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Towards Defence Cooperation:India-Australia TIES: An Evaluation, by Ashok Sharma, 11 April 2006 Print E-mail


New Delhi, 11 April 2006

Towards Defence Cooperation

India-Australia TIES: An Evaluation

By Ashok Sharma

School of International Studies, JNU

The visit of the Australian Prime Minister, John Howard to India last month, is significant in many respects. It can be seen in the context of India’s emerging economic status in Asia, the Indo-US nuclear deal signed between George Bush and Manmohan Singh the day before Howard’s visit and uranium deal between Australia and China during the recent visit of Chinese premier Wen Jiabao to Australia.

India and Australia have many things in common. Both the nations share common values of parliamentary democracy, their commitment towards stopping of terrorism, prevention of proliferation of nuclear technology and to achieve economic progress for their country.

The delegation of 20 Australian top businessmen from banks, transport and resources companies as well as universities accompanied PM Howard to sign number of agreements and memorandum of understanding. They focused on promotion of business, tourism, science technology, educational exchanges and cultural links.

This visit can be seen more in the context of India‘s rising economic status. At present, India is Australia's 12th biggest trading partner. Bilateral trade stands at slightly less than 5.5 billion US dollars, with India being Australia's sixth largest market for exports. Australia sold India goods and services worth $6.9 billion, while imports were $1.8 billion. Australian businesses have now begun to look at India to see more dollar signs. India with growth rate of 7 to 8 per cent, with highest growth rate of middle-class professional manpower, comparatively young population and its stable economic growth attracts many developed countries as trading partner.

John Howard’s visit to India just after the leaders of Saudi Arabia, the United States, France and Ireland to India in recent months, indicates that Australia too wants to take advantage of Indian growing opportunities for trade in an economy forecast to grow 8.1 per cent in the fiscal year ending March. India also wants to become the member of Asia-Pacific Economic Co-operation (APEC). Australia is hosting APEC 2007 Conference and India would need Australian support to become a member. Indian software companies like TCS and INFOSYS are establishing and competing in Australian market. There is a lot of scope in the economic relations between Australia and India.

In the education sector agreements were signed between Indian and Australian institutions for exchange and joint research programmes. These agreements were signed between IIT Mumbai and Monash University, IIT Mumbai and University of New South Wales, and IIT Chennai and Queensland University of Technology. Howard has announced   a grant of A$25 million for exchange and collaborative programmes. These agreements are going to encourage exchange programmes, both at the faculty and student level and research collaboration in the areas of science and engineering.

Howard also launched a new push for more Indian students to study in Australia. India is the second-largest source of foreign students and fourth-largest source of immigrants over the past 10 years. In 2005, about 25,000 students came to Australia for studies under different programmes. In fact, Australia is fast becoming the desired destinations for Indian students. In 1995 just 270 Indian students were present in Australia while currently 27,000 Indians are studying in the country. It is reasonable destination in terms of money, opportunities, tuition fees and cost of living in Australia is cheaper than UK and US.

The UPA Government’s plan extending reservation in IITs and IIMs upto 50 per cent on the basis of caste would further accelerate students fleeing to Australian universities. These students are highly skilled and professional and these Indian Australians form a very influential Diaspora. Although not very politically active the way Indian Americans are but trends suggest that they have started playing a constructive and facilitating role in Australia –India relations and are likely to accelerate in the near future.

According to MoUs both agreed to enhance defence cooperation in the areas regarding exchange of views on security and defence-related matters, training, maritime cooperation, defence industries, defence research and development. It also envisages setting up of India-Australia Joint Working Group on defence for guiding and monitoring the on-going defence cooperation between the two countries. Other agreements include a Trade and Economic Framework, an Air Services Agreement, MoUs on Customs and Biotechnology and a Letter of Intent on the establishment of a Strategic Research Fund.

