Wednesday, December 3, 2014

Growing Up Fearful in Nigeria / Ukamaka Olisakwe

ABA, Nigeria — Horror calls down to us from northern Nigeria. Most of the 276 schoolgirls kidnapped by Boko Haram rebels last spring are still unaccounted for. On Nov. 10, Boko Haram bombed a high school in Potiskum, killing at least 48 children. Last month, the group killed 48 fish vendors near the border with Chad. And just last week, in apparent retaliation, the central mosque in the city of Kano was bombed, with some 100 people killed.
But fear and religious fanaticism are not new to the north. They are a fate we long ago came to accept. They were already woven into the pattern of life when I was a child there in the 1980s.
My father arrived in Kano one cold morning in the 1970s, with the dry, dusty harmattan wind blowing south from the desert. He was 23, and like many young Christians from Nigeria’s lush southeast, he had gone to the Muslim-majority north after surviving the bloody civil war of 1967-70. Kano was a new business frontier then. But it was uneasy, too: While Muslims and Christians lived side by side, so did hope and fear.
In December 1980, hope took a terrible blow when Yan Tatsine, a group led by the Islamic preacher Maitatsine, took to the streets in a blaze of violence. Like Boko Haram today, Maitatsine reviled Westernization. He had declared himself a prophet and clashed with the police, but was supported by some Muslim clerics. My father remembers shuddering in fear alongside other Christians in their neighborhood, Sabon Gari, as the bloodshed snuffed out 4,000 lives. Eventually, the Nigerian Army arrived, Maitatsine was killed, and his followers fled to neighboring states to continue their insurgency.
A period of peace in Kano followed. My father married. I was born. My parents were protective — too much so, I thought. They hardly ever let me venture outside Sabon Gari or get near a mosque during Friday Prayer. I could not understand why, and eventually began to rebel.
One day in October 1991, when I was not quite 9, I walked toward a large mosque near our home. It was a Friday, and the street was closed. From afar, I could see worshipers on prayer mats in the road. The mosque’s loudspeakers spewed out anger, and I wondered if this anger was why my parents warned us to stay away. Then, suddenly, worshipers spilled from the building, chanting in Arabic, punching the air with their fists.
I ran home, dazed. Later that evening, we were told that a proselytizing German Christian evangelist, Reinhard Bonnke, planned to visit Kano. The following Monday, tension smothered us like a thick veil. School closed early. Some Muslim classmates and teachers didn’t show up at all. Grown-ups muttered in hushed voices.
We children would later learn that hundreds of Muslim demonstrators had taken to the streets that day, protesting Mr. Bonnke’s visit, and rioting ensued in which Christians were attacked and killed — an estimated 200 in the city and nearby. Then Christians counterattacked, killing Muslims. For hours, I tried to wish away the screams I was hearing. For days, the air stank of burned flesh and decaying bodies on the streets. Mosques lay in ruins, charred.
Two days after the crisis started, the Nigerian Army arrived, and within the week, cleanup crews cleared the streets. But the smell lingered.
At home, we no longer laughed. Father returned to his shop, Mother to her food kiosk and we children to school. We all stayed away from mosques. But in time, our memories of the riot were thrust aside, as if into a dusty closet. We talked about almost anything else: the coming harmattan, how we could taste Christmas on our lips if we threw our mouths open and sucked in the cold air. On Christmas Eve, we played with firecrackers. By morning, we wore new clothes to church. We stuffed ourselves full of rice, goat meat and Fanta. And the decade began flitting by quietly, with little special for a child to remember or mourn.
In 2001, fully grown, I left Kano to live with my husband in Aba, a southeastern city near where my father grew up. The air here, I discovered, bubbles with the people’s unrestrained, stomach-clenching laughter, and for the first weeks it made me jittery. I couldn’t put my finger on why. It was not just the southerners’ boisterous talk, or the shocking Western way the women dressed. Here, girls could wear skirts so short they dared not bend over; their makeup stood out like street signs. And when they talked to boys, they stared them straight in the eyes.
I missed home. On my first visit to the market, I heard a bus conductor call out: “Mosque! Mosque!” I hopped on, and rode to a mosque in front of which men sold suya, a spicy northern meat kebab. I greeted a seller in the north’s Hausa language. Beaming, he returned greetings in Igbo, the language of the southeast. Had I been in the north? he asked. I said I’d just left. I ordered suya, and he served twice as much as I’d paid for. Thanking him, I started to leave. But I kept staring at the mosque.
I realized then what had made me feel unmoored: the absence of fear. I had learned to live with fear in the north. It had become a second skin, and losing it had dazed me. I missed it and the boundaries it set.
I called my parents and told them I wasn’t sure whether I loved this new freedom to laugh loud, to wear red lipstick and miniskirts. Most of the time, I missed Kano itself, and the good memories of peaceful interludes. My mother took to visiting Aba, bearing news of new buildings or improved roads, or simply of peace. My father’s business had expanded. He’d bought a new car. She’d shut her food kiosk to work with him. She wore hope in her eyes, as we used to.
But 2004 brought another riot. Some 300 Christians had died, Mother called to tell me. She said I must never return to Kano. I never have.
Up north, we hear, Boko Haram is the group that spreads fear today. But it has taken cruelty a step further. It focuses its rage on Western education. So its victims are often children.
In the safe southeast, my mind still wanders north. I wonder how the captive girls feel. Do they dare hope for rescue? How does a high-school girl get through the day? Counting the ceiling boards of a cell? Or, worse, dealing with a husband whom Boko Haram has forced on her?
Meanwhile, Christians have relocated southward en masse. Mother and Father live in Onitsha, near me. Father said the Christians of Sabon Gari gave up after a pair of bombings mere blocks from my parents’ home.
They are safe now, but forever marked. Like me and the legions of other Christians who have fled northern Nigeria, Father wears his memories like a badge of loss.

web filter

“This planned prohibition of pornography and any other objectionable content will ultimately come at a cost to our collective interest in the freedom of expression while simultaneously turning a deaf ear to what science is or isn’t able to account for. A web filter opens the doors to abuse, stupidity, official petty-mindedness and a habit of giving up and reaching for the easiest way out.” In the light of government’s plan to filter the web, critically comment on the statement.

