Events & Issues

New Delhi, 6 August 2007

Right To Information Act

Counter Productive in Jammu & Kashmir?

By Balraj Puri

The Right to Information Act is the latest and glaring example of the misuse of Article 370, guaranteeing special status to the State of Jammu & Kashmir.

The autonomy that J&K enjoys and the demand for its enlargement can be justified only if it is used for its peoples’ interest and not for strengthening repressive and arbitrary powers of the rulers. Exclusion of jurisdiction of the National Human Rights Commission, 73rd and 74th amendment to the Constitution of India to empower local self governments are some other cases of how Article 370 has been applied to deny democratic rights to the people of the State.

Without compromising its powers under this Article, the State could surely enact better laws than those at the national level, provided it does so only after studying their working. The RTI Act is thus being discussed here in the hope that some remedial measures might still be considered.

In its report on Good Governance in J&K State presented to the Third Roundtable Conference, the working group made a simple recommendation:  that "there should be sensitization of the Right to Information Act, to bring about transparency in the Government." It must have investigated the reasons for its conspicuous failure in the State. In fact, not a single case of a person having got redressal under the RTI Act has been reported or is known.

The reason for the indifference to the use of RTI Act in the State or to seek information about any case is not due to the lack of people’s interest in their problems or that they don’t need such information. It is the lack of a strong voluntary effort to make the people conscious of the right to information and to fully explain why they are not asserting this right. Worse, the main reason is that there are limitations inherent in the State Act and sheer lack of will of the State government to implement it.

The main difference in the State law with that of the Central RTI Act is unlike the latter, it does not provide for the institution of an Information Commission. The Information Commission, for the rest of the country, is appointed at the Centre by the President on the recommendation of a committee consisting of the Prime Minister, leader of the Opposition in Lok Sabha and, a Union Cabinet minister nominated by the Prime Minister. The State Commissions too have similarly been assured of their autonomous character and are to be appointed by the Governor on the recommendation of a committee consisting of the Chief Minister, leader of the Opposition and a Cabinet minister.

The Commission headed by the Chief Information Commissioner is a vital link between the people and the Government. It has the same powers as are vested in a Civil Court. It can summon and enforce attendance of persons and compel them to give oral or written evidence and to produce the document. The Commission, during the inquiry of any complaint under the RTI Act, can examine any record which is under the control of the public authority and "no such record may be withheld from it on any grounds."

As J&K RTI Act does not provide for the appointment of an Information Commission, the complainant is not only deprived of any guidance about the procedure of filing a complaint, but there is no compulsion on the public authority to supply the information sought. Most of the people, including educated people, are unaware of the procedure for filing a complaint and the patience to follow it up.

Further, the list of subjects on which the State government can withhold information is as much as 15 items. It includes advice, including legal advice, opinion or recommendation made by any officer of a public authority during the decision-making process, information which would affect the enforcement of any law, information the disclosure of which would affect the government's ability to manage economy and in general "any record and information which under the Evidence Act is claimed to be privileged."

The in-charge of an office can also regret to supply information to an applicant if the information cannot be complied without considerable financial expenditure or without considerable extra work. Further, a public authority can deny information if it would adversely interfere with its functioning.

There is no Commission to which a person seeking information from the government can approach for guidance if his/her request is rejected. Nor any Court "shall entertain any suit, application or other proceedings in respect of any order made under this Act and no such order shall be called to question"; the Act states categorically and somewhat ominously. The corresponding provisions in the Central Act are far more liberal. In any case the Central Information Commission and the State Information Commissions have wide powers to force the public authorities to provide the necessary information sought by the applicant.

Apart from obvious weaknesses in the State RTI Act which handicap and discourage persons to seek requisite information, an additional factor is the general practice of ministers and legislators to hold durbars to listen to grievances and offer redressal. But this is no substitute for an institutional system for receiving grievances and then offering redressal. More so, because not everybody has access to such durbars. In sum, as far as Right to Information Act of the State is concerned, it is in every sense much worse and regressive than the Central Act.

