UNICEF data shows 48% of India's children under five suffer from malnutrition, that is some 60.8 million children. Both in percentage terms and in absolute terms it compares poorly with neighboring countries like China ( 15%),Bangladesh ( 43%) , Pakistan (42%)and African countries like Nigeria (41%), Tanzania ( 44%) and Congo ( 46%). Only Ethiopia seems to be worse off at 51%. And this when the GDP has more than doubled since 1991. What development are we talking about ?
Lets look at another piece of information. Between 1997 and 2007, the Parliamentary Committee found that 1.83 lakh tonnes of wheat, 6.33 lakh tonnes of rice, 2.20 lakh tonnes of paddy and 111 lakh tonnes of maize rotted due to either lack of storage facilities or poor maintenance of stocks in the existing facilities. And against a buffer norm of 31.9 Million tonnes, FCI was having a stock of 57.8 Million tonnes. With such a poor track record why maintain excess stock ? So the point is not about availability . The point is about willingness to feed people. What kind of Government are we having ??
And the third piece of information is this. An amount of Rs 28054 Crores has been spent to host the Common Wealth Games in Delhi. And we know the quality of the infrastructure created with this money.
The basic question is this : Is this the infrastructure that India needs now ? Cant the tax payers money be better spent in creating adequate storage facilities for grains or in distributing food at affordable price to the needy rather than let it rot...What national pride are we talking of when we have our children suffering for want of proper and adequate food ? When will we get our priorities right ?????
Tuesday, September 28, 2010
Monday, September 27, 2010
Development - in numbers..
Over the years we have been seeing development quantified in numbers - more specifically in terms of the amount spent. A more interesting way is to talk of allocation - and that is not even spending !!!
So we hear of around Rs 1.34 trillion allocated for education etc ..or we hear it in terms of percentage of GDP spent. The focus is hence on spending and there are saner and some less saner ways of representing it.
The basic premise appears to be simple : If money is spent , then development or a positive change is guaranteed.
The questions are
1. Is the money well spent ?
2. Is there a mechanism to assess the actual development or change that has been created by way of this development ( basically are the assumptions made at the time of approving the spending tested and verified ?) Are there independant ( politically and economically independant) systems to study the impact of the spending ? ( The key point is Independant - if one arm of the government spends and another arm measures impact and both report to one ministry , it is not difficult to understand how the assessment would be ! )
3. Is there any monitoring and accounting mechanism to see the above
In the absence of these ; or in the absence of the information actually made available widely ( actually , this is the only information desired ), talking in terms of expenditure is meaningless.
Statistics they say, conceals more than it reveals. And spending is not equal to developing.
So we hear of around Rs 1.34 trillion allocated for education etc ..or we hear it in terms of percentage of GDP spent. The focus is hence on spending and there are saner and some less saner ways of representing it.
The basic premise appears to be simple : If money is spent , then development or a positive change is guaranteed.
The questions are
1. Is the money well spent ?
2. Is there a mechanism to assess the actual development or change that has been created by way of this development ( basically are the assumptions made at the time of approving the spending tested and verified ?) Are there independant ( politically and economically independant) systems to study the impact of the spending ? ( The key point is Independant - if one arm of the government spends and another arm measures impact and both report to one ministry , it is not difficult to understand how the assessment would be ! )
3. Is there any monitoring and accounting mechanism to see the above
In the absence of these ; or in the absence of the information actually made available widely ( actually , this is the only information desired ), talking in terms of expenditure is meaningless.
Statistics they say, conceals more than it reveals. And spending is not equal to developing.
Wednesday, September 22, 2010
A 120 Schemes
...that is the approximate number of schemes that a DDA ( Deputy Director of Agriculture) is supposed to manage. The Agricultural Department in the State is in a state of mess. Recruitment into this Department stopped long time back - as a part of the austerity drive to control Government spending ( I keep wondering if what the Agri department does is spending or investing .... but na, it has steadily moved to spending these days)...and the officers are busy today putting up vegetable arches and fruit arches when a minister visits or setting up exhibition stalls on the roads to please some visitor...
