INTERNATIONAL RELATIONS

Chinas campaign for a new Asian security order

Last weeks celebrations in Beijing, marking the 60th anniversary of the Panchsheel proclamations, from
Delhis perspective, might have looked like a ritual that had to be performed. For China, though, the
occasion was about mobilising regional political support, including from India, for a new security
framework that President Xi Jinping has been promoting with some vigour.
As it rises to become a great power, China is determined to reconstitute Asian geopolitics, which had
been dominated by the United States since the end of World War II. Central to Xis argument is the
proposition that the US security role in Asia is a manifestation of outmoded Cold War thinking. He is
suggesting that American alliances must be replaced by a new regional security order.]
Xi has affirmed that in the final analysis, it is for the people of Asia to run the affairs of Asia, solve the
problems of Asia and uphold the security of Asia. The people of Asia have the capability and wisdom to
achieve peace and stability in the region through enhanced cooperation. Heady stuff indeed. This kind
of rhetoric has not been heard in Asia for decades.
The Panchsheel is at the very heart of Xis conception of a new security order for Asia. The five principles
were outlined by Zhou Enlai in separate joint statements with Jawaharlal Nehru and Burmas U Nu in
1954. These principles respect for territorial integrity and national sovereignty, non-aggression, non-
interference in internal affairs, cooperation for mutual benefit and peaceful coexistence were later
expanded at the Afro-Asian Conference in Bandung, Indonesia, in 1955. The first summit of the non-
aligned nations in Belgrade, Yugoslavia, in 1961 endorsed these principles.
Last week in Beijing, Xi argued that it is no coincidence that the five principles of peaceful coexistence
were born in Asia, because they embody the Asian tradition of loving peace. Xi went on to add that,
thanks to the contributions made by China, India and Myanmar, these principles are accepted in other
parts of Asia and the world. For some, Xis attempt to recalibrate Panchsheel for its contemporary
foreign policy needs might seem empty rhetoric at worst or political romanticism at best. A more careful
look, however, would suggest China is dead serious.
The idea of Asia for Asians is of old provenance and has a record of repeated failures. Way back in
1940, imperial Japan called for a bloc of Asian nations led by the Japanese and free of Western
Powers. If Tokyos call found some political resonance among those Asians yoked to the European
empires, Japans own colonial ambitions exposed the limitations of the slogan Asia for Asians. In fact,
nationalist China, British India and the US pooled their resources to defeat Japanese imperialism.
In the immediate post-war period, the idea of Asia for Asians gathered much momentum after Nehru
convened the Asian Relations Conference in early 1947. Yet the impact of the Cold War and new
nationalisms in Asia undermined the hopes for Asian unity. As it normalised relations with the US in the
1970s, Beijing toned down its campaign against the American military presence in Asia. It believed
American alliances in Asia would counter Soviet hegemonism and prevent the revival of Japanese
militarism.
China now appears confident that an America in decline has opened the door for the construction of a
new security order in Asia. Xis vigorous pursuit of Asia for Asians, however, has run into some political
resistance. Chinas expanding military clout and its assertiveness in territorial disputes are driving some
of its neighbours into a tighter embrace with the US. Although Xi has repeatedly sought to give
reassurance that Chinas rise is peaceful and Beijing will never exercise hegemony, few Asians are willing
to take it at face value.
In a controversial move this week, Prime Minister Shinzo Abe decided to re-interpret Japans peace
constitution. After being a passive partner in the military alliance with the US all these decades, Tokyo is
seeking a more active military role in shaping its security environment. Communist Vietnam, which
fought a bitter war against the US in the 1960s and 1970s, has rapidly expanded its security cooperation
with Washington. The Philippines, which threw American military forces out of the country in the early
1990s, is restoring the American presence and deepening defence ties with Japan.
If Beijing is trying to undermine American alliances in Asia, its neighbours are trying to strengthen them.
How does India respond to this unfolding contestation in Asia? On the face of it, a non-aligned India
should oppose all alliances and support collective security proposals seemingly in tune with Delhis
idealist tradition. Yet, Indias foreign policy record speaks otherwise.
After its conflict with China in 1962, India turned first to the US and then the Soviet Union to balance
Beijing. Despite its embrace of Moscow, Delhi rejected the proposals for collective security that
emanated from Russias Leonid Brezhnev (1969) and Mikhail Gorbachev (1986). Put simply, non-aligned
India was not averse to playing balance of power politics when compelled by external circumstances.
As an increasingly powerful China seeks to reorder Asia, Delhi must firmly locate Chinas Panchsheel
campaign in a clinical assessment of Asias rapidly evolving geopolitics and its consequences for Indian
security. China is doing what rising powers, including the US, have done before frame ones national
interests in universal terms, push other major powers out of ones immediate vicinity and replace the
old regional order with a new one. Beijing is undoubtedly following a well-trodden path in international
politics. But Delhi appears a long way from developing an appropriate strategy to cope with Asias new
power play.
The searing hypocrisy of the West
The bodies of three Israeli settlers who went missing on June 12th were found in a hastily dug shallow
grave in Halhul, north of Hebron.
Since the teens went missing from Gush Etzion, a Jewish-only colony in the West Bank, Israel has
besieged the 4 million Palestinians who already live under its thumb, storming through towns,
ransacking homes and civil institutions, conducting night raids on families, stealing property, kidnapping,
injuring, and killing. Warplanes were dispatched to bomb Gaza, again and repeatedly, destroying more
homes and institutions and carrying out extrajudicial executions. Thus far, over 570 Palestinians have
been kidnapped and imprisoned, most notably a Samer Issawi, the Palestinian who went on a 266-day
hunger strike in protest of a previous arbitrary detention. At least 10 Palestinians have been killed,
including at least three children, a pregnant woman, and a mentally ill man. Hundreds have been
injured, thousands terrorized. Universities and social welfare organizations were ransacked, shut down,
their computers and equipment destroyed or stolen, and both private and public documents confiscated
from civil institutions. This wonton thuggery is official state policy conducted by its military and does not
include the violence to persons and properties perpetuated by paramilitary Israeli settlers, whose
persistent attacks against Palestinian civilians have also escalated in the past weeks. And now that the
settlers are confirmed dead, Israel has vowed to exact revenge. Naftali Bennet, Economy Minister said,
"There is no mercy for the murderers of children. This is the time for action, not words."
Although no Palestinian faction has claimed responsibility for the abduction, and most, including Hamas,
deny any involvement, Benjamin Netanyahu is adamant that Hamas is responsible. The United Nations
requested that Israel provide evidence to support their contention, but no evidence has been
forthcoming, casting doubt on Israels claims, particularly in light of its public ire over the recent
unification of Palestinian factions and President Obamas acceptance of the new Palestinian unity.
In the West, headlines over pictures of the three Israeli settler teens referred to Israel's reign of terror
over Palestine as a "manhunt" and "military sweep." Portraits of innocent young Israeli lives emerged
from news outlets and the voices of their parents are featured in the fullness of their anguish. The US,
EU, UK, UN, Canada and the International Committee of the Red Cross (ICRC) condemned the
kidnapping and called for their immediate and unconditional release. Upon discovery of the bodies,
there has been an outpouring of condemnation and condolences.
President Obama said, "As a father, I cannot imagine the indescribable pain that the parents of these
teenage boys are experiencing. The United States condemns in the strongest possible terms this
senseless act of terror against innocent youth."
Although hundreds of Palestinian children are kidnapped, brutalized or killed by Israel, including several
in the past two weeks, there is rarely, if ever, such a reaction from the world.
Just prior to the disappearance of the Israeli settler teens, the murder of two Palestinian teens was
caught on a local surveillance camera. Ample evidence, including the recovered bullets and a
CNNcamera filming an Israeli sharpshooter pulling the trigger at the precise moment one of the boys
was shot indicated that they were killed in cold blood by Israeli soldiers. There were no condemnations
or calls for justice for these teens by world leaders or international institutions, no solidarity with their
grieving parents, nor mention of the more than 250 Palestinian children, kidnapped from their beds or
on their way to school, who continue to languish in Israeli jails without charge or trial, physically and
psychologically tortured. This is to say nothing of the barbaric siege of Gaza, or the decades of ongoing
theft, evictions, assaults on education, confiscation of land, demolition of homes, color coded permit
system, arbitrary imprisonment, restriction of movement, checkpoints, extrajudicial executions, torture,
and denials at every turn squeezing Palestinians into isolated ghettos.
None of that seemingly matters.
It does not matter that no one knows who murdered the Israeli teens. It seems the entire country is
calling for Palestinian blood, reminiscent of American southern lynching rallies that went after black
men whenever a white person turned up dead. Nor does it matter that these Israeli teens were settlers
living in illegal Jewish-only colonies that were built on land stolen by the state mostly from Palestinian
owners from the village of el-Khader. A huge portion of the settlers there are Americans, mostly from
New York, like one of the murdered teens, who exercise Jewish privilege to hold dual citizenship; to have
an extra country no matter where they're from, one in their own homeland and one in ours, at the same
time that the indigenous Palestinians fester in refugee camps, occupied ghettos, or boundless exile.
Palestinian children are assaulted or murdered every day and barely do their lives register in western
press. While Palestinian mothers are frequently blamed when Israel kills their children, accused of
sending them to die or neglecting to keep them at home away from Israeli snipers, no one questions
Rachel Frankel, the mother of one of the murdered settlers. She is not asked to comment on the fact
that one of the missing settlers is a soldier who likely participated in the oppression of his Palestinian
neighbors. No one asks why she would move her family from the United States to live in a segregated,
supremacist colony established on land confiscated from the native non-Jewish owners. Certainly no
one dares accuse her of therefore putting her children in harms way.
No mother should have endure the murder of her child. No mother or father. That does not only apply
to Jewish parents. The lives of our children are no less precious and their loss are no less shattering and
spiritually unhinging. But there is a terrible disparity in the value of life here in the eyes of the state and
the world, where Palestinian life is cheap and disposable, but Jewish life is sacrosanct.
This exceptionalism and supremacy of Jewish life is a fundamental underpinning of the state of Israel. It
pervades their every law and protocol, and is matched only by their apparent contempt and disregard
for Palestinian life. Whether through laws that favor Jews for employment and educational
opportunities, or laws that allow the exclusion of non-Jews from buying or renting among Jews, or
endless military orders that limit the movement, water consumption, food access, education, marriage
possibilities, and economic independence, or these periodic upending of Palestinian civil society, life for
non-Jews ultimately conforms to the religious edict issued by Dov Lior, Chief Rabbi of Hebron and Kiryat
Arba, saying "a thousand non-Jewish lives are not worth a Jew's fingernail."
Israeli violence of the past few weeks is generally accepted and expected. And the terror we know they
will unleash on our people will be, as it always is, cloaked in the legitimacy of uniforms and technological
death machines. Israeli violence, no matter how vulgar, is inevitably couched as a heroic, ironic violence
that western media frames as response, as if Palestinian resistance itself were not a response to Israeli
oppression. When the ICRC was asked to issue a similar call for the immediate and unconditional release
of the hundreds of Palestinian children held in Israeli jails (which is also in contravention of international
humanitarian law), the ICRC refused, indicating theres a difference between the isolated abduction of
Israeli teens and the routine abduction, torture, isolation, and imprisonment of Palestinian children.
When our children throw rocks at heavily armed Israeli tanks and jeeps rolling through our streets, we
are contemptible parents who should be bear responsibility for the murder of our children if they are
shot by Israeli soldiers or settlers. When we refuse to capitulate completely, we are not partners for
peace, and deserve to have more land confiscated from us for the exclusive use of Jews. When we take
up arms and fight back, kidnap a soldier, we are terrorists of the extreme kind who have no one to
blame but ourselves as Israel subjects the entire Palestinian population to punitive collective
punishment. When we engage in peaceful protests, we are rioters who deserve the live fire they send
our way. When we debate, write, and boycott, we are anti-Semites who should be silenced, deported,
marginalized, or prosecuted.
What should we do, then? Palestine is quite literally being wiped off the map by a state that openly
upholds Jewish supremacy and Jewish privilege. Our people continue to be robbed of home and
heritage, pushed to the margins of humanity, blamed for our own miserable fate. We are a traumatized,
principally unarmed, native society being destroyed and erased by one of the most powerful militaries in
the world.
Rachel Frankel went to the UN to plead for their support, saying it is wrong to take children, innocent
boys or girls, and use them as instruments of any struggle. It is cruelI wish to ask: Doesnt every child
have the right to come home safely from school? Do those sentiments apply to Palestinian children,
too? Here, and here, and here, and here, and here, and here are video examples of the abduction of
Palestinian children from their homes at night and on their way to and from school.
But none of that matters either. Does it? It matters that three Israeli Jews were killed. It doesnt matter
who did it or what the circumstances were, the entire Palestinian population will be made to suffer,
more than they already are
Sino-Indian coordination on global issues
India on Monday called for forging an alliance with China to turn the 21st century into an Asian
Century. With the world economy shifting towards Asia, Vice-President Hamid Ansari said, India and
China will have to play a decisive role and create a world based on good-neighbourliness and mutual
prosperity rather than one based on the balance of power calculations and animosity, to emerge as
regional leaders.
Close on the heels of Chinese President Xi Jinpings assertion that his country will never seek hegemony,
no matter how strong it becomes, Mr. Ansari pitched for forging an alliance between India and China for
mutual benefit in the emerging era of multi-polarity.
On the global stage, both countries are at the forefront of the emergence of a more democratic global
order and of multilateral approaches to resolving global issues in an equitable manner. The United
Nations Security Council today no longer reflects reality and must be expanded, he said.
Speaking on, Calibrated Futurology: India, China and the World at the Chinese Academy of Social
Sciences here, Mr. Ansari said, We have several areas of convergence and common interests on global
issues. Both our countries hold similar positions on issues such as climate change, Doha round, reform of
international financial institutions, and energy security. We also coordinate our positions before major
multilateral events. It is important that we continue to do so since these pose common challenges.
Climate change talks
He called for a united voice on the issue of climate change negotiations, where both countries have
been maintaining that the burden sharing has to be fair and must take into account historical emissions.
Tracing the India-China journey that started of as that of Buddhist twins to colonial twins to having
emerged as geo-civilisational twins, the Vice President said the two countries are united in their effort
to reshape the world order.
Committed neighbour
Assuring that India remains committed to building a future with its neighbour, Mr. Ansari said, For the
first time in 30 years, a single political party has obtained parliamentary majority on its own [in India].
Despite this change, there will be continuity in foreign policy. India has always followed an independent
and autonomous foreign policy. The main task of our foreign policy is to create an external environment
that is conducive for our rapid development. Our foreign policy also seeks to expand our development
choices and give us strategic autonomy in the world.
He asserted that India does not subscribe to alliance building nor does it believe in the logic of
containment. We firmly believe that both India and China are too big to be contained. Building peaceful
and cooperative relationships in our d neighbourhood is an intrinsic element of our foreign policy. The
challenge here is to our ability to work together, handle differences and compete and cooperate at the
same time, he said.
China not a business adversary
India which is on the cusp of strengthening its trade and investment ties with China through a series of
agreements, does not perceive China as an adversary in business, Mr. Ansari said. As two large
developing countries, our common interests far outweigh our differences. We admire Chinas
achievements in terms of development and hope to see China become a developed country soon, he
said.
Even as he called for correcting the perception gap and to change the negative perception of each
other in some quarters, Mr. Ansari said the India-China relationship has transcended bilateral scope
and acquired regional, global and strategic significance. We both view each other as partners for
mutual benefit and not as rivals or competitors. Our primary interest is to pay attention to the task of
development. For it to succeed, both countries need a peaceful periphery and an environment of
tranquillity. And thus it has been the objective of both our countries to seek tranquillity and stability in
our immediate neighbourhood and extended region.
Admitting that India and Chinas record of adhering to the five principles of Panchsheel is a mixed one,
but improving, Mr. Ansari said, the border clash of 1962 left a scar on the Indian psyche and led to a
brief interregnum in the growth of ties. He called for crafted strategy for management of resources,
demographics, inclusiveness, rural-urban balance, energy security, environmental sustainability and
above all a sustained period of peace and stability conducive to economic and social development to
counter the damage to India-China economies, distorted social structures, disrupted lines of trade and
cultural communications, disregarded affinities and synergies caused by the period of imperial or
colonial dominance.
Eastern outreach
The clear message from the visit by External Affairs Minister Sushma Swaraj to Bangladesh is that the
new government, as the previous one, places great importance on Dhaka-New Delhi relations.
The visit by External Affairs Minister Sushma Swaraj to Bangladesh saw the National Democratic Alliance
government start off on a positive note with Indias important eastern neighbour. New Delhi relaxed some
visa rules for Bangladeshi nationals; the frequency of the cross-border train is to be increased; there is to be a
new bus service that will connect Guwahati and Shillong with Dhaka. India has also committed to sharing 100
MW of power from the Palatana power project in Tripura. It is encouraging that after an election campaign
that bristled with negative references to Bangladesh, the new government has chosen to follow in the
footsteps of its predecessor in reaching out to Dhaka, even though the Manmohan Singh government could
not complete its own bilateral initiatives. Signalling broad continuity in ties, Ms. Swaraj has promised that her
government would make efforts to take those initiatives to their conclusion, even though, disappointingly for
Bangladesh, she gave no time-frame. With its majority in Parliament, the BJP needs only to convince itself
that the Land Border agreement is beneficial to both sides. On the Teesta river water-sharing agreement, the
Modi government will need to convince Mamata Banerjee, but it will take more than the phone call that the
External Affairs Minister made to the West Bengal Chief Minister. The clear message from the trip is that the
new government, as the previous one, places great importance on Dhaka-New Delhi relations. Ms. Swaraj
even acknowledged the UPA governments contributions by saying that a great deal has been accomplished
in the... relationship in the last few years, including progress in the areas of security, economic
development, sub-regional cooperation, opening of the Indian market to Bangladeshi goods, border
infrastructure, energy and people-to-people exchanges. Dhakas cooperation will be critical to Indias Look
East policy.
Bangladesh will watch to see if the continuity with UPA extends to another trait: playing favourites with
Bangladeshs political parties. Indias main engagement has to be with the government of Bangladesh. But as
Ms. Swaraj said in an interview, the effort must also be to establish an inclusive partnership with
Bangladesh, and we want to do it by taking every section of *Bangladeshi+ society into confidence. The
country has yet to emerge from a phase of great internal turmoil. Ms. Swaraj wisely refrained from making
any comments on the January elections, the credibility of which has been widely questioned. Her meeting
with Bangladesh National Party leader Khaleda Zia, although she is no longer Leader of the Opposition, was a
well-advised move, signalling that New Delhi still considers it a significant political party.

