To maintain pace of its economic growth India is now exploring nuclear energy options.  Indo-US nuclear deal is an important step in this direction. Nothing concrete has emerged from the talk between John Howard and Manmhohan Singh on uranium supply to India for civilian purposes. But in the long run Indo-US nuclear deal could clear suspicion and doubts in Australia about uranium supply since US and Australia have been very close allies. On 16th 2006 Condolizza Rice discussed Indo-US nuclear deal in her Australia tour and said that whether to sell uranium to India is an issue to Australia to decide. She talked about India as a rising power in Asia and need of a broader and deep relationship with India.  

Australian foreign Minister Alexander Downer supported the move and agreed with the United States' view of India's importance in international relations. In fact these trends also indicates possibility of formation of troika between US-Australia-India on the issues of economic co-operation, energy, science –tech, tackling terrorism, prevention of nuclear proliferations, balancing Chinese influence in the Asia-Pacific region.But the uranium deal signed between Australia and China on 6th April 2006 makes it imperative to look the above growing Australia-India relations from this angle too.

Australian foreign minister Alexander Downer and his Chinese counterpart Li Zhaoxing signed two agreements – a Nuclear Transfer Agreement and a Nuclear Cooperation Agreement in Canberra in the presence of Australian Prime Minister John Howard and his Chinese counterpart Wen Jiabao. According to this deal China can buy uranium for its nuclear power station from Australia. Australia has 40% of the world known reserves of uranium. China got this deal after months of negotiations and lobbying. According to Australian Government the deal has been signed under strict safeguards and arrangements ensuring that China does not divert Australian nuclear fuel towards its nuclear weapons programme and it is used only for civilian purposes. This visit by Chinese premier Wen Jiabao is the first by a Chinese premier in 18 years.

Australian-China uranium deal, on the one hand, exposes hypocrisy and double standards in Australian policy, because of its refusal to sell uranium to India, but giving the green light to China. That too, despite the fact that China helped Pakistan to develop its nuclear weapon programme. This has led to the further proliferation by father of Pakistani nuclear programme A.Q. Khan selling the nuclear technology to Iran and Syria. Whereas India has shown commitment towards democracy, international security and peace and has adhered to the nuclear non- proliferation norms and has not indulged in any kind of nuclear proliferation despite having not signed the NPT.

The deal has received some media coverage in the US. Congress is likely to give it some scrutiny as it decides whether to approve the recent Indo-US nuclear deal to sell civilian nuclear technology to India. Although uranium shipments may not start for many years, critics have also charged that the deal opens the way for regional instability and environmental problems. Every nuclear weapon state, except China, has publicly declared that it doesn't make fissile material that is highly enriched uranium for military purposes. Australia is also being criticized for not pressing China to do the same as a condition of this deal.

But when looked at from Australia’s perspective one need not be too critical of Australian nodding to uranium sale to China. Australia refuses to sell uranium to nations that have not signed the NPT. India falls into that category. United States’ nuclear exception to India has yet to be cleared through Congress to become an act. Bush administration is lobbying for India among NSG groups and as a result there is a positive sign but Australia would prefer to see other NSG nations move on this matter.

This uranium deal with China also shows that Australia is trying to have an independent foreign policy which always does not get haunted by the United States. This becomes obvious when Mr. Howard hailed the upswing in Canberra's ties with Beijing and gave a statement, "We do not see any merit at all in any policy of containment towards China." This also implies that Australia is concerned with its own geo-strategic position in Asian region and business consideration in present world of economic interdependence..   

This Australia-China uranium deal may not sound good to India but there are enough developments on India-Australia in recent years which indicate that India-Australia relationship has grown beyond cricket to a deeper engagement and will strengthen the relations in the future.---INFA


(Copyright, India News and Feature Alliance)


La Affaire Baalu:PM DEBASES PARLIAMENT, by Poonam I Kaushish, 3 May 2008 Print E-mail


New Delhi, 3 May 2008

La Affaire Baalu


By Poonam I Kaushish

If the heat wave across North India is not bad enough, political New Delhi is reeling under the T.R Baalu inferno. Frankly, it’s much ado about nothing given our present political culture, which rubbishes morality, probity and accountability as old hat. Come on guys get real, our khaas aadmis rule by law. So discount instantly, all talk of the Shipping, Road Transport and Highways Minister resigning. After all, why make a big deal about him helping his sons. Do you expect him to help others’ children?