There is a scheme for everything ... for instance there is a scheme under the national horticultural mission , where if one were to submit (a copy of) the title deeds, the saplings of one's choice, the agricultural inputs - the bio fertilizer required, oil cake ..everything is given free. Such a wonderful scheme ....- except that one can never be sure if the sapling given is of the variety one actually asks , or if what has been given will ever grow , or if there is any nutrient at all in the fertilizer supplied or if what is supplied as oil cake is oil cake or soil. No wonder there are hardly any serious takers for this scheme. Similarly there are schemes for rearing cattle , growing earthworms etc etc ...all adding up to several crores of rupees. It is no rocket science to know what happens with all this money....and who actually gains.
And if there are 120 schemes to manage, one wonders if the scheme is actually managed or the vouchers and auditors are managed.
There is no vision for the Department. Or probably there is one - of how the create fancy and free schemes running to several crores to benefit select individuals. What else can one say of a scheme to increase pulse production - where the concerned official is simply given an amount to be spent in any way suitable to increase pulse production and he/she just conducts awareness programs ? or of the revised nutrient based subsidy scheme which no one seems to fully understand - except that now every fertilizer manufacture prices his product differently...
There seems to be no serious application of mind on actual agriculture development - on augmenting irrigation capabilities ,on rainwater harvesting , on water conservation, on extending responsible post harvest technologies , on creating good storage and market infrastructure , on supply of quality seeds, focused nutrient management etc. And we are happily turning prime agricultural land into SEZs and residential apartments and what not. No 'educated ' individual wants to take up agriculture as a career - oh forget the educated mass - even the not so educated mass benefiting from the 100 day employment scheme does not want to look at agriculture. Labor is probably the biggest problem that a farmer faces today - that is if the rains don't fail him. And we still keep talking of India living in villages and of more than 60 % of the population depending on agriculture for livelihood. That number surely should go down by over 20%. ...
I keep wondering how long we can pull along this way...
There is a scheme for everything ... for instance there is a scheme under the national horticultural mission , where if one were to submit (a copy of) the title deeds, the saplings of one's choice, the agricultural inputs - the bio fertilizer required, oil cake ..everything is given free. Such a wonderful scheme ....- except that one can never be sure if the sapling given is of the variety one actually asks , or if what has been given will ever grow , or if there is any nutrient at all in the fertilizer supplied or if what is supplied as oil cake is oil cake or soil. No wonder there are hardly any serious takers for this scheme. Similarly there are schemes for rearing cattle , growing earthworms etc etc ...all adding up to several crores of rupees. It is no rocket science to know what happens with all this money....and who actually gains.
And if there are 120 schemes to manage, one wonders if the scheme is actually managed or the vouchers and auditors are managed.
There is no vision for the Department. Or probably there is one - of how the create fancy and free schemes running to several crores to benefit select individuals. What else can one say of a scheme to increase pulse production - where the concerned official is simply given an amount to be spent in any way suitable to increase pulse production and he/she just conducts awareness programs ? or of the revised nutrient based subsidy scheme which no one seems to fully understand - except that now every fertilizer manufacture prices his product differently...
There seems to be no serious application of mind on actual agriculture development - on augmenting irrigation capabilities ,on rainwater harvesting , on water conservation, on extending responsible post harvest technologies , on creating good storage and market infrastructure , on supply of quality seeds, focused nutrient management etc. And we are happily turning prime agricultural land into SEZs and residential apartments and what not. No 'educated ' individual wants to take up agriculture as a career - oh forget the educated mass - even the not so educated mass benefiting from the 100 day employment scheme does not want to look at agriculture. Labor is probably the biggest problem that a farmer faces today - that is if the rains don't fail him. And we still keep talking of India living in villages and of more than 60 % of the population depending on agriculture for livelihood. That number surely should go down by over 20%. ...
I keep wondering how long we can pull along this way...
Monday, September 20, 2010
The Math Lecturer ...
Haircuts are typically weekend morning ( the earlier the better) chores. Yesterday was an exception though.In an unusual, impulsive act, I decided to go for a haircut at around 8.00 PM.
The hair dresser was new to the place and the owner called him close and instructed .
"Sir is working in the University ...give him a nice stylish haircut" .
I realized it would be a futile exercise trying to explain that the institute I work is legally not a part of the University and so I shifted my thought to something more productive .... the haircut per se . By any definition , mine is certainly not a stylish hair syle. I hence closed my eyesa and started to mentally picture different stylish hairstyles on my head.
