Deprivation and disparities: Poverty

Could India's mock war on poverty ever turn real?

India became independent 63 years ago. Since Independence the country has implemented 10 Five Year Plans and a few Annual Plans. Currently the 11th Plan is being executed. Efforts made during the last six decades have resulted in the modernisation of a stagnant economy and India's emergence as a major industrial power. This period also witnessed remarkable progress in agricultural production.

But India has failed miserably in its efforts to alleviate poverty and create a more equal society. The Arjun Sengupta Committee concluded that some 77 per cent of Indians live on less than Rs.20 a day. According to the Global Hunger Index compiled by the International Food Policy Research Institute, India ranks 67 among 88 developing countries. In the course of economic growth the disparities have widened. The hope held out by the distinguished economist Simon Kuznets decades ago that economic growth under enlightened capitalism would have a favourable impact on income distribution has not materialised in India's case. It is high time India introduced effective measures to abolish extreme forms of deprivation, reduce gross disparities and provide a level playing field to the wretched of the land.

Mock war

In the first two decades of planning it was hoped that the implementation of land reform measures would transform the agrarian structure, release the productive energies of the long-suffering peasantry and usher in an egalitarian social order. Primarily because of the absence of political will, land reform failed to achieve the objectives set out in the Five Year Plans. The experience of the East Asian countries in the post-Second World War period demonstrated that land reform could indeed play a significant role in reducing rural poverty. The extent of redistribution was 43 per cent in the People's Republic of China, 37 per cent in Taiwan, 33 per cent in Japan and 32 per cent in South Korea. Against these, the extent of redistribution in India was a negligible six per cent.

As part of the Second Five Year Plan, India launched a well-thought-out Community Development Programme aimed at the all-round development of villages. It laid emphasis on agricultural extension, minor irrigation, education, comprehensive health care and other developmental activities. After making steady progress for a while the programme collapsed because of the failure to induct suitable personnel and owing to thoughtless mismanagement. To cite one instance, the Chief Minister of a major State in his wisdom, or rather the lack of it, passed an order allowing each MLA to seek the transfer of two Block Development Officers. In course of time, the Community Development Programme collapsed.

After the historic split in the Congress in the late-1960s, Prime Minister Indira Gandhi came out with the catchy slogan of “Garibi Hatao.” In the war on poverty, emphasis was laid on revising land reform laws and implementing them efficiently. Simultaneously, a number of other schemes were launched with fanfare. From a vantage point as the Central Land Reforms Commissioner during the 1970s, this writer had an insider's view of the phoney war on poverty. It was really an exercise in hypocrisy aimed at bamboozling the people. Though several token efforts were made, there was no significant reduction in poverty.

The framers of the Sixth Plan correctly identified three cardinal failures of Indian planning. These were: the failure to achieve full employment, the failure to eradicate poverty and the failure to create a more equal society. Then the planners proceeded to spell out a strategy for the drastic reduction of poverty. The essential elements of that strategy were enlarged employment opportunities in industry and agriculture, a minimum-needs programme aimed to improve the living conditions of the poor and a few measures aimed to reduce disparities in income and wealth. After a detailed analysis of the proposals in the draft plan, I came to the conclusion that the Sixth Plan was not likely to make a dent on poverty in India. That critique was published in Kurukshetra on May 1, 1979. As expected, the measures suggested to solve the problem proved to be inadequate. With the liberalisation of the economy in the mid-1990s there has, of course, been a marked increase in the annual rate of growth of GDP but without any impact on the incidence of poverty. If anything, economic disparities have widened.

11th Plan initiatives

In the context of the political conditions prevailing in India, it is unrealistic to expect any radical measures being adopted. The only feasible approach is to augment employment opportunities, provide easy access to quality school education and healthcare, and operate a universal public distribution system guaranteeing monthly supply of foodgrains at subsidised prices to the poor. And this is what the recent initiatives offer.

Here, a word of caution will be in order. The government often speaks with a forked tongue. Among those who operate the levers of power, there are many who subscribe to the Washington Consensus and neoliberal shibboleths that constitute an antagonistic contradiction to the Indian Constitution, particularly the noble sentiments enshrined in the Preamble and Part IV on Directive Principles of State Policy.

Consider the Prime Minister's announcement regarding the opening of 6,000 Navodaya-type schools. Without losing time the Planning Commission announced that 3,500 of them would be in the public sector and 2,500 in the private sector — without bothering to note that in recent years school education has become a commercial activity. It should be squarely the responsibility of governments at the Central, State and lower levels to provide schooling to the poor. Similarly, in healthcare there is the mistaken emphasis on providing health insurance for the poor. These insidious attempts have to be identified and nipped in the bud to ensure that the governance of this country is in accordance with the Constitution.

