75 per centof the workforce, from the minimum wagesenforcement seems destined to continue. Thefailure of the Act to effectively cover home-basedand other forms of unorganised labour will alsocontinue.

The labour movement also has its agendafor reform. Labourers demand the introduction ofa ‘secret ballot’ for determination of trade unionrecognition. It is unfortunate that even decadesafter independence, this simple democratic rightremains elusive. They also demand that theirright to go to court should not be restricted by the

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requirement that they take permission from thegovernment under Section 10 of the IndustrialDisputes Act. Seeking such permission delayslitigation by years. They also demand that, byamendment, the two anti-labour judgments of theSupreme Court in the Umadevi case and the SAILcase be reversed, so that non-permanent workerswho have put in long years in governmentservices are entitled to regularisation, and thatwhen the contract labour system is abolished bythe Board, the contract workers will beregularised. The Supreme Court had condemnedthese categories of workers to permanentservitude. They demand that child la bour beabolished. These are some of the long-standingdemocratic reforms pending consideration of thegovernment.

Boost for infrastructure

The maiden budget of the Narendra ModiGovernment has allowed banks to raise long-termfunds from the market to finance infrastructureprojects. For funds thus raised, banks are freedfrom requirements with respect to StatutoryLiquidity Ratio (SLR), Cash Reserve Ratio (CRR)and Priority Sector Lending. The move is in tunewith the recommendations of the Nachiket MorCommittee on Comprehensive Financial Servicesfor Small Businesses and Low-IncomeHouseholds. The panel had suggested the gradualpha se-out o f SLR, and recommended CRRapplication only on demand deposits. The budgetproposal has a two-fold objective. For one, itseeks to address concerns over the asset-liabilitymismatch in banks’ lending to infrastructureprojects, which have long gestation periods. Byfreeing banks of statutory obligations on thosefunds, on the other hand, the budget aims tobring down the financing cost for them. Withprojects facing overruns on cost and time frontsdue to assorted reasons in the wake of economic

slowdown, the banking system as a whole hascome under heavy stress. So much so that bankshave been forced to restructure a substantialportion of their lending to infrastructure projects.The failure of infrastructure projects on a largescale ha s seen non-performing assets (NPA)piling up in this sect or . A funds-star ve dgovernment needs private enterprises to give abig push to infra growth. Private enterprises willmove into the infra space only if long-term fundsare available at affordable rates and near-termworries on repayment do not weigh on them.Viewed against this backdrop, the budgetproposal is a twice-blessed move. For, it benefitsbanks as well as private enterprises.

There is, however, a huge risk in looking atthe proposal from a micro prism alone. Is non-availability of long-term funds the sole reason forthe present predicament in the infrastructurespace? A host of factors — ranging from landacquisition to green clearance and poor creditappraisal — have combined to derail theinfrastructure sector. Is the monetary regulator— the Reserve Bank of India – on the same pagewith fiscal bosses on the issue of letting banks gofree on statutory obligations for money raised tofund infrastructure projects? Even if it is in syncwith the fiscal bosses, the RBI may yet be keen toensure that its ability to exercise control over themonetary aspects of the economy is notcompromised. The RBI may do well to ensure thatsuch selective exemptions from statutoryobligations do not compromise the viability ofthe banking system. The budget proposal must betaken forward in a composite way by all thestakeholders so that infrastructure developmentis facilitated.

⇒ ⇒ ⇒ ⇒ ⇒ DAMS WITHOUT RESPONSIBILITY

The devastation in Uttarakhand had alreadyhappened much before the cataclysmic events of

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June 2013. The unprecedented rainfall and floodsand loss of life drew attention to the alarmingsituation in a State known for its pristine forestsand rivers. It also drew attention belatedly to the“bumper to bumper” dams in the mountains.

Construction on all dams in Uttarakhandwas halted by the Supreme Court in August 2013and on its instruct ions, the Ministry ofEnvironment and Forests (MoEF) appointed anexpert body which said that 23 hydropowerprojects out of the 24 it was asked to examinewould have an irreversible impact on thebiodiversity of the Alaknanda and Bhagirathibasins and should not be constructed.

In May, the Supreme Court reiterated itsorders stopping work on the 24 hydropowerprojects examined by the body. While all thisamounts to shutting the stable door after thehorse has bolted, it is a measure of recognition ofthe man-made destruction wrought by unplannedhydel power projects in a sensitive and fragileecosystem.

The State of Uttarakhand is a part of theGanga basin and rivers suffer from severaldepradations apart from dams in high places,including extensive pollution from untreatedsewage. Despite huge amounts of money beingspent, plans to clean up the river have failedmiserably. An IIT-led consortium has been set upto prepare a master plan for the National GangaRiver Basin Authority (NGRBA), to restore its“wholesomeness,” as the extended summary of adraft Ganga River Basin Management plan says.Citing anthropogenic activities, it says dams andbarrages have snapped her “longitudinalconnectivity.”

In its report of March 2013, the Inter-Ministerial Group (IMG) on Issues Relating toRiver Ganga says that the development of new

hydro power projects has an impact on theenvironment, the ecology, the biodiversity, bothterrestrial and aquatic, and economic and sociallife. Crucially, it says that in the upper reaches ofthe river — where the oxygenating abilities ofthe river are the highest — there are growingsigns of contamination. This suggests that evenhere, water withdrawal for hydroelectricity isendangering the health of the Ganga.Implementation of the 69 hydro power projectswill lead to 81 per cent of the Bhagirathi and 65per cent of the Alaknanda getting affected. TheIMG had considered the need to have portions ofthe river free of hydro projects and recommendedthat six rivers should be kept in pristine form.