Besides, what about the Prime Minister’s role? Why is he mute on La Affaire Baalu?  Even if his silence is smothering Parliament and undermining its authority. Why make a song and dance about this? Silly, he is his khaas mantri of a khaas party.  

Sadly, this is no joking matter. It is all about moral turpitude, which started with infamous Baalu confession in the Rajya Sabha. That he had “put in a word” to the Petroleum Minister Murli Deora to provide gas to family-owned King Power Corporation, being run by his sons Selva and Raj after he resigned as Managing Director subsequent to becoming a Union Minister.

His case was ‘simple’. Baalu wanted resumption of natural gas cheaper than the market price using his ministerial clout for his firm. So he asked Deora to arrange a meeting with the GAIL Chairman to do the needful. Smugly asserting that he “did nothing wrong and there was no nepotism.” Given that the supplies had been disconnected when he resigned from the NDA Government in 2003 and “the BJP took revenge on me”.

Evidently, the DMK Minister was making the point that he was merely doling out natural justice to his sons. Perhaps on the plea that ministerial posts are temporary and cannot take precedence over the permanent role of a father! However, Baalu's own admission makes it clear that he did "use" his office to benefit his family firms. If this is not dishonourable what is? Is it correct for a Minister to abuse his official position to solicit personal favours for his family? Does this not smack of conflict of interest and unduly influencing the Petroleum Ministry?

Baalu has defended his actions by making two points. One, that there was a Madras High Court order directing GAIL to supply gas to the firm, which was not being adhered to. The recourse was to file a contempt petition, why meet Deora and write to the PM? Two, he was trying to save his sick companies from closing down and rendering workers jobless. There are more than 6,000 sick industrial units in the Government and States. Why hasn’t Baalu "put in a word" to the PMO to save these units?

Clearly, the Minister and the Government needs a quick recap of history. Specifically, the infamous Mundhra scandal which rocked Parliament in 1958, leading to the then Finance Minister TT Krishnamachari’s resignation. The cause celebre was the Government asking the Life Corporation of India to purchase Rs 12.4 million worth of shares in six companies belonging to Calcutta industrialist Haridas Mundhra to bail him out.

The nation-wide furore led to the appointment of the Justice Chagla Commission. During the inquiry, Krishnamachari tried to distance himself from the LIC and the actions of his Finance Secretary. However Chagla held that the Minister was constitutionally responsible for the actions of his Secretary and could not take shelter behind them nor could he disown their actions. Look at the irony. Baalu confesses of “putting in a word” yet the Government is mum about asking him to resign, notwithstanding the Opposition clamour.

Amidst all this hangama none has the time or inclination to see the body-blow dealt to Parliament. By none less than the Prime Minister. Clearly, Manmohan Singh’s refusal to answer the Opposition’s pointed queries on the PMO’s role in L’ Affaiire Baalu goes against the tenets of democracy and dilutes Parliament’s authority to demand accountability from the Head of Government. What is unpardonable is that the PM quietly left the House even as MPs demanded an answer.

Remember, unlike the Presidential form of Government wherein a President is not answerable for his actions, Parliamentary democracy’s greatest strength lies in a MP’s right to ask any question of the Prime Minister which he is obliged to answer. As also his basic right to information and demanding accountability. By choosing to shy away from replying, Manmohan Singh has raised more doubts about his Office’s role. Plainly, if the PM and his officials had not issued any order/instructions to help the Union Minister`s family.firm, why shy from stating this in Parliament? Certainly it is not the job of the Petroleum Minister to speak for the PMO.

Baalu claims he never wrote to the PM's Office. But the PMO wrote eight letters to the Petroleum Minister asking him to help Baalu’s firms --- without Baalu asking? Is it “routine” for the PMO to forward eight letters of a aam aadmi, Selvakumar Baalu “without any recommendations” in a span of four months (Nov 2007-Feb 2008)? Countered the Congress spokesman, “There is no question of endorsing or agreeing with the contents. There is no question of lobbying." Then, what is the point? Why forward the letters? Does the PMO forward all mail without going into the merits or demerits of every letter? Has the PMO been reduced to a Mail Forwarding Service sans recommendation?

