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Contemporary issues related to human development , regional and global.

Category: INDIA

Kerala and its Vizhinjam International Port

Kerala and its Vizhinjam International Port

Construction of Vizhinjam International Port, estimated to cost over Rs.6000 Cr, has just started: Project was initiated fifteen years ago: It was facing serious environmental objections and a judicial enquiry was ordered recently to look into the serious irregularities pointed out by C&AG. Copied below is an old note on this project, prepared by me and sent to Kerala State Planning Board, in Sept 2006.

This note was titled by a question: International Container Transshipment Terminals at Vizhinjam, Kochi and where else? Those were the days, when global finance capital was promoting ICTTs all over the world, including the Indian subcontinent: Global consultants were ready with big-ticket feasibility notes for port development, in support of new global markets and trade routs, divined by the IMF-WB-WTO regime.

I was part of the consortium of Rogge Marine Consult and L&T Rambol, who had prepared the first DPR for Vizhinjam ICTT in 2004 (?) on behalf of GOK. Despite several road-shows organized by foreign teams, there were no takers for the project. In the mean time another ICTT project proposed at Cochin was assigned to Dubai Port International on a single tender basis and there was little scope for yet another ICTT on Kerala Coast.

There was a Government change again in 2006, and the new Ports Minister was keen to revive the project at least on a smaller scale, but nothing much happened during the five year term of this Government. In 2011, as soon a new Government took over, a Delhi based consultant was asked to re-design the project as an International Port: All consultants were suitably compensated and Adani group assured of big profits but issues raised in my good old note remain unanswered!

INTERNATIONAL CONTAINER TRANSHIPMENT TERMINAL
AT VIZHINJAM, KOCHI AND WHERE ELSE?
A policy note sent to Planning Board by K Vijayachandran

1. Facts as I know: Myself as well as my consultancy, Industries Research & Services (IRS), were part of the the professional team that prepared the ICTT Project Report for Vizhinjam. L&T Ramboll of Chennai were the lead consultants and we were associated in the study through M/s Rogge Marine Consult of Germany, a leading port development consultancy in the world, for the socio-economic study of the hinterland and for transportation economics. Apart from myself, M/s Gopalakrishnan IAS(Retd) and tranport economist, Jayachandran and Neelambran (both, retired Chief Engineers of Cochin Port Trust) and Vijith V (Naval Architect of IRS) had participated in this study on behalf of IRS.

2. ICTT, a new concept in global shipping: The concept of International Container Transshipment Terminal (ICTT) is a product of the recent large scale restructuring and optimization of global shipping: Huge vessels called Mother Ships, sticking to the trunk routes and visiting only ICTTs, which serve as regional hubs that exchange containerized international cargo, and lighter ships ferrying between ICTTs and domestic ports are a relatively new development in global shipping. ICTTs are already in operating in Colombo, Singapore and Dubai ports which are used as regional hubs by global shippers. Commercial success of any new ICTT in the region depends on the patronage extended by shipping monopolies, as part of their restructuring plans aimed at the maximizing of their global profits.

3. Economic Reforms, Indian Ports and ICTTs: As part of the economic reforms, all the thirteen major ports under the administrative control of the Central Shipping Ministry had engaged global consultants to prepare corporate plans aimed at their corporatisation or privatization. ICTTs were suggested by the consultants in about half a dozen major ports, and the tenth plan had proposed four ICTTs, two each on the East and West coasts. These proposals were supported by an unsubstantiated estimate that India was incurring an additional expenditure of Rs.1000 Crore per year because of wasteful transshipments in Colombo and elsewhere. These plan proposals did not include establishing ICTT at Kochi or Vizhinjam. Cochin Port Trust was asked to build an ICTT outside the plan, with foreign investment on a Build Operate and Transfer (BOT) basis. There was no takers for the much publicized Vallarpadam ICTT, despite repeated global tenders and finally the Cochin Port Trust was asked to hand over its existing Rajiv Gandhi Container Terminal to the Dubai Ports International (DPI), a company owned by UAE Government, on the condition that it will build and operate an ICTT at Kochi, within four to five years, after establishing its techno-economic viability. In the meanwhile, Ports Department of Kerala organized the earlier mentioned feasibility study for ICTT at Vizhinjam, which was in the assembly constituency of the minister for ports. Discipline of national planning having collapsed, questions whether we really need ICTTs, and if we need how many and where all, were never asked or answered. In the meanwhile, the long pending Sethu Samudram Canal Project had taken off under the initiative of the Central Minister for Shipping: This canal will eliminate the need for sailing around Sri-Lanka and cut down sailing distances by 850 Km for ships touching India’s Eastern Coast. Our planners have not cared to study the impact of SS Canal either on the shipping routes along Indian ocean and or on the ICTTs planned as well as in operation.

4. ICTT proposal for Vizhinjam: Located 60 Km North of Kanyakumari, and just 10 Km away from the international shipping route, Vizhinjam with its 20 meter deep contour within a nautical mile off the coast, was identified as an ideal site for a Major Port even before national independence. CP Ramaswamy Iyer, the Dewan of Travancore had commissioned a British consultant who had conducted detailed engineering investigations, prepared preliminary designs and submitted detailed estimates for constructing an all weather port at Vizhinjam in early forties. However, the British had started developing a major port at Cochin which had a big locational advantage over Vizhinjam to serve as a gateway of united Kerala. The site selected for the Vizhinjam ICTT is further South of Vizhinjam and close to Tamilnadu border. In fact the site selection committee would have recommended the Poovar-Colachal stretch, transcending the inter-state boundary, as a more suitable site. The three southern districts of Tamilnadu including Kanyakumari and Thiruvananthapuram district of Kerala were considered as the hinterland of a future harbor in the region. ICTT was, in fact, a national facility in the region and was possibly best promoted jointly by Kerala, Tamilnadu and Central Governments. Though this was considered the ideal solution, the feedback from political leadership was reportedly hostile. Arguments were simple: Projects were primarily for votes, and the prevailing political environment in the country demanded a different gender of cost-benefit analysis! Our German counterpart Captain Menzel, a leading light in our project team and a strong supporter of the joint initiative, was greatly amused by this political situation. He said despite strong local sentiments, such factors could never distort infrastructure planning in his country.

5. Development planning and vote banks: I am not an expert to decide on the developmental priority of an ICTT at Vizhinjam. It is to be decided at the national level, based on some cost-benefit criteria. No such exercise was ever done, as far as I Know, neither by the Federal Government nor by the State Government. Interestingly, an Indian private firm has offered to BOT, the facility jointly with a Chinese Public Sector Enterprise. Why the Chinese Government should think of building this national facility at Vizhinjam? This is not a first or isolated experience: At Kochi, on the promise of building an ICTT at Valarpadam in the coming years, the existing Rajeev Gandhi Terminal was handed over to Dubai Port International, a company owned by the Government of Dubai. Incidentally, this company had recently taken over, the facilities in several international ports, operated by P&O Lines (see my article in Passline of April 15 2006). The promised ICTT may may not come at Kochi but Central and State Governments are committed to make large matching investments in anticipation: Even today, the quantum of public investments needed has not been assessed in full. Political leaders of Left and Right persuasions blindly support such populist mega projects. They compete among themselves in extending blind support to all such vote catching exercises, reminding us of an earlier era of Latin American politics. The recent all party delegation for Vizhinjam was a typical response: There was the rumor that the Central Shipping Minister Balu was conspiring for Tamilnadu and US imperialism was blocking Chinese initiatives!

6. Development planning based on cost-benefit analysis: This was the guiding philosophy prior to economic reforms. Shipping ministry and Planning Commission should have evaluated the ICTT facilities proposed at Kochi, which were infrastructure investments involving thousands of Crores of Rupees, from a point of view of national requirements and priorities. The argument that, such evaluation is not necessary in the case of private or foreign investments, do not make any economic sense. Moreover, heavy public sector outlays are necessary for acquiring land and providing rail and highway connexions, power, water and other related infrastructure in support of this project. UPA Government has, long ago, done away with that type of modern governance at the federal level. Even before assessing how much plan funds would be necessary for supporting the Vllarpadom ICTT, to be built by a company owned by Dubai Government, the Prime Minister of India was under political compulsion to lay the foundation stone for the same, in an imaginary site kilometers away from the actual construction site. An all party delegation to Delhi was mobilized, in support of the Vizhinjam ICTT, by the LDF Government in a hurry, even before the newly constituted State Planning Board with all its experts and advisers, getting even a chance to evaluate the Rs.4000 Crore project. UDF regime had formulated more than a dozen high profile investment projects during the last five years, mainly as vote catching exercise and the LDF Government is under political pressure to inherit them.

7. Fresh look at priorities, necessary: The Vizhinjam exercise had brought to surface the basic weaknesses in the planning and management of our ports. India has a coastline of around 6000 Km with well over 300 minor or intermediate ports, all under the custody of state governments. But the federal Government has no policy perspective whatsoever, for managing them and for the revival and development of coastal shipping, which should serve as a key component of our transport infrastructure at the national level. Concepts like Golden Triangles and Quadrilaterals are pushed on by automobile MNCs but there are no lobbies to support of coastal shipping or inland water transport. ICTTs may be priority investments for world shipping monopolies; they could cut down costs and increase profits at our expense. This is quite understandable. However, if the LDF Government is serious about looking for patriotic alternatives, the State Planning Board should have a fresh look at all the high investment proposals including Vizhinjam and Kochi ICTTs. And, this is true with regard to most of the dozen or so high-profile high-cost infrastructure projects, given shape to by the UDF regime.

END/08-09-06

*Note: This technical note was slightly modified later and published in the Passline dated 15.10.2006

TWO DECADES OF WTO: THE FAILURE TO DELIVER

TWO DECADES OF WTO: THE FAILURE TO DELIVER*

By K Vijayachandran: Chairman Cochin Center for Policy Initiatives

 

With WTO hijacking the role of UNCTAD, United Nations has lost its development mission. UN is managed by a global bureaucracy, today, sitting over the head of a virtually apolitical Security Council. It has lost its moorings and has to re-discover its founding objectives. And, the two decades of WTO were a disaster: World has turned more unsafe and insecure for its inhabitants. These are my stray thoughts as we observe the 70th UN Day.

 

World Trade Organization was founded on 1st Jan 1995 in a unipolar global environment, three years after the dissolution of USSR on 26th Dec 1991 and the demise of socialist camp. United Nations Conference for Trade and Development (UNCTAD), established in 1964 under the initiative of G77 including China with the support of Non-Alignment Movement (NAM) and the socialist camp, had served as its harbinger.

For the past two decades, WTO has been trying jointly with the International Monetary Fund (IMF) and World Bank, to develop a global market economy that functions. This TRIO, now virtually independent of the UN System and its Security Council, is held together by the developed countries and the Organization for Economic Cooperation and Development (OECD).

How far the concept, framework and practice of WTO could succeed in achieving the declared objective of building an orderly global economy during the last two decades, is planned to be examined by the 10th Ministerial Conference of its 161 member countries, scheduled for December 2015 at Nairobi. Issues to be hammered out in the Ministerial Conference are being finalized, now, in the so-called Doha rounds of consultations among various interest groups.

