India Japan China Relations

China is most important for India, Japan

The deepening relationship between India and Japan is driven by a combination of economic and strategic considerations. Japan, with its large but stagnating economy, is keen on the rapidly growing Indian economy. India, too, is interested in boosting trade with Japan and attracting investment. The recently concluded Comprehensive Economic Partnership Agreement sets the stage for closer economic relations. At the strategic level, New Delhi and Tokyo are concerned about China’s swagger and assertiveness on a range of bilateral and regional issues. For India, closer ties with Japan are not only important in their own terms but also provide strategic pay-offs with respect to China. At a minimum, it will indicate to China that India has an important role in the emerging Asian security landscape. This, in turn, will strengthen India’s hand in dealing with China on bilateral matters. Nevertheless, India should not overestimate the importance of that aspect. Nor should we underestimate the negative fallouts. Managing ties with China is the most important challenge for Indian foreign policy. While there are major outstanding disputes, there are important areas of cooperation —such as climate change. China is India’s largest trading partner. New Delhi is concerned about trade imbalances, but let us not forget that the volume of trade with China is nearly six times that of Japan. From a strategic standpoint, it would be unwise to convey an impression to China that our relationship with Japan is primarily directed against it. We have to cope with the rise of China without stoking its insecurity. Japan too has much at stake with China. Japan’s trade with China in 2009-10 was $232 billion compared with $10.3 billion with India. Tokyo also seeks Beijing’s cooperation in dealing with key security challenges in East Asia. For both India and Japan, then, their relationships with China will remain more important than their own bilateral ties.

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Indo-Japanese ties can keep China in check

For both India and Japan, China is a challenge as well as an opportunity. Challenge because China’s assertive posture does not augur well for peace and stability in Asia. China’s exclusive claim over the whole of the south China Sea and territorial disputes over Senkaku/Diaoyu islands makes the security environment in the East Asian region fragile. China’s military modernisation and enhancement of power projection capability cause considerable disquiet in that part of the world. Similarly, Chinese stance over Arunachal Pradesh, Tibet and the Dalai Lama issue are irritants in India-China relations. The issue of stapled visas and denial of visa to a senior army official do not please India as well. China’s port development ventures in Sri Lanka (Hambantota) and Gawadar (Pakistan) with the suspected objective of increasing its naval presence raise uncomfortable questions in India. Both India and Japan as well as other nations in Asia would certainly rejoice if China’s economic rise is peaceful. There is no guarantee, however, that this is the case. Such an environment propels both India and Japan to share commonality of interests. Engaging China, rather than infuriating it by designing a strategy of containment, would be in the larger interests of securing peace and stability in Asia. The opportunity is clearly demonstrated in the burgeoning ties in the economic realm. Despite tensions between India and China, and Japan and China, their bilateral economic relations have been flourishing. Japan cannot afford to derail the process of deepening economic ties with China. Similarly, the irritants between India and China in the political domain have not deterred strengthening of economic ties between the two. Both India and Japan have a huge stake in the Chinese market and they cannot afford to undo this advantage. For India, Japan as a partner in development vis-à-vis China, would serve a twin purpose: to help engage China, and also keep China under check.

universal social security

Times of adversity call for a larger role by states to protect the vulnerable. One far-reaching outcome of the recent global economic downturn is the reiteration of the continued importance of the state as a protector of the labour force. The proposal by the International Labour Organisation and the World Health Organisation for a United Nations Social Protection Floor (SPF) Initiative, which has been in the making for over a year, is a vital intervention. The global social security floor comprises four elements: “universal child benefits; universal access to essential health services; modest financial relief for the working poor unable to earn enough for their families to escape poverty as a result of underemployment or low productivity; and basic tax-financed pensions for the old, the disabled and those who have lost the main breadwinner in a family.” Today's shocking reality is that a mere 20 per cent of the world's population has adequate social security protection, with the advanced economies having the lion's share of this coverage. Europe, at 25 per cent of GDP, has the highest level of social security expenditure, and Africa a meagre 4.3 per cent. Even within successful models, the Nordic states, which base their welfare systems on the principle of entitlements, have the more effective systems. A condition precedent for a global social security floor is direct state involvement, both economic and institutional.

Experience from the developing world reflects two massive failures. One is reliance on the ‘trickle-down' effect. The other is that social security measures in these countries, mainly colonial in origin, were until recently designed to cater largely to the formal workforce. The changeover to universal social security in their case demands three things. First, ensure universal provision of a set of basic services. Secondly, see to it that those who are economically active but fall into adversity are cushioned from slipping into poverty. Thirdly, support — through social transfers — those who are not at an economically productive stage. There have been some recent signs of change, although piecemeal, across the developing world. Schemes such as India's National Old-Age Pension Scheme, Brazil's Bolsa Familia, and Mexico's Oportunidades are examples of building blocks that can be used to create effective social protection systems. The challenge now is for states to re-configure their public finances and win political support to put in place a basic floor below which their residents do not fall.

Water Law and Resource Management

It covers a vast range of water-related issues with legal ramifications not only in the context of large dams and irrigation canals but in the groundwater and tank irrigation settings as well.

With the institutional and governance issues getting greater importance in the policy discourse in recent years, the relevance of legal aspects, which are an integral part of the governance system, is also increasing in many fields. Understandably, one of these fields relates to water — a resource the scarcity or mismanagement of which could be a major constraint for food security and economic development.

What are the legal dimensions of water resource management? How law can provide solutions to water-related conflicts and allocations issues? Are the existing legal systems capable of addressing these challenges? What changes are needed in the legal system? What are the prospects for water law reform now and in the foreseeable future? This book seeks to address these and related questions from a theoretical as well as a practical perspective.

As many as 25 eminent scholars with a lot of research and administrative experience to their credit have contributed to this volume. It testifies to the scholarship and practical insights of the authors as well as the editor. The chapters are arranged in seven parts, each part dealing with different dimensions of the nexus between water and law. They are well sequenced, ensuring a logical flow of the themes discussed.

Notably, the book provides an index that lists the important water-related statutes operating both at the Central and State levels. The subject-indexing system is excellent and it should enable the reader to pursue with ease the subject or theme of his interest.

Range of issues

The book covers a vast range of water-related issues with legal ramifications not only in the context of large dams and irrigation canals but in the groundwater and tank irrigation settings as well. Issues at both macro and micro levels are dealt with. For instance, some of the chapters discuss the legal issues affecting Centre-State relations in the matter of water resource development, allocation, and management.

Some others dwell upon jurisprudential issues in the specific context of water rights and entitlements as well as in the general context of water institution and governance. Conceptual issues involved in the fundamental question of rights vs. duties are also covered in one of the chapters.

In two different chapters, the legal issues involved in one of the least-studied areas, namely floods, and in one of the most-studied areas, namely water pollution, are discussed at length. Sensitive aspects of water resource development, such as environmental impact, population displacement, and resettlement, are analysed in quite a few chapters.

Although the general focus of the book is on water issues from a national perspective, the final chapter highlights the international dimensions of water law, especially in the context of trans-boundary river basins.

Meticulous

Overall, it is a well-conceived and well-written volume, for which both the editor and the contributorsdeserve full appreciation. Their painstaking effort and the thoroughness of their work are remarkable.

What is unique about the book is that it does not deal with water law per se but with water law as it relates to various physical, economic, institutional, and policy aspects affecting water resource management in India. In short, this is not a book on water law but a book on the implications of water law for water resource management in India. Despite the legalistic nature of the subject, the language used in most of the chapters is easy to follow even by the lay people.

Undoubtedly a major addition to existing literature, the book fills a gap in one of the less-researched areas of water resource management. It will be useful to students of water resource management and connected areas. It should serve as a valuable source for senior researchers working in the water-law interface. I am happy to commend the book to everyone, academic and non-academic, interested in the study of water and its sustainable management.

WATER AND THE LAWS IN INDIA: Edited by Ramaswamy R. Iyer; Sage Publications India Pvt. Ltd., B1/I-1, Mohan Cooperative Industrial Area, Mathura Road, New Delhi-110044. Rs. 995.

Towards sustainable water management

An international private-social group foresees India’s water demand exceeding availability by a factor of two by 2030. Time is now for India to take on the daunting task of formulating a unifying national water policy.

The 2030 Water Resources Group is a consortium of private-social sector organisations formed in 2008 to provide insights into emerging world-wide water issues. In a report, “Charting our water future” issued in 2009, the group provides a candid, fact-based integrated assessment of the global water situation over the next two decades.

Globally, current withdrawals of about 4,500 cubic km exceed the availability of about 4,200 cubic km. By 2030, the demand is expected to increase to about 6,900 cubic km, with a slight drop in availability to 4,100 cubic km. Thus, by 2030, a global deficit of 40 per cent is forecast. For India, the annual demand is expected to increase to almost 1,500 cubic km, against a projected availability of 744 cubic km; a deficit of 50 per cent. The report admits unavoidable uncertainties in these estimates. As an independent check, an alternative perspective merits consideration.

