Nuclear liability bill

The nuclear liability bill drafting process has been marred by lack of consultation and transparency from the start. In a democracy, legislation by stealth will always create a backlash.

Behind the unseemly word games the Manmohan Singh government has been playing over the language of the proposed nuclear liability bill lies a more dangerous conceit: that complex legislation with the potential to affect the lives of tens of millions of people can simply be pushed through with stealth, subterfuge and the barest minimum of consultation.

Not once but thrice have the government's managers been caught trying to fiddle with the bill in order to address the concerns of nuclear suppliers that are obviously so illegitimate nobody seems to have the political stomach to even try to convince the public about them. What were they thinking? That people would laugh and say, what's wrong with a bit of ‘and' here and a bit of ‘intent' there and pat them on the back for their craftiness?

At the initial stages of consideration, the first attempt was made to simply delete Clause 17(b), which allows the Indian nuclear operator — who is otherwise wholly liable — to exercise a right of recourse in the event that an accident is caused by gross negligence on the part of the supplier. Difficult though it may be to prove gross negligence, U.S. nuclear industry representatives made it clear this provision was unacceptable to them. Therefore, without any attempt to discuss or debate the issue publicly, the Manmohan Singh government simply sought to oblige them. On June 8, the Department of Atomic Energy circulated a ‘consolidated list of proposed amendments' to the Standing Committee on Science and technology suggesting the deletion of 17(b) altogether. When members of the Standing Committee objected, the DAE Secretary, Srikumar Banerjee, said this was only a “suggestion” and withdrew it.

Subsequently, when the Standing Committee agreed to strengthen 17(b) by allowing a right of recourse against the supplier in the event of an accident caused by defective equipment, the government sought to nullify it by making this conditional on the same being spelt out in a commercial contract. Forced to abandon that position too, the Union Cabinet finally cleared a version which allows a right of recourse against the supplier only if the latter intentionally causes an accident. That's a camel so huge it is unlikely to ever pass through the eye of a needle.

Now, surely the primary motive of liability legislation in a democracy ought to be reassuring people that their interests would be fully looked after in the unlikely event of an accident. In this case, however, the motive seems to have become reassuring the foreign suppliers who stand to make billions of dollars supplying nuclear reactors to India that their interests would be fully looked after, come what may.

Somewhere along the line, our rulers forgot that we are a democracy. They also forgot that this is, after all, Bhopal country. Twenty years on, the victims of the world's worst industrial disaster languish without adequate financial compensation or health care. The Indian administrative and judicial system has failed to assign legal culpability for the incident and still cannot decide who should pay for the removal of toxic wastes from the plant site that have leeched into the soil and groundwater. Against this backdrop, the government ought to have gone out of its way to reassure the public that the lessons from Bhopal were being acted upon, that every concern about the consequences of a nuclear accident would be addressed openly and transparently, that every effort would be made to use the levers of regulation and liability to ensure the highest attention to safety by all those in the nuclear energy production chain whose activities or products could conceivably contribute to an accident. A broad range of views within and outside government ought to have been solicited at the drafting stage itself so that the final product could have the widest possible ownership. But this never happened.

Work on the legislation began as an in-house effort of the Department of Atomic Energy a decade ago, well before there was any possibility of the Nuclear Suppliers Group agreeing to nuclear commerce with India. Even though a draft law was readied, the Centre showed little or no urgency in discussing, let alone enacting, it. So much for the official claim that the law's aim is to provide speedy compensation to victims. Once the NSG clearance came, however, the Manmohan Singh government saw the liability issue as something that had to be pushed through to provide comfort to foreign suppliers. After all, the U.S. nuclear lobby managed to make India's accession to the IAEA's Convention on Supplementary Compensation for Nuclear Damage (CSC) — which effectively indemnifies suppliers from any liability — a pre-requisite for any nuclear sales.