On April 16, 2013, Kamlesh Vaswani, an advocate from Indore, filed a Public Interest Litigation petition in the Supreme Court of India asking for the viewing of pornography to be made a non-bailable offence and demanding that pornographic content on the Internet be blocked. The court subsequently asked the government to respond to the petition. Fast forward to September 2014, by which time both the erstwhile United Progressive Alliance-II and the incumbent Bharatiya Janata Party-led governments said they were unable to track the number of cases and block Internet pornography in India.
Then, on September 5, 2014, Information Technology and telecommunications officials from various Ministries, including Union Minister for Communications and Information Technology Ravi Shankar Prasad convened at the Department of Electronics and Information Technology (DEITY) to discuss a solution to the pornography question. They discussed not why but how to implement a web filter, which is a technical system that controls what content is blocked on the Internet.
Mr. Vaswani’s petition cited pornography as being the reason for rapes in the country. But is there a demonstrable psychological link between viewing pornography and perpetrating sexual violence?
Social predispositions
Studies have shown show that non-aggressive men’ s reactions to non-violent pornography is markedly different from aggressive men’s reactions to violent pornography (Malamuth et al 2000; Kingston et al 2009). Among women, findings show that those who have experienced coercive sexual behaviour before exposure to pornography are offended by violent pornography but approve of erotica (which is the artistic use of subject matter for sexual arousal) (Senn and Radtke 1990). Similarly, women who have not experienced coercive sexual behaviour before exposure to pornography approve of non-violent pornography in general (Sommers and Check 1987).
Therefore, it is clear that pornography can’t be treated as an undifferentiated mass and that its implications for sexual violence can’t be assessed without accounting for one’s social predispositions. In fact, a 2010 study conducted by the University of Zagreb in Croatia pinpointed a confounding factor: sexual sensation seeking. The study was able to show that while there seemed to be no demonstrable link between viewing pornography and sexual behaviour, the age at which the viewer was exposed to pornography and sexual stimulation-seeking behaviour seemed to affect how aggressive the viewer turned out to be.
In fact, an Indian study published in the Indian Journal of Psychological Medicine in June 2014 was able to go so far as to conclude that “easy access to pornography did not have a significant impact on rape [and crime] rates against women” by comparing “reported incidence of crime” in 1971-2008 and “availability of pornography over the Internet with a particular focus on crime against women.”
Moreover, there are also shortcomings in evaluation hinged on the inability to statistically eliminate the unconscious biases of those designing the tests. In India, as elsewhere, these confounding factors would point at the wider social environment one grows up in. If the DEITY group really wanted to curb sexual violence, they would go after all the black sheep in this environment — from the entrenched culture of misogyny to the objectification of women in popular culture that is consumed en masse — but no. Science is unable to show that pornography causes sexual violence, and so the reason for a web filter is something else, and worthy of suspicion at that.
Some studies even argue that viewing pornography gives men and women a safe way to release their sexual stress in the privacy of their homes without having to resort to publicly dissonant behaviour (e.g. Ferguson & Hartley 2009). With a filter in place, there is a chance that sexual violence could thus increase.
So why is there so much need for a filter at all? A web filter is the answer because it is the perfect technological solution to problems that we would like to sweep under the rug without debate or discussion. It allows parents to avoid coming up with a rational explanation for why pornography is evil; it provides the perfect cover for politicians who cannot define what obscenity is, let alone try and explain how it is “destroying Indian culture.”
The people in favour of a web filter understand this all too well, which is why untenable arguments such as “pornography causes sexual violence and is responsible for crimes against women” are advanced, because they are causes that we can all seemingly get behind and support. Likewise, the war against child pornography is a great rallying call. But while it is a noble objective, it is also a mask that hides the other problems for which a web filter will be used.
The problem with technological solutions in particular, and algorithmic regulation in general, is that they are primarily judged by their efficiency and not by whether they are serving the larger interests of the population. In the pre-Internet and mobile age, we had to decide whether to deliver solutions through the market or the state, which had their own ideological differences as to who the solution was really serving.
Today this clarity is lost as our choice is between analogue and digital solutions and the only criteria by which we judge success is efficiency. When we use technology to create massive databases of citizen data, governments across the world think only about how much more efficient it is compared to the old paper-and-filing-cabinet regime and not about how these databases bring with them the potential for surveillance, tracking and profiling. The transformation from paper-filing to online database brings a number of benefits in terms of costs and convenience. What it also does is make the data more accessible than it should be, to the detriment of citizens.
Bypassing filters
A government-imposed filtering mechanism also fails to serve the larger sections of the population. As the members of the cyber regulation advisory committee pointed out, filters deployed by Internet service providers to block specific online material can be easily bypassed through a number of mechanisms.
Furthermore, it is difficult to argue whether the majority of Indians truly believe that pornography is harming this country’s cultural sensitivities. Data recently released by one of the world’s biggest pornography websites points out that Indians are, and have been, among the most prolific consumers of Internet pornography in the world.
This planned prohibition of pornography and any other objectionable content will ultimately come at a cost to our collective interest in the freedom of expression while simultaneously turning a deaf ear to what science is or isn’t able to account for. A web filter opens the doors to abuse, stupidity, official petty-mindedness and a habit of giving up and reaching for the easiest way out.
Is it worth trading away our assured freedoms for merely speculative benefits?