India’s average annual precipitation is about 1,170 mm, and the land area is 3.28 million sq. km. Thus, the volume of annual precipitation input is 3,840 cubic km. The projected availability of 744 cubic km constitutes about 19 per cent of this amount. In comparison, California, known for its spectacular hydraulic-engineering structures, diverts about 18 per cent of its annual rainfall. For a variety of reasons, California is already contemplating a 20 per cent reduction in water use over the coming decade. Conservatively, if we assume that India may harness 15 per cent of rainfall with careful management, an annual availability of about 600 cubic km is perhaps a reasonable figure to comprehend the scope of India’s water crisis.

Looking to the future, the report stresses that closing the gap between supply and demand will be very difficult. Rather than claiming to provide solutions to all water problems, the authors cautiously consider the report a starting point for meaningful dialogue among all stakeholders for action towards credible solutions. In this spirit, we may examine the implications of their findings to India’s water situation.

In the broadest sense, two questions arise: What do the findings portend for India’s economic growth? How should India respond to the impending crisis?

Concerning economic growth, even a modest 6 per cent annual growth implies a real tripling of the economy by 2030. Is this achievable, if the annual availability is limited to about 600 cubic km? What rate of economic growth should India reasonably plan for?

The question how India should respond is of fundamental importance. India’s greatest challenge is to set in place an equitable, efficient system of governance for sharing a finite resource among all segments of society, simultaneously preserving the integrity of the resource for future generations.

At the time of independence, the annual availability of water in abundant quantities was taken for granted, and India’s Constitution declared water to be a State subject, with the Union government playing a role in inter-State issues. The Constitution does not explicitly recognise water’s unique attributes as a finite resource, widely variable in space and time, and vital for the sustenance of all living things.

At the beginning of the 21st century, when confronted with the imperative of sharing this vital resource among all segments of society according to the values of justice and equality assured in the preamble, one finds a conspicuous lack of philosophical authority necessary to make decisions on the allocation, prioritisation, protection, regulation, and management of water resources. This want of a philosophical basis is manifest in a lack of a national water policy. If so, what might be an appropriate philosophical approach?

India is about as large as Europe without Russia. Both have long histories of human habitation. India comprises 28 States and 7 Union Territories. Europe is a union of 27 independent nations. In 2000, the European Union issued the far-reaching Water Framework Directive with the goal of achieving sustainable management of water. The Directive requires all member-states to establish water laws conforming to common hydrological principles applied over river basins, with the active participation of citizens. The Directive’s philosophical foundation is set forth in the preamble: “Water is not a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such.”

In 1976, a committee on Earth Resources, Time, and Man of the International Union of Geological Sciences observed: “Mankind is on the threshold of a transition from a brief interlude of exponential growth to a much longer period characterised by rates of change so slow as to be regarded essentially as a period of non-growth. Although the impending period of transition to very low growth rates poses no insuperable physical or biological difficulties, those aspects of our current economic and social thinking which are based on the premise that current rates of growth can be sustained indefinitely must be revised. Failing to respond promptly and rationally to these impending changes could lead to a global ecological crisis in which human beings will be the main victims.” This observation clearly anticipates the findings of the 2030 Water Resources Group.

Even with the best available technologies, the finiteness and unpredictable variability of water resource systems place severe limits on human aspirations for prosperity. At present, India is in a difficult position of not only accepting this reality but also having to take concrete steps to adapting to the reality.

A related development. A November 2009 report, “A framework for India’s water policy” of the National Institute of Advanced Studies, Bangalore, discusses India’s water endowments and the human challenges confronting sustainable water management.

National Water Policy

The Union Ministry of Water Resources has undertaken a review and revision of the National Water Policy (NWP) 2002. The present article is intended as a contribution to that process. It will not offer a detailed critique of the Ministry's discussion paper, but will outline an approach for its consideration.

Need for radical overhaul

Ideally, a review at this stage should take climate change into account, but while we know that climate change may mean increased precipitation in some areas, increased drought in some others, and increased variability of precipitation, we do not yet know in detail precisely what will happen, when and where. Studies on these matters are still going on. A policy response will have to wait for some reasonably definitive findings on them.

However, an overhaul of the NWP is necessary even without reference to the issue of climate change. The reason for saying so is that there has been a gross mismanagement of water, as evidenced by the following selective list:

• intermittent, unreliable, unsafe and inequitable water supply in urban areas;

• rivers turned into sewers or poison, and aquifers contaminated;

• intractable water-related conflicts between uses, sectors, areas, States;

• major and medium irrigation systems in disarray, rendering poor and unreliable service, and characterised by inequities of various kinds;

• alarming depletion of aquifers in many parts of the country;

• inefficiency and waste in every kind of water-use;

• the environmental/ecological impacts of big water-resource projects, poor EIAs, the displacement of people by such projects and the general failure to resettle and rehabilitate project-affected persons; and so on.

The need for a radical reform of water policy is evident.

Not revision but new start

If so, the kind of transformation that is needed will not be achieved by incremental changes in the NWP 2002. If we start from NWP 2002, our thinking will quickly fall into well-worn grooves, and getting out of them will be difficult. It is necessary to put aside the NWP 2002, and start from scratch.

Reversals of past approaches

Such an exercise will involve many reversals of past approaches. For instance, reversing the usual approach of projecting a future demand and bringing about a supply-side response to meet that demand, we must start from the fact that the availability of fresh water in nature is finite, and learn to manage our water needs within that availability. This will mean a stringent restraint on the growth of ‘demand' for water (other than basic needs) which will be difficult and will involve painful adjustments; but the effort is inescapable.

A second reversal will have to be on the supply side. Primacy will have to shift from large, centralised, capital-intensive ‘water resource development' (WRD) projects with big dams and reservoirs and canal systems, to small, decentralised, local, community-led, water-harvesting and watershed-development programmes, with the big projects being regarded as projects of the last resort; and the exploitation of groundwater will have to be severely restrained in the interest of resource-conservation as well as equity.

A third reversal will have to be in relation to rivers, from massive interventions in flows and maximal abstraction of waters to letting the rivers flow and keeping interventions to the minimum. Instead of killing rivers and then trying to revive them, we must learn to keep rivers alive, flowing and healthy. A fourth reversal will have to be in the relative roles of the state and the community (from ‘eminent domain' or sovereign powers of the state to the state as trustee holding natural resources in public trust for the community). There may have to be other reversals. The intention is not to discuss these matters in detail but to indicate the kind of changes that will be needed.

Multiple perspectives

The changes cannot be piecemeal and fragmented. They need to be integral parts of a holistic vision. One difficulty in this regard is the multiplicity of perspectives on water that need to be taken into account. For instance, consider the following:

• the rights perspective, focussing on the fundamental or human right to water, traditional rights of access of communities (tribal or other) to rivers, lakes, forests, and other sources of sustenance and livelihoods, and so on;

• the social justice/ equity perspective, concerned with issues of inequity in urban and rural water and sanitation services, injustices to the poor and to the Scheduled Castes or Tribes, forced displacement by major projects and deficiencies or failures in resettlement /rehabilitation, inequities in access to irrigation water in the command areas of projects, etc;

• the women's perspective stressing the burden on women of fetching water from long distances as well as managing water in the home, with no voice in water-planning or water-management institutions;

• the community perspective urging the right relationship between state and civil society, the empowerment of people vis-à-vis the state (or the corporates), the community management of common pool resources, mobilisation of people for local water augmentation and management, social control of water use and sanctions against misuse, voice in water policy formulation and water management, etc;

• the state perspective, concerned with legislation, policy formulation, planning, administration, ‘governance' at all three levels, ensuring/enforcing rights, providing or facilitating or regulating water supply and sanitation services, preventing or resolving or adjudicating inter-state/inter-sector/inter-use/inter-area water disputes, prescribing and enforcing quality standards, managing water relations with other countries, ensuring compliance with international law, and so on;

• the engineering perspective (which needs no explanation);

• the water quality perspective concerned with the enforcement of water quality standards, and the prevention and control of pollution and contamination of water;

• the citizen/ water-user perspectives tending to assert requirements for various uses (drinking, domestic, commercial, industrial, agricultural, etc) quite strongly, but showing poor recognition of the obligations of economical and efficient use, avoidance of waste and conflict, conservation of the resource, and protection of the environment;

• the economic perspective that sees water as economic good subject to market forces, and argues for water markets, the full economic pricing of water, the privatisation of water services, private sector participation in water resource projects, etc;

• the ‘growth' perspective focussing on economic growth at a certain desired rate, and tending to be impatient with social, community, rights, equity, environmental or other perspectives;

• the business perspective, concerned with a supply response to demand, the objective being profits, professing ‘corporate social responsibility' but tending to subordinate it to the imperative of profits;

• the legal perspective, which is not really a separate perspective, as legal issues arise in all perspectives; but specifically concerned among other things with the constitutional division of legislative powers, Centre-State and inter-State relations on water, inter-State river-water disputes, riparian law, international water law, questions of ownership and/or control of water, etc. (all these being not merely legal but also socio-political questions); and

• the environmental/ecological perspective, concerned with the protection of the environmental/ecological system from the impacts of ‘developmental' activity, and the prescription/monitoring of remedial measures.

The foregoing enumeration of perspectives will immediately show that a multiplicity of disciplines is involved. The formulation of a national water policy must necessarily be an inter-disciplinary exercise.