The interesting thought process was interrupted by some discussions on differential calculus !!... I almost jumped from the seat preparing to run away. (I have always had this healthy allergy for Math in general and calculus in particular)..
But was'nt I in a saloon ?? ....I opened my eyes and was reassured to find myself still in the saloon ... I saw a pair of hands silently 'cutting away and styling' my hair. Before I could close my eyes again to resume my thoughts on hair styles, I heard the word 'calculus' yet again and was stunned to realize that it was my hair dresser who was uttering it . I had not looked at his face properly till then ...I glared into the mirror and saw a fine face. Politely I asked him what he has studied ...and he said he had a M.Sc in Mathematics and an M.Phil at EVR College (The college was named after the great rationalist leader Periyar E.V.Ramasamy, who had bought that piece of land and donated it to the Government to start the College. My Father had served as Librarian in this college for a large part of his career)....
What the hell was happening to the education system ....
I looked at him ....and he said he was working as a Lecturer in Mathematics in an Engineering college ...softly adding that they were not paying him too well.....
I did not know how to react ... The hair styling was over. The Math Lecturer had done a decent job...I paid and left ...wondering not just if I would take a comb and a pair of scissors to style somebody's hair, but of Periyar and the current day Education Industry, of dignity of labor , of the purpose of education etc etc...
The hair dresser was new to the place and the owner called him close and instructed .
"Sir is working in the University ...give him a nice stylish haircut" .
I realized it would be a futile exercise trying to explain that the institute I work is legally not a part of the University and so I shifted my thought to something more productive .... the haircut per se . By any definition , mine is certainly not a stylish hair syle. I hence closed my eyesa and started to mentally picture different stylish hairstyles on my head.
The interesting thought process was interrupted by some discussions on differential calculus !!... I almost jumped from the seat preparing to run away. (I have always had this healthy allergy for Math in general and calculus in particular)..
But was'nt I in a saloon ?? ....I opened my eyes and was reassured to find myself still in the saloon ... I saw a pair of hands silently 'cutting away and styling' my hair. Before I could close my eyes again to resume my thoughts on hair styles, I heard the word 'calculus' yet again and was stunned to realize that it was my hair dresser who was uttering it . I had not looked at his face properly till then ...I glared into the mirror and saw a fine face. Politely I asked him what he has studied ...and he said he had a M.Sc in Mathematics and an M.Phil at EVR College (The college was named after the great rationalist leader Periyar E.V.Ramasamy, who had bought that piece of land and donated it to the Government to start the College. My Father had served as Librarian in this college for a large part of his career)....
What the hell was happening to the education system ....
I looked at him ....and he said he was working as a Lecturer in Mathematics in an Engineering college ...softly adding that they were not paying him too well.....
I did not know how to react ... The hair styling was over. The Math Lecturer had done a decent job...I paid and left ...wondering not just if I would take a comb and a pair of scissors to style somebody's hair, but of Periyar and the current day Education Industry, of dignity of labor , of the purpose of education etc etc...
Monday, July 12, 2010
Caste Census
The GOM is debating on the issue of Caste census.
The strongest argument for caste census is that it will help in targeting development at specific social groups. This argument appears flawed as social classes no longer seem to be caste based. The so called BCs / OBCs / MBCs are equally if not more powerful - politically , economically and socially - as the groups that earlier prided themselves as forward castes. Differences that persist still , can get eliminated in time with education , development and increased awareness and the existing affirmative action structures are , to my mind adequate for this purpose.
The only significant difference that exists today is between the Dalits and the Non Dalits - and this marked difference certainly needs to be worked on. It is highly disconcerting that the so called backward classes have successfully and diligently learned the art of discrimination from the (erstwhile ?) forward castes - and Dalits these days are victimized largely by the so called backward castes.
The Dalits who have for ages been victims of untouchability and physical separation certainly need enhanced affirmative action - but that should not be extended to the other castes. It is indeed a sad state today that groups vie with each other to be classified as backward to move forward.
A caste based census for enumerating the so called backward classes - particularly on the basis of declaration will serve only one class - that of the ruling political class, which will be able to take on focused activities to develop specific caste based vote banks !
