Governance today august 2016

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AUGUST 2016 VOL. 02 ISSUE 11 `60 RNI NO: UPENG/2014/62662 ISSN 2455-0426 PR NO: UP/GBD-212/2015-17 Date of Publishing 04-08-2016 Date of Posting 07-08-2016

LET THERE BE LIGHT

2 I August 2016

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4 I August 2016

16 Let there be light!

Among real issues, power availability is the most used phrase during election campaigns in India. Not surprisingly, because it has been the most scarce commodity for Indian population since Independence. Even today, nearly seven decades after Independence, it is a frequent sight to see miles after dark miles after sunset, just hundred kilometers out of any major city. It is a commentary on not only the faulty planning and management of power sector, but also on the horrible execution of whatever is planned. For far too long, power has been a political subject, like every other major commodity, resulting in badly skewed power tariffs, improper and poor power availability, huge and unproductive power subsidies, and power theft. Yet, even with such haphazardness, electricity is a crucial economic sector and with a weightage of 10.32 per cent in the Indian government’s index of core sectors, it bears much more impact on the economic health compared to say coal, which has a weightage of 4.38 per cent, and cement which has a weightage of 2.41 per cent.

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REGIONAL CONNECTIVITY IS THE CENTERPIECE OF THE AVIATION POLICY 24 P. Ashok Gajapathi Raju Minister of Civil Aviation (MOCA)

WE NEED TO ENSURE THAT SMALL FARMERS RETAIN COMPLETE CONTROL OVER THEIR LAND AND FARMING Dharmendra Kumar Director, India FDI Watch

36

EU INDIA FTA SHOULD BE AMBITIOUS TO TAKE TRADE TO A HIGHER LEVEL Jan Luykx 28 Ambassador of Belgium to India

26 NURTURING TODAY’S DREAMS AND

TOMORROW’S REALITIES 31 39

IT IS BECOMING EASIER TO DO BUSINESS IN INDIA Richard Heald CEO, UK India Business Council

40 33

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REFORMING CAMPUS POLITICS STAGE SET FOR A DEAL ON HFC PHASE-DOWN SEBI MAKES REIT ROUTE EASIER FOR REALTY SMART CITIES - WATER SECURITY THROUGH INTEGRATED APPROACH INDIA’S FORESTRY LAWS ON THE PATH TO SELF-DISCOVERY

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Editorial

Pushing renewables to address power problems

I

n routine conversations with our friends about the benefits and conveniences (or otherwise) of their localities and areas of residences, the first question we ask is how efficient is the supply of electricity and how many times the power trips, trying to figure out what would it be like to spend a summer night in their locality. Such is the (mis)trust and faith we have on our electricity departments known for their (in)efficiency.

India aims to be a superpower in years to come. What it fails to realize often is that power comes from industrial and economic strength, not just military strength. But in reality, our industry is losing competitiveness globally because they have to install alternative power infrastructure simply because they cannot rely on government to supply power continuously. What they do get, is costly and at fluctuating voltage. On the other hand, our farmers, whom no political party fails to woo in every election, and to whom government provides free electricity for agricultural use, frequently go without power. Surely something is wrong in power sector of this country.

Our power plants are highly inefficient. Most plants have low plant load factors which means their power generating efficiency is very low. On top of this, our transmission and distribution system delivers only three fourth of power generated, lowest in the world.

Privatization of distribution which was a novel step to ensure efficiency has fallen flat and most private distribution companies are in red. All plans to make them financially viable have failed so far. Then there are problems regarding our fuel mix. Over 60 per cent of our electricity is generating burning coal, which is highly environmentally polluting. This is especially bad because our coal is not high quality.

However, the good part is that the government is working in multiple fronts to improve the situation. It has turned around CIL which is now ensuring record coal availability to plants. It has successfully auctioned new coal blocks, the power generation is on upswing and capacity is being added up fast. However, the most important aspect of the government’s planning is the focus on non conventional and nuclear power.

It has ratcheted up the target for renewables, including solar from which it expects to get 100 GW of power over next few years. Also, it is working on multiple nuclear power plants and has secured fuel supply from abroad. All of these inspire confidence that the power situation would improve over coming years.

The monsoon is at its peak and is playing havoc in many parts of the country. On the one hand, many parts of the country are under flood and on the other hand, in cities like Delhi NCR, it is causing miles long traffic jams and other problems, which have created much problem for people and governments alike. The government needs to work on multiple fronts to take care of this situation. India receives over 80 per cent of its rains in just a couple of months. As such, rainwater harvesting is a must. Further, the governments both at central and state levels need to prepare better for flood control and management. In cities, sewage infrastructure which are tottering in most cases, need immediate and comprehensive overhaul. Only then we can actually enjoy the monsoon and not fear it.

Best regards

Ajit Sinha Editor-in-Chief www.governancetoday.co.in

August 2016 I 7

THUS THEY SPOKE Pakistan is struggling with terrorism itself — the Lal Masjid was attacked — but, at the same time, (it) arms our youth. It has to stop.

Rajnath Singh Union Home Minister

I and my party are very much in favour that residents of Bihar should get preference in employment in state jobs. ... There is a need for intense discussions on the topic and if consensus emerges among all parties, steps could be taken in this direction.

Nitish Kumar Chief Minister, Bihar During elections, Modiji had said ‘make me a chowkidar’ (watchman). Now, there is theft of dal under the very nose of the chowkidar. But the chowkidar has not uttered a word. He is mum. ... Now he has become a big person. Leave that job of chowkidari to the Congress.

Rahul Gandhi Vice President, Congress There should be a CBI inquiry. The whole episode relating to my selection had gone to court. There was a CID report that my life is under threat. All this makes it clear, I have been framed so that I am stopped from going to Rio.

Narsingh Yadav Wrestler, India

I apologise to those who were personally offended, my intention was not to attack him (Rajesh Khanna).

Naseeruddin Shah Actor, Bollywood

He (Donald Trump) has taken the Republican Party a long way, from ‘Morning in America’ to ‘Midnight in America. ... He wants to divide us - from the rest of the world, and from each other.

Hillary Clinton Presidential Candidate, US 8 I August 2016

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GOVERNANCE WATCH

Health likely to become a fundamental right soon

No annual increment for nonperforming employees

Health could soon be declared a fundamental right of every individual, similar to education, if the draft National Health Policy proposed by the ministry goes through. Pending for nearly two years, the draft is expected to be sent to the Cabinet this month. Among various proposals, the draft policy advocates a National Health Rights Act, which will make “denial of health” an offence. It proposes that the Centre, in coordination with states, should use the legal clause available under the Clinical Establishments Bill and ensure health as a fundamental right. Besides, it suggests raising public health expenditure to 2.5 per cent of GDP from the current 1.2 per cent. The draft addresses issues of making available universal health coverage, reducing maternal and infant mortality, as well as making free drugs and diagnostics available at least in public healthcare facilities in the country. It suggests that the Centre must amend laws to align them with the current healthcare scenario.

The Centre recently said non-performing Central government employees will not get annual increment if their performance is not up to the mark. The benchmark for performance appraisal for promotion and financial upgradation has been enhanced to “very good” from “good” level, the finance ministry said in an order notifying implementation of Seventh Central Pay Commission’s recommendations. The Modified Assured Career Progression (MACP) scheme will continue to be administered at 10, 20 and 30 years of service as before, the ministry said. The recommendation of “withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service” has been “accepted”, it said. The pay panel had in its report said that there is a widespread perception that increments as well as upward movement in the hierarchy happen as a matter of course.

Child labour Bill passed in Parliament Parliament recently approved a controversial law that would allow children to work for family businesses, despite widespread concern by the United Nations and other rights advocates that it will push more children into labour. A week after the bill was passed by the Rajya Sabha, the Lok Sabha approved the measure that brings a raft of changes to a three-decade-old child labour prohibition law. The bill now goes for the President’s assent before becoming law. The UNICEF as well as many others have raised alarm over two particular amendments - permitting children to work for their families and reducing the number of banned professions for adolescents. A 2015 report by the International Labour Organization (ILO) put the number of child workers in India ages 5 to 17 at 5.7 million, out of 168 million globally. The new legislation extends a ban on child labour under 14 to all sectors. www.governancetoday.co.in

August 2016 I 9

GOVERNANCE WATCH

Govt to rank states on health, education parameters

Exit exam for MBBS students on cards

States will now be ranked on the basis of their performance in the social sector, including health and education. The move, initiated by Niti Aayog, is aimed at encouraging states to compete among themselves and improve social sector indicators as there is growing realisation that performance in health, nutrition and education has not kept pace with the country’s economic growth. As the states are the implementing agency for welfare schemes costing around Rs three lakh crore every year, the ratings will push them to perform. To begin with, the focus is on ranking of health and nutrition as Niti Aayog has designed a framework to measure incremental improvement in states’ performance in this sector. According to an official, the Aayog will engage third party, likely to be World Bank, for measuring the states’ performance in the health sector.

The Centre is planning an exit exam for MBBS students passing out of government as well as private medical colleges to address concerns over the standard of medical colleges and the quality of doctors being produced in the country. The move is part of wideranging reforms in the medical sector being considered by a high-powered committee headed by Niti Aayog vice-chairman Arvind Panagariya. The PM’s additional principal secretary P K Mishra and Niti Aayog CEO Amitabh Kant are the other members. The panel is also set to recommend scrapping of Medical Council of India (MCI) and replacing it with a National Medical Commission (NMC) which will have four independent boards to oversee under-graduate and post-graduate education, accreditation and rating of colleges, medical register and ethics. There will also be a Medical Advisory Council (MAC), with members from states like an eminent professional such as a professor from a medical college.

A Bill to increase green cover and protect wildlife passed in Parliament A much awaited Bill, meant for unlocking over Rs 42,000 crore fund for compensatory afforestation and wildlife protection, was passed by the Parliament recently. The Rajya Sabha approved the Bill after the government assured the Upper House that it would make enough provision in rules to safeguard the interests of forest dwellers and tribals. The Lok Sabha had passed it - Compensatory Afforestation Fund (CAF) Bill - during the budget session in May. The Bill, once got the assent from the President, will also create an institutional mechanism for use of fresh accrual of estimated Rs 6000 crore per annum (beyond those locked Rs 42,000 crore) that would be collected for diversion of forest land for non-forest use in future.

The legislation is also aimed at setting up the National Compensatory Afforestation Fund at centre and the State Compensatory Afforestation Fund in respective states.