The three new measures capable of making a dent on poverty are the NREGA (now rechristened MGNREGA), the Right to Education Act and the proposed right to food legislation. If some glaring inadequacies in these schemes are rectified and they are properly implemented, the poor will get considerable relief. In an article published in The Hindu on September 15, 2009, I made certain suggestions to improve access to the disadvantaged sections of the population to quality school education. In an article published on October 14, 2009, I made suggestions to expand and re-orient the NREGA. Regarding the recent recommendation of the National Advisory Committee on the Food Security Bill, I support the suggestion made in an editorial in The Hindu (October 26, 2010) that the Bill should provide for universal entitlement to cereals and other components of a food basket. Recast on these lines, the three legal guarantees could turn out to be a veritable Magna Carta for the poor.

It is difficult to answer the question whether the phoney war would ever turn real. If the laws are suitably modified and efficiently implemented, it may become possible to make a dent on India's abysmal poverty. But considering that India's administration has become dysfunctional, the panchayati raj system is a shambles, pervasive corruption is eating into the country's vitals, and governance has evaporated, there is not much room for optimism.

Writing about conditions in France on the eve of the Revolution, Hilaire Belloc famously observed: “Government is a thing that guides, and if need be, compels. Visible in France there is not such a thing.” Regrettably, India is heading towards that kind of situation.

(P.S. Appu is a former Chief Secretary of Bihar and a former Director of the Lal Bahadur Shastri National Academy of Administration in Mussoorie. He can be reached at psappu@hotmail.com)

Eleventh Plan and health care

The Eleventh Plan, whose central theme is ‘Inclusive Growth,’ has substantially stepped up the allocation for health. The public health care system in many States is in [a] shambles. Extreme inequalities and disparities persist both in terms of access to health care as well as health outcome, bemoans the Plan document.

The role of health care in economic development has received increasing attention in recent years. There is a general agreement that economic growth is not merely a function of incremental capital-output ratio. Investment in man -- enhanced allocation for education, imparting skills and health care -- plays a significant role in fostering economic growth. It is, therefore, in the fitness of things that the Eleventh Five-Year Plan, whose central theme is ‘Inclusive Growth,’ has substantially stepped up the allocation for health. The Plan document presents a well-conceived, comprehensive programme for the sector. According to the Prime Minister, the aim is to provide broad-based health care in rural areas through the National Rural Health Mission (NRHM).

Health care in a shambles

While the proposed structure for providing health care is adequate and commendable, what is in place at present is thoroughly disappointing. The Plan document itself bemoans: “The public health care system in many States is in [a] shambles. Extreme inequalities and disparities persist both in terms of access to health care as well as health outcome.” (The Eleventh Plan: Vol. II, page 61, para 3.1.16.) The Plan deplores the critical shortage of health personnel, particularly doctors and nurses, poor working conditions and inadequate incentives, and the low utilisation of the meagre facilities in government hospitals. Government hospitals at all levels present a picture of neglect and decline.

I shall deal with two major problems: shortage of doctors for rural service; and the desperate state of medical education.

Health care after independence

Before independence, medical facilities in rural India were rudimentary. The Community Development Block pattern of rural development launched in the 1950s was the harbinger of modern health care in rural areas. According to the approved model, every block was to have a Primary Health Centre (PHC) with 10 beds at the block headquarters and three sub-centres at carefully selected locations. The sanctioned staff for a PHC consisted of two doctors, one Lady Health Visitor and two Sanitary Inspectors. One post of Auxiliary Health Worker and two posts of Auxiliary Nurse-Midwives were sanctioned for each sub-centre. A doctor was required to visit each sub-centre twice a week. I was the Collector of Darbhanga in north Bihar from mid-1958 to the end of 1960. During my tenure, out of the 44 blocks sanctioned for the district, only 37 had become operational. Some 25 blocks had one doctor each and the rest none. Most posts of Lady Health Visitors and Auxiliary Nurse Midwives were vacant.

As chance would have it, I became Bihar’s Health Secretary in July 1962 and stayed on in the post for nearly five years. The total number of blocks in Bihar was about 600. In spite of my best efforts, very few blocks had the full complement of doctors and paramedical staff. During the severe drought of 1965-66, it was only by resorting to draconian measures that we could ensure that all blocks had at least one doctor. Most doctors had an urban background and were reluctant to go to rural areas lacking in modern amenities. There has been no significant improvement in the situation during the last four decades. According to the data given in the Eleventh Plan, there is a shortage of 5,801 doctors in PHCs and a shortfall of 4,681 specialists in Community Health Centres (CHCs).