Overarching perspective

If these perspectives are to be integrated and harmonised into a coherent whole, some will have to be regarded as the overarching, governing perspectives, and all others subsumed under them. In the author's view, the ecological and social justice perspectives will have to be the overarching perspectives, and all other perspectives subordinated to them. In particular, engineering and economics, which have so far been the dominant disciplines, must be firmly kept under check by ecology and by the idea of social justice.

Dharma perspective

Keeping in mind Gandhiji's firm conviction that rights flow from responsibilities, we can consider combining the ecological and social justice perspectives into a moral responsibility perspective or, in other words, an ethical or dharma perspective. Let us think in terms of our responsibility or dharma in relation to:

• the poor, deprived, disadvantaged, or disempowered;

• other humans sharing the resource with us, including those in our State or other States, our country or other countries, our generation or future generations;

• other species or forms of life;

• rivers, lakes, aquifers, forests, nature in general, Planet Earth itself.

That is the overarching perspective that this writer would like to propose. In place of the current slogan of Integrated Water Resource Management or IWRM about which he has strong reservations, he would like to offer the alternative formulation of Responsible, Harmonious, Just and Wise Use of Water.

Alas, RHJWUW is not a catchy term like IWRM. The latter term has come to stay, but it should really be understood to mean the former.

The Arctic's strategic value for Russia

Russia and the United States have made headway in improving their relations on arms control, Afghanistan and Iran but there is one area where their “reset” may yet run aground — the Arctic.

The U.S. military top brass recently warned of a new Cold War in the Arctic and called for stepping up American military presence in the energy-rich region.

Earlier this month, U.S. Admiral James G. Stavridis, supreme NATO commander for Europe, said global warming and a race for resources could lead to a conflict in the Arctic because “it has the potential to alter the geopolitical balance in the Arctic heretofore frozen in time.”

Echoing similar views, Coast Guard Rear Admiral Christopher C. Colvin, who is in charge of Alaska's coastline, said Russian shipping activity in the Arctic Ocean was of particular concern for the U.S. He called for more military facilities in the region. “We have to have a presence up there to protect our claims for the future, sovereignty claims, extended continental shelf claims,” the Rear Admiral told the Associated Press aboard a C-130 flight over the Arctic Ocean.

The statements are in line with the U.S. policy laid down in a National Security Presidential Directive George W. Bush signed in January 2009. It calls for “deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence, and maritime security” in order to “preserve the global mobility of the United States military and civilian vessels and aircraft throughout the Arctic region” including the North Sea Route along Russia's Arctic coast, which Moscow regards as its national waterway.

Russia is the prime target of the U.S. expansionist strategy. Two months ago, the first Russian supertanker sailed from Europe to Asia along the North Sea route. Next year, Russia plans to send more ships across the Arctic route, 9,000 km off the traditional route via the Suez Canal.

The U.S. Geological Service believes that the Arctic contains up to a quarter of the world's unexplored deposits of oil and gas, 60 per cent of them in the Russian sector of the region.

Washington also disputes Moscow's effort to enlarge its Exclusive Economic Zone in the Arctic Ocean. Under the 1982 United Nations Law of the Sea Convention, a coastal state is entitled to a 200-nautical mile EEZ and can claim a further 150 miles if it proves that the seabed is a continuation of its continental shelf. Russia was the first to apply for an additional EEZ in 2001 but the U.N. Commission on the Limits of the Continental Shelf asked for harder scientific evidence to back the claim. Moscow said it would resubmit its claim in 2013 and the other littoral states plan to file theirs. However, the U.S. has not ratified the U.N. Convention as many Congressmen fear it would restrict their Navy's “global mobility.”

Despite the end of the Cold War, the potential for conflict in the Arctic has increased recently the scramble of the five Arctic littoral states — Russia, the U.S., Canada, Norway and Denmark (through its control of Greenland) —for chalking out claims to the energy-rich Arctic as the receding Polar ice makes its resources more accessible and opens the region to round-the-year shipping. All claims are overlapping and the five states are locked in a multitude of other bilateral disputes. But, at the end of the day, it is Russia against the others, all NATO members.

The U.S. and Canada have agreed to put aside, for the time being, their dispute over navigation rights off the Canadian coast to stand up jointly to Russia.

Last year NATO, for the first time, officially claimed a role in the Arctic, when Secretary-General Jaap de Hoop Scheffer told member-states to sort out their differences within the alliance so that it could move on to set up “military activity in the region.”

“Clearly, the High North is a region that is of strategic interest to the Alliance,” he said at a NATO seminar in Reykjavik, Iceland, in January 2009.

Since then, NATO has held several major war games focussing on the Arctic region. In March this year, 14,000 NATO troops took part in the “Cold Response 2010” military exercise held in Norway under a patently provocative legend: the alliance came to the defence of a fictitious small democratic state, Midland, whose oilfield is claimed by a big undemocratic state, Nordland. In August, Canada hosted its largest yet drill in the Arctic, Operation Nanook 2010, in which the U.S. and Denmark took part for the first time.

Russia registered its firm opposition to the NATO foray, with President Dmitry Medvedev saying the region would be best without NATO. “Russia is keeping a close eye on this activity,” he said in September. “The Arctic can manage fine without NATO.” The western media portrayed the NATO build-up in the region as a reaction to Russia's “aggressive” assertiveness, citing the resumption of Arctic Ocean patrols by Russian warships and long-range bombers and the planting of a Russian flag in the North Pole seabed three years ago.

It is conveniently forgotten that the U.S. Navy and Air Force have not stopped Arctic patrolling for a single day since the end of the Cold War. Russia, on the other hand, drastically scaled back its presence in the region after the break-up of the Soviet Union. It cut most of its Northern Fleet warships, dismantled air defences along its Arctic coast and saw its other military infrastructure in the region fall into decay.

The Arctic has enormous strategic value for Russia. Its nuclear submarine fleet is based in the Kola Peninsula. Russia's land territory beyond the Arctic Circle is almost the size of India — 3.1 million sq km. It accounts for 80 per cent of the country's natural gas production, 60 per cent of oil, and the bulk of rare and precious metals. By 2030, Russia's Arctic shelf, which measures 4 million sq km, is expected to yield 30 million tonnes of oil and 130 billion cubic metres of gas. If Russia's claim for a 350-mile EEZ is granted, it will add another 1.2 million sq km to its possessions.

A strategy paper Mr. Medvedev signed in 2008 said the polar region would become Russia's “main strategic resource base” by 2020. Russia has devised a multivector strategy to achieve this goal. First, it works to restore its military capability in the region to ward off potential threats. Russia is building a new class of nuclear submarines, Borei (Northern Wind) that will be armed with a new long-range missile, Bulava. Navy Chief Admiral Vladimir Vysotsky said recently he had also drawn up a plan to deploy warships in Russia's Arctic ports to protect polar sea routes.

A second strategy is to try and resolve bilateral disputes with other Arctic nations. In September, Russia and Norway signed a border pact settling their 40-year feud over 175,000 sq.km in the Barents Sea and agreeing to jointly develop seabed oil and gas in the region. Even as Russia continues to gather geological proof of its territorial claims in the Arctic, it is ready for compromises. Canadian Foreign Minister Lawrence Cannon did not rule out, after his recent talks in Moscow, that Canada and Russia could submit a joint application to the U.N. for the Lomonosov Ridge, an underwater mountain stretching from Siberia to Canada, which both countries claim as an extension of their continental shelves.

A third direction of Russia's policy is to promote broad international cooperation in the region. Addressing Russia's first international Arctic conference in Moscow in September, Prime Minister Vladimir Putin called for joint efforts to protect the fragile ecosystem, attract foreign investment in the region's economy and promote clean environment-friendly technologies. He admitted that the interests of the Arctic countries “indeed clash,” but said all disputes could be resolved through international law.

Interestingly, Russia has recently sought to alert its neighbours to China's Arctic ambitions. The rising Asian giant is building large ice-breakers, sending warships in the Arctic Ocean and wants to play “an indispensable role” in the region, according to Chinese Rear Admiral Yin Zhuo. Commenting on China's growing presence in the Arctic, Admiral Vysotsky said last month that notwithstanding differences among countries in the region, “most problematic relations may emerge with nations that are not members of the Arctic Council.”

This is a direct invitation to the U.S. and other Arctic nations to overcome Cold War stereotypes, abandon their brawl and face the challenges from new claimants.

Census of Marine Life (CoML)

The first-ever Census of Marine Life (CoML), a mammoth decade-long exercise involving more than 2,700 scientists from over 80 countries, has been successfully completed. The painstaking research has unearthed nearly 250,000 marine species of an estimated one million. About 6,000 new species have also been discovered. The landmark exercise marks a remarkable beginning in identifying and mapping the diversity, distribution, and abundance of marine organisms. Though long-distance migration of many predators like tuna and sharks was tracked, large areas of the oceans, mainly the Indian Ocean, have not been fully explored. While ten marine hotspots were identified, including one in the Indian Ocean, many biodiversity hotspots await detailed investigation. This is because the oceans cover 75 per cent of the earth’s surface, and investigating their surface and depths requires tremendous scientific expertise and huge investments. The good news is that even though the census has been completed, several national and regional initiatives started during the CoML programme will continue to operate with support from government and non-government agencies. Unlike other major projects such as the mapping of the human genome, the scope of this study is undefined. Thus the CoML provides an ideal platform for incorporating diverse inputs from future studies to help us understand the big picture. It will also serve as the baseline for evaluating the future impact of human intervention on sea animals.