The people of J&K State specially need good and less corrupt governance. This is possible through empowerment and ready information about the administrative working. And, if it happens, it will reduce the levels of alienation that clearly exist there. ---INFA

(Copyright, India News and Feature Alliance)

Events And Issues

New Delhi, 12 July 2007

India’s Capital Market

WILL THE BULL RUN SUSTAIN?

By Dhurjati Mukherjee

The capital market has been surging ahead with the inflow of global funds on an unprecedented scale. From 7000 on 20 June 2005, the sensex crossed the 8000 mark on 8 September 8 and the 9000 mark on 28 November. Last year it crossed the 10,000 mark on 6 February, the 13,000 mark on 30 October ending the year at 13800.

This year after a dull start, the sensex crossed the 15,000 mark on 6 July and analysts are optimistic the positive trend will continue, with the March 2008 target put at 16,000-17,000. The confidence stems from the fact that India is the second fastest growing economy in Asia (and possibly one of the fastest in the world) and the current valuations of the equity market still appear lucrative to investors.   

The Indian story of spectacular performance during the last 4 years is viewed with interest by the world’s financial capitals and analysts are unanimous that the growth is “sustainable and secular”. India’s growth story has become globally acceptable, following big acquisitions by Indian entrepreneurs who have proved that they can manage businesses beyond the country’s boundaries. Experts point out that though China remained an important FDI destination, India too was becoming an integral part of global portfolio investments.

The market surge over the last two years has been fuelled by better-than expected monsoon rains, excellent economic growth (current year pegged at around 9 per cent) and outstanding corporate performance. Both the GDP and market capitalization are around $1 trillion. Economists feel that a higher ratio of market capitalization to the GDP reflects economic maturity. In developed countries, this ratio is always in excess of one, while in developing countries it is below 0.5. For instance, in the UK it is 2.5, which means the market cap is 2.5 times the GDP, 1.8 in the US and 0.3 in China.

Interestingly, the bull run since early 2005 is different from the ones in 1991 and 1999. It is not one big rush but a sustained push by optimistic investors. India is widely viewed as one of the best and safest of the emerging markets, which will give attractive returns resulting in a steady buying momentum by the FIIs. Moreover, with SEBI introducing a number of disclosures, the stock market has become more transparent and attractive.

Several research reports have indicated that though the earnings growth momentum will be sustained it may come under pressure due to the oil price hike. However, the FMCG segment, construction, power equipment, capital goods companies and IT scrips etc have recorded remarkable gains in the last few months.

An ICICI Securities report has predicted that IT stocks could reach new highs in the current financial year. A 30% growth due to increased spending and revenues from new service lines – BPO and enterprise solutions (business intelligence and data warehousing). The NCAER, an independent think tank, has predicted that higher consumer demand and export order could drive industrial growth. This has been reiterated by the Reserve Bank of India and the Finance Ministry. Some feel that due to a paradigm shift in the country’s policies and the economy gaining strength has led to buoyancy in the stock market.

A Citigroup report ‘Earnings Outlook – Deceleration Ahead’,  pointed out: “One of the key factors behind the spectacular re-rating of the Indian equity market has been strong earnings growth, which averaged over 26 per cent for the last four years up to financial year 2005.” It prediction that while double-digit growth would continue, “our bottom-up forecast suggest a significant deceleration over the next 12 to 18 months” has been proved wrong.  

The boom in equities has been fuelled by huge inflows of funds from overseas investors and FIIs. The momentum of FII investment in India can be gauged from the number of new FIIs being registered. There are presently around 975-980 FIIs registered in the country, according to the SEBI data. The overseas investors pumped in a record $ 10.7 billion in 2005 and a little over $ 8 billion in 2006. In fact, India was the second biggest recipient of offshore funds in Asia in 2005, next only to Taiwan’s $ 12 billion.

