POLITICAL DIARY

New Delhi, 28 January 2006

 
Rahul Debut’s At Congress Session

CHALNA HAI, CHALNA HAI, PAR KAHAN?

By Poonam I Kaushish

It was billed as the greatest political extravaganza of the new year. A feel good show intended to instill a new vigour and vitality in the Grand Old Party. A lesson in political ABC --- aggression, bounce and confidence --- to achieve greater heights. Alas, all plans went phut. Pricked by scams galore. Which popped up like the proverbial bad penny, leaving the party more deflated than ever.

How else should one describe the 82^nd three-day Congress plenary held at the Gachibowli stadium (renamed Rajiv Nagar) in Hyderabad on 2l-23 January last? Its title –Ateet Ki Neev, Bhavishya Ka Nirman, Nayi Zimadari (Building a future on the foundations of the past is the new responsibility) – could not have been more misleading.

Held as it was under the shadow of the Volcker and Quottrochi scandals, the looming crisis in neighbouring Karnataka where its Government was tottering on its last legs, and skirmishes with the Left on crucial policy matters. But our Congress netagan  typically chose to brush everything under the carpet. Refusing to see the writing on the wall, they continued yet another charade in wishful thinking --- without a new disha and without a fresh sandesh.

Before you read me wrong, this is not to detract from the positive aspects of the session. One, it injected the aphrodisiac called power among the 15,000 delegates who assembled at the Rajiv Nagar, aimed at steering a new direction, sense of consolidation and organizational renewal. Two, boasting of flawless arrangements by the hosts, headed by Congress Chief Minister Rajashekhar Reddy, it proved that when it sets it’s heart on delivering, none can do it better than the Congress. Proved by the 150 computers in the media centre. Three, it lined up a Gen Next leaders, headed by Rahul, who are willing to assert and call a spade a spade.   

Promises were a plenty. So also the pledges. There was a khichri of Nehruvian socialism (reform with a human face) and Manmohanic liberalization. There was lots and lots of secularism without any clue about how it could be translated it into votes. A huge typical Congress tamasha which failed to find answers to the dilemmas facing the party. It refused to address the ticklish issues of striking a balance between its stand on alliances and coalitions and the need to expand its organization and social base in the states ruled by its allies or other opposition parties. What is more, how to fulfil its “coalition dharma”, check corruption, maintain austerity and build bridges between the party and the government.

The political resolution which recognized the inevitability of coalition governments, terming them as ‘a political reality’ at least for the next few years, put the onus for the successful run of such arrangements on its partners. It talked of “collective responsibility.” Asserted Defence Minister Pranab Mukherjee at a media briefing, “ Coalitions are a give and take.   Our partners should be ready to give so that all Indians are able to take.  The alternative is too dangerous to even countenance”

The dichotomy was so obvious in the document. “The discipline of coalition politics was honestly and strenuously followed by the Congress from that day (the day it accepted the reality), making the UPA possible and successful.”  Implicit was the message that while the party had followed the dharma, the partners had not. The resolution is almost certain to be contested by the alliance partners as the party shares power with other outfits in many states.  Coalitions in these states have had had their own share of troubles, thanks in no small measure to the attitude displayed by the Congress.

As the crisis in Karnataka has shown, the Congress has none to blame but itself. On the sidelines of the session, senior Congress leaders confided that Dharam Singh was basically to blame. Emboldened by the outcome of the panchayat elections, the state unit ill-advisedly needled the JD(S) and its President HD Deve Gowda. And when the former Prime Minister rushed to Delhi to hold talks with Sonia Gandhi, the latter refused him an audience.

In Andhra Pradesh, the TRS is up in arms against the Grand Dame for its refusal to take any steps towards the fulfillment of its long-standing demands for the creation of a separate state of Telangana. And in Maharashtra, the Congress is engaged in a behind-the scenes feud with the NCP after it overtook the latter in terms of numerical strength in the state assembly.

Similarly, even while the Party exhorts its workers to strive hard to revive the party’s fortunes in the states where its base has been eroded or has a negligible presence, it is tempered with the realization that it cannot declare open war on partners who have grown at its expense. Like the RLD and Jan Shakti in Bihar and the Samajwadi and BSP in UP. Also, with the Left parties being the UPA Government’s ‘life-line’, it cannot afford to get on its wrong side. Notwithstanding the fact that it has gone to considerable pains to dispel speculations about friendly fights in the forthcoming elections in Kerala and West Bengal – States where the Left is directly pitted against the Congress.