In the Alaknanda and Bhagirathi basins,the report said that 17 dams have beencommissioned with a total installed capacity of1,851 MW. Fourteen projects of 2,538 MWcapacity are in different stages of constructionand 39 projects with an installed capacity of 4,644MW are in different stages of planning. Theexpert body report said that if all the 450 dams inthe State are completed, about 252 projects willeach have an installed capacity of 5MW or more.The vast majority of them will divert riversthrough tunnels to power houses downstream.Their combined impact will affect the landscapeof Uttarakhand. The environment managementplans of individual projects do not address thecumulative impacts of multiple projects in a rivervalley.

With dams proposed on major rivers forevery 20 to 25 kilometre stretch, large fragmentsof these rivers could be left with minimal f low asalmost all the river water is extracted forproducing hydroelectricity, the body’s report hassaid. Prof. Ravi Chopra, chairperson of the bodysaid that tunnelling is also controversial andleads to damage with natural springs being

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diverted and homes developing cracks. Thegovernment has only looked at the need togenerate power and not the impact on theenvironment. On field visits, the body noticedscarred landscapes, dry river beds and a completedisappearance of riverine ecosystems due tosubmergence at existing and under constructionlarge hydropower projects such as Tehri Stage Iand Koteshwar on the Bhagirathi basin and theSrinagar dam in the Alaknanda basin.

Extensive deforestation and diversion offorest land too has posed problems. The bodyfound that 80,826.91 hectares of forests havebeen diverted for non-forest use in Uttarakhandsince 1980. The diversion for hydropowerproduction is 5,312.11 ha. Most of the diversionfor roads and hydropower has been in Uttarkashi,Rudraprayag, Chamoli and Pithoragarh districts,the areas most affected in the June 2013 disaster.

People have been agitating against dams foryears in the region, notably Tehri. In 2010-11, andfor the first time for any project, there were threepublic hearings on the Devsari hydel project onthe Pinder. After two hearings, the third one wasaccepted by the government, according toVimalbhai of the Matu Jansangthan which ledprotests along with the Bhu-Swami SangharshSamiti. He says this was the first major protestafter the ones against Tehri. A public hearing wasalso organised where many voiced theiropposition to the dams and on the need to keepthe undammed tributary of the Ganga that way.He referred to the pathetic status of thecatchment area, and the lack of studies on waterflows and climate change impacts. The peopledisplaced by the Tehri dam are still to get landrights or basic amenities in their relocated homes,he added.

Local people who have borne the brunt ofthe devastati on due to dams and fl oods and

environmental groups have questioned thefeasibility of dams. By all accounts there is causefor concern as reflected in many reports. Even asthe Uttarakhand government proposes toapproach the Supreme Court in a bid to get a greensignal for dam construction, it must rememberthis. It has to ensure that the quest forhydropower cannot come without a responsibilityto preserve a reg ion that is limping back to lifeafter a calamity aggravated by unplanned humaninterventions neither scientifically assessed norendorsed by the people of the region.

⇒ ⇒ ⇒ ⇒ ⇒ BREAKTHROUGH FOR THE BLIND

India under the Narendra Modi governmenthas become the first country in the world to ratifythe Marrakesh Convention that codifiesexemptions to copyrights to benefit blind andvision-impaired readers. The government shouldnow build on this momentum and enact thecomprehensive and path-bre aking law, nowbefore a Parliamentary Standing Committee, thatcould transform the lives of millions of peoplewith various disabilities. This is imperative alsobecause seven long years have elapsed since NewDelhi ratified (it was one of the earliest to do so)the United Nations Convention for the Disabled.The current trea ty of the World IntellectualProperty Organization removes legal restrictionson the conversion of published works into anyone among a range of alternative formats whichthe blind and vision-impaired may access.Ratifying countries are required to enact domesticlaws to overcome their own copyright limitationsto further this objective. The treaty also easeshurdles for cross-country exchange of books indifferent formats so as to overcome the cost ofduplication. This is a genuine concern, as non-governmental organisations are by and large theprincipal service-providers for the disabled. Indiaamended its copyright law in 2012 broadly on the

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lines of the Marrakesh Treaty. Hence, the mostdirect benefit from its ratification of the latterwould be the access to literature that is convertedoverseas. WIPO has just launched the AccessibleBooks Consortium to provide technical supportfor the production of suitable formats and tocreate a global database of such transcriptions andto encourage publishers to participate in thisinitiative.

All of the above potentially add up to vastimprovements on the present situation wherepublished works are out of the reach of anoverwhelming majority of the blind. Theexception to this rule is the extremely limitedavailability of educational material. The worst-affected are people in developing countries, whichare home to 90 per cent of the world’s blindpopula tion, according to the World HealthOrganization. Moreover, barely 15 countriesworld-wide have copyright exemptions as per aWIPO finding, and these are mostly in theadvanced economies. The full potential of thisconvention will be realised ultimately when largenumbers of blind people have full access toquality education, which is still a distant dream.The treaty will not enter into forceinternationally unless it is ratified by at least 20countries. The lack of backing from the UnitedStates from the beginning of the negotiationscould prove to be a handicap in canvassing widersupport. The world has indeed come a long waysince WIPO began to contemplate copyrightexemptions some three decades ago.