10 I August 2016

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GOVERNANCE WATCH

Govt plans to train 10 lakh unemployed youth in 3 years The Ministry of Human Resource Development said over 10 lakh unemployed youth including school dropouts will be trained by engineering colleges to make them employable in the next three years. According to the officials in the ministry, the unemployed youth will be imparted skill training under Pradhan Mantri Kaushal Vikas Yojana by technical institutions. Beginning from the academic year 2016-17, the scheme aims to rope in 2,500 colleges initially to provide skills training to 100 people each and there is no age bar for candidates who will not only be trained but also be provided placement assistance and counselling. The number of colleges would be raised to 3,000 in the next academic year and to 5,000 in 2018-19. The scheme envisages colleges and polytechnics under the All India Council for Technical Education (AICTE) to be utilised for its implementation. A national-level committee, headed

by Higher Education Secretary in the HRD ministry, will supervise implementation of the scheme.

Census-based study for learning outcome opposed by 3 states Haryana, Tamil Nadu and Karnataka have expressed serious reservations to the Prime Minister’s Office’s idea that a census-based assessment of learning outcomes be done at the school level. In the recently concluded Joint Review Mission (JRM) of Sarva Shiksha Abhiyan, Haryana and Tamil Nadu made a strong pitch for sample-based assessment and showed from their experience how it has worked and helped improve the system. Even NCERT has expressed reservations.

Many states have pointed out that the idea of censusbased assessment has come from a big NGO working in the field of education and has found takers in the PMO and multilateral agencies. As per a senior Tamil Nadu official, the census-based assessment would not give the kind of data that is expected. As per him, the sample-based assessment of Class III, V and VIII students in Tamil, English and Mathematics that Tamil Nadu started in 2012-13 was not only easy to administer but also helped draw conclusions easily.

Drug price regulation saved Rs 4,988cr in 2 years Various drug price regulatory measures by the government helped consumers save Rs 4,988 crore over the last two years, Rajya Sabha was told recently.

Following approval of the pharmaceutical pricing policy in 2012, the government has capped prices of essential medicines at least three times since 2013, when the policy was first implemented by the National Pharmaceutical Pricing Authority through the Drugs Price Control Order (DPCO), 2013. According to chemicals and fertilizers minister Ananth Kumar, the drug price regulator NPPA had initially brought 530 essential medicines under price control, giving consumers a benefit of Rs 2,422 crore.

Thereafter, the government revised the National List of Essential Medicines to include 404 more drugs, which saved consumers another Rs 2,216 crore. Apart from this, the NPPA also fixed prices of 106 other drugs under public interest provision which saved consumers Rs 350 crore in a span of last two years. www.governancetoday.co.in

August 2016 I 11

GOVERNANCE WATCH

Chapters on disability soon HRD Minister Prakash Javadekar recently said chapters on disability will soon be included in school curriculum to increase awareness and sensitize the youth about the issue. At a bikers’ rally in New Delhi to spread awareness about universal accessibility for the differently-abled, Javadekar said educational institutes would be made accessible to the disabled in a phased manner, according to an official statement.

The ‘Ride for Accessibility’ was organized as part of a campaign run by the Ministry of Social Justice and Empowerment to spread awareness about the issue.

The department of empowerment of persons with disabilities (Divyangjan) is running an Accessible India Campaign (Sugamya Bharat Abhiyan) for creating universal accessibility in built environment, public transportation and Information and Communication Technology (ICT) eco-system. The campaign was initially launched by PM Narendra Modi on the occasion of the International Day for Persons with Disabilities.

Prohibition law to be more stringent in Bihar The Bihar government recently circulated Excise Amendment Bill in the Assembly with more stringent measures to enforce prohibition law, which includes putting behind bars all adult members of a family in case liquor was found from their house. The proposed Excise Amendment Bill which intends to provide more teeth to the existing prohibition law was circulated among members on the opening day of five-day monsoon session for their comments. The draft has already been cleared by the Nitish Kumar Cabinet and the government aims at getting it approved by the Assembly in the current monsoon session itself. The 44-page draft of Excise Amendment Bill also has stern punishment for giving illegal advertisement in support of liquor or other intoxicant. It further has a provision of life sentence for those engaging minor below age of 18 year or a woman for sale, hide, transportation and distribution of intoxicant.

India aims to double tiger population by 2022 Union Environment Minister Anil Madhav Dave recently reiterated the government’s resolve to double the country’s tiger population through conservation and care by 2022. Speaking on the occasion of International Tiger Day on July 29, Dave appealed to tourists to visit India to see tigers. With 2,226 tigers in its forests reserves, India is home to majority of the world’s wild tiger population. The minister emphasised that India is contributing significantly towards achieving the St. Petersburg target, commonly referred to as the global wildlife conservation goal `TX2’, which aims to double tiger numbers in the next six years. NGOs working for the cause of tigers noted the proliferation of tiger trade in the world which prompted poachers to lay their hands on tigers wherever they find opportunities to kill them for their body parts. Led by the London-based Environmental Investigation Agency (EIA), these organisations noted that there are 7,000-8,000 captive tigers in the world.

12 I August 2016

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GOVERNANCE WATCH

Maternity leave for 26 weeks soon After year-long deliberations, the Union government has begun the process of fixing maternity leave to 26 weeks — six-and-a half months — across sectors. This is more than double the leave mothers get in the private sector: 12 weeks or three months. Maternity leave for government workers is six months. A group of ministers headed by Finance Minister Arun Jaitley recently gave the green signal to the labour ministry’s proposal to increase maternity leave for working women. Women and Child Development Minister Maneka Gandhi met labour minister Bandaru Dattatreya and requested him to expedite the process. If the Union cabinet clears the proposal, India will become one of 40 countries where maternity leave benefits span more than 18 weeks.

The International Labour Organization’s Maternity Protection Convention mandates a minimum 14 weeks of maternity benefit to women but recommends that countries should increase it to 18 weeks.

Healthy growth in medical tourism India has seen a huge jump in the number of visas given to patients, indicating a further liberalisation of the visa regime. The number of medical visas given in 2014 was 75,671, which increased to 1,34,344 in 2015, up by almost 80 per cent. The first six months of this year has seen 96,856 medical visas issued. This follows the online tourist visa scheme that was initiated in 2013 and has gradually been increased to 150 countries.

The highest number of patients in 2015 came from Bangladesh (68,034) followed by Afghanistan (19,644), Nigeria (5,765), Iran (5,656) and Oman (4,728.) The people coming to India under the medical visa category include patients and their attendants. The steady increase in the number of patients seeking medical and wellness solutions in India comes due to a variety of reasons with the country boasting of not only topquality medical professionals but also state of-the-art facilities and reasonable costs as compared to several other countries.

Author-activist Mahasweta Devi no more Noted litterateur and social activist Mahasweta Devi passed away recently at a private hospital in Kolkata.

The 90-year-old Magsaysay awardee was admitted to the hospital on June 22, 2016 with septicemia and urinary infection. She was also suffering from diabetes. The condition of the author — who has played a significant role to uplift the extremely backward community, Kheria Sabar — deteriorated over the last few weeks, following which an eight-member medical board was formed for her treatment. She was put on ventilator support. Wife of one of Bengal’s most prolific playwrights and litterateurs, Bijon Bhattacharya, the activist-writer grew up in the family of Bengal’s leading writers, poets and filmmakers.

Filmmaker Ritwick Ghatak was her uncle. Influenced by the Communist movement of the 1940s, she chose to work among the poorest of the poor in the tribal areas of southern West Bengal and in other parts of the country. www.governancetoday.co.in

August 2016 I 13

GLOBAL WATCH

China, Russia to hold naval exercise in SCS Close to the UN ruling against its position on South China Sea, Chinese will be holding what they have termed “routine” naval exercises with Russia in the South China Sea in September. China claims most of the South China Sea, through which more than $5 trillion of trade moves annually. China has said that the drills are aimed at strengthening their cooperation and are not aimed at any other country. China’s defense ministry spokesman said that the exercise is aimed at strengthening the developing ChinaRussia strategic cooperative partnership. Chinese and Russians have shared opinion and positions on multiple global issues of late, including those on Syrian crisis and on alleged American hegemony. Last year, the two had held joint military drills in the Sea of Japan and the Mediterranean. White House spokesman Josh Earnest played down the significance of the exercises even though he conceded that the South China Sea was “a sensitive diplomatic topic right now”.

Suu Kyi holds talks with rebels Myanmar leader Aung San Suu Kyi has held talks with one of the most heavily armed rebel groups Wa. The “very positive discussions” between leaders of the Wa, a powerful group called the Mongla army, and Suu Kyi were an “important first step” in building trust, Suu Kyi’s spokesman said. The United Wa State Army (UWSA) stopped fighting the government in 1989 in exchange for control of a remote portion of territory bordering China, but they continue to have a 20,000 to 25,000 strong standing army and are yet to commit to a full nationwide ceasefire. The Wa are accused of producing and trafficking huge amounts of methamphetamine and heroin from their secretive holdout and buying weapons with the proceeds. Myanmar’s border is home to multiple ethnic groups which have been in the state of conflict for long. Many ethnic groups had joined Myanmar after a deal with Aung San, the country’s first leader but after military came to power, the deal collapsed resulting in conflicts.

NATO commits $1 Bn to Afghan forces NATO allies have promised to pump around $1 billion annually over the next three years to help fund Afghan security forces. NATO has been present in Afghanistan since 2003 and has invested tens of billions of dollars in trying to stabilize the country. This came after US President Barack Obama announced that the United States was shelving its plans to cut the US force in Afghanistan nearly in half by the end of 2016, opting instead to keep 8,400 troops there till the close of his presidency next January. The United States has been keen to secure the target of a billion dollars annually to support more than 350,000 Afghan security forces as it draws down its own military presence in the country. The Pentagon has budgeted $3.45 billion in annual US funds to pay for the Afghan forces, with the Afghan government providing an additional sum of around $420 million, for a total yearly budget of nearly $5 billion.

14 I August 2016

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GLOBAL WATCH

European banks better prepared for shock According to the European Central Bank (ECB), the euro zone’s biggest banks would fare better in case of stress than two years ago as they have amassed capital and made headway in fixing their balance sheets. The ECB said this after conducting a stress test of the bloc’s 37 biggest banks.

The banks entered the test with an average Common Equity Tier 1 capital ratio of 13 per cent, above the 11.2 per cent two years ago, and would still hold a 9.1 per cent capital ratio in case of an adverse scenario, above the 8.6 per cent seen in 2014, the ECB said. It also said that all but one bank showed CET1 capital levels well above the benchmark of 5.5 per cent applied in 2014 in the hypothetical adverse scenario. In a realted development, France’s central bank said that a stress test carried out by European Banking Authority (EBA), confirmed the resilience of the six French banking groups that were tested.

Japan upgrading missile defense In view of the North Koran threats to the 2020 Tokyo Olympic Games, Japan is upgrading its Patriot PAC-3 missile defense system. It the most significant upgrade to Japan’s missile defense system in a decade. The rollout of the new advanced Missile Segment Enhancement, which could double the range of the current PAC3 missiles to around 30 km (19 miles), will likely start next year, according to the sources. North Korea in June test-fired what appeared to be two Musudan rockets.