The CoML facilitated the use of diverse technologies on a large scale, technologies that are of continuing use. For instance, there are special sonar devices which allow us to see how marine life assemble in schools and move both vertically and laterally over thousands of square kilometres. Thanks to the use of modern techniques, scientists were also able to have a glimpse of the hitherto unknown world of marine animals. One finding of the study which is a cause for concern is that the fate of many animals living in easily accessible habitats appears gloomy. Large fishes and marine mammals like sea turtles and tuna have declined by 90 per cent on an average due to over-fishing and/or pollution. Apart from being an invaluable source of food, the oceans produce 70 per cent of oxygen present in the atmosphere, and also absorb one-third of global carbon dioxide emissions. All these are warning signs that oceans, the lifeline for all things living on earth, may well turn into a watery grave if damage to marine life continues unabated.

Sedition versus free speech

It is deplorable that three sentences uttered at a seminar relating to the status of Kashmir within India should have evoked such zealous hyper-patriotic anger and resulted in demands for invoking harsh sedition laws. Writer and social activist Arundhati Roy has strong views on the strife-torn and troubled Valley, which many may disagree with, or regard as extremely contentious. But what possible justification can there be — as the Bharatiya Janata Party has outrageously demanded — for slapping a case against her under Section 124 (A) of the Indian Penal Code, for exciting “disaffection” towards or bringing “hatred or contempt” against the government? Do we lock up or threaten to silence our writers and thinkers with an archaic section of the law that carries a maximum penalty of life imprisonment, merely because they speak their minds? Why is it criminal to suggest that Kashmir's status in India is not settled despite the accession? Aren't so many others in Jammu and Kashmir saying as much? Didn't Chief Minister Omar Abdullah recently remark that the State had only acceded to, and not merged with, the Indian Union? The central government would do well publicly to make a stand and deny reports that it is considering pressing sedition charges against Ms Roy and Hurriyat leader Syed Ali Shah Geelani, who addressed the same seminar. Courts too must apply their mind and refuse to entertain frivolous and vexatious petitions that make such outrageous allegations.

In his classic defence of free speech, On Liberty, John Stuart Mill laid down what is known as the ‘harm principle.' It postulates that the only justification for silencing a person against his will is to prevent him from causing harm to others. It is to this powerful libertarian mid-19th century principle that we owe the idea that free speech cannot be proscribed merely because we find it disagreeable, and that curbs may be imposed only if such expression constitutes a direct, explicit, and unequivocal incitement to violence. There is no such nexus in Ms Roy's statements on Kashmir, which are shaped around the theme of gross human rights violations and (as she points out in a statement: "Pity the Nation that has to silence its writers" ) “fundamentally a call for justice.” It is tragi-comic that there is talk of ‘sedition' at a time when it is regarded as obsolete in many countries. Courts have ruled that laws that aim to punish people for bringing a government into hatred or contempt are frighteningly broad and risk being used to suppress radical political views. In Britain, the last completed trial in a sedition case dates back to 1947. In the United States, Supreme Court rulings have rendered toothless the most recent sedition law, the Smith Act enacted in 1940. The controversy over Ms Roy's remarks is essentially much ado about nothing.

UID

The UID project has both ‘security' and ‘developmental' dimensions. The former leads to an invasive state; the latter leaves us with a retreating state.

Is identity the “missing link” in India's efforts to rise as an “inclusive” economic superpower? Can an identity-linked and technology-based solution change the face of governance in India? Given the euphoria around the Unique Identification (UID) project, one is tempted to believe so. However, a careful look at the project would show that the euphoria is just hyperbole; only the politically naïve can afford to ignore the far-reaching implications of this Orwellian project.

One can summarise the criticisms of the UID project under four heads. First, the project would necessarily entail the violation of privacy and civil liberties of people. Second, it remains unclear whether biometric technology — the cornerstone of the project – is capable of the gigantic task of de-duplication. The Unique Identification Authority of India's (UIDAI) “Biometrics Standards Committee” has noted that retaining biometric efficiency for a database of more than one billion persons “has not been adequately analysed” and the problem of fingerprint quality in India “has not been studied in depth”. Third, there has been no cost-benefit analysis or feasibility report for the project till now. Finally, the purported benefits of the project in the social sector, such as in the Public Distribution System (PDS), are largely illusive. The problem of duplicate ration cards is often hugely exaggerated. Even so, some States have largely eliminated duplicate ration cards using “lower” technologies like hologram-enabled ration cards.

In this larger context, the UID project has two distinct political dimensions. The first dimension is that the project is fundamentally linked to “national security” concerns rather than “developmental” concerns. In fact, the marketing team of the UIDAI has always been on an overdrive to hush up the security angle, and play up the developmental angle, to render it more appealing.

The first phase of today's UID project was initiated in 1999 by the NDA government in the wake of the Kargil War. Following the reports of the “Kargil Review Committee” in 2000, and a Group of Ministers in 2001, the NDA government decided to compulsorily register all citizens into a “National Population Register” (NPR) and issue a Multi-purpose National Identity Card (MNIC) to each citizen. To ease this process, clauses related to individual privacy in the Citizenship Act of 1955 were weakened through an amendment in 2003. In sum, the ground work for a national ID project was completed by 2003 itself.

The parallels between the UPA's UID and the NDA's MNIC are too evident to be missed, even as the UPA sells UID as a purely “developmental” initiative. The former chief of the Intelligence Bureau, A.K. Doval, almost gave it away recently, when he said that UID, originally, “was intended to wash out the aliens and unauthorised people. But the focus appears to be shifting. Now, it is being projected as more development-oriented, lest it ruffle any feathers”.

The potential of the project to unleash a security frenzy is the reason why privacy concerns have to be taken seriously. The government and the UIDAI have made it appear as if the purported, and unsubstantiated, benefits of “good governance” from the project eclipse the concerns regarding privacy and civil liberties. This is where the problem lies. A foundational understanding in the study of individual freedoms, pioneered by scholars like Amartya Sen, is that consequence-independent absolute rights are rather hard to defend. Hence, the demand to trade-off one freedom for another (here, the “invasive loss” of privacy for “development”) is an untenable demand. Each freedom, independently, has an instrumental value, and the loss of one freedom undermines the individual's overall capability to expand up on other freedoms. No wonder then that Sen himself has voiced the privacy concern regarding the UID project.

There is a related concern: police and security forces, if allowed access to the biometric database, could extensively use it for regular surveillance and investigative purposes, leading to a number of human rights violations. As Amartya Sen has argued elsewhere, forced disclosure and loss of privacy always entailed “the social costs of the associated programmes of investigation and policing”. According to him, “some of these investigations can be particularly nasty, treating each applicant as a potential criminal.”

The second dimension of the UID project is the following: it would qualitatively restructure the role of the state in the social sector. Contrary to claims, the UID project is not an instrument to expand India's social security system, for whatever it is worth. Instead, the aim is to keep benefits restricted to the so-called “targeted” sections, ensure targeting with precision and thereby, limit the government's expenditure commitments. None other than the Prime Minister has made this amply clear. Addressing the National Development Council (NDC) on July 24, 2010, he noted: “to reduce our fiscal deficit in the coming years, … we must [be] … reducing the scale of untargeted subsidies. The operationalisation of the Unique Identification Number Scheme … provides an opportunity to target subsidies effectively.”

The UIDAI claims that UID would help the government shift from a number of indirect benefits into direct benefits. In reality, such a shift would represent the opposite: a transformation of the role of the state from a direct provider to an indirect provider. For the UIDAI, the UID is a tool of empowerment. In reality, the UID would be an alibi for the state to leave the citizen unmarked in the market for social services. Nowhere is the illustration more telling than in the case of the PDS.

Let me state the argument upfront. The UID project is part of a larger effort to dismantle the PDS in India. The aim is to ensure a back-door entry of food stamps in the place of PDS, and later graduate it to a cash transfer scheme, thereby completing the state's withdrawal from the sphere of food procurement and distribution.

According to the UIDAI, the most important benefit from the UID could be that you could have a “portable” PDS. In other words, you could have a system where you (say, a migrant worker) could buy your PDS quota from anywhere in India. The claim, of course, has a deceptive appeal. One would have to dig deeper to grasp the real intent.

If we take the present fair price shop (FPS) system, each FPS has a specified number of households registered to it. The FPS stores grains only for the registered households. The FPS owner would not know how many migrants, and for what periods, would come in and demand their quota. Hence, for lack of stock, he would turn away migrant workers who demand grains. Hence, the FPS system is incompatible with the UID-linked portability of PDS. There is only one way out: do away with the FPS system, accredit grocery shops to sell grains, allow them to compete with each other and allow the shop owners to get the subsidy reimbursed. This is precisely what food stamps are all about; no FPS, you get food stamps worth an amount, go to any shop and buy grains (on why food stamps are deeply problematic, see Madhura Swaminathan, “Targeted Food Stamps”, The Hindu, August 3, 2004).