According to the Institute of International Finance, the inflows are expected to fall by $ 1 billion this year. This does not augur well for the market, which has been rallying on the back of ample liquidity. Any diversion of the existing FII portfolio upwards of $ 125 could compound the problem. 

Moreover, as per the guidelines of the RBI, the FIIs can invest up to 24 per cent of the paid-up capital of an Indian company and 20 per cent of the paid-up capital in case of public sector banks. The FII investment in the stocks of the blue chip companies have already been reached. Leading to waning of interest by the domestic players as well. The FIIs focus on mid-cap stocks has resulted in significant bull activity. Many companies are passing special resolutions to hike the ceiling for FII investment to attract more fund flows and impress investors. 

The strong fundamentals and the pro-industry attitude of the Government has kept the sentiment of the market almost unhindered but the same enthusiasm may not manifest this year. According to ASSOCHAM, the Government could have raised Rs 31,000 crores in the current stock market boom by divesting only 10 per cent of its stake in the top 14 public sector undertakings. But pressure from the Left parties has not made this possible. Only time will tell whether the Government yields to the Left pressure or convinces them to support partial disinvestments of some PSUs.

The interest in the capital market has affected even small savings. In Maharashtra and West Bengal, accounting for more than one-fourth of the country’s net small savings collections, there has been insignificant growth rate in 2004-05 onwards. The trend is more or less the same in most other states. The high returns from the equity market and mutual funds have inspired investors to shy away from postal savings/banks and invest in stocks.

The sustained inflow into local stocks from overseas funds has kept the rupee steady. It is now trading at Rs 40-Rs 41 due to cushioning by strong foreign investment in stocks for most of the year. As most software companies earn huge revenues from exports, further strengthening of the rupee vis-à-vis the dollar may have an impact on their bottom line though oil companies may benefit.

The challenge of sustaining the market in the coming days at an overvalued level will be tougher and requires a sustained scale of flows, despite better corporate performance and the FII growing interest. But the hike in interest rates may affect the corporate sector, in terms of demand than on profits. For sensex companies, a 2 per cent increase in interest rates would chop off 3 per cent of earnings. 

Clearly, as long as the fundamentals of the economy remain strong, one can expect a reasonable continuous inflow of funds. True, India is possibly among the most expensive Asian markets but this is cushioned by the high real EPS and shift in domestic savings to equity. More. India is now the third largest emerging market in Asia after Korea and Taiwan.

For the market to keep the present momentum, it will be necessary for companies to keep up its growth plans to generate confidence and buoyancy. For an investor, the short-term rallies or the unexpected quarterly/half-yearly results of a company should not be the investment index but its long-term implications of growth. But they need to go with a systematic investment plan; as markets reward the patient investor. ----- INFA

(Copyright India News and Feature Alliance)

Events And Issues

New Delhi, 23 July 2007

Naxalite Movement

NO SHORT CUTS TO SOLUTION

By T.D. Jagadesan

News about Naxalites attack on a police station or a jail or an electric substation etc appears to be making it the front pages of national dailies routinely every month. Is the Government concerned? Where is it heading? A careful analysis suggests that the Naxalite movement appears to have been a triumph and a tragedy. Triumph in the sense that a movement, which started in 1967 from a small village at the tri-junction of India, Nepal and what is now Bangladesh, has today spread across roughly 150 districts in 14 States of the country.  

It has been a tragedy in that an ideology, which was questioned even at the first party Congress of Naxalites in 1970, was almost reiterated at the ninth Congress held in early 2007.  The Naxalite leaders are caught in a time warp. They are parroting the same jargon, the same convoluted arguments and the same ideological abracadabra which they did in the 70s.

The Naxalites talk of “Indian expansion: If India were truly an expansionist power, what is today Bangladesh would have been a part of India.” In fact, India’s frontiers have been shrinking. We have lost a good chunk of territory to China and conceded PoK to Pakistan. The Naxalites support the separatist struggles in Jammu and Kashmir and in the North-East. If India had a leader like Mao, whom the Naxalites adore, the separatist and secessionist groups would have stream-rolled into submission.