The first failed, but the second traveled 400 km, more than halfway towards the southwest coast of Japan and reached a height of 1,000 km - enough altitude to give its warhead a range of more than 3,000 km. Japan is also considering purchasing the advanced Terminal High Altitude Area Defense, or THAAD, anti-missile system, which Washington and Seoul have agreed to deploy in South Korea. China has complained to the move saying it would destabilize the regional security balance.

Google meets Italian demand on data use According to Italian data privacy regulator, Google had met its requests to change the way it treats and stores user data to bring practices into line with Italian rules. It said that the monitoring of Google would continue. Under the changes agreed, Google will have to make clear to users how their data is used and will not be allowed to use data to profile users without their prior consent. Users will be allowed to withhold or grant consent partially. Two years ago, the watchdog had given Google 18 months to comply fully with the country’s laws saying that the American giant that its disclosure to users on how their data was being treated was inadequate. The move was one of several privacy challenges against the U.S. Internet giant in the European Union, highlighting the bloc’s desire to ensure its citizens’ data is treated according to EU law, even when held in foreign jurisdictions. www.governancetoday.co.in

August 2016 I 15

COVER STORY

Let there be light!

Anand Mishra

A

mong real issues, power availability is the most used phrase during election campaigns in India. Not surprisingly, because it has been the most scarce commodity for Indian population since Independence.

Even today, nearly seven decades after Independence, it is a frequent sight to see miles after dark miles after sunset, just hundred kilometers out of any major city. It is a commentary on not only the faulty planning and management of power sector, but also on the horrible execution of whatever is planned.

For far too long, power has been a political subject, like every other major commodity, resulting in badly skewed power tariffs, improper and poor power availability, huge and unproductive power subsidies, and power theft. Yet, even with such haphazardness, electricity is a crucial economic sector and with a

16 I August 2016 2016

weightage of 10.32 per cent in the Indian government’s index of core sectors, it bears much more impact on the economic health compared to say coal, which has a weightage of 4.38 per cent, and cement which has a weightage of 2.41 per cent.

Fortunately, over last decade or so, real progress has been made.

Electricity Act 2003 paved way for private investment and easing of anachronistic norms, metering of unmetered connections was pushed through, transmission was privatized in pockets and purchase of power made easy on all India basis. The 2014 amendments aims to further build on it to improve things for power generators and transmission companies. Government has also taken other measures such as the Coal Mines Special Provision Ordinance, e-auction of coal blocks, auction of natural gas, Integrated Power Development Scheme (IPDS), Ujwal DISCOM Assurance Yojana (UDAY) and Deendayal Upadhyaya

Gram Jyoti Yojana (DDUGJY) for making power available for all and making Discoms healthy again.

Besides, it has been working on improving the ease of trading power through the national grid and putting aggressive focus on renewable energy generation to increase efficiency and reduce load on polluting fuels. For example, it has increased its PV capacity target for 2022 from 20 GW to 100 GW. However, coal will continue to remain the dominant fuel in foreseeable future and according to International Energy Outlook 2016 (IEO2016) of the US Energy Information Administration (USEIA) , China and India alone account for 69 per cent of the projected worldwide increase in coal-fired generation, while the OECD nations continue to reduce their reliance on coal-fired electricity generation.

At 1,108 billion units, India was the fifth largest electricity producers and third largest consumer of

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electricity in the world. However, on per capita level, it is near the bottom of G20 countries. As of June 3, 2016, India’s total power generation capacity was 303 GW. At just under 70 per cent, thermal accounted for the bulk of the total. Capacity from renewable sources, including hydro and wind, among others made up around 28 per cent of the total.

And the remaining about 2 per cent came from nuclear power.

Between 2010 and 2015, electricity production expanded at a CAGR of 6.3 per cent. Within thermal, according to Central Electricity Authority (CEA), coal alone accounts for 61 per cent followed by gas at 8 per cent. As for distribution of power generation capacity, while majority of states continue to grapple with power shortages, three states in the eastern region—West Bengal, Odisha and Chhattisgarh have recently turned power surplus.

Moving forward, electricity demand is expected to touch 1,900 billion units by 2020. The government targets capacity addition of 88.5 GW under the 12th

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Five-Year Plan (2012–17) and around 100 GW under the 13th Five-Year Plan (2017–22). As for renewable energy on which the government has laid extra focus, the installed capacity reached 36.5 GW as on October 2015. The targets too have been fixed rather ambitiously for the segment. As for nuclear energy, India aims to massively increase the nuclear power generation capacity post Indo-US nuclear deal. It has started to get uranium from Russia, France and Kazhakhstan and is negotiating supply from Australia.

It also sits on one of the world’s largest reserves of thorium which could provide clean fuel for nuclear power.

Major problem areas In December last year, citing challenges like fuel supply risks, cost overruns at private plants and financially weak discoms, Moody’s Investor Services kept India’s power sector outlook at negative.

In its press release, it said “Our outlook for the Indian power sector remains negative, because the industry faces persistent challenges, mainly resulting from high, albeit moderating, fuel supply risk, cost

over-runs at some plants operated by independent power producers (IPPs), and the limited capacity to pay on the part of financially weak distribution utilities.” But these are not the only problems that experts cite to with respect to problems related to Indian power sector.

Aggregate technical and commercial (AT&C) losses are said to be the bane of country’s power sector and is a symbol of what ails the broad system. About quarter of power generated does not reach the customers and is lost mid way.

This is the highest loss rate in the world which averages at around 15 per cent globally. Technical losses are caused because of multiple factors including substantial energy being sold at low voltage, sparsely distributed loads over large rural areas, inadequate investment in distribution system and improper billing. High loss levels also have led to supply outages throughout the country, including the largest power outage in the world which occurred in 2012 and left over 650 million people without power in north and east India.

But while technical improvements and expansion of the national grid have helped reduce electricity losses to some extent, it has been more than undone by theft which accounts for most of India’s

August 2016 I 17

THE ELECTRICITY GENERATION HAS GROWN CONSISTENTLY

Source: Ministry of Power, GOI

transmission and distribution losses.

Theft takes place in two ways. First, energy consumed is not accounted for, which mostly happens as a result of consumers rigging lines to bypass their electricity meters or directly tampering with their meters.

Secondly, customers avoid paying for some or all of the electricity they consume. Often they bribe utility meter readers or billing agents.

High AT&C losses are also a major reason for financial nonviability of distribution companies (discoms), among others. Most State Electricity Boards and discoms are not taking power because they are unable to generate revenues by selling power. This sometimes results in an awkward situation in which there is power available at plant but with no buyers even as end users stay in dark. According to experts, distribution companies 18 I August 2016

are losing over one rupee per unit they are selling. Despite financial assistance, viability gap funding, mandates to ensure tariff revision and energy accounting by the central and state governments, discoms have remained financially unviable.

Over 60 per cent of India’s power comes from coal and obviously, the supply of coal is crucial to keep plants running.

However, coal availability has been a gray area for coal based thermal power plants for long. Coal supply

by Coal India Ltd (CIL) is restricted to around 65 per cent of actual coal requirement by coal-based thermal plants. It is not without reason that India, despite being the thirdlargest producer of coal globally, is also the fourth-largest importer of coal. Furthermore, much of the coal produced in the country is of a relatively inferior grade.

Only a small part of the country’s coal reserves is of the anthracite variety, with the rest being of the bituminous, lignite or peat genres.

Even within bituminous, the highercarbon grades preferred by the power plants, are less commonly produced. It forces coal-fired thermal plants to either use subquality coal leading to lower energy

COAL DOMINATES THE POWER CAPACITY

Source: Ministry of Power, GOI

www.governancetoday.co.in

generation or mix costly imported coal and improve the overall output.

Because of poor fuel quality, the average energy efficiency of these plants is lower than 33 per cent, which according to Center for Science and Environment (CSE), is among the lowest in countries that heavily depend on coal-based thermal power. Some coal based power plants have energy efficiency of below 20 per cent.

Another complicated problem plaguing Indian power sector is the terrible plant load factor (PLF) of power plants, which basically is the ratio of actual energy generated by the plant to the maximum energy that can be generated with the plant working at its rated power. During FY 2014-15, Indian power plants recorded the lowest plant load factor of 15 years with the country’s power capacities operating at a mere 65 per cent. For the first nine months of FY 2015-16, this ratio stood at an even lower level of under 62 per cent, according to the research agency Ind-Ra. This is despite the fact that fuel supply has improved, which indicates that the demand could be slowing down, possibly because of weak industrial activity.

Besides these, there are other regulatory issues which need sorting out to realize the growth potential of the sector. Most notable is the complexities related to tariffs and cross subsidization. For example, there are separate tariffs for poultry farms, pisciculture, wetland farms, mushroom and rabbit farms, etc.

Then there is largely wasteful subsidy for rural and agricultural sectors which is often misused for non agricultural purposes. Transmission and distribution network is largely unorganized with high fraction of power being transmitted at low voltage leading to higher losses.

Because of unplanned city planning, the last mile distribution of power is quite wasteful.

New initiatives The Electricity Act 2003 unshackled the power sector to a great extent. It eased up regulatory www.governancetoday.co.in

structure for private investment to flow in the sector, ushered in open access policy to allow generators to sell power to the highest bidders while letting consumers source their needs from the most economic seller, and made captive power generation free from control. The government is now working hard to push through the Electricity Amendment Bill 2014 which aims to enhance efficiency and competition in distribution sector, strengthen

their revival. By becoming part of it, states power discoms can convert their debt into state bonds as well as roll out number of measures to improve efficiency at power plants. Unlike a typical government driven bailout program which just gives cash to discoms and states without accountability, UDAY lays out a specific roadmap for debt restructuring and there are hard budget constraints imposed for participating in the program.

NUCLEAR POWER GENERATION HAS INCREASED SHARPLY

Source: Central Electricity Authority

grid security, rationalize tariff and encourage open access.

Government has also acted on specific problem areas with select initiatives. Most ambitious among these are UDAY and DDUGJY. UDAY intends to financially restructure the debt of discoms and ensure

It compels discoms to improve operational efficiency as the restructuring package is based on a loss trajectory agreement where the discoms have to sign up for ensuring reductions in their cost of operations and also ensure that their revenue from operations is sufficient to August 2016 I 19

COAL WOULD CONTINUE TO DOMINATE POWER GENERATION

coal to thermal power plants. The coal production has risen smartly over last two years after remaining subdued in previous two years.

The CIL went up by 8.5 per cent in FY 2015-16 even though it missed the output target of 550 MT. The increased offtake has resulted in increase in stocks at power stations which in April this year reached up to a record 28 days.

The way forward According to estimates, India’s electricity demand could hit 300 GW mark in another decade. Needless to say, such capacity addition would require massive ramp up in the pace of capacity addition. And for that to happen, actions would be required at all the three broad

Source: USEIA Intl. Energy Outlook 2016

cover their cost of supplies.