What is interesting is that everyone, except those enamoured by the UID glitter, appears to know this. On its part, UIDAI officially accepts that food stamps become easier to implement with the UID. So does the Planning Commission, which sees the UID as the fulcrum around which its plans to “reform” the PDS revolve. It turns out that an opposition to the dismantling of PDS, and to food stamps, also involves an opposition to the UID.

On his part, Nandan Nilekani has been showcasing his extraordinarily poor understanding of India's developmental priorities. According to him, “in the Indira years, the slogan was garibi hatao. Then it was roti, kapda, makaan. In the last few years, it was bijli, sadak, pani.” However, these slogans are “passé”; the in-thing is the slogan “UID number, bank account, mobile phone.” Such an inverted world view, totally divorced from the grim realities of poverty, has prompted critics to call AADHAAR as just NIRAADHAAR!

In conclusion, the UID project is marked by both “security” and “developmental” dimensions. The former leads to an invasive state; the latter leaves us with a retreating state. Either way, the “citizen” is worse off.

Corruption in Military

An alarming rise in the number of Indian military officers charged with corruption, senior ranks quitting due to frustrating service conditions, and increasing instances of ‘fragging' in which disgruntled soldiers shoot dead their seniors, are severely damaging the image of the country's defence forces.

Few want to join the once-favoured military with the shortage of officers in the army never having fallen below 11,000 for over a decade against a sanctioned strength of 46,615 personnel. The navy and the air force too face officer shortage but it is not as severe as in the 1.2 million strong army.

Senior defence officials cite expanding employment opportunities as the reason behind the shortage. But serving and retired officers say this is only part of the cause. The Services too have to take responsibility for lowering the military's image and overall standing in the country's order of precedence and preference, they point out.

“Standards and values have changed for the worse and the army is not impervious to the overall environment,” admits a retired Lieutenant General. Like the rest of society, India's military too is in the turbulent and unsettling throes of transition, he adds.

Serving army officers say the ‘rot' in service ethics has been steadily creeping into the Services. Till the 1980s, military officers were considered upright men, respected in society and eagerly sought after by parents as suitable match for their daughters. Retired military men talk nostalgically of the days when a mere note from the commanding officer on behalf of a jawan to the local authorities back in his village carried weight.

Those were the times when the esprit d' corps in the apolitical service was strong and invitations to riotous, albeit swinging, regimental officers' messes were much sought after. Salaries were low but the lifestyle was lavish in what was largely a gentleman's army.

Many officers were, in reality, eager boys trapped inside adult bodies seeking to indulge in passions like shikar, riding, polo and outdoor living and danger at state expense as expansive colonial traditions made military service not only respectable but attractive. From Independence till the third war with Pakistan in 1971, there was ample opportunity for such expansiveness.

And it was adequately vindicated, except for the disastrous 1962 war with China in which India came off badly. But in this instance, it was widely acknowledged that it was the political and not the military establishment that forced ignominy upon the country.

The flamboyance, bravery and tactical brilliance of all ranks in the three wars with Pakistan are well recorded and the subject of study in combat institutions around the world. It is rarely acknowledged even at home that in 1971, the Indian army single-handedly achieved what even the United States with all its mite and technical wizardry has not managed since World War II — it liberated a nation.

Politics was rarely, if at all, discussed by officers who, if passed over for promotion, retired gracefully, confident of their status in society. Promotions, the bane of the Services today, were merit-based and, by and large, fair with undeserving candidates, adhering to the Peter Principle and rarely ever crossing their limits of incompetence.

Army chiefs and senior commanders brooked no political interference in operational matters and were listened to with respect by the establishment. Asked by Prime Minister Indira Gandhi to move into East Pakistan — later Bangladesh — in early 1971, General Sam Manekshaw — later Field Marshal — firmly told her that it would take at least 10 months before his force would be ready for combat.

“That” he declared, referring to Indira Gandhi's scheme of launching operations earlier “would present me with problems far more complex than what had been the bane of the German general staff for more than 50 years across two world wars. It would be unwise to rely on diplomatic assurances that the Chinese would not react in support of Pakistan. We must wait for the snow to block the northern passes.” Indira Gandhi listened and Bangladesh came into being in December that year.

In short, the olive green uniform enjoyed an exalted status it was soon to lose. Its professionalism and apolitical stance began to slowly unravel after the Third Pay Commission in the late 1970s when officer ranks were diluted, ostensibly to enhance career prospects, but their responsibilities reduced in inverse proportion to their promotions.

Periodic cadre reviews further led to a lopsided rank structure creating a situation where Lieutenant Generals among the seniormost army officers, and their equivalents in the navy and the air force, discharged duties previously performed by middle-ranking Colonels and half-colonels and similar ranks in the other two services.

Currently there are over 900 Brigadiers, some 290 Major Generals and 85-odd Lieutenant Generals, roughly around a third of who were replaced every two-three years due to retirement, promotion and other reasons.

Pressure on promotions in the pyramid-like structure also meant that most served between 12-18 months in these higher ranks leaving them little time to effect any meaningful change in the overall command and control structure.

The cadre re-assessment was the moment for which politicians and civil servants had long been waiting. Having always looked upon the military with suspicion after independence and gazing nervously at Pakistan's experience, they were simply waiting for an opportunity to gain ascendancy over the Services.

Incidentally, this inherent misgiving and fear of the military persists, adversely manifesting itself in the non-appointment of a Chief of Defence staff, despite ministerial commissions and review and parliamentary committees stressing the need for such an officer in a nuclear weapon state and for an expanding military power with possible out-of-area responsibilities.

Sadly, many senior officers actively contributed to this negative state of affairs by seeking political and bureaucratic patronage for career enhancement whilst in service and for lucrative sinecures after retirement. Consequently, over years the military's standing deteriorated, reaching the unbelievable stage where it was selectively included in the “security loop.”

The Service chiefs, for instance, were told about the multiple 1998 Shakti tests at Pokhran just hours before they occurred; and that too as insurance against any “adverse reaction” from neighbouring Pakistan. In the intervening period thereafter, the military has been dealt a limited hand in maintaining India's strategic deterrence.

In another shocker, the military, particularly the army, was also unaware of India's cache of chemical weapons stored at various Defence Research and Development Organisation laboratories across the country that were destroyed under the global Chemicals Weapon Convention some years ago.

In conclusion, a large number of military officers concur that India's Mughal-like army, with an inordinately high teeth-to-tail ratio, faces a serious crisis of confidence which simply refuses to abate even as it is increasingly employed not only in counter-insurgency operations, flood and drought relief but also to battle mosquitoes threatening the Commonwealth Games athletes' village.

For, besides struggling against the slew of corruption charges, lopsided promotions and un-equitable pensions, the military also faces ad hoc equipping policies determined and dominated by ill-informed politicians and civil servants, as it grapples desperately to reorder and modernise itself within a nuclear weapon state. But that, as they say, is a far longer and complex saga.

Manual Scavenging

On November 1, a unique journey will come to a ceremonious end in Delhi. Earlier this month, five bus loads of men and women headed out from different corners of the country with one slogan on their lips: honour and liberation for those still trapped in the horror of manual scavenging.

When the protesters (most of them former manual scavengers) set out on their mission, they knew that the Samajjik Parivartan Yatra (national rally for social transformation) would have to be more than a petition to the government. A comprehensive rehabilitation package was undoubtedly at the core of the yatra's demands. But there was equally another objective: To motivate the remaining members of the scavenging community to throw off the yoke — on their own, without waiting for a package. Bezwada Wilson, convenor of the Safai Karamacharis Andolan (SKA) and the brain behind the rally, explains the concept of self-liberation: “Manual scavenging is a blot on humanity, and if you engage in it, it is a crime you commit on yourself. So, don't wait for the government, break free.”

Given the depth of emotion in this message, it will be a double crime if the government does not do everything in its power to hasten the process of liberation. Perhaps that is why, on October 25, the Sonia Gandhi-led National Advisory Council proposed a far-reaching package of reforms to end the practice. Nonetheless, the irony is inescapable. Sixty-three years after Independence, India is still debating the best way to lift manual scavengers out of their collective misery.

Mr. Wilson was a young boy when his family in Karnataka sent him away to study in a school across the border in Andhra Pradesh. He came home for holidays but felt out of place in a community whose defining feature was the uncontrolled violence of its menfolk. It was the early 1970s and they lived in a large, grimy neighbourhood around the edges of the Kolar Gold township. The evenings were always the same. The men would get into a drunken rage and assault the women senseless. The pattern of male aggression and female submission was common to most feudal, patriarchal societies, but even by this yardstick, the violence was excessive.

The teenager knew he had been born to a family of sweepers. The local school he went to as a child was segregated and was known by a swear word. But that still did not explain the anger that erupted around him. His father, a retired government employee, and his brother, mysteriously employed in an unnamed place, stonewalled his questions. Determined, the boy followed his brother to his workplace, where the horror of manual scavenging hit him like a million lashes.

Mr. Wilson learnt that he and his family were part of a huge community of manual scavengers that serviced the Kolar Gold township. They physically lifted and carried human excreta from the township's network of dry latrines. He could now see where the violence came from. But he could also see the unfairness of it all on the women who formed 85 per cent of the manual scavenging workforce. The women of his community were victims thrice over: they were outcasts even among Dalits; they were despised and shunned for the work they did, and they were physically abused by the men who saw the beatings as an outlet for their frustrations.

