Cow Minister!

नस्लभेद बहुत है यहां
गोरी गायों के मंत्री बन गए
काली भैंसे किसी ने न पूछी!

मैं न कहता था,
अप्रैज़ल तुम्हें ही मिलेगा जानेमन
दूध मेरा कोई कितना भी दुहे!

शाम

छत से दिखता है सूरज

साइकल पे एक बूढ़ा

सड़क पे झड़े पत्ते

मोटे इवनिंग वॉकर्स

और बादलों में तुम्हारा चेहरा.

Hail the invisible hand of the state / Ajit Balakrishnan

The current debate in India about how to trigger a quantum jump in industrial manufacturing activity and, thus, create large-scale employment is largely centred on ways to reduce the role of the state - in allotting land, in environmental clearances, in firing workers and so on. Yet the case studies of two industries that came from origins even smaller than where manufacturing is today and have become international success stories - the Indian pharma industry and the Indian information technology (IT) services industry - proves the opposite point. Neither would have come to their current stellar role in the Indian economy without the active but largely invisible hand of the Indian state.

The Indian pharma industry has grown from minuscule revenues in the late 1960s to a world player with an annual revenue of $40 billion (of which $15 billion is in exports) and an activity base of 20,000 plus manufacturing units employing over 29 million people. The case of the software services industry is even more striking; it employed just 8,500 people in 1990 and had a revenue of a mere $165 million (tiny Ireland had a $185-million software industry at that time). Today, its size is $118 billion, with $100 billion as exports. The people directly employed in the industry is reported as exceeding two million, with another seven million employed indirectly. Both these industries have also created multiplier effects in sectors such as housing construction, transport services and household goods, as young chemists and programmers set up homes, and bought cars and home appliances.

What was the magic? Unfortunately, finding the key to these success stories is like that old tale of the blind men of "Hindoostan", who, when asked to describe an elephant, said that it was like a wall, snake, spear, tree, fan or rope, depending upon which part of the elephant each touched.

Proponents of the "market economy" will say that the success of these two industries is an example of what energetic Indian entrepreneurs can achieve when the government of India steps aside. Reinforcing this view is India's business press, which frequently features stories about software and pharma industry millionaires. Proponents of "globalisation", such as New York Times columnist Thomas Friedman, in his book The World Is Flat, credit globalisation: increased world trade that spreads prosperity around the world. Proponents of "privatisation" say that decades of public sector efforts in these industries (Electronics Corporation of India in the case of IT and Hindustan Antibiotics are often quoted as examples) came to nothing until the private sector was "allowed" to participate. To them, this is proof that the government needs to privatise many other industries as well. And, of course, there are those that say that the state's only role should be to provide zero income tax on export incomes, government-sponsored software parks and export zones.

But actual case studies of these two industries tell another story. The rise of the Indian software services industry can be traced back to two mega projects sponsored by the Union government: the computerisation of public sector banks and Indian Railways. These two projects, apart from providing an impetus to the start-up and growth of hundreds of software development companies, also had another dimension. Far-sighted government policymakers like N Seshagiri of what was then called the department of electronics, the forerunner to the current ministry of IT, insisted that these applications be built using such technologies as the Unix operating system and relational database systems; the world was then getting ready for a paradigm change that would unleash an insatiable wave of demand for computer programmers well versed in these specific technologies as the world shifted from mainframe computers to client server computers. Thanks to the banking and the railway projects, Indian companies had a ready stock of thousands of software programmers well versed in these new technologies, who could be immediately deployed on assignments abroad.

The rise of India's pharmaceutical industry is based on similar visionary moves by the Indian state. In 1970, the government introduced a new patents Act reforming the 1911 one, which excluded pharmaceuticals and agrochemical products from eligibility for patents. Patents on molecules, which are products of chemical reactions or on mere admixtures and the like, were made non-patentable in India. Only the method of making the product was patentable. This resulted in the Indian pharmaceutical industry developing considerable expertise in reverse engineering of drugs that are patentable as products throughout the industrialised world but not in India.

You need to peer really hard to detect this kind of invisible hand of the state. Mariana Mazzucato, professor of science and technology at the University of Sussex and the author of The Entrepreneurial State - Debunking Public vs. Private Sector Myths, did just that and uncovered the role of the American state behind what is generally seen as the ultimate artifact of entrepreneurial vision, the Apple iPhone. "What actually makes the iPhone a smartphone, instead of a stupid phone?" she asks in a recent TED talk. And answers that it is the internet; the Global Positioning System (GPS), which detects your geographic location; the touchscreen display that makes it also a really easy-to-use phone. She points out that "the very smart, revolutionary bits about the iPhone, are … all government-funded … the Internet was funded by the Defense Advanced Research Projects Agency (DARPA) of the United States. The GPS was funded by the [United States] military's Navstar program … the touchscreen display was funded by two public grants by the CIA [Central Intelligence Agency] and the US National Science Foundation", and in the American pharmaceutical industry, "a full 75 percent of the new molecular entities with priority rating are actually funded in boring, Kafkian [United States government] public sector labs".