PAPER2
The relevance of the institution of Planning Commission in the context of a
rapidly changing Indian economy and society
As speculation mounts by the day that the Modi government is thinking of winding up the Planning
Commission, this is an opportune moment to reflect on the relevance of the institution in the context of
a rapidly changing Indian economy and society.
One way of classifying institutions is in terms of the balance between their potential positive power
(PPP) and potential negative power (PNP). Potential positive power may be broadly understood to mean
the capacity and power to enforce or facilitate positive change that would hasten the achievement of
national goals. Potential negative power, on the other hand, refers to the capacity or power to obstruct,
delay or derail positive reform, in cases where such reform threatens entrenched vested interests,
status quo or business as usual. The exercise of PNP is often a ruse to foster corrupt practices, but it can
also be an exercise of wanton power for its own sake, reflecting a perverse sense of power-induced
pleasure.
The two institutions with perhaps the highest quotient of both PPP and PNP in the government of India
are the Planning Commission and the ministry of finance. In my five years in the Planning Commission, I
saw many instances of PNP and how this became a source of great resentment against the Planning
Commission, both among state governments and Central ministries. Of course, at times, the Planning
Commission acted with sagacity in checking profligacy of funds and schemes. But there were many cases
where in-principle approvals, investment clearances, grants-in-aid and other decisions appeared to
smack of bureaucratic red tape more than an application of mind motivated by the broader national
interest and effectiveness of functioning. There were also visible vestiges of the old Stalinist command
and control, inspector raj mindset.
But it is also true that in these five years I saw innumerable instances of the exercise of positive power. I
believe there are at least five broad areas in which the Planning Commission played an extremely
positive role: one, pioneering an inclusive planning process; two, facilitating and mainstreaming reform,
especially emphasising the principle of subsidiarity, recognising the deep diversity of India; three, co-
ordinating across, if not breaking down silos; four, being the spokesperson of the states at the Centre;
and five, arbitrating disputes by taking a more long-term and holistic view of issues.
The 12th Plan process saw a completely unprecedented architecture of plan formulation. For the first
time in the history of the Planning Commission, the 12 working groups on water, rural development and
panchayati raj were chaired by eminent experts from outside government and included the best minds
and practitioners from across Central and state governments, academia, research institutions, industry,
civil society, and panchayati raj institutions. It was clearly recognised that all wisdom does not reside
within government and that the best plans, programmes and policies could be made only with the active
involvement of those outside government. This was not mere tokenism in the name of participation.
Final decisions were made by these inclusive working groups. For me, the true indicator of the success of
this process was that even though none of the players involved were fully happy with the final outcome,
something truly pathbreaking was achieved. This only reflected the spirit of compromise that is a
hallmark of good governance, as a hard-fought consensus was thrashed out among the members and
the chair and co-chair, who was in each case the seniormost official of the concerned department.
The result was a series of landmark proposals that constitute a paradigm shift in water management in
India, including the first-ever National Aquifer Management Programme, a new approach to incentivise
de-bureaucratisation of large irrigation projects and irrigation management transfer to increase water
use efficiency, a new integrated approach to rural drinking water and sanitation, a proposal to regularly
audit the industrial water footprint, a new approach to flood management, a scheme to empower gram
panchayats, a radically reformed MGNREGA, etc, each of which drew upon best practices pioneered by
the states, who have always led the reform process in our country.
At the request of the chief minister of Punjab, I chaired a high-level expert group on waterlogging in
Punjab. The group, consisting of the nations best experts on the subject, conducted a thorough
investigation of the problem in close partnership with the state government and came out with a
package of solutions, which was generously supported by the government of India. When the chief
minister of Madhya Pradesh went on a fast, raising a series of legitimate grievances of the state with the
Centre, the prime minister asked me, as member in-charge of Madhya Pradesh, to work with all
concerned Central ministries to hammer out an amicable solution, which was done in record time, to
the satisfaction of the aggrieved CM. Similar roles were played by other members in other contexts,
which illustrate how the PC can be an effective mediator and problem-solver for states, rather than their
tormentor.
My aim in the Planning Commission was to be a support available 247 to dynamic officers in the states
to showcase their best practices and help mainstream these across the length and breadth of the
country. I attempted to do this with the Jyotigram separation of power feeders scheme in Gujarat, the
participatory irrigation reforms of Andhra Pradesh, the water regulator of Maharashtra and many
others. My hope is that whatever the Modi government decides will only give greater strength and
momentum to this positive role of the Planning Commission, in whatever shape and form.
File revised affidavit on Katchatheevu: Jayalalithaa
Says it is an integral part of the territory of India
Taking a strong exception to the Centres affidavit in the Madras High Court on Tuesday that the issue of
maritime boundary between India and Sri Lanka and the related Katchatheevu island was a settled matter,
Tamil Nadu Chief Minister Jayalalithaa on Wednesday urged Prime Minister Narendra Modi to direct the
officials concerned to file an appropriately revised affidavit in the court.
In a letter to Mr. Modi, the AIADMK leader said she was appalled and shocked at the stand taken by the
Ministry of External Affairs (MEA) in the affidavit filed in a case by Fishermen Care of Pallavaram. Perhaps
the counter affidavit had been prepared and approved by the previous UPA government and the matter
was not brought to your personal attention, Ms. Jayalalithaa said.
It has always been the stand of my government that Katchatheevu is an integral part of the territory of
India, she said, referring to the issue that she had specifically raised in the memorandum submitted to Mr.
Modi recently. She added that Indias sovereignty over the island had to be retrieved.
Urging the Centre to take active steps to abrogate the 1974 and 1976 agreements (that ceded the small
island in the Palk Straits off Rameswaram to Sri Lanka), retrieve Katchatheevu and restore the traditional
fishing rights of fishermen of Tamil Nadu, the Chief Minister recalled the steps taken by her in this regard.
These included a resolution in the Tamil Nadu Assembly as early as 1991 and the writ petition filed by her in
the Supreme Court in 2008 seeking restoration of Katchatheevu. Ms. Jayalalithaa cited the Supreme Court
ruling in the Berubari case of 1960, which said any territory owned by India could be ceded to another
country only through a Constitutional amendment. In the case of Katchatheevu, it was done without such an
amendment and hence it was unlawful and invalid, she stressed. These circumstances had emboldened the
Sri Lankan Navy to resort to frequent attacks on our innocent fishermen who fish in their traditional fishing
grounds, she said.
Pointing out that even former Prime Minister A. B. Vajpayee had stated that he would file a case against the
ceding of Katchatheevu to Sri Lanka by the then Congress government, she said the affidavit filed on MEAs
behalf in the High Court, thus comes as a rude shock.
The Centre should modify its affidavit in the court, which adequately reflects our concerns, without further
delay, she added.
Thanks PM
In another letter to Mr. Modi, Ms. Jayalalithaa thanked the Prime Minister for the prompt constitution of the
Supervisory Committee to raise the Mullaperiyar dam water level to 142 feet as mandated by the Supreme
Court recently.
Centre urged to take steps to abrogate 1974 and 1976 pacts
Supreme Court ruling in Berubari case of 1960 cited
No automatic arrests in dowry cases, says SC
In a bid to prevent casual and mechanical detention of accused, the Supreme Court on Wednesday
directed States to instruct police officers not to make any arrests in dowry harassment offences without
first ascertaining viability under parameters laid down in Section 41, Code of Criminal Procedure.
Acting on a special leave petition, in which Arnesh Kumar challenges registration of FIRs against him and
his family for alleged dowry harassment, the Bench advised against automatic arrest under Section
498A.
The Bench said police should issue notice of appearance to the accused in terms of Section 41A of the
Cr.PC within two weeks from the date of institution of the case, which might be extended by the
districts Superintendent of Police for reasons that must be recorded in writing. Failure to comply with
the directions would render the concerned police officers liable for departmental action as well as
contempt of court before the High Court having territorial jurisdiction.
The Bench said: The Magistrate, while authorising detention of the accused shall peruse the report
furnished by the police officer; only after recording its satisfaction, the Magistrate will authorise
detention. Authorising detention without recording reasons by the judicial Magistrate concerned shall
be liable for departmental action by the appropriate High Court. The directions shall apply *also in+
such cases where offence is punishable with imprisonment for [up to] to seven years. We direct that a
copy of this judgment be forwarded to the Chief Secretaries as also the DGPs of all States and UTs for
ensuring its compliance.
Writing the judgment, Justice Prasad said that there was a phenomenal increase in matrimonial
disputes in recent years.
The importance of piecemeal reforms
In 1986, when I was travelling by bus from Aligarh to Moradabad, we stopped at a dhaba. An old man
sitting there was reading loudly from an Urdu newspaper. If the uniform civil code is enacted, then
Muslims will not be allowed to bury their dead and they will be forced to burn them just like Hindus, he
said. I was shocked at hearing this, but it is true that most Muslims still do not know what the uniform
civil code really means. The Bharatiya Janata Partys victory has revived the age-old debate.
There are well-defined positions on the uniform civil code. Human rights advocates, feminists and Sangh
Parivar supporters favour it while Muslim fundamentalists simply oppose it. No one is willing to look at
the problem rationally. Muslim backwardness is often attributed to the religions personal law. Most
Hindus continue to be backward and earn just Rs.20 per day in spite of reforms in Hindu law. Several
Muslim countries have made radical changes in Muslim law but they are still quite backward. So how
will enactment of the uniform civil code help in improving the communitys backward status? It will not
lead to employment generation or economic growth.
Not related to development
Generally, three arguments are put forth in favour of enacting a uniform civil code: that it will lead to
national integration and draw minorities into the mainstream, encourage communal harmony and work
towards improving the status of women. While these arguments concede that the minorities are not in
the national mainstream, terms such as national integration and mainstream are vague.
Moreover, no one can say with certainty that communal riots take place because Hindus
performsatpadi and Muslims nikah or that Hindus have one law of divorce while minorities have
another. Similarly personal law has no relationship whatsoever with the development or backwardness
of any community.
The point which is often missed in this debate is that we have already reformed Hindu law. Has it
resulted in the upliftment of Hindu women? How many Hindu women get a share in property? The
amount of land actually inherited by Hindu women is only a small fraction of the amount of land they
are entitled to under the reformed Hindu law. Even when women inherit land, it is invariably less than
an equal share. Women are likely to get more land as widows than as daughters. Even though women
want to inherit land, they prefer to inherit land from their husbands rather than from their parents, in
order to avoid offending the harmonious relationship with their family. Taking advantage of the reduced
registration fee and stamp duty, men purchase land in the name of their wife or daughter-in-law, but
retain the title documents and control the land. Normative changes in law certainly do not bring about
necessary social reform.
Further, the directive principles are positive obligations of the state. Why then has no government
prepared any blueprint of a uniform civil code? Did not even the BJP under Atal Bihari Vajpayee
abandon it just to stay in power? In the absence of a blueprint, ignorance over the matter is being
misused by fundamentalists to state that a uniform civil code will lead to uniform ceremonies such as
rites of death. Present day Hindu law should not and cannot become the uniform civil code. If the new
BJP government takes up this issue soon, the much-needed conducive environment for the enactment
of a code can never be created; only an emotional outcry will be heard from different quarters.
It is also disgusting to note that while the directive principle of a uniform civil code is emphasised, no
one speaks of the non-implementation of other directive principles that are far more important : the
right to work, living wages, avoiding the concentration of wealth in the hands of a few, protection of
monuments, etc. Amending a communitys personal law with a view to bringing about changes for its
betterment is one thing, but to tinker with the enactment for the sole purpose of introducing
uniformity is another issue altogether. The former may be an act of reform, but the latter is an
arbitrary action that may attract disapproval.
Accepting a uniform civil code
The Muslim law has been reformed in several countries. Then why have Muslims opposed reforms in
India? The answer lies in the minority psyche of Indian Muslims, which is tied to the question of their
identity. Let them be convinced that a uniform civil code has nothing to do with their distinctive identity,
let them develop faith in the new government, let them have a fair and equitable share in the power
structure of the state and let culprits of communal violence not be rewarded with ministerial berths.
Accepting a uniform civil code would then become far easier. Muslims in India should also realise that in
spite of uniform family laws in the West, Islam is growing at a very fast pace. Thus, a uniform civil code is
not a great threat to the religion as it is perceived by many.
It is also disturbing to note that no one ever points out that many Hindus take advantage of their own
personal law under the Hindu joint family system, causing losses worth millions of rupees to the income
tax department. Will the BJP take the first step of withdrawing this benefit?
The enactment of a uniform civil code will disrupt communal harmony. The better course would be to
bring about piecemeal reforms. There are already several reforms that go against personal laws. The
British introduced a number of changes in Muslim Law: slavery was abolished, the loss of civil rights on
apostasy was abrogated, Islamic Criminal Law was abolished and replaced with the Indian Penal Code, a
comprehensive Evidence Act was enacted which made the Islamic law of evidence obsolete, etc. A
uniform civil code cannot and should not be enacted at one go.
Of fact, procedure, and principle
Like all things Indian, small events appear to have large implications. The curious Indian, with a few
thousand years standing behind her, finds connections and controversies in everything. Questions
naturally appear. For example, does the Gopal Subramanium elevation controversy have wider
implications for the polity? Must we see it as telling us something about our public culture or is it just a
one-day spectacle, permitting us, now that it has passed, to go back to business as usual? Is the
nonchalance on the issue because of fear or because of indifference? Because legal practitioners have
dominated the debates so far, we have been cautious since this is a zone where angels fear to tread. But
when the demons of doubt will not go away, the issues require detailing. These concern matters of fact,
of procedure, and of principle.
The process
Let us begin with the facts. The practice followed by the collegium of the higher courts, before a
candidate is recommended for elevation and a panel of names is sent to the government for
appointment, is as follows. The Chief Justice initiates a consultation with the legal fraternity. Speaking in
confidence to senior advocates and fellow judges, to both the bar and the bench, a long list of possible
candidates for elevation is prepared. Based on these recommendations the Chief Justice then invites the
candidates to determine their willingness to be considered. If the candidates are willing then they are
required to furnish details about themselves, such as their contributions to the law especially with
respect to important cases, the extent of their legal practice, their annual income, their legal history,
etc. These details are then processed by the court administration, during which time, I suppose, the
court gets inputs from relevant investigating agencies about whether they have any legal proceedings
against the candidate, etc. other inputs that may make them ineligible for consideration.
Based on (i) the recommendations of the legal fraternity, (ii) the willingness of the candidate, and (iii)
the hard data relating to the legal practice and public standing of the individual, the file is placed before
the collegium. The collegium then scrutinises the information on record and, based on the highest
standards of judicial scrutiny, arrives at a decision on whom to recommend and whom to ignore, from
the names before it. Not every name that comes up through this process gets the approval of the
collegium. The shortlist prepared by the collegium is then sent up to the government for its approval.
This I am told is the standard process that is followed. Gopal Subramaniums case, I suppose, went
through the same process.
There are many issues that need clarification now. Let us list them here. Let us begin with the issue of
sequence. (i) When was the collegiums due diligence completed? (ii) When did it send its recommended
panel of names? (iii) When did the Central Bureau of Investigation (CBI) and the Intelligence Bureau (IB)
give their reports which made him ineligible? (iv) Was it before the collegium considered the file, or
after? (v) If before, were the intelligence reports presented to the collegium? (vi) If yes, then assuming
that the reports were considered by the collegium, can they be regarded as germane to the
appointment after the panel is sent to the government? (vii) If not, why were they concealed from the
collegium? (viii) Does it constitute contempt by the CBI and the IB of the Supreme Court? (ix) When was
the file sent to the President for his seal of approval? (x) How long did he take to grant approval? (xi)
What were the reasons he gave to segregate the names into those he had approved and those that
were to be kept in abeyance? (xii) Since this act of segregation has constitutional implications, did the
President consult constitutional experts, as is the practice, or did he rely on his own wisdom? (xiii) If he
did consult constitutional experts, who were they and what was their advice, and if he did not why did
he not do so?
Fair and transparent
The principle for such empanelment was enunciated by the Supreme Court in the case of P.J. Thomas,
nominee for the Central Vigilance Commission (CVC), whose candidature was rejected in 2011 when it
described in detail the process to be followed in the appointment to a position of authority.
Appointments to the Supreme Court, I expect, fall into this category. Here is what the judgment said
(vi) The empanelling authority, while forwarding the names of the empanelled officers/persons, shall
enclose complete information, material and data of the concerned officer/person, whether favourable
or adverse. Nothing relevant or material should be withheld from the Selection Committee. It will not
only be useful but would also serve larger public interest and enhance public confidence if the
contemporaneous service record and acts of outstanding performance of the officer under
consideration, even with adverse remarks is specifically brought to the notice of the Selection
Committee. (vii) The Selection Committee may adopt a fair and transparent process of consideration of
the empanelled officers.
Complete information, including fair and adverse comments, is a necessary condition. Also fair and
transparent process. I suppose the collegium, the government and the President followed these
guidelines.
Separation of powers
Assuming complete information was available to the collegium, we now have to consider the contrasting
positions of the collegium and the government. Based on the same facts considered by the collegium,
the government is at liberty to give an alternative reading and argue for the unsuitability of a particular
candidate. This is legitimate since the political lens of the government may be at variance with that of
the collegium. The disagreement, at this stage, has to be on political grounds and not on facts. The
procedure then requires the government to place its disagreement before the collegium which can
either restate its earlier recommendation or revise it in the light of the arguments made.
This second stage is constitutionally sacrosanct since contained in it is the core principle of the
separation of powers. The collegium has to deliberate on this contrary opinion of the government and
decide whether, by accepting or rejecting it, the independence of the judiciary is eroded or enhanced.
The decision that emerges from this review must indicate where the power of decision in the last
instance, lies, with the government or with the court. Both parties must give clear reasons for their
positions so that the final decision taken can educate the public on the core issue of separation of
powers. The governments reasons and the collegiums views, as well as the facts of the matter, should
be made public to serve, as the Supreme Court in the P.J. Thomas case said, the larger public interest.
We now come to the question of suitability. Was Gopal Subramanium unsuitable because of some
actions of his, which were not kosher, i.e., meeting persons that he should not have met when he was
Solicitor General, or was he unsuitable because of a disposition, i.e., shutting his mind out for an hour
and praying as he was alleged to have done when he was investigating the Sree Padmanabhaswamy
temple gold case? From leaked reports in the press it appears that both actions and disposition
made him unsuitable. This is puzzling. How was he then the lead counsel of choice for both the IB and
the CBI? How was he amicus curiae for the Supreme Court in several cases such as the Bachpan Bachao
Andolan case, the Sohrabuddin Sheikh fake encounter case, and the Sree Padmanabhaswamy temple
case. If he was good enough to be amicus curiae , why is he unsuitable now?
Basic issues for democracy
Three basic issues for our democracy emerge from this controversy. The first is the issue of public
attitude. Are we prepared to let it lie, to blow over because another headline has grabbed its place or
are we prepared to interrogate it further? This is not a partisan issue, of UPA versus NDA, since it
perhaps points to a growing disregard for our constitutional culture. When the confidentiality of the
collegiums recommendation is treated lightly, when the intelligence reports are leaked, when the
Presidents confidential actions are public knowledge, we have reason to be concerned about the
disregard for constitutional propriety. Will those who leaked information be punished to restore the
sanctity of the process? Or are we moving toward what Paulo Friere calls the culture of silence?
The second issue concerns the doctrine of separation of powers. By segregating the names, did the
President give primacy to the executive over the judiciary? Was this a question of political expediency
trumping constitutional principles? With whom should the final decision, on who should be elevated,
lie? The executive or the judicial fraternity? Since the Emergency, when it had touched its nadir, our
democracy has been struggling to restore the balance between the executive and judiciary. Does the
Gopal Subramanium case suggest that the pendulum has begun to swing again?
The third issue concerns Gopal Subramaniums withdrawal of consent. By resigning he prevented the
issue from developing into a constitutional face-off between the executive and the judiciary. Ronald
Dworkin, the great legal and political philosopher, in Taking Rights Seriously , recommends such a face-
off since he believes that only in such a situation will we be able to distinguish between just and unjust
laws. We hope that the moment has not passed for the collegium to enunciate on the principle of
finality. Mr. Subramaniums withdrawal also highlights one of the knottiest problems of political
philosophy. Should he have been pragmatic, and withdrawn to fight another battle, or principled, since a
foundational principle was at stake? Is the cost of standing up for the principle too high, undermining
other values that are also important, or is it necessary to stand up for them regardless of the cost since
it would take society to new and higher morality?
Aung San Suu Kyi did not go to England to see her husband who had terminal cancer, when she was
offered the choice, because she would have had to abandon the political struggle and leave the country.
He passed away. She did not meet him. Yudhisthira told a little lie and won the war.