⇒ ⇒ ⇒ ⇒ ⇒ BRICS FOR A NEW BANK

What might have been dismissed as animpossibility just f ive years ago is now a reality.Defying sceptics and critics, five countries thatbetween them account for 40 per cent of theworld’s population and 20 per cent of its GDP

have signed an agreement to create a developmentbank to provide financial assistance to developingcountries and emerging market economies,mainly for infrastructure projects. As its nameimplies, the agreement for the New DevelopmentBank, signed by Brazil, Russia, India, China andSouth Africa at their sixth BRICS summit inBrazil, signals the start of a new global financialorder that aims to be more inclusive than theWestern-focussed International Monetary Fundand the World Bank. The $100 billion bank willhave an initial subscribed capital of $50 billion.The five members managed to iron out theirdifferences to agree on an equal share for each inthe bank, so no one member dominates theinstitution. India and South Africa both wantedto host the headquarters. The eventual decisionto locate it in Shanghai was an acknowledgementthat China’s is the biggest economy in thegrouping. The Bank will also have an AfricanRegional Centre in South Africa and India willassume the first presidency of the bank. Firstmooted at the fourth BRICS summit in NewDelhi in 2012, the Bank will certainly have animpact on the existing arrangements put in placeby the Bretton Woods institutions, and will g ivemore say to smaller countries. But BRICS alsoappears to recognise that the NDB cannot replacethe IMF, the World Bank or the re gi onaldevelopment banks. Thus, the FortalezaDeclaration describes the NDB as a “supplementto the efforts of multilateral and regionalfinancial institutions for global development.”

A second financial instrument, theContingency Reserve Arrangement of $100billion, has been set up to help developingeconomies tide over “short-term liquiditypressures, promote further BRICS cooperation,strengthen the global financial safety net andcomplement existing international

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arrangements.” In its sixth year, BRICS has a newconfidence, and it was more than apparent at thesummit. The only world grouping that is notregion, security or trade-based, its members havecome together with the determination to create amore multilateral global order. China and Russiahave backed the other three BRICS members onthe issue of UN reform and Security Councilexpansion. But the grouping needs to find astronger political voice. The Declaration came inthe midst of the bombardment, even if undergrave provocation, of Gaza by Israel, but it issilent on this while calling for Israel andPalestine to resume negotiations towards a two-state solution.

⇒ ⇒ ⇒ ⇒ ⇒ REVAMPING THEPPP FRAMEWORK

In both the railway budget and the generalbudget, the BJP-led NDA government has made itclear that Public Private Partnership (PPP) is thepreferred mode for driving major infrastructuredevelopment projects. Finance Minister ArunJaitley even announced the decision to set up aninstitution named 3P India with a corpus ofRs.500 crore, to provide support tomainstreaming PPPs. This ‘Triple-P’ mode was acommon thread in Mr. Jaitley’s speech as he wentthrough several proposed initiatives of the Modigovernment in sectors such as urban renewal,urban transportation, real estate, and even gaspipelines. Railway Minister D.V. Sadananda Gowdatoo held out the hope that major passenger andconsumer initiatives such as development ofrailway stations, terminals, or even connectivityto ports could be taken up through the PPP route.To achieve the projected 8 per cent growth in GDP,infrastructure development is of criticalimportance, and this calls for huge doses ofinvestment across sectors. Successivegovernments have tried to parcel major projects

through this route. The greenfield airports,private ports and real estate projects have beensome of the noteworthy instances on this front.But there has also been a chain of problems andallegations in the implementation of suchprojects, or in terms of the concessions offered topromoters in the private sector or to foreigninvestors.

No doubt, PPPs represent a valuable deviceto leverage scarce public funds with privatefunding to finance critical infrastructure projects.Prime Minister Narendra Modi has been a votaryof the PPP model, and prides himself onincluding a fourth ‘P’ — ‘people’. This puts thefocus on a major problem. If only the people of thearea are taken on board in its planning, much ofthe opposition and hurdles will disappear. Moreoften than not, land acquisition andcompensation payable for it emerge as the biggestproblems, invariably leading to public agitationsor protest. Mr. Jaitley spoke of “the weaknessesof [the] PPP framework, the rigidities incontractual arrangements, the need to develop [a]more nuanced and sophisticated model ofcontracting and develop quick dispute redressalmechanisms.” The other side of the issue relatesto user charges. These projects, notably thoserelated to national highway development, arebased on certain user projections. When thenumbers do not add up on the ground, theinvestor becomes frustrated because the projectedreturn on investment may not materialise. Thegovernment and its agencies must work on a newframework for PPPs to make them attractive toinvestors, and at the same time affordable to theusers or consumers.

⇒ ⇒ ⇒ ⇒ ⇒ TOWARDS A COMPREHENSIVEJUVENILE JUSTICE LAW

The Juvenile Justice (Care and Protectionof Children) Act, 2000 (JJ Act) has been amended

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twice: in 2006 and in 2011. More demands toamend the Act have been in the reckoning. Therewas, for instance, a public outcry demanding morestringent punishment for the prime accused, ajuvenile, in the Delhi gang rape case of 2012.Besides crimes committed by juveniles, violenceagainst them is also emerging as an importantissue which needs to be redressed bystrengthening the existing provisions. Protractedinter-country adoption procedures in the existingJJ Act need urgent legislative resolution. Whilepersonal laws allow specific communities toadopt, other persons can become guardians onlyunder an archaic Guardians and Wards Act, 1890.A secular gender-neutral adoption law for allpeople is required.