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Source: http://www.business-standard.com/article/opinion/ajit-balakrishnan-hail-the-invisible-hand-of-the-state-115011201338_1.html

Ajit Balakrishnan, founder and chairman of Rediff.com, is the author of The Wave Rider, A Chronicle of the Information Age
ajitb@rediffmail.com

( A very interesting but debatable post! )

Farmers Issues

Indian farmers especially small and marginal are under great stress. It is being revealed from from NSSO 70th round findings ,which estimated more than 50% of farm households in debts,farm holdings of 90% shrinking to less than 2 hectares.most worringly most findings have deteriorated even from previous ms swaminathan report on national commission on farmers.
major problems associated with vulnerability of marginal farmers include-
1)flawed aspects of green revolution-
(a)regional disparity- targeted assistance to only selective regions nw india,coastal andhra etc
(b)social disparity- institutional help for credit,bore well etc was availed by rich farmers only.
(c) agricultural disparity- overemphasis on only selected crops ruined traditional crops such as millet. 
2)failure of land reforms- petty politics and loopholes in land ceiling act never allowed proper land reforms except kerala.
3)very low penetration of institutional financial credit in rural areas, in fact priority sector lending has neither benefited farmers nor banks,higher chunk being appropriated by rich farmers,besides heavy corruption keeps needy at bay. 
4)market reform failure- role of middlemen not decreasing even after adoption of model APMC act making farmers much vulnerable.
5)not proper diversification of agriculture-though adoption of rainbow revolution did envisioned overall development but in absence of market exposure,food processing infrastructure they have not impacted small farmers on large scale.
6)vagaries of monsoon- over 60% of indian agriculture dependent on monsoon.
Govt has attempted several approaches specially targeting marginal farmers such as
1)financial schems- (a)criteria of priority sector lending by banks(b)subsidies on diesel,kerosene,drip irrigation,farm machinery etc
2)employment generation - such as IRDP, SGSY,MNREGA act etc
3)institutional structure for agriculture development
(a)Funding for research via ICAR, state agriculture university.
(b)national plans such as -droght prone area development programme,rashtriya krishi vikas yojna,national mission on sustainable agriculture etc
(c)personalized help- soil testing, phone based technical guidance etc.
The dismal state of farmers depicts failure of schemes, major overhaul is agriculture sector is need of hour, governments approach towards establishing a grand alliance between farmers,market and credit institutions is must not only for farmers but also food security and robust economy of country.

An uncertain Hobbesian life / Feroze Varun Gandhi

Of India’s 121 million agricultural holdings, 99 million are with small and marginal farmers, with a land share of just 44 per cent and a farmer population share of 87 per cent. With multiple cropping prevalent, such farmers account for 70 per cent of all vegetables and 52 per cent of cereal output. According to National Sample Survey Office data, 33 per cent of all farm households have less than 0.4 hectares of land. About 50 per cent of agricultural households are indebted. In Sultanpur district, Uttar Pradesh, cultivation cost per hectare for wheat has increased by 33 per cent in five years. Such farmers face an uncertain Hobbesian life: poor, brutish and short.

Rain-fed agriculture has been practised since antiquity in India, with Indus Valley farmers growing peas, sesame and dates. Greek historian Herodotus had noted in The Histories : “India has many vast plains of great fertility. Since there is a double rainfall, the inhabitants of India almost always gather in two harvests annually.” With the British era came the zamindars, the ryots and penury. As Tirthankar Roy notes in The Economic History of India , 1857-1947 , “from 1891 to 1946, diminishing returns coupled with growing land-shortage and yield deceleration led to an acute crisis, particularly in Bengal.” India’s marginal farmers have been worse off for centuries.

Alleviating marginal farming

Our policymakers recognised this dependence on rain and formulated policies focussed on supporting canal-fed crops and improving agricultural productivity. This they coupled with incentive structures, pricing regimes and input subsidies. A bewildering array of schemes was launched — Small Farmers Development Agency (1971), Integrated Rural Development Programme (1980), Swarnjayanti Gram Swarozgar Yojana (SGSY, 1999) and the Mahatma Gandhi National Rural Employment Guarantee Act. Skewed by a bureaucratic approach, these schemes focussed on creating yearly jobs and roads, while resisting decentralisation and localised decision-making. Individual symptoms were mitigated, while long-term food security and ecological sustainability were ignored.