India gave a formal assurance on the CSC to the U.S. on September 10, 2008 and that is when the legislative clock started ticking in earnest. The DAE's draft was circulated to only a handful of Ministries — Finance, Environment, Home, External Affairs and Law. Ministries like Health, Water Resources, Food and Agriculture, upon whom the burden of handling a nuclear accident would inevitably fall, were never consulted at the drafting stage. The Standing Committee attempted to remedy the situation at the eleventh hour by inviting other Ministries but hardly any of their excellent suggestions even made it to the committee's recommendations.

As matters stand, a political consensus has emerged over the Standing Committee's proposal to hike compensation limits and the need to hold suppliers indirectly liable via the right of recourse for defective equipment. Just as in other hazardous industries, of course, culpability will still have to be established in a court of law. But what the suppliers want is a free pass at the start-up stage itself.

Instead of relying on stealth, the government ought to argue up front why it does not believe suppliers should be indirectly liable for any potential nuclear accident. But its arguments should be grounded in facts and sound analysis, not theology. For example, if suppliers are forced to take out insurance to cover themselves as a result of the Indian law, how much will this affect the cost of a nuclear power project? It is meaningless to argue that no country, not even South Korea, has a law as balanced in its apportioning of liability as India. India is not “any other country.” It plans to buy 20 to 25 large reactors over the next two decades and need not behave as if it is entering a suppliers' market. It is said Indian suppliers will also be reluctant to provide components for our indigenous reactors if the operator can exercise a right of recourse against them. But the fact is that the current legal regime in India exposes suppliers to unlimited liability and that hasn't prevented major Indian corporates from manufacturing products for the NPCIL's reactors around the country.

Even if the government is ultimately forced to concede this point, the Opposition should insist that the right of recourse cannot be limited by the Rs 1500 crore operator liability cap but must extend to cover the full amount the government must pay in the event of an accident. There is also one other clause that needs improvement. Though many experts pointed this out in their testimony, the Standing Committee passed up the opportunity to clarify Clause 46, which purports to allow victims to take legal action under other laws. If the aim of this clause is to explicitly preserve the right of victims to file tort claims, why does it only speak of the “operator” not being exempt from other legal proceedings? The absence of a reference to the supplier here is likely to become an obstacle if victims pursue tortious liability claims.

To be sure, these sorts of improvements will not go down well with foreign nuclear suppliers. But this is the price they will have to pay to get a share of the energy sector in a democratic country like India. As Montek Singh Ahluwalia famously said in one of his leaked emails on the U.S. suggestion that the government be lenient towards Dow Chemicals in order to win American investment and support, “There is always a quid pro quo, though I fear on this we are helpless.”

Indian unorganized retail sector and its challenge

India is the only one country having the highest shop density in the world, with 11 outlets per 1000 people (12 million retail shops for about 209 million households). Rather we can see the democratic scenario in Indian Retail (because of low level of centralization, low capital input and due to a good number of self organized retail).

India started its Retail Journey since ancient time.
In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a pretty long times to & step to shape the modern retail. In between these two concepts (i.e. between ancient retail concept & the modern one there exist modern kirana/ mom and pop shops or Baniya ki Dukan.
Still it is predominating in India

So the Indian retail industry is divided into two sectors- organized and unorganized.
Organized retail sector refers to the sectors undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate retail formats of the exclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, hand cart and pavement vendors, & mobile vendors, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc.

Characteristics of unorganized retail-------

Small-store (kirana) retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labour. It is generally family run business
, lack of standardization and the retailers who are running this store they are lacking of education, experience and exposure. This is one of the reason why productivity of this sector is approximately 4% that of the U.S. retail industry.


Unorganized retail sector is still predominating over organized sector in India, unorganized retail sector constituting 98% (twelve million) of total trade, while organized trade accounts only for 2%.

The reasons might be-

1. In smaller towns and urban areas, there are many families who are traditionally using these kirana shops/ 'mom and pop' stores offering a wide range of merchandise mix. Generally these kirana shops are the family business of these small retailers which they are running for more than one generation.

2. These kiran shops are having their own efficient management system and with this they are efficiently fulfilling the needs of the customer. This is one of the good reasons why the customer doesn’t want to change their old loyal kirana shop.