Manmohan Singh needs to recall his predecessor Rajiv Gandhi’s action when two French intelligence officers stole documents from the PMO in 1985. In the ensuing furore, Rajiv made a statement in the Lok Sabha about the incident and his Principal Secretary P C Alexander resigned. Though he did not accept responsibility for the shocking negligence in his office, he nonetheless resigned to uphold high moral principles.

Clearly, any Prime Minister who believes in accountability and respects the canons of parliamentary democracy would clarify his position in such matters in both Houses of Parliament.  Manmohan Singh is duty-bound to make a statement in Parliament on two counts. Firstly, as head of Government, he cannot shirk his responsibility over the misdeeds of a member of his Cabinet. Secondly, he is answerable for the actions of the PMO.

He needs to heed some of Justice Chagla’s seven principles: The Government should not interfere with the working of autonomous statutory corporations and if it does, it should not shirk responsibility for directions given. The Minister must take full responsibility for the actions of his subordinates and cannot be permitted to say that they did not reflect his policy or acted contrary to his directions.

And his advice: “In a Parliamentary form of Government, Parliament should be taken into confidence at the earliest stage to avoid embarrassment from other sources of information….." Will our khaas aadmis Manmohan Singh and Baalu follow suit? ----- INFA

(Copyright, India News & feature Alliance)



Pakistan’s Shaheen-II:RACE FOR MISSILE SUPREMACY, by Dr. Monika Chansoria,5 May 2008 Print E-mail

Round The World

New Delhi, 5 May 2008

Pakistan’s Shaheen-II


By Dr. Monika Chansoria

(School of International Studies, JNU)

South Asia has yet again plunged into a quest for missile supremacy, with Pakistan successfully test firing the Shaheen-II long-range, surface-to-surface ballistic missile last month from an undisclosed location. Also referred to as the Hatf-VI, the missile has a 2000 km (1,245 miles) range and is capable of carrying nuclear as well as conventional warheads.

The Pakistan army’s Strategic Forces Command launched the Shaheen-II during a field training exercise on April 19, 2008. According to a statement released later by the military, “Shaheen-II is a two-stage solid fuel missile that can carry nuclear and conventional warheads with high accuracy. The launch of the missile was part of the process of validation of the operational readiness of a strategic missile group and technical improvements to consolidate and verify various land-based strategic missile systems.”

Shaheen-II is the longest-range ballistic missile of the several missiles in Pakistan’s nuclear-capable arsenal qualifying to hit targets anywhere in India, Iran, as well as Afghanistan through to Central Asia.

Recently appointed Pakistan Prime Minister Yousaf Raza Gilani witnessed the testing of Shaheen-II and termed it as an ‘important milestone in Pakistan’s quest for sustaining strategic balance’ in South Asia. His presence was symbolic in that it was an indicator of the fact that the newly-elected government in Pakistan was well in control of the political and military establishments of the country.

In addition, Chairman, Joint Chiefs of Staff Committee General Tariq Majeed and Defence Minister Ahmed Mukhtar also witnessed the missile test. Commenting on the reliability of Pakistan’s nuclear capability, Navy Chief Admiral Muhammad Afzal Tahir congratulated those responsible for the ‘successful launch and the accuracy of the missile at the target. Pakistan could be proud of the reliability of its nuclear deterrence and the country would further enhance its nuclear capability.’

Islamabad’s foreign office spokesman said Pakistan’s strategic force goals were determined by the requirements of minimum overt deterrence. “We have to test these missiles from time to time. The reach of the missile should be enough to deter aggression. When we do take the test, we inform neighbours and concerned countries. It reflects Pakistan’s resolve to maintain minimum credible deterrence as the cornerstone of its security policy.”

The National Defence Complex, a subsidiary of the Pakistan Atomic Energy Commission directly manages the Shaheen project. However, unlike the liquid-fueled Ghauri, the Shaheen-II uses a two-stage solid propellant motor. Solid fuel can be left in the missile indefinitely, unlike liquid fuel, and therefore, dramatically decreases the time it takes to launch the missile thereby heightening deterrence.