PAPER3
GMOs and the 'safeguard clause'
The case of genetically modified organisms is the latest issue where the EU will have to look at the
harmonisation of standards and regulations
A common market not withstanding, the 28-memberEuropean Union (EU) faces the difficult task of
harmonising its regulations across many important areas, thereby creating a market-access issue for
trade partners on many occasions.
The latest such divergence that has been agreed upon by the environment ministers of member states
of the EU is the case of genetically modified organisms (GMOs). The ministers have agreed to broad-
base the criteria allowing member states to impose a ban on GMOs in their respective countries for a
large number of reasons, ranging from socio-economic concerns, land use and town planning and
agricultural policy objectives.
The recent agreement by the EU environment ministers to adopt a legislative proposal would allow
member states to restrict or prohibit the cultivation of GMOs in their territory even if the crop has been
authorised by Brussels. Twenty six of the 28 member states have reportedly agreed to these measures.
Till date, member states of EU can invoke the so-called "safeguard clause" only for some specific
reasons. According to the existing clause, member states may provisionally restrict or prohibit the use
and/or sale of the GM product on its territory. However, the member state must have justifiable reasons
to consider that the GMO in question poses a risk to human health or the environment. Six member
states of the EU currently apply safeguard clauses on GMOs: Austria, France, Greece, Hungary, Germany
and Luxembourg.
GMOs have for long been a matter of debate within the EU, with some countries completely opposed to
the entry of these products. Since this has been a politically sensitive issue, the European Commission
has till date approved only a few GM crops - cotton, maize, rapeseed, sugar beet and soya bean among
others - for use in the EU. The US and Brazil are the largest growers of GM crops in the world.
The national safeguard ban, which is used in the EU, has been a matter of debate within the World
Trade Organisation (WTO) for long. The WTO Agreement on Sanitary and Phytosanitary measures allows
countries to protect their citizens from consuming food or related items if there is scientific evidence to
prove that the particular product is harmful for residents of a particular country. However, without
scientific evidence, countries are not allowed to ban products.
News reports suggest that the existing safeguard ban imposed by the EU had been questioned at the
WTO by three countries - Argentina, Canada and the US. However, the EU reached an out-of-court
settlement with all these countries after it was pointed out that these national bans are not entirely
backed by scientific evidence.
Opposition on the issue of GMOs is not unique to the EU. Even countries such as India are not in favour
of a completely open environment towards GM crops. However, what is important to note is the lack of
harmonisation across the EU in some key areas of interest to trade partners, which takes away the
benefit of tapping a common market.
Analysts are of the view that this issue will come to the fore during the discussions for a transatlantic
treaty between the US and the EU because Washington may not support a ban on GM products since it
could hurt exports of its agricultural produce to the EU market.
While this issue will be politically sensitive within the EU countries, Brussels will have to take a close look
at issues where harmonisation of standards, regulations and so on differs between member states. This
will be important given that when bilateral trade agreements are signed, such regulations could lead to
the creation of non-tariff measures for other partners.
GMOs are created by transferring genetic material from one organism to another. This process is called
genetic engineering, or biotechnology. Although the transfer of genetic material has long occurred
through selective breeding and other techniques, new technologies permit more controlled transfers,
and transfers of genes from completely unrelated species. Although citizens and governments in
different countries all want to ensure that these GMOs do not pose a threat to human health or the
environment, they do not agree on the best way to protect against these potential threats.
Trade problems arise when countries have different regulations regarding the testing and approval
procedures necessary to place GMOs and their products on the market, or when they disagree about
labelling and identification requirements. Some countries ban imports and sales of GMOs and their
products altogether. In other countries, a large part of the production of some crops, such as maize or
soybeans, is from genetically modified seeds, and is mixed with non-modified varieties during storage,
transport and processing. These countries argue it would be unnecessary and very costly to keep GMOs
separate, and consider that labelling requirements or import bans are unnecessary trade barriers.
So far, no trade dispute over GMOs has been examined by a WTO dispute settlement panel. Several
WTO agreements could apply to the topic, including SPS, but also the TBT Agreement, the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPs) and the GATT. An international agreement
on living modified organisms, the Biosafety Protocol, was negotiated in the year 2000 under the
Convention on Biodiversity of the United Nations.

GMOs and SPS back to top
Under what circumstances does the SPS Agreement apply to GMOs? According to the definition of an
SPS measure, the agreement applies to measures taken
to protect: from:
human or animal
life
risks arising from additives, contaminants, toxins or disease-causing organisms in their
food, beverages, feedstuffs;
human life plant- or animal-carried diseases (zoonoses);
animal or plant
life
pests, diseases, or disease-causing organisms;
a country damage caused by the entry, establishment or spread of pests.
In the discussion of GMOs, the first and last definitions seem relevant, i.e. protection from food safety
risks and invasive species risks from genetically modified plants. In the case of food safety, however, the
SPS Agreement applies to risks from additives, contaminants, toxins or disease-causing organisms, and it
is not clear if potential risks from GMO foods fit into one of those categories. If the SPS Agreement did
apply, regulations on GMOs would have to conform to the provisions of the Agreement, such as
scientific risk assessment and least trade restrictive measures.
Countries could also argue that relevant scientific evidence is insufficient, and adopt a provisional
measure according to Article 5.7, based on the available pertinent information. They would then be
obliged to actively seek the additional information needed for a more objective risk assessment, and to
review the measure within a reasonable period of time. What might be reasonable would have to be
determined on a case-by-case basis.
The SPS Committee has not discussed GMOs in any detail. However, the United States circulated a paper
in June 2000 which pointed out the lack of consistency in notifications. Some countries notified GMO-
related regulations under SPS, others under TBT, and sometimes under both. Thailand has also brought
to the Committees attention Egypts restrictions on its canned tuna, allegedly because of concerns that
the tuna was canned in genetically modified soy oil, and in September 2000 requested official
consultations with Egypt. For an update on the state of play of WTO disputes, go to the WTO website
athttp://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm#news.

Other WTO Agreements back to top
To the extent that the SPS Agreement did not apply to GMO regulations, theTBT Agreement may apply.
The TBT Agreement allows governments to take measures if they have a legitimate objective, such as
protecting health or the environment. TBT measures should not be more trade-restrictive than
necessary. In addition, the TBT Agreement does not allow for discrimination between like products. If a
panel were established, it would thus have to decide whether the measure had a legitimate objective,
whether it was more trade-restrictive than necessary, and whether GMOs and their products were
substantially the same as their non-modified counterparts. In the case of processed foods, for example
mayonnaise containing oil from modified soybeans, the like product consideration might be difficult.
The TBT Committee has discussed GMOs mostly in relation to labelling requirements.
The TRIPs Agreement requires countries to provide a minimum level of protection for certain intellectual
property rights. However, only new inventions have to be patentable, not discoveries. Even where a
patent is granted, the government can still regulate or ban a product from sale. With respect to GMOs,
countries may exclude from patentability plants and animals as well as essentially biological processes
for the production of plants and animals. However, they must provide protection for microorganisms
and non-biological and microbiological processes. The TRIPs Agreement also allows temporary exclusion
from patentability when necessary to protect human, animal or plant life or health or to avoid prejudice
to the environment. The TRIPs Agreement would normally not be invoked in a conflict regarding market
access for GMOs, but it might be invoked in a dispute on intellectual property protection related to
GMOs.
Finally, Article XX of GATT provides for exceptions from GATT rules in order to protect health or the
environment. Here, again, the issue of like products would arise. In addition, a country would have to
show that it is necessary to violate the GATT to achieve the desired health or environmental protection.
In preparations for the Ministerial Conference in Seattle in 1999, several Members proposed the
establishment of a working group in the WTO to study GMOs. This group might examine GMOs and their
relationship with the different WTO Agreements, and evaluate the need for further action. However, no
such working group has been established, and since the Seattle Ministerial at the end of 1999, the issue
has not been discussed. In the context of the negotiations on agriculture which began in 2000, the
United States has submitted a proposal (G/AG/NG/W/15) calling for disciplines to ensure that processes
covering trade in products developed through new technologies are transparent, predictable and timely.
All proposals for the agriculture negotiations and other related documents can be found on the WTO
website athttp://www.wto.org/english/tratop_e/agric_e/negoti_e.htm.

GMOs and the Three Sister Organizations back to top
The three sister organizations have begun work on GMOs, and any standards, recommendations and
guidelines they develop will be international standards in the sense of the SPS Agreement.
Codex has established an ad hoc task force on foods derived from biotechnology. The task force is
developing general principles for risk analysis for GM foods, and specific guidance on risk assessment. It
is also examining the analytical methods available for detection of GMOs in foods. To support the work
of the task force, there has been a joint FAO/WHO expert consultation on safety aspects of genetically
modified foods of plant origin in May/June 2000, and further expert consultations are planned on the
safety of genetically modified foods from animals and micro-organisms, plus a working group on testing
methods.
Some of the standards developed by the OIE deal with diseases that have human health and biosafety
significance. These standards are approved by the OIE member countries and published in the OIE
International Animal Health Code. The OIE also publishes the Manual of Standards for Diagnostic Tests
and Vaccines. A few of the tests and vaccines use genetically modified organisms. The OIE has had a
working group on biotechnology since 1996.
The IPPC has formed an open-ended working group on phytosanitary aspects of GMOs, biosafety and
invasive species. It will develop standards for risk analysis as applied to environmental hazards.