The Eleventh Plan presents a well thought-out and comprehensive structure for health care in rural areas. The important features of the set-up are:

— 1.75 lakh sub-centres each with two Auxiliary Nurse Midwives at one sub-centre for each panchayat (five or six villages).

— 30,000 PHCs at one for a group of four or five sub-centres. Each PHC will have one Lady Health Visitor and three staff nurses. There will also be an AYUSH physician. (AYUSH is acronym for Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy).

— 6500 CHCs each with 30-50 beds. The staff will include seven specialists and nine staff nurses.

— 1800 taluk or sub-divisional hospitals and 600 district hospitals will be fully equipped to provide quality health service.

When this structure is in position, and if it functions reasonably well, we can expect a significant improvement in the quality of medical care in rural India. There will, of course, be an enormous increase in the number of medical graduates, postgraduates and nurses needed to operate the system. The baffling question is how to find the number of personnel needed to fill the vacancies and new posts.

It should be possible to recruit adequate number of doctors and persuade them to stay in the field if the three suggestions given below are adopted and strictly enforced.

— After internship, every medical graduate should be required to work for a minimum of two years in rural areas before he is granted the MBBS degree.

— Only those who have completed three years of rural service should be admitted to any postgraduate course, including the Diplomate of the National Board.

— Every postgraduate student should serve for one year as a specialist in a CHC or sub-divisional hospital before he is awarded the degree or a diploma.

These proposals are not entirely new. Assam has already made rural service compulsory for medical graduates. Some medical colleges have been encouraging fresh graduates to opt for rural service for short periods. The implementation of the proposals, of course, calls for resolute political will. The rationale for making these seemingly harsh suggestions is this. Despite the recent increase in fee, medical education is heavily subsidised by the state. It is manifestly just and fair to stipulate that those who receive medical education should serve the rural society for a short period. Incidentally, the young graduates will benefit a great deal by getting an opportunity to improve their clinical skill. There should, of course, be substantial improvement in the salary of doctors and the amenities available to them.

Shameful state

The proliferation of sub-standard, under-staffed and ill-equipped private medical colleges in recent years is an unmitigated menace. A few institutions like the CMC, Vellore; St. John’s, Bangalore; and the Kasturba Medical College, Manipal, are among the country’s best. But many private colleges lack basic facilities and are run as profit centres for garnering huge amounts as capitation fee. I hear that the present capitation fee for an MBBS seat is Rs. 35 lakh-50 lakh and for a postgraduate seat above Rs.60 lakh. For a discipline like Radiology, the amount could exceed Rs. 1 crore!

Some 15 years ago, a relative of mine had to pay only Rs. 2 lakh through a bank draft and Rs. 2 lakh in cash to get his son admitted to a postgraduate course. The Indian Medical Council has laid down arduous norms in respect of faculty, hospital beds, equipment and so on. Apparently, there is some laxity in the enforcement of the norms. I have heard that while a well-equipped college may run into difficulties, substandard institutions manage to pass muster. I have also heard of cases in which retired teachers and other doctors with postgraduate qualification are shown as visiting faculty for short periods during an inspection by Medical Council teams. No civilised country, not even a soft state like India, can allow such a scandalous state of affairs to continue. It is time the government took resolute action to stem the rot.

Some reservations

The Prime Minister in the Foreword and the Deputy Chairman of the Planning Commission in the Preface have highlighted the positive role the Rashtriya Swasthya Bima Yojana will play in providing health care to the population below the poverty line. I have serious doubts about the benefits that will actually accrue to the rural poor from health insurance and the option to go to private hospitals. As I have not personally observed the working of the scheme, I would leave it to experts familiar with field conditions to evaluate the Yojana.

Another controversial matter is Public Private Partnership (PPP) in providing health care. I do not share the optimism expressed in the Plan document about the role of private institutions in providing health care in rural India. Nor do I agree with the Commission’s enthusiasm about the role of corporate health care and the benefits flowing from the expansion of medical tourism. These issues deserve to be dealt with by more knowledgeable persons.

I shall conclude reiterating that health care in rural India and school education throughout the country should squarely be the concern of the government. Private initiative can certainly supplement the government’s efforts in these fields, but that will benefit only the affluent.

(P.S. Appu is a former Chief Secretary of Bihar and former Director of the Lal Bahadur Shastri National Academy of Administration, Mussoorie. He can be reached at: psappu@hotmail.com)

Expand and re-orient NREGA

The recession is a promising moment to expand NREGA with greater emphasis on building social capital in a big way.