(Vasudevan Mukunth is a science journalist. Anuj Srivas is at the Oxford Internet Institute, U.K.)

Source: http://www.thehindu.com/todays-paper/tp-opinion/the-ostensible-reason-for-a-web-filter/article6653271.ece

Tuesday, December 2, 2014

Development as a people’s movement / Madhav Gadgil

Development was a key issue in the 2014 Lok Sabha election. In his very first speech after taking over as Prime Minister, Narendra Modi asserted that his government is committed to carrying on development as a people’s movement. This, he has asserted, will draw upon India’s democratic, demographic and demand dividends. But are we genuinely moving towards organising development as a people’s movement while building on these strengths?
At the heart of democracy is access to information. We do have the vital Right to Information Act, but need to do much more since the public is being continually misled. To reap the demographic dividend, our youth should be well nourished. But what is the reality? The government’s statistics show that 28 per cent of school children were malnourished in 1993; this came down to 17 per cent by 1999 and declined further to 8 per cent by 2006. However, this is based on information provided by schools, and many of them are guilty of maintaining bogus records of enrolment and expenses towards the provision of mid-day meals. As a cross-check, we have the data provided by the carefully and professionally conducted National Family Health Survey. According to its very different and shocking results, 53 per cent of school children were malnourished in 1993. This came down slightly to 47 per cent by 1999 and changed a little by 2006, to 46 per cent.
To cater to India’s massive population of consumers, people should have adequate purchasing power, such as that enjoyed by people employed in the industries or services sector. Unfortunately, as the malnourishment statistics indicate, a vast majority of Indians are poor, with barely 10 per cent employed in the organised sector. We are being convinced that vigorous economic growth is generating substantial employment. But this is not so. When our economy was growing at 3 per cent per year, employment in the organised sector was growing at 2 per cent per year. As the economy began to grow at 7-8 per cent per year, the rate of growth of employment in the organised sector actually declined to 1 per cent per year since most of the economic growth was based on technological progress, including automation. At the same time, the increasing pressure of the organised sector on land, water, forest and mineral resources has adversely impacted employment in farming, animal husbandry and fisheries sectors. People who are being pushed out of these occupations are now crowding in urban centres. This is in turn leading to a decline in the productivity of the organised industries and services sector. Evidently, the ship of our development is sadly adrift.
What is development?
Undoubtedly, people aspire for development. But what is development? Joseph Stiglitz, a recipient of the Nobel Prize in Economics and one-time chairman of Bill Clinton’s Economic Advisory Council, offers an insightful analysis, asserting that development should result in an enhancement of the totality of a nation’s four-fold capital stocks: the capital of material goods, natural capital such as soil, water, forests and fish, human capital including health, education and employment, and social capital comprising mutual trust and social harmony. Our current pattern of economic development is by no means a balanced process resulting in the overall enhancement of the totality of these stocks. Thus, for instance, mining in Goa has severely damaged the State’s water resources and caused high levels of air and water pollution. The ever-increasing content of metals in drinking water reservoirs has adversely impacted health. When thousands of trucks were plying ore on the roads of Goa, the resulting chaos in traffic and accidents seriously disrupted social harmony. Evidently, the single-minded focus on industrial growth is not leading to sustainable, harmonious development, but merely nurturing a money-centred violent economy.
We must, of course, continue to develop modern technology-based industries and services, but these cannot generate employment on the massive scale required. It is therefore imperative that this modern sector must rein in its adverse impacts on labour-intensive, natural resource-based occupations and livelihoods. The modern capital-intensive, technology-based economic sector must nurture a symbiotic relationship with the nature-based, labour-intensive sector. Our democracy provides for fashioning such a mutual relationship through the 73rd and 74th constitutional amendments and the Biological Diversity Act, the Panchayats (Extension to Schedule Areas) Act and the Forest Rights Act. We must take advantage of this constitutional framework that promotes decentralised governance and work with nature and people to move forward on a path towards genuine development — a path that would be entirely compatible with making development a people’s movement.
Examples of people’s movements
In Chandrapur and Gadchiroli districts of Maharashtra, both of which are Naxal-torn, there are hopeful examples emerging of how development may be nurtured as a people’s movement. A number of tribal and other traditional forest-dwelling communities of these districts now have management rights over Community Forest Resources under the Forest Rights Act. The state retains ownership over such resources, and these cannot be diverted to other purposes. But now these resources are being managed holistically with a fuller involvement of the people. The citizens of Pachgaon, for instance, have, through two full-day meetings of their entire Gram Sabha, decided upon 40-odd regulations. Tendu leaves are a major forest produce, but their harvest entails extensive lopping and setting of forest fires. So, Pachgaon has decided to forego this income and instead focus on marketing the edible tendu fruit. By stopping the collection of tendu leaves, the trees are healthier and both fruit yield and income from its marketing have gone up. Incomes from bamboo harvest have also gone up manifold, and for the first time the people are moving out of the earlier precarious existence. Notably, they have on their own initiated protecting part of these forests as newly constituted sacred groves. Such community management of forest resources is the only sane way to combat extremism, and I have every hope that the new government, with its commitment to making development a people’s movement, will wholeheartedly support these initiatives.
Verle village, perched atop Sahyadri mountains in Goa’s Sanguem taluk, provides another instance of how we can make development a people’s movement. In this charming village, the locals have initiated a cooperative tourism project. Visitors stay in the homes of the locals, which are now equipped with modern amenities, and enjoy home-cooked food. They can wander around to their heart’s content with three well-trained local youth who serve as nature guides. This is a neat example of how development benefits people at the grassroots level while safeguarding the natural heritage.
Recently, I had requested Goa University students to write an essay on any issue of their interest. Many chose tourism; they were very concerned with the negative fallout of the flourishing hotel industry. These included depletion and pollution of ground water, ever-growing piles of solid waste, encroachments on public beaches and alarming growing drug abuse, associated crimes and women’s insecurity. They also felt that few economic benefits actually reach the people of Goa. Why then can we not focus on enterprises that are nature-friendly and give full scope to local initiatives like Verle to develop tourism? Why do we not organise activities such as these that genuinely promote development as a people’s movement?
Furthermore, Goa could revive its currently stagnating mining business through novel people-oriented initiatives such as the proposal from the tribals in Caurem village in Goa’s Quepem taluka. There, extensive community lands that harbour a large sacred grove — lands that ought to have been assigned as Community Forest Resources — have been encroached upon by palpable illegal mining, which has damaged water resources, affected farming, and created social dissonance. The mines are currently closed because of the illegalities, and the Gram Sabha has unanimously resolved that if they are to be restarted, this should be done through the agency of their multi-purpose cooperative society.
The Goa government ought to seize this golden opportunity and do all that it can to ensure that it succeeds. When the first cooperative sugar factory in the country was established at Pravaranagar in Maharashtra 60 years ago, many doubted if the farmers could manage such an enterprise. But it succeeded beyond people’s wildest dreams because of capable farmer-leaders like Vitthalrao Vikhe Patil and a sympathetic Finance Minister like Vaikunthbhai Mehta. Let us therefore hope that the Goa government with its commitment to making development a people’s movement will vigorously support the Caurem initiative and create for the country a new model of how mining can be developed as a people’s activity.