The Naxalite campaign to annihilate class enemies has also gone completely haywire. Over 90 per cent of the people killed by the Naxalites today belong to the very classes whose cause they pretended to champion. Kanu Sanyal, one of the architects of Naxalbari, recalling his visit to China and the advice given by Mao, said in an interview: “Whatever you learn in China, try to forget it. Go to your own country to understand the specific situation and carry the revolution forward”.

The Naxalites have not learnt this simple lesson. They must understand that any movement out of sync with the thinking and aspirations of the majority is unlikely to make much headway beyond a certain point. They have yet to give an impression of patriotic commitment to the country.  They are, according to the Home Ministry working in close coordination with certain terrorist outfits, maintaining links with the LTTE, and have a nexus with the ULFA. Does that not amount to treason?

In the meantime, the Naxalite movement has acquired devastating capabilities with the party possessing about 6,500 weapons, including AK-47 rifles and SLRs. Some recent incidents demonstrated their capacity to overwhelm the State apparatus in a particular area: Koraput district headquarters in Orissa was overrun in 2001; Jehanabad prison in Bihar was attacked and its prisoners freed in 2005; Udayagiri town of Orissa was overrun in 2006; 55 policemen were killed in an attack in Rani Bodli village of Chattisgarh in March 2007. No less a person than the Prime Minister of India acknowledged Naxalism as the greatest threat to the internal security of the country.

The Naxalites may claim that the spread of the movement shows their ideology is well conceived and their tactic is sound. Their success is actually to be attributed to two factors. One, the basic factors responsible for the origin and growth of the movement have not been addressed by the powers-that-be. Poverty continues to be endemic. The spectre of unemployment haunts a large mass of youth. Governance is riddled with corruption.

Tribals have been getting a raw deal. People aggrieved on any of these counts often gravitate towards the Naxalities, who hold out the promise of fighting for their cause.  Two, the Government has no strategic plan to deal with the problem. Every time there is a major incident, Government spokesmen say that public order is a State subject and it is for State Governments to deal with the problem.

The Naxalites would be deluding themselves if they think that the soundness of their ideology or tactic has carried them so far. The Indian State can pack enormous punch once it makes up its mind. It did that in Punjab, where one of the world’s deadliest terrorist movements was vanquished.

What is the way out? The Naxalites must realize that they can never achieve their dream of what they call a “New Democratic Revolution” through protracted warfare. They are just playing with the lives of the poor and deprived sections of society. On the other hand, the Government must understand that a movement which draws its strength from genuine grievances of the people cannot be stamped out.

Militarily, it may be subdued as happened twice before in the past -- once after the arrest of Charu Mazumdar and again after the eclipse of Kondapally Seetharamaiah. But, like a phenoix, it has risen again. A long-term solution lies in an honest attempt to address the basic causes arising out of poverty, land alienation, unemployment, corruption, displacement of tribals and poor governance.

True, these problems cannot be solved overnight or even in five or 10 years. But if the State could at least give an impression that their severity is being mitigated every year, that itself would go a long way in building confidence among the people.  Unfortunately, the impression is that the problems are getting aggravated with every passing year. And perhaps that is the principal reason why Naxalism continues to spread in ever-widening circles. ---INFA

(Copyright, India News and Feature Alliance)

Events And Issues

New Delhi, 2 July 2007

Data Deficiency

danger TO Environment’S sustainability

By Suraj Saraf

Not many are aware that India will lose over ten per cent of the Gross Domestic Produce (GDP) on account of environmental costs incurred due to land degradation, morbidity and mortality as a result of pollution, water scarcity, inefficient use of energy resources and loss of forest resources.

As matters stand, the per capita availability of water in the country has gone down. By 2047, India will not only face an acute water scarcity but over 80 per cent of the land area will be lost in soil degradation resulting in loss of agricultural production.