Soon after assuming office, the first UPA government took an impressive step for the alleviation of rural poverty by launching the National Rural Employment Guarantee Scheme. It was, indeed, a wise move to insulate the programme from the vicissitudes of electoral politics by enacting the National Rural Employment Guarantee Act (NREGA). The implementation of the programme has been uneven. A large number of articles have appeared in the press pointing out the defects in implementation. On September 19, The Hindu published an article by Professor Jean Drèze, “Employment guarantee or slave labour?” It reveals a sorry state of affairs. Every effort should be made to remove the shortcomings and ensure better implementation. Despite all its failings, the NREGA has proved to be a boon to the rural poor. It is now necessary to expand and re-orient the NREGA. That is the theme of this article.

The NREGA evolved into its present shape by building on past experience in designing and executing schemes for providing employment. The new programme is an improvement on its predecessors. There is greater flexibility and the implementing agencies have freedom to start new works according to necessity. Though the main emphasis is on providing employment, the law also aims at the creation of durable productive assets. The present recession is a promising moment to expand the programme with greater emphasis on the second objective of building social capital in a big way.

Great scope for building social capital on a massive scale. More than half a century ago, Ragnar Nurkse, the distinguished Cambridge economist, had pointed out that capital starved over-populated countries could build social capital in a big way by employing the surplus labour on a variety of projects. He had listed schemes concerning irrigation, drainage, roads, railways, housing, etc. In his view, the only danger was the onset of inflation caused by the increased demand for food and other wage goods. Though the Indian planners were aware of Nurkse’s prescription, they could not have implemented the idea in the pre-Green Revolution era of precarious food supply. Now we have ample stocks of food grains. And our industry will welcome the enhanced demand for consumer goods. We can, therefore, employ the surplus labour for building social capital in a big way without incurring any risk.

National Rural Development Board. There is considerable scope for absorbing vast quantities of human labour in well planned projects of soil and water conservation, rain water harvesting, irrigation and drainage works, flood control, watershed development, de-silting and maintenance of numerous water bodies, both manmade and natural, and an ambitious programme of afforestation aimed at restoring green cover throughout the country. In that enormous programme, governments’ efforts should be supplemented by suitable NGOs, co-operative societies, joint stock companies and so on. The present ad hoc approach aimed at providing immediate employment should yield place to a systematic, well planned, well co-ordinated effort.

Such an ambitious programme would necessitate the setting up of a National Rural Development Board clothed with adequate statutory powers. It should be a lean organisation responsible for policy and overall guidance. Under the Board there should be a well staffed regional office for each major river basin to handle planning, formulation of projects, co-ordination between major watersheds, technical guidance and supervision, maintenance of the assets created and so on. The valley of a big river will naturally include a number of major watersheds. Every major watershed should have a small office for coordinating and supervising the work within that watershed. The Panchayati Raj set up should handle the work within the district. The expanded programme will generate employment on a large scale, both for skilled and unskilled hands. The afforestation project will absorb a large number of rural workers, many on a permanent basis.

Two basic suggestions for better implementation: The fatal weakness of NREGA is poor implementation. The main reasons for shoddy execution are the decline and degeneration of the administration at all levels, particularly at the block level, and the lukewarm, half-hearted approach to democratic decentralisation. As I am out of touch with field conditions, I am unable to present a comprehensive proposal for setting things right. However, as a Collector in North Bihar five decades ago I had closely observed the robust functioning of the block administration. In 1981-82, I had occasion to see the sorry state of the block set up in several States that I visited as Director of the National Academy. As far as the Panchayati Raj is concerned, I had the privilege of serving on the review committees set up by two States, Karnataka and Kerala. Relying on these slight exposures I have mustered the courage to make the following radical suggestions.

Induct Block Development Officers of a higher calibre. The responsibility of the BDO is so onerous that it should be held by an officer of a much higher calibre. I suggest that after the completion of their training, all IAS officers should serve as BDOs for at least three years. The implementation of this suggestion will provide only about 300 officers. The country would need some 6000 bright young men and women to work as BDOs.

I put forward three suggestions for getting the required number of officers. The annual recruitment to the All India and Central Services may be stepped up by 50 per cent. After six months’ training, the new recruits should serve as BDOs for two years. Thereafter the required number may be allotted to the different services on the basis of their performance, aptitude and choice. The rest may continue as BDOs. A two-year stint as BDO will prove to be an invaluable experience even for those joining the foreign service.

The second suggestion is that short term contracts may be offered to the products of IITs, Regional Engineering Colleges, national law schools and so on. They could be posted as BDOs after being trained for six months. At the end of the contract some may be absorbed in government service and the others may move on to jobs of their choice elsewhere. Companies in the public and private sectors may be persuaded to offer them suitable employment giving credit for their service in the Block.