Institute for Studies in Industrial Development (ISID-1) New Delhi and their affiliates organized a two day National Conference on 22-23 Sept on the theme, WTO Negotiations, Free Trade and Investment: Implications for Development Policy Space: Venue was the well appointed conference hall of ISID at Vasant Kunj: It was attended by some eighty delegates from professional bodies, NGOs and Trade Unions: This writer was invited as an observer.

The conference was over-represented by Delhi-based institutions and experts. There were one or two foreign delegates; participation by mass organizations, rural communities and non-Delhi states was scanty. Nevertheless, the conference papers, as well as the discussions thereon, were reflective of the larger concerns of the Indian people.
Statistical data and information revealed in the conference intro-paper, circulated by the Secretary General of ISID, were quite revealing and disquieting: “India has signed some 14 FTAs and is negotiating 16 more. The most controversial amongst these include the EU-India FTA and the Regional Comprehensive Economic Partnership (RCEP) with the ten ASEAN Countries plus Australia, China, India, Japan, the Republic of Korea and New Zealand.
…..Another mega FTA, the Trans-Pacific Partnership Agreement (TPP) is being used as a benchmark for standards on IP and this will have an impact on RCEP and other FTAs. With the growing coverage of trade agreements spanning agriculture, industry, services, intellectual property, investment, government procurement and other areas, the interactions between provisions in the sector/area and specific liberalization policies are becoming more complex. These interactions have to be fully understood for their likely impacts on future policy space.

 

….Further India’s trade policy continues to be undemocratic and opaque, especially in case of FTAs and BITs. Negotiating texts are secret, consultations with affected groups are limited to the big industry bodies, and there are no publicly available impact assessment studies especially from a human rights or development perspective. Neither is there parliamentary oversight, or consultation with state governments.
…..What is at stake are livelihoods, incomes and labour rights; agriculture, seeds and the right to food; access to affordable medicines; environmental protection; access to essential services such as health, education, water, and energy; conservation and peoples control over natural resources”.
And, we may append to this long listing of treaties: reports on collapse of the manufacturing sector, chaotic roads and power systems, break-down of infrastructure in general, farmer suicides, rapid increase in crime rates, galloping corruption and lawlessness, and rapid decline in the quality of governance all around the country and at every level. In brief, WTO was being used as an instrument for forcing down the unwilling throats of our people all sorts Free Trade Agreements, without rhyme or reason. It was an irresponsible act of the ruling elite classes and history will not forgive them.
Picture at the global level and the experience of the people of other countries was also not different, according to the ISID report: “…trade and investment landscape has expanded in the past two decades in a big way through the execution of FTAs. As of 2015, some 406 Free Trade Agreements (FTAS) are in force according to the WTO. Further, UNCTAD estimates that there are more than 2200 Bilateral Investment Treaties (BITs) currently operational…ability of national governments to pursue independent macro-economic and development policies on a range of issues from agriculture, industry, services and the environment has been compromised. Global institutions and forums are today crucial in determining people’s access to decent jobs, incomes, food, essential services and natural resources”.
It is, now, more than obvious: Attempts to regulate and expand the global economy in a crisis free manner through Free Trade Agreements under the supervision of WTO have proved to be a grand failure. The current year (2015) report of ILO on World Employment and Social Outlook (2) had noted that the Global economy had failed to recover the output levels of pre-crisis trends: “Employment creation is still not sufficient to close the jobs gap that opened up with the crisis. Indeed, there were more than 61 million fewer jobs in 2014 than would have been expected had the crisis not struck.
….Global employment grew at an average annual rate of 1.7 per cent between 1991 and 2007. However, since the outbreak of the economic crisis, employment growth has slowed to 1.2 per cent per annum between 2007 and 2014. On current trends, unemployment will continue to rise as the labour force expands. Going forward, job creation is expected to remain at this lower growth rate over the medium term, causing a widening of the global jobs gap to around 82 million jobs in 2019. If new labour market entrants are taken into account, 280 million jobs will need to be created over the coming five years to close the crisis-related global jobs gap and to absorb the increase in the labour force.”
Trade and Development Report of UNCTAD of 2014 (50th Anniversary-3) had made this disquieting observation: “…Markets require a framework of rules, restraints and norms to operate effectively. As such, the market economy is always embedded in a legal, social and cultural setting, and is sustained by political forces. How and to what extent the framework of rules and regulations is loosened or tightened is part of a complex political process specific to each society, but it cannot be dispensed with without threatening a breakdown of the wider economic and social order.”
In more recent years this sort of breakdown of economic and social order or breakdown of political economies of nation-states has been widespread experience among the developing countries of almost all continents. Destabilization of the state, internal strifes, stage-managed color revolutions, military interventions and cultural invasions of every sort, all reminiscent of the massive trade expansion through colonial wars of the earlier centuries, were the indirect if not the direct consequences of the invasion of policy spaces of developing countries, by the OECD, using WTO as a cover.
Under the direct and indirect impact of WTO, India’s education system is in a total crisis: With the spread of English medium schooling, abetted by the CBSE (4), starting from KG and primary, we have shifted away from the time-tested culture of neighborhood schooling. Quality education is a luxury and perceived as a passport for migration to OECD countries: Anarchy prevails at every level, starting from KG classes. Worst is yet to come, according to a campaign paper presented in the Delhi Convention, by All India Forum for Right to Education (AIFRTE): “The offer of ‘Market Access’ to higher education under General Agreement of Trade in Services (GATS) will turnout to be a commitment in perpetuity”.
Political economies of several Afro-Asian and Latin American countries have virtually collapsed under the impact of mindless globalization presided over by WTO. Political economies of the Southern partners of even EU are reportedly under strain. Political economy of Greece, the citadel of a millenniums old civilization, is under serious repair: With two-thirds of its people voting against economic policies, its economy had collapsed, contributing to the rapidly swelling ranks of refugees in Europe. Reports by the UN High Commission for Refugees (UNHCR) indicate that the number of refugees under its care has already crossed the post-war record of 60 millions.
The desire for cultural autonomy of nationalities and nation-states is quite logical and legitimate: Peaceful coexistence and mutual cooperation were the basic building bricks of UNO: The tempo of globalization forced on the member countries using the WTO mechanism, is being resisted today not only by developing countries but even by some of the developed countries. Even the United Kingdom of Great Britain is facing dissent from within: People of Scotland have won their demand for autonomy and the new leader of Labour Party in UK, Jeremy Corbyn, has announced several policy initiatives to strengthen local governments and grass-root level democracy.
Intellectual Property Rights (IPR) regime forced on the peoples of the world by WTO was supposed to globally accelerate S&T development and spread the use of new production technologies. Experience of the past two decades in this regard was disappointing: UN organizations like WHO, FAO, UNIDO, UNDP, IAEA, ITU, WMO and the others, established for promoting technological cooperation among member-states turned more and more dysfunctional under the weight of WTO and its totally irrational IPR regime.
This had a negative impact on even the Millennium Development Goals (MDG) program of UN launched in 2007 in its fight against diseases as well as for agricultural, industrial, infrastructure and cultural development in less developed countries (5): As Prof Galbraith used to point out, Mankind has all the technologies needed for supporting several time the present day world population and for sustaining the environmental balance. (6)

 

Global production-distribution systems based on market competition are wasteful and inherently incapable of making full and optimum use of already established technologies. And, history of discoveries and innovations would tell us that they are not the products of market forces or competition. In fact, it is the other way round: market is the product of S&T developments. State monopoly capitalism of USA is supported by a state supervised S&T program in the public domain and an all pervasive National Science Fund administered by Federal Government (7).
WTO has failed in delivering its commitments to the global community. Promise of accelerating global economic development through free trade, FTA etc has not been fulfilled. It has failed in ensuring the optimum use of the technologies already available. Its contribution to improve work participation rates and creating new jobs has been negative. Reforms have disrupted the political economy of several nation-states, creating massive refugee problems, reminiscent of the post-war and prewar situations.
It is time for the countries of the South to think of quitting WTO and getting back to the UNCTAD perspective and agenda of real development, by utilizing the expertise and resources of UNDP. UNIDO, FAO, WHO, WMO, ITU, and other UN Institutions. What humanity needs, today, is a performing world political economy that could make full use of the vast possibilities of information, space and bio technologies, but at the same time assuring the cultural autonomy and identity of nationalities and nation states based the principle of peaceful coexistence and mutual cooperation, and not anymore on destructive competition and conquests of the colonial period. Prospects of using UNO for global governance was the theme of my seminar paper presented on the UN Day observed by CCPI, two years ago(8).
UNO and the several institutions created and developed under it for mutual cooperation among members have been rendered dysfunctional thanks to the disruption caused by WTO during the last two decades of its existence. There are hardly any statistics or logic to support its existence: It is time to get back to the spirit of UNCTAD and wind up this white elephant.

………………………………………………………………………….

* Paper for the UN Day Seminar of 24th Oct 2015 at the Ernakulam Public Library Hall

Notes and references
1. ISID: A sponsored Institution of the Indian Council of Social Science Research: More info at : http://isid.org.in and http://isidev.nic.in
2. ILO Report 2015: Full report downloadable from http://www.ilo.org/global/lang–en/
3. UNCTAD Report 2014: Chapter III, Policy space and global governance issues at stake
4. CBSE: See blog: https://kvijaya40.wordpress.com/2014/08/05/cbse-for-equity-and-excellence-2/
5. MDG: The much hyped Millennium Development Goals announced by UN in 2007 has turned out to be virtual non-starter. It is now being re-vamped by the UN bureaucracy.
6. Galbraith: The celebrated economist and proponent of the theory of convergence of Soviet and US systems of governance was convinced that the technological levels achieved by late fifties was good enough to give a life plenty to a much larger world population.
7. NSF: National Science Foundation was ordered to be set up by President Roosevelt as recommended by his scientific adviser Vannevar Bush in his report of 1945; Science the Endless Frontier: It is the fountainhead of state monopoly capitalism in USA, today. Though launched in 1950, US Congress started committing large funds for NSF only after the launch of Soviet Sputnik in 1957. NSF perfected the art of state directed R&D, with the help of autonomous universities managed by State governments: Interestingly the Bush report was inspired by the ‘scientific ecosystem’ created by the state monopoly socialism of USSR. Site http://www.nsf.gov gives detailed info on NSF as on today.
8. United Nations: New relevance of the world body: https://kvijaya40.wordpress.com/2013/11/22/httpwww-frontline-inworld-affairsnew-relevance-of-the-world-bodyarticle5338837-ece/

DECENTRALIZE INFRASTRUCTURE DEVELOPMENT

DECENTRALIZE INFRASTRUCTURE DEVELOPMENT
By Engr K Vijayachandran F.I.E

This paper was written for a seminar at Kochi on 5th April 2015, organized by Bharathiya Vichara Kendra. It could not be presented and is reproduced here for those who missed it. The seminar in memory of Pandit Deen Dayal Upadhyaya was inaugurated by Murali Manohar Joshi: See report at: http://epaper.newindianexpress.com/c/4922093

The Left had looked at India as a multinational country: A federal Government at the Center, decentralized administration and real autonomy for state governments were the core part of their political ideology. However, they have been compromising on this fundamental after the collapse of USSR, and ever since the economic and structural reforms got initiated in the country, in early nineties (1).