3. A large number of working class in India is working as daily wage basis, at the end of the day when they get their wage, they come to this small retail shop to purchase wheat flour, rice etc for their supper. For them this the only place to have those food items because purchase quantity is so small that no big retail store would entertain this.

4. Similarly there is another consumer class who are the seasonal worker. During their unemployment period they use to purchase from this kirana store in credit and when they get their salary they clear their dues. Now this type of credit facility is not available in corporate retail store, so this kirana stores are the only place for them to fulfill their needs.

5. Another reason might be the proximity of the store. It is the convenience store for the customer. In every corner the street an unorganized retail shop can be found that is hardly a walking distance from the customer’s house. Many times customers prefer to shop from the nearby kirana shop rather than to drive a long distance organized retail stores.

6. This unorganized stores are having n number of options to cut their costs. They incur little to no real-estate costs because they generally operate from their residences.
Their labour cost is also low because the family members work in the store. Also they use cheap child labour at very low rates.
As they are operating from their home so they can pay for their utilities at residential rates.
Even they cannot pay their tax properly.


Currently the value of the retail market is estimated at around $ 270 billion with a growth rate of 5.7 per cent per annum according to the Indian retail report which creates a big threat for the small unorganized retailers.
The well established organized retail sector in India are Pantaloon Retail, Shoppers’ Stop, Spencers, HyperCITY, Lifestyle, Subhiksha & newly emerging Reliance etc.

Over 20,000 new retail outlets are expected to open within this segment. Major corporate retail like Wal-Mart and have started to try and take over the Indian retail sector.

But in India the unorganized retail is a source foods and other necessities of millions of Indians , major link between rural and urban societies. Not only that it is also act like a convenience store for the customer offering right product at right time at right place. In a country with large numbers of people, and high levels of poverty, this model of retail democracy is the most appropriate

So these unorganized retail sector need to be promoted so that they can organize & supply food to Indian consumer.



Now the question is how to promote this sector-

The suggestions might be-
(a) Establishment of Retailer co-operatives among retailers which is highly required for the sustenance of the unorganized retail sector
(b) Merger and buy-out of weak retailers by a stronger one that would give a new horizon to the small retailer
(c) Setting up of franchisee organization may also help in strengthening the position of the retailers. The franchiser can exert a tremendous control over the way retailing is done.
(d) There must be good network connection between retail organizations, the suppliers and other channel members to use compatible technology so that they can build strong distribution set-up to satisfy the customers.
(e) Setting up of more and more non-store retailing centers would also ensure a strong retailing organization. Non-store retailing makes implementation of modern principles easier and less costly.
(d) Moreover there must be a change in the mindset of the unorganized retailer. They have to understand the pulse of the trend. They have to understand, come forward & lead this change management then only this sector not only can exist but flourish.

Financial inclusion

Meaning:
Financial inclusion is the availability of banking services at an affordable cost to disadvantaged and low-income groups. In India the basic concept of financial inclusion is having a saving or current account with any bank. In reality it includes loans, insurance services and much more.

Definition of financial inclusion as per the Rangarajan commitee :
Government of India "Committee on Financial inclusion in India" : The process of ensuring access to financial services and timely and adequate credit where needed by vulnerable group such as the weaker sections and low income groups at an affordable cost. (Rangarajan committee,2008)

Definition of financial inclusion as defined in the paper:
A process that ensures the ease of access, availability and usage of formal financial system for all members of an economy.
Index of financial inclusion (IFI) takes values between 0 to 1 and is based on the following factors in general:
Number of bank accounts per 1000 adult persons.
Number of bank branches per million people.
Number of ATM’s per million people.
Amount of bank credit. (Credit to GDP ratio)
Amount of bank deposit. (Deposit to GDP ratio)


Research paper has used the following three parameters for ranking the countries :
Banking penetration
Availability of banking services (branches, ATM’s or number of employees per customer)
usage of banking system. (credit and deposit)

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Summary:

1. India ranked 50th in a recent study for financial inclusion by ICRIER among 100 countries.
2. Only 34% of Indian individuals have access to or receive banking services.
3. Financial inclusion mainly focuses on the poor who do not have formal financial institutional support and getting them out of the clutches of local money lenders.
4. Banks are now permitted to utilize the service of NGOs, SHGs and other civil society organizations as intermediaries in providing financial and banking services through the use of business facilitator and business correspondent models.