The Drought Prone Area Programme (1974) was “concerned with drought proofing rather than livelihoods and growth-focussed development.” The National Policy on Farmers (2007) focussed on improving farmer income through better risk management and an improved price policy. Implementation, sadly, was lacking, with less than 30 per cent of small and marginal farmers borrowing from institutional credit systems.

The Rashtriya Krishi Vikas Yojana (2011) allocated Rs.10 lakh to each district to prepare and implement the Comprehensive District Agriculture Plan with the participation of local panchayats. The discussions were mostly chaired by the local minister or district collector, with little reflection on farmers’ needs. Best practices were mostly ignored.

Farmers in arid regions were encouraged to plant high-yielding wheat instead of Malwi Ghehu, a local wheat variety, while relying on declining groundwater. Sixty one per cent of irrigation is now from groundwater, with the proportion of districts with semi-critical and overexploited groundwater rising to 33 per cent. The proportion of districts in the critical, semi-critical and over-exploited category rose from 5 per cent in 1995 to 33 per cent in 2004, according to statistics available from the Central Ground Water Board.

Punjab is well past unsustainability, with 110 blocks out of 137 falling under the “over-exploited” category. The Punjab State Farmers Commission (2013) recommended a substantial crop diversification to cotton, pulses and vegetables, decreasing area under paddy cultivation by 40 per cent over five years. Of the Rs.5,300 crore suggested for diversification to dryland crops, the Centre allocated only Rs.500 crore.

A shift back to dryland agriculture, particularly in western India, is much needed. Rajasthan, despite low rainfall, is buffering by integrated farming — having subsidiary farm enterprises such as dairy, poultry, sericulture and goats. States with little rainfall such as Haryana can be encouraged to shift back to oilseeds and coarse cereals. Rice cultivation could be increased in rainfed Odisha and Assam, while incentives to promote wheat and rice are realigned.

With conventional irrigation mostly tapped, drip irrigation is an obvious solution. By accommodating irregular field sizes and unlevelled topography, water application efficiency (greater than 70 per cent) can be kept high, lessening soil erosion. Yield can be increased up to 230 per cent, while fertilizer efficiency rises up to 30 per cent. However, the high initial cost has been a significant barrier. With individual loan sizes too small for transaction costs, banks have been reluctant to provide loans. Bundling farming households through subsidy schemes like SGSY can help structure such transactions. Tamil Nadu offers a 100 per cent subsidy for small and marginal farmers for taking up micro irrigation up to a maximum of 60,000 acres. With high monetary ceilings in irrigation projects, drip irrigation can be mostly funded through a revolving subsidy fund, which is based around local self-help groups.

Even with existing subsidies, sanction delays can cause installation delays, with suppliers reluctant unless the full cost is paid. Banks could be encouraged to advance full loans to government-authorised self-help groups, without insisting on sanction and release of subsidy. Subsidy adjustment can occur later, while repayment periods are kept between 10-15 years.

Funding for research

The Indian Council for Agricultural Research (ICAR) has been primarily focussed on breeding higher yielding varieties for rice and wheat, while mostly ignoring coarse cereals. Funding for research for ICAR and State Agricultural Universities (SAUs) has been dismal. Most SAUs are in overdraft, with little accreditation and a growing dependence on ICAR.

A restructured funding scheme, with a focus on Research and Development in 10-12 crops in dryland agriculture can be encouraged. The Kelkar Committee in Maharashtra had suggested that funding to SAUs could be increased by at least Rs.100 crore, to upgrade research facilities and set up agriculture labour training schools. Mechanisation needs to be encouraged as well.

Even the National Mission for Sustainable Agriculture has been hit by a funds crunch. This mission would have focussed on mitigating risks associated with climate change and ensuring food security, with a focus on organic farming and System of Rice Intensification propagation. Such initiatives need to be encouraged.

The Working Group on Marginal Farmers (2013) recommended that marginal cultivators could be encouraged to join Farmer Producer Organisations (FPOs). Such organisations can be provided interest subvention on loans for a five year period and exempted from the agricultural produce market committee cess. Procurement from small and marginal farmers should be prioritised particularly through regulation for multi-brand retail. Enhancing their investment credit and matching their working capital requirements should be a priority. FPOs could be extended collateral free loans of up to Rs.25 lakh, along with creating a Credit Guarantee Fund for financial institutions to lend to such institutions.

To foster these shifts, comprehensive ground-up regulatory and social action is essential. A shift to drip irrigation can be instituted by mandating it for all sugarcane plantations and fruit orchards. Combining this with micro-irrigation and horticulture incentives might create demand on-ground. Agriculture can be further customised through soil test labs at the ground level that provide advice to farmers on a personalised basis, while promoting greater water efficiency. Taxes on agricultural machinery should be removed and agro-based industries fostered, with commodity parks created at the district level. Such social and governmental action can help the marginal farmer peer beyond penury.