Pandit Deen Dayal Upadhyaya and his philosophy of Integral Humanism (ekaatma maanava darsanam) had visualized for India ‘a decentralized polity and self-reliant economy with the village as the base’: A concept which, according to him ‘was deeply embedded in the Indian Psyche.’ This was very close to the Gandhian view: Both had rejected capitalist globalization on moral grounds but did not have a chance to look at the possibility of socialist a globalization as Einstein did, and using the framework of United Nations, founded on the principles of peaceful coexistence of diverse cultures, an altogether new historical experience. (2)

BJP had, in the past, mostly stuck to the one-nation theory of RSS and like Congress had looked at a strong Central Government as the panacea for the under-development at national level. However, elections for the sixteenth Loksabha were a watershed in BJP policies: Its election manifesto had explicitly accepted the need to revamp Central-State relations. And the views of Modi Government on the re-defining of Central-State relations were reflected in the Presidential speech of Pranab Mukherjee; he had commented, “India is a federal polity. But, over the years, the federal spirit has been diluted.”

In order to correct this distortion from the past, the President had promised to “re-invigorate fora like the National Development Council and the Inter-State Council” and introduced a novel concept of Cooperative Federalism, possibly intended to deepen the economic relationship between State and Central Governments. However, he did not elaborate on how the concept will translate itself into reality and help to rectify the distortions.

Our constitution makers had looked at the development and upkeep of basic infrastructure, physical as well as social, including language and culture, as the joint responsibility of Central and State Governments. For a newly liberated multinational country of continental proportions federal type governance was, no doubt, most appealing as well as practical.

However, role of state level and lower level governments, as well as those of Inter-State Council, National Development Council, Planning Commission and other policy making institutions at the national level, built up during the early years of national independence, as well as that of even Loksabha and Rajyasabha, were drastically eroded in more recent years, thanks to the highly authoritarian economic reforms. It appears the trend continues even under the new regime of the new Prime Minister.

Central Government, along with its elaborate Committee of Ministers and PMO, had virtually taken over the sole responsibility for infrastructure development, with the help of foreign and Indian monopoly capital, leading to numerous scams of national shame. Even the Planning Commission was charged of breeding crony capitalism. And, despite massive doses of privatization and foreign direct investments and experimenting with PPP concepts, Indian reforms have so far failed to deliver positive results from a patriotic perspective.

Experience of India’s Power sector, where structural reforms had an early start, is typical: Indiscriminate import of equipment and systems are causing costly breakdowns in our national and regional grids. Reforms have inflated capital costs and further increased the financial losses of State Electricity Utilities. They have turned totally dysfunctional: Uninterrupted quality power, at lowest possible costs to the consumer, is not their motto anymore.

Electricity generation using imported fuel is on steady increase, while our own fossil fuel reserves remain under-utilized. Role and functions of Central Electricity Authority (CEA), the federal organization that was in charge of power sector as per the 1948 Electricity Act, was virtually taken over by Power Ministry and re-assigned to international consultants in the pay role of global capital and MNC monopolies. (3)
A World Bank study of June 2014 has admitted the near-total failure of power sector reforms of early nineties and the new electricity act, in meeting their declared objectives: Debts of electricity utilities have ballooned to Rs. 3.5 Trillion or five percent of India’s GDP by 2011, the target of full electrification by 2011 was miserably missed with some 300 million households remaining non-electrified, and the objective of an integrated all India power grid remains a pipe-dream despite massive investments in T&D gear (4). Solution lies in reversing the reforms initiated in the early nineties for force-opening up of the national market for electricity and power equipment. Federal character of the power sector needs to be urgently restored in national interests.

In the telecom sector, the two legged policy of having state-wise circles and centralized technology development by Central Public Sector Units was given up, in order to force open the national telecoms market. Net result is abject dependence on imports in the telecoms sector, not only for hardware and software needed for modern communication systems but even their maintenance. The only silver lines in our communication system are the great achievements in space communication technologies developed by ISRO.

Reforms had struck the telecoms sector, when ICT revolution based on microchips and Internet technologies started its sweep. Instead of mobilizing the technology resources of central and state public sector organizations as well as academic and R&D institutions, market oriented solutions like state-wise auctioning of spectrum rights was resorted to by the Central Government, leading to massive scams and corruption. It is time to restructure India’s telecoms sector on a federal basis with an expanded role assigned to central and state public enterprises. Will this fit in with the concept of Cooperative Federalism of Modi Government?

Indian Railways is, possibly, most suited for exploring and enriching the idea of co-operative federalism, suggested in the Presidential speech: IR is a leviathan, an insensitive bureaucratic organization presided over by a cabinet minister, supported by one or two ministers of state, and then the Railway Board, its Chairman and half a dozen board members etc etc, and all connected up in series and in parallel.
There are fifteen zonal railways, each administered by a General Manger, who looks after the construction and operation of rail lines and related subsystems of the zone. The nature and number of complaints with regard to their performance indicate that they are likely to perform far far better, if IR is organized state-wise, as in the case of P&T, BSNL, DD, CEA and the good old Electricity Boards, and several other central government functions (5).

It will be even better, if these state-wise zonal organizations are converted into public sector undertakings, with equal shareholding by IR on behalf of Central Government and then the other half by the concerned State Governments, as in the case of Delhi or Chennai Metro. A full fledged rail minister and a skeletal rail department or even a rail board in every state, for servicing and supporting this sort of joint national endeavor will greatly enhance the policy planning and management capabilities of the country with regard to rail development.

This sort of structural reforms will bring the administration and management of our on-rail resources closer to the people, and their elected Governments at the state as well as lower levels. Rail penetration continues to be very low in our country and hardly two percent of the 598,110 census villages and towns are connected to the national rail system even after seven decades of national independence: There were only very few additions to the number of railway stations in the country after national independence. (6)

Food Corporation of India (FCI) owned and operated by the Central Government is best re-organized and operated as a federal entity. The State Warehousing Corporations could also be reorganized under a federal umbrella, brought closer to the users and managed more effectively. There is an urgent need to improve the performance of these key public sector undertakings, and this is best done by reorganizing them on federal basis. There is an urgent need for a federal set up for promoting modernization of agriculture: The Indian Council for Agricultural Research (ICAR) intended to support agriculture development and food security programs in the country will perform far better with the support of their state level counterparts. (7)

Water tight division of responsibilities between Central and State governments and the three lists annexed to Indian constitution, viz Central, State and Concurrent are a colonial legacy, inherited from imperialists. An earlier article of mine ‘Third Front and RE-Envisioning of Indian Unity’ ( 8) had examined the several areas, where economic relationship between Central and State Governments could be deepened within the existing constitutional framework, by taking the route of cooperative federalism.

Cochin International Airport Ltd (CIAL) virtually owned and managed by GOK and erroneously quoted as an ideal PPP model, is a splendid example for the potential of Co-operative Federalism. Air Kerala the dream project of State Government and a project of great relevance to the regional economy could take off instantly provided it is promoted as a subsidiary of Air India. And the much talked about Palghat Rail Coach Factory will roll out immediately, if it is re-envisioned as a JV of Kerala Government and the Indian Railways.

Like the Indian Railways, there are several CPSEs and Central Government organizations which have distinguished themselves as technology generators for the country, who could join hands with state governments in industrial development. I had the good fortune of brokering a deal in 1987, between GOK and ISRO: The Kerala High-Tech Ltd (Kel-Tech), promoted with Dr, Kasturirangan as Chairman, is today a proud partner in BrahMos Aerospace, an Indo-Russian Joint Venture (www.brahmos.com).
The CSIR, ICMR, ICAR and other all India institutions were formed on the basis of the British model, which had nothing to do with the Indian reality and Indian ethos. The same could be said about all India institutions in the social sciences as well as art, literature and culture. These organizations could have performed far better if they were organized on federal principles, with their autonomous State-level counterparts functioning under the patronage of State Governments. Instead, we see that individual institutions or even head offices of central agencies are farmed out to different states on some consideration or other but mainly for appeasing public opinion in different states. (1).

State level offices of ESI and EPF offices could be easily converted into autonomous state level units under the state governments and better managed with the participation of the elected representatives of employees and employers at the board level. These state level boards could then be federated under the central government.

Participation of state governments in banking, insurance and investment industries through appropriate participatory mechanisms could substantially cut down on the investment requirements and also improve the quality of economic management in the country which is now entirely left to the whims and fancies of a few RBI bureaucrats and their global mentors.

Why not put the concept of co-operative federalism and deepening of economic relationship between Central and State Governments as well as institutions under them on the fast track, instead of PPP that has proved to be a virtual non-starter or even FDI for the development of physical, social and fiscal infrastructure?

This is the need of the hour: building a strong Centre based on the capabilities of the constituent states and not their weaknesses and disabilities, so that Indian people could unitedly stand against neocolonial exploitation in the rapidly globalizing international market.

 

References:
1. Center-State relations and the Indian left, article by K Vijayachandran, published in the book, Perestroika Glasnost and Socialism, ISBN 978-1-4828-1353-1
2. United Nations: New relevance of world body: http://www.frontline.in/world-affairs/new-relevance-of-the-world-body/article5338837.ece, article by the author
3. Problems of national grid: belling of Chinese cat is no solution- by K Vijayachandran, Passline Business Magazine January 2014
4. World Bank Report: More power to India, the challenge of electricity distribution, Sheoli Pargal and Sudeshna Ghosh Banerjee: April 2014
5. Indian Railways: in search of a new vision, Perestroika Glasnost and Socialism, by K Vijayachandran, ISBN 978-1-4828-1353-1
6. Blog: https://kvijaya40.wordpress.com/2014/07/10/coopertive-federalism-india-needs-a-federal-rail-board/
7. Indian agriculture: search for patriotic alternatives, Perestroika Glasnost and Socialism, by K Vijayachandran, ISBN 978-1-4828-1353-1
8. Passline Business Magazine, April 2009

Colloquium on Kerala power sector: recipe for a culture change

Colloquium on Kerala power sector:
recipe for a culture change

1. Introductory: The colloquium held on 16th October 2014 at Anugraha Hotel, Vyttila was a joint initiative of individuals and organizations, who believed that KSEB is facing a crisis situation today, like many of its counter parts elsewhere in the country. During the sixth and seventh five year plans, KSEB could put to use nearly a third of the hydro-electric potential of Kerala and developed substantial capabilities in the design and construction of hydroelectric power stations as well as the T&D network needed for a fairly efficient state power grid. The State had also built up, during this period, substantial capabilities not only in the design and building of reservoirs, dams, tunnels, penstocks and other auxiliary equipment but also in the manufacture of electrical equipment as well as complex T&D systems.