The Cartagena Protocol on Biosafety back to top
In January 2000, negotiations on a Biosafety Protocol, under the Convention on Biological Diversity of
the United Nations, were completed in Montreal. The protocol lays down rules for international trade in
living modified organisms, or LMOs. LMOs are basically GMOs that have not been processed, and that
could live if introduced into the environment, such as seeds.
Under the protocol, a country which wants to export LMOs for intentional introduction into the
environment (such as seeds for planting) must seek advance informed agreement from the importing
country before the first shipment takes place. Exports of LMOs which are to be used for food, feed or
processing do not have to go through advance informed agreement; rather, trading partners will inform
each other of their policies through a biosafety clearing-house. The protocol provides for decisions to
be based on risk assessment. Under certain circumstances, importers can ask the exporter to carry out
the risk assessment. In addition, the protocol contains provisions related to identification of LMOs in
international trade.
If a dispute is brought to the WTO, the panel can only judge compliance with WTO Agreements. In doing
so the Cartagena Protocol would presumably be taken into account as a relevant international treaty.
The relationship of the protocol with the SPS Agreement and other international agreements is not
clear.
The Cartagena protocol will enter into force ninety days after it has been ratified by at least fifty
countries.
Bangladesh: womens education cuts maternal, child mortality
Bangladesh is a classic case of a low- and middle-income country achieving the unachievable which
many others failed to. It reduced its maternal mortality by 66 per cent between 1990 and 2010; the
reduction was 40 per cent between 2001 and 2010 alone.
These were achieved by lowering the maternal mortality rate (the number of maternal deaths per
100,000 live births) from 574 to 194 during the period 1990 to 2010. The reduction was substantial even
in a short span of eight years (1990 to 1998) 574 to 322 per 100,000 live births. As per the 2012 WHO
estimates, the average annual rate of decrease was 5.9 per cent during the period 1990 to 2010, which
is more than the Millennium Development Goal 5 target of 5.5 per cent or more.
What is more surprising is that the reduction in MMR (maternal deaths per 100,000 live births) was
almost the same in both the urban and rural areas.
At the current rate of (MMR) reduction, Bangladesh is well on its way to reaching the MDG 5 target of
143 per 100,000 live births this year a year ahead of schedule. India too reduced maternal mortality
by 65 per cent from 569 to 190 per 100,000 live births between 1990 and 2013.
Yet, with only 4.5 per cent annual reduction in MMR, India is bound to miss the MDG 5 target of 5.5 per
cent or more decrease rate before 2015.
So how did Bangladesh, one of the poorest countries in the world with the highest population density
and where 75 per cent of the population lives in rural areas, achieve it? Its a difficult question to
answer. Several different things happened and they were interlinked, said Prof. Shams El Arifeen,
Centre for Children and Adolescent Health, ICDDR, B, Shaheed Tajuddin Ahmed Sharani, Dhaka.
If you were to highlight the factors, the status and value of women have improved. They are more
educated and have access to finance. Discrimination against women has come down... there is quite a
bit of evidence of that. Education has in turn increased womens willingness and ability to seek health
care. Education for women in the 15-24 years age group is particularly important... there is a revolution
happening with 80 per cent literacy in women. It is the time when they are starting their reproductive
life and having families and babies. A big factor is that the government is consistent in encouraging
education regardless of which political party is in power, he explained.
In villages can see more girls are educated compared with boys. One of the biggest benefits of
education is seen in reduced fertility. Each individual is replacing himself. Every couple produces no
more than two children. I couldnt have imagined this 20 years ago, he pointed out. The family planning
norm has changed. Couples used to have more children but that norm has changed. Most couples have
2 or less children. With increased use of contraceptives, fertility rate reduced by 0.7 child per women.
On average, the fertility is currently 2.3. The desired fertility is 1.6. That gap can be reduced by reducing
fertility, he said. Besides reduced fertility, one third to one half of women who deliver are first time
mothers. Twenty years ago, each couple would have had five children, Prof. Arifeen said.
It is known that mothers have a greater risk of dying when they have greater parity. So we dont see
high risk deliveries happening now. There are fewer chances of maternal mortality.
There is a shift from high parity high risk to low risk low parity, he noted. According to a paper
published today (June 30) in The Lancet (Prof. Arifeen is the first author), the fertility reduction led to
MMR reduction through two mechanisms. While there was 21 per cent deaths averted through
reduction in the number of births, a shift towards more younger women (aged 20-34 years) and those
with fewer children delivering babies contributed an additional seven per cent reduction in MMR.
It is a valid, nationally-representative household survey-based statistical evidence of progress towards
MDG 5, the journal notes. This is just one of the many factors that differentiate Bangladesh from India.
The first survey in 2001 included 100,000 households and the second in 2010 covered 174,000
households. Bangladesh witnessed a 40 per cent reduction in maternal mortality during the period the
2000 and 2010. A three-fold increase in deliveries by medically trained healthcare providers was one of
the important factors; deliveries attended by midwifery were, however, low (3 per cent).
While there has been an improved access to and use of health facilities, most often people turn to the
private sector. There has been only a fair bit of investment in the public health sector. The private
sector is more expensive, Prof. Arifeen admits.
The problem is that the ultra-poor dont benefit. So have to worry *about+ how to provide help to that
stratum. We definitely need to provide affordable care to everybody. He does see the Indian model of
more public care spending as an advantage to the socioeconomically backward class. There is a lot to
learn from Indias experience, he admitted. We are talking about universal health coverage.
Affordable service is a part of health coverage. We must provide some sort of safety net for the poor.
Plastic waste costs $13 billion worth of damages a year to marine ecosystems
Every year plastic waste costs marine ecosystems $13 billion in damages, says a report released recently
by the United Nations Environment Programme (UNEP).
The estimated 10-20 million tonnes of plastic waste that finds its way into oceans, smothers coral reefs,
routinely entangles marine wildlife, and more insidiously, degrades into microplastics that transfer
toxins into the food chain.
Microplastics (or plastic particles of 5mm diameter or less) are ingested by creatures ranging from sea
birds to mussels, said marine biologist and UNEP chief scientist Jacqueline McGlade at a press
conference at the United Nations Environment Assembly (UNEA) in Nairobi.
Microplastics form plastispheres that harbour thriving communities of dangerous microbes and also
absorb and transfer heavy metals such as mercury across vast distances through the ocean.
The report titled Valuing Plastic presents a business case for plastic-intensive companies, and
recommends that companies monitor plastic use, disclose their results and increase resource efficiency
and recycling.
Plastic toys, athletic goods, and household durable goods sectors use the largest amount of plastic in
their products while food companies, soft drinks and the pharmaceutical industry are the biggest users
of plastic in their packaging.
A growing source of microplastics is the cosmetic and personal care industry that has introduced plastic
particles of 5mm diameter or less in products such as toothpastes and showergels, says the report.
Asia faces the highest environmental costs from plastic pollution because of the higher pollution
intensity levels of manufacturing and a lack of adequate waste management facilities.
Companies must consider their plastic footprint just as they do their carbon footprint, said Andrew
Russell, director of Plastic Disclosure Project that was part of the research.
However, consumer goods companies have a poor track record of disclosing their plastic use, the report
finds. Of 100 companies assessed, less than half reported any data relevant to plastic.
India ratifies Marrakesh Treaty for visually impaired
India has become the first country to ratify the Marrakesh Treaty to facilitate access to published works
for persons who are visually impaired, or otherwise print disabled. The Treaty was adopted by 79
member countries of the World Intellectual Property Organisation (WIPO) on June 27, 2013, and India
ratified it on June 24 this year.
India handed over the Instrument of Ratification to WIPO at the 28th session of the Standing Committee
on Copyright and Related Rights in Geneva.
The Marrakesh Treaty will come into force once 20 countries ratify it. The treaty requires signatories to
adopt national law provisions that facilitate the availability of published works in formats like Braille that
are accessible to the blind and allow their exchange across borders by organisations working for the
visually impaired.
The treaty will facilitate import of accessible format copies from the member states by the Indian
authorised entities such as educational institutions, libraries and other institutions working for the
benefit of the visually impaired. This will also facilitate translation of imported accessible format copies
and export of accessible format copies in Indian languages.
OCD over SEZs
Every government that has come to power since the late 1990s has looked, quite sincerely, for a way to
clear the red tape that entangles businesses in India. Mostly, these regimes search for a single Big Bang
solution that will someday, somehow enable the country to awake to a new dawn of economic
prosperity. Since the 2000s, this desire has resulted in something akin to an obsessive compulsive
disorder, orOCD, over special economic zones (SEZs) in all its variations - export processing zones;
export-oriented units; industrial parks; and so on.
Given the renewed excitement over the prospect of Chinese companies investing in industrial parks in
India following Commerce Minister Nirmala Sitharaman's visit to China, the current regime appears to
have caught this syndrome from its predecessor. Indeed the idea was first floated byManmohan
Singh late last year. The logic was simple, given China's awe-inspiring record with its own special
economic zones.
But Dr Singh's proposal was in the nature of a last hurrah, since the last government's attempts to
develop SEZs via a 2005 Act has patently yielded less than satisfactory results. And that Act was
essentially the United Progressive Alliance-I's attempt to improve on a scheme offered by its
predecessor, the Atal Bihari Vajpayee-led National Democratic Alliance.
Till 2013, the 170-odd SEZs operational in India apparently generated direct employment for roughly
1,019,146 people and accounted for under a third of India's total exports, according to commerce
ministry data. This is hardly the stuff of revolutionary change, given that SEZs were expected to have
generated 1,743,530 additional jobs by 2009. In any case, there is ample evidence of growing
disenchantment with SEZs. Till March last year, the Board of Approval had received 54 requests for
denotification.
Analysts have offered many reasons for why the SEZ concept has not worked - tax imposts (such as the
minimum alternate tax and the dividend distribution tax), stringent laws for organised labour, the
economic meltdown, lack of skilled labour. Note that these reasons figure among the usual suspects
when it comes to doing business in India in general.
So even as Raisina Hill displays a touching faith in the marvellous feats that the Chinese are expected to
achieve via industrial parks, it is a fair bet that the initiative will go the way of similar proposals. The
biggest reason has to do with an issue that has plagued Indian business since Mamata Banerjee so
dramatically shot to power over a chemical export hub in Nandigram and the Tata Nano project in
Singur: land.
The export miracle that made China the world's second largest economy is based mainly on just six
economic zones strategically located along the coast so that manufacture and transport operated
seamlessly. The largest of them, the famous Shenzhen, covers 49,300 hectares. That kind of scale, so
vital to manufacturing success, is simply not replicable in India. Some SEZs in India are as tiny as 10
hectares. The largest proposed SEZ in India in Raigad district of Maharashtra was just 14,000 hectares,
and it was eventually scrapped owing to problems with land acquisition.
True, the government is considering some sensible adjustments to the recently passed land acquisition
laws to make them more business-friendly. But these are unlikely to change the position significantly in
most states, which are the critical drivers of the success of SEZs. The real issue here is what Indians of a
certain persuasion like to package as our "demographic dividend". It actually remains India's biggest
problem and explains why SEZs in any form are unlikely to work. In a country with the world's highest
population density, private companies continually struggle to acquire even medium-sized tracts of land
for industrial projects. If the government struggles a little less, it is only because local land losers trust it
to deliver compensation; they are less trusting of the private sector.
So why, despite the evidence to the contrary, does the SEZ concept continue to exercise its allure over
policymakers across party lines? The reason is that it essentially offers investors the glittering mirage of
a Non-India: a haven of fast-track approvals, tax breaks, flawless infrastructure and minimal labour laws
- all the things the Chinese manage to achieve.
Like the multiple "single windows" that successive governments open to put Indian and foreign
investment on the fast track - the Foreign Investment Promotion Board, special cells within the Prime
Minister's Office - the manifold SEZ policies are a reflection of the collective failure of the Centre and the
states. It is a lazy alternative to the durable institutional and cultural reform sorely needed at every level
of governance to make the whole of India an SEZ.