Significantly, the Congress maa-beta duo Sonia and Rahul both made a forceful pitch for waging a “long and forceful war to recover ground in the Hindu heartland”. Realizing that they would be trapped in the quagmire of playing second fiddle to regional players in unless they got their act together in the vital states of UP, Bihar and Madhya Pradesh which account for nearly 200 Lok Sabha seats, Sonia made no bones about the fact that she was no longer satisfied with the Party’s space in coalition politics and extolled her partymen to take “the commanding heights of politics again”.

Undoubtedly both she and Rahul succinctly diagnosed the problem but could not come up with convincing answers to galvanize the comatose units. Specially, against the backdrop of the Party’s shrinking vote nation-wide. Crippled as it with rank indiscipline within. Big, small and petty leaders are all pulling in different directions. In the last three years alone the Party has changed its PCC chief thrice in UP. Not only that. Three top guns “refused” to attend the session. Uttarkhand Chief Minister N.D. Tiwari (dropped from the CWC) and his counter part in Himachal, Vir Bhadra Singh. Bengal leader Ghani Khan Chowdhary who is reportedly keen to join Trinamool’s Mamata. There were loud whispers of discontent about the recent AICC reshuffle specially the reconstitution of the CWC which now has been packed with “non-entities”. How then one wonders will the party recapture its lost glory?

That sycophancy reigns supreme was so evident when speaker-after-speaker eulogized, in glowing terms, the sacrifices made by the Nehru-Gandhi family and, in particular, Sonia Gandhi. Never mind Sonia making amply clear at the outset itself that she did not want the speakers to waste time eulogizing her or Rahul. Even before Rahul had stepped into the city, banners converting his name into an acronym (R-reformist, A-accomplished, H-honest, U-upcoming, L-leadership) had sprung up all over.

Speakers continued to unabashedly croon, “The entire country is looking towards Rahul… Rahul aana, is desh ko aage le jana, (please take the country forward), Rahul lao, Desh bachao.” Slogans were vociferously raised for him to join the CWC. In his maiden address at the session, the Gandhi scion was a picture of calm and composure as he read out from a prepared text, yet never failing to connect.  His speech, which came in the form of an intervention during the discussion on the political resolution, was heard with rapt attention by the delegates.

He posed some soul-searching, posing some uncomfortable, yet real, questions – Why is that the Congress, which, at one point of time, was so strong in the Hindi heartland, has become so weak?  What should be the mantra to re-charge the party apparatus in north India? But there were no answers. True he did not set the Krishna on fire. But the young man minced no words that he meant business. Whether he really means business and can deliver time alone will tell.

In sum, even as Sonia offered the moon and the stars to project a Congress rainbow on India’s future political horizon and every Congressmen present lapped it up, the reality was different. In fact, harsh. Barely had the session ended in a grand finale of a new sankalp the party had mud all over its face. What with the Supreme Court severely indicting Bihar Governor Buta Singh as well as the Central Government and appropriately casting doubts, how so ever politely, about the President’s conduct.  Raising a moot point: How will the Congress fare in its new tryst with destiny. Chalna hai, chalna hai aur chalna hai. But where? ---INFA

 (Copyright, India News & Feature Alliance)

ECONOMIC HIGHLIGHTS

New Delhi, 25 May 2006

National Policy Needed

Making Best Use of Available Water

By Dr. Vinod Mehta

The weather department has predicted upto 5% shortfall in rain this year, which is going to be reflected in the agricultural output.  The vagary of monsoon has once again focussed over dependence on monsoon.  It implies that we must do something to reduce our dependence on rains.  This also calls for a national water policy to make best or optimum use of available water.

Budgetary proposals for the year 2004-05 had paid special attention to water management and allocated a substantial amount of money for this sector. This step was taken considering the fact that the availability of water is decreasing with every passing day and unless something is done to conserve water we may be courting trouble, vis-à-vis, population, agriculture and industry.

Let us first have a look at some facts. Fresh water represents less than 0.5% of the total water on the earth surface. Rest of the water is either in the form of sea water or locked up in icecaps or soil. The worldwide consumption of water is doubling every 20 years more than twice the rate of increase in population.

In spite of the fact that water is scarce, it is being used recklessly. A large amount of water is being wasted in agriculture, industry and urban areas. It has been estimated that available technologies and better upgradational practices, agricultural water demand could be cut by about 50% and that in urban areas by about 33% without affecting the quality of life. But most of the governments do not have adequate laws or regulations to protect their water systems.