In order to increase FI, the Reserve Bank of India had the Government of India take innovative steps:
1. opening new branches of Regional Rural Banks to make banking services accessible to poor.
2. With the directive from RBI, our banks are now offering “No Frill” Accounts to low income groups.These accounts either have a low minimum or nil balance with some restriction in transactions.
3. some of our banks have now come forward with general purpose credit cards and artisan credit cards which offer collateral-free small loans.
4. The RBI has simplified the KYC (Know your customer) norms for opening a ‘No frill’ account. This will help the low income individual to open a ‘No Frill’ account without identity proof and address proof


Reason for financial exclusion:
1. Lack of a regular or substantial income.
2. In most of the cases people with low income do not qualify for a loan.
3. The proximity of the financial service is another fact.
4. The loss is not only the transportation cost but also the loss of daily wages for a low income individual.
5. Most of the excluded consumers are not aware of the bank’s products, which are beneficial for them.
6. Getting money for their financial requirements from a local money lender is easier than getting a loan from the bank.
7. Most of the banks need collateral for their loans. It is very difficult for a low income individual to find collateral for a bank loan.
8. Banks give more importance to meeting their financial targets. So they focus on larger accounts. It is not profitable for banks to provide small loans and make a profit.

Ways to achieve Financial Inclusion:

1.The provision of uncomplicated, small, affordable products will help to bring the low income families into the formal financial sector

2.Correspondents can be considered to be an excellent channel which banks can use to distribute their product information.

3.Educating the consumers about the financial benefits and products of banks which are beneficial to low income groups will be a great step to tap their potential.

4.Banks are now using new technologies like mobile phones to reach low income consumers. It is possible that the telephone providers themselves will start basic banking services like savings and payments.

5. Kirana store owners may emerge as the new bankers for rural India with commercial banks lining up to enlist them as business facilitators to increase their reach. The RBI has allowed banks to explore tie ups with local operators such as kirana stores, medical shop owners and public call office operators, agents selling small savings schemes, petrol pump owners and retired teachers to further the cause of financial inclusion.

6. The real push has come from the government which is putting pressure on state-owned banks to achieve greater financial inclusion and even wants to include it in the criteria used for evaluating their performance.

7. Other state-owned banks such as Bank of Baroda and Oriental Bank of Commerce (OBC) are also in the process of firming up agreements with kirana store owners. Kirana store owners are already in the business of giving small domestic loans and will have the wherewithal to help banks with the know-your-customer (KYC) norms.

8.Norms allow a kirana store acting as a banking facilitator to disburse loans up to Rs 25,000 per borrower for which they will get a fee from the bank. The final liability for the loan will, however, rest with the bank only. They can also recover the same amount besides selling other financial products such as micro insurance, mutual fund and pension products.

Financial inclusion is a great step to alleviate poverty in India.

Enforcing environmental law

Union Minister of State for Environment and Forests Jairam Ramesh has acted boldly and impartially by relying on scientific expertise and rejecting the application from Vedanta Resources for forest clearance to start bauxite mining in Orissa's Niyamgiri hills. In doing so, he has laudably upheld due process, human rights, and environmental laws. The transparent manner in which the Ministry went about assessing environmental concerns and the impact the project would have on tribal groups in the proposed mining area before arriving at a decision is particularly noteworthy. Evidence collected by the Saxena Committee of the MoEF clearly warrants rejection of the proposal. The 72 million tonnes of bauxite ore deposits estimated to be available in Niyamgiri hills can feed the aluminium refinery of Vedanta Alumina Limited in Lanjigarh only for about four years at the expanded capacity being created. To sacrifice the rich ecology of the area for such a purpose would be unconscionable. There is little doubt that the mine would destroy the 7 sq km of forests that await inclusion in the Niyamgiri Wildlife Sanctuary, and deal a devastating blow to the Dongaria Kondh and Kutia Kondh tribal folk, who sustain themselves largely with forest produce.