India ratifies Marrakesh Treaty for visually impaired
India has become the first country to ratify the Marrakesh Treaty to facilitate access to published works
for persons who are visually impaired, or otherwise print disabled. The Treaty was adopted by 79
member countries of the World Intellectual Property Organisation (WIPO) on June 27, 2013, and India
ratified it on June 24 this year.
India handed over the Instrument of Ratification to WIPO at the 28th session of the Standing Committee
on Copyright and Related Rights in Geneva.
The Marrakesh Treaty will come into force once 20 countries ratify it. The treaty requires signatories to
adopt national law provisions that facilitate the availability of published works in formats like Braille that
are accessible to the blind and allow their exchange across borders by organisations working for the
visually impaired.
The treaty will facilitate import of accessible format copies from the member states by the Indian
authorised entities such as educational institutions, libraries and other institutions working for the
benefit of the visually impaired. This will also facilitate translation of imported accessible format copies
and export of accessible format copies in Indian languages.
Most unnatural deaths caused by road accidents, suicides: data
Road accidents are the biggest non-disease killers of men in the country and suicides the biggest killers
of women, shows an analysis of National Crime Records Bureau data for 2013.
The NCRB data is a compilation of all deaths reported to the police in that year. The vast majority of
deaths in the country, however, are on account of diseases, which the NCRB does not count. Of the 95
lakh annual deaths in the country in 2013, only 5.7 lakh people died of unnatural reasons such as
murder, natural disaster, accident and suicide.
Road accidents killed over 1.17 lakh men in 2013, more than the number killed by the next two biggest
causes of unnatural deaths suicide and murder put together. Train accidents and drowning round
off the top five causes of unnatural deaths for men.
For women, however, suicides are the biggest cause of unnatural deaths, killing over 44,000 annually.
Last year, an international study led by the Institute for Health Metrics and Evaluation found that suicide
had become the leading cause of death in women aged 15-49 in India, ahead of maternal disorders
related to child birth, the historic big killer of women in developing countries. Road accidents come next
killing over 20,000 women annually, followed by fire, poisoning and murder.
These causes have a lot to do with occupational status in India. The bulk of travel for work is by men,
and the road and rail accident statistics reflect that, P. Arokiasamy, professor in the department of
Development Studies at the International Institute of Population Studies and expert on fertility and
mortality, told The Hindu . Similarly for women, fire whether accidents in the kitchen or for mala fide
reasons is a major cause of death, Dr. Arokiasamy said.
Accidents are a major cause of death among younger adults, but for those 60 and above, non-
communicable diseases are the biggest cause of deaths, he said. Uttar Pradesh, Maharashtra and Tamil
Nadu account for a third of all road accidents. Family problems are the biggest official cause of
suicides for both men and women.
Centre keen on bringing broadband connectivity to entire rural India
In steering Indias growth in the field of Information and Communication Technology, the newly-elected
government at the Centre will focus on two major milestones: broadband connectivity across the length
and breadth of rural India and electronics manufacturing.
In his maiden interaction with chief executive officers and decision-makers in the software industry,
Union Minister for Communications and Information Technology Ravi Shankar Prasad asked why the
Indian industry has been a laggard when it comes to manufacturing.
Electronics manufacturing, he said, was a priority for the government and he sought feedback on what
can be done to incentivise Indian industry to get into manufacturing. I understand there is a duty
structure issue, and we are trying to address it, but that cannot be the only reason the sector did not
grow, he said.
He pointed out that products with simple elementary technologies, such as set-top boxes, were also
being imported.
On the semiconductor fabrication, Mr. Prasad said that he has spoken to two people who are setting up
two semiconductor wafer fabrication manufacturing facilities in the country.
I have asked them to do it on a fast-track basis. I realise that once a fabrication facility is established,
India is going to expand enormously in everything from chip design to manufacturing, he said and
added that the government was looking at creating STPI-like structure to further incentivise this sector.
Mr. Prasad was speaking at a NASSCOM-organised meet that he called an IT Panchayat, where he
heard the whos who of the IT industry speak on issues regulatory, trade and others being faced by
the sector.
The participants included Wipro Ltd. Chairman Azim Premji, Microsoft India Chairman Bhaskar Pramanik
and Mindtree Chief Executive Officer K.K. Natarajan.
Representatives from mid-size companies and the start-ups world addressed the Minister on issues
ranging from tax structures and regulatory hurdles that are perceived as hindering business to the skills
gap when it comes to new technologies.
Mr. Prasad said that the Prime Ministers roadmap for expanding the broadband network came with
strict deadlines. The Prime Minister, he said, wanted 50,000 villages connected by broadband by end of
this year and had set a target of adding one lakh villages each every year until all of rural India was
covered.
In addition, he wanted the Indian industry to focus on developing e-education and e-healthcare
products, that will help spur a demand for broadband.
Expanding IT
Mr. Prasad said that the Prime Minister was keen on taking the IT story to yet untapped areas such as
the east and Northeast. The Northeast has a large English-speaking talent pool, why not promote BPOs
there? We are looking at what we can do to take IT and BPOs beyond the Bangalore-Hyderabad-
Mumbai-Pune circles, and to tier-II cities, he said.
Water security
Charge end-users and create more storage structures
Food and energy security are often discussed as goals of critical importance for the Union government.
But water security is equally vital - and as gravely endangered. Water is as critical for some key
industries, for hydropower production, for freight movement - not to mention for agriculture and
households. The worry is that the current scenario, in which national water resources are mismanaged
and used indiscriminately, may render India water-scarce much sooner than anticipated earlier.
The worst victims of increasing water stress are the cities, many of which are already facing an acute
water crisis. A recent study by the Hyderabad-basedNational Geophysical Research Institute has
predicted that several large cities and their satellite towns will run out of locally available water,
including groundwater, in the next few years. Hyderabad may be the first to go dry, followed by Delhi
and Chennai, among others. An earlier World Bank-sponsored study ranked Chennai and Delhi as the
most vulnerable cities in Asia in terms of daily water availability. The unrealistic pricing of water and its
imprudent and wasteful use in the absence of regulatory mechanisms are the chief reasons for this
crisis. Several previous finance commissions have recommended that water rates recover not only
operational and management costs, but also part of the investment in water projects. Even so, most
states have not revised prices for decades; some others have done so reluctantly and inadequately.
The National Water Policy, 2002, said water rates should make the users realise its scarcity value. This
pointed phraseology was replaced in the 2012 version of the policy with the recommendation that
water be treated as an "economic good". That policy did call for curtailing subsidies on power for
running water pumps - again, not fully implemented.
Regrettably, the bulk of the rainwater that India receives every year - especially in the monsoonseason,
which accounts for 75-80 per cent of total precipitation - is allowed to run off wastefully to the seas.
Hydrology experts maintain that at least 16 per cent of it should be guided to subsurface water reserves.
However, at present, less than half of that amount is so preserved. Some cities have ordered large
building complexes to install rainwater harvesting systems. Compliance is dismal. Worse, civic
authorities are themselves not serious about rainwater conservation. Much of the water falling on
public lands is allowed to run off, choking the drains and leading to waterlogged roads.
The solution to the impending water emergency, therefore, lies in conserving water in underground
aquifers, as well as in surface storage structures, such as ponds, lakes and reservoirs. Many countries
have created adequate storage capacity through dams to cater to their needs over two or more years. In
India, on the other hand, the total water stocking capacity in its 85 main reservoirs is only about 253
billion cubic metres, hardly sufficient to meet a year's requirement. Unless conservation and storage are
enhanced and water is priced adequately to deter its reckless use, it may be difficult to make the
country water-secure.
Doha Round
After having got developing and least developed countries to assent to a binding trade facilitation
agreement at the 2013 ministerial meeting of the World Trade Organisation in Bali on the understanding
that their bread-and-butter issues in agriculture and development would be addressed in the Doha
Round negotiations, the US and the European Union do not seem to be in a mood to take things further.
The post-Bali narrative indicates that a new agenda that does little to address distortions in the global
trading system is about to be foisted on members when the Doha Round resumes.
D Ravi Kanth (dravi_kanth@hotmail.com) is a writer based in Geneva reporting on the multilateral
organisations headquartered in Switzerland.
It was a moment of triumph when 159 members of the World Trade Organisation (WTO) concluded an
agreement at the ninth ministerial meeting in Bali, Indonesia, six months ago. After an 18-year
drought, said Roberto Carvalho de Azevedo, the then recently-elected director general of the trade
body from Brazil, Bali proved that the WTO can deliver negotiated outcomes. A binding agreement on
trade facilitation (TF), along with several best endeavour outcomes, provided a glimmer of hope that the
paralysed Doha Development Agenda (DDA) negotiations would come back to life.
That the TF agreement is a payment to the United States (US), the European Union (EU) and other
exporting countries for returning to the Doha negotiating table is an open secret. The developing and
the least-developed countries, which remained divided in the run-up to the Bali meeting, agreed to TF
on the assumption that their bread-and-butter issues in agriculture and development would be
addressed. The weaker members of the global trading system were promised that they will receive
substantial technical and financial assistance to implement ambitious TF commitments for tearing down
so-called red tape and bureaucratic hurdles.
More importantly, it aimed at harmonising customs procedures and rules in the industrialised and
developing countries, such as China and Korea. At one go, the new TF agreement will provide market
access for companies such as Apple, General Electric, Caterpillar, UPS, Pfizer, Samsung, Sony, Ericsson,
ebay , Hyundai, Huawei, and Lenovo, among others, to multiply their exports to the poorest countries. It
is a different issue whether a majority of the people in sub-Saharan Africa or south Asia or other
developing countries are endowed with the resources to use these gadgets. It is like a Marie Antoinette
paradox of letting the poor consume high-end gadgets when they are impoverished. Several estimates
of benefits, ranging from $64 billion to $1 trillion, were bandied about to sell the importance of the TF
agreement.
Bali Promises
In an attempt to balance what some commentators called the fictitious Bali package, the developing and
poor countries were promised several cosmetic best endeavour outcomes in agriculture and
development. In agriculture, they include general services (such as land rehabilitation, soil conservation
and resource management, drought management and flood control, rural employment programmes),
public stockholding for food security purposes, an understanding on tariff rate quota administration,
export competition, and some progress in phasing out trade-distorting cotton subsidies (provided
largely by the US) in agriculture. The developmental outcomes cover non-binding outcomes on
preferential rules of origin for the export of industrial goods by the poorest countries; an
operationalisation of waiver on preferential treatment to services and service suppliers in least
developed countries (LDCs); duty-free and quota-free market access for LDCs; and a monitoring
mechanism for special and differential treatment flexibilities.
Despite the asymmetrical and unequal Bali package, the developing and least developed countries
joined the consensus as they were assured that the unfinished business in the DDA negotiations,
particularly in agriculture and other areas, would be taken up on a war footing. We instruct the Trade
Negotiations Committee to prepare within the next 12 months a clearly defined work programme on the
remaining Doha Development Agenda, the Bali Declaration stated. This will build on the decisions
taken at this Ministerial Conference, particularly on agriculture, development and LDC issues, as well as
other issues in the Doha mandate that are central to concluding the round. The developing and least-
developed countries were promised that where legally binding outcomes could not be achieved they
will be prioritised. It meant very clearly that the best endeavour outcomes to developing country issues
arrived at in Bali would be converted to binding commitments on a priority basis. This is the compromise
that developing countries made at Bali to set the ball rolling and avoid being called spoilsports by the
dominant countries in the WTO.
Reality Check
More than 180 days after the conclusion of the Bali meeting, the time has come for a reality check on
whether the Bali best endeavour outcomes and the new TF agreement have progressed on an equal
footing. Also, whether the speed and the focused attention on implementing the TF roadmap is
demonstrated in other areas such as agriculture, particularly cotton subsidies, where the poorest west
African countries continue to suffer. What about the progress on the food security text on which India
waged a grim battle? Is there any forward movement on the developmental benefits promised to the
poorest countries? Are the landmarks of the Doha mandate, which include the 2001 Doha agenda, the
July 2004 framework agreement, the 2005 Hong Kong Ministerial Declaration, and the December 2008
draft modalities in agriculture and industrial goods, the basis for formulating the post-Bali work
programme to conclude the Doha negotiations? Have the developing and least developed countries,
including China, India, Brazil, South Africa and Argentina, closed ranks to put up a common stand in the
face of a combined push from the industrialised countries to give short shrift to the 2008 draft texts?
These are some issues on which the emerging narrative from the Centre William Rappard, the WTO
headquarters in Geneva, is anything but encouraging. Although there is considerable activity at various
levels, the progress so far has been only in one direction -- implementing the TF roadmap, while turning
a deaf ear to the issues raised by the developing and poor countries. A constant refrain from the
director general is first delivering on TF by implementing the deadlines set out in the Bali agreement.
Otherwise, the DDA will soon turn to ashes if members choose to bring any linkage between TF and
other Bali issues. African countries are threatened with dire consequences if they create any hurdles in
implementing the TF roadmap, which includes drawing up the Protocol of Annexation and notifying the
Category A commitments that come into force once the agreement is ratified. Developing country
members are told, during closed-door meetings, not to doubt the intentions of the US and its
commitment to the Doha negotiations.
The African countries which remain aggrieved since the Bali meeting about the lack of balance in the
results have recently adopted a position that they would accept the TF agreement only on a provisional
basis. At a meeting of African trade ministers in Addis Ababa in April 2014, they felt the Bali outcomes
were not the most optimal decisions in terms of African interests, according to the African Trade
Union commissioner, Fatima Acyl. We have to reflect and learn from the lessons of Bali on how we can
ensure that our interests and priorities are adequately addressed in the post-Bali negotiations, she said.
The African ministers instructed their negotiators to formally submit language on the Protocol of
Amendmentthe legal instrument that will enter the TF Agreement into force at the WTOto the
effect that the Trade Facilitation agreement will be provisionally implemented and in completion of the
entire Doha Round of negotiation.
The African countries have cited paragraph 47 of the Doha Ministerial Declaration for their negotiating
position to adopt TF on a provisional basis. That paragraph says,
With the exception of the improvements and clarifications of the Dispute Settlement Understanding, the
conduct, conclusion and entry into force of the outcome of the negotiations shall be treated as parts of
a single undertaking. However, agreements reached at an early stage may be implemented on a
provisional or a definitive basis. Early agreements shall be taken into account in assessing the overall
balance of the negotiations.
There is a hue and cry about the African decision as if it has killed the TF agreement. After all, the TF and
other issues were plucked out of the Doha agenda after the eighth ministerial meeting (under paragraph
47) on the ground that these were low-hanging fruit ready for consummation. Even though the draft TF
text contained more than 800 square brackets in 2012, it was rushed through because of a concerted
push by the US and its allies in total disregard to other issues in agriculture and industrial goods.
Since the African countries have adopted a common position seeking provisional agreement on TF, all
hell has broken loose at the WTO. Dont worry, nobody is going to walk away with your money, the
African countries were told at a retreat in Annecy, France, three months ago.
Ignoring 2008 Modalities
When it comes to agriculture, the dominant theme is how to give short shrift to what is called Rev 4 or
the December 2008 Fourth Revised draft modalities in agriculture as they are not acceptable to the US
and the EU. Indeed, the director generals statements about the Rev 4 text have caused grave doubts as
to where he stands on this central issue. If any of you insists that those *2008 draft modality texts+ are
cast in stone and unalterable, then you have made a choice; a choice that irreparably condemns our
efforts to failure, Azevedo told members at a trade negotiations committee meeting on 7 April 2014.
We therefore must resume our task of finding the balance and the convergence that would enable
progress towards the conclusion of the Round. This statement from the director general is neither here
nor there about how to proceed on drawing up the post-Bali work programme on agriculture.
It is inexplicable how the director general arrived at this position on Rev 4 because in the past he said
assiduously that they represented a delicate balance and the basis for negotiations. Two general
principles have guided Brazil and the G-20s *Group of Twenty+ positions in the substantive discussions
on agriculture, Azevedo wrote with Braz Baracuhy in an article titled Agriculture -- At the Centre of
DDA Negotiations. (in Reflections from the Frontline: Developing Country Negotiations in the WTO,
CUTS, 2011):
The December 2008 draft modalities are the basis for negotiations and represent the end-game in terms
of the landing zones of ambition. Any marginal adjustments in the level of ambition of those texts may
be assessed only in the context of the overall balance of trade-offs, bearing in mind that agriculture is
the engine of the Round....
The draft modalities embody a delicate balance achieved after 10 years of negotiations. This equilibrium
cannot be ignored or upset, or we will need readjustments of the entire package with horizontal
repercussions. Such adjustments cannot entail additional unilateral concessions from developing
countries.
But the US has made up its mind in agriculture and other areas of the Doha negotiations for some time
now that it will under no circumstances accept the 2008 texts because of the change in realities in which
China, India, and other countries have emerged as major exporters over the last five years. However,
Washington wants market access in agriculture, industrial goods, and services in the emerging countries
over and above what was decided in the draft 2008 modalities. Sadly, the Cairns Group led by Australia
and the EU, which used to be a counterweight to the US in the previous trade negotiations, have joined
forces with the US despite their differing trade agendas that fail to correspond to the demands raised by
Washington.
Disappearing G20
Another major development is the sudden disappearance of the G-20 farm coalition led by Brazil in
setting the agriculture agenda since last year. After all, it was the G-20 that played a major role after the
ignominious Cancun ministerial meeting where trade-distorting subsidies in cotton and other farm
products came to centre stage. The conspicuous silence of the G-20 in recent months has left the
agriculture negotiating ground wide open to trans-Atlantic trade majors to score goals.
The post-Bali narrative came into the open at a recent retreat convened by Switzerland. In a day-long
event held outside Geneva to discuss what each member is willing to accept and what each is willing
give, the US set the stage by declaring that the 2008 draft texts were unacceptable because their
domestic constituencies did not see much merit in them. The US, then, went on to pound India and
China for causing all the problems in agriculture by providing farm subsidies and denying real market
access. The EU and other members at the retreat joined the US in declaring that the 2008 texts were
irrelevant because of changed realities. Indeed, the negotiating tactic adopted by the big boys in the
recent past is one based on naked belligerence, all aimed at the so-called emerging countries such as
India, China, South Africa, Brazil, Indonesia, and Argentina, among others.
While India remained largely silent at the retreat without defending its interests, South Africa and China
told the big boys how they pocketed all the gains in agriculture by securing a range of flexibilities
without any payment. Since the election of Azevedo to the post of director general, Brazil has remained
more or less silent on issues on which it once used to strongly articulate a common developing country
position. In short, the ground is now set for embarking on a narrative set by the big boys, who have
already tasted success at Bali, with active collaboration from the Centre William Rappard.
That narrative has little to do with the evolving Doha mandates from 2001 to 2008. And the salient
features of this new narrative include tariff-reduction commitments based on a simple formula in
agriculture; turning a blind eye to reforming trade-distorting farm subsidies; a simple formula for tariff
cuts with a request-and-offer approach for tariff elimination in some sectors; and pursuing global value
chains by liberalising trade in core services in areas such as banking, asset management, insurance,
logistics, multi-brand retail, courier services, telecommunications, and information and communication
technology. Once the core elements of the TF agreement are stitched by the end of July, a new agenda
will be foisted in September when members return from their summer break.
It will ensure that the Doha Round is successfully completed by shrinking the DDA to vanishing point and
declaring a grand victory. It will be a round that does absolutely nothing to the grave distortions in the
global trading system, yet will claim cosmetic results. Hey presto, you have done something, but in
reality nothing. An emperor without clothes will once again rule the roost at the WTO.
The cost of energy
Fossil fuels overall - and oil from West Asia in particular - will be no less important going
forward
With its large population, low per capita income and energyconsumption, future economic growth and
limited domestic resources, India will be a central player in global energy over the next few decades. A
new special report by the Paris-based International Energy Agency (IEA) on the prospects and issues in
global energy investment till 2035 accordingly provides compelling reading for those interested in the
energy choices facing India, and the countrys place in the global energy landscape. Numbers provided
below from the report are in 2012 dollars. I should mention that my part of Shell seconds a staff
member to the group at the IEA (under their Chief Economist Fatih Birol) that has produced this report.
I will begin with the salient findings at the global level, before turning to the implications for India.
Before I do so, however, it is worth indicating what the IEA includes in its concept of investment in
energy. First of all, this is investment in capital expenditure (capex) and does not include associated
operational expenditure. The report defines capex as the creation or refurbishment of assets that
extract, transform or transport energy. This includes, inter alia, costs of engineering, procurement and
construction; of equipment and other material; labour costs; and ancillary costs, such as planning,
feasibility studies, external advisory services, the cost of land, and costs of licensing and approval,
including environmental approvals. By convention, these expenses are recorded in the year that the
project concerned is commissioned.
Secondly, the costs covered include all parts of the energy value chain, both upstream (the provision of
fuel) and downstream, including delivery of energy services to the final user. In addition, and more
ambitiously, the report also attempts to quantify capex toward improvements in energy efficiency,
presumably on the grounds that a barrel of oil saved is equivalent to one found. The measure used is
the amount that is spent to procure equipment that is more efficient than a baseline ... *reflecting+ the
additional amount that consumers have to pay for higher energy efficiency over the period to 2035.
Third, the projections of the IEA cited below are those that are consistent with their so-called New
Policies Scenario. The IEA also constructs a so-called 450 Scenario, which attempts to simulate the
investment trajectory that would be consistent with the international goal to limit long-term increase in
average global temperature to no more than two degrees Celsius when compared with the pre-
industrial era, but these results are not reported below.
Using these concepts and drawing on a wide range of sources, the IEA calculates that $1.6 trillion was
invested for the provision of energy for the worlds consumers in 2013, with an additional $130 billion
invested toward increased energy efficiency. These numbers may carry little meaning for the non-
specialist reader, so it may be worth putting them in context. $1.6 trillion is just slightly lower than the
size of Indias current gross domestic product (GDP) measured at market prices and exchange rates. Put
another way, world GDP is currently estimated at around $72 trillion; so energy investment accounts for
about two per cent of world GDP, provided that the IEAs numbers are roughly equal to measures of
value-added used in GDP. Of this figure of $1.6 trillion in energy capex, 70 per cent is connected in some
way to the fossil fuel chain, from extraction to transformation (refining), or the use of fossil energy in
power generation; the remaining 30 per cent is evenly divided between non-fossil sources (renewables,
nuclear power and biofuels), and electricity transmission and distribution. As the report delicately
observes, the estimates do not show a clear diminishing trend in the share of investment going to fossil
fuels since 2000 despite a quadrupling of the volume of investment in non-fossil energy supply.
Against this background, what are the prospects for the period from 2014 till 2035? While the aggregate
figures ($40 trillion for energy supply and $8 trillion for energy efficiency) are of some interest, it is the
underlying detail that deserves greater attention. The first point to note is that two-thirds of this
investment is due to take place in emerging economies. Second, less than half of the $40 trillion goes to
meet growth in demand. The larger share is needed to offset declining production from existing oil and
gas fields, and to replace power plants and other assets that have reached the end of their productive
life. Third, investment in natural gas supply is globally well distributed; however, for oil incremental
demand is largely dependent on West Asia, as the supply from countries not members of the
Organization of the Petroleum Exporting Countries runs out of steam in the 2020s. The report estimates
that the investment needed to supply India and China with imported oil and gas is of the order of $2
trillion over the next two decades. Fourth, even by the end of the period, the share of fossil fuels in
primary energy demand is still 76 per cent of the total, even though low-carbon sources account for as
much as 45 per cent of the growth in demand over this period.
Within this overall picture, the prospects for the electricity system are also challenging not only in the
developing world but also in Europe. The report carries a special section on Indias power sector, noting
both the impressive progress made in new generation capacity (up fourfold since 2000) and the progress
in renewables. But the Achilles heel of the system remains inadequate cost recovery in distribution.
Owing to the unwillingness to sanction price increases, distribution utilities are incurring losses equal to
one quarter of their average cost of supply; the situation has been getting worse, not better, in recent
years. Surprisingly, Europe has a similar affliction: the wholesale price for electricity is too low, at
present, to provide incentives for the required investment in new thermal plants, despite widespread
public concern about high prices for end-users.
What are the implications for India? First, fossil energy will remain an important part of global energy
even as renewables grow in importance. Second, West Asia will remain crucial for global oil supplies,
with implications for diplomacy and energy security. Third, rapid electrification is one way of expanding
the range of Indias energy supply options. The new Union government will need to exercise
considerable ingenuity to reconcile incentives for investment with wider access, and will need to carry
the states with it.