In most developing countries the fresh water supply comes in the form of seasonal rains. Such rains do not provide enough time  for efficient use during the monsoon. India, for instance, gets 90% of its rainfall during the summer monsoon season which lasts from June to September. For the rest of the months there is hardly any rain. As a result of the seasonal nature of rain India can make use of no more than 20% of its potentially available fresh water resources.

The per capita availability of renewable fresh water in the country has fallen drastically over the last 50 years. The water table is rapidly falling with unregulated over exploitation of groundwater. By 2025 water scarcity in India is expected to be acute and big dams-mega river linking projects or privatized water distribution may not help. Apart from rain the other two important sources of water in India are rivers and ground water. India has 14 major, 44 medium and 55 minor river basins. India’s ground water resources are almost ten times its annual rain fall. Like surface water nearly 85% of the ground water is used mainly for irrigation.

It is quite obvious that the country will have to do something so that the water problem does not assume any alarming proportions. Since we do not have any control either over monsoon or rivers the only way to conserve water is through efficient management of rain and river water. It calls for various measures in the next two to three years.

It is amazing that despite the fact that we are faced with the problem of growing scarcity of water, we do not have any national water policy. During drought we dig up many areas under ‘food-for-work programme’ for storing rain water during the next monsoon. Then we come up with ideas like linking of rivers and occasionally we beat our chest for the falling underground water table. One has been hearing about water harvesting for several years but not much is known as to how much work has been done in this area.

It is, therefore, essential that the country must have a clear cut water management policy for the next fifty years. How the river water is to be used and how it is to be diverted from surplus to water deficient areas must be clearly spelt out. Linking of rivers is a good idea but before attempting such a course an exercise must be carried out very carefully to weigh all the pros and cons of it because once the rivers have been inter linked it may not be possible to reverse the whole thing if we find one day that it is not working well or has created numerous other problems.

For each district and for each village we should have a data base on the average annual availability of water, number of wells, ponds, pools, streams etc. This will help manage water in a better way.

Beyond this there is an urgent need to change the attitude of the people towards the use of water. As of today people are wasting and polluting a large amount of water in many ways. The most polluting of them are the city sewage and industrial water discharged into the rivers. Currently only about 10% of the waste water generated is treated. The rest is discharged as it is into our water bodies. Due to this, pollutants enter ground water and other water bodies. This water which ultimately ends up in our household is often highly contaminated carrying disease causing microbes.

Water from the agricultural fields that drains into rivers is another major water pollutant as it contains fertilizers and pesticides. The effects of water pollution are not only devastating to people but also to animals, fish and birds. Polluted water is unsuitable for drinking, recreation, agriculture and industry. It diminishes the aesthetic quality of lakes and rivers. More seriously contaminated water destroys aquatic life and reduces its re-product ability. Eventually it is a hazard to human health. Nobody can escape the affects of water pollution.

Therefore, apart from having a national water policy, the government along with NGOs should start a long term campaign to educate and sensitize the general public about the need to save water and stop its pollution. It should be made a part of the school curriculum. The time is not on our side.  We must manage our available water resources to the best extent possible.---INFA

(Copyright, India News and Feature Alliance)

ECONOMIC HIGHLIGHTS

New Delhi, 18 May 2006

Exploiting World Market

Processed Food Industry NEEDS A Push

By Dr. Vinod Mehta

India is the world’s largest producer of milk, the second largest producer of fruits and vegetables, a major producer of spices, tea and coffee and large livestock population and vast marine wealth.  In fact, India, one can say, is almost sitting on a goldmine of processed food.  There is not only a potential vast domestic market for it but also huge foreign market.

The industry can become a top foreign exchange earner provided we follow appropriate policies and capture foreign market.  The effort is totally indigenous, does not involve any import of any inputs to any significant extent and with little investment one can earn lot of hard currency.  The world processed food business runs into billions of US dollars and India's share in it is not even one per cent as of today.

India as a signatory to the WTO has to open up its economy to imports of agricultural products from all over the world within a few years time. When the WTO Agreement was signed it was said that India stands to gain by the opening of the agricultural sector as the Indian products will be relatively cheaper than the similar products produced elsewhere.  The reasoning was that other countries especially the developed ones will be forced to eliminate or lower down their subsidies on agricultural products while the subsidies on products in India are already much lower than allowed by the WTO. 