(Feroze Varun Gandhi is a Member of Parliament, representing the Sultanpur constituency for the BJP.)

Source: http://www.thehindu.com/todays-paper/tp-opinion/an-uncertain-hobbesian-life/article6782402.ece

SEBI

As a quasi-judicial body how has the Securities and Exchange Board of India (Sebi) performed in fulfilling its mandate? Critically evaluate.

The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India.
SEBI has three functions: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders resembling court in its quasi-judicial capacity.

SEBI has been under scanner by CBI for different cases such as matter related to grant of licence to MCX Stock Exchange (MCX-SX), Bank of Rajasthan (BoR) and Saradha scam. Several of its officers and decisions are being probed and has been put under intense scrutiny.
This issue raises two questions: first, upon the autonomy of SEBI and second, upon the performance of SEBI in fulfilling its mandate as a quasi judicial body.

So far as per records SEBI has enjoyed success as a regulator by pushing systematic reforms aggressively and successively. SEBI is credited for quick movement towards making the markets electronic and paperless. It has also been instrumental in taking quick and effective steps in light of the global meltdown and the Satyam fiasco. These records quite a bit proves the effectiveness of SEBI as a regulatory and quasi judicial body.

As far as unwarranted intrusion by an investigative agency is not fully justified. Just following the cases on the basis of only complaints, without going into the merits of the case, is harmful for its sanctity and affecting its productivity as the market watchdog.

The scams and other cases can also be not neglected and demands a greater accountability from SEBI along with its autonomy to function with greater efficiency.

Spate of CBI probes hits morale at Sebi / Jayshree P Upadhyay

In what seems a case of the doctor getting a taste of his own medicine, the Securities and Exchange Board of India (Sebi), which often dons the role of an investigator, is finding itself a subject of intense scrutiny, and several of its officers and decisions are being probed.

In a span of four months, close to 30 Sebi officials have come under the scanner of the Central Bureau of Investigation (CBI), probing for criminal misconduct and conspiracy.

Such mass scrutiny by an external agency is unprecedented and affecting productivity at the market watchdog, say Sebi veterans.

CASES UNDER RADAR

Bank of Rajasthan MCX-SX Saradha scam

“Regulatory officials are aware of their responsibility and are open to scrutiny but the sheer scale of examination is impeding completion of even the day-to-day tasks,” says an official, who does not wish to be named.

In March last year, CBI registered a preliminary inquiry against former Sebi chairman C B Bhave and former whole-time member K M Abraham, in a matter related to grant of licence to MCX Stock Exchange (MCX-SX). In August, CBI converted this into a First Information Report (FIR), without naming either Bhave or Abraham. But four officials, three serving and one former, who had worked on the case were named in the FIR.

The multi-crore Saradha scam has also placed a spotlight on the market regulator. People in the know suggest CBI has interrogated more than 15 of its officials who handled or were part of investigations and adjudicating proceedings. These officials include the brass — a member and three executive directors.

In a matter related to Bank of Rajasthan (BoR), CBI has also registered a preliminary inquiry against five Sebi officials, including the adjudicating officer, investigating officer, and head of the investigation department, R K Padmanabhan.

Sources indicate CBI is examining whether or not the regulator could have ascertained the loss to investors. Another official says there is a general feeling among employees that officials are being targeted indiscriminately.

“Basing an investigation on only the complaints, without going into the merits of the case, is harmful for the sanctity of any organisation. During the course of interrogation, Sudipta Sen, alleged architect of the Saradha chit fund scam, took names of over 40 regulatory officers. In such a scenario, how does one ascertain such claims are genuine and out of vindictiveness?” asked a source.

Acknowledging the challenging work environment amid a spate of inquiries against its officials, Sebi Chairman U K Sinha recently wrote a morale-boosting letter to the staff. “Our job is getting tougher by the day. Our accountability, as well as vulnerability, is very high. I am conscious of the challenges we have lately been facing with external agencies. Nevertheless, I am confident that in due course, our solidarity will sail us through these obstacles,” Sinha said in the letter.

Following the inquiry related to MCX-SX, former member Abraham had released a statement to CBI, in public domain, saying Sebi, as a statutory body, was legally entitled to autonomy.

“At legal and constitutional levels, unwarranted intrusion by an investigative agency into a regulatory and quasi-judicial body like Sebi, which administers the recognition of exchanges under the Securities Contracts (Regulation) Act, 1956, and the Securities and Exchange Board of India Act, 1992, is ultra vires of judicial pronouncements of the Honourable Supreme Court of India. Preserving the autonomy of Sebi is important to the financial markets of the country. An investigative agency like CBI cannot be allowed to tamper with this autonomy,” said Abraham in an affidavit.

Source: http://www.business-standard.com/article/markets/spate-of-cbi-probes-hits-morale-at-sebi-115011200184_1.html