(Madhav Gadgil is D.D.Kosambi Visiting Research Professor, Goa University.)

Lower petroleum prices: A mixed blessing for India / Mahesh Sachdev

The Oil Ministers of 12 member states of Organization of the Petroleum Exporting Countries (OPEC) concluded their meeting in Vienna on November 27 by deciding to continue with their three-year-old production quota of 30 million barrels per day (mbpd). Thus, they calculatingly ignored nearly one mbpd oversupply in the global oil market which has pushed the crude prices down by over 30 per cent since June 2014. The global oil glut, in turn, has been caused by a number of factors which include OPEC’s own overproduction, rising non-OPEC production (particularly by the U.S.-based “Shale Revolutionaries”) and lower demand from China and Europe. By declining to cut their output to shore up the prices, OPEC in general, and Saudi Arabia in particular, have refused to play the role of global “swing producer.”
As most factors responsible for the current global demand-supply disequilibrium are systemic in nature, the world faces prospects for relatively bearish oil prices over the foreseeable future. Indeed, the prices have continued to fall with the Indian basket touching $72.51/barrel on November 27 — a decline of nearly $9 from the average during the first fortnight of the month.
As the world’s fourth largest importer of crude, India can afford to exult at this precipitous crude price decline. Still, given the strategic importance of this development, a more comprehensive analysis is desirable.
A virtuous cycle in the economy
From the limited perspective of India’s consumer economy, lower global oil prices undoubtedly augur well. Lower pump prices reduce pressure on the consumer who can spend the savings elsewhere, spurring the demand side of the economy. As petroleum products form a large part of the consumer price indices, lower crude prices result in reduced inflation, which in turn paves the way for lower interest rates and greater buoyancy in investments. Thus, lower oil prices can trigger a virtuous cycle in the Indian economy. After all, with India’s imports running at an estimated 3.7 mbpd in 2013, a $30/barrel decline in oil prices amounts to a $40 billion savings bonanza on annual imports. The impact would be best felt on the petroleum sector where marketers have been groaning under subsidy burden. The transport sector would also be a direct beneficiary.
If we widen the impact analysis to consider the totality of the Indian economy, some challenges also appear. First, as oil producers are India’s major markets and investment destinations, their economic decline may affect the country. Recent decline in the share prices of Bharti Airtel and Bajaj Auto due to the devaluation of the Nigerian Naira illustrates this more complex trend.
Second, apart from being the fourth largest oil importer, India is also the world’s sixth largest petroleum product exporter earning over $60 billion annually — nearly a fifth of global exports. A bearish oil market would hurt this segment with reduced demand, lower unit prices and lower margins.
Third, the oil price decline coincides with resumed foreign interest in investing in India. It is difficult to assess their mutual correlation, but lower oil revenues may attenuate arrival of petrodollars into India.
Fourth, whenever oil revenues decline, countries that export Gulf oil try to tighten their belts by emphasising local production and downsizing their foreign labour force in which Indians dominate. Thanks largely to over five million Indian expatiates there, India was the world’s largest recipient of remittances which topped $70 billion in 2013. The possibility of these remittances being reduced cannot be ruled out. This would have a serious impact on remittance-dependent States such as Kerala and Goa.
Fifth, lower crude prices may cast a shadow over the sputtering controversy over natural gas pricing norms in India as the latter generally follow the oil prices. Future investment decisions in oil-related sectors may get delayed.
Sixth, lower pump prices may cause higher fuel consumption as sales of automotive products soar. This would worsen commuter woes as well as cause increased urban pollution.
Finally, a decline in oil prices generally accompanies a global decline in commodity prices, particularly those of minerals and agricultural products. India remains a major exporter of these and would see lower realisation, particularly of Guar Gum, a critical input for the shale industry.
The long-term impact of lower oil prices is likely to be felt beyond the economic domain. Geopolitically, persistent lower oil revenue could propel a number of emerging exporters towards domestic political instability as the ruling elites lose their capacity to provide “stomach infrastructure” to the common man. Countries with lower per capita oil revenue such as Nigeria, Iran, Algeria and Venezuela may be more at risk. In general, however, lower oil revenues may have a dampening effect on regional or domestic disputes.
Measures to leverage oil prices
India can leverage the current low oil prices for long-term gains. To this end, the following measures can be considered. One, it can foster long-term crude supply relationships with exporters in return for stable prices, upstream engagements, inbound investments, etc. Two, it can enter into oil-for-infrastructure barter deals to boost project exports. Three, it can restructure public sector oil companies to make them more productive and globally proactive for leaner times ahead. Four, it can channel some of the oil bonanza to mitigate the increased cost disadvantage of renewable and alternative energy sources. Five, it can build its own strategic oil reserves.
The current downturn in oil prices underlines the cyclic nature of commodity trade and illustrates OPEC’s reduced regulatory capacity consequent to it supplying only a third of global demand. While Shale Revolution may be a new and price-sensitive factor, it is unlikely to vanish with time or with lower prices. During past oil bear-hugs in 1986, 1993-99 and 2008, the lower prices invariably spurred consumption and the oil bounced back. There is no reason to believe that the oil prices shall not rise again. India would do well to recall an old oil adage, “The cure for high oil price is high oil price itself” — and use this rare, cyclic opportunity for long-term gains.