ECONOMYS
Controlling rising prices
Both macro policies like monetary tightening by the RBI as well as commodity-specific measures
implemented by the government have to be used to deal with inflation
Onion prices more than doubled in the last two weeks and retail food inflation rose to 9.5 per cent in
May as against 8.64 per cent in April, giving the new government more reason to worry. As the urban
working class bears the brunt of the rising and fluctuating food prices, Finance Minister Arun Jaitley
quickly announced measures to stem the price rise of onions. These included fixing a minimum export
price (MEP) of U.S. $500 per MT, distributing onions through the Public Distribution System, and
advising State governments to delist fruits and vegetable from the Agricultural Produce Market
Committee (APMC) Act.
As much as these short-run measures are necessary, the problem is more deep-rooted. Several
interrelated determinants such as low agricultural productivity and yield, global price changes, scarcity
of resources such as land and water, domestic price policies such as Minimum Support Prices, and
stocking and trade policies (both international and domestic) have played a role in the increase of prices.
With increase in income there has been a decline in intake of wheat and rice, but an increase in demand
for foods of high value such as milk, fruits and vegetables, meat, egg and fish. The increase in income
has been generalised with MNREGA substantially increasing rural wages. Also, supply constraints such as
lack of proper storage and warehouse facilities, which have resulted in post-harvest losses to the tune of
30-60 per cent, have amplified the effects on prices, especially of perishable items. This is quite stark
given the mammoth stocking of food grains, especially in light of changing preferences away from
cereals. In the case of grains, the extravagant stocking policy works at cross purposes with limited
movement of grains in the market.
A long-term view
Food price inflation in India clearly underscores the need for understanding the heterogeneities across
food commodities. This knowledge could be important to inform macroeconomic policy. For example,
the assumption in standard macroeconomic models that changes in relative prices of food and fuel
represent supply shocks may not hold for many commodities as we see them right now. Further, with
a persistent upward trend in inflation, taking a long-term view rather than focusing only on recent
inflation episodes seems imperative. In all this, one thing that is reasonably clear is that it may not be
sufficient to identify the sources for high prices at a broad level. Both macro policies like monetary
tightening by the RBI as well as commodity-specific measures implemented by different branches of the
government (trade policies and domestic interventions in food markets) have to be used to deal with
inflation. The questions to ask are: Why have interest rate policies not been as effective as intended? Is
food demand interest rate sensitive? Do food prices lead to generalised price changes leading to
inflation as macroeconomists know it? Overall, combining both macro as well as micro perspectives may
be crucial to design policies to rein in inflation. Inflation in India demands the need for a Jaitley-Rajan
fellowship.
Remedial options
Faced with the current scenario, what are the remedial options? For one there seems to be little reason
to not liquidate excessive wheat and rice stocks. In distributing released stocks, the government should
think about an incentive overhaul along the lines of what was done in Chhattisgarh. The small State is a
leading example of a well-functioning PDS system where leakages have been checked because of
measures like colour coding of transport vehicles and raising the commission of PDS shopkeepers. Over
time, there must be a gradual movement toward a cash transfer system. This depends on development
of backend facilities such as bank outlets.
In food items with a high value, a case- by-case approach is needed. While onions could be facing a
problem of excessive hoarding due to expectations of inflation, in commodities like milk the cost push
might be playing a role. Dairy products such as oil cake and molasses are increasingly being diverted to
alternative uses or markets. Milk has been the prime driver of inflation for many years and though its
demand has been rising substantially (different estimates show that it is the food item with the highest
income elasticity), there are supply side issues that need to explored for finding the right policy mix.
Given the current governments paradigm of accepting short-term pains to incur long-term gains, it
should seize this opportunity of high food prices. Investing in the private sector in cold chain or
processing units needs to be encouraged. This will create rural jobs that are not farm-related, and create
more efficient value chains, giving a better deal to farmers and consumers alike. Over the long run,
streamlining wholesale markets under Agricultural Produce Market Committees, reducing limitations on
private-sector procurement and storage, and checking on double taxation in interstate movement, need
to be considered.
Finally, as a weak monsoon is being predicted, we must think of the long run. It is about time we gear up
toward climate-smart agriculture (drought-resistant crops, conservation agriculture, etc.) to increase
yields and income of farmers. This will increase farmers productivity while providing the much-needed
price stability to consumers. The promise of acche din for consumers and the agricultural industry need
not be a far cry.


RBI governor must realise that financial regulation reforms proposed by
FSLRC are necessary
RBI Governor Raghuram Rajans recent speech on the Financial Sector Legislative Reforms Commission
(FSLRC) started with kind words about it and how its reports influence will be felt for many years to
come. However, there are two areas where he has disagreements with it.
The first is on judicial review. He argues that a regulator fills in the gaps in laws, contracts and even
regulations. Not everything the regulator does can be proven in a court of law. He expresses concerns
about tribunals as they lack domain knowledge. He suggests that a healthy respect for the regulator
keeps participants in line.
Parliament passes laws. The RBI is a creature of the RBI Act. Under the rule of law, the RBI has absolutely
no discretion to do things that the RBI Act does not clearly specify in terms of its objectives and powers.
For example, if the RBI were to write a regulation forcing banks to not serve beef in their canteens, this
is illegal. It is illegal for the RBI to reach beyond the law and do things based on its own assessment of
what the gaps in laws are. The RBI is not Parliament.
Regulations are written by the RBI. So, if there is a feeling that there is a gap in the law, then it is up to
the RBI to plug it as long as its objective and the powers used to achieve the objective are specified in
the primary law.
Finally, on judicial review. The Constitution empowers courts to review the work of the legislature and
the executive. This is a healthy arrangement. All successful liberal democracies thrive on checks and
balances.
Courts routinely go into complex matters. For instance, there is far more intellectual complexity to a
biotechnology patent dispute than anything we see in finance. The answer to intellectual complexity is
to establish specialised tribunals that amass domain knowledge. This is what the FSLRC proposes.
Liberal democracy is not about a perfect executive interacting with a perfect legislature interacting with
a perfect judiciary. Liberal democracy has worked well because checks and balances deliver better
results when all three are imperfect. Each of the three wings gets better by grinding against the others.
The RBI and the courts are both imperfect. Imperfect judicial review will improve an imperfect RBI, and
vice versa. Over the last 20 years, judicial review by an imperfect Securities Appellate Tribunal has
strengthened an imperfect Sebi. The RBI has much catching up to do.
I am hostile to healthy respect for the regulator. At present, in India, what we have is a feudal
environment where regulators lord over practitioners, threaten them, extort from them, and so on.
Power corrupts and Indian finance is replete with examples of how things have gone wrong because of
respect for the regulator. Rajan should be championing the elimination of such misbehaviour.
The second area where Rajan has concerns is the financial regulatory architecture proposed by the
FSLRC, which reduces the RBIs turf. The first principle of natural justice is nemo iudex in causa sua do
not judge your own cause. Rajan should not speak on the size of the RBIs turf, just as Sebi Chairman
U.K. Sinha does not speak about the size of Sebis turf.
Within the FSLRC, there were three persons connected with the RBI: Y.H. Malegam (who was a member
of the RBI board at the time), K.J. Udeshi (former deputy governor) and P.J. Nayak (practitioner in an
industry regulated by the RBI). The RBIs point of view on its turf was vigorously represented within the
FSLRC. Justice B.N. Srikrishna heard all views and hammered out a working compromise.
There are good reasons why the regulation of payments and banking should not be the RBIs job. But the
FSLRC recommended that the RBI do this over and above setting monetary policy. This outcome reflects
intense debate and discussion between people who think a lot about these things.
Rajan says that different financial regulatory set-ups have worked in different countries and, therefore,
no one set-up is correct for all places. This does not mean that Indias present financial regulatory
architecture is correct for it. For the last 20 years, reformers in India have looked towards its backyard
and thought about what works and what does not. For example, its easy to make an abstract argument
that commodity futures should be regulated by the department of consumer affairs after all, this
worked well in the US with the department of agriculture. But in India, reformers advocated moving this
function to Sebi 11 years ago. The events at NSEL have proved the reformers right.
Finally, Rajan says we should not establish a clean, coherent, modern law that replaces the existing mess
of older laws. We have spent 20 years making minor tweaks, and this hasnt worked. The economy is
doubling every decade or less, and the demands on the financial system are rising rapidly. Scandals,
mistreatment of consumers, the crisis of infrastructure financing, the failure of the bond market, bad
RBI regulations, etc, all point towards the fact that the current system is broken and that we should fix
it.
Countries like the UK, Australia, etc rewrite their financial laws and redesign their regulatory
architecture every 30-40 years. In India, we have never done this, even though we are changing at a
faster pace. India requires a big move. As with every big move, there is need for great caution and this
kind of public debate.
Weeding out obsolete and conflicting laws should be made a national objective to be followed with
vigour in a number of areas, not just in finance. The Financial Sector Legislative Reforms Commission
(FSLRC) made an early start on this and offers many useful suggestions. The RBI has recently announced
timelines for regulatory approvals and delivery of services following these suggestions. The concept of
deemed approval, if timelines are not met, should also be adopted.
The underlying FSLRC philosophy seems to be to jettison the past and start afresh, whether in laws or
regulatory structure. But this limits its usefulness since past learning is lost, with both the domestic
and international contexts ignored to building for a future that comes from nowhere.
Moreover, principles must be above reproach in a principles-based approach. As RBI governor Raghuram
Rajan has recently argued, the regulatory division proposed, with all trading to go to a new unified
financial agency, is arbitrary since it will split regulation of debt products and of credit. The government
securities market could be set back, and the conduct of monetary policy harmed.
Principles such as competitive neutrality in treatment, for example of domestic and foreign firms, and
consumer protection are unexceptional. But qualifications tend to privilege firms by requiring, for
instance, that consumers take adequate responsibility for their decisions, while financial innovation,
efficiency, access and competition are not compromised. Any obligation on a firm is expected to be
consistent with the benefit expected from such obligation.
The FSLRC views a financial crisis as due to human errors more than behavioural aberrations, so that
micro-prudential regulation is adequate to safeguard firms. Systemic spillovers are thought to occur
from failures of large systematically important financial institutions (SIFIs). They are to be made the
responsibility of the Financial Stability and Development Council (FSDC).
But behavioural aspects are important. Too much risk is taken in good times without internalising
negative spillovers on others. These risky strategies are widely copied, so SIFIs are not the only potential
threats. Therefore, micro-prudential regulations, applying at the firm level, should work in tandem with
macro-prudential regulation. Information acquired during the first helps in the design and timely
application of the second. The FSLRCs proposed restructuring would result in a serious loss of
information and hinder regulation.
The experience of the global financial crisis made most countries give their central banks more
responsibility for financial stability. The UK had shifted to a financial-sector funded unified financial
regulator, focused on supporting innovation. The FSLRC wants to follow this experiment. But the UK
found it worked poorly and returned powers to an independent Bank of England. The FSLRC is not able
to establish the case for moving away from the current system, in which the RBI could implement
innovative protective macro-prudential policies, to a design that proved unstable elsewhere.
In the financial system, a delicate balance has to be maintained between conflicting interests. The FSLRC
seeks to tilt the balance towards financial firms, political representatives and the legal community. This
is dangerous because the first two have a short-run perspective. Since the latter has severe capacity
constraints in India, the poor would remain unprotected while the rich would find avoiding regulation
easier.
It is in the short run that financial risks build up. For a long time after Independence, the RBI was forced
to help finance the governments development expenditure. It maintained financial stability by
squeezing the private sector. The measure of independence established with great difficulty by the
reforms should not be reversed.
Cash-starved and growth-hungry governments are often tempted to ease foreign borrowing. Again, this
is a soft short-term option that, without complementary domestic reforms, creates long-term risks. The
FSLRC wants the finance ministry to decide on inflows and the RBI on outflows. But international
agreements often make it difficult to restrict outflows of foreign capital, so the RBI will be asked to
ensure a stable balance of payments without the necessary instruments. The FSLRC also advocates a
monetary policy committee, with appointments made by the government, giving populist pressures an
entry.
Coordination is poor among Indian financial regulators. But the FSDC is better suited to improve these
aspects rather than enact macro-prudential policy, where timing is crucial. It can homogenise
compliance requirements to reduce transaction costs, introduce centralised reporting, and encourage
innovation. In a country of Indias size and complexity, some regulatory competition is healthier than an
error-prone, one size fits all, unified regulatory regime. Adequate democratic oversight can be imposed
through transparency and accountability to Parliament.
The simplification that the FSLRC promises is also illusory. Sector-specific laws are to be replaced by a
simpler principle-based unified financial code. This will guide regulators, who are to draft subordinate
regulation as required, but subject to judicial oversight. So the complexity of regulation does not go
away, but is simply pushed down to a messy process of appeals, even against rules and policy decisions.
Rajan correctly fears this will harm the exercise of regulatory judgement, which is essential when
financial contracts are incomplete and so cannot be proved in court.
The army of FSLRC lawyers would have been better employed in deleting obsolete laws to come up with
a modern simplified set, rather than pointing us to a system with absent laws and a messy architecture
to interpret doubtful principles.