2. Decline from mid-eighties: By the early eighties Kerala was exporting not only the cheap electricity generated in its hydro plants to the neighboring states but also a host of electrical engineering equipment like transformers, transmission lines and switch gear. However, after the Silent valley controversy, capacity addition by KSEB was only marginal and even this was mostly thermal based. As on now bulk of the electricity sold by KSEB is imported from outside. This prolonged dependency on purchased electricity, coupled with the uncertainties created at the national level by the structural reforms of nineties and the new Electricity Act 2003 have destabilized KSEB, financially as well as organizationally.
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3. Present situation: Faulty HRD and HRM policies have led to serious shortages of trained and experienced cadres to manage key positions in this public utility, especially at the top. Computerization programs including ERP at various levels could not take off or was abandoned half-way through, due to lack of understanding or seriousness at the director board level. Delays as well as non-execution of generation projects, hydro as well as fossil fuel plants, are the result of lack of experienced manpower at the top, familiar with power development projects, thermal as well as hydro. There is an urgent need for capacity building and cadre development in almost all disciplines of power systems development and management: engineering design, technology, project planning, finance and general management as pointed out by many. Employees are well organized, disciplined and prepared to accept quality leadership. There is the need for a total culture change in the organization, from top to bottom.

4. Situation at the national level: A World Bank study of June 2014 has virtually admitted the near-total failure of power sector reforms initiated in early nineties and the new electricity act, in meeting even their own declared objectives: Debts of electricity utilities have ballooned to Rs. 3.5 Trillion or five percent of GDP by 2011, the target of full electrification by 2011 was miserably missed with some 300 million households remaining non-electrified, and the objective of an integrated all India power grid remain a pipe-dream despite massive investments in T&D gear.

5. World Bank View on KSEB: Surprisingly, the above said report has identified KSEB as the best performing power utility in the country on several counts, even though under pressure from employees, it did not to trifurcate itself into separate generation, transmission distribution utilities. The box item on KSEB in this report had concluded: “since 2011 its finances have been constrained due to the states declining hydro generation, forcing the utility to purchase power from external sources and draw down surpluses earned in earlier years. Inadequate planning for power procurement to address demand growth has exacerbated the change in fortune of the utility, which remains well managed is but is now suffering from external shocks.”

6. Reorganizing Kerala’s power sector: Any major course correction of the current reform process at the national level is unlikely in the immediate future under the present circumstances, though there is every indication that the country will be under compulsion to limp back to the old federal system with more autonomy for the state governments, and CEA playing once again the key role of a federal authority. Taking into account the observations in the present WB study referred to above, and based on the findings of the Colloquium, it will be prudent for Kerala Government to launch a program for re-organizing KSEB on the following lines,

(a) KSEB will be reconstituted as a holding company, one hundred percent shares owned by GOK as on now but with an expanded board of directors giving equal representation for government, employees and consumers as in the French Electricity Board (EDF), and as recommended by the High Power Committee appointed by the previous Government. KSEB could function as the TRASNCO of Kerala as spelt out in the Electricity Bill, dealing with the T&D responsibilities directly and leaving generation responsibilities to two specialist joint venture subsidiaries, one for thermal generation and the other for hydro generation. KSEB will retain majority shares in both the subsidiaries.

(b) KSEB employees who work for the T&D functions that constitute around 85 percent of the present work force will continue as direct employees of the holding company: Participation of the representatives of employees and customers at the top level management of KSEB, will improve its accountability and sense of responsibility as a public utility, and also help in a big way to launch and implement system improvement programs in a far more meaningful and effective manner. The holding company should be held responsible for addressing the environmental concerns with the help the two subsidiaries, specializing in Hydro and Thermal generation.

(c) A Kerala Hydro Power Corporation (KHPC) may be floated as joint venture with National Hydro Power Corporation (NHPC) for the operation and modernization of existing hydro plants and for taking up new hydro projects within the state, including the augmentation and modernization of the existing plants. Projects of less than 500 KW or so can be left to ANERT for non-grid power development. As an organization specializing in hydro generation, KHPC will be useful in augmenting specialist manpower needed for the design and operation of hydro power plants and also for addressing the environmental concerns in a more effective manner.

(d) A Kerala Thermal Power Corporation (KTPC) may be setup as joint venture with National Thermal Power Corporation (NTPC) with similar objectives as for Hydro. Even NTPC Kayamkulam could be brought under the purview of KTPC. As an organization specializing in thermal generation, KTPC will help in augmenting specialist manpower needed for design and operation of thermal power plants and also in addressing environmental concerns related to thermal power generation in a more effective manner

(e) KSEB will buy power from its two subsidiaries, KHPC and KTPC, on a cost plus basis. NTPC and NHPC being Navaratna companies and technology generators for the country will be in a position to help the capacity buildup of these state level subsidiaries rather quickly and effectively. It will facilitate a major culture change in Kerala’s power sector.

(f) Activities of ANERT may be brought under a commercial undertaking jointly owned by Central and State Governments to continue the promotional and R&D work on renewable energy and distributed generation program for remote and rural communities in conformity with the policies of the ministry for renewable energy and, supplementing the power development programs of KSEB

7. Summing up: The above re-construction plan of the states electricity sector will conform to the state level objectives of Electricity Act 2003 and will be in harmony with the aspirations, wishes and preferences of KSEB employees. The proposed joint ventures will help Kerala to develop quickly the much needed specialist manpower, expertise and technology needed for the healthy development of its power sector.

8. The next step: CEA may be assigned the lead responsibility for finalizing this conceptual plan and requested to prepare detailed operational plans for implementing it.

9. Colloquium participants: PC Syriac, K Vijayachandran, MP Sukumaran Nair, P Parameswaran, KR Unnithan, KS Damodaran Nampoothiri, Philip P Paulose, S Balakrishna Menon, G. Sudhadevi, G Balachandran, Anilkumar P.Kv, S Jayathilakan, MT Varghese, AR Unnikrishnan, CV Usha, PR Shaji, KK James, EV Mohandas, Malippuram Khalid, G. Ram Mohan Nair, AV Narayanan Nair, CK Raghavan, MV Varghese, CK Joseph, PD Aruna, K Asokan, MK Parameswaran Nair, EN Gopinathan Nair, KK Karuppankutty, PH Abdul Rasheed, MA Abdulkhader, Roy Xavior T, VV Satyarajan, Sivarajan, John Darrel, TK Moidu, AR Satheesh, George Thomas, Robin Sebastian, CV Subramanian

Nuclear power development in India: A patriotic perspective

NUCLEAR POWER DEVELOPMENT IN INDIA
A PATRIOTIC PERSPECTIVE *
Engr. K Vijayachandran F.I.E

[Indo-US nuclear deal was rushed through in 2007, as if India urgently needed a large quantum of imported nuclear power plants, over and above its own indigenous program. USA has been pressing for its implementation is unhappy with the poor progress. Even Modi’s visit to USA was a disappointment in this regard: there are speculations now that problems will be sorted out during Obama’s visit to India next week. Need for rushing with imports is now being debated by experts, once again.This paper presented in an IEI seminar at Kochi, in June 2013 is published here in this context.]

Nuclear electricity plays an increasing role in grid power development in developed countries, and the trend is likely to continue. Thanks to the complex nature of the technology, that demands close regulation at the national as well as global levels, only large economies with pretty high level of state intervention capabilities could afford its development: Most developing countries are, thus, denied the benefits of this relatively new source of energy.

USA has a big lead in reactor technologies (as is the case of all areas of frontier technologies) and a majority of nuclear reactors, operating in the world today, are of US make or made under US license. It tries to retain reactor technology as its natural monopoly, and uses the unjust NPT regime for this purpose.

Indian nuclear program, based on the atoms for peace policy of Nehru days, has made tremendous strides in the peaceful applications of nuclear energy; in health, agriculture, industries and power generation. Eighteen power reactors of total capacity 4460 MW designed, manufactured and fuelled by us are safely working for several years in six power plants, located in six different states of our union republic: Five more are getting ready for commissioning, including a Thorium based Fast Breeder Reactor of 570 MW.

Our PHWR reactors of 220 MW, 540 MW, and 700 MW ratings are internationally well accepted as safe, robust, efficient and cost-effective. We are well advanced in the futuristic breeder technology using Thorium, the exclusive fuel resource of great relevance to our country. DAE has a dozen specialist organizations, dealing with diverse aspects of nuclear technologies with a manpower base of around 50,000. India is a major non-weapon nuclear power, respected for its well-integrated technological capabilities, and in this respect, shares a ring-side seat among the comity of nations, along with USA, Russia, France and China.

The three stage nuclear power development program, envisaged by DAE, had targeted for 29460 MW of nuclear power by the year 2022, 62,900 MW by 2032, and 274560 MW by 2052 (targets of 2001). Breeder technology using our own Thorium resources is the unique feature of India’s three stage program, which has, by and large, stood the test of time. Even India’s Business classes, like Tatas, Birlas or Ambanis could play a role in this national endeavor, if they shed their comprodorial outlook and aspirations.

India never had a serious nuclear weapons program: the two test explosions by the country, one by Indira Gandhi and the other by Vajpayee as Prime Minister, were aberrations to the atom for peace policy formulated by Nehru. However, these were used as alibis for treating India like a nuclear Pariah, by USA, using the unjust NPT-NSG regime under its command. During those cold war years, Soviet Union came forward to help India in setting up the Kudankulam power plant, on extremely favorable terms and conditions, and as an integral part of its own national program.

Implementing this program, along with its vision and targets, may be accepted as a national platform. The organizational structures developed over a period of time, may be reviewed and revised as necessary by the Indian Parliament, and all necessary support by way of material, financial and policy inputs ensured for its systematic implementation. State governments, members of Indian parliament and all patriotic sections of the Indian people should take special interest in this program of great national importance.

The ongoing nuclear power program, the related organizational infrastructure, and human resources base were developed at enormous cost to the national economy, and represent a large investment of great relevance and value for our future. No deal or treaty with foreign countries or change in statutes should affect the efficacy and integrity of this national program or destabilize the structures that were created in the long term benefits of our country.

India, like the USA, is an equal member of UN-IAEA and should take the initiative for opening it up, and strive to liberate it from the clutches of US stranglehold and its handmaiden, the Nuclear Suppliers Group, with the help of other countries. Normal international trade in nuclear materials needs to be encouraged, under the supervision of IAEA, which should promote international cooperation in the peaceful applications of atomic energy.

India should use its bi-lateral relationships and diplomatic influence with other countries and group of countries, for a role in the management of IAEA that is commensurate with its expertise and image as the largest non-weapon nuclear country in the developing world.

India should keep its commitments to the exclusive use of nuclear technologies for peaceful purposes and campaign for total nuclear disarmament along with all peace-loving peoples of the world.

*Presented in the seminar at Institution of Engineers Cochin Centre on 24-06-2013

GETTING INDIA BACK ON TRACK?

GLOBAL FINANCE CAPITAL AND YOJANA BHAVAN
Review of the book ‘Getting India Back On Track’
Edited by Bibek Debroy, Ashley J. Tellis and Reece Trever,
Published by Vintage Books, Random House India, April 2014

1.Introductory:

Published just before India’s sixteenth Loksabha elections, the 314 page book ‘Getting India Back on Track: An Action Agenda for Reform’ has a forwarding note by Ratan Tata, the icon of Indian capitalism. Such icons have disappeared from USA and most other developed countries, long ago. In India they survive, thanks to its backwardness and the English speaking elite classes with their vast media power.