The employment of humans to clean human faeces was unarguably the worst violation of human rights anywhere in the world. The degrading act stripped the individual of her dignity while the constant handling of excreta brought in its wake crippling illnesses and infections that went untreated because the community bore the cross of untouchability. Over the next decade-and-a-half, Mr. Wilson worked at educating the elders and spreading awareness about the dehumanising aspect of their occupation. But it was difficult to organise a community that was simply unprepared to give up its job.

This was a baffling paradox. On the one hand, there was the daily ritual of the men drinking and getting violent to forget the pain and humiliation of manual scavenging. At the same time, there was a sense of ownership about the job. “It is our job,” they told Mr. Wilson, vastly complicating his effort simultaneously to organise them, fight the company management that employed them, and push the government towards banning the occupation and rehabilitating the workers.

Mr. Wilson told The Hindu, “Our people had internalised their oppression. They saw themselves as a condemned lot, it was their fate, they had to do this work.” If the manual scavenging community, now included among the safai karamcharis (sweepers) to diminish the ugliness of the act, owned up its work due to an acute lack of self-worth, those higher in the caste hierarchy compounded the injury by perpetuating the myth that toilet cleaning and allied activities, like sweeping and picking up garbage, could only be done by the valmiki Dalits, also known as dom, hela, hadi, arundatiyar, madiga, relli, pakhis, chekilliyars, etc.

Incredibly, the ridiculous notion prevailed even at the level of governments — and it continues to prevail — with job reservation for the Scheduled Castes translating as the Dalit castes forming the majority of workforce in Class IV and lower categories. Whatever the official explanation for this, this was nothing if not the Varna system by diktat.

The insensitivity of officialdom to manual scavenging can be seen from the length of time it took India to formally ban the practice. The Constitution abolished untouchability once and for all in 1950. The Protection of Civil Rights Act, which prescribed punishments for untouchability, followed in 1955, and The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act came in 1989. But manual scavenging, which is untouchability at its most violent, was prohibited by legislation only in 1993. The Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act came into force 46 years after Independence.

Far worse, manual scavenging continues to this day, with many Central and State government departments themselves employing manual scavengers in violation of the 1993 Act. The worst offender in this respect has been the Union Ministry of Railways: the open discharge system of toilets in train carriages results in excreta having to be manually lifted off the tracks. Many municipalities too continue to use dry latrines.

In 2003, the Supreme Court directed all the State governments to file affidavits on manual scavenging, taking a serious view of a PIL petition filed by the SKA and 18 other social action groups. The Uttar Pradesh government admitted to the practice as did the Railway Ministry. But most other State governments brazenly lied that their States were “free from manual scavenging.” The SKA, which has an entire library devoted to the documentation of the practice, has clinching photographs and data that establish the lie. The Andolan estimates that there are currently over 3 lakh manual scavengers, down from 13 lakh a decade ago. However, it attributes the declining numbers as much to voluntary liberation as to official intervention.

So far, manual scavenging has been tackled at two levels: The conversion of dry latrines into pour-flush toilets and the rehabilitation of those engaged in the practice. The rehabilitation itself has been terribly half-hearted; a shocking report in The Hindu shows that the district administration in Ambala fired manual scavengers it had re-employed as sweepers. The crucial issue, therefore, is a vital third element: the de-stigmatisation of the so-called menial jobs via changes in recruitment patterns and policies. Without this overhaul, manual scavenging will continue in one form or another.

It is also necessary to expand the definition of manual scavenging to include other kinds of unhygienic toilet cleaning. The Union Ministry of Housing and Urban Poverty Alleviation has been overseeing the elimination of dry latrines since 2004. According to the Ministry, the numbers of dry latrines have declined from a total of 6 lakh in six States to about 2.4 lakh in Uttar Pradesh, Bihar and Uttarakhand.

But significantly the Ministry makes the point that while dry latrines may be on their way out, this does not necessarily mean the end of manual cleaning of excreta. A recent paper prepared by HUPA says that in the poorer areas in many towns and cities, the dry latrines have given way to “bahao” latrines. These are not connected to septic tanks or underground pits but flow out directly into open drainage, resulting in the “sludge and excreta” having to be manually removed. Says the paper: “These unsanitary latrines require continuous cleaning, which is done by municipal staff and almost always manually, with the most rudimentary appliances.”

And no prizes for guessing which castes form the municipal staff. As Union Minister for HUPA Kumari Selja says: “It is ultimately about attitudes. As long as society treats toilet cleaning and sweeping as menial jobs to be done only by certain members of the caste system, it will be difficult to end the obnoxious practice. The scavenging and sweeping community will be truly liberated when cleaning jobs become respectable with the workforce drawn from all communities.”

Why Separate Railway Budget

Ever wondered why we have a railway budget? The railways are no doubt important, but so are roads, telecom, petroleum, water and many other necessities of life. Do we have separate budgets for these categories presented to Parliament every year?

The British rulers of India decided to have a separate budget for railways because they used the rail infrastructure to reach all corners of the country to facilitate control over India and the plunder of its resources.

Even after Independence, India has continued with the practice of a separate railway budget being presented to Parliament every year. Perhaps no other country in the world indulges in this ritual. In no other Parliament will you see a minister, sounding like a bad geography teacher, reading out for an hour hundreds of place names she cannot even pronounce. That does not mean that railway infrastructures in other countries have not grown or not been modernized.

Politicians, of course, will not want to do away with the practice. Where else would they get such a platform to talk about things like "aalo dum", "chai kulhads" and water bottles?

It also gives them a great opportunity to make grand announcements like "railways will not be privatized", as Mamata Banerjee did during her budget speech on Wednesday. If the private sector can be involved in something as crucial as electricity, why should the country be averse to the involvement of the private sector in the railways?

As for changes in fare and freight rates, these do not need to be presented to Parliament because they do not need its approval. They can be announced the way changes in oil prices are announced or the way telecom companies announce changes in tariff.

It's high time India started treating the railways in the same way as any other utility rather than something that is used by politicians to distribute "goodies". If we need a separate budget at all, why not have a water budget or a food budget?

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For:

Let us break with the archaic practice It has taken 86 years since the practice of presenting a separate Railway budget began and over half a century after the British left the shores of this country to question this legacy. The Constitution prescribes that a statement of the estimated receipts and expenditure of the government of India shall be laid before Parliament every year. Railways is not an exception to this requirement. Surely, it is not anybody’s case that Railways is not a part of the government. It is in compliance of this constitutional requirement that the annual financial statement, popularly known as the Union Budget, placed before Parliament also includes the receipts and expenditure of the Railways. There is no justification that the British practice of separating the Railway budget from the Union Budget should continue merely because running trains is a commercial activity. Nor can the size of the Railways’ receipts and expenditure be a relevant consideration. If the commercial nature of the operations or the size of the receipts and expenditure is the criteria, then defence, posts and telegraph and telecom should have separate budgets too. Those who are in favour of continuation of the current practice will argue that Railways is an important activity and deserves special attention of Parliament. Some others might say that merging the Railway budget with the Union budget will compromise the independence of the railway ministry. This does not cut ice and can easily be overcome within the existing framework. What is more important is the integrity of the budgetary process of the government as a whole and not a fragmented view currently available. A comprehensive view of the central finances, including a total picture of the government’s assets and liabilities, is essential. We have done away with the tradition of presenting the budget at 5:00 o’clock in the evening. Then why should there be hesitation in doing away with the tradition of a separate railway Budget? Railway finances should also be brought within the purview of the fiscal responsibility and budget management legislation. Let the debate begin.

Against:

But it leads to better focus on the service A separate Railway budget, a brainchild of Acworth committee, was a historic necessity that freed the commercial undertaking from the government system. The arrangement was reviewed by at least two committees, but no major change was suggested, except to evolve a national policy for the Railways. No government system should dilute the essential ingredients of checks and controls vital for public finances. For Railways, no such aberration had taken place by this emancipation of the ministry from the finance department, as Indian Railway Accounts Service discharged the responsibility of comprehensive and integral management of railway finances. Path-breaking decision of devolution of powers, financial flexibility, autonomy and freedom to Railway Board was expected to result in expansion and modernisation. Railways did achieve this with balanced distribution of resources for rehabilitation and replacement (through Depreciation Reserve Fund), expansion and justified connectivity (through Capital Fund) and essential amenity works (through Development Fund). The setting up of Special Railway Safety Fund to overtake the arrears in replacements and renewals in a time-bound manner through government grant and safety surcharge proved the merit of the special status. Was the system capable of withstanding challenges posed by external factors? When the economy was booming, this crucial infrastructure sector rose to the occasion, thanks to its autonomy. Through a slew of measures encompassing technical innovation, commercial response and dynamic managerial strategy, the challenge was met well. Critics may question its relevance in a globalised scenario, which had dented the monopoly edge of government-owned Railways. The business models should have a market focus supported by new processes in planning, reporting and performance assessment. Besides, there should be a ready tool for smooth separation when domains of public-private partnerships are explored. Can there be a more effective device to meet these requirements than a separate Railway budget, which puts this entity under Parliament scanner and watchful public?

Should RBI check rupee's rise?