The Insurance Amendment Bill must be passed urgently and without compromises
Honourable finance minister, as you prepare the economic agenda for the country, I take the liberty of
drawing your attention to the serious challenges the insurance industry is facing and the long-
pending Insurance Amendment Bill inParliament.
The insurance reforms of 2000 under the National Democratic Alliance government, enabling private
participation, significantly enhanced insurance coverage through 65 new private insurers and existing
government-owned companies. Regrettably, it has struggled over the last several years and requires
your immediate attention. It faces many challenges and calls for prompt corrective action to revitalise
this industry, which has immense strategic relevance, employment generation potential and a strong
multiplier effect.
India is woefully underinsured
For an economy nearing a GDP of $2 trillion, we have woefully low insurance penetration and density.
Only six per cent Indians have a reasonable insurance cover. Most small businesses, that are family-
owned, have little or no protection. For a country's balanced growth and development, protection of life
and productive assets is critical.
The insurance sector is capital starved
The Indian insurance industry has struggled due to the lack of domestic capital required for orderly
growth. The country's life insurance industry growth in the private sector has been negative in recent
years, leading to market consolidation.
According to Insurance Regulatory and Development Authority (Irda) estimates, India's insurance
industry needs $10-12 billion capital up to 2020. Indian companies have already invested close to $3.5
billion over the last 10 years. An increase in foreign direct investment (FDI) limit to 49 per cent will bring
in an estimated $3-4 billion in the near term, providing relief to a capital-starved sector.
The industry urgently needs incremental domestic and foreign capital. In addition to the importance of
enhancing the FDI cap limit, it is concurrently important to identify new sources of domestic capital. The
domestic institutional fund route provides stable long-term sources of capital. It takes away dependence
on domestic corporates that face capital constraints. It is crucial that regulators enable this dispensation
for seamless growth.
Many Indian joint venture (JV) partners have taken advantage of FDI restrictions, benefitting from
excessive guaranteed returns being provided by foreign partners on change of FDI cap. Consequently,
FDI restrictions are raising the cost of capital to industry, detrimental to policyholders' interests.
Insurance Amendment Bill must be passed urgently
The Insurance Amendment Bill has been languishing in the Rajya Sabha since 2008. There are high
expectations on the Bill being passed in its entirety in the next session of Parliament. Apart from the FDI
cap increase to 49 per cent in this Bill, it has several other significant amendments, imperative for robust
growth of the sector and effective regulation by Irda. The industry desperately needs a more
contemporary regulatory framework in line with current market conditions.
But must be passed without compromises
The Bill should be passed in its current form and not sidetracked by compromise approaches such as
limiting voting rights or restricting new investment to foreign institutional investors (FIIs) or increase in
FDI cap lifted sequentially in non-life, health and life companies or variations thereof. These disregard
ground realities and cause serious unintended consequences, sending confused signals to global insurers
and investor community:
FII vs FDI: Any proposal to increase foreign equity through the FII route to achieve 49 per cent, does not
align with the long-term nature of this business. Life companies take about 10 years to break even.
Under such circumstances and extremely volatile market environment, FDI is more prudent capital badly
needed for stable growth.
Fresh equity only: The proposal to increase the FDI limit to 49 per cent through the "fresh equity" route
is discriminatory. Many domestic sponsors are challenged to inject additional capital. Any constraints on
several domestic sponsors, bearing the ostensible burden of risk capital to sell their stake to partner
foreign insurers, will create severe limitations for free flow of FDI.
Limiting voting rights: The proposal to increase foreign ownership to 49 per cent but limiting their voting
rights to 26 per cent is totally inconsistent with the spirit of equity. The limitation is untenable and will
not elicit FDI.
Testing patience
Mr Minister, your predecessor in the United Progressive Alliance-I announced the government's intent
to raise the insurance FDI cap in Parliament over 10 years back. Foreign insurers have patiently awaited
the outcome of our democratic process of building political consensus. Many insurance JVs are facing
serious partner issues, resulting in limiting growth and eroding employee/policyholder confidence. A
number of foreign insurers have exited or announced their intention to exit from India. Any delay in
getting to a meaningful ownership of their Indian JVs, which can be consolidated and not treated merely
an investment, will wear down interest of global insurers.
There are no limitations imposed on 100 per cent foreign commercial/investment banks, asset
management companies or non-banking finance companies. The Reserve Bank of India's dispensation to
foreign banks to incorporate "wholly-owned subsidiaries" and acquire stake in local banks defies logic of
limiting foreign ownership in insurance companies to 26 per cent. The FDI cap of 26 per cent in the
insurance sector is the lowest in the world.

India needs long-term capital to fund insurance growth
We need new and concurrent sources of long-term domestic and foreign capital to fund the growth of
our insurance sector. There are limitations on the availability of domestic capital, which need to be
addressed. Global capital will flow to markets that provide higher and sustainable returns. With a
restrictive FDI cap of 26 per cent, domestic slowdown and mounting liability of guaranteed returns to
local JV partners, several global insurers are losing interest. Given our fiscal situation and evolving
geopolitical developments, it is important to send clear signals to global investors on the increase of FDI
cap to 49 per cent.
Robust growth of insurance is critical for domestic capital formation, financing much-needed
infrastructure and employment generation. The catalytic effect is visible. Bold steps by the regulator to
overhaul distribution, products and inappropriate market practices will enable this sector to realise its
true potential.



















ARTICLESS
The big deal about the Armys small arms
Even deciding on a multi-purpose tool, akin to a Swiss knife, for example, has been delayed despite trials
in 2011 featuring European and American vendors.
Shortly after taking over as the Chief of Army Staff in May 2012, General Bikram Singh had emphatically
declared that upgrading the small arms profile of his force was his foremost priority.
Two years later, as Gen. Singh prepares to retire in end July, neither the 5.56mm close quarter battle
(CQB) carbines nor the multi-calibre assault rifles he promised are anywhere in sight for the Armys 359
infantry units and over 100 Special Forces and counter-insurgency battalions, including the Rashtriya
Rifles and Assam Rifles.
The Armys prevailing operational reality is that it does not own a carbine as the Ordnance Factory
Board (OFB) ceased manufacture of all variants of the WWII 9mm carbines, including ammunition,
around 2010.
And, two years later, the Ministry of Defence (MoD) finally endorsed the Armys persistent complaints
regarding the inefficiency of the Defence Research and Development Organisation (DRDO)-designed
INdian Small Arms System (INSAS) 5.56x39mm assault rifles. It agreed that they needed replacing.
The former Defence Minister, A.K. Antony, was forced into admitting in Parliament in late 2012 that the
INSAS rifles had been overtaken by technological development a euphemism for a poorly designed
weapon system which the Army grudgingly began employing in the late 1990s and, unceasingly, had
complained about ever since.
Among largest arms programmes
The Armys immediate requirement is for around 1,60,080 CQB carbines and over 2,20,000 assault rifles
that it aims on meeting through a combination of imports and licensed-manufacture by the OFB.
Ultimately, the paramilitaries and special commando units of respective State police forces too will
employ either or both weapon systems in what will possibly be one of the worlds largest small arms
programmes worth $7-$8 billion.
Gen. Singhs guarantees, however, remain delusional and, expectedly unaccountable. And, in time-
honoured Indian Army tradition, they will now be transferred to his successor, the Army Chief-
designate, Lieutenant Gen. Dalbir Singh Suhag, to vindicate.
An optimistic time frame in inking the import of 44,618 carbines, which have been undergoing an
unending series of trials since August 2012, is another 12-18 months away if not beyond. The deadline
to acquire assault rifles, trials for which are scheduled to begin in August, is even longer certainly not
before 2016-17, if not later.
Till then, the Army faces a fait accompli of making do without carbines, a basic infantry weapon. It will
also have to make do with inefficient INSAS assault rifles, another indispensable small arm for the
forces largest fighting arm.
Currently, three overseas vendors are undergoing confirmatory trials at defence establishments and
weapon testing facilities in Dehradun, Kanpur, Mhow and Pune with their CQB carbines. The November
2011 tender for CQB carbines also includes the import of 33.6 million rounds of ammunition.
Competing rivals include Italys Baretta, fielding its ARX-160 model, Israel Weapon Industries (IWI) with
its Galil ACE carbine and the U.S. Colt featuring the M4. The U.S. subsidiary of Swiss gunmaker Sig Sauer,
which was originally part of the tender with its 516 Patrol Rifle, has failed to turn up at the ongoing
carbine trials.
Sig is under investigation by the Central Bureau of Investigation (CBI) on charges of alleged corruption in
potentially supplying its wares to the Indian paramilitaries. Alleged arms dealer, Abhishek Verma and his
Romanian wife, Anca Neacsu both are in Tihar jail once represented Sigs operations in India.
Inefficiencies
The carbine trials, expected to conclude by mid-July, will be followed by a final report by the Army,
grading the vendors on the performance of their systems. Thereafter, the MoD will open their
respective commercial bids, submitted over two years earlier and begin price negotiations with the
lowest qualified bidder or L1 before inking the deal.
According to insiders associated with the project, this intricate process is almost certain to be
protracted, despite the inordinately high expectations of efficiency from the Narendra Modi
government. They believe the carbine contract is unlikely to be sealed within the current financial year.
However, once signed, weapon and ammunition deliveries are to be concluded within 18 months
alongside the transfer of technology to the OFB to licence build the designated carbine.
In short, no Army unit will be equipped with a carbine till well into 2016.
The saga of the assault rifles is even starker.
A multi-service internal review in 2012 of the INSAS assault rifles revealed that they were made from
four different kinds of metal, an amalgam almost guaranteed to impair their functioning in the extreme
climates of Siachen and Rajasthan.
Surprisingly, the Indian Air Force was the most vociferous in castigating the DRDO over as many as 53
operational inefficiencies in the rifle that the countrys prime weapons development agency took nearly
two decades to develop and at great cost.
Inexplicably, the DRDO insisted on the OFB developing the SS-109 round, an extended variant of the SS-
109 NATO-standard cartridge for 5.56x39mm rifles aimed at achieving marginally longer range, a
capability unnecessary for such a weapon system. This operational superfluity delayed the INSAS
programme as it required the import of specialised and expensive German machinery and necessitated
the stop gap import of millions of ammunition rounds from Israel.
The DRDO-designed and OFB-built rifle also cost several times more than AK-47 assault rifles of which
around 100,000 were imported from Bulgaria in the early 1990s for less than $100 each as an interim
measure at a time when the Kashmiri insurgency was its most virulent and Islamist militants better
armed than Army troopers.
The MoD issued the tender for 66,000 5.56mm multi-calibre assault rifles in November 2011 to 43
overseas vendors, five of who responded early the following year.
The competing rifles, required to weigh no more than 3.6kg and to convert readily from 5.56x45mm to
7.62x39mm merely by switching the barrel and magazine for employment in counter-insurgency or
conventional roles, include the Czech Republics CZ 805 BREN model, IWIs ACE 1, Barettas ARX 160,
Colts Combat Rifle and Sig Sauers SG551. The latters participation, however, remains uncertain. A
transfer of technology to the OFB to locally build the selected rifle is part of the tender.
Meanwhile, field trials for the rifles are scheduled for early August, nearly 30 months after bids were
submitted, as that is the extended time period it surprisingly takes the Army to conduct a paper
evaluation of five systems.
But these too have already run into easily avoidable problems.
On security grounds, the rifle vendors are objecting to the Armys choice of its firing range at Kleeth in
the Akhnoor sector hugging the Line of Control (LoC) as the venue for the initial round of trials. A final
decision on this is awaited. Thereafter, other trials will follow in diverse weather conditions in Leh,
Rajasthan and high humidity areas, all regions where the assault rifles will eventually be employed.
Transforming the soldier
Acquiring these modular, multi-calibre suite of small arms is just part of the Armys long-delayed Future-
Infantry Soldier As a System (F-INSAS) programme envisaged in 2005, but interminably delayed.
The F-INSAS aims at deploying a fully networked infantry in varied terrain and in all-weather conditions
with enhanced firepower and mobility for the digitised battlefield. It seeks to transform the infantry
soldier into a self-contained fighting machine to enable him to operate across the entire spectrum of
war, including nuclear and low intensity conflict, in a network-centric environment.
But senior military officers concede this programme stands delayed by six to seven years almost
exclusively because of the Armys inability in formulating qualitative requirements (QR) to acquire many
of these ambitious capabilities.
Even deciding on a multi-purpose tool, akin to a Swiss knife, for example, has been delayed despite trials
in 2011 featuring European and American vendors. Officers associated with F-INSAS said this, like other
equipment acquisitions, was due to the Armys rigid procedures, inefficiencies and inability to take
timely decisions.
The Army continually blames the MoD for creating bureaucratic hurdles in its modernisation efforts, but
fails in acknowledging its own shortcomings in drawing up realistic QRs, conducting timely trials and,
above all, realistically determining its operational needs and working towards them economically.
Senior officers privately concede that the uniforms are largely responsible for the lack of
modernisation, but manage to successfully deflect their own limitations sideways onto the MoD.
Gen. Singhs tenure, like several other chiefs before him, exemplifies this. It is highlighted by their
collective inability to even incrementally upgrade the Armys war waging capacity be it night fighting
capability for its armour fleet, modern artillery, light utility and attack helicopters or infantry combat
vehicles, among others.
Integrating ecology and economy
One of the hardest things in politics, U.S. President Barack Obama said in a recent interview, is
getting a democracy to deal with something now where the pay-off is long term or the price of inaction
is decades away. Obamas words are pertinent not only to the U.S.; they are also relevant to the other
great democracy and its spanking new government on the other side of the planet: India.
The science whose central concern is the long term and leaving a healthy environment for future
generations is ecology. And within ecology, on a planetary scale, it is the science of climate change. So
when Indias new government under Prime Minister Narendra Modi renamed the Ministry of
Environment and Forests (MoEF) appending and Climate Change, it was a timely move. It signalled that
even as the government pursues its stated policy of industrial and infrastructural expansion for
economic growth, it would place tackling climate change firmly on its agenda, along with the protection
of environment, forests, and wildlife.
But a series of media reports belie this interpretation. According to these reports, the MoEF, in its new
avatar, plans to redefine what an inviolate forest is so that more forests can be opened for mining. It
proposes to dilute environmental norms and procedures to bypass existing legal requirements for large
infrastructure and defence projects. The government announced plans to increase the height of the
Sardar Sarovar dam, raising concerns over the rehabilitation of 2,50,000 people, even as a leaked
Intelligence Bureau report attacked NGOs for working on people-centric issues. Meanwhile, the MoEF
has been silent on other pressing needs: releasing the long overdue India State of Forest Report 2013,
acting to save critically endangered species such as the Great Indian Bustard (now down to less than 300
individual birds in the wild), or implementing proactive measures to combat climate change. Within
hours of taking charge as Minister of State for Environment, Forests and Climate Change, Prakash
Javadekar said with unsettling brevity in a TV interview: ... India needs a window for growth and
emissions and other things. To his credit, Mr. Javadekar has promised to ensure that environmental
protection and developmental activities will go together. While it is too early to assess promise against
practice, this is as good a time as any to recount five lessons from ecology on why environmental
protection should concern Indias new government and people.
Thinking long term
Obamas words point to lesson one: ecology takes the long view. Development projects promoted for
short-term gains may have unaccounted long-term costs. The previous United Progressive Alliance
government allowed the conversion or loss of over 7,00,000 hectares of forest an area the size of
Sikkim for development projects and non-forest uses. Natural forests of diverse native tree species
function as watersheds, wildlife habitats, and sources of livelihood for tribal, farming, and fishing
communities, contributing to long-term human well-being in ways not captured by indices such as
annual GDP growth.
The science of restoration ecology attests that such diverse natural forests and the living soils they
spring from, once destroyed, are difficult and costly or infeasible to bring back, and appreciable recovery
may still take decades to centuries. This is not adequately factored into the estimation of net present
value (NPV) of forests that tries to approximate economic losses over a 20-year period, by which time
the losses are recovered in compensatory afforestation sites. A project developer pays out the NPV
at current rates, a maximum of Rs 10.43 lakh per hectare for very dense forests in the most biologically
rich regions such as the Western Ghats and flattens football fields of forests for the price of a mid-
range SUV. Furthermore, compensatory afforestation, if carried out at all, frequently involves raising
plantations of one or few alien tree species such as eucalyptus and wattles. Such artificial forests are no
substitute for the more diverse natural forests of mixed native species, including centuries-old trees.
This is why, as the Modi government worries over its 100-day report card, ecologists will be concerned
about its 100-year fallout.
Lesson two is that ecology is a science of connections. Pluck the hornbills out of their forest home, and
forest trees whose seeds the birds disperse begin to decline. Strip the oceans of sharks and predatory
fish with industrial fishing and entire ecosystems and livelihoods of artisanal fishers unravel in what
ecologists call a trophic cascade. So, the wholesale construction of 300 large dams in the Himalaya as
proposed by the government would not just generate power, but have other negative consequences
radiating down the chains and webs of life, including to people downstream. When these are taken into
account, implementing fewer and smaller projects or alternatives appears more attractive.
The third lesson, the mandala of ecology, is that ecology closes the loop. Nature recycles, without
externalities, wasting little. If the government applied this to everything from recycling municipal waste
to curtailing pollution by industries, it could generate jobs and induce growth without leaving behind
irredeemable wastes.
Fourth, ecological processes transcend political boundaries. We pump CO{-2}and other greenhouse
gases into the common pool of our atmosphere anywhere and affect people and the earths fabric of life
everywhere. To conserve tigers and elephants in protected reserves, we need to retain connecting
corridors and forests, some spanning state or international boundaries. Development and infrastructure
projects can be designed and implemented such that they do not further disrupt fragmented
landscapes, but instead help retain remnant forests or reconnect vital linkages.
The science of home
Finally, ecology teaches us that humans are not external to nature. Land and nature are not
commodities that can be bought or sold recklessly or reduced to a packaged spectacle for tourists to
gawk at. They form the community we belong to: we are part of nature, it is home. In the debate over
ecology versus economy, we must remind ourselves that both words originate from the greek word
oikos, meaning home. The science of our home environment (ecology) must inform the management of
our home resources (economy). What is often forgotten in the debate falsely caricatured as
environment versus development is that for almost every destructive project, there are often
alternatives and means of implementation that cause less harm to environment and local communities,
and can provide overall long-term benefits. For instance, roads can be routed to avoid wildlife
sanctuaries and provide better connection to peripheral villages, thus helping both people and wildlife.
Decentralised village power generation systems that use biomass, solar power, and other renewable
sources can help reduce reliance on mega power projects plagued by corruption and requiring long
power lines that suffer transmission losses and cause forest fragmentation. There are already many
promising examples of ecologically sensitive development. If ecologists, engineers, and economists
synergise their efforts, and the government chooses to exercise its electoral mandate to take the long
view, there can be many more. The integration of ecological considerations into economic development
is vital and valuable if, in the pursuit of profit, we are to ensure the long-term well-being of people and
planet.
An overburdened public sector and an exploitative private sector
Poverty and its alleviation has been, perhaps, the most recurrent theme in Indias political discourse
since independence. Yet, an oft-ignored fact for those interested in poverty alleviation is that
catastrophic health expenses are the biggest reason for pushing individuals and families into poverty.
The poor cannot afford to be sick because they cannot afford to get well.
This raises some critical questions. Why do the poor have such dismal access to healthcare? Why is it
that our investments in the health system are so unimpressive? Perhaps the most critical question is
this: why do close to 70 per cent of Indias sick, mostly belonging to the poor or lower middle class,
choose to go to the private sector when there is ostensibly free healthcare in the public system?
Lacunae in the system
A study done a decade ago answered some of these questions. It clearly demonstrated the lacunae in
the public health system including poor quality of care, long waiting lines, patient maltreatment and
neglect. The patients that chose to go to the private sector did so for a perceived quality of care. What
does this tell us? First, sick people, however poor, need diagnosis but they also need a sense of care.
Second, the poor are discriminating, if uninformed, consumers of services including health care. They
will pay to get care which gets them back to work rather than wait.
Yet sickness is such a state that even the most discriminating consumers can be exploited. Imagine you
are a poor person living in an urban slum with a cough and fever. After ignoring it for weeks you decide
to seek help. Initially you try the government health centre. This, you realise quickly, is not an option if
you are a migrant worker or a daily wager. So you end up in the private sector. In all probability your
local slum doctor will be a quack. The treatment you will receive will possibly be inappropriate. You may
feel better briefly or get sicker with time its a matter of time. But you will go back because your
options and time are both limited.
If you are lucky and can afford it, you might actually get to see a real doctor, though not necessarily with
the best outcomes. For starters, you may be asked to do a battery of tests. The tests can be done only
from particular labs to ensure reliable quality and kickbacks. If the tests are clear, pray to whichever god
you worship. If, however, you have a common disease like tuberculosis, the nightmare has just begun.
If the realisation that you have TB or another such ailment doesnt terrify you, the expenses will. By this
time you will have probably spent your savings and are in or about to be in debt. However, there is still
no guarantee of appropriate treatment or complete recovery. If you do get the right treatment, the
drugs may have side affects and you may not be able to work for days. This will make you poorer.
Additionally, you will need a diet that you may never be able to afford. At this point, you will have few
choices either to discontinue treatment, go further into debt or go to the public sector and wait.
This journey is instructive in many ways about the poors ability to access healthcare. For one, the
common man cannot really access the public health system easily. Though well intentioned, it is over
burdened and slow and insensitive. It needs investment and possibly a complete restructuring to make it
accessible. The alternative is an exploitative private sector, where appropriate diagnosis and treatment
and recovery is not necessarily guaranteed.
Ending the trust deficit
Its important at this point to ask whatthe role of government in this is. Is the goal of the public sector
disease control or just providing free health services? If it is the former, then the efficiency, the quality
of care and the accessibility of the public sector has to improve. The government needs to restructure
how it plans and delivers services and also how these services are perceived by the consumers. The trust
deficit must end.
Similarly, the private sector must be innovatively engaged to become part of the solution. The
government must ensure that this sector is regulated and monitored effectively. The overuse of
diagnostics, over-the-counter sale of drugs and the rising numbers of quacks must be checked
immediately. The onus is more on the government to build a mutually beneficial relationship with the
private sector.
To the cynics this may seem impossible, but it is not. Previous experiments provide valuable lessons in
all these areas. There is enough national and international expertise available to help us relaunch public
health services.
Finally, beyond the technicalities we must be guided by the simple realisation that until we choose to
change the way the poor access health care, it is unlikely that we will be able to change their poverty
status. They will continue to be vulnerable and sick but also consequently poor.