State monopoly capitalism has taken over the economies of most OECD countries: They jointly try to enforce a new imperial order, with the support of a global financial market, presently regulated by IMF-WB-WTO combine. According to Ratan Tata, Getting India Back on Track was brought together by some of the ‘most incisive policy minds working on India, who are experts, commentators, and practitioners….’ .It is a product of the Carnegie Endowment for International Peace-CEIP (1), a Global NGO sponsored by French Government: The book is, naturally, consistent with its founding objective of providing professional help to developing countries in the building of capitalism.

Tata himself is a trustee of this unique NGO network or think tank of policy research centers operating from Russia, China, Europe, the Middle East, and the United States. Its mission, as stated in the website, is to “advance the cause of peace through analysis and development of fresh policy ideas and direct engagement and collaboration with decision makers in government, business, and civil society… Working together, our centers bring the inestimable benefit of multiple national viewpoints to bilateral, regional, and global issues.”. It provides policy inputs to not only World Bank and IMF but also to NATO for helping to hold the world together under their hegemony.

‘Getting India Back on Track’ means putting back on rails, the reforms and economic restructuring programs that were getting derailed, thanks to numerous political expediencies, global as well as local. Introductory chapter of the book by its general editor, Ashley J. Tellis, Senior Associate of CEIP and a senior bureaucrat in US Government, is titled “Completing Unfinished Tasks”, gives fairly detailed instructions for returning the country to a path of high growth, when a new Government assumes power after Loksabha elections.

The 28 page introductory essay by Tellis paints the so-called Indian socialism of yesteryears as a disaster, reviews the ongoing reforms with great enthusiasm, and concludes with a highly diplomatic warning: “Neither India nor the world-and especially its partners such as the United States-can afford to watch fortune elude New Delhi for another five years.” However, the last article, ‘Rejuvenating Foreign Policy’ by C Raja Mohan, a well known defense analyst and columnist in Indian Express does not reveal any such diplomatic sensibilities, when he simply insists: “revitalizing strategic partnership with United States must be the foundation on which the new government pursues its great power relationships”. Between these two articles are sandwiched, some sixteen chapters contributed by those, who are considered as experts on Indian development.

2. Perceptions at macroeconomic level.

First chapter, by the young Indian economist Ila Patnaik repeat the well known World Bank sermon on the virtues of maintaining macroeconomic balance in a national economy. The second Chapter titled Dismantling the Welfare State is by Surjit Bhalla, a seasoned investment analyst and a board member of NCAER, considered as the think tank of Indian reforms; it simply ridicules the welfare policies of Indian State. This chapter examines the efficacy of redistribution in Indian economy and tend to conclude that, “re-distributive politics have made India a welfare state before its time. Bhalla seems to forget that vast majority of the Indian workforce are employed, even today, in the informal sector and are denied the benefits of even permanent employment (2).

Those who enjoy the benefits of minimal social security are less than ten percent of Indian workforce, just the reverse of the situation in developed societies. Bhalla have not looked at the real problems of India’s welfare politics at the national and state level or from the broader perspective of Human Resources Development and Management, needed for a nation building. He simply pleads to improve the effectiveness of PDS and MGNREG schemes by preventing leakages through the Adhar route, initiated by UPA Government with lot of fanfare and then kept under suspended animation.

Bhalla, like the Adhar experts, looks at ICT as a tool for tightening of administrative controls from top and not as a tool for expanding and deepening of the democratic process. Evidently, he does not know about, what large sections of the working class in the informal sector of Kerala, could achieve by way of minimal social security with the help of tripartite labor boards and welfare fund schemes starting from the grass root level, even before the enactment of MGNREA. Even in implementing MGNREGA, left governments were far better than the others, with Tripura judged as the best performer among all states. It is not surprising that there is widespread opposition from state governments against the move to dilute the act.

3. Managing, natural resources energy and environment

Four chapters are dedicated to the use of resources; land (Chapter 10), water (Ch-11), energy (Ch-12) and environment (Ch-13). Barun S. Mitra and Madhumita D. Mitra, who have jointly authored the chapter on land, appear to be social activists with very little exposure on the ground realities related to India’s land resources. They want land to be an easily trade-able commodity with minimal of regulation and transaction costs. They simply share the impatience of big investors, especially the foreign ones, in matters related to land acquisition and management. They lament on the extremely slow pace of implementing the Land Acquisition Rehabilitation and Resettlement (LARR) Act of 2005 that entitles state governments to short-circuit several land related statutes for the speedy implementation of Special Economic Zones. In the name of deepening democracy, the authors even suggest settling of land and environmental issues directly with local governments, bypassing the authority of State Governments.

Tushaar Shah and Shilp Verma who have jointly authored the Chapter on water management are well known experts in ground water management. Both are Fellows of Integrated Water Systems and Governance Group of UNESCO-IHE, a UN institution operating from Netherlands and they were involved in the rehabilitation of irrigation systems in India as well as abroad. The chapter praises the great achievements in the management of irrigation pumping systems in Gujarat by investing Rs.1200 Crore in separate irrigation feeders with the objective of preventing theft.

Neglect of management improvements, governance reforms and institutional innovations are identified as the root cause for the poor management of India’s water resources. The article explores different models for the integrated ground water management in Eastern India consisting of UP, Bihar, West Bengal and Odisha and projects including a solar version of the same. The need for strengthening of Central Water Commission (CWC) is rightly emphasized for pursuing such adventurous ideas but, the authors fail to see the even more pressing need for capacity building at the state level by creating its subsidiaries at the state level and federating them into a central body.

The chapter on energy, by Sunjoy Joshi, a former IAS officer and climate change enthusiast, highlights the rapidly increasing energy dependence on imports. He points out that energy import constitutes a quarter of India’s current accounts deficits and puts the blame for the deteriorating situation on the so called half-dismantled planned economy. He makes some casual remarks on the problems of power sector which has turned extremely inefficient under the impact of quarter century of reforms dictated on from outside (3). He has nothing much of a solution other than leaving everything to the global market players and market forces.

In sharp contrast to the energy chapter, Chapter on “Manging the Environment” by Ligia Noronha of TERI has made several positive suggestions. She briefly reviews the prevailing unsatisfactory ecosystem management practices related our rivers, forests and coasts and then suggests a five point agenda for the next five years. She is of the view that, “the central government needs to apply the principle of subsidiary to the case of environmental management in India to ensure that different levels of government take responsibility for those dimensions of environmental quality within their jurisdictional boundaries, leading to better environmental management across the board….

….This would also allow for greater public voice in the design of programs, enable feedback for the fine-tuning of policies, and reduce the number of layers of bureaucracy, thus making clear jurisdictional responsibilities for enforcement and service,.”. These recommendations are sound, perfectly rational and scientific but calls for capacity building at various layers of Government and also democratic decentralization of administration as in socialist societies but, unlikely to be accepted by a bourgeoisie society dominated by big monopoly capital.

4. Burden of agriculture and poverty of Indian peasantry

Indian capitalists and their professional advisers look at the Indian peasantry as a burden and liability. The chapter titled, Revamping Agriculture and the Public Distribution System is the contribution of Ashok Gulati, who had held positions like Chairman of the Commission for Agricultural Costs and Prices. He looks at Indian agriculture mainly from the point of view of its capacity to contribute to GDP and comments with a sort of wry satisfaction: “With all these positive signs -overall production, trade, grain stocks, and investments in agriculture -the picture seems reasonably optimistic, and even rosy at times. But at the same time, one also hears about farmers’ suicides and farmers complaining about returns in agriculture not being good enough to keep them in agriculture.” Gulati takes a summary view that ‘considering the size of the country and and its diverse agriculture’, this ‘could also be true in some pockets.’

It is surprising that, eminent Indian economists like Ashok Gulati and others refuse to look at the common Indian peasantry as a deprived class under the bourgeoisie landlord regime that look at Indian agriculture mainly as a resource for earning foreign exchange needed for its own comfort and expansion. They oppose the subsidized supply of irrigation, power and fertilizer to farmers and insist on the immediate switch over to direct transfer system for subsidies, through the Adhar, an untested high cost system based on imported computer hardware and software.

Mounting inefficiencies and anomalies that have developed in the administration of the support systems, including technology development and R&D, mostly managed by Central Government, with very little role or participation of state and lower level governments and farmer collectives, are hardly of any concern for these experts (4). The article makes a casual reference to the greatly successful Amul cooperative model in Gujarat but does not even mention on the success of cane sugar cultivation in Maharshtra on a cooperative basis. There is no mention on the prospects of repeatability of these models to other crops and regions.

The chapter have failed to take a view on resisting the imminent threat of WTO treaty on farm products. Despite the advice and media campaigns by India’s bourgeoisie experts, the new BJP Government of Prime Minister Modi have so far refrained from signing the WTO treaty on farm products, which would have opened the flood-gates of cheap farm exports from OECD countries, supported and subsidized by their well organized R&D and technology inputs provided at the national level. (5)

5. Urban development and the transport sector

Somik Lall and Tara Vishwanth who have authored the chapter on Managing Urbanization are experts from the World Bank, who have studied extensively the urbanization problems of third world countries. This chapter has made a realistic assessment of urban development in the country and examines the present situation, based on the performance of the $24 billion Jawaharlal Nehru National Urban Renewal Mission (JNNURM), launched in 2005.

JNNURM, with massive inputs from multilateral agencies and touted as the panacea for our urban development problem, is now facing a serious crisis according to these World Bank experts: “The lack of municipal capacity, allowing only a minimal role for local bodies in preparing city development plans or detailed project reports, was noted” by the latest appraisal report in May 2011 (6). There is an urgent need of large capacity building and augmenting of manpower resources at various levels in order to overcome these problems..

Obviously this could not be done because of the overriding conditions on cutting down the size of Government and reducing staff strength and staff expenses by state governments. Most of the JNNURM investments like its KSRTC experiment in Kerala have failed to achieve their basic objectives. JNNURM assuming the responsibility of centralized bus purchases and similar reforms make little sense. Authors suggest more detailed studies on the failures of JNNURM in achieving its declared objectives. The basic problem appears to be the absence of appropriate state level organizations to work with the JNNURM of Central Government.. .

Lopsided policies in the transport sector, have further worsened the slum situation in towns and cities. Rajiv Lall, noted columnist in business journals and Ritu Anand who was the Chief Economist of IDFC have written the chapter on Modernizing of Transport Infrastructure. It argues for the speedy expansion of National Highways and Indian Railways through the PPP route with little or no involvement of lower level governments. Experiments with the PPP route were a failure all over the world and India is no different. Contractual and regulation problems faced by the PPP route in the country are discussed in some detail in this chapter and it appears there are too many of them for which there are no easy solutions. Roads other than NH, waterways, coastal shipping, ports and shipping are outside the scope of this chapter.