(Mahesh Sachdev has served as Indian ambassador to Algeria, Norway and Nigeria — all major oil exporting countries.)

Source : http://www.thehindu.com/todays-paper/tp-opinion/a-mixed-blessing-for-india/article6645245.ece

Sunday, November 30, 2014

A FUNNY CHUTUKLA …

***
Let me tell you a short ‘chutukla’ a dear friend once told me.
***
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. 

If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing. 
The fifth would pay $1. 
The sixth would pay $3. 
The seventh would pay $7.
The eighth would pay $12. 
The ninth would pay $18. 
The tenth man (the richest) would pay $59. 

So, that’s what they decided to do.. 

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner offered “Since you are all such good customers, I’m will reduce the charge of your daily beer by $20″. Drinks for the ten men would now cost just $80. 

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by 6 is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving). 
The sixth now paid $2 instead of $3 (33% saving). 
The seventh now paid $5 instead of $7 (28% saving). 
The eighth now paid $9 instead of $12 (25% saving). 
The ninth now paid $14 instead of $18 (22% saving). 
The tenth now paid $49 instead of $59 (16% saving). 


Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
”I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man,”but he got $10!” 

”Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” 

”That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!” 

”Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill! 


(Never mind all the math, the gist of the chutukla is that rich are overburdened with taxation in our taxation system which suffers from a ‘socialist’ mindset.)
***
And that is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is friendlier.
But does this tell us the complete story when applied to the real life? Let me tell you another chutukla…
***
To save the argument of the chutukla, let me reframe it. Let 1 beer every day be essential for a man to survive. Now obviously poor are poor. They can’t afford even 1 beer. Let us now add weight to the argument of the chutukla. Lets say there is only 1 rich man, 2 middle class men and rest 7 are poor. The rich man has the money to pay for 10 beers, middle class to pay for 1 beer each and the poor have zero money.
Lets say richest man goes in a bar alone and drinks his beer there from his own money. Now when he comes out, our other 7 poor guys and the 2 middle class men ask him to go back in and pay for their beer as well. Now in this second visit the richest man doesn’t drink, only the 7 poor and 2 middle class drink and the rich man pays the entire bill (for all 9) happily. Let this be our initial taxation system (even more unfair to the rich man than the initial chutukla, ain’t it?).
Now enter the real life. In real life, the rich man is never happy paying the bill for the other 9 men’s beers. So he goes and tells the government, “I ll pay you 1 beer (for your election spending or whatever purposes) so that you give me an exemption from paying for say 2 beers.” Now both the middle class men will have to buy their own beers (in best case)… less equity but still acceptable. But it doesn’t stop here. Our rich man now goes and tells the government, “I ll pay you 2 beers so that u exempt me from paying for 4 beers.”… Now what? In the best possible case also, 2 poor men will have to die (or be deprived of ‘minimum needed’ economic resources).
***
In real life, it is obvious that the rich man has all the incentive in the world (except should he be otherwise persuaded by a dissenting conscience) to bribe the government to save his taxes… and the government will have all the incentives in the world to accept the bribe since its overriding objective is to win elections. So in all likelihood the second chutukla is going to prevail. At least 2 poor are going to die, the rich man will invest the saved beer in a say beer refinery and produce 5 more beers tomorrow. GDP will grow and we will call this development. Funny…
The poor are worse off in the system. But they are in majority. So how does the system survive in a democracy like ours? Consider this…
***
Lets multiply everything by 2 now and let us assume that 1 beer is essential for physical survival and 1 for other basic needs like education, health, environment etc. which are otherwise essential to lead a minimum “meaningful” life. Now lets eliminate the middle class and club them with poor so that there are 9 poor. Say our rich fellow now bribes the government 4.5 beers so as to save on 9 beers in tax. Now every poor will have his 1 beer of physical survival but thats it. Election time comes and government distributes the 4 beers among the poor (read “populist” fiscal sops or alcohol, cash, mixers etc.), the poor are happy and vote for the government.
***
The rich are happy (they got to save 4.5 beers), the government is happy (it got reelected and also saved 0.5 beers), the poor are happy (they got election time sops). But the poor are still the losers for now they have been condemned to poverty in perpetuity. The poor – they never knew they had a chance of a better life… think of that child who has no future in our society now and yet he finds unparalleled joy in laying his hands upon a kite or playing with dustbin in a park riding it as if it were a horse….
The question we must then ask ourselves is whether in a civilized society (which we claim to be) can we condemn the unfortunate to live lives in perpetual “unfreedoms” (borrowing the term from Sen) given that they may find joy in small things (but which in no way can enable them to overcome their unfreedoms)? Lets not forget that men (and of course women) are human beings and not just a factor called labor used in the process of producing economic goods and services and its only the “accident of birth” which determines whether a man will be poor or rich in an overwhelming majority of cases in a real world society like India. (If you are considering of negating this then I implore you to impartially consider the probability of you being what you are today had you suffered from the “accident” of taking birth in any poor household. In fact at the risk of diverging from the current discussion, I would go to the extent of saying that the only difference between a feudal society and what we have today is that while in a feudal society there was legal sanction to the discrimination based on the accident of birth whereas now we have no such legal sanction but in 90-95% cases, our social and economic construct ensures such a discrimination prevails.)
So what can we do? The most compelling way I think is to “awaken” and “empower” people. Think of this… for 60 years since our independence the state had been providing all social goods to the poor (at least that was the declared aim). I am sure 450 years ago, Akbar would have been doing the same and some 2300 years ago, Asoka would have tried the same… yet none of it worked (or let me claim “could have” worked)… this is because the truth of all such efforts, however praiseworthy was that they were “acts of generosity by the state”. If you are a poor and the state is providing you with food, health and education, it was state’s “generosity”. It wasn’t your right… So if you happened to get nothing there was nothing which you could possibly do to redress the situation. However, if we are to really eliminate deprivation, it should be a matter of “right” for the poor to claim such benefits. Just because they happen to exist, they should have the right to have proper food, proper education and proper health… and if they don’t get it they could take action against the state…
MGNREGA (the national employment guarantee scheme) was implemented on this philosophy by making employment a right and not an act of generosity and dare I say it has been one of the most meaningful and successful schemes ever (true, there are defects but dude, we don’t live in a bookish world. In real world everything has defects).
-- Gaurav Agrawal
[This article is borrowed from Gaurav Agrawal's (IAS topper 2013) blog 'Khelo India', you can read original article with readers comments HERE ]