The apex court in a public interest litigationdecided on March 28, 2014, in Dr. SubramanianSwamy and others v. Raju and others , refused toread down the provisions of the JJ Act, 2000, inorder to account for the mental and intellectualcompetence of a juvenile offender and refused tointerfere with the age of a juvenile accused, incases where juveniles were found guilty ofheinous crimes. It was held by the Court that theprovisions of the Act are in compliance withConstitutional directives and internationalconventions. The Court further stated that theclassification of juveniles as a special class stoodthe test of Article 14 of the Constitution, andthat the Court should restrict itself to thelegitimacy and not certainty of the law.

In this backdrop, the Government of Indiais now contemplating re-enacting a new JJ Act,2014, for which a review committee has beenconstituted under the Ministry of Women andChild Development. The baton has been passed onto Parliament to enact a new law.

The JJ Bill, 2014, seeks to enact a law byconsolidating and amending the law relating to

children who are in need of care and protection.It seeks to cater to their developmental needsthrough proper care, protection and treatment byadopting a child-friendly approach in theadjudication and disposal of matters, and forrehabilitation through processes provided andinstitutions established under the proposed newenactment.

The Women and Child De velopm entMinistry has posted on its website a proposeddraft of The Juvenile Justice (Care and Protectionof Children) Bill, 2014, suggesting broadamendments. The draft states that the increase inreported incidents of abuse of children needsurgent legislative action; that there are inadequatefacilities, quality of care and rehabilitationmeasures in private and government-run childrenhomes; delays in various processes under the JJAct ; delays in inter-country adoption processunder CARA; and inadequate provisions to dealwith offences against children, among others.

The draft incorporates the principles of theHague Convention on Protection of Children andCoopera tion in Res pect of Inter-CountryAdoption (1993) which was absent in the originalJJ Act, 2000. The new JJ Bill, 2014, provides forapplication of the proposed Act in: casesinvolving detention, prosecution or penalty ofimprisonment; matters relating to apprehension,production before court, disposal orders andrestoration, procedures and decisions related toadoption of children, and rehabilitation andreintegration of children who are in conflictwith law or, as the case may be, in need of care andprotection under other such law.

The word ‘juvenile’ has been replaced withthe word ‘child’ and the expression ‘juvenile inconflict with the law’ has been changed to ‘childin conflict with law.’ While in the JJ Act, 2000,juveniles in conflict with the law are defined as

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the ‘accused’, the draft Bill identifies a ‘child inconflict with law’ to be one who has been foundby the Juvenile Justice Board to have actuallycommitted an offence. It also defines an‘abandoned child’ as well as ‘aftercare’. Chaptertwo is the most noteworthy characteristic of theproposed Bill, providing for ‘FundamentalPrinciples for Care, Protection, Rehabilitation andJustice for Children’. It incorporatesinternationally accepted principles ofpresumption of innocence, dignity and worth,family responsibility, non-sti gma tisingsemanti cs, privac y and confi dent iality,repatriation and restoration, equality and non-discrimination, and diversion and natural justice,among others. Institutionalisation is suggested asa measure of last resort — juveniles are toinstitutionalised only if no other family-basedcare option is possible or available.

CARA has been made a statutory body vestedwith functions of in-country and inter-countryadoptions. Section 58 of the draft Bill lays downspecial emphasis on inter-country adoptions,stating that all applications for adoption shall befiled before a Principal Magistrate of theconcerned jurisdiction where the registeredadoption agency is located.

However, the proposed provision foradoption orders to be passed by the PrincipalMagistrate on the first date of hearing itself, orwithin a period of two weeks, failing which it willbe construed by the higher authority of thePrincipal Magistrate, “as dereliction of duty”, doesnot seem to be practical for actualimplementation. Judicial proceedings have to beregulated by the Code of Civil Procedure and nofast-track procedure that bypasses rules ofevidence can be proposed in contravention of law.Likewise, transgenders need adoption rights. TheJJ Bill must encompass these issues.

The proposed Bill also prohibits the mediafrom disclosing the identity of children orpropagating any such information which wouldlead to identifying them. All reports relating tochildren are to be treated as confidential.Corporal punishment and ragging, cruelty tochildren, employment of children for begging,adoption without proper procedure, and sale orprocurement of children for any purpose are allacts that are punishable under the draft Bill.

The draft Bill therefore provides acomprehensive mechanism to deal with childrenin conflict with law as well as children who arein need of care and protection. However, only astringent implementation can provide ameaningful disposition to make it a true letter oflaw.

⇒ ⇒ ⇒ ⇒ ⇒ A NEW INDEX TOMEASURE SOCIAL PROGRESS

Is Gross Domestic Product (GDP) anadequate measure of a country’s developmentacross many dimensions? This has been debatedvigorously in recent years. The discontent withGDP stems from the fact that it focussesexclusively on economic growth. Even there, itdoes not capture the level of inequity which canexist in a society despite overall economicgrowth. The inequity can in fact even beexacerbated by it. More importantly, i t pays noattention to the social and environmentalmeasures of development which are as importantas economic development. Indeed, the UnitedNations has identified three pillars on which thepost- 2015 Sustainable Development Goals(SDGs) must rest: economic, social andenvironmental.

Several alternative measures have beenproposed to capture the social dimension ofdevelopment, combined with or independent of

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economic indices. Bhutan has embraced andespoused the concept of Gross NationalHappiness. A World Happiness Report is nowperiodically published from the ColumbiaUniversity which compares self-reported levels ofhappiness of people from different countries. Acomposite Wellness Index was proposed by notedeconomists Stiglitz, Sen and Fitoussi in responseto a request from the then President of France,Nicolas Sarkozy, for a measure of developmentthat looks beyond GDP. A GlobalMultidimensional Poverty Index was developed atOxford to gauge inequity within and acrosssocieties.