Various defence analysts are of the opinion that Shaheen-II is possibly a two-stage version of the M-9, or more likely a copy of the Chinese M-18, which was publicly displayed at an exhibition in Beijing in 1988. The M-18 was originally advertised as a two-stage system with a payload capacity of 400-500 kgs over a range of 1,000 kms. US intelligence sources suggest that Pakistan remains heavily reliant on external assistance for Shaheen-II programme and that China is actively assisting Pakistan through the supply of missile components, specialty materials, dual-use items, and other miscellaneous forms of technical assistance.

Since the late 1980s and early 1990s, Pakistan has invested in both solid-motor and liquid-engine ballistic missile programmes with significant Chinese and North Korean assistance, respectively. In the early 1990s Islamabad acquired Chinese M-11 missile parts along with a number of M-9 Short Range Ballistic Missiles (SRBMs).

Furthermore, the Chinese assistance extended to training Pakistani missile crews in the assembly, maintenance, and simulated launches of these missiles. Chinese assistance most likely encompassed equipment and technology transfers in the areas of solid-fuel propellants, manufacture of airframes, re-entry thermal protection materials, post-boost vehicles, guidance and control, missile computers, integration of warheads, and the manufacture of transporter-erector launchers (TELs) for the missiles.

In 1991, the US objected to Chinese sales of M-11 ballistic missile technologies to Pakistan and for the first time imposed sanctions on China in accordance with the newly passed Missile Technology Control Act. The sanctions were imposed for alleged exports of M-11 ballistic missiles to Pakistan. Soon after the US sanctions, Beijing agreed to observe the MTCR guidelines.

Subsequently, Washington waived off sanctions only to re-impose them back when evidence indicated continuing Chinese missile sales to Pakistan from 1992-93. In December 1992, reports surfaced that China had transferred 34 complete M-11 missiles to Pakistan and also allegedly built a turnkey missile plant for Pakistan at Tarwanah, a suburb of Rawalpindi, in violation of its 1991 pledge. As a result, in May 1993, the Clinton Administration re-imposed MTCR-related sanctions against China.

Apparently, development flight tests of the Shaheen-II began in March 2004 when a 26-tonne missile was launched from Pakistan’s Somiani Flight Test Range in the Arabian Sea. According to the Chairman of Pakistan’s National Engineering and Scientific Commission, Samar Mubarakmand, the missile covered a distance of 1,800 kms during the test. Thereafter, reports in summer 2007 stated that Pakistan had commenced the process of deployment of the Shaheen-II.

Besides, there could well be numerous factors that play a crucial role in the growing dominance of the missile leg in Pakistan’s weapons arsenal. Pakistan has been unable to augment its fleet of modern combat aircrafts due to the past US policy of military and economic sanctions designed to arrest and slow down Pakistan’s nuclear weapons programme.

Even though Pakistan is now a US ally in the global war on terrorism, Washington has been rather hesitant to supply Islamabad with advanced combat aircrafts as it would invariably add to the latter’s nuclear strike capability. Furthermore, the country’s frail economy has prevented the Pakistan Air Force from undertaking major fleet expansion and modernization efforts by making the switch from US to European and Russian suppliers. Finally, the unfolding and potential advances in India’s air-combat, air-defence, and long-range reconnaissance capabilities seem to be channeling Pakistani investments into bolstering its ballistic missile-based capabilities. 

For this reason, the missile test by Pakistan is yet another trigger at altering the existing strategic equation in South Asia. On its part, India for decades has countenanced the Chinese-Pakistan nuclear and missile collaboration as one of the gravest challenges posed to its peace and security and the testing of Shaheen-II is the newest testament to the same. In all certainty, the near future is likely to witness counter reactions to this recent initiation by Pakistan, thereby plunging the subcontinent into yet another stage of a spiraling arms race.--INFA

 (Copyright, India News and Feature Alliance)

Global Food Crisis:DON’T PASS THE BUCK, MR. BUSH , by Radhakrishna Rao Print E-mail

Events & Issues

New Delhi, 6 May 2008

Global Food Crisis


By Radhakrishna Rao

The US President George W. Bush’s recent observation that the growing prosperity of an upwardly mobile Indian middle class is to blame for the global food crisis appears far-fetched and totally in variance with the prevailing ground reality.