A third possibility is to depute young officers from the State services and public sector banks to work as BDOs for fixed periods after a short orientation course. The matter, of course, calls for a more thorough consideration.

The District Officer to be the Chief Executive of the District Panchayat. Thoroughgoing democratic decentralisation is the only way in which this sprawling country of great diversity can be governed efficiently. The Seventy Third Amendment to the Constitution providing for the creation of panchayats at the district, intermediate and village levels was a giant step forward. The State governments have, however, been reluctant to empower the panchayats. Their approach has been half-hearted and lukewarm. Even so, in the larger public interest, the States should be persuaded to delegate adequate powers to the panchayats.

After considerable introspection, I have come to the conclusion that the District Officer, variously designated as Collector, Collector and District Magistrate, or Deputy Commissioner, should be the Chief Executive of the district panchayat. This single step will go a long way in strengthening the Panchayati Raj. The District Officer should, of course, have under him at least four senior officers to handle work relating to law and order, land revenue, development and Panchayati Raj. Initially there will be many hitches and irritants. A sub-clause should be added in Article 243-C of the Constitution spelling out the powers of the Chairperson and the Chief Executive.

Such a clear demarcation of powers and responsibilities will hopefully reduce friction and promote mutual respect, understanding and cooperation between the two functionaries. Furthermore, hand-picked officers of 10-12 years of service should be appointed District Officers and the Chairmen should be seasoned public persons. I hope that in due course, the relationship between the Chairperson and the Chief Executive will settle down to resemble that between the Chief Minister and the Chief Secretary. In the initial stages, however, the relationship could be like that between the non- executive chairman and the managing director of a large company. I know that this proposal is highly controversial. It will be opposed both by politicians and bureaucrats. However, in my considered view, this radical step will facilitate the better implementation of the re-oriented NREGA.

The massive effort in building social capital outlined in this essay could trigger higher productivity of land and labour, diversification of agriculture and faster industrial growth. It would also mitigate the suffering inflicted by chronic drought and flash floods.

What I have presented is not an action plan or a project report for reorienting NREGA. It is only the rough outline of a fond vision I have been nursing for a long time. I shall be happy if this article provokes purposeful discussion.

The road to inclusive growth: Education

Why the provision of a good school education is the key first step.

The twin goals of Indian economic planning have been rapid all-round economic growth and equitable sharing of the fruits of development. The country has made significant progress in realising the first objective. But the second goal has remained elusive. After six decades of planned economic development, the disparities have widened and some three-quarters of the population are mired in poverty. The world financial crisis offers an opportunity to make a course correction and advance towards inclusive growth.

It is generally agreed that the Keynesian prescription of stepping up public spending for the management of aggregate demand is the most potent weapon to fight a recession. The Indian government has already initiated action on the right lines by enhancing outlay on infrastructure, particularly on highways, power and other public works, the NREGA, supply of foodgrains to the poor at subsidised rates and so on. But more needs to be done. Here are some specific suggestions to help the disadvantaged by giving them access to quality school education.

The main reasons for India’s failure to achieve inclusive growth and distributive justice are the failure of land reform, the wrecking of the well-designed community development programme that aimed at the all-round development of the village, the lack of success in providing adequate employment opportunities at living wages to a rising population, the neglect of school education and the absence of special measures designed to help children of the poor to get a good school education.

Crux of the problem

The significant weakness of the Indian economy is the continued dependence of some 60 per cent of the workforce on low-productivity agriculture and allied occupations for employment and living. The efforts made since Independence have led to only a small decline in the percentage of the population dependent on agriculture. In that period, the share of agriculture in the gross domestic product declined by more than one half, resulting in great distress. Even if we achieve an annual growth of 10 per cent or 12 per cent in industry, there will be no substantial decrease in the dependence on agriculture.

Furthermore, it is high time we took note of the tectonic shift that has taken place in the nature of industrial employment. In the early stages of industrialisation, rural workers could migrate to the cities and seek employment in the textile mills of Bombay, Ahmedabad or Coimbatore, or the Tata Iron and Steel mill at Jamshedpur, for instance. That is no longer possible. The doors of modern industry will open only to those with good schooling and the relevant skills. This is equally true of the service sector which has grown fast in recent years. With the onset of the IT revolution it has become obligatory for new entrants to acquire even higher levels of skills. Hence it is a matter of urgency to provide adequate facilities for quality school education and impart relevant skills to the disadvantaged.

The policymakers who introduced reservation for the disadvantaged in institutions such as the Indian Institutes of Technology and the Indian Institutes of Management without ever bothering to give them access to high-quality school education put the cart before the horse. What the politicians really did was to invite the disadvantaged to a veritable Barmicide’s feast! Only the so-called creamy layer benefit from reservation. The most effective affirmative action in the field of education would have been to provide adequate facilities for quality school education to children of the weaker sections.