Does it have an option? We expect the Reserve Bank of India (RBI) to intervene in the foreign exchange market to mop up surplus capital flows. This means that the RBI will buy dollars and inject rupee liquidity into the economy. This, of course, is different from imposing controls to turn capital flows away, which we do not expect. Why? Well, the RBI must generate more money to fund growth at reasonable interest rates. Its 100-basis-point hike in cash reserve ratio has pulled money growth down to a tight 15% level. This is clearly insufficient to fund loan demand growing at 20%. Won’t this fuel inflation? Not really. Some monetary expansion is necessary for growth; it is only excessive money supply that is inflationary — the difference between eating and overeating. Second, the RBI needs to inject liquidity to fund government borrowing. Although the Centre and states plan to borrow around Rs 2,000 billion (net) in October-March 2011, it is difficult to see how banks and insurers can put in more than Rs 1,400 billion. This means that the RBI will have to plug the gap either by directly buying government bonds through open market purchase or indirectly by injecting rupees through forex intervention. Third, the RBI needs to recoup the $35 billion of forex reserves sold during the 2008 credit crisis to arrest the deterioration in vulnerability indicators. Short-term external debt of one-year residual maturity has gone up to 42% of forex reserves from 26.5% in March 2008. Fourth, the RBI needs to shore up forex reserves to cover for the rising debt-to-equity ratio of external liabilities. The bond investment limit for foreign institutional investors has been hiked over five-fold to $30 billion. In a downturn, bond investors gain from falling interest rates unlike equity investors who lose badly in a stock market correction. Finally, the RBI will have to contain appreciation to protect exports when the G3 slows down. The Indian rupee’s six-country real effective exchange rate, after all, has risen to 116.60 on September 9 that is far above usual 105-110 mid-cycle levels. Even with RBI’s forex intervention, the rupee should trade strong with capital flows coming in.

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roblem is the speed of appreciation The country’s rapid economic growth and rising interest differentials with the West, which continue to follow easy monetary policy, have attracted huge capital inflows in pursuit of higher returns. This has precipitated a sharp rupee appreciation, making exporters voice their concerns. Faced with a similar situation, some Asian central banks have actively intervened in the forex markets to protect the competitiveness of their currency, with South Korea and Indonesia resorting to selective capital controls to check short-term foreign inflows. Arising currency is not detrimental to everyone’s interest. It benefits entities borrowing abroad as well as importers and consumers of imported goods. Exporters with high import intensity would not be affected much as the lower cost of imports offsets the negative impact of appreciating currency on exports. But exporters of price-sensitive items and those that source their raw materials locally are adversely impacted. In the last decade, the country’s burgeoning economy has led to a general trend of rupee appreciation, and this scenario is likely to continue over the long run. Therefore, exporters will have to increasingly rely on productivity improvement and currency hedging to protect their competitiveness and margins. Right now, the problem is not so much the trend of currency appreciation but the speed. While gradual movements in the currency can be absorbed, any sharp swings in the rupee take the stakeholders by surprise, are disruptive and, hence, call for intervention. When the RBI intervenes, which in the current context means buying dollars, it increases money supply in the process. This is in conflict with the central bank’s current stance of tightening monetary policy and, therefore, would necessitate sterilisation operations. The extent of sterilisation depends on the stock of securities available for intervention and entails a fiscal cost. In the last few years, the RBI’s actions have been aimed at curbing potentially-disruptive swings, and not towards steering the currency in a given direction. Accordingly, if the foreign capital inflows continue unabated, the rupee will continue to appreciate, albeit at a slower rate due to RBI intervention.

CWG Corruption: The narcissism of the neurotic

The Commonwealth Games were no showcase, but a mirror of India 2010. If they presented anything, it was this — Indian crony, casino capitalism at its most vigorous.
The Commonwealth Games over, we can now return to those of everyday Indian life. For all the protests, though, there was nothing in the corruption that marked the Games that does not permeate every town and city, all the time. Just that, in these Games, it got concentrated in one very high-profile event, under constant public and media gaze. Much of the agonising — over what was routine corruption — was occasioned by “what the world will think of us.” For ‘world' read Western world. We care little about what Tuvalu or Tonga or Papua New Guinea think of us.
The corruption — or its public manifestation — hurt us because it messed with our self-image and our need to be accepted as special by the Western elite, in every way, even at sports. After all, we are knocking at the door of the G-8. Else, there were no surprises in the corruption. Shocking, yes. Surprising, no. Dirty contracts handed out to sleazy builders? That's business as usual in Mumbai, any day in the past three decades. Most of the city's 36 MLAs are builders or contractors, which is its own comment.
Shoddy construction? Footbridges that collapse? We figured out how flimsy were the buildings in Gujarat's cities after the 2000 quake. Yet we continue to build huge high-rises in high seismic zones — because there's money in that. It was logical for the authorities to say of the collapsed footbridge in Delhi that — it was meant for ordinary citizens, not athletes. (Read: It's okay if ordinary citizens fall off it.)
Kickbacks for the boys? Conflict of interest? You're more likely to win the lottery than find the citizen surprised by these. Appropriation of the resources of the public, particularly of poor people? Well, Maharashtra shows you how. You can grab adivasi land — inalienable in law — for your private city and hill station. The Revenue Minister will “regularise” these violations for you. Contrast this with the daily struggle of people in Mumbai's slums for ‘regularisation.' Their massive contribution to the city's economy counts for nothing.
Shady banking and money transfer practices? The Enforcement Directorate has traced slush accounts involving IPL-linked entities to perhaps a dozen countries. Overpricing for car hire, for catering, for other services — all staples of Indian life. And speaking of contracts and food, it's begun with the ICDS. Watch how midday meals, too, will steadily move from the hands of SHGs to those of private corporations in the name of “pre-mix” packages. Even as India falls to rank 67 (out of 84 nations) in IFPRI's Global Hunger Index of 2010. A rank driven by high levels of underweight children. As the GHI report tells us: “India is home to 42 per cent of the world's underweight children and 31 per cent of its stunted children.”
Lying about objectives? Like saying the Games residential area would later become university hostels? When in fact several hostels were emptied during the Games (partly because of the water crisis the event entailed). And when the flats are being organised for sale, with prices already in crores. Well, low-cost housing was the excuse used during the 1982 Asiad. And we know who lives in Khelgaon now. There are those who see the Games as a ‘Triumph' of the Private Sector and a Public Sector failure. Facts count for little in matters of Faith. Who messed up the Metro Line? Public Sector. Who built the crumbling village? DDA. In truth: that sector of the Delhi Metro which did not get completed in time for the Games was the only line (probably the most profitable) that was privatised. And the giant private corporation failed to deliver. The Games village was not built by the DDA, but by a private entity. In any case, it's simple: every single private scam and racket of our time is introduced through government, in the name of the poor.
Displacement of people in and around The Games areas? Find a city, town, urban periphery or rural region where this is not an everyday fact of life. At any given moment, millions of footloose migrant labourers wander across the country, quite unsure about where the next meal comes from. Throwing out construction labourers when our work — their labour — was done in Delhi? Tens of thousands of migrant labourers, whether the Oriyas from Ganjam in Surat, or the migrants in Tirupur (owed backwages for months), or millions of others, experience this all the time. Contrast this attitude with this week's good news — the anxiety and joy over the rescue of the Chilean miners, also in a society also beset by problems.
A cheering elite, telling us how wonderful we are and how we have “showcased Indian talent for the ‘World'?” You can find that in most Indian newspapers or channels any day, any time. “India has showcased for the world,” declaimed one television anchor, “that we can and have and always will in the future organise and run world class events.” Let alone not looking beyond the world of the White and the western, what millions of Indians, including those thousands adversely affected by The Games, think, bothers us not a whit. Another TV channel ran a programme on “What makes Indians world-beaters?” This, about India's win over an Australian cricket team that has lost Adam Gilchrist, Shane Warne, Glen McGrath and Matthew Hayden. Interestingly, all the panellists gently dissented from the proposition that we could call ourselves world-beaters. That in no way fazed the anchor, though.
Bad conditions? Athletes attending state and district level sporting meets have slept in disused railway wagons, and worse. These Games, anyway, were more about commerce and elite ego than about the athletes or their performance. The fine showing of some athletes came despite their organisers and sports bodies, not because of them. Now, they return to the bondage of bodies driven by profit, corruption and greed.
It's another matter we should never have organised this ‘mega-event.' In all cities holding such events over the past four decades — a tiny elite has made billions. The city has gone bankrupt — and ordinary people then pay the bills. Los Angeles is a good example. The ‘City' (i.e. Big Business) made huge profits. Residents paid the price for years afterwards. As did people in Montreal. As will those in London after the next Olympics there. Imagine, instead, if we had spent our billions on having playgrounds in all our schools? That way, you would really widen the sporting gene pool.
The point simply, is this: The Commonwealth Games were no showcase, but a mirror of India 2010. If they showcased anything, they showcased Indian crony, casino capitalism at its most vigorous. To build such a society and then expect The Games won't reflect its warts and sores is high optimism. But never in our history have an elite been so in love with themselves, so soaked in narcissism; so anxious about what ‘the World' thinks. So contemptuous of what our own people think, about anything. (Though the Commonwealth wouldn't exist without them. Indians account for over 55 per cent of all people in the Commonwealth.)
There is one anomaly, though, where the Games do not typify the Indian model. The Minister of Sports, shortcomings aside, is a person of integrity (as was his outspoken predecessor). He tried cleaning up various sporting bodies and was humiliated for it. He tried curbing the number of years a person could head a sporting body. Some, in their seventies, have been around decades (a couple in their eighties, too). That bombed, as well. On the other hand, the OC was about Organised Cronyism. Many of the tactics by which sporting bodies are run originate in Maharashtra. Sporting-politicians from there have headed more associations than they can count. Everything from kho kho and kabbadi, to wrestling and cricket. In some senses, the Games reflect the national expansion of the Maharashtra model. It's the way this state runs its cooperatives, their banks, its education. The Games, like Maharashtra, were a snapshot of primitive accumulation at work.
Meanwhile, may we suggest a modest alternative to Rahman's theme song: Jeeyo, Utho, Badho, Jeeto (Live, Get up and ready, march forward, win)? It didn't click too well, compelling the maestro to return to his ‘Jai Ho' from Slumdog Millionaire at the opening ceremony. There is some irony in that. That film outraged the same Indian elite and India Shining crowd. Leading Bollywood personalities spoke and blogged on how it had upset them. Yet the song found greater acceptance. It won an Oscar — showcasing us to the ‘world' — and that overrode disquiet about the film. Fact is: Jeeyo, Utho, Badho, Jeeto didn't quite grab us. So how about: Jaao, Loot-oh, Utho, Bagho? (Go ahead, loot, get up and scoot).