 “Worldwide there is an increasing demand for food. There turns out to be prosperity in developing world which is good. It is going to be good for you because you will be selling products in the countries, you know, big countries perhaps, and it is hard to sell products into countries that  are not prosperous…It, also,  however increases the demand”,  was Bush’ words of wisdom.

He elaborated saying “So for example, just as an interesting thought for you, there are 350-million people in India who are classified as middle class. That is bigger than America.  Their middle class is larger than our entire population .And when you start getting wealth, you start demanding better nutrition and better food and so demand is high and that causes prices to go up”. Of course, Bush also cited changes in climatic patterns and spiraling energy costs as some of the other contributors to the global food price spiral.

Prior to what is being termed as a highly objectionable statement by the head of the world’s largest economy, US Secretary of State Condoleeza Rice had created a near  controversy by saying that the global food price spiral was partly due to the growing intake of food in countries like India and China. The distorted thesis of Bush and  Rice  that the  severe food crisis haunting a large part of the world  was a direct outcome of measures taken by India and China to keep the foodgrains within  the confines of their countries by imposing severe export restrictions.

Right from the outset the Bush administration has been blaming “event and developments” outside its home country as the causative factors for problems haunting the US. The uncalled for bloody intervention in Iraq is but one of the many instances of the 21st century avatar of the so called “gun boat diplomacy” perfected by the Bush Administration.

Surprisingly, while throwing blame at the doorsteps of India and China for the current food crisis affecting a large section of the global population, Bush would not agree with the widely held view that the growing diversion of corn produced in the US for the production of ethanol as a fuel alternative was pushing up food prices. “I don’t subscribe to the notion that ethanol is the main cost driver. The reason why food prices are higher is, because, energy costs are high. And if you are a farmer you are going to pass on the cost in the product you sell to the buyers” quipped Bush.

However, food policy analysts from across the world  have been driving home the point that diversion of food crops for the production of eco- friendly and cost-efficient bio fuels is a major contributor to the foodgrains’ shortage experienced by the world at large. Similarly, there has been  a serious concern  over the diversion of prime farm land meant for growing food crops to raise oil yielding crops  .Against this backdrop, the competition between food and fuel  is likely to hit the developing countries much harder that the industrialised nations.

Rightly, Defence Minister A.K.Antony has described Bush’s hollow argument as a “cruel joke”. Antony was clear in his perception that the widespread conversion of agricultural land for commercial and bio-fuel cultivation purposes had, in fact, resulted in food shortage at the global level. ”Policies of the US have also been responsible for foodgrains shortage. Those who criticize should not set apart farm land for other purposes .The countries including the US should rectify these mistakes” he observed.

The argument put forth by Antony receives support from the recent FAO (Food and Agricultural Organisation) data which pins the blame on the US for the fast-spreading global food crisis. In fact, FAO data revealed in clear terms that the consumption of cereals is growing far more rapidly in the US than in India or China. A fact-filled study of the global food market by FAO states that the consumption of cereals by India is projected to have grown 2.17 per cent from 193.1-million tonnes in 2006-07 to 197.3- million tonnes in 2007-08, while that in neighbouring China it had gone up 1.8 per cent from 382.2-million tonnes to 389.1-million tonnes. More importantly, during the same period the consumption of cereals in the US has been projected to have grown 11.81 per cent from 277.6-million tonnes to 310.4-million tonnes.

Indeed, following the skyrocketing of oil prices in the global market, the US has been forced to use 30-million tonnes of corn to make bio-fuel. “About 30-million tonnes of corn was used in the US to produce biofuels last year,” observed Asia Director, International Food Policy Research Institute, Ashok Gulati. Though the demand for foodgrains in the Indian market has been going up, the situation has been made worse by serious supply constraints, he elaborated. ”Factors like the drought in Australia, diversion of corn to biofuel by the US and speculative investment in futures market globally have caused prices to flare” he said.