In any purposeful programme to achieve inclusive growth, the pride of place should go to education, particularly quality school education. In this context, the Prime Minister’s announcement about opening 6,000 Navodaya-type schools is welcome. Prime Minister Rajiv Gandhi took a laudable initiative by opening the Navodaya schools. Unfortunately those schools ended up catering to the elite. What is now needed is to reserve 50 per cent seats in existing and future Navodaya schools for children of the disadvantaged. This simple, inexpensive step will be a boon to the poor.

Expand and modernise facilities

Apart from opening schools, the working of existing government schools should be improved as a matter of priority. Some six decades ago, government schools were among the best institutions in the country. But today most of them are in bad shape. While there are numerous expensive private schools to cater to the needs of the affluent, the poor mostly depend on government schools.

Hence the need to improve the functioning of government schools without losing more time. There is also a need to expand and modernise teacher-training facilities. In order to attract better talent, it is necessary to improve the emoluments of teachers. A society that compensates clerks in government offices and banks more liberally than teachers cannot expect the talented to opt for teaching.

Opening of schools and improving the functioning of government schools will not automatically confer great benefits on the poor. Special steps are needed to enable students to make use of the facilities. The greatest handicap that poor children face is that at home they do not have an ambience conducive to the pursuit of studies. This drawback can be overcome to a large extent if they are lodged in hostels equipped with good tutors to guide them.

A new initiative

The establishment of schools and the improvement of government schools will take time. The provision of quality school education to children of the poor is crucial and we cannot afford to wait. A practical solution is to reserve seats in existing good schools and provide hostel accommodation and special tuition. It should be possible to reserve at least 10 per cent of seats in each class in all Central schools, Sainik schools and good government schools. Additionally, good private schools, including those run by Christian missionaries and others, should be persuaded to join the endeavour. The government should, of course, give the institution ample grants to cover capital and recurring expenditure. Each student should be given a scholarship sufficient to meet all legitimate expenses. Public schools such as the Doon School, the Rishi Valley School and so on, good missionary schools like St. Columba’s and Jesus and Mary in Delhi, and others like the Delhi Public School, should become a part of this.

There should be a caveat added here. Great care should be taken in selecting the schools. There is the danger of unsuitable institutions trying to gatecrash to avail themselves of the generous financial assistance. Recent years have witnessed a mushrooming of so-called English medium schools of poor quality started for commercial reasons. Such schools should be left out. In each State, a small committee consisting of knowledgeable persons of integrity should be set up to select the schools. If serious efforts are made it should be possible to admit at least one lakh poor students in good schools over the next few years. If successfully implemented, this may turn out to be the most effective affirmative action attempted so far.

Though we have succeeded in modernising the economy and the country has registered remarkable industrial and agricultural growth, we have failed to ensure that a fair share of the growth accrues to the poor. The present recession is an opportunity to reverse the trend and implement programmes aimed to achieve inclusive growth. Investment in school education should be stepped up in order to help the poor get quality schooling. The other areas that cry out for attention and enhanced allocations are an enlarged and revamped NREGA, public health and medical care, a reorganised public distribution system targeting the poor and augmented housing facilities for the poor, both urban and rural. There is also a dire need to revamp the delivery mechanism, making it more efficient and accountable.

All these measures will necessitate a substantial additional outlay pushing the fiscal deficit a little above the projected 6.8 per cent. Considering that these steps are needed to make a course correction and ensure inclusive growth, the risk is a justified one to take. A polity that incurs colossal wasteful expenditure on a bloated government machinery, some avoidable subsidies, the supply of free electricity to prosperous farmers, distribution of free colour television sets, the installation of statues of megalomaniac politicians and so on should not grudge a large outlay on projects targeted to benefit the weaker sections. If an amendment to the Fiscal Responsibility and Budget Management Act 2003 becomes necessary, the Government of India should amend it without hesitation.

(P.S. Appu is a former Central Land Reforms Commissioner and a former Chief Secretary of Bihar. He can be reached at psappu@hotmail.com)

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Learning from 3G Auction

The government may have taken inordinately long to actually auction 3G spectrum, but there’s little to doubt the success of the auction once it took place, both in terms of transparency of conduct and revenues raised for the exchequer. Now, according to a report in The Financial Express published on Monday, the government is keen to replicate the “clock auction” model used for 3G in the auctioning of a third set of FM radio licences. What is special about the clock auction model? For one, its operation is completely electronic and involves no human element. Unsurprisingly, therefore, it is more transparent than the conventional auction method where bidders hand their bids over in sealed envelopes; the possibility of human tampering in the latter system makes it more vulnerable to misuse.