DDUGJY, on the other hand, is a central government scheme designed to provide continuous power supply to rural India. A key initiative of the Modi government, it focuses on rural distribution reform by feeder separation (rural households and agricultural) and strengthening of sub-transmission and distribution infrastructure including all pervasive metering in rural areas. It aims to prevent theft and provide round the clock power to rural households. At urban level, government has rolled out IPDS that focuses on distribution network and speed up metering. Also, to iron out the problems in the tariff structure, the National Tariff Policy, 2016 was brought in by the government earlier this year which made 30 amendments in the existing tariff policy. It tightens the discretion allowed to regulators while setting power tariffs and makes a strong pitch for promotion of clean energy and increased competition. Last year, the government also set up a new National Smart Grid Mission to work with Discoms and other financing agencies in planning smart grid projects.

However, the most significant achievement of the government has been in ensuring availability of 20 I August 2016

THE PLF OF CENTRAL GOVT. OWNED PLANTS IS HIGHEST

Source: Ministry of Power, GOI

www.governancetoday.co.in

Coal supply has gone up in last couple of years

levels, namely power generation, transmission and distribution, and regulatory infrastructure. The capacity planning would have to be respectful of some basic realities.

First, for any foreseeable future, coal will continue to dominate the power generation in the country.

As per the IEO2016, by 2040, coal will continue to account for nearly 55 per cent of the country’s power generation. Such continued heavy dependence on one energy fuel would require careful planning for not only securing enough quantity, but also scaling up the quality of the coal being made available to power plants.

In this regard, recent rounds of coal block auctions inspire confidence. Additionally, captive mine development is necessary for adding a second flank to the Coal India Ltd’s efforts to keep coal supply steady. Furthermore, the government needs to support Indian companies’ efforts to secure coal mines abroad and put in place sound infrastructure to handle large scale import of coal and its transportation to power generators. At regulatory level, approval procedure has to be streamlined at both central and state levels the process of which has already started. Beyond coal, natural gas is a crucial cog in the overall power generation and India needs to focus on new sources like Bangladesh and Myanmar along with traditional sources in the Gulf. www.governancetoday.co.in

Second, a definite and desirable push has to be provided to nonconventional or renewable sources of power generation. According to the Intended Nationally Determined Contribution submission at UNFCC meet at Paris last year, India has committed to nearly triple

about 13 per cent of India’s power generation capacity, but it would increase to 28 per cent in 2040 if the IEO2016 reference case is to be believed. According to this report, India was the world’s seventhlargest producer of hydroelectric power in 2012, with 125 billion kWh generated. In 2040, this would go up to 405 billion kWh in 2040.

In 2015, the overall renewable capacity stood at a little over 36 GW; the government wants it to go up to 175 GW by 2022. This includes 100 GW from solar, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro power sources. Currently, wind energy is the largest source of renewable energy in India, accounting for a little under 65 per cent of total installed capacity in renewable space. Besides renewables, nuclear power generation is the third big bet moving forward. From current 2.1 per cent or 5.8 GW capacity, it is planned to reach 14.5 GW by 2024.

Further into future, the IEO2016

KEY CHANGES TO BE BROUGHT IN BY ELECTRICITY (AMENDMENT) BILL 2014 • Separation of carriage from content • Provision for open access, removal of cross-subsidy if procured from renewable energy sources • Tariff rationalization • Boost for renewable power generation-renewable generation obligation (RGO) • More powers to ERCs renewable energy capacity from 2012 levels by 2022 and increase the share of zero-carbon electricity generating capacity to 40 per cent of the total by 2030. Considering the massive overall capacity addition that is required to allow high GDP growth of over seven per cent a year, it means exponential increase in capacity addition in non conventional power. And the announcements of the government with regard to targeted power generation from renewable are indicative of the things to come, which is a welcome step.

Currently, renewables constitute

predicts as much as nine per cent of India’s total power generation by 2040 could come from nuclear sector.

In “More Power to India: The Challenge of Electricity Distribution”, a study conducted on Indian government’s request, the World Bank singled out electricity distribution to the end consumer as Indian power sector’s debilitating point. It lauded India’s achievements mentioning the tripling in generation capacity, with the private sector playing a substantial role and praised the state-of-the-art transmission grid that the country has set up.

August 2016 I 21

However, it also underscored that more than 300 million Indians still live without electricity, some 200 million of them in villages that are considered ‘electrified’. The report finds that while the country has made huge strides in the generation and transmission of electricity, the distribution segment, which generates revenues, has seen mounting debts and continuing losses, affecting the entire value chain. The report attributed the poor performance of the sector to factors such as lax governance, a soft regulatory environment, tariffs that have not kept up with costs, power theft, unfunded mandates and pervasive political interference.

The report made a few key recommendations to reform the sector. Most importantly it sought full implementation of the Electricity Act mandates, especially those on competition and distribution, examples being tariffs, open access, and performance standards.

Next, it asked the government to ensure regulatory autonomy, effectiveness and accountability for utilities and regulators. Finally,

Wind is the largest renewable power source in the country

to prevent political interference, it recommended insulating utilities from state governments. These continue to be the basis of what country needs to strengthen its power infrastructure; physically and institutionally.

If India has to grow at a healthy

MAJOR POLICY INITIATIVES OF THE GOVERNMENT OVER LAST TWO YEARS Ujwal DISCOM Assurance Yojana (UDAY) • States to take over 75 per cent of discom debt • States to take over future losses of discoms in a phased manner • Reduction of AT&C losses to 15 per cent by 2018-19 • Reduction in difference between average cost of supply and average revenue realized (ARR) by 2018-19 • Banks/FIs not to advance short term debt to discoms for financing losses Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) • Electrification of all villages • Metering of unmetered connections • Separation of feeders to ensure sufficient electricity to agriculture • Improvement of sub-transmission and distribution network to improve the quality and reliability of supply Integrated Power Development Scheme (IPDS) • Strengthening of sub-transmission and distribution network in urban areas • IT enablement of distribution sector • Metering of distribution feeders and transformers in urban areas

22 I August 2016

rate, which is necessary to pull out millions out of poverty, there is no alternative to ramp up the power generation capacity of the country. For long, power sector was neglected because of which an inefficient system existed that could not keep up with the demand.

However, over last decade, multiple attempts have been made to sort out the mess. But still, there are systemic problems which are symbolized by the coexistence of a high quality national grid and a hopelessly sick distribution segment. This and other problems related to fuel supply, tariff complexities and inefficient plants have led to a situation where most rating agencies have a less than optimistic opinion of the sector.

On the positive side, government is working honestly to improve the situation; successful e-auction of coal blocks, higher coal offtake at CIL, programs to revive discoms and sharp focus on renewables are indicative of the intent. Hopefully, these initiatives will ensure that soon no village will go dark after dusk and soon industry will not have to install costly alternative power infrastructure to ensure smooth power supply. anand@governancetoday.co.in

www.governancetoday.co.in

www.governancetoday.co.in

August 2016 I 23

INTERVIEW P. ASHOK GAJAPATHI RAJU | MINISTER OF CIVIL AVIATION (MOCA)

REGIONAL CONNECTIVITY IS THE CENTERPIECE OF THE AVIATION POLICY

The government recently came out with the National Civil Aviation Policy 2016 which aims to bring smaller cities on the aviation map through enhanced regional connectivity, among many things. Anand Mishra and Ramesh Raja spoke to the Minister of Civil Aviation (MOCA), P. Ashok Gajapathi Raju, about the new policy and multiple other issues of importance to aviation sector of the country.

EDITED EXCERPTS: 24 I August 2016

The government recently came out with the much anticipated aviation policy. Could you let our readers know how this policy was planned?

The aviation policy is a reaction to the prevailing situation. Any policy is not an eternal truth. It is a framework which would need to be upgraded and changed over a period of time. But for a medium term, say three to five years it is not going to change. So, it helps to plan economic activity pertaining to the sector. The policy that we have come up with covers 22 basic areas of the sector and has an overall look of the sector. The centerpiece of the policy is regional connectivity which came out from the BJP manifesto. How this can be brought

about took time to figure out. We had extensive consultations and through that churning process, in which the draft policy was put up for public comments and suggestions, the final policy has come about. While you cannot have unanimity, it has been by and large well received. The nittygritty are being tied up and soon it will be rolled out.

What challenges do you foresee during the implementation phase?

In a big country like India, challenges are bound to be there.

For example, if you look at the economics of the sector, aircrafts are getting bigger and bigger. All airports and infrastructure won’t be able to take these big aircrafts. So, we need different types of aircrafts including propeller aircrafts. This way, we will www.governancetoday.co.in

be able to use more of the runways that we have. We will have to use our resources judiciously.

bodies on board. Some strategy has to be formulated to improve this segment.

As you said, regional connectivity is an important aspect of the new policy. But airlines say smaller cities don’t make money? How you think this issue can be addressed?

Ease of doing business has been high on the government’s agenda since it came to power and it has also started to show result in some sectors. But some say that even registering with MOCA takes a long time.

What is MOCA doing in this regard?

Well we already have route disbursal guidelines. We have category 1 routes which have at least 5 million passengers a year, examples being metro and large cities. All airlines are naturally interested in those routes. The airlines are asked to fly at least ten per cent on other routes which are not highly profitable. But still there is a big gap.

That gap has to be filled which is what we are trying to do through the regional connectivity. The idea is that a performing airport can contribute to the economy and if it is not used properly, it is non performing asset. We already have nearly 30 of such airports. So we need to have scheduled aircrafts going there. In budget, we have apportioned for new airports too which will also be adding to the infrastructure. And if we don’t use these, it does not make any sense.

Air cargo segment has seen some slowdown over last couple of years. It is not growing even though the overall cargo business has been on upswing.

Air cargo is miniscule in India.

But, it is growing, though on a very small base. As far as air logistics is concerned, right now it is mostly going in normal flights. In terms of air freight, there are not more than a couple of aircrafts dedicated for cargo. But that also means there is a huge potential and we need to rise up to the potential. We need to get state governments understand the economics of this potential. We also need to get all the trade and industry www.governancetoday.co.in

In order to enhance the ease of doing business, we have cut down procedures. Earlier airline companies used to come to the ministry (MOCA) for approval which is no longer the case. We have also increased the digitization of DGCA and have initiated the eGCA project. Now many approvals like that for purchase of aircrafts have been done away with. Lot of clerical works which used to come to the ministry, have been delegated. We now only get regular reports on these. There are other steps too which we have taken to simplify things. For example, code sharing has become more liberal, the 5-20 rule has gone. Of course there are some aspects which we cannot give up, examples of which could be safety and security that we must retain. But on most other issues, we have been working on improving the ease of doing business.

What is your reaction to the perception that higher ATF prices are making air freight uncompetitive?