Dependence on import dependence for energy will also see a sharp rise. By 2047, oil imports will be four times the current imports of the entire Asian region and over 60 per cent of our coal requirements will be met by imports. With the country’s weather  vulnerable to climate changes and the with the rising sea level could result in a loss of 9 to 15 per cent in farm revenues. 

These frightening prospects about impending disasters were viewed by R.K. Pachauri, Director General, Tata Energy Resources Institute at a seminar “sustainable development in South Asia. Issues of infrastructure and environment”, held recently in New Delhi.

Moreover, according to the World Health Organisation estimates, pollution in Asian cities results in nearly eight lakh deaths and 4.6 million life-years lost every year. No wonder, India ranks 101 among 146 countries in the Environmental Sustainability Index prepared by the Yale Centre for Environmental Law and Policy and the Centre for International Earth Science Information Network at Columbia University in collaboration with the World Economic Forum.

How does one combat this disastrous environmental scenario? Can India avert the looming threat with its National Environmental Policy? Opposed by many environmentalists because of its “soft approach” on issues like biodiversity in the name of development? Against the backdrop that our levels of air pollution, water quality and quantity and biodiversity are also far from satisfactory.

At a workshop on “Environmental data availability and decision making presses” organized by the Indian Institute of Forest Management at Bhopal recently, experts asserted that any national policy to meet these adverse  factors should be backed by adequate honest data on environment management.  Not information that is grossly inadequate to safeguard the country against environmental disasters.

Further the data should not be put on the shelf but translated into action. “The challenge is to see the data on a proactive basis by ensuring that those who have the expertise to collect data become active players in the decision making process,” underpinned a panelist. Another participant felt that the real question that needed to be addressed was the “redistribution of power and social change.”

As there was a strong linkage between information availability and robustness for an effective statistical system when it came to informing the law makers and law enforcers. Additionally there was a need to build up an environmental statistical system as a resultt pf which there has been a rise in litigations due to the failure of the executive to comply with the law and the changes in the society. Another major conflict related to land and natural resources.

Emphasizing that ecology issues could no longer be segregated from economies, the former Director General of the Indian Institute of Forest Management J.B. Lal underscored the importance of integrated resources management and asserted that no system could be viewed in isolation.

A shocking example of the lack of environmental data was highlighted by the Sambhavna, an NGO which has taken up the cause of the Bhopal Gas tragedy. The NGO revealed that the basic data, including the details of the gas leak from the Union Carbide Plant, 20 years ago which resulted in thousands deaths and left many maimed were still not available.

Not only that. Rising environmental crimes was leading to the disappearance of many indigenous tribes, dissipation of forests and was a threat to marine life. The effects of these crimes too were closing in very fast.

Scandalously, data on grazing and cutting of fuel wood on a daily basis from forests, was not quantified nor reflected in our GDP. Notwithstanding the fact that 55 to 75 per cent of the country’s energy requirement was being supplied by forests. Sadly, the energy policy remained oblivious to the energy removal from the forests. The experts stress the urgent perquisite of data on the fuel wood being consumed by the people.

Indeed, India falls disturbingly short of the desirable benchmarks relating to environmental systems: social and institutional, human vulnerability and ecological stresses and policy initiatives in critical areas is woefully short.  The most significant, being the shortfall in pollution control, water quality and quantity, waste management and eco-efficiency, coupled with the neglect by various State Governments.

In the ultimate, Central and the State Governments need to arise from their slumber and take immediate action, not act only when reprimanded by the courts.  India needs to take a cue from the above mentioned Environmental Sustainability Index. It urgently requires to collect data for the sound management of its environment like Finland and Norway that score high in the Global Environmental Safety Index. Clearly, the need of the hour   is to build an environmental statistical system to avert impending environmental disaster.

---INFA

 (Copyright, India News and Feature Alliance)