However, none of these has really caughton because economists, industrialists andpoliticians alike are conditioned to place a highpremium on economic development as themeasure of progress and do not like to see theclarity of a single measure like GDP cluttered bya host of other indicators they view as impreciseor even irrelevant. So, an index of social progressis needed which does not try to displace GDP (notyet anyway) but has additive value. Such an indexcan be used to remind political leaders that theirbifocal vision must accommodate both economicand social progress as being important for acountry, recognising, of course, that these twotracks are closely interlinked and sometimesinseparable.

Such an index of social progress hasrecently been created by a group of academics andinstitutions constituting the Social ProgressImperative (www.socialprogressimperative.org).This index has three major domains: Basic HumanNeed s, Foundat ions of Wellbeing andOpportunity. Each of these has several clusters ofspecific indicators (as shown in the table).

The environmental dimension is partlyincorporated into the Social Progress Index (SPI)

as a cluster of indicators related to ecosystemsustainability. While there can be debates onwhich other indicators could have been includedin any of the clusters, the SPI does provide a listof key areas which need to be tracked and actedupon to ensure a higher level of social progress.The index is still evolving, with validationstudies being conducted on data from differentcountries. The authors have extended an openinvitation to groups from anywhere in the worldto use their data sets for validation and suggestrefinements.

The designers of this index draw ourattention to three overarching findings of theirstudy so far: social progress is distinct fromeconomic development, though correlated with it;some aspects of social progress are more closelyrelated to the level of economic development thanothers; countries have relative strengths andweaknesses in social progress, both across themajor dimensions and across components withinthe dimensions.

Of the three domains, Basic Human Needsis best correlate d wi th per capi ta GDP,Foundations of Wellbeing being intermediate andOpportunity the least so. However, in eachdomain there is variability in the degree ofcorrelation between the individual componentsand per capi ta GDP. As the developers of SPIaffirm, the index offers a new tool to explore thecomplex two-way relationship between economicand social progress. At the same time, it providesa metric for comparison of countries, and Stateswithin a country.

Even as the country commits itself to moveon the fast track of economic growth, it must bemindful of the need to invest in improving thesocial indicators as well. We may continue tomeasure GDP if that is still considered thetalisman of economic progress by the worlds of

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politics and finance, but we must alsosimultaneously measure social progress lest weend up as a soulless society characterised bygaping inequality and glaring socialbackwardness despite gaining wealth. Let GDPand SPI be the inseparable Gemini twins thatherald our ascent to higher levels of balanceddevelopment.

⇒ ⇒ ⇒ ⇒ ⇒ TRIALS AND REGULATIONS

The promise and performance of geneticallymodified crops in agriculture is once again underthe spotlight, with the sanction given by theGenetic Engineering Approval Committee forconfined field trials of several food crops. In itslast days, the UPA government decided to end themoratorium on trial cultivation of theseengineered varieties, and to allow experimentsaimed at generating biosafety data. The GEAC hasnow taken further steps to allow field trials ofrice, brinjal, mustard, chickpea and cotton, andimport of GM soyabean oil. Clearly, there can beno credible argument against scientificexperiments in agriculture that advance the goalof developing plant varieties that can withstanddrought, resist pests and raise yields to feed thegrowing world population. But this should bedone through a transparent regulatory processthat is free of ethical conflicts. Proponents of GMcrops funding research in agricultural universitiesrepresents one such conflict. To aid transparency,research findings should be made available in thepublic domain for independent study. But Indiahas taken only halting steps towardsestablishing a strong regulatory system; theBiotechnology Regulatory Authority of India Bill,2013, which provided for multi-level scientificassessments and an appellate tribunal, has lapsed.

While the Central government has notpermitted the commercial cultivation of Bt brinjal

in India, the recent case of neighbouringBangladesh shows that regulatory mechanismsmust be put in place before such crops are grown,whether for research or for the market — andthey must be functional. Although the licence toproduce the crop in Bangladesh required that theGM variety be isolated from indigenous ones toprevent genetic contamination, the condition wasnot followed. Field trials in India, in which theState governments have a say, must ensure thatthere are sufficient safeguards against suchviolations. If GM food is allowed to be sold toconsumers, they must have the right to knowwhat they are buying, and labelling should bemade mandatory. Here again, the Bangladeshexperience shows that such a condition may bedifficult to enforce. There is no consensus on theperformance of GM crops and the results havebeen mixed. They have had some beneficialimpact on tillage practices and in terms ofcurbing the use of insecticides, but as the Unionof Concerned Scientists in the U.S. points out,they have created monocultures and may beaffecting birds and bees. All this underscores theneed for a cautious approach — one that fostersscient ific inquiry, allows for scrutiny and isunderpinned by regulation. Enacting acomprehensive law that covers all aspects of GMcrops should be a priority.

⇒ ⇒ ⇒ ⇒ ⇒ THE BUDGETSECOLOGICAL BANKRUPTCY

“While 2015 will be a landmark year forsustainable development and climate changepolicy, 2014 is the last chance for all stakeholdersto introspect to be able to wisely choose the worldthey want post 2015.”

Th e survey contains (for the third yearrunning) an independent chapter on ‘SustainableDevelopment and Climate Change’, whichcontains a few more pearls of wisdom like the

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one quoted earlier. It recounts in detail severalgoals set by the United Progressive Alliance(UPA) government (without mentioning it ofcourse), especially as part of the National ActionPlan on Climate Change (NAPCC). Of significanceis the goal to reduce “emissions intensity of GDP”quite substantially, meaning moving towards alower carbon emissions economy.