Beyond the rejection of the forest clearance for the mining project, the Vedanta case is turning out to be an example of the forces eating into the environmental vitals of the country. If the violation of key laws such as the Forest (Conservation) Act, the Environment (Protection) Act, and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act by the mining company and its subsidiaries is brazen, the enabling role played by the Orissa government is deplorable. The State government has an interest in the project through a joint venture involving the Orissa Mining Corporation. Rather than adopt the legal process, it chose to file false certificates on forest rights claims of tribals to speed up MoEF clearance, and did little to stop illegal occupation of forest lands by the private mining company. Equally disturbing is the fact that the Vedanta refinery has expanded its capacity six-fold without environmental clearance. Against such a backdrop, Minister Jairam Ramesh deserves the nation's commendation for stopping the activity in its tracks. He should now launch investigations into violations by other mining leaseholders across the country, applying environmental laws with full force. The Vedanta case should also persuade the Supreme Court, which gave some approvals to the proponents, to rely on scientific data and reports in deciding appeals from extractive industries.

Foreign Exchange Market

The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries.

In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of its

• huge trading volume, leading to high liquidity
• geographical dispersion
• continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday
• the variety of factors that affect exchange rates
• the low margins of relative profit compared with other markets of fixed income
• the use of leverage to enhance profit margins with respect to account size

Over-the-counter (OTC) or off-exchange trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. It is contrasted with exchange trading, which occurs via facilities constructed for the purpose of trading (i.e., exchanges), such as futures exchanges or stock exchanges.

A floating exchange rate or fluctuating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. It is not possible for a developing country to maintain the stability in the rate of exchange for its currency in the exchange market.

There are economists who think that, in most circumstances, floating exchange rates are preferable to fixed exchange rates. As floating exchange rates automatically adjust, they enable a country to dampen the impact of shocks and foreign business cycles, and to preempt the possibility of having a balance of payments crisis. However, in certain situations, fixed exchange rates may be preferable for their greater stability and certainty. This may not necessarily be true, considering the results of countries that attempt to keep the prices of their currency "strong" or "high" relative to others, such as the UK or the Southeast Asia countries before the Asian currency crisis. The debate of making a choice between fixed and floating exchange rate regimes is set forth by the Mundell-Fleming model, which argues that an economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy. It can choose any two for control, and leave third to the market forces.

In cases of extreme appreciation or depreciation, a central bank will normally intervene to stabilize the currency. Thus, the exchange rate regimes of floating currencies may more technically be known as a managed float. A central bank might, for instance, allow a currency price to float freely between an upper and lower bound, a price "ceiling" and "floor". Management by the central bank may take the form of buying or selling large lots in order to provide price support or resistance, or, in the case of some national currencies, there may be legal penalties for trading outside these bounds.

A free floating exchange rate increases foreign exchange volatility. There are economists who think that this could cause serious problems, especially in emerging economies. These economies have a financial sector with one or more of following conditions:

• high liability dollarization
• financial fragility
• strong balance sheet effects

When liabilities are denominated in foreign currencies while assets are in the local currency, unexpected depreciations of the exchange rate deteriorate bank and corporate balance sheets and threaten the stability of the domestic financial system.

For this reason emerging countries appear to face greater fear of floating, as they have much smaller variations of the nominal exchange rate, yet face bigger shocks and interest rate and reserve movements.^[1] This is the consequence of frequent free floating countries' reaction to exchange rate movements with monetary policy and/or intervention in the foreign exchange market.