Saturday, November 29, 2014

RBI's payment bank norms to deepen financial inclusion

The Reserve Bank of India (RBI) on Thursday announced the final guidelines for setting up and small banks, to attract serious players and push financial inclusion. It allowed corporate houses, including telecom players and retail chains, to set up payment banks, and also gave them the option of forming joint ventures with commercial banks. But small banks will be a no-go area for companies, including promoters of large non-banking financial companies. Small banks will, however, not have any geographical restriction, as proposed in the draft norms.

Government-owned entities, such as India Post, have been allowed to set up payment banks, subject to their owner’s approval.

has asked interested parties to apply by January 16. The application will be screened by an external committee, which will send its recommendations to the central bank.

The final norms on payment banks, analysts said, were more liberal than the draft guidelines issued in July this year. Rishi Gupta, chief operating officer & executive director of FINO PayTech, said the guidelines had expanded the scope of activities and given clarity on providing third-party products and services, such as mutual funds, insurance and pension. This would open avenues to earn fee income. The guidelines have also allowed sending and receiving remittances from multiple banks & international remittances and permitted payment banks to function as business correspondents of other banks.

The guidelines have also simplified the promoter structure — listing is mandatory within three years of reaching a net worth of Rs 500 crore, unlike the requirement to dilute promoter stake to 40 per cent within three years as stated in the draft.

Besides, payment banks should have a leverage ratio of at least three per cent (its outside liabilities should not exceed 33.33 times its net worth). This was around five per cent earlier.

Payment banks are not allowed to lend and must have a cap of Rs 1 lakh on deposits which can be invested in government securities, but they will have access to the RBI’s liquidity windows. They will be required to invest at least 75 per cent of their ‘demand deposit balances’ in statutory liquidity ratio (SLR)-eligible government securities and treasury bills with maturity of up to one year. They can hold a maximum of 25 per cent in current and time/fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.

Payment banks will be allowed to issue debit cards, but not credit cards, and can offer current and savings account deposits.

CLEARING THE AIR
guidelines
Dos
  • Have to use the word ‘Payment Bank’ in their name
  • Can accept demand deposits; that is, current deposits and savings bank deposits, from individuals, small businesses and other entities
  • Can hold a maximum balance of Rs 1 lakh per individual customer
  • Will be allowed to set up branches, ATMs, business correspondents
  • Will be allowed to issue debit cards and offer internet banking
  • Can accept a large pool of money to be remitted, but the balance should not exceed Rs 1 lakh at the end of the day
  • Can accept remittances to be sent to, or receive remittances from, multiple banks
  • Permitted to handle cross-border remittances in the nature of personal payments on the current account
  • Allowed to distribute mutual fund, insurance and pension products
  • Can undertake utility bill payments
 Don’ts
  • No NRI deposits should be accepted
  • Cannot issue credit card
  • Not allowed to set up arms to undertake NBFC activities
  • Other financial and non-financial services of promoters should not be mingled with the working of payment banks

For payment banks, both cash-in and cash out services are allowed through various channels like branches, automated teller machines (ATMs) and business correspondents (BCs). Cash-in could be made through mobile banking and cash-out via point-of-sale terminals.