The budget too has a few provisions togladden the hearts of “sustainable development”and “green economy” advocates, such as cleanerenergy technologies, a big fund for cleaning theGanga, a boost to watershed development andprovisions for water purification in areas badlyaffe ct ed by toxic wa stes. Solar energy get sRs.1,000 crore, including for agriculture pumpsets and water pumping stations. A doubling ofthe Clean Energy Cess (from Rs.50 per tonne toRs.100 per tonne of coal) is aimed at financing“clean environment” initiatives.

Unfortunately, as in the case of previousbudgets and economic surveys, the fe wconcessions given to securing our environmentalfuture are overwhelmingly submerged by what ismissing and, worse, what is contradictory. Thesurvey’s chapter on ‘Sustainable Developmentand Climate Change’ appears to exist in isolationof the other chapters; indeed, if the governmentwas serious about “sustainable development,”sustainability would run like a thread through allthe sectoral chapters. A few examples will sufficeto show that it does not.

Th e survey ’s chapt er on industryacknowledges that it is a cause of “naturalresource depletion (fossil fuel, minerals, timber),water, air, coastal and marine, and landcontamination, health hazards, degradation ofnatural ecosystems, and loss of biodiversity.” Yet,neither in this chapter nor anywhere else is therean indication of how this is to be tackled. The

chapter on agriculture and food has no mentionof the enormous health implications of the use ofchemical fertilizers and pesticides, nor does the‘Sustainable Development and Climate Change’chapter say anything about the need to reduceemissions from fertilizer use. Indeed, the Unionbudget makes an increased allocation for thefertilizer subsidy, ignoring the repeated advicefrom both within and outside government tobegin moving towards organic, ecologicalfertilization measures (it does have a tokenprovision of Rs.100 crore for organic farming innortheast India, peanuts when compared to theRs.70,000 crore plus subsidy for chemicalfertilizers). Nowhere in the survey are the issuesof dryland farming or the importance of revivingmillets for the health of soils and peoplementioned.

A lot more could be said about the ecologicalbankruptcy of the Economic Survey; for instance,how can anyone gauge whether we are movingany closer to sustainability in the completeabsence of any indicators to measure this? Tribalwelfare does get a substantial allocation, but thereis no indication whether it will be allocated tocontinuing the intricate nature-culturerelationship of such peoples; thus far it has not,and the NDA is unlikely to be any different. Andwhat appears to be good news on the solar energyfront pales into insignificance when one realisesthat the allocation is only 0.6 per cent of the totalenergy budget, with the lion’s share still going todirty sources like coal and big hydro and nuclear.

The “Key Features of Budget 2014-2015”document has no section on the environment.Mr. Jaitley’s speech mentions the environmentonly in respect of coal, c lean energy cess andmining. The promise of sustainability in themining sector has been made for many years, butno government has taken serious measures to

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implement it. We need to see whether the NDAdoes any better. It will be surprising given theother measures it is already taking or proposing,such as faster environmental clearances and evenself-monitoring by companies which have shownscant regard for even mandatory provisions.

The budget lays great stress on industrialcorridors. I f Gujarat’s model is anything to go by,this will mean massive amounts of forcible orinduced land acquisition and pollution. This is arecipe for conflicts and social disruption. EarlyJuly has seen massive farmer protests in Raigaddistrict of Maharashtra, against the proposedacquisition of 67,500 acres for a part of theMumbai-Delhi Industrial Corridor.

The budget also initiates the River Linkingproject (Rs.100 crore for Detailed Project Reports),which has been under discussion for many years.Mr. Jaitley’s speech lamented that India was “notuniformly blessed with perennial r ivers.” Both theUPA and the NDA are ignoring expert opinionthat warns of the enormous ecological disruptionand social displacement that such a massiveengineering project would cause; equallyimportant, they are turning a blind eye to thehundreds of initiatives that have shown howwater security can be achieved throughdecentralised solutions even in the driest ofregions.

The focus is on growth through making iteasier for industry and commerce , with theassumption that a larger economic pie will helpthe poor rise above the poverty line. The fact thatdespite a blistering pace of growth through muchof the 1990s and 2000s, the employmentsituation worsened (latest figures show nearly 15per cent unemployment), and 70 per cent ofIndians remained deprived of one or more basicneeds, appears lost on the proponents of such anagenda. And the fact that such growth actually

trashes the ecological pie on which all of usdepend for our very lives, appears to be of littleconsequence. Not even the World Bank’s 2013study showing that environmental damageannually knocks off 5.7 per cent of GDP growth,seems to have made a dent in such thinking.

The NDA’s first budget has thrown a fewsops in the direction of the environment and themillions dependent on it. But much like itspredecessors, in painting the big picture itremains embarrassingly devoid of innovativeideas on how to move India towards ecologicalsustainability and justice.

⇒ ⇒ ⇒ ⇒ ⇒ THE FALLACY OF AUTONOMY

There can be good arguments for andagainst a four-year undergraduate degree. In anycase, for the time being the debate is settled, inour very own messy sty le. Th e new NationalDemocratic Alliance government has used thesame steamrolling tactics to reverse the decisionthat the earlier United Progressive Alliancegovernment had used to push FYUP. Now we havea controversy about the Chairman of the IndianCouncil of Historical Research (ICHR). Tomorrowwe can expect something else. The real issue ishow we take big decisions on higher educationthat affect the future of millions of students.Governments change but the ways of power donot.