Minimum deterrent and large arsenal
A show of determination and toughness on non-nuclear fronts such as terrorism is more important than
stockpiling nuclear weapons
Although the 42-page-long BJP election manifesto had only one short paragraph addressing strategic nuclear
policy, that presumably does not reflect the priority that the newly elected government will attach to the
subject. It is well-known that the BJP lays great importance on national security, of which nuclear policy
forms an important component. Indeed, one of the first tasks undertaken by the Modi government was the
appointment of a National Security Advisor.
Sooner or later the new government will undertake, perhaps quietly, a review of our nuclear doctrine. Now is
an appropriate time to offer suggestions on what needs to be revised and what can be left as is.
The current official nuclear doctrine, released by the Cabinet Committee on Security on January 4, 2003,
summarises our nuclear policy in eight succinct points. Of these, only a few of them really call for significant
modification, because in recent years things have been relatively stable on the South Asian nuclear front.
This is despite the fact that both India and Pakistan continue to produce weapons-usable Plutonium at the
Dhruva reactor and the Khushab reactors respectively. Pakistan may also be continuing to produce some
weapons-grade Uranium at its centrifuge plants, despite its overall Uranium ore constraints. All this fissile
material is presumably being assembled into warheads. So both arsenals have been growing, as have all the
attendant dangers of maintaining a nuclear force. Nevertheless the situation has, by and large, just been
more of the same. Therefore there is no call for any radical change of our nuclear doctrine. But a few
features do need to be clarified and others underlined.
No First Use
During the election campaign, the only brief reference to nuclear issues was a statement attributed to
Narendra Modi that he would retain the principle of No First Use (NFU). His statement is very welcome,
particularly since simplistic expectations were that Mr. Modi would bring a more hawkish approach to
nuclear issues. Maintaining a doctrine of NFU, apart from being generally in tune with Indias non-aggressive
ethos, has considerable diplomatic value. After our 1998 nuclear tests elicited the anticipated international
opprobrium, the inclusion of NFU thereafter in the 1999 Draft Nuclear Doctrine helped soften the criticism,
especially in comparison to Pakistan, which till today retains the option of a first strike.
However, although NFU has moral and diplomatic value, there should be no illusions about its impact on hard
strategic decision makers on the other side. What matters to them is not any statement of intentions (like
NFU) but the actual capabilities of the adversary. Pakistani colleagues one meets in Track II invariably say
they set little store in our NFU. It makes no operational difference in their nuclear plans.
What matters more for nuclear confidence building is the actual state of alert. India has been sensibly
following a system of keeping its warheads de-mated from their missiles and delivery aircraft. This introduces
a minimum built-in delay in launching an attack after the decision to do so has been made. It greatly reduces
the risk of an accidental or hastily decided launch. The new government should continue our policy of a de-
mated de-alerted posture.
One clause currently in the Doctrine merits some revision. It states that ....*our+ nuclear weapons will only
be used in retaliation against a nuclear attack on Indian territory or on Indian forces anywhere...retaliation to
a first strike will be massive. Now, threatening retaliation against a nuclear attack on Indian territory is
one matter. It is the basic component of nuclear deterrence and should apply whether the attack on our
territory is small or big, as long as it is nuclear.
But adding on the phrase or on Indian forces anywhere is a different matter. The rationale behind it was
presumably to deter a nuclear attack on our forces should they enter alien territory or the high seas in
combat. Such an eventuality is not implausible after Pakistan developed the Nasr a nuclear capable
battlefield missile which could be used on Indian forces if they march deep into Pakistani territory. However,
threatening retaliation against that with a massive nuclear attack from our side can boomerang on our
credibility. Pakistans battlefield nuclear attack is likely to be small (by nuclear standards). They would not
want to spread much radioactivity on their own soil. It is also unclear whether they can develop a sufficiently
miniaturised warhead to fit the Nasr, and how much damage such a warhead could do. It may achieve at
most a few hundred fatalities. This is still a terrible loss of Indian soldiers and armoury. But it would be far
from being mass destruction.
However, such a battlefield nuclear attack will place India in a dilemma. Having threatened in our Doctrine to
inflict a massive nuclear retaliation, can we really go ahead and kill lakhs of their civilians in response to a
much smaller attack, that too on their own soil? It would be a disproportionate response, which would go
against our national sensibilities and attract widespread criticism from around the world. Surely, there are
more proportionate non-nuclear ways of inflicting punitive retaliation.
Yet, if we do not counter attack after having threatened to do so, that would invite derision that we are a
soft state incapable of hard nuclear decisions and would erode the credibility of our future deterrence, not
only against Pakistan, but also against China.
It may therefore be better to limit massive nuclear retaliation only against nuclear attacks on our country and
say nothing in the Doctrine, one way or the other, about attacks on Indian forces anywhere. Should the
latter take place, we always have the option of some appropriate, measured retaliation.
What deterrence needs
Next, consider the characterisation in our Doctrine of our nuclear force as a credible minimum deterrent
(CMD), where the requirement of minimum has been spelt out as what is needed to inflict unacceptable
damage to the adversary. These represent a very judicious choice of words selected, in fact, by the last BJP
administration. It is designed in part to temper over-zealous weapon enthusiasts from going on an endless
spree of building nuclear bombs. It recognises the dangers of possessing an unnecessarily large arsenal of
nuclear weapons, beyond what is essential for deterrence. The new government must ensure that the
agencies concerned respect CMD in spirit and substance.
Unfortunately, our arsenal of nuclear bombs has already gone way over the minimum required to inflict
unacceptable damage on any rational government, be it Pakistan or China. (Should Pakistan someday be
taken over by irrational extremists to whom death of lakhs of civilians is acceptable, then no arsenal,
however large, will deter them anyway. With respect to China, what deterrence needs is not more bombs
than what we already have, but longer range missiles capable of reaching major Chinese cities.)
As to credibility, large arsenals, beyond a point, do not enhance it. What does is a show of determination and
toughness on other non-nuclear fronts, such as terrorism or border incidents.
Virtual courses for a knowledge-based society
Equal access to higher education requires the introduction of massive open online courses
With a staggering population of 1.25 billion and almost half of it under the age of 25 India is confronted
with enormous challenges while it plans to fulfil the aspirations of its people. Despite these challenges, it has
the potential to become a leading nation in many areas of development, including education. If we accept
that knowledge-based societies develop at a faster rate, then providing access to good education, particularly
higher education, becomes crucial.
The current model of higher education in India, mostly adopted from developed countries, is largely campus-
based, limited in its range of learning, and essentially attempts to comply with the needs of the industrialised
world. While it is true that higher education has enabled social mobility for many in India, it is also true that
those who have access to higher education belong to the more privileged sections of society. To bring about
a change in this restrictive character of higher education and meet the ever-increasing demands of students
and teachers, we need to evolve and adopt innovative ways of teaching and learning. Providing equal or at
least more equitable access to higher education cannot be brought about through changes in the existing
model; it requires a clear and genuine disrupter that will usher in sea change.
Virtual learning
Introducing Massive Open Online Courses or MOOCs in higher education in developing and densely
populated countries like India and China could be one such intervention. MOOCs are online courses with
unrestricted participation and open accessibility. However, they are different from other distance-learning
programmes. First, they are essentially structured courses and not programmes that award degrees or
diplomas. Second, they are interactive there is continuous teacher-learner contact and assessment. Third,
they allow a distinct possibility of virtual community/group learning.
MOOCs were initiated in 2008, but their potential as a valuable tool in higher education was fully recognised
by 2012. A large number of universities in the U.S., Europe and other parts of the world now offer these
courses to supplement their teaching-learning programmes. In India, MOOCs have still not formally entered
the wider university system, barring some IITs which have floated their own MOOCs. Yet it is interesting and
impressive to note that about one-fourth of all MOOCs enrolment worldwide is from India, second only to
the U.S. This clearly underlines the fact that learners in India are quick to adopt new technologies. But it must
also be noted that successful completion rate of MOOCs worldwide ranges from 5 to 15 per cent only.
Can MOOCs be useful in a country like India? The most attractive feature of these courses is the ease with
which both students and teachers can access available content. MOOCs are very useful in providing high-
quality conventional courses like engineering and basic sciences to people in different locations, thereby
bridging the gap between well-established teaching institutions and those that lag behind.
MOOCs can be a real boon to those who seek extra knowledge in specific domains and are not necessarily
looking for a degree/diploma qualification. These courses could, for example, be a great asset in teacher
training and enhancing teaching capabilities. MOOCs can also become very valuable in acquiring skills and
knowledge that are suited to specific industry-related jobs. Traditional education is often considered
inadequate for entering industries like information technology, pharma, healthcare and biomedical sciences.
Tailor-made MOOCs for specific jobs can be provided and can be pursued by those who wish to enter these
job markets after finishing their graduate programmes. The industry could participate in the development of
specific MOOCs for this purpose. Needless to say, all this would require active collaborations, involvement of
experts and most importantly, establishment of easy access to internet across the country.
A powerful disrupter
While possibilities are many, several issues need to be addressed for MOOCs to be successfully adopted.
First, if MOOCs do not contribute towards acquisition of a degree/diploma, then what would be its attraction
to a learner seeking higher education? This is particularly true of a country like India where degree
qualifications are considered an absolute necessity for entering the job market. However, if MOOCs were to
be credited towards a degree, then those enrolled would have to be assessed by their universities and the
online course educators. This is possible, but would be an added responsibility for the course-providers. Also,
will well-established universities make MOOCs a part of those programmes that award formal degrees? And
if they do, would the prospective employers be willing to consider MOOCs-based education/training as being
on par with institution-based degree/training and accept it?
What is perplexing is the rationale of top universities in the developed world in floating almost free courses in
collaboration with service providers like edX, Coursera, and udacity, when the cost of higher education in
these universities is becoming prohibitively expensive. These universities may well be developing business
models for their version of higher education. They also, perhaps, see no competition between MOOCs and
their established and much sought-after degree courses. It is not hard to predict that MOOCs may not be
offered for free once they become financially gainful. In fact, some universities in the U.S. have already put in
place degree-yielding MOOCs at a considerable cost.
It is quite clear that MOOCs can be a powerful disrupter in providing and enriching higher education in
countries like India. At the same time it is also obvious that platforms like these will need to be adapted to
suit the specific needs of a large number of young people who have every right to seek and receive higher
education. For India to become a knowledge-based society, it is imperative that higher education and training
in skills are made accessible to as many as possible, and at the earliest. MOOCs can play an important role in
the governments agenda to expand the reach of higher education. Whatever the future may be, these virtual
courses can only be seen as complementing and not substituting traditional degree courses.