Meanwhile, UN Secretary General Ban-Ki-Moon has expressed his concern over the rising food prices causing a veritable “global crisis”. Commenting on the worldwide protests over the food prices’ spiral, Moon thus wanted the world leaders to mull on a strategy aimed at devising ways and means to enhance food security and improve food production and distribution system.

Back home, Minister of State for Power and Congress leader Jairam Ramesh has blamed the US-led developed world for diverting the precious crop land for biofuel production for the current food crisis. “George Bush has never been known for his knowledge of economics and he has just proved once again how comprehensively wrong he is. To say that the demand for food in India is causing global food crisis is completely wrong”, he said.

However, the ruling political elite in India has done precious little either to curb the inflation or to ensure food security for a large section of impoverished population. While the urban middle class with its growing purchasing power has been in a position to buy as much food as it needs, rural poor, landless farmers, daily wage earners and the socio-economically disadvantaged sections of the society are forced to make do with a decreasing intake of food. It is a grim ground reality that malnutrition and a sort of semi-starvation haunt a large segment of the Indian population. The callous and continuous neglect of the agricultural sector by successive ruling dispensations in New Delhi has contributed in a big way to the food crisis threatening the country’s growth.

While both the Prime Minister Manmohan Singh and Finance Minister P.Chidambaram are never tired of harping on an “impressive GDP(Gross Domestic Product)growth”, they have no answer as to how this achievement has  helped the poor and underprivileged  to lead a life without ”penury and suffering” .As things stand now, the fast spreading food  insecurity  that could breed violent street protests could become a major challenge for India’s ruling elite, whose concern at present appears to win the elections at any cost. ---INFA

(Copyright, India News and Feature Alliance)

Understanding Poverty:RURAL REJUVENATION VITAL, by Dhurjati Mukherjee,2 May 2008 Print E-mail

People & Their Problems

New Delhi, 2 May 2008

Understanding Poverty


By Dhurjati Mukherjee

An expert group of the Planning Commission is reviewing the methodology used for poverty estimation and is expected to submit its report to Parliament within three months.  The group would go into the 13-point criteria being used for estimation of below poverty line (BPL) households and preparation of accurate BPL lists by States. Importantly, the identification of individual poor households has come in for scrutiny from different quarters, to assess the effects of the reforms initiated in the country since the last decade.

According the latest Economic Survey (2007-08), the ratio of allocation of subsidies to the proportion of BPL population was less than one per cent for many States, barring eight, between 2005-06 and 2006-07.  And, as per the results of the 61st National Sample Survey, in 2004-05, poverty estimates based on URP (uniform recall period) were 27.5 per cent of the total population below the poverty line, while corresponding figures obtained from MRP (mixed recall period) it was 21.8 per cent. Earlier, the government claimed that poverty had declined to 22 per cent from 36 per cent in 1993-94, a decline of around 0.79 per cent during the period 1999-2005. However, the Planning Commission, which placed the poverty level at 27.8 per cent in 2004-05, disputed the earlier method.

The Commission in its Approach to the 11th Five Year Plan (December 2006) pointed out: “Thus the average decline in percentage of population below the poverty line over the period 1993 to 2004 is 0.74 per cent points per year, much less than implicit by the official 1999-2000 data. Because of the slower pace of reduction in the percentage of the poor, the estimated number of poor is now estimated to be approximately 300 million in 2004-05, larger than the official estimate of 1999-2000”. Thus it is quite clear that there is no evidence of a higher rate of decline in poverty in the post-reform period and that inequality increased significantly in this period as compared to the earlier decade.

However, according to unofficial estimates, the number of poor may be around 300 million (officially around 237 million in 2004-05) of which three-fourth live in the countryside Apart from this segment, there is another major section of 150-250 million who have to struggle for existence with very meagre earnings equivalent to $ 1.5-2 a day. One may also mention that the number of rural landless families increased from 35 per cent in 1987 to 45 per cent in 1999 and further to 55 per cent in 2005.