The number of countries that present fear of floating increased significantly during the nineties.^[2]

India Post

India's search for viable methods of creating a financially inclusive economy has a ubiquitous, albeit underutilised, ally — India Post. The world's largest postal network has over 1.55 lakh post offices, 89.76 per cent of which are in rural areas. On an average, a post office serves 7,175 people and covers an area of 21.21 sq. km, giving it a natural advantage to take financial services closer to the unbanked. A recent expert committee report makes a strong case for harnessing the Post Office Savings Bank (POSB) for achieving financial inclusion, as the reach of post offices is twice as extensive as that of all commercial banks put together. The time-tested credibility of POSBs, started in 1882, and the wide customer base of 206 million savings accounts, which held Rs. 56,369.77 crore as on March 31, 2009, make out a strong case for full-fledged banking operations for India Post. Against this backdrop, the XI Five Year Plan's proposal to set up a Post Bank of India merits serious consideration.

Key policy changes are in order, however. India Post now carries out its banking and insurance operations as an agency function of the Ministry of Finance. This raises issues relating to operational autonomy. To overcome this limitation, the expert committee's suggestion that India Post should engage with the Finance Ministry to “re-examine and expand its presently limited agency function” is an important starting point. The possible start of full-fledged banking operations, including lending, will also necessitate post office banks to be governed by the country's banking laws. For now, however, India Post is striving to be in sync with the times. Its recent step to facilitate remittances by NRIs is one indicator. Such efforts need to be taken further to make financial inclusion meaningful. As the expert committee points out, the advantage of India Post taking to banking operations is that it can bring a multiplicity of stakeholders on a common platform, for instance, central and State governments, microfinance institutions and technology providers, and serve the financially excluded. The tying up of user-accounts for rural job schemes is a welcome start, and can be expanded to include cash transfer schemes that benefit the poor. The committee's suggestion that post offices open low-cost accounts and provide micro-loans strengthens the case for post offices doubling as banks. The most important determinant of how well India Post rises to its potential to emerge as a lead player in financial inclusion, however, will be the quality of services it renders to its customers.

People before profits

If there is a single conclusion the Ministry of Environment and Forests can arrive at based on the report of the four-member committee led by Planning Commission member N.C. Saxena on the proposed open cast mining in Orissa's forested Niyamgiri hills, it is this: drop it. The violation of laws protecting the environment and the rights of tribals to facilitate the project proposed by Vedanta Resources is nothing short of scandalous. It is unconscionable that the Orissa government, in its eagerness to remove all obstacles to mining, has trampled over the rights of primitive tribal groups such as the Dongaria Kondh and Kutia Kondh residing in the areas proposed to be mined. The panel appointed by the Ministry of Environment and Forests makes it clear that due process was not followed to get the consent of the tribals for diversion of forest land. What is particularly egregious is the steamrolling of the people's opposition, ignoring the protection that Scheduled Tribes enjoy under Schedule V of the Constitution. The provisions of the Forest (Conservation) Act, the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, and the Environment (Protection) Act have been ignored by the district collectors of Rayagada and Kalahandi. The only proper course open to the MoEF, therefore, is to reject the proposal and ask the applicant to go back to the drawing board to explore alternatives.

It is natural that in a populous country such as India, alienation of land is bound to be contentious as people are sought to be displaced in favour of profit-oriented extractive industries with no long-term stakes in the environment. There is also the question of externalities. Perhaps the best-known example in this regard is the loss of ecology and devastating water pollution caused by mining in Kudremukh. The mines here silted dams and affected agriculture in surrounding areas before the activity was ended five years ago. It is welcome that the Saxena Committee has sounded a warning on the ecological fragility of Niyamgiri, and underscored the estimated losses from the proposed project. That includes a staggering 121,337 trees, innumerable ground flora, habitat of elephant and some rare fauna, not to speak of tribal livelihoods. Also, the mountain is sacred to the beleaguered Dongaria Kondh, who have become emblematic of global tribal struggles and even inspired comparisons with the fictional Na'vi people of James Cameron's Avatar. The MoEF and the Orissa government must now unsparingly investigate the reported violation of Environment Impact Assessment guidelines by Vedanta at its alumina plant and uphold the process of law in Niyamgiri and elsewhere.