Rotting grain & judicial transgression

The mountainous state-owned food stocks lying in the open and rotting in the rain are in stark conflict with a failing public distribution system , hunger, malnutrition and high food prices. The poor management of food stocks provoked the Supreme Court to transgress into executive domain when, on August 12, the court made certain directions like limiting procurement to covered warehousing capacity and distributing the rotting foodgrains free of cost to the poor. The directions were given with the noble intent to prevent the wastage of foodgrains and a feeling of empathy towards the poor and hungry. As on August 1, 2010, the total food stocks with the FCI were 55 million tonnes (mt) as compared to the buffer requirements of 27 mt. Of this, 15 mt of wheat was lying in the open in Punjab and Haryana alone. As per estimates, 50,000 tonnes of food stocks have already deteriorated beyond human consumption as a result of long, improper storage. There are two essential components to the management of food stocks: procurement and distribution through PDS. To ensure that stocks are available round the year for the PDS, different buffer stock norms are prescribed for different points of time during the year. The storage ought to be in scientific warehouses to prevent damage . FCI’s losses are billed to the exchequer and are known as the food subsidy bill. If the stocks exceed the warehousing capacity, safe storage becomes a challenge . But if the stocks are lower than the buffer stock norms, the problem would be to meet the requirements for PDS. This is addressed if FCI is mandated to manage the stocks as per buffer stock norms through open market operations of buying /selling. The efforts of FCI to dispose of some of the excess stocks of wheat at a price of . 1,240 per quintal (excluding VAT) in the recent past have met with abject failure since the price demanded was not commensurate with the quality of the stocks offered in addition to the additional transactional costs in dealing with FCI staff. The solution also does not lie in fixing the open market sales scheme (OMSS) price much below the market price. This will only offer the trader arbitrage opportunities in connivance FCI staff. Low OMSS prices had led to large-scale corruption in the FCI, for which the government failed to pinpoint responsibility. Unfortunately, the court’s directions to distribute rotting foodgrains free of cost to the poor, no doubt appealing to the emotions , would suffer from the same malady. It would lead to massive diversions due to arbitrage opportunities in active collusion with the FCI staff without benefiting the intended beneficiaries. Organised diversion of PDS stocks direct from government warehouses to private flour mills is rampant , with the differential pocketed between the transporters, the PDS shopowners and the government staff. The FIRs yield no concrete result, given the quality of investigation and prosecution and the interminable delays in judicial trials. Chief economic adviser to the government Kaushik Basu has suggested offloading excess food stocks in small lots in order to depress market prices. The same was officially suggested to the FCI/food ministry two years back to dispose of the excess stocks by open and transparent domestic auctions in small monthly lots to reduce any arbitrage opportunities instead of disposals at fixed prices to selected parties. However, FCI continues to dither between exporting excess food stocks and domestic disposals at fixed prices.

Currency War

IN RECENT weeks the world economy has been on a war footing, at least rhetorically. Ever since Brazil’s finance minister, Guido Mantega, declared on September 27th that an “international currency war” had broken out, the global economic debate has been recast in battlefield terms, not just by excitable headline-writers, but by officials themselves. Gone is the fuzzy rhetoric about co-operation to boost global growth. A more combative tone has taken hold (see article). Countries blame each other for distorting global demand, with weapons that range from quantitative easing (printing money to buy bonds) to currency intervention and capital controls.

Behind all the smoke and fury, there are in fact three battles. The biggest one is over China’s unwillingness to allow the yuan to rise more quickly. American and European officials have sounded tougher about the “damaging dynamic” caused by China’s undervalued currency. Last month the House of Representatives passed a law allowing firms to seek tariff protection against countries with undervalued currencies, with a huge bipartisan majority. China’s “unfair” trade practices have become a hot topic in the mid-term elections.

A second flashpoint is the rich world’s monetary policy, particularly the prospect that central banks may soon restart printing money to buy government bonds. The dollar has fallen as financial markets expect the Federal Reserve to act fastest and most boldly. The euro has soared as officials at the European Central Bank show least enthusiasm for such a shift. In China’s eyes (and, sotto voce, those of many other emerging-market governments), quantitative easing creates a gross distortion in the world economy as investors rush elsewhere, especially into emerging economies, in search of higher yields.

third area of contention comes from how the developing countries respond to these capital flows. Rather than let their exchange rates soar, many governments have intervened to buy foreign currency, or imposed taxes on foreign capital inflows. Brazil recently doubled a tax on foreign purchases of its domestic debt. This week Thailand announced a new 15% withholding tax for foreign investors in its bonds.

Jaw-jaw, please

For now, these skirmishes fall far short of a real currency war. Many of the “weapons” look less menacing on closer inspection. The capital-inflow controls are modest. In the rich world only Japan has recently resorted to currency intervention, and so far only once. Nor is there much risk of an imminent descent into trade retaliation. Even in America, tariffs against China are still, with luck, a long way off—both because the currency bill is milder than it sounds and because it has yet to be passed by the Senate or signed by Barack Obama.

Still, there is no room for complacency. Today’s phoney war could quickly turn into a real dogfight. The conditions driving the divergence of economic policies—in particular, sluggish growth in the rich world—are likely to last for years. As fiscal austerity kicks in, the appeal of using a cheaper currency as a source of demand will increase, and the pressure on politicians to treat China as a scapegoat will rise. And if the flood of foreign capital intensifies, developing countries may be forced to choose between losing competitiveness, truly draconian capital controls or allowing their economies to overheat.

What needs to happen is fairly clear. Global demand needs rebalancing, away from indebted rich economies and towards more spending in the emerging world. Structural reforms to boost spending in those surplus economies will help, but their real exchange rates also need to appreciate. And, yes, the Chinese yuan is too low (seearticle). That is hurting not just the West but also other emerging countries (especially those with floating exchange rates) and indeed China itself, which needs to get more of its growth from domestic consumption.

It is also clear that this will not be a painless process. China is right to worry about instability if workers in exporting companies lose their jobs. And even reasonable choices—such as the rich world’s mix of fiscal austerity and loose monetary policy—will have an uncomfortable impact on small, open emerging economies, in the form of unwelcome capital inflows. This flood of capital will be less devastating to them than the harm they would suffer if the West descended into deflation and stagnation, but it can still cause problems.

Collective Seoul-searching

All this cries out for a multilateral approach, in which institutions such as the IMF and the G20 forge consensus among the big economies. The hitch is that the multilateral route has, so far, achieved little. Hence the chorus calling for a different line of attack—one that focuses on getting tough with China, through either retaliatory capital controls (such as not allowing China to buy American Treasury bonds) or trade sanctions. And it is not just the usual protectionist suspects: even some free-traders reckon that economic violence is the only way to shock China out of its self-harming obstinacy (and to stop a more widespread protectionist reaction later).

This newspaper is not convinced. The threats look like either unworkable bluffs (how can China be stopped from buying Treasuries, the most widely traded asset in the world’s financial markets?) or dangerous provocations. Confronted with a trade ultimatum, the Beijing regime, puffed up in its G2 hubris, may well reckon it is cheaper politically to retaliate to the United States in kind. That is how trade wars start.

Anyway, to focus on America and China is to misunderstand the nature of the problem. The currency wars are about more than one villain and one victim. Rather, redouble multilateral efforts behind the scenes, especially by bringing in the emerging countries hurt by China’s policy. Brazil and others have only just begun to speak out. South Korea is hosting the G20 next month. Use the Seoul summit as a prompt, not to create some new Plaza Accord (today’s tensions are too complex to settle in a grand peace treaty of the sort hammered out by just five countries in New York in 1985) but as a way to clarify the debate and keep up the pressure. It will get fewer headlines; but this is a war that is best averted, not fought.