The strongest argument for caste census is that it will help in targeting development at specific social groups. This argument appears flawed as social classes no longer seem to be caste based. The so called BCs / OBCs / MBCs are equally if not more powerful - politically , economically and socially - as the groups that earlier prided themselves as forward castes. Differences that persist still , can get eliminated in time with education , development and increased awareness and the existing affirmative action structures are , to my mind adequate for this purpose.
The only significant difference that exists today is between the Dalits and the Non Dalits - and this marked difference certainly needs to be worked on. It is highly disconcerting that the so called backward classes have successfully and diligently learned the art of discrimination from the (erstwhile ?) forward castes - and Dalits these days are victimized largely by the so called backward castes.
The Dalits who have for ages been victims of untouchability and physical separation certainly need enhanced affirmative action - but that should not be extended to the other castes. It is indeed a sad state today that groups vie with each other to be classified as backward to move forward.
A caste based census for enumerating the so called backward classes - particularly on the basis of declaration will serve only one class - that of the ruling political class, which will be able to take on focused activities to develop specific caste based vote banks !
Monday, June 28, 2010
Bank regulation
Bloomberg reports that the rules for tighter capital requirements and liquidity requirements by banks could get delayed. They are to be discussed by the G 20 in November and implemented from 2012 on. But as Mario Draghi the Governor of Bank of Italy and the Chairman of the Financial Stability Board - a global coordination body, which works closely with Basle Committee put it - it is better to delay the standards put in rather than weaken them. My only concern is that as public memory is short, time might prove a weakening factor in itself. So the fond hope is that delay is not too long.
The norms - detailed by a consultative paper released by BIS in 2009 December - apart from other areas - are on two major fronts
a) Capital - particularly, what can constitute Tier 1 capital and if there can be a minimum floor level of Tier 1 that can be stipulated.
b) Liquidity - reserves which are liquid and can handle short and medium term volatility.
The powerful banker's lobby ( The Institute of International Finance ) and other bodies had predictably painted a bleak picture for the economies if the Basle proposals are implemented - and have also indicated that the recovery would get jeopardized if they are put in place now. The lobby in the US has succeeded in diluting some of the recommendations in the reform package - largely on the liquidity front and in part on the capital front - that will be soon cleared by the Obama administration.
Thankfully in India RBI has had a significant amount of forethought - and the IBA - dominated by PSBs is not also unreasonably strong. I am not surprised to see several positions made by BIS - including counter cyclic capital stipulations - have already been implemented in India. The norms for classifying instruments is relatively tighter in India and we do have a floor at 6 %. There is no concept of Tier 3 in India. The SLR and CRR requirements have also helped maintain the required amount of liquidity comfort in the banking system. No wonder we have a resilient banking system !
The norms - detailed by a consultative paper released by BIS in 2009 December - apart from other areas - are on two major fronts
a) Capital - particularly, what can constitute Tier 1 capital and if there can be a minimum floor level of Tier 1 that can be stipulated.
b) Liquidity - reserves which are liquid and can handle short and medium term volatility.
The powerful banker's lobby ( The Institute of International Finance ) and other bodies had predictably painted a bleak picture for the economies if the Basle proposals are implemented - and have also indicated that the recovery would get jeopardized if they are put in place now. The lobby in the US has succeeded in diluting some of the recommendations in the reform package - largely on the liquidity front and in part on the capital front - that will be soon cleared by the Obama administration.
Thankfully in India RBI has had a significant amount of forethought - and the IBA - dominated by PSBs is not also unreasonably strong. I am not surprised to see several positions made by BIS - including counter cyclic capital stipulations - have already been implemented in India. The norms for classifying instruments is relatively tighter in India and we do have a floor at 6 %. There is no concept of Tier 3 in India. The SLR and CRR requirements have also helped maintain the required amount of liquidity comfort in the banking system. No wonder we have a resilient banking system !