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Summary:

1. Proposed open cast mining in Orissa's forested Niyamgiri hills, project proposed by Vedanta Resources

2. Lead to the violation of laws protecting the environment and the rights of tribals.

3. Primitive tribal groups such as the Dongaria Kondh and Kutia Kondh residing in the areas proposed to be mined.

4. The provisions of the Forest (Conservation) Act, the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, and the Environment (Protection) Act have been ignored by the district collectors of Rayagada and Kalahandi.

5. It is natural that in a populous country such as India, alienation of land is bound to be contentious as people are sought to be displaced in favour of profit-oriented extractive industries with no long-term stakes in the environment. There is also the question of externalities. Perhaps the best-known example in this regard is the loss of ecology and devastating water pollution caused by iron ore mining in Kudremukh (Karnataka). The mines here silted dams and affected agriculture in surrounding areas before the activity was ended five years ago.

Young and jobless

The developing world is home to nearly 90 per cent of the economically active youth, with Asia alone accounting for some 60 per cent. India, with half its population under 25 years of age, has huge stakes in shaping the prospects of an entire new generation.

Urban lessons from Brazil

India has valuable lessons to learn from Brazil's urban failures as much as from its innovations. A recent report, published by the United Nations Population Fund and the International Institute for Environment Development, concludes that Brazil's urban policies over the last four decades failed because they were too slow to respond to changes and address inequalities.
The growth of Brazilian cities coincided with a decline in agricultural production. There was an exodus from rural areas. Instead of paying attention to the housing needs of the migrants and other workers, policymakers left them at the mercy of market forces. Numerous underserviced and crime-ridden slums sprang up in the peripheries of the cities. Corrective efforts were too little, too late. As a result, these cities now face severe inequalities, tensions, and ecological deterioration. This is a warning to Indian cities with inept housing policies. The urgent need is for a bold plan that reserves sufficient land and built units for those who cannot access formal housing markets.

Brazil's experiment with regional planning is also of relevance to India. From the 1970s, the South American country relied on incentives to encourage growth in 130 small cities so as to relieve pressures on larger cities. This did not work as planned. India has tried similar policies from the mid-1970s with the same lack of success. Brazil's experience demonstrates that unless infrastructure, including schools and hospitals, are developed, growth cannot be directed to second- and third-tier cities. The City Statute enacted in Brazil in 2001 is a unique legal instrument appreciated worldwide for its potential benefits. Among other things, it helps municipalities democratise urban management through public hearings and participatory budgeting. Indian urban local bodies must adopt similar instruments. However, they should guard against their misuse, as evidenced in Brazil. Municipalities are empowered to negotiate with public groups and create Special Zones of Social Interest. This is meant to protect low-income areas from real estate speculation but in practice these powers have often been subverted by influential high-income groups. Urbanisation offers tangible benefits but to realise them, planning must keep pace with growth and be equitable.

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Summary:

United Nations Population Fund and the International Institute for Environment Development, concludes Brazil's urban policies over the last four decades failed.

Reason of failure: They were too slow to respond to changes and address inequalities

1. The growth of Brazilian cities coincided with a decline in agricultural production.

So

Large number of people migrated from rural areas to urban areas.

But

Instead of paying attention to the housing needs of the migrants and other workers,
policymakers left them at the mercy of market forces.

It lead to

Numerous underserviced and crime-ridden slums sprang up in the peripheries of the cities. Corrective efforts were too little, too late. As a result, these cities now face severe inequalities, tensions, and ecological deterioration.

Solution to this problem:

This is a warning to Indian cities with inept housing policies. The urgent need is for a bold plan that reserves sufficient land and built units for those who cannot access formal housing markets.


2. Brazil's experiment with regional planning: They relied on incentives to encourage growth in 130 small cities so as to relieve pressures on larger cities. India has tried similar policies from the mid-1970s with the same lack of success.

But

This did not work as planned

Why?

Brazil's experience demonstrates that unless infrastructure, including schools and hospitals, are developed, growth cannot be directed to second- and third-tier cities.

Urbanisation offers tangible benefits but to realise them, planning must keep pace with growth and be equitable.