6. Crisis in the manufacturing sector

Chapter-4, titled Revisiting Manufacturing Policy is authored by Rajiv Kumar, well known Indian economist and author of several books on Indian economy: It has not attempted any sector-wise or sub-sector wise analysis of the totally disappointing performance of India’s manufacturing industries, under the quarter century old reforms. To quote from its opening page:”With a gross value addition of $226 billion, India’s manufacturing sector looks tiny when compared with China’s at $1.9 trillion. Consequently, its share of global manufacturing is a mere 2.2 percent, compared with China’s 18.9 percent. Employment in absolute terms has declined in the formal manufacturing sector from 55 million in 2004-05 (12.2 percent of India’s total workforce) to 50 million in 2010 (10.5 percent). Share of manufactured exports in India’s total exports has also declined from 74 percent in 1991 to about 61 percent in 2011-12.”

This is not surprising: Reforms had removed, at one stroke, all quantitative restrictions on the import of industrial goods and technology: Instead, a calibrated tariff regime was put in place, aimed at, (a) liberal import of technology and capital goods at very low customs duty, (b) easy import of intermediate goods and components at fairly low tariff and, (c) discouraging import of consumer goods and consumer durables, by enforcing very stiff import duties. This sort of import regime was desired by our big capitalists and their associations and it was progressively implemented during the nineties.(7)

Impact of this calibrated liberalization on Indian industry has not been fully studied yet, as revealed by Rajiv’s article. Public Sector Units like BHEL, SAIL, MAMC, HEC, HMT, ITI, BEL, Shipyards and others serving the capital goods sector were the first hit by the new regime. Highly skilled employees were offered VRS or simply retrenched. Reforms blocked or delayed their expansion-diversification schemes. Tens of thousands of small and medium entrepreneurs who had built the capability to serve the capital goods industry sector closed shops.

R&D institutions like the CSIR, ICAR, ICMR and others which were already underutilized due to their foot-lose relationship with agricultural, health, defense and infrastructure sectors were pushed into irrelevance. The budding electronics manufacture was simply wiped out. Industries manufacturing consumer goods and consumer durables having technology collaboration with leading foreign companies had a big boost initially but, collapsed as their principals decided to push their own brands and products in the vast Indian market.

Reasons for the crisis in manufacturing industry are far more basic and fundamental and the measures suggested by Rajiv Kumar, such as diluting labor laws, improving administrative efficiency etc are unlikely to bring any results. Screw driver technology has virtually taken over several sectors of Indian industry, and that is why India does not have a healthy automobile industry, even though its roads are flooded with cars and bikes of all makes and brands.

China presents a different picture because, its industry was encouraged to serve the national economy and develop itself by serving the domestic needs of modernizing its own agriculture and basic infrastructure like electric power, railways, shipping, telecoms etc including national defense and security. The so called investment and export led growth, forced on our country by global advisors and blindly practiced by it for the last quarter century, has proved to be disastrous and destructive for Indian manufacture. Instead of telling this real story, Rajiv Kumar goes round and round repeating the need for developing a vibrant manufacturing industry for the country!

7. Health education and employment

India presents a confusing picture on the health front. True, the best and world’s most expensive health care is available in India provided one has the purchasing power. In Chapter 7, Confronting Health Challenges, AK Shiva Kumar makes some international comparisons between India and other countries, including SARC countries: “We find that health outcomes in India are far from equitable. Differences in morbidity, mortality, and nutritional status linked to differences in socioeconomic status caste, class, gender, and geography persist ….. It is a little-known and sad fact that health conditions in India are similar in some respects, and even worse in others, to those prevailing in sub-Saharan Africa….Close to 43 percent of children under five in India are moderately or severely underweight; the proportion sub-Saharan Africa is 21 percent…India’s health performance is particularly disappointing because it has fallen behind Bangladesh and Nepal on many health indicators, despite a higher per capita income and two decades of rapid economic growth.” (8)

It is clear that building super specialty hospitals with five star facilities in the corporate sector is not the solution to overcome this backwardness: Their contribution to improving public health care is marginal and consume bulk of the critical resources by way of expertise and manpower. Moving towards a system of universal health care is the only solution and Shiva Kumar points out that; “Almost every country in the world that has achieved universal health coverage or is working toward it has done so through the public assurance of comprehensive quality public health care for all. Though treatment is nearly free in India, only 22 percent of the population in rural areas and 19 percent in urban areas access government facilities for outpatient care.” (9)

Improving the quality of public health-care system and winning over the confidence of people is seen as a near term possibility by Shiva Kumar: He pleads for an attitudinal or cultural change as the first step for moving toward a system of universal health coverage: “Indian society, including both the central and state governments as well as the influential middle class, should more firmly embrace the concept of universal health coverage.” (10). The influential middle class as well as the English speaking intellectuals may not get enthused by such counsellings: However, he has put forward valuable suggestions for a joint initiative of Central and State Governments for building up a credible public health care system for the country, that need serious consideration by the working class movement as well.

Lavish Bhandari who has done extensive work on inequality and socio-economic performance at the level of states, districts and cities of India is not a specialist in education by theory or practice. He leads “Indicus Anlytics, India’s economics research firm” and has Phd from Boston University in economics.

After a detailed review of India’s educational system as it emerged after independence, he concludes Chapter 6 titled, “expanding education and skills”, with a totally pessimistic note: “The absence of an overall vision is the primary flaw of the education regime in India today….At the primary and upper primary levels, improved quality can best be achieved though greater community participation and parental involvement in overseeing delivery and content. At the secondary and tertiary levels also he suggests fundamental revolutionary changes and believes that it could be done through action by the central government, and none requires any changes in the laws” (11).

This is a simplistic approach, considering the cultural and linguistic diversity of India. Central Board for Secondary Education (CBSE) in Delhi, directly administered by Central Government, was responsible for the policy distortions that have accumulated in India’s education system, during the past few decades: English speaking elite classes have used CBSE for the virtual shift-over to English medium special schools from the traditional system of neighborhood schools. This was a silent counter revolution that has simply redefined education in our country as a passport for migration in search of foreign jobs. Takeover of university and professional education by the corporate sector with the help of the English speaking intelligentsia was the next logical step. Brain drain and skill drain have increased; a major impediment to economic progress. (12).

Chapter 5 by Omkar Goswamy is on job losses in the national economy and the future manpower requirements for supporting specified GDP growth rates. He is a manpower consultant operating from Delhi, and Chairman of CERG Advisory, a corporate consulting firm.

Goswamy’s comments on the so called labor market flexibility in the Indian context is rather interesting: “Despite the existence that prevent unfettered entry and exit of labor in the organized sector, the fact of the matter is that India has a reasonable labor market flexibility. For one, the vast unorganized sector, which account for more than 90 percent of India’s 470 million workers or there abouts, has absolutely no entry or exit barriers Moreover, the legal right that allegedly prevent extra hiring in the organized sector such as sections 25(N) and 25(O) of the ID Act 1947 or provisions of the Contract Labor Act 1970-are often overstated.” (13)

In the projections for future employment scenario in the country, no shift whatsoever, from unorganized sector to organized sector seems to take place. And, Goswamy even concludes that if the average growth rate hovers around 4.5 to 5.0 percent per annum, India will never generate a demand for labor even vaguely in line with its future supply. Tables, he had created and presented, illustrate that the additional job creation needed by Indian economy for a 7 to 7.5 percent GDP growth will be only an insignificant fraction of the total workforce. (14)

It means, around 90 percent of Indian workforce will continue to work in the unorganized sector as of now and there is little scope of reversing this ratio and getting on par with the developed countries even by 2040. This raises the most fundamental question: how, from where and for whom Indian reforms should begin?

8. Rule of law and quality of governance

Chapter 14 and Chapter 15 are attempts to evaluate the status of rule of law in the country and the quality of governance by Indian state: The first one titled “Strengthening Rule of Law”, was jointly authored by Devesh Kapur a Chemical Engineer from Banaras Hindu University tuned expert on Indian diaspora and Milan Vaishnav, an associate in the South Asia Program at the Carnegie Endowment. The next one, Correcting the Administrative Deficit, is by Bibek Debroy, Professor at the Center for Policy Research New Delhi and co-editor of the book under review.

The chapter on rule of law points out the numerous basic deficiencies in India’s legal system, starting with its antique statutes and ending with lack of autonomy and accountability. Indian courts hardly follow modern management systems and according to the authors, “the clogged, dilapidated plumbing of Indian courts has led to multiple efforts to create alternative systems”. India with 1225 police officers per million population is one of the least policed country in the world. They take note of the cultural gap between a tiny, very selective Indian Police Service (IPS) and a large, ill-trained constabulary under the state governments and stress the urgent need for organizational and structural changes.

The chapter on administrative deficit has repeated the need for decentralization and transforming of India’s highly centralized administration into a federal entity, expressed in most other chapters of the book, barring the one on education, where it was needed most. Debroy argues that, unwarranted decision-making has concentrated in New Delhi, leading to widespread corruption and scams, and this can be brought down only through decentralization of the administration. According to him, neither the attraction of big pay scales nor the threats by way of vigilance inquiries have discouraged the corrupt bureaucrats and ministers. The need for central authority is conceded but it appears that India is excessively centralized even compared with China.

Debroy argues that consultations at the time of national planning or inter-ministerial meeting etc are no substitute for “decentralized governance which consists of political decentralization, administrative decentralization, fiscal decentralization and economic decentralization. Decentralized governance could also extend to the efficient provision of goods and services and optimal levels of governance …… Decentralization also implies the devolution of authority within individual states and the empowerment of the third, more local tier of governance ; we will focus on central-state relations.”. (15)

Debroy had concluded that management of central-state relations should be one of the most important agenda items for the new government. Toward the end of the chapter, he recalls briefly the outcome of past debates on central-state relations and argues that these could be the long term goals because implementing them may call for constitutional amendments (16). Thus, after building up a fierce argument in support of decentralization and federalism, he settles down for a fairer deal by the current finance commission.

9. In conclusion

Not only Debroy but also most other chapter writers have pleaded for decentralizing of administration and or reorganization of the Indian state on federal lines. Central Government had amassed too much of unwarranted power during the early years of planning, as explained by Debroy.

JP movement of the seventies had challenged this trend, demanding a harmonious blend of jana-sakti and raj-sakti. Left had looked at India as a multinational country: A federal Government at the Center, decentralized administration and more autonomy for State Governments were the core part of their political ideology. Federalism was the very backbone of regional parties. Rajiv Gandhi had even amended Indian constitution for creating a three tier Panchayati raj, which could not take off. BJP has explicitly admitted in its latest election manifesto, the urgent need for revamping of central-state relations: It has, now, topped up this with a promise of cooperative federalism in the Presidential speech (17).

However, there are the vested interests, who are scared of upsetting the apple cart: The big business in India, supported by global finance and large sections of our intellectual classes, especially the English speaking intelligentsia, who are quite comfortable with most of the powers, financial, economic and political, concentrated around Delhi and the national parliament.

The book, Getting Back On Track, hardly gives any direction for the modernization of India’s agriculture, for the development of its industry and infrastructure or building up a system of governance that suits the country of continental dimensions. Its sponsors are the agents of global finance capital, who have chosen Ratan Tata as a collaborator, in order to wean away the people of India from the Gandhi-Nehru tradition of Swaraj and Socialism and a development model based on technological self-reliance. They occupy several important tables in the Yojana Bhavan but would love to have it demolished or demobilized at the earliest.