Super Fund and Disaster Liablity
The compensation 'settled' with Union Carbide ( a 50.9% subsidiary of Union Carbide - with the remaining portion coming from some Indian investors including Mr Keshub Mahindra) for the Bhopal tragedy was USD million - abysmally low for the amount of damage that the company has done. What is ridiculous is this. After the disaster , UCC offered USD 350 Million - the insurance amount. Indian Government claimed USD 3.3 Billion and settled for USD 470 Million !!!!! ( which was the insurance amount with interest). Wonder in whose Interest the Government was working for ! The site still has hazardous wastes and UCC's new owner Dow is refusing to clean it up.
Following the uproar after the recent pathetic judgment , the GoM has rushed with a INR 1500 Crore compensation - which is a really thoughtful gesture - particularly considering that it is funded by tax payers money !
And now what is more ridiculous is - the Government is pushing a civil nuclear liability bill capping the liability at USD 100 Million (which even the paragon of free economy - 'The Economist' says is low by international standards. And it does'nt require one to be a nuclear scientist to know the potential damage of a nuclear disaster.
The US corporate sector has an unrivaled record of polluting - NY Times says there are over 1200 sites waiting to be cleaned up and of this half are what are called orphan sites - where ownership and responsibility is difficult to establish.
The basic principle in handling disasters should be that the polluter should pay ( not the tax payer). One significant and relevant development in this is that the US Environment Protection Agency has asked the Congress to reinstate Superfund taxes. This was first introduced by the Carter Administration in 1980 and abandoned by the Republicans (naturally !). This fund was essentially built over time by excise and taxes on oil, chemical and certain other industries and was used to clean up contaminated ( and abandoned ) sites. In some cases, however, it was hard to pinpoint responsibility because sites had changed hands over the years or the owners had gone bankrupt. So Congress created an “orphan fund” financed by corporate excise taxes to clean sites where the polluter could not be clearly identified.
Representative Earl Blumenauer, Democrat of Oregon, has introduced a bill that would raise about $19 billion over 10 years by imposing excise taxes on oil producers, refineries, chemical manufacturers and a few other industries. It remains to be seen if the Industry lobby will let is pass.
This is one lesson we urgently need to learn - if we want US companies or probably after British Petroleum's contribution to pollution - every company that wants to do business in India - in addition to fixing a liability amount on every company, we will need to have a Super fund - which will be generated from taxes on certain industries - like oil, chemicals and of course nuclear power - to handle damages to men and worksites they could possibly pollute , plus also contribute to clean up the mess and redress damages that their counterparts cause(d).
Following the uproar after the recent pathetic judgment , the GoM has rushed with a INR 1500 Crore compensation - which is a really thoughtful gesture - particularly considering that it is funded by tax payers money !
And now what is more ridiculous is - the Government is pushing a civil nuclear liability bill capping the liability at USD 100 Million (which even the paragon of free economy - 'The Economist' says is low by international standards. And it does'nt require one to be a nuclear scientist to know the potential damage of a nuclear disaster.
The US corporate sector has an unrivaled record of polluting - NY Times says there are over 1200 sites waiting to be cleaned up and of this half are what are called orphan sites - where ownership and responsibility is difficult to establish.
The basic principle in handling disasters should be that the polluter should pay ( not the tax payer). One significant and relevant development in this is that the US Environment Protection Agency has asked the Congress to reinstate Superfund taxes. This was first introduced by the Carter Administration in 1980 and abandoned by the Republicans (naturally !). This fund was essentially built over time by excise and taxes on oil, chemical and certain other industries and was used to clean up contaminated ( and abandoned ) sites. In some cases, however, it was hard to pinpoint responsibility because sites had changed hands over the years or the owners had gone bankrupt. So Congress created an “orphan fund” financed by corporate excise taxes to clean sites where the polluter could not be clearly identified.
Representative Earl Blumenauer, Democrat of Oregon, has introduced a bill that would raise about $19 billion over 10 years by imposing excise taxes on oil producers, refineries, chemical manufacturers and a few other industries. It remains to be seen if the Industry lobby will let is pass.
This is one lesson we urgently need to learn - if we want US companies or probably after British Petroleum's contribution to pollution - every company that wants to do business in India - in addition to fixing a liability amount on every company, we will need to have a Super fund - which will be generated from taxes on certain industries - like oil, chemicals and of course nuclear power - to handle damages to men and worksites they could possibly pollute , plus also contribute to clean up the mess and redress damages that their counterparts cause(d).
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