ATF prices steadily went up for many years. It was still going up when this government came in. With declining ATF prices, the passenger traffic started growing and is still growing. It is growing at the highest rate in the world though our base is still not very large. So,

if we continue to grow at such high rate, our size will also become high eventually. So, on passenger side, we are doing well. On cargo section too, if we work well, we can grow fast and become a big market.

Regarding the capping of fare there are apprehensions. How do you look at the situation?

There is some confusion regarding that. We do not interfere in the fares.

We did an analysis and found that competition is keeping rates down.

Over a one year period we found that only 1.7 per cent of the tickets were high priced. And the general graph was coming down, so that was not a worrisome trend. While analyzing the issue of regional connectivity as to why it has not picked up, we found two major hurdles. First, the proximity of airports to places of work or residence mattered a lot.

Second issue was that of price.

What is the response of carriers to the aviation policy?

By and large everyone has accepted it well. During consultation phase, for passenger centric issues, they were all on board, but later on some of them have gone to court. But on policy front, there is no problem.

How can aviation sector and airports be a part of the smart city initiative?

Smart transportation is an integral part of any smart city. If a person is coming to an airport, he or she needs a mode of transportation.

For example, in bigger cities like Delhi and Chennai, there is metro coming to airport. So a multi modal transportation system is required and bigger and smarter the city, more modes would be needed. That makes travelling to and from airport much easier. I too take metro from airport to come to office which saves me a lot of time. So yes, all cities need to think on these lines as they grow bigger.

August 2016 I 25

SOCIETY

Nurturing today’s dreams and tomorrow’s realities The Nandghar initiative of the Vedanta group aims to create a unique model for child development and women empowerment

Minister of Women and Child Development Maneka Gandhi inaugurates first Nandghar in Haryana

Anil Agarwal

“I

believe deeply that women and children are more precious than any other natural resource a country can have. Everyone deserves the best start in life and I can’t think of any social issue that is more important than a sincere work for women and child development.

It is society’s passport to a better future.

In serving the best interests of children, we serve the best interests of all humanity. Very often, I ask myself…how we can make a better

26 I August 2016

world for future generations! I believe we can, if we are working for the welfare of women and children; not just under any project but while working with a missionary zeal.

India is an economic powerhouse in South Asia both in terms of its economy and annual rate of growth, but malnutrition has been one of the enduring enigmas of contemporary India. While poverty is not the only cause of malnutrition, it is an important cause, not just because poor people may lack adequate food but also because the poor parents often have less time and resources to care for their children.

So, we need to work on models which can address these issues at grassroots level i.e. in rural part of our country. Anganwadi scheme is one such approach that requires a fresh outlook.

India is home to over 13.7 lakh Anganwadi and the Integrated Child Development Scheme (ICDS) is one of the largest social initiatives by any government in the world. The role of Anganwadi is critical in combating malnutrition, promoting pre and post-natal care, immunization and early child hood education.

We, at Vedanta aim to strengthen these innovations by www.governancetoday.co.in

providing an integrated model “Nandghar” which provides access to quality early childhood care and education complemented with skills development. While joining hands with the Government of India for this mission, Vedanta has signed a MoU with the Ministry of Women and Child Development to construct 4,000 AWCs across India. The Model reimagines the existing Anganwadi Network present across the country and enhances the role of Anganwadi in the community.

The Nandghars are in line with Prime Minister’s vision of social development through initiatives such as Digital India, Swachh Bharat and Skilling India. A Nandghar will use state of art construction technology and has added benefits such as round the clock electricity through Solar panels, e-learning in a stimulating environment, clean drinking water through RO purifiers and primary healthcare through mobile medical units.

The Nandghars will run as children’s education and health centre in the morning and train women in vocational skills in the second half. This will be a revolutionary measure to eradicate malnutrition in children and create women entrepreneurs across the country. An estimated 400,000 children and women will benefit through this project each year.

Vedanta has proposed a state of the art infrastructure to supplement the services currently offered by Anganwadis. The value add of Nandghars will result in creation of learning environment and centers of employment. They will provide interactive learning, primary health care, nutritious food, skill development, clean water, toilet and electricity through solar panels.

The empowerment of women is a very effective tool for development.

When women- the real architect of society, thrive, all of society benefits, and succeeding generations are given a better start in life. But, while women in rural India spend 30 per cent of their time working in fields, there is a huge gap in their average earning. Men earn Rs 9.8 per hour in the rural sector while www.governancetoday.co.in

women earn Rs 5.3, approximately.

Moving women to more productive vocations will contribute to rural economy and empower women.

Nandghars will support women towards entrepreneurship by providing training, access to credit and support services.

The Nandghar with its design aesthetics and functional utilities has the potential to be center point for the community around it. The operational approach of the Nandghar is to identify and converge government programs for sustenance of the infrastructure created as part of the investment.

Anganwadi. By adopting a cluster based approach to delivery of health and skills services, we aim to create a sustainable model for delivery of healthcare, skills training and sustenance of operations of Nandghar.

A central Health Clinic will cater to daily health issues of women and children and circulate a Mobile Medical unit equipped with a Doctor and a Paramedic in the Nandghar cluster, fortnightly. Each cluster will comprise of 25 Nandghars.

Nandghars aim to improve preprimary education by introducing interactive learning. Pre-loaded

Nandghar attempts to improve children’s health as well as learning

The underlying approach to the sustenance of the infrastructure is to create a robust skills and entrepreneurship approach towards Nandghar. The model aims to create an economic incentive for the community to sustain and enhance the role it has in the neighboring community.

The proportion of underweight children in India is 29.4 per cent, and that of stunted children 38.7 per cent. (Rapid Survey, Ministry or Women and Child Development, 2013). 8.49 crore children avail the Supplementary nutrition through AWCs, which is 67.65 children per

content on TV and smart kits provided to children help in building cognitive ability. The Anganwadi workers are provided training and are equipped with 52 weeks of engaging content.

Our aim is to co-create across India with GoI, a movement that will help rejuvenate the quality of life of millions of children and empower women to be independent, armed with appropriate skills to shape their own destinies.

The writer is the Chairman of the Vedanta Group

August 2016 I 27

INTERVIEW

JAN LUYKX| AMBASSADOR OF BELGIUM TO INDIA

EU INDIA FTA SHOULD BE AMBITIOUS TO TAKE TRADE TO A HIGHER LEVEL

Belgium is among the most important countries of Europe for the very simple reason that Brussels seats the European Parliament and is the headquarters of the European Union. Also, it is among the most advanced economies of the world and is home to some of the leading organizations that have the technological capabilities to contribute significantly to the various initiatives of the government of India.

Anand Mishra, Editor, and Rajesh Mehta, Consulting Editor, Governance Today, talked to Mr Jan Luykx, the Ambassador of Belgium to India, to elicit his opinion on the various issues of common interest to Belgium and India, including Brexit and EU India FTA. EDITED EXCERPTS: 28 I August 2016

We would like to start with the most happening news in Europe these days which is the Brexit.

What impact do you see it having on EU in general and Belgium in particular?

Well we are all analyzing the situation.

Everything is in a flux right now and nobody exactly knows what’s going to happen. We don’t know what the UK is going to do. We will have to see. But for the moment, the existing EU-structures and arrangements remain what they are. That does not mean however that the political factor of Brexit is not there, it surely is.

But it is early days. Of course, the uncertainty that Brexit has created will have an economic impact.

It is however really difficult at this point to say

www.governancetoday.co.in

to a higher level. Foreign trade is an important aspect of economic growth. We believe in foreign trade and think that it can be a very important element of India’s economic development as well.

Recently, Belgium hosted the second Yoga day.

How did it go?

June 21 was the World Yoga Day, and several events were organized in Belgium too to mark the occasion. However, because of inclement weather, lots of activities were indoor ones. In fact, we organized many events a couple of days before June 21st in Brussels as we knew the weather could play truant. In fact around 1,500 people gathered in the ‘Bois de la Cambre’ to participate in the Yoga.

Recently, there has been a spate of terrorist attacks across the world.

How do you see the security situation in light of the immigration issue which has become so important over last year or so in Europe? how big the impact will be on the economic growth of EU countries.

Belgium has pitched for early resumption of talks on EU India FTA. By when do you expect it to take place?

It should happen as soon as possible. The negotiations started several years ago. But these were frozen before the last elections in India and because of the changes in the European Commission. Now both sides are trying to resume the negotiations. I understand some contacts have taken place recently on sidelines of the OECD www.governancetoday.co.in

ministerial meeting at Paris in June and possibly both parties will again meet in the margins of G20 meeting. So, we are hopeful that substantive negotiations will start very soon. It is important for both sides that the negotiations are completed at the earliest so that trade can increase.

What are the major bottlenecks?

Well I understand that there is a question of the level of ambition as regards how we should go forward and to what level import tariffs should be reduced etc. We in Belgium believe that the FTA should be ambitious so that it can take the trade between EU and India

You should not link the issues of terrorism and immigration; these are two different issues.

Surely some terrorist outfits might try to use the flow of refugees to organize terrorist activities, it is possible, but terrorism per se is not linked to the flow of refugees.

As for the issue of terrorism, it is certainly something we all have to take very seriously as it is clearly a worldwide phenomenon and a big challenge. You in India know it and we in Belgium also experienced it in on March 22nd. We are trying to strengthen our security system on the one hand and on the other hand to take away the reason of this terrorism, which is linked to the radicalization of certain groups in society. It is a work in progress. In the joint statement issued after Indian PM Modi met August 2016 I 29

Belgian PM Michels in Brussels on March 30th, it is clearly mentioned that we have to fight together the horrible challenge that terrorism poses all over the world. As far as immigration is concerned, it is a real challenge for Europe.

On the one hand, Europe has to accommodate so many people leaving the battlefield in Syria, and on the other, our politicians have to take into account domestic public opinion. That is a political challenge.

Immigration was a big issue in UK referendum as well.

It is clear that immigration have been presented as a threat by populist groups all across Europe. They are trying to exploit this development politically, and it is impacting lot of elections and decision making processes in several countries of the continent at the moment.

PM Modi visited Belgium on March 30th and many agreements were signed.

What has been the progress on these areas?

If you look at the joint statement issued during the visit you will see that it is quite detailed. The visit was planned much in advance but it took place immediately after the terrorist attack of March 22. Therefore the fight against terrorism got so much focus in the Statement, but this issue is one in which action is a work in progress and about which one cannot say too much in public.

However, there were also detailed discussions on economic issues.

Belgium has a lot to offer in many of the big projects that PM Modi has started. Clean Ganga and Smart Cities are two of the initiatives in which Belgian companies have a lot to offer in areas such as waste water treatment, water treatment in general, smart infrastructure, digital systems etc. We are an 30 I August 2016

advanced economy and have a lot to offer in these fields. The main challenge for our mid and small sized companies is how to get grips on these projects as they are huge and so far away from Belgium.