And fortunately, compared to the years of freedom struggle, Indian working class and their trade unions are far better equipped today, intellectually as well as organizationally: They are sure to see through the book and its contents and use them for advancing their own struggles against the tyranny of global capital.

Notes and references

1. See web site http://www.ciep.fr/sites/default/files/atoms/files/plaquette-ciep-en.pdf
2. This is based on the ‘Report on conditions of work and promotion of livelihood in unorganized sector brought out in 2008, by the National Commission for small enterprises in the unorganized sector’. This report is an eyeopener on the so called Welfare State theories about India. Five Year Plans, Planning Commission and Public Sector Enterprises were meant as instruments for protecting the national economy from neocolonialism and not for building welfare capitalism or socialism. .
3. World Bank Report June 2014 by: Sheoli Pargal and Sudeshna Ghosh Banerjee http://dx.doi.org/10.1596/978-1-4648-0233-1
4. For a detailed analysis of this mismatch, see my article “Indian Agriculture: Search for Patriotic Alternatives”, in Perestroika Glasnost and Socialism, published by Partridge India, 2013
5. Now there is a India-US understanding to defer the issue indefinitely
6. See p-168 of the book under review
7. My article ‘The Public Sector in India’ published in the Marxist of Dec 1988 had pointed out the thrust and direction of India’s public sector investments. They were addressed to the core sector and served as the technology generators of the nation and helped to retain its economic independence in good measure. The reforms instead of further building on this skilled manpower and expertise resorted to its wanton destruction through VRS and closures. Big capitalists had preferred the consumer goods and consumer durable sector with foreign collaboration which were far less risky and enjoyed a highly protected market.
8. See p-123
9. See p-128
10. Page 129
11. Page-118
12 See my blog: CBSE for equity and excellence? : https://kvijaya40.wordpress.com/
13. Page-96
14. Tables 2and 3 on page-94 of the book
15. Page-273
16. Page-274
17. Blog: Cooperative federalism of Modi Government https://kvijaya40.wordpress.com/

22-1-2014/EOD

MULLA PERIYAR SCRAP BOOK

MULLA PERIYAR SCRAP BOOK-PART II
By Engr. K Vijayachandran FIE

Mulla Periyar, the more than a century old gravity dam in Kerala owned and operated by the neighboring state of Tamilnadu is once again live in the regional media. It is a ping-pong game, quarter century old and played by the media and opportunist politicians from both sides both sides. Its entertainment value had greatly come down with the last definitive verdict by Supreme Court, about an year ago, authorizing Tamilnadu to go up to 142 feet of reservoir level, six feet above the restrictions fixed by the court in 1979, pending a final decision.

Dispute was about the safety of the old gravity dam and not on any sort of riparian rights. Tamilnadu is quite within its legal and moral right to store the water in the reservoir up to 142 height which is supported by the best of professional opinion in India, globally respected for its dam related expertise. Kerala has lost the case legally, morally and politically. Its last weapon was a horror film DAM900 depicting the massive destruction of four Kerala districts with a population of over four million ion people.

Horror scenes with tens of thousands of bloated carcasses of humans and animals floating around the flood were acclaimed as great cinematic achievements. But hardly anybody, in Kerala, was interested in the movie and Tamilnadu had simply banned its exhibition: Film had proved beyond doubt the limitations of art in distorting facts and manipulating human minds. Opportunist politics and other vested interests have totally failed in instigating processions and satyagrhas, this time, despite attempts by small sections of the media. Some five hundred families staying on the downstream of Mulla Periyar were advised to move to safer places. But they were not convinced about the official logic.

There is the argument that even the best of predictions could go wrong some time and the preparations to deal with accidents may not work. They insist on unreasonably high safety factors. However, one of the suggestions now made by the Kerala side is worth considering: Why not limit the water level in Mulla Periyar to the minimum dictated on by the actual irrigation demands on the Tamilnadu side. Kerala has suggested that level in MP may be raised beyond 136 feet only after filling the Vaigai reservoir to the maximum limit, and only when it is absolutely necessary for the farmers.

This is break from the endless debates on safety, possibly a healthy development: by moving to a dialogue mode, lot of problems could be easily resolved. In fact, when and how much water was required by Tamilnadu farmers or the actual storage and water level requirements were never discussed or debated by the court or the media. Let us hope that that such discussions will take place, now: After all, dams and reservoirs are extremely flexible instruments and we are sure to discover plenty of solutions, as we play them.

Another equally interesting debate has now sprouted from the higher water levels of MP. This relates to the over 6400 acres of land that got re-submerged under water, after some three and a half decades. Reports are slowly coming in on the desirability of ecological and environmental changes these areas are now undergoing: Such issues, though not unexpected, were never discussed or debated within or outside the trial courts.

Earlier, there were also stray reports on illegal settlements, by businesses, tourism and religious establishments that had come up on the tracts of lands vacated by MP waters. We may hear about them more in the coming days.

19th Nov 2014

COOPERATIVE FEDERALISM: INDIA NEEDS A FEDERAL RAIL BOARD

INDIA NEEDS A FEDERAL RAIL BOARD
By Engr. K Vijayachandran F.I.E

 

The first rail budget of Narendra Modi Government has disappointed the people and of most Indian states. Though the Prime Minister passionately intervened through visual media and expressed his solidarity with his rail minister, Sadananda Gowda, market sentiments stuck to the negative note: Shares registered an average loss of 3.5 percent in a single session.

It appears, the Railway Board , the Rail Ministry like most other central ministries and even the PMO continue to be infested and dominated by foreign financial consultants and agents of multinational corporations, as in the UPA days. Delhi reality is that, even before a Central Minister and his personal staff settle down in the new office, these experts and advisors are ready with policy papers and policy announcements.

Confluence of opinions on government budgets and policies by the lay public on one hand and market sentiments on the other, as in the case of IR Budget 2014, is rare and rather unprecedented. Possibly, the market down-slide was speculative and got sparked off by the unreasonable hypes, triggered by the regime change. However, the reasons for negative reaction from the general public were genuine. People were expecting announcements of new schemes, introduction of new trains, and for the expansion of rail systems that were long long overdue.

Census 2011 has counted a total of 598,110 census villages and towns in the country and there are only 7172 railway stations in the country. This means bulk of our population centers are unlikely to have a proper rail link. After the British left, only only 11,000 route KM has been added to the Indian rail system. Most this 20 percent increase was effected during the first four decades of national independence. During the twenty five years of economic reforms; annual addition was only around 100 KM or at the best around some ten new railway stations per year.

In fact this new additions did not even compensate for the closure of rail stations in the name of financial losses. With the stress on express and super fast trains and neglect of passenger trains, a large number of rural railway stations have a deserted look today and are facing closure. At the same time. many of the large stations look dirty, ill-maintained, user-unfriendly and overcrowded, despite the best efforts of the employees whose strength was being arbitrarily cut down at an average rate of 17,000 per year during the past two decades.

Planned retrenchment was resorted to on a large scale on the plea that, IR was a losing concern and has outgrown the real social needs. But rail penetration in the country continues to be far below the international experience, on the basis of geographical area as well as population. India has 60 route km of railway per million people, and 20 route km per 1000 sqkm of land area. This is far below that of USA (803/22), France (603/63), Germany (520/117) or Japan (192/63). China was far behind India in rail penetration at the time of its revolution, but it has more than doubled its route rail length during the past sixty years to around 65,000 KM.

Despite the cutting down of employee strength and slow down of network expansion during the two decades of economic reforms initiated in late nineties, IR had continued to increase its output in terms of passenger as well as goods traffic. Number of rail passengers crossed the 8.2 billion in 2011-12, a 6.4 fold increase in six decades, and in terms of passenger-km the increase was nearly 16 times. In goods traffic, IR was concentrating on long-distance bulk goods and its output increased to 667 billion ton-km, an 18 fold increase during the same period. (1)

With its 13 million skilled employees in 16 zonal railways, 8 manufacturing units, 12 public sector undertakings and a dozen or so service organizations, IR is mammoth business organization with an annual turnover of over Re. 123,000 Crore. It is a major resource base for the country with regard to engineering and technology development. Its potential to contribute to the economic development of the country is substantial even outside of rail development. But this is not being put to use, even for the expansion of rail network, as needed and desired by the people Indian states and their elected governments. IR budget presented in the Indian Parliament two days ago is an open confession of this sad reality.

It is now proved beyond reasonable doubts that, the economic reforms and structural adjustments forced on the country as part of the globalization drive, was an utter failure and a disaster in the case of IR. Starting some two dozen express and super-fast trains or opening up of ultra-modern rail corridors with bullet trains through the FDI and PPP routes, will not solve the basic problems facing IR. Only way to reach out the half a million Indian villages through a national rail network is to re-build IR on a federal basis, as visualized in my earlier blog (2).

Modi Government could have used the occasion of presenting its first rail budget as an initial step toward implementing the concept of Cooperative Federalism propounded in the Presidential address of Pranab Mukherjee (3). Instead, it has taken to the surrealistic game of flaunting toys like bullet trains that makes little sense in the current national context.

—————–

References:
1. Calculated based on data from IR website: http://www.indianrailways.gov.in/railwayboard/
2. Paper titled, “Indian Railways: In search for a New Vision”, published in my book, Perestroika Glasnost and Socialism ISBN 978-1-4828-1353-1, published by Partridge. The book examines the possibilities of improving the efficacy of Indian State by reorganing it on federal lines based on the experience of USSR. The paper was republished as a WordPress blog: https://kvijaya40.wordpress.com/2014/02/13/indian-railways-go-round-and-round/
3. See my just previous last blog  on Cooperative Federalism

COOPERATIVE FEDERALISM OF MODI GOVERNMENT

 

CENTRE-STATE RELATIONS AND COOPERATIVE FEDERALISM
By Engr K Vijayachandran F.I.E

Views of Prime Minister Modi on the re-defining of Central-State relations are seen reflected in the presidential speech of Pranab Mukherjee: “India is a federal polity. But, over the years, the federal spirit has been diluted.”.

In order to correct the situation the President had promised to “re-invigorate fora like the National Development Council and the Inter-State Council” and introduced a novel concept of Cooperative Federalism, possibly intended to deepen the economic relationship between State and Central Governments. He did not elaborate on how the concept will translate itself and help to rectify the distortions.

Our constitution makers had looked at the development and upkeep of basic infrastructure, physical as well as social including language and culture, as the joint responsibility of Central and State Governments. For a newly liberated multinational country of continental proportions a federal type governance was most appealing.

However, roles of state and lower level governments, as well as those of Inter-State Council, National Development Council, Planning Commission and other policy making institutions at the national level, built up during the early years of national independence, as well as that of Loksabha and Rajyasabha, were drastically eroded in recent years, thanks to the highly authoritarian economic reforms.

Central Government, along with its elaborate Committee of Ministers and PMO, had virtually taken over the sole responsibility for infrastructure development, with the help of foreign and Indian monopoly capital, leading to numerous scams of national shame. Even the Planning Commission was charged of breeding crony capitalism. And, despite massive doses of privatization and foreign direct investments and experimenting with PPP concepts, Indian reforms have failed to deliver results.