The lowest poverty ratio was 5.4 per cent for Jammu & Kashmir and highest poverty ratio was for Orissa (46.4 per cent). Five States namely, Uttar Pradesh, Maharashtra, Bihar, West Bengal and Orissa accounted for 166 million poor – about 55 per cent of the total poor estimated at 303 million. The highest percentage of BPL was registered in Bihar with 12.2 per cent but the State clocked a subsidy distribution ratio of only 0.3 per cent. UP at 19.6 per cent BPL clocked a subsidy distribution of only 0.8 per cent, while both Maharashtra with BPL population of 10.5 per cent and Orissa with 5.9 per cent showed subsidy distribution of 0.8 per cent each.

The currently used Lakdawala panel mode of estimating the poor and their number used the per capita consumption expenditure as a key criterion to determine the incidence of poverty in the country. This has been fixed at Rs 49.09 per month in rural areas and Rs 56.64 per month in urban areas at the 1973-74 national level prices.          

As the level of consumption has come in for criticism, the Planning Commission has rightly thought it necessary to review the whole issue. Moreover, as food and nutrition requirement of the human body has undergone change, a fresh assessment was required. The exercise is also significant at this juncture as the government is keen to reach food to all those who are hungry. But with high inflation and rising cost of essential commodities, BPL families have been struggling to ensure two square meals a day. 

Meanwhile, it has been found that the Rs 5,000-crore National Food Security Mission (NFSM), launched to ensure food security for all by the year 2012, may be inadequate to meet the demand for foodgrains in the country. While the total production has been estimated to touch 230 million tonnes by the year 2012, this will fall short of the demand by 4.15 million tonnes, according to experts.

The Food & Agriculture Organization (FAO) has estimated that one-fifth of the Indian population is undernourished because of poverty. While general consumption has been on the rise, on the one hand, and a changing pattern discernible, on the other, there would be increasing pressure on foodgrains. One cannot deny that the effects of the National Rural Employment Guarantee Programme (NREGP) and Bharat Nirman will steadily have an impact on the rural areas and, as the poor and the economically weaker sections use over 70-80 per cent of their income on food, the demand projections may need to be revised.

The NFSM has been designed to only produce more rice, wheat and pulses and does not take into account the demand for coarse grains. But it is now considering it. This is necessary as demand for coarse grains would increase immensely in the coming five years while, in urban areas, the demand would be oriented towards meat, eggs and pulses.

In such a scenario, re-estimation poverty would have to be simultaneously tackled with higher foodgrains output so that the BPL population is assured of their daily meals. Moreover, the economically weaker sections have also to be provided food at reasonable prices in all parts of the country. This is indeed a big challenge for the government during the coming years.

Thus, the basic element of poverty eradication strategy has to focus on the development needs of the rural areas so as to rehabilitate the poor, starving farmer and his family. More resources need to be allocated even as some headway has been made in recent years by allocating increased resources for infrastructure development. 

Keeping in view the growing demand for food, there has to be greater emphasis on modernizing agriculture and increasing foodgrain production. This would entail ensuring three crops per year, encouraging horticulture and floriculture production and keeping an eye on productivity increase. Since land holdings have become smaller and smaller over the years, some form of cooperatives should be formed to cultivate a few holdings together and then share the produce equitably. The output would increase considerably and benefit the poor farmer. But for this, the panchayats have to come forward and ensure that the land yields optimum and value-based products while all sorts of inputs have to be made available free of cost to these cooperatives. Moreover, the government has to ensure that agricultural land should under no circumstances be used for industrial/township development.

Well-known economist Ignacy Sachs had way back urged the need for a second green revolution. This has been reiterated by Prime Minister Manmohan Singh. At conferences he has noted that: as the share of agriculture in national income has been falling rapidly and the population dependent on it has remained more or less static, science and technology must look into agricultural productivity and affordable technologies for energy and water, efficient and relevant farm and non-farm technologies. If put into practice this will go a long way in rural regeneration, which, in turn, will reduce poverty.--INFA

(Copyright, India News and Feature Alliance)







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