The challenge therefore is to bring these, the companies and the projects together and to create winwin situations. A lot of focus was laid on that aspect. For example, we now have a bilateral MOU in renewable energy which aims to help our companies to come to India and to bring their technology and investment. We are working on similar lines for other sectors too.

Recently India made an application to join Nuclear Supplier Group.

How do you see India’s candidature for this group and also in other relevant groups? India has a huge energy requirement and hopes that nuclear energy would contribute significantly to this need.

We think that India’s interest in joining these different international arrangements is absolutely legitimate. We encourage India to continue to move in the direction it has taken.

Among many new initiatives of the government of India, which are the ones in which you think Belgium can make most impact?

Basically, in all of them. We are focusing especially on Clean Ganga and related to that, on water projects all over India.

Water technology is one of our strong points and we are focusing on that. Then there is renewable energy which is quite big an area of interest. Smart Cities is

another domain which consists of a lot of elements such as physical infrastructure, digital infrastructure, water treatment, waste treatment in general etc., in all of which Belgian companies have excellent competencies. And there are many Belgian companies like Barco that are already present here. Mumbai Police is using Barco screens for example. Many more companies are interested to come to India and for them the only issue is finding the right conditions.

What has been your experience on the issue of ease of doing business since this government took over a little over two years ago?

Some progress is there especially in areas like digitalization. But I feel things need to speed up a bit. It is going slower than what a lot of people expected which is not too hard to understand considering the complexity of India. But the expectations were very high in India and therefore very high abroad too. But in two years things have started to move not only at central level but also in states which have been inspired by the centre. And some states are doing a fine job. Also, we hear that corruption has gone down, at least at the highest levels. Governance is a work in progress and most important work is done at the lowest levels which don’t make the headlines. It is said that twenty five years ago one was fighting the License Raj and today one is fighting the Inspector Raj. But yes because of lot of procedures are now going online, things have started to move. And this is important because if you want to attract investments from abroad, you need to convince investors that it easy to do business here.

So, the changes have to be made and they have to be visible as well.

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EDUCATION

Reforming campus politics

After JNU episode, the draft national education policy envisages curbs on political activities in university campuses Ramesh Kumar Raja

N

ow that students’ union elections are approaching in various universities of the country with the beginning of the new academic session, campus politics is going to be the new buzzword for freshers joining colleges. Although it is not bad to hold polls on campus as it gives students an opportunity to exercise their franchise for the first time (for many) and make them mature as a citizen to participate in the democratic electoral process, recently whatever happened in Jawaharlal Nehru University (JNU) and Hyderabad Central University (HCU) paints a negative picture of the campus politics. The nationalism debate, under the garb of freedom of speech and expression, erupted at JNU followed by arrests, sedition charge on anti-India slogan shouting students snowballed into a broader political drama at the national level. On the other hand, dalit scholar Rohith Vemula’s suicide at

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HCU rocked the nation like never before putting in focus the Human Resource Development Ministry’s role in handling the crisis.

Although these things are not new on the campus in India (they keep happening in one form or the other), in these cases the issues went beyond college level politics.

The controversies led to frequent disruptions during the Budget session of Parliament this year, prompting the Centre to take a note of negative politics dominating the campuses. Union Minister M Venkaiah Naidu even went on to say (about JNU agitation), “They are all studying at a central university where public money is involved. So they must do justice to the cause and they must study, that’s all. If they are interested in politics, they can leave studies and join politics.”

Months after these two condemned incidents, a government committee entrusted with making suggestions for the new national education policy (NEP) has recommended restrictions on political activities in universities

and colleges across the country. The panel, headed by former cabinet secretary T S R Subramanian, has also said that educational institutions should consider derecognising student groups based “explicitly on caste and religion” and also restrict the period for which students can stay on campus.

These are somewhat akin to years’ old JM Lyngdoh committee’s recommendations on students’ union elections in universities. These recommendations are unwelcoming for those who treat campus politics as a stepping stone for their political career.

The Subramanian Committee in its report talks about how most students in colleges and universities enrol themselves for studies in courses of their choice and spend a precious part of their young life in the pursuit of their education.While most students in almost all colleges and universities could be classified in the above category, there are those whose priorities lie firmly outside academic realm.

Expressing serious concerns August 2016 I 31

against party politics in the campus, the report discusses how many national parties have their own chapters in nearly every university in India. Many campuses also have caste or community-based organizations. Thus, one finds unions or associations of subsets of students, or teachers, or other employees, who aggressively pursue their special political or other interests, on campus. It is not infrequent that two or more of such groups of students or faculty members come into serious opposition with each other, and have no hesitation in blocking the main-line work of the university.

They may have real or imagined grievances, but the collateral damage to the serious students can be heavy indeed. The report says that because of agitation politics one frequently hears of agitations, disturbances, gheraos and movements of one sort or the other in various campuses from time to time. Often examinations need to be postponed or in some cases the student even loses a year or more due to unsettled conditions.

Although restricting politics in campuses means curbing free speech and expression, the report countering this argument states that while the Constitution provides every citizen with the right to form groups or associations it should also be kept in mind that “every right has a corresponding duty implicitly attached to it, that every right is circumscribed to ensure that it shall not adversely affect the interest of others.”

Drawing a comparison with western universities, the report states, “Traditionally, universities in the US and the western world have encouraged new ideas to flourish, and have never placed any restriction of any kind on freedom of speech or association within their

campuses. It should also, however, be noted that one has rarely heard in the context of US or Europe or other educationally developed countries of postponement of examinations or disruption of academic activities, arising out of groups of students pursuing their ‘right’ to free speech and association. Thus, while intense political activity takes place nationally during an election year in US, like in 2016, and the student groups discuss these issues with much animation, one has never heard of disruption of the academic atmosphere in these universities.”

The report also emphasises that the universities should not to lend themselves as play grounds for the larger national rivalries, inequalities, inequities, and social or cultural fault-lines as these need to be tackled by society as a whole. “The point in short is that it is now essential to review the current situation, and find the balance between free speech and freedom of association guaranteed by the Constitution, the needs of various sections of society, and balance them with the primary purpose for which the universities and institutions of higher learning have been established”, the report suggests.

The report makes some strong observations of the JNU row, after which it was argued that many students stay in campuses for long years by enrolling themselves in one course or another and get into unnecessary politics. It states, “One frequently hears of ‘students’ who continue for 7 or 8 years or more, enrolled in the university, and occupying the hostels – in general should there not be some guidelines or time limits for enrolment in a particular course or

Corrigendum This is with reference to the article, “Unofficial Education on Social Media” in our last issue. The actual author of the article is Dr Rakhi Tripathi and not Dr Jitendra K Das. She is an Assistant Professor, Information Technology and Head, Center for Digital Innovation, FORE School of Management, Delhi. The mistake is regretted.

32 I August 2016

for occupation of hostels; those who stay for long periods start ‘owning’ the universities, and frequently have an undue influence on the course of non-academic activities in campuses.” The panel’s suggestion of capping the period for which a student can stay on campus could end the use of institutes’ resources to nurse political ambitions.

Meanwhile, it is difficult to understand why the government was so wary about making the TSR Subramanian committee report public, given the progressive

recommendations made in it. The Committee backs the setting up of a standing Education Commission to continually assess the changing circumstances of the education sector and advise the HRD Ministry on the need to upgrade or change policy.

Some points of the draft national education policy have been put on the ministry website for the public to see and offer suggestions.

The ministry is set to reach out to individuals across the country on the policy through over 2.75 lakh direct consultations besides taking citizens’ input online. The last date for sharing inputs on the Draft National Education Policy is August16. ramesh@governancetoday.co.in

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INTERVIEW RICHARD HEALD | CEO, UK INDIA BUSINESS COUNCIL

IT IS BECOMING EASIER TO DO BUSINESS IN INDIA

Ever since the UK voted to move out of EU, there has been much discussion about its impact on the UK economy, and indirectly on its impact on the Indian interests in the UK. These are complex issues which will unravel gradually. To assess the possible impact of Brexit on UK businesses, Indian business in the UK and other crucial aspects of India UK business relationship, Rajesh Mehta, Consulting Editor, Governance Today spoke to Richard Heald, the CEO of UK India Business Council.

EDITED EXCERPTS: www.governancetoday.co.in

Why do you think UK decided to exit EU and what impact you think this exit will have on British business?

There are a combination of factors that caused the “Leave� vote. Many people today world feel that they are being left behind in the ever speeding world we live in. Arguably, you could characterise the result of 23rd June as a protest vote, against the social, economic and political conditions in their daily lives. Not surprisingly, if you look at the UK areas which have most benefited from globalization and international trade, predominantly voted to remain in the EU; examples being Cambridge, August 2016 I 33

Oxford, and London where there are heavy tech and scientific centers with lots of young people with aspiration and technological capabilities. Mind you, this feeling of disenfranchisementfrom the benefits of globalisation is a world-wide phenomenon. There are lots of people who look at the globalisation, who are told about the benefits of the same but who don’t feel they enjoy those benefits. As to the effects on British business, it is too early to tell. What is true is that the UK economy remains fundamentally strong with vibrant sectors which actively trade with countries across the world. The UK has development a very string capability in product and process innovation based on the established nexus between academia and business. This will continue and will accelerate economic relations with developed and developing economies such as India.

What in your opinion would be the biggest impact on the India– UK business relations because of this vote?

I think that bilateral relations between India and the UK will prosper and bilateral trade and economic relation between the two countries will increase.

I really do believe there is a significant opportunity. There will naturally be a period of introspection and evaluation, by the Indian government and the UK government to identify the opportunities and to decide how best to exploit them. For example, India and the EU have for a long time wanted to sign an FTA. Post Brexit, UK and India have the opportunity to sign a bilateral trade treaty. It won’t be easy, it won’t be fast, but there is an opportunity … and if you couple such arrangements with the probability that the UK will reestablish access, in some form, with the EU free market, there is potentially an 34 I August 2016

extremely attractive avenue which puts UK India relationship in a unique position.

How do you rate the performance of the Modi government over last two years?

We polled our members on how they regarded the first 2 years performance of the Modi government. They marked the NDA Government at 7 out of 10. In truth, we in the developed world had too high an expectation on what could be achieved of the new administration in this time bearing in mind the nature of reforms that needed to be implemented and the nature of bureaucracy that had to execute them. While there have been fewer “fireworks” than most people would have expected, look hard and you will find seismic changes on the ground. On issues like how the business is done, interaction on licenses etc, we are hearing that it is becoming easier to do business in India.

Fifty per cent of our members say they are seeing a material change. And now you are faced with a possibility that GST will be introduced in the monsoon session, which will be a big positive both in terms of perception about India’s momentum on reforms and also spurring economic development.

Recently, India has announced FDI reforms.

What impact will it have on the investment from UK to India?