Two years of a ringside view of bigdecisions on higher education taught mesomething: governance is not about procedures,committees, rules and regulations; it’s all aboutwinks and nods of the powers that be. Thisapplies as much to ‘autonomous bodies’ like theUGC as it does to public sector undertakings ordepartments of the government. This was as trueof the UPA government as it is of the current NDAgovernment, or the various State governments.

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The story of how FYUP was introduced andthen withdrawn serves to illustrate how poweroperates. The move to shift from theconventional three-year graduate course to FYUPbegan in late 2012. Usually the university takes acouple of years to deliberate and decide about anymajor change in syllabi. Last time the DUoverhauled the syllabi of the existing three-yearcourse, it took about three years to do so. But thistime, the vice-chancellor wanted the entireprocess — from brainstorming to theannouncement of the new course — to becompleted within six months or less. Everyonein the academic community was aghast. Eventeachers who were willing to look at the idea ofa four-year degree favourably thought it was crazyto push the idea at this pace.

However, the vice-chancellor wasdetermined to go ahead. It was said that he wasthe blue-eyed boy of the then Minister of HumanResource Development. It was also said that theFYUP has the Minister’s nod. And everything fellin place. All the formalities of consultationwithin the university were completed withlightning speed. Protests by teachers anddepartments were set aside. Ministry officialswere keen to assist in any which way and wereunwilling to lend an ear to anyone who protested.The President of India, the Visitor to DU, refusedto intervene. The funny thing was the alibi used:everyone from Minister downwards said theywere respecting the autonomy of the university.

Now the new government has nodded theother way. Th e tide ha s turned, so has theMinistry and the UGC. Interestingly, the samepersons continue to occupy key positions such asChairman of the UGC and Se cre tary (HigherEducation). But they have suddenly discovered allthe arguments against FYUP that they haddismissed last year. Those who could not bear the

thought of interfering with the autonomy of theuniversity are now issuing diktats andultimatums with 24-hour deadlines. The rollingback of FYUP was as whimsical and arbitrary asits rollout. The world of higher education isdivided into those who applaud one or the other.

This story is worth remembering in thedays to come, as the BJP would extend its controlover one institution after another: UGC, thenICHR, then Indian Council of Social ScienceResearch, and of course the National Council ofEducational Research and Training. Scores of wellmeaning, secular academics will cry foul andprotest against violation of institutionalautonomy by the BJP or the RashtriyaSwayamsevak Sangh. Such protests will bejustified and necessary. But they would also beg aseries of questions: do we have legacy ofsafeguarding institutional autonomy? Has theacademic community shown the courage todefend its autonomy? What is our record of usingacademic autonomy as and when we get it? Canacademic autonomy be equated with self-indulgence of the ivory tower, secular orotherwise? How do we look firmly into the future,unperturbed by nods and winks?

⇒ ⇒ ⇒ ⇒ ⇒ A MINIMUM WAGE DEBATE

Echoes of the statutory universal minimumwage legislation adopted by Germany’s governinggrand coalition seem to reverberate beyondBerlin, in the European Union and across theAtlantic. Europe’s largest economy is to enforce anational minimum pay of •8.5 an hour fromJanuary. Such a guarantee would extend cover tothe millions of workers — mainly in the easternregion — who remain outside the negotiatedwage settlement that defined post-War Germany’sindustrial model. Britain has had a nationalminimum wage law since 1998. But ahead of the2015 general election, the opposition Labour Party,

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which was the architect of the legislation, wantschanges so that those at the bottom of theworkforce may share the fruits of the economicrecovery. Neighbouring France codif ied a legalguarantee in 1950, amended since in 1970. ButParis has recently floated the idea of a minimumwage across the European Union, although a pan-European measure may not materialise any timesoon given the legal prohibition in this area. Theidea may well inf luence the remaining six EUstates — founder-member Italy, Austria, Cyprus,and the three Nordic countries — to stipulatetheir respective basic f loor. Although the Swissrejected a proposal that would have given thecountry the world’s highest minimum pay, theplebiscite in May occasioned a lively debate. U.S.President Barack Obama’s bid to raise the federalminimum wage was blocked by Congress. Butthere is evidence of growing support among theRepublicans, who are anxious not to antagonisevoters.

The implications of a minimum-wage flooron employment generation and growth continueto divide opinion. This is true equally of Germanywhich is set to introduce the new law in January,or Bri tain and the U.S. which have put forthproposals to effect an increase in the existingamount. But growing support on this contentiousissue cutting across traditional party linesperhaps means there is greater recognition thatminimum wages ought to keep pace withinflation, average wages and productivity growth.The imperative need to mitigate the impact of the2007-08 economic meltdown on large sections ofthe population in the advanced economies hasalso strengthened support. A legal minimum payremains a vital tool for the workforce in maturedemocracies, even though these are alreadyunderpinned by vibrant trade unions and highlevels of social protection measures. However, for

the bulk of the wage-earners in the developingworld that is outside the organised sector of theeconomy, a legal guarantee of a minimumsubsistence pay seems morally non-negotiable.This is true even from the standpoint of thephysical and mental capacities that are paramountto enhance overall productivity.

⇒ ⇒ ⇒ ⇒ ⇒ FOR THE BRICS BANK,A TOUGH ROAD AHEAD

The announcement of a new BRICS Bankdisplays the desire of emerging economies tomove away from Washington D.C.-style lendinginstitutions. But between India’s bureaucraticef ficiency and China ’s indifference tohumanitarian, environmental and regionalconcerns, they resemble John F. Kennedy’s tartcharacterisation of the very place they hope toleave behind. Much work lies ahead for thecreators of these new multilateral financialinstitutions before the first loan can be made.