Experience of India’s Power sector, where reforms had an early start, is typical: Indiscriminate import of equipment and systems are causing costly breakdowns in our national and regional grids. Reforms have inflated capital costs and further increased the financial losses of State Electricity Utilities. They have turned totally dysfunctional: Uninterrupted quality power at lowest possible costs is not their motto anymore. (1)

Electricity generation using imported fuel is on steady increase, while our own fossil fuel reserves remain under-utilized. Role and functions of Central Electricity Authority (CEA), the federal organization that was in charge of power sector as per the 1948 Electricity Act, was taken over by Power Ministry and virtually re-assigned to international consultants in the pay role of global capital and MNC monopolies.

Prices of electricity are increasing all over the country and its quality deteriorating: Solution lies in reversing the reforms initiated in the early nineties for force-opening up of the national market for electricity as well as power equipment. Federal character of the power sector need to be urgently restored in national interests.

In the telecom sector, the two legged policy of having state-wise circles and centralized technology development by Central Public Sector Units was given up, in order to force open the national telecoms market. Net result is abject dependence on imports in the telecoms sector, not only for hardware and software needed for the modern communication systems but even for their maintenance. The only silver line in the cloudy communication system are the great achievements in space communication technologies developed by ISRO, despite imperialist boycotts.

Reforms had struck telecoms sector, when the ICT revolution based on microchips and Internet technologies started its sweep. Instead of mobilizing the technology resources of central and state public sector organizations as well as academic R&D institutions market oriented solutions like state wise auctioning of spectrum rights was resorted to by the Center leading to massive scams and corruption.

It is time that we restructure India’s telecoms sector on a federal basis with an expanded role assigned to central and state public enterprises. Does it fit in with the concept of Comparative Federalism of Modi Government?

Indian Railways is, possibly, most suited for exploring and enriching the idea of co-operative federalism suggested in the Presidential speech: IR is a leviathan insensitive bureaucratic organization, presided over by a cabinet minister, supported by one or two ministers of state, and then the Railway Board, its Chairman and half a dozen board members etc etc, and all connected up in series and in parallel (see-https://kvijaya40.wordpress.com/2014/02/13/indian-railways-go-round-and-round/ ).

There are fifteen zonal railways, each administered by a General Manger, who looks after the construction and operation of rail lines and related systems of the zone. The nature and number of complaints with regard to their performance indicate, that they will perform far far better, if IR is organized state-wise, as in the case of P&T, BSNL, DD, CEA and good old Electricity Boards etc etc, and several other central government functions.

It will be even better, if these state-wise zonal organizations are converted into public sector undertakings, with equal shareholding by IR on behalf of Central Government and then by the concerned State Governments, as in the case of Delhi or Chennai Metro. A full fledged rail minster and a skeletal rail department in every state, for servicing and supporting this joint enterprise will greatly enhance the policy planning and management capabilities in the country with regard to rail development.

This sort of structural reforms will bring the administration and management of our on-rail resources in the country closer to the people, and their elected Governments at the state as well as lower levels. Rail penetration continue to be very low in our country and only very few towns and villages were connected to the rail system after national independence.

Water tight division of responsibilities between central and state governments and the three lists annexed to Indian constitution, viz Central, State and Concurrent are a colonial legacy, inherited from imperialists. An earlier blog of mine, ‘Third Front and RE-Envisioning of Indian Unity’ (https://kvijaya40.wordpress.com/2014/02/16/third-front-should-re-envision-indian-unity-12/ ) examines the several areas where economic relationship between Central and State Governments could be immediately deepened within the existing constitutional framework, by taking the route of cooperative federalism.

Cochin International Airport Ltd (CIAL) virtually owned and managed by GOK, erroneously quoted as a PPP model, is a splendid example for the potential of Co-operative Federalism. Air Kerala the dream project of State Government and a project of great relevance to the regional economy could take off instantly, provided it is promoted as a subsidiary of Air India. And the much talked about Palghat Rail Coach factory will roll out immediately, if it is re-envisioned as a JV of Kerala and Indian Railways.

Like IR, there are several CPSEs and Central Government organizations which have distinguished themselves as technology generators for the national economy. I had the good fortune of brokering a deal in 1987, between GOK and ISRO: Kerala High-Tech Ltd (Kel-Tech) promoted with Dr, Kasturirangan as Chairman is today, a proud partner in BrahMos Aerospace, an Indo-Russian Joint Venture (www.brahmos.com) (3).

Why not put the concept of Co-operative Federalism on the fast tract, instead of PPP that has proved to be a virtual non-starter?

********

 

Notes and references:
1. Power situation worsens, Government looks helpless: page 139, article by author, Perestroika Glasnost and Socialism ISBN 978-1-4828-1353-1, Partridge 2013
2. Today, India is mostly dependent on imports from China for its telecoms hardware and software Indian telecoms industry has virtually lost its lead to the Chinese thanks to our mindless reforms.
3. This totally non-conventional project was the brainchild of Engr. Sudhakar and a dozen of his ISRO colleagues. It caught the imagination of the Communist leader KR Gowri, the then industries minister of Kerala. With the color of Government changing the project did not have a smooth sail but managed to survive several layers of pettiness spanning over a quarter century thanks to its technological relevance.

 

CBSE FOR EQUITY AND EXCELLENCE?

LANGUAGE POLICY AND THE CBSE
Engr K Vijayachandran FIE

Central Board of Secondary Education (CBSE) claims itself to be a National Board, committed to Equity and Excellence in School Education (1). However, its primary aim appears to be promotion of English as the medium of education in the country.

In 1962 there were only 309 schools under its care, mostly inherited from the colonial era. Today, there are nearly 9000 schools under CBSE system, including 141 schools in foreign countries, 897 Kendriya Vidyalayas, 1761 Government Schools, 5827 independent schools, 480 Jawahar Novodaya Vidyalayas and 14 Central Tibetan Schools run for the Dalai Lama. CBSE with the vast resources at its command and support for the English medium virtually dominates the schooling system and its management in the country (2).

Before the CBSE drive started in early sixties, share of English medium enrollment in Kerala schools was negligible: It reached half percent level in 1971 and ever since the percentage was doubling up every ten years. In the last academic year, nearly ten percent of students in Kerala went to English medium schools (3). True, this is part of a national pattern. But, impact of this continuing shift towards English medium education has never been evaluated and understood at the regional or national level. (4)

Even after six decades of independence English dominates Indian administration: It is the medium of higher learning in Indian universities and the language of Indian science and technology. Major contributor to exclusive development, in the past, was the language policy, practiced by Indian State. Discussions on inclusive development make little sense, outside the frame of our language policies.

Look at our agrarian sector: Literature on our crops, soil or climate is simply not available in the languages spoken by our farmers and farm workers, numbering around 180 million: Kerala is the land of coconuts, but there is no scientific literature in Malayalam dealing with the tree, its cultivation, products and related technologies. Agricultural universities of India and ICAR institutions speak only English, have little contact with our farming communities and mostly work for publishing papers in foreign journals.

We have around 45 million industrial workers, including the ten million in organized sector: spinners, weavers, welders, blacksmiths, fitters, electricians, plant operators, telephone workers, auto drivers, motor mechanics etc. They would love to read technical literature on their trades, in their mother tongues; for improving skills, efficiency and quality. That sort of literature, including safety manuals, hardly exists in Indian languages.

We have a large army of construction workers: masons, bricklayers, bar-benders, form workers, painters, carpenters, plumbers, electricians, lift and crane operators, loading and unloading workers, and then the so called attimari or head load workers. Nobody knows, from where they come, how they get trained, and where they disappear: They hardly get any formal training in their trades, though their share in GDP continues to expand, every year.

Specifications and standards for public works are prepared and published in English. If published in local languages, they could impart technical knowledge to millions of construction workers, contractors and engineering students, and bring in transparency in our public works. Indian Standards prepared by BIS, at huge cost to public exchequer, will help in educating workers and using their creativity, if published in local languages.

In the health sector, doctors, nurses and other paramedical staff learn their trade only in English. Medical prescriptions and instructions are made out only in English. Indian languages stand virtually banned by the ICMR and Indian medical profession. Even Ayurveda has turned English, despite its claims on holy origin. Ayurveda is learned and taught in English, nowadays, though the original texts were written in Indian languages.

Best way to develop the capabilities of our languages is to start using them for learning and teaching science and technology. This will, not only galvanize the learning process but also lead to the creation of a vibrant indigenous S&T. This, in turn will help the working people to participate in technological and scientific innovations**. This is the lesson to learn from developed countries, and also developing nations like Korea, Vietnam or China.

English speaking intelligentsia is a key constituent of our elite classes that rule our country. Language policy, now practiced by Indian state, immensely suits their selfish interests: First, it helps them to sustain their hegemony over the working people, as in the good old days of Brahmin domination, when Sanskrit was the veda bhasha and deva bhasha and holding the same status as Latin in medieval Europe. And secondly, it helps them to migrate to the West, and extract global prices for their labor power.

This microscopic section of our society insists that knowledge in general and S&T in particular has to be taught and learned only in an imperial language, if the country is to benefit from modern technologies. Such hypotheses by the elite classes of Europe were demolished by the industrial revolution and Latin replaced by Portuguese, Spanish, English, French, Russian or German. And, the socialist revolutions, that followed the two global wars, led to an even bigger upheavals in the language policies of nations-states and nationalities.

Our language policy is blocking the creativity of a billion people: Stagnation and exclusive growth are the inevitable results, as evidenced by our poor performance in innovations and inventions. Deliberations on inclusive development, outside the framework of national language policy, are typical of the hypocrisy practiced by our English speaking intelligentsia. And, CBSE as a national board patronized by our elite classes, has created an impression that country has already created an excellent secondary school system with equity that need to be sustained and further expanded.

NOTES
1. See webpage: http://cbse.nic.in/welcome.htm
2. CBSE has grown into a massive bureaucratic organization. Text books are produced in English and Hindi and question papers follow the same pattern giving a distinct advantage to examinations to Hindi speaking populations. CBSE’s claim on equity and excellence make little sense in the Indian context.
3. Total school enrollment in Kerala was around 40 Lakh in 1961 and it steadily increased and peaked to around 59.1 Lakh by 1991. Then there was a decline thanks to demographic transition and by 2013 it was only 38.5 Lakhs. Government school enrollment nearly halved, private aided school enrollment came down by one third and unaided synonymous with with English medium reached the all time high of 3.65 Lakh. This year, the much celebrated new enrollment was hardly 3.25 lakhs, some two lakhs less than two decades ago. Kerala could have gone back to the healthy and more wholesome neighborhood schooling that existed in the good old days. Due to the unhealthy growth of the English medium sector the state could not take any economic advantage of the demographic transition and improve the quality of education.  The state could plan for it in the coming years with the help of local governments, provided it could resist the CBSE culture and move away from the English medium mania.
4. Continued domination of English as medium of instruction as the language for higher learning and as official language is a major disincentive for inclusive development. See pages 131-134 of the book recently published by the author: Perestroika Glasnost and Socialism ISBN 978-1-4828-1353-1.

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