Initial capital requirement for payment banks, as well as small banks, have been set at Rs 100 crore. In case of the former, the promoter will have to retain a 40 per cent stake in the first five years.

For small banks, a promoter’s minimum initial contribution will be 40 per cent of the paid-up equity capital. If the initial shareholding is over 40 per cent, it has to be brought down to 40 per cent in five years. Further, the promoter’s stake should be brought down to 30 per cent within 10 years, and to 26 per cent within 12 years.

The cap on foreign shareholding has been kept in line with the existing rules for private-sector banks — at 74 per cent, with a minimum requirement of 26 per cent to be held by residents.

For small banks, the maximum loan size and investment limit exposure to single and group obligors has been restricted at 10 per cent and 15 per cent of its capital funds, respectively. Additionally, at least 50 per cent of their loan portfolio should constitute loans and advances of up to Rs 25 lakh, the RBI has said.

The central bank has also said that small banks can convert themselves into universal banks, though the transition would not be automatic; it will depend on the regulator’s approval.

The RBI has also allowed the promoter of a small bank to set up a payment bank. But banks of both types will have to be set up under a Non-Operative Financial Holding Company (NOFHC) structure.

“However, a promoter will not be granted licences for both universal bank and small bank, even if the proposal is to set those up under the NOFHC structure,” the RBI guidelines say.

Experts said more players would be interested in setting up small banks which liberated the scope of activity.

“Many players will now be interested in small banks as geographical restrictions proposed in the draft have been removed,” said Shinjini Kumar, leader (banking & capital markets), PwC India.

But large non-banking financial companies would still not be interested in setting up small banks, as they have to convert into banks. That would mean meeting reserve requirements, such as cash reserve and statutory liquidity ratios.

The banking regulator has indicated that applications will be invited on a continuous basis, after gaining experience from the present exercise.

Source: http://www.business-standard.com/article/finance/rbi-s-payment-bank-norms-to-deepen-financial-inclusion-114112700916_1.html

India to sign TFA: positives and negatives

is all set to sign the Trade Facilitation Agreement (TFA) at WTO's special General Council (GC) meeting in Geneva today. The TFA aims at easing global customs rules for smoother and easier movement of goods across international borders. India vetoed signing the deal in July this year. However it seems to have agreed now that the government has reached an understanding with the US which has promised to support its demand for a permanent food 'Peace Clause' until a definitive solution to public stockholding schemes is achieved by the WTO. 

Here are the positives and negatives once India signs the TFA
POSITIVES:
1. Industry will save transaction costs that runs into billions of dollars for exporting their products in the international markets.
2. Indian exporters will be able to achieve greater access in some of the difficult markets like US, Europe, Japan & China that have stringent customs rules and regulations.
3. Indian small and medium enterprises (SMEs) will be the biggest beneficiaries as they will now be able to spend more on marketing their products than spending time and money on tedious paperwork that result in inordinate delays. 
NEGATIVES
1. India will lose a major bargaining power before it achieves a permanent solution on the food security issue. It is believed that once the developed countries obtain the TFA, they will not expedite talks on public stockholding issue, which is in fact India's main goal.
2. To have a permanent food security 'Peace Clause', India will have to adhere to some stringent riders to avail the provision. Farmers & civil society activists fear these stringent riders will result in disastrous consequences.
3. India's main demand of having a permanent solution to the food security issue might get delayed forever. Achieving a permanent solution to the food stockpile issue entails amendment of the  Agreement on Agriculture.

source : http://www.business-standard.com/article/economy-policy/india-to-sign-tfa-positives-and-negatives-114112600180_1.html

WTO Trade Facilitation pact, food security signed

After almost 11 months of parleys, the World Trade Organization (WTO) on Thursday signed the trade facilitation agreement (TFA) and agreed to India’s demand for a perpetual ‘peace clause’ till a final solution to the issue of food stockholding is found. The decisions were taken at a ‘special’ meeting of the (GC), the highest decision-making body after ministerial conferences.

Following tense negotiations and last-minute hiccups due to oppositions from Argentina and Pakistan, the GC adopted three main decisions — signing of the TFA protocol, extension of the ‘peace clause’ for an indefinite period and setting a deadline for the remaining Bali package commitments for poorer countries. “With Thursday’s decision, our chances of getting a permanent solution to the food stockholding issue gets a massive boost. Now we do not have to beg for it. We are now in a position to negotiate an optimum solution,” an official involved in the talks told Business Standard.

WTO had not issued an official statement till the time of going to press.

The breakthrough came after India and the US earlier this month reached an understating where the Americans assured support to India’s demand for a permanent ‘peace clause’ and, in turn, India agreed to sign the TFA, which it had vetoed in July.

The TFA, expected to infuse $1 trillion into the global economy and create 21 million jobs, will now be open for ratification by all 160 member countries. After that, it will be implemented by July 2015. “WTO has taken a critical step forward by breaking the impasse that had prevailed since July. I am pleased that the US was able to work with India and other WTO members to find an approach that preserved the letter and spirit of the package of decisions reached at last year’s Bali Ministerial Conference. With this win under WTO’s belt, we can again focus our efforts on revitalising the organisation’s core negotiating function,” said US Trade Representative Michael Froman.

The Bharatiya Janata Party, which came to power at the Centre in May after a landslide victory, had vetoed adoption of the process that would have turned the TFA into a legally binding deal by July 31, the previously set deadline.

Since then, the government had been insisting on having a parallel agreement on public food stocks for its poor and marginal farmers.