Second, the clock auction method will yield more revenue for the government than a conventional auction. In a conventional auction, the bidders put in their bids once and the highest bid wins straight away. A clock auction is a long, continuous bidding process, where the auctioneer starts with a reserve price and continues to raise it upwards until the number of bidders (who name their price without knowing what other bidders are doing) are reduced to the exact number of slots available to be given out. The clock auction for 3G spectrum and broadband and wireless access earned the government Rs 1.06 lakh crore in revenue, three times the budget estimate of Rs 35,000 crore. The massive revenues have even made a significant dent on the fiscal deficit in the first five months of the year.

The stakes in the FM auction may not be as high as in 3G, but are significant nonetheless for a government that needs to trim its deficit down further. The government is planning to allocate 806 stations across 283 towns in this latest round. Obviously, there will be different bid categories, with the largest metro cities in the top tier likely to command the highest prices. Interestingly though, the ministry of information and broadcasting, which is responsible for handing out the FM licences, had earlier turned down the clock auction method in favour of a conventional auction. But the government, in the interest of maximising its own revenues, has fortunately succeeded in persuading the ministry to reverse its earlier stance.

Climate Change Management in Asia

Climate change management and environmental protection are the way forward in India's outreach plans for the subcontinent and beyond.

External Affairs Minister S.M. Krishna shows his wry sense of humour every once in a while. Asked about seeming differences between him and Environment Minister Jairam Ramesh on dealing with China recently, he answered “Well, environment knows no boundaries and our Environment Ministry similarly transcends boundaries.”

Mr. Krishna may have meant the comment in a lighter vein, but what he said has serious, even exciting, possibilities for India, and must be looked at more closely by his own Ministry as it makes its moves in the subcontinental ‘great game'.

Last week, British consultancy Maplecroft listed India as second in the group of countries most at risk from climate change. Bangladesh came first, facing the loss of a large part of its coastal landmass to rising waters. Also prominent, apart from the African nations, were Nepal, Afghanistan and Myanmar, and a little further down the line, Pakistan. Maldives, though not studied for the list, is of course, at the top of the list of islands likely to disappear under water. In short, it is South Asia that will bear the brunt of climate change in the coming decades. While every study these days is received with a certain scepticism, the focus is really not on whether or not this is true but on whether India can turn its plans for climate management into a game-changer for subcontinental relations. To paraphrase Mr. Krishna, can environmental diplomacy transcend political boundaries and help India forge closer ties in the region?

At the South Asian Association for Regional Cooperation (SAARC) summit in Thimphu, Bhutan, this year, South Asia nations agreed on a 16-point action plan, including measures like planting 10 million trees in the next five years and setting up inter-governmental marine, mountain and monsoon initiatives. Unfortunately, given the SAARC's track record of allowing subcontinental rivalries (primarily India-Pakistan) to overshadow their implementation of decisions, those initiatives are unlikely to see quick action. However, the urgency of the situation, particularly the prospect of thousands of ‘climate refugees' being forced out of their homes, requires India to lead the way as the subcontinent comes to grips with global warming.

Two recent projects may serve as role models — the first is an initiative to save the Sunderbans. Earlier this year, India and Bangladesh decided to set up the Sundarbans Eco-System Forum to protect the 10,000 sq.km of mangroves that span both countries. According to a study at Jadavpur University, global warming is causing the sea to rise 3.14 mm a year — far higher than the global average. The study, undertaken by oceanographers in 2009, estimated that about 10,000 inhabitants have already been forced out of their villages and 70,000 more would have their homes inundated in the next 30 years — not to mention the impact on the fast-disappearing Bengal tiger. While India and Bangladesh have spent much of this year ironing out their differences over terror groups, trade barriers and border fencing, they can and must take quicker strides on an issue like joint management of the mangroves before 75 per cent of them disappear, as is predicted by the university survey.

A similar concern led India to join hands with China and Nepal this year to agree on a framework, the Kailash Sacred Landscape initiative, to conserve the ecosystem of Mount Kailash. “India must see climate change management as a strategic investment,” says Mr. Jairam Ramesh, proposing a series of such engagements with other countries on our land and sea borders.

India has much to learn as well as impart to the SAARC region, whether it is about coastal zone management from Maldives or forestry management from Bhutan, a country whose Constitution mandates 60 per cent forest cover, and it actually manages about 70 per cent. On the other hand, Afghanistan could benefit from the Indian experience of managing the degradation caused by the plunder of its mining and mineral resources that is bound to follow any degree of peace and stability in that country, and Sri Lanka from Indian technologies on harnessing its wind energy of an estimated 20,000 MW.