This is true to a very large extent.  The WTO has only opened up the opportunities to be exploited by us.  However, whether India will be able to exploit this advantage will depend upon a large number of factors.  The relatively lower prices, on their own, will not be of any help unless we make a sustained effort in the international market and produce goods which are in demand in those countries.  This implies increase in the productivities of various agricultural products, improving their quality, tastes, etc., application of highly efficient processing technologies and improving the packaging of those agricultural products.

Both the developed and developing countries have now increased their pressure on India to open up its economy to their agricultural products sooner, as India has comfortable foreign exchange position. For instance, Malaysia is keen to increase its export of palm oil while Mexico is keen to increase its export of soybean oil to India.  Australia and New Zealand are looking for opportunities to export milk and milk products as well as kiwi fruit to India. The USA is looking for exporting its almonds and orange juice to India, which has allowed import of agricultural products but these countries expect much more.

It must be understood that India will have to open up its economy to import agricultural produce from these countries sooner or later, for India cannot afford to ban their entry for as long as India itself is an exporter of agricultural products (though not up to their level) like basmati rice, fruits and vegetables, milk and milk products, tea, coffee, spices and so on.  But India is not yet a major player in these products in the international market even though it has the potential.  Its record of consistency in quality, adherence to supply schedules is very bad which puts off the foreign importer.

This is a minus point with our exporters which comes in our way of tapping export market.  Thailand and the Philippines are exporting Pineapple juice on a large scale for the past several years while India is unable to do so in any good measure because of the non-professional attitude of our business community.  How can we enter the international markets with this kind of attitude?

The Government has already initiated policy measures to provide boost to the processed food industry.  In the latest budget, food processing industry has been declared priority sector; 100 per cent FDI has been permitted through automatic route, zero excise duty and so on.

Though incentives have been provided in the past to encourage the growth of food processing industry yet it is still lagging behind by international standards. With the new incentives as provided in the budget, the processed food industry can hope for a big boost.  But there are other minus points. The food preservation technology in most of the cases is more than two decades old.  Similarly, packaging of the products is much below the international standards.  On the top of it no attempt has ever been made to develop brand names in foreign countries. 

It is only for the past few years that some of the companies have started marketing their products in the international market under their brand names.  For instance, till recently the Indian tea was being auctioned in bulk to foreign buyers rather than selling them in a packaged form.  The Tatas have now started selling packaged Tea in the international market under its own brand names.  Similarly, the cooperative sector producer of milk and milk products Amul has also started marketing its product in the international market under its own brand name.  But these are only few exercises in brand building  and cannot be said to establish markets for Indian agricultural products in a very big way. 

Therefore what the country needs to do immediately is to chalk out a concrete programme for the development of processed food products industry, so that India can become a major player in the international market in the next three to four years. 

As a first step India should concentrate on increasing the productivity of those agricultural products in which it has a comparative advantage.  It could be Basmati rice or tea or coffee or it could be mangoes or bananas.  Some of the energies of our agriculture research centres should be concentrated on developing high yielding varieties of these products.  In fact Indian agricultural scientists have successfully developed a new strain of basmati rice which provides 25 to 30% more yield per hectare without any compromise on quality or aroma.

The second step should be the development of new preservative technologies which are of international standards and can prolong the shelf life of those products without any much refrigeration.  For instance, we are producing large number of oranges including Kino yet 30% of this fruit goes waste as we have not been able to develop any technology to preserve its juice.  Therefore, before bottled orange juice from Florida (USA) enters the Indian market we must perfect the technology to preserve the citrus fruit juice in India so that we can compete effectively the US producers not only in our own domestic market but also in the international market. 

Third step needs to be to improve the food processing technology and bring it up to international standards.  One public sector organization is engaged in the development of such technologies but it has had very little impact till date. 

Finally, the food processing industry will have to pay attention to packaging of the processed food products.  At the moment the packaging of most of the processed food products is so repulsive such that even if we have very good product to offer it will not sell in the international market because of its poor packaging. 

India has a comparative advantage in selling its agricultural products at competitive prices in the international market but it will not be able to capture by itself the vast international market for various agriculture products without first improving the quality of its products and its packaging in every aspect.  We have a lot to learn in this respect from countries like Thailand, Philippines and Malaysia which have well established food processing industry.  We must now move fast enough to take advantage of our comparative advantage in the agricultural sector.---INFA

(Copyright, India News and Feature Alliance)

ECONOMIC HIGHLIGHTS

New Delhi, 11 May 2006

A Challenging Task

Creating Even Job Opportunities

By Dr. Vinod Mehta

The UPA Government at the Centre had promised to create more jobs under its Common Minimum Programme (CMP). It is a formidable task and the Government seems to be quite serious about the whole thing. However, till date no serious effort has been made to do it except that the Bharat Nirman Programme has become operational.