STEPS TO THE PACT
  • Dec 7,’13: WTO 9th ministerial concludes in Bali. Members agree to sign TFA. India claims victory for achieving the ‘peace clause’ for a period of four years that will give it the freedom to provide WTO-prohibited subsidies to its poor and marginal farmers
  • February ‘14: July 31 fixed as deadline to sign TFA pact; to fully implement it by July 2015
  • July 31: WTO General Council suspended; India refuses to sign the TFA, demands a parallel agreement on food stockholding
  • Sep 29: Preparatory committee on trade facilitation meets; India stays firm on stand. US denies further meetings on TFA,  demanding a pact on along with TFA will entail collapse of entire Bali Package
  • Sep 30: PM Modi holds first meeting with US President Obama; both agree on achieving "next steps" in WTO talks
  • Oct 16: Trade Negotiations Committee meets; talks inconclusive
  • Nov 13: India claims to garner US’ support on its concern for food stockpiling
  • Nov 27: WTO ‘special’ General Council agrees to TFA implementation and food security ‘peace clause’

A permanent ‘peace clause’ insulates India and other developing countries with public stockholding programmes from challenges by other WTO members, even for violation of global rules on farm subsidies.

The so-called ‘peace clause’ also grants India the freedom to offer subsidies to its farmers without following any limit. The cap, according to WTO rules, is 10 per cent of the total production of the crops that are covered under the food stockholding programme.

At present, India offer subsidies in the form of ‘minimum support price’ for rice, wheat and cereals. However, the ‘peace clause’ does not come for free. India, along with other developing countries, have to adhere to some strict conditions to avail of the interim relief. The most important rider pertains to future food stockholding programmes, which would not be covered under this provision. In other words, any new food stockholding programme will have to follow WTO’s 10 per cent threshold.

Another condition is that countries following food stockholding programmes will have to ensure they do not distort trade and adversely affect similar schemes of other developing countries. Otherwise, the affected country will have to the option of appealing to the WTO dispute-settlement body.

Minister of State (independent charge) for Commerce & Industry Nirmala Sitharaman is expected to make a statement on Friday.

--Nayanima Basu / Source : http://www.business-standard.com/article/economy-policy/wto-trade-facilitation-pact-food-security-signed-114112701151_1.html

Friday, November 28, 2014

Happy Ending | Review



Only reason to watch this film was ( even after critics declared it 'flop' ) its story. Its a story of a writer (best selling) who stop working coz he thought ki there is enough to enjoy so why should work! I thought, I ll gain something as writer but forgot that its a Krshna & Raj's film and they never add a single meaningful scene in their films.

Saif Ali Khan is in cool-guy avatar , is a single book wonder who is struggling to survive. Illeana D'cruz as new successful writer, who is enjoying her success. Govinda as typical bollywood hero, Ranvir Shorie as Biwi-se-Bachao character and Preity as Saif's ex GF, Kalki as Saif's current GF and Sif again as his alter ego Yogi. Overall cast is good and anyone can make a hit film from it except director duo. I don't know why they are here in film industry.

Illeana and Saif has common agent and they meet there. Saif gets new assignment as script writer for Govinda's film, hang out with Illeana and Ranvir and story goes on. Dialogue contain many urban dictionary words and few ma-bahen gali and sometimes make you laugh and sometimes you feel- why the fuck is gali is here.

Music is ok ok. None of the song will remain in your mind for so long.

Saif, Govinda and Ranvir did well, Illeana is good and looked bful. Preity is as always justified her small character.


Youth : The demographic challenge

The rhetoric on the capacity of countries to reap the so-called demographic dividend cannot mask the more complex reality of a not-so-young world in 2014, and non-uniform patterns of growth. About a quarter of the world’s population — 1.8 billion — is in the age-group of 10-24 years, according to the latest United Nations Population Fund report. In 1950, the proportion was higher, at almost a third of the global total, at 721 million. The 10-24 age segment has thus declined overall, while it has more than doubled in absolute terms during the period. This means that in theory, people in this age bracket, their number larger than China’s population, can hope to live longer, be better fed and educated, do decent jobs and earn adequate incomes. In concrete terms, this segment would swell the share of the working-age population — those between 15 and 64 years — over the next few decades. But here is the catch. Nine out of ten people, or 89 per cent, in the 10-24 age-group live in less developed countries, says the UNFPA report. Most people who are alive today are below 30 years of age. In 17 states, 15 of them from sub-Saharan Africa, one half of the population is under 18 years. One in three girls in the developing world is married before reaching 18, raising the risk of early and perhaps unintended motherhood among children and hampering the realisation of their full potential. One in seven HIV infections occur during adolescence.

According to the World Bank, last year there were 100 dependents (those below 15 years and above 64 years) for every 100 people in the working age in Angola. The ratio was even higher, at 103, for Chad; for other states in the conflict zones of sub-Saharan Africa, the figures were in the 80s and more. Whereas India’s age-dependency ratio has ranged in the 50s per 100 working population between 2010 and 2013, China has stayed in the mid-30s during the corresponding period. India’s higher ratio underscores the extent to which social protection measures would have to be strengthened for both the components to ease their mutual interdependence and enhance the quality of life. Alongside measures to boost growth and attract multinational corporations in the manufacturing and services sectors, Prime Minister Narendra Modi must take up massive public-funded programmes in basic education, health care and vocational training, with a thrust on building a clean economy. Only then could the current younger age profile of the population prove advantageous. The demographic dividend refers to the potential among countries to increase economic growth by taking advantage of the changing age structure in the population. Clearly, a great deal remains to be done to realise this potential.

Source: http://www.thehindu.com/todays-paper/tp-opinion/the-demographic-challenge/article6637656.ece