Simply reaching sufficient agreement toannounce the new BRICS Bank represents asignificant achievement for the six-year-oldBRICS group. While it may seem silly to organisea serious international grouping based on a cleveracronym, the BRIC countries are the four largesteconomies in the developing world. They haveeconomic heft, but do they have much incommon?

What they most need to succeed is trust.Russia and India have long histor ies of conflictwith China. Brazil and Russia are not famous forbeing creditworthy. South Africa is a solid neutralparty, but also, frankly, a lot less significant thanthe other members. So apparently their jointdesire to pl ant a f l ag on the global economysufficiently overcame mutual differences.

The preponderance of the friction onlending policy at the International Financial

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Insti tutions (IFIs) ref lects typical lender-borrower conflict. Developed countries, mostoften net lenders, want high standards to makesure money is used responsibly and repaid. Thedeveloping countries, most often net borrowers,resent outsiders imposing conditions on the useof money inside their own country.

Any lender must pay attention to prudentialconcerns to survive. But given business practicesin the BRICS — especially where government isinvolved — this cannot be taken for granted. TheBRICS governments have not always beenenthusiastic about World Bank scrutiny andtransparency in the past. They must be vigilant toensure that BRICS Bank money is used wisely andgets repaid.

Developed countries have also imposedhigh-minded lending values, the benefit of whichcan be more reasonably debated. Highenvironmental standards, for instance, may feellike a luxury that poor borrowing countri escannot afford. Some Western-imposed mandatesfeel more like development fads. Most arelegitimate values that the BRICS should aspire tofollow.

If the BRICS are comfortable with loweringtheir lending standards I do not doubt they willfind plenty of projects to fund. But if they are, itis best that the existing IFIs are not affiliatedwith it.From what has been announced, the BRICSBank will take a very democrati c approach togovernance by giving each member equal votingrights. Undoubtedly there is value in such anequal arrangement for symbolic solidarity, as wellas to avoid concerns about Chinese domination.

Despite its shortcomings, this arrangementmay be the only way to overcome their mutualtrust deficit. Mihir Sharma has already pinned theBRICS Bank as a vehicle for the Chinese tocommandeer the friendlier public image of the

three southern BRICS as a front for China ’sforeign economic policy. On the other hand, canan institution survive being funded pr imarily byChina and Russia, the only two BRICS with excessreserves, when their inf luence is no greater thanany other member? If adequate checks are put inplace to prevent Chinese dominance, will Chinaremain interested in this project?

This works as long as they see long-termvalue in the institution. U.S. taxpayers would notaccept such a bargain, but China and Russia haveless need to answer to their own taxpayers. TheBRICS clearly want something tangible todemonstrate their global prominence and thepower of non-Western values. Yet the new BRICSBank faces two critical tensions. The first pits thedesire to be free of Western-imposed constraintson lending, versus the need for prudentiallending. The second sets the high-minded desirefor equality of governance against the reality thatlack of Chinese dominance may result ininstitutional neglect by its pr imary benefactor.

While the BRICS Bank project was puttogether in an impressively short two years, mostof the difficult questions remain unanswered.These tensions — critical to the bank’s viability— will not be easily resolved. I expect it will beseveral years before the details are sufficientlyironed out for the BRICS Bank to open its doors.

Keep talking Peace

The four-month extension of talks to haltTehran’s bid to make an atomic bomb is anindication of the positive if limited fallout fromthe historic late-2013 interim agreement. Beneaththat was well-founded and deep scepticism — inthe United States, Europe and even among theIsraeli intelligence — of any resort to brute forceas a means to restrain Iran’s pursuit of nuclearweapons. The five permanent members on theUnited Nations Security Council (UNSC) and

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Germany accordingly decided to ease sanctionsworth $7 billion for six months. The readiness ofthe latter to relent on Iran’s cont inuati on ofuranium enrichment up to the level necessary forpower generation was in sharp contrast to pastUNSC resolutions requiring Tehran to freeze allenrichment. In return, Iran agreed to limit itsnuclear programme and permit vigorousmultilateral inspections of its facilities. WhereasU.S. President Barack Obama insisted that suchrelief was conditional and reversible, theRepublican hard-liners and Israel decried theNovember agreement as a huge mistake. It issignificant that the International Atomic EnergyAgency (IAEA) should have acknowledged in Junethat Iran was cooperating with investigationsinto the so-called Possible Military Dimensionsto its nuclear programme. The IAEA had alsoobserved that such inspections could necessarilyproceed in a step-by-step manner — a possiblecase to extend the deadline for negotiations.

There is evidently no guarantee that theNovember deadline would yield the outcome thatall parties envisage. Tehran has offered to freezethe country’s operations at current levels over the

next three to seven years and thereafter resumeuranium production as per its own requirements.Conversely, Washington and its partners insistthat Iran dismantle major aspects of its uraniumenrichment facilities and that current restrictionsshould continue for well over a decade. The realforce behind these stated positions may also beinfluenced considerably by ge opolitics in theMiddle East.

A foremost factor is the election last year ofIran’s moderate President Hassan Rouhani, whichalmost coincided with the interim nuclearagreement. A thaw in Britain’s relations withTehran could prove to be a vital channel for theEuropean powers and the U.S. to exert pressure onthe radical Sunni Islamic groups in Iraq and Syria.These are factors with a strong potential toinfluence the course of nuclear talks. The road tolong-term peace lies in eschewing hard positions;one that goes to the root of the global Nuclearnon-Proliferation Treaty (NPT). Nuclear weapon-states championing disarmament ought to treada delicate line vis-à-vis potential aspirants inorder to strengthen world peace.