Generally speaking, increase in the level of investment generates more jobs in the country. But it does not guarantee generation of more jobs on its own.  Moreover, in a vast country like India job opportunities need to be created evenly all over India, especially in the rural areas with a view to checking undesirable migration to cities. 

It is common knowledge that 74% of the population lives in rural areas. In urban areas the problem of unemployment is not acute; it is serious mainly in rural areas.  The sheer size of the urban population in metropolitan cities like Delhi, Mumbai, Kolkata and Chennai  provides many job opportunities, more so in the unorganized sector. There is so much demand for various kinds of labour and services that anyone looking for a job can find some work even if it may not be to one’s liking. The labour that migrates to these areas is bound to find some work. It is a different matter that unregulated migrations lead to many problems in urban areas like emergence of slums, increase in crime rate and so on.

Therefore, the real challenge of generating employment is in smaller towns and villages where the size of the population is so small that there are hardly any opportunities for generating remunerative employment. Setting up of factories or small businesses does not make any economic sense. Since there are no factories or workshops in these areas, the demand for labour is almost nil. Again the total population of the area is so small that it does also not make any economic sense to provide services or generate some kind of a work in these areas.

According to the Census figures, out of a total of 5,88,781 villages, 2,90,093 i.e. about 50% have population less than 1,000. The number of villages having population between 1,000-2,000 is 1,14,395; the number of villages with population between 2,000-5,000 is 62,915; for villages with population between 5,000-10,000, it is 10,597 and the number with over 10,000 population is 2,779. It means that for 70% of the villages the size of the population is less than 2,000.

What impact can it have on employment generation?  For one you cannot make massive investments as it would not be able to reap any economies of scale. It will not be able to supply the required skilled or semi-skilled labour. The demand for services from the villagers will not be enough to provide job opportunities. This means that the demand factor will also not work. Thus there will be almost nil opportunities for young people of these villages to find jobs even in the unorganized sector. This problem is acute in the North-East.

In other countries, the rural population is small, while it is very large in urban areas; less than 25% of the population is in rural areas. A large number of jobs are being created in the service sector, followed by the manufacturing sector. (Even though some of the services are being outsourced by these countries, it has also been noticed that some of the affected employees are also migrating to the developing countries.) Thus, the employment opportunities are relatively more in these countries than in a country like India where the population is overwhelmingly rural. It is a sheer challenge how to generate employment in areas where the population is less than 2000.

Therefore, the Government will have to have some kind of a strategy to generate employment in these villages in the coming years. One way to overcome this situation would be to club these villages into viable economic zones on the basis of some economic criteria before making investment in these areas. Most of the activities may be centred around food processing of various agricultural products including milk and milk products and smaller workshops, production units etc. For instance, the Government can help these villages to start food processing and marketing cooperatives, start small repair and maintenance workshops to attend to repair of mechanical equipments, to set up cold storages etc., which in turn will raise employment opportunities for the local people both in the organized as well as the unorganized sector.

The second equally important point is to link all these villages with towns and metropolitan cities with all-weather good quality roads. This will help the rural people from these villages to take their products to nearby towns and metropolitan cities where there is a market for their  products. Good roads can facilitate the to and fro movement  of labour on daily basis to nearby towns where they are bound to find some work.  Once these villages are linked by good roads many of the companies in the private sector may find it economical to procure their raw materials or outsource their work from these places. They may even come forward to set up small units.

Large-scale investment does not mean that one puts big money and sets up bigger projects. It also means that one spreads out investment all over and help people to engage in meaningful economic activity. Food for work programme is not just enough. What is needed is gainful employment on a sustained basis. This requires the Government to ensure easy movement of agricultural and other products from one place to another and easy to and fro movement of labour from village to nearby towns.

In the long run, however, the emphasis will have to shift from creation of jobs in the agricultural sector to creation of jobs in manufacturing and service sector. The experience of developed countries shows that more jobs are created in the non-agricultural sector.  It has been noticed by economists that the Indian service sector is expanding very fast which defies the experience of other developed countries.  But that is the truth.  Any way, the creation of jobs in the rural sector can at best be a medium term solution to unemployment problem; the emphasis will have to be creation of jobs in the manufacturing sector in the long run.---INFA

(Copyright, India News and Feature Alliance)