The UK isalready the largest G-20 FDI investor in India for the last 14 years. Moreover, Sebi says that UK controlled investment firms registered with them control around $20bn worth of additional FII investment in Indian stock market. So, the UK is already very firmly committed to India.

We believe that a combination of further relaxation of FDI in key sector like logistics etc. coupled

with the enhanced ease of doing business will see an increased level of activity, even with Brexit. The UKIBC has businesses coming to us saying that theyare looking at India to increase their level of exports and/ or diversify our exports away from slower growth market such as the EU.If UK companies’ access to EU market is reduced post BREXIT, they should be looking at other markets with significant growth to diversify and if India is growing at some 8.0 per cent pa, it is a pretty attractive market.

Could you let our readers know what the major areas in which UKIBC is working are?

Well, there are three major pillars of what the UKIBC does.

First, we raise awareness among small and medium sized companies in UK about the attractiveness of opportunities in India and improvements of ease of doing business. Secondly, the UKIBC provide services and advice to medium and larger size companies on things like the attractiveness of their product, the viability of their processes, the applicability of their pricing, their entry strategy,in which state should they be locating, with which companiesthey should partner and issues around set-up.. Thirdly, we engage in sectorally focused public advocacy raising issues on behalf of medium and large companies.

So if there is an issue around say defense procurement, or GST, or about the states’ application on ease of doing business, the UKIBC amplifies concerns at corporate, state government and Indian and UK government levels. I should also add we do this for India companies in the UK as well as UK companies in India. Currently, about 10-12 per cent of our membership now comes from Indian companies who want similar advocacy, similar positioning and similar networking in the UK. So, the companies that are looking towards UK, come to us for services that mirror the services www.governancetoday.co.in

we provide to UK companies in India.

There are more than 800 Indian companies operating in the UK. What is the advantage that they have operating there?

The UK is one of the most open investment environments.

Indeed in the past 12 months there has been a substantial increase in Indian companies operating in the UK – particularly in the areas of financial services and pharmaceuticals. There are significant advantages around language, rule of law, workforce competency etc. In many sectors it is the unique relationship which has grown up between in academic research and the corporate world which has catalyzed innovation and entrepreneurialism across sectors. The UK also benefits from a robust patent and IP law for protecting intellectual property. So if you want to do research, it is a very safe environment forthe ideas you create and generate. So there are specific reasons why there are so many Indian pharmaceutical companies in the UK.

Could you tell about the study that UKIBC has conducted on the states of India?

The UKIBC takes a close interest in how individual states in India try to attract inbound investment.

Competitive federalism has unleashed a real catalyst for good governance and good behavior. We think that the lead table that DIPP publishes is very good - making states compete against each other on good governance. The UKIBC has conducted its won a survey on individual states. We studied the ease of decision making, amount of digitization in approval systems, ease of interaction with the state and state legislatures www.governancetoday.co.in

etc. UK businesses traditionally are focused in very concentrated pockets in Karnataka, Maharashtra, and the Northern economic regions. This reflects traditional “business friendly” states. But this is changing.Gujarat is now being given a run for its money by states like Maharashtra and Karnataka as destinations for industry.Moreover, states like Telangana, Andhra Pradesh are also competing very hard for business. The UKIBC is now even seeing states competing in a formal “beauty parade” processes in their efforts to attract investments. These are all very positive developments.

What are the major challenges that British companies face in India?

The implementation of the GST will sweep away one of the major challenges UK companies face in India. A simplified sales tax across states will at a stroke enhance ease of doing business, simplify costs and reduce bureaucracy.

This will be welcomed across the corporate sector. The challenge is not solely a British centric one.

At the same time, smaller UK companies, operating in a localized environment, have significant challenges in understanding the nature of business and how to operate, who to tie up with and such things. Then, if you operate in the services sectors, there issues around the provision of services in accountancy, legal, architecture or design etc. Current restrictions stifle India receiving the full benefit of expansion by attracting widest possible talent pool to create the required momentum. Look at the area of infrastructure where a huge amount of work and effort is being deployed. At the same time, there are a limited number of professionals - architects, lawyers, and accountants - who can support these critically important. If liberalization were to occur in these areas, bottlenecks in the expansion of critical infrastructure could be avoided.

Another area where challenges impact on the ability of business to support economic growth is in the area of skilling and upskilling. There is requirement for training that make people fit for purpose. UK companies already spend an estimated 7 per cent of turnover annually on training. But there is an ever increasing need to have a qualified workforce. And I am not talking about the bottom of pyramid; there is requirement right up to the apexof the pyramid. There are requirements for skilling at higher education and professional training - even up to actuaries. As the economy develops these skills shortages become greater challenges for UK industries and Indian industries.

How do rate the skill India program and other major programs of GOI? The existing programs are good and yet they could be more effective and be more widespread. Nonetheless credit must be given to the schemes that have been rolled out so far.They have given a point of reference from where everything is driven. I have read that Nasscom has some criticism about Digital India. But Rome was not built in a day. You have to move forward in a direction and build incrementally on the initial steps. So, I think programs like “Swachh Bharat”, “Skill India”, and “Digital India” are good starting points. “Make in India”,in particular, has demonstrable success. If you look at the FDI flows into India, they have surpassed FDI inflow in China over last couple of years.

At the same time, the ease of doing business, which for me is the most important element of the “Make in India” program, is also improving. So, I think, these show a direction and also hold ministers accountable against those objectives.

August 2016 I 35

INTERVIEW DHARMENDRA KUMAR | DIRECTOR, INDIA FDI WATCH

WE NEED TO ENSURE THAT SMALL FARMERS RETAIN COMPLETE CONTROL OVER THEIR LAND AND FARMING

The Government of India recently eased the rules of foreign direct investment (FDI) in seven key sectors ranging from civil aviation and defense to food products and pharma in a bid to attract more money to create jobs and boost economic growth. The government raised foreign investment caps in some sectors, brought more investments under the automatic route that will not entail prior approval, and relaxed some conditions governing FDI to improve the ease of doing business. This is the second major overhaul of FDI rules in seven months. In November, the government had eased norms for 15 sectors.

According to the government, India has become one of the most open economies in the world with these radical changes in FDI policies, but will the country benefit from this form of investment? To discuss the issue, Ramesh Kumar Raja talked to Dharmendra Kumar, director of India FDI Watch which has been at the forefront of the debate in India on FDI, especially in retail trade services.

He conducts various research works primarily on issues of trade and investment which include “A Future of Co-existence? Hawkers and the impact of corporate and chain retail” and “Agri-retail: Implications for the weakest links in the supply chain”. He has also co-authored with Pia Eberhardt of Corporate Europe Observatory a research report titled “Trade Invaders: how big business is driving EUIndia FTA”.

EDITED EXCERPTS: 36 I August 2016

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Recently, India opened its defense and other sectors for higher FDI after which government said India has become most open country for FDI. What is your comment on the move and the statement?

Undoubtedly, Indian foreign direct investment policy has widely opened the gate for foreign investors. Now, most sectors are on the automatic route barring a very small negative list. Sensitive and much debated sectors like defense, civil aviation, airport construction, pharmaceutical and retail are now completely or almost fully opened for foreign direct investment. Like many other countries, India has treaded cautiously and opened its door for FDI in a phased manner.

But, the present Indian government seems to be in haste and has liberalized hitherto controversial sectors without preparing a sound ground to benefit from policy changes and leaving aside the much needed regulatory framework overhaul. In fact, the liberalization process has relaxed regulations rather than to plug in the loopholes. FDI can be beneficial for an economy only if it brings in modern technology, creates jobs and expands the production base.

FDI is a highly sensitive subject in India. Why does any move in relation to FDI become so controversial, even in areas such as defense?

Any policy of bilateral, regional or multilateral trade and investment have various kinds of ramifications. It not only shapes your economy but is quite influential in guiding and in many cases controlling your polity, culture and foreign relations.

Foreign investors and traders www.governancetoday.co.in

eventually colonizing a destination country is a common recent past of the third world countries including India. In present times, we come across many evidences where a foreign investor or trader calls shots in the destination country.

Defense is quite sensitive and requires utmost diligence. It’s true that India, being the largest importer of defense equipment in the world has its manufacturing capacities at a nascent stage. In India, defense manufacturing is still by and large being taken care of by public sector. The Self Reliance Index of our defense acquisition remains around 30 per cent. We need to improve indigenization.

This could only be done through increased investment in research and development. Mere policy posturing won’t help. The allocation to the Defense Research and Development Organization (DRDO) remains only around six per cent of the total defense expenditure. Private domestic companies operating in the field of defense manufacturing shy off from investing in R&D. They hardly invest one per cent of their total turnover. Foreign investors are looking for definite market and control. Most likely, India is going to remain the largest importer of defense equipment in times to come as well. Unfortunately, technology transferred in the past has not even allowed us to upgrade the equipment. Specific clauses related to technology transfer and granting India special rights during emergencies must be included in the contracts.

India FDI Watch has been against FDI in retail. Why so? Don’t you think higher FDI will reduce the structural inefficiency in the retail sector and add jobs?

FDI in retail particularly in multi brand retail is a subject encompassing the whole supply chain including of food. Any move

on this front would impact both ends of the supply chain producers and consumers. Supermarkets can have considerable influence over who produces food, how it is produced and what is eaten.

Supermarkets too have structural inefficiency with a high per centage of wastage. There are nearly 60 million Indians directly depending on retail trade services.

Small farmers never become part of such so-called modern supply chain as chain retailers look for large volumes. On the contrary, small farmers could even lose the local market. Along with livelihood concerns, the supermarketization of the Indian retail sector also raises concerns over food sovereignty, food security, food safety, nutrition, local economies and the environment.

So far, India has not made any commitment on retailing services to the World Trade Organization.

Yet, the sector is increasingly being autonomously liberalized to corporatize it including by global capital. India now allows 100 per cent foreign direct investment (FDI) in wholesale trading, single brand retailing and business to business e-commerce through automatic route. The previous central government of India also finally allowed FDI in multi brand retailing up to 51 per cent but through government route and with some riders. Through the recent FDI policy changes, Indian government has eased FDI norms and the conditions on minimum capitalization and floor area restrictions have now been removed for the construction of shopping complexes. Up to 100 per cent FDI is now allowed in coffee/rubber/cardamom/palm oil & olive oil plantations via the automatic route. 100 per cent FDI is now allowed via the auto route in duty free shops located and operated in the customs bonded areas. Manufacturers can now sell their products through wholesale and/or retail, including through e-commerce without government approval. The new FDI policy has August 2016 I 37

also relaxed the domestic sourcing conditions for single-brand retailers. Single brand retailers are not required to meet the 30 per cent sourcing condition until they open their first store. In case of state of the art and cutting edge technology, the sourcing condition has been removed. The policy also allows a single entity to do both wholesale trading and single-brand retailing provided both business arms separately comply with the relevant regulations.