The melting Siachen glacier is another border-transcending issue. After the devastating floods in Pakistan this year, there is much that India and Pakistan can share on managing river systems. In fact, in a year when dialogue on all other bilateral issues floundered, the discussions of the Indus Water Commission in the Pakistani Parliament this month shone by comparison. Water Minister Raja Pervez Ashraf acknowledged that India had addressed all Pakistan's concerns like the Nimmo Bazgo and Chutak hydel projects on the Indus and Uri-II on the Jhelum, even as the third dispute, over the Kishanganga project was headed for international arbitration. The message is clear. While talks break down frequently on terror and strategic issues, dialogue on environment can ‘flow' more naturally to a resolution. To that end, South Block must look at ways of collaborating on research, encourage scientist exchanges and build capacity for decades to come, opening new avenues of engagement with each of India's neighbours.

Climate change studies, though, are only part of the race against nature's anger at industrialisation — the future will quite clearly belong to countries and regions that are able to harness renewable energies best. It's disappointing that India, which practically pioneered solar technology, has lagged behind in that race. In the 1980s everyone who had access to Doordarshan heard of indigenous solar cookers and waterheaters. Today it is China that leads the world in manufacturing capacity of solar, wind and biogas energy, investing close to $35-billion in renewable energies last year, a figure that put it ahead of the U.S.

Interestingly, India does fairly well on the renewables index: according to the latest Ernst and Young survey, it ranked fourth behind China, the U.S. and Germany, though none of its South Asian neighbours figures anywhere in the top 25. In the past year while India has looked to spend more than $1 billion on infrastructure projects in Afghanistan, Sri Lanka, Bangladesh and Myanmar, it may well consider substantial investments in renewable energies in each of these countries.

Finally, environmental negotiations give India and China another opportunity to work on their otherwise tricky relationship. With every indication that this year's climate change conference in Mexico will again see an equally tough fight between the developed world and the developing world, India and China are once again working together on their strategy for 2010 — carrying the spirit of Copenhagen to Cancun, as it were. This despite all the bad blood over China's aggression on visa issues, and Indian ire over the border.

The changing environment offers India new avenues to forge ties within the neighbourhood and beyond, as it claims its position both as a subcontinental leader and Asian power. Perhaps the big push will come with the Environment and External Affairs Ministries working in tandem: because climate change, like terror, cyber warfare and other 21st Century threats to the world, knows no boundaries.

Japan India Relations: A strategic corrective

From a donor-recipient relationship centred on Overseas Development Assistance (ODA), India's trade and economic ties with Japan are set to embark on a new phase of wide-ranging bilateral cooperation. Last week, Prime Ministers Manmohan Singh and Naoto Kan concluded negotiations and exchanged documents in Tokyo on a bilateral Comprehensive Economic Partnership Agreement. The India-Japan Strategic and Global Partnership, launched in 2006 as part of India's ‘Look East' policy, prepared the ground for this. CEPA, once it comes into force in the first half of 2011 after ratification by the Japanese Diet, is expected to deepen mutual engagement in trade in goods and services, investment, technology, and cooperation. It will also open up new avenues. From the stage of cautious joint venture collaboration in Maruti Udyog in the 1980s, economic ties with Japanese companies have come a long way. Nevertheless, India's trade with the world's second largest economic and technological powerhouse has remained virtually stagnant over the past two decades. Japan is ranked tenth among India's export destinations and sixth among the country's major investors. Perhaps owing to a system of over-cautious decision-making, Japanese companies seemed to lose out to their South Korean counterparts in major sectors such as electronics and automobiles — areas in which Japan once dominated on a global scale.

CEPA should be seen as part of a strategic corrective aimed at strengthening the capabilities of both Asian giants, especially in the aftermath of the global financial crisis and the consequent slowdown and rise of protectionism in the west. India's success in the auto sector has shown that its manufacturing capabilities are up to world standards, as are the capabilities of its software and IT-enabled services. CEPA can help catalyse the advantages of Japanese technology and India's labour cost advantage to emerge as major partners in a slew of sectors such as auto, healthcare and drugs, apparel, farm products and allied machinery on top of increased trade in goods as a result of reduced tariffs on more than 8,000 products. The real stumbling block is India's lack of quality infrastructure across the country. Perhaps aware of this drawback, Japan has been channelling its ODA to development of infrastructure in a major way. Japanese investments already have a major share in the development of freight corridors, apart from Delhi Metro which is regarded as an unqualified success in urban transportation. Tokyo has wisely shown special interest in developing freight corridors in the southern States and building other infrastructure to exploit the hitherto untapped potential for cooperation.