It must be noted that the retail trade is not infinite. In the short run, the so-called modern retail may co-exist with traditional retail. This co-existence necessarily may not be in the same geographical area and the same format. Eventually the growth of the superstores would take place only at the cost of small stores. The number of livelihoods displaced in the process would be far greater than the number of jobs superstores could add. This is quite evident from the so far experience we have from across the globe including of USA, western European countries, Latin American countries and countries of south East Asia.

Could you throw some light on the work of your organization? What you want to achieve?

India FDI Watch works to promote ecologically sustainable and economically viable modes of production, distribution and consumption. It endeavors to protect food sovereignty and livelihoods. Specifically, India FDI Watch wants to secure regulatory framework that will protect communities and the environment; ensure the stability of existing small businesses; guarantee fair wages and improve working conditions for employees.

Being a member to WTO and as potential member of leading regional trade 38 I August 2016

bodies such as APEC and RCEP, India has to open its markets by reducing trade barriers including in investments. What impact would it have on Indian economy?

There are concerns related to India’s engagement in the World Trade Organization (WTO) and the new generation free trade agreements (FTA). Regional Comprehensive Economic Partnership (RCEP) and other regional and bilateral trade and investment treaties and negotiations under way deal with not only tariff cuts but also a range of other issues such as investment, intellectual property rights, services and competition etc. This could have far reaching implications on India’s future economic and social development.

India is currently facing huge trade deficit with ASEAN, South Korea, Japan and China. RCEP is expected to worsen the huge trade deficit and damage India’s manufacturing sector. Similarly, concerns are expressed in the field of intellectual property (IP). Many proposals in the area of IP go well beyond our current national IP legislations, especially the Indian Patents Act 1970, which would compromise access to medicines and technologies in many critical areas.

Likewise, many foreign negotiators want all RCEP member countries to become members of another IP agreement on seeds – the UPOV Convention. Firstly, this would be ‘TRIPS-plus’, taking us beyond what WTO requires us to do in the area of seed. Secondly, it will mean going against the ‘farmer’s rights’ provisions in our national law – Protection of Plant Varieties & Farmers’ Rights Act, (passed by Parliament in 2001 in compliance with WTO. The leaked investment chapter shows that the proposals are going against India’s current position on investment treaties. India has

developed a model BIPA text.

India has also re-negotiating 57 of its 83 bilateral investment treaties (BITs) on the basis of its new model BIPA & to avoid one-sided approach to protecting investor’s interest. But demands being made in negotiation like RCEP may push us beyond our position on investments as well, for example, on the investor-state dispute mechanism.

In a recent article you stated that trade policies need to focus on farmers. Could you elaborate with examples?

Food is a human right and it should not be commoditized.

India needs to commit to Food Sovereignty and the Right to Food and resist “free trade paradigm” and “market-driven development”. We need to learn from FTAs like the European Union’s Economic Partnership Agreements (EPAs) with Africa that resulted in more hunger and poverty. Public policies and investments should be oriented towards protecting and strengthening local farmers led markets. We already have many well regulated farmers’ and direct markets functioning as longstanding traditional markets.

These markets mainly provide a market to marginal and small farmers. Small farmers based food systems promote social justice and dignity. Aggressive commitments by India on agriculture trade and investment in international agreements are largely guided by its orientation to augment the country’s market share in the global trade of agriculture produce. Such export driven policies hardly benefit small farmers. We need to ensure that small farmers remain in complete control over their land and farming and have fair and equitable access to resources.

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ENVIRONMENT

Stage set for a deal on HFC phase-down Amendment to Montreal Protocol should be ambitious and should provide provisions to address energy efficiency, says CSE

Negotiating parties at the Vienna meet

Ramesh Kumar Raja

A

fter 10 days of negotiations in Vienna on an amendment to the Montreal Protocol to phase down hydrofluorocarbons (HFCs) recently, clear signs have emerged of a deal with solutions to all the major HFC related challenges. The meeting in Vienna was being held to pave the way for just such a deal among nations when they meet again in October this year in Kigali, Rwanda, at the 28th Meeting of the Parties to the Montreal Protocol.

In Vienna, countries submitted six proposals for baseline, a freezedate for developing countries and two proposals for developed countries. So far, the Indian proposal remains the most unambitious and conservative among all the proposals submitted.

With a goal firmly set on getting in place an agreement this year on HFC phase-down, it was recognised that a flexible approach is needed for developing countries. But there was divergence on fairness, ambitiousness, Intellectual Property www.governancetoday.co.in

Rights (IPR) and funding. It must be noted that HFCs are used in air conditioning and refrigeration as a substitute for ozone-depleting chlorofluorocarbons or CRCs, whose use was eliminated under the Montreal Protocol.

Energy efficiency emerged as an important component in the negotiations. “There is a need to have a deal that prioritises natural refrigerants during HFC phase-down and India should enhance ambition and push for energy efficiency in equipment,� said Chandra Bhushan, deputy director general, Centre for Science and Environment (CSE).

CSE, the Delhi-based environment think-tank and research agency, has encouraged parties to agree to a deal that ambitiously phases down HFCs while moving to a safer, nonpatented technology like natural refrigerants. Considering that the IPRs of new generation chemicals are owned by just a few companies, CSE has recommended that Parties should not permit a situation where a monopoly over new chemicals emerges as an outcome of an important environmental

conference. These new generation chemicals also have high potential for polluting waterbodies and therefore, are unnecessary and should not be funded.

With negotiations expected to end in October, countries have decided to converge ahead in intersession meetings or in an extended OEWG 38, which could take place a couple of days before the meeting in Rwanda, based on the availability of funding.

CSE, headed by environmentalist Dr Sunita Narain, recommends to have an ambitious phase-down proposal, promote non-patented natural refrigerants which have low global warming potential and stop new generation unsaturated chemicals which could pollute water.

The environmental organization seeks to resolve issues related to funding; IPR of new chemicals and blends; provide provisions for incentivising energy efficiency to reap greater benefits; and provide a financial mechanism to support leapfrog to natural refrigerants. ramesh@governancetoday.co.in

August 2016 I 39

REALTY

SEBI makes REIT route easier for realty With the Securities and Exchange Board of India relaxing norms for Real Estate Investment Trusts for investment in realty sector, the cash crunch problems will be answered and hopes will be high for a better demand of property in future Ramesh Kumar Raja

W

ith the dawn of affordable housing, housing for all and Smart Cities mission, the demand for property is projected to multiply in the course of next few years. There is no denying in the fact that today, the realty sector of India is suffering from a strong cash crunch and dampened investors’ confidence. The incorrect reading of the real demand, improper infrastructure, saturation of Tier 1 cities, property price escalation, stringent FDI norms and absence of a regulator in the sector had caused real estate in India to hang by a thread. However, the government over the last couple of years has brought in several measures to ease the ways of conducting business in the Indian real estate sector that will help the demand to grow in near future. With the Securities

40 I August 2016

and Exchange Board of India (SEBI) relaxing norms for REITs for investment in realty sector, the cash crunch problems could be addressed and it is hoped that it will help the sector over long term.

Real Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate. Much like mutual funds, REIT provides investors with all types of options including regular income streams, long-term capital appreciation and diversification.

This tool allows anyone to invest in portfolios of large scale properties, by way to investing in REIT units. The stockholders of REIT earn from the income produced without having to own or finance a property. The Budget 2016-17 has announced the relaxation on Dividend Distribution Tax (DDT) from the income arising out of REITs, thus making it a more lucrative deal for the investors. SEBI, on the other hand, has increased

the proportion of holdings that REITs can have in under-construction properties. Adding further, SEBI has also proposed changes that would make it easier for eligible offshore fund managers to relocate to India, plus allowing them to register as portfolio managers or as investment advisors. “The investment cap of REITs has been increased from 10 to 20 per cent for under construction projects. Indian realty sector is pretty much starving and REIT will here provide a much needed alternate route of funds and attract several small and medium level investors in the sector. With plans to upgrade Indian infrastructure already laid, REITs might serve as a chief instrument in years to come”, explains Vikas Pundir, CMD, SKB Group.

Also agrees Kushagr Ansal, director of Ansal Housing, as he says, “The REITs route has been eased enormously over the last www.governancetoday.co.in

few months. Removing DDT from the income earned through REITs and now increasing the investment cap will surely boost the investors’ sentiments. But, with the promise of high investment and returns, comes greater risk as well. If a project gets delayed, the chances of funds getting

the same. Infrastructure in India is soon to take a giant leap with lots of funds allocated for smart cities mission and housing for all. With so much real estate in pipeline, REITs will perform successfully,” avers Ankit Aggarwal, CMD, Devika Group.

“REIT is a concept which has

of small amounts of returns. Even InvITs is rapidly gaining momentum with several institutional investors showing keen interest.

Concluding on the chapter and elaborating on how REITs and InvITs will shape up the Indian realty sector’s future, Vikas Bhasin, MD of

stuck are very high. Although, Real Estate Regulatory Authority (RERA) has now become an Act and will now look into timely completion of projects. If single window clearance system gets operational pan-India, investors will feel more secured while investing with a long term vision.”

Indian residential real estate sector has plans to deliver over 7,50,000 units in the next 4-5 years with commercial real estate quickly gaining momentum as well. Thus, there are a wide variety of options available for investors along with a huge scope of returns. “At present, there is almost 250 million sq. ft. of office space that is eligible for REITs and if even 50 per cent of these get listed, there will be a total REIT listing of around Rs 1,34,000 crores.

InvITs (Infrastructure Investment Trusts) have also started to make rounds with SEBI recently approving two out of the four applications for

been followed by several countries abroad. Considering the results of REIT in those countries, even the Indian government has introduced it here. REITs are to work under the control of SEBI which earlier had some tough regulations. However, now allowing the investments in under-construction projects, it will prove to be a game-changer. Also, SEBI has removed the restrictions on SPVs (Special Purpose Vehicles), who are now allowed to invest in the holding and assets of any other SPVs. Therefore, the realty fraternity definitely welcomes this step and hopes that it will boost the sector’s pace in near future,” elucidates Ashwani Prakash, executive director, Paramount Group.

Like REITs, Infrastructural Investment Trust (InvIT) is much like mutual funds that enables direct investments of small amounts of money from individuals or institutional investors with a promise

Saya Group says, “The government is leaving no stones unturned to pick up the country’s realty sector and present it on the global map. Easing ways of doing business, attracting FDI and appointing instruments such as InvIT and REIT to boost the cash flow in the sector are a proof of the eagerness of the government towards this sector’s success. It is evident that there is a massive fund crunch in the sector with projects getting delayed; and to fight it out, government is working in two ways; boosting investors’ confidence by making entry and exit easy and bringing policy reforms to enhance transparency. Once REITs and InvITs become fully operational, this sector won’t remain cash starved, and will offer returns to the investors better than any other country due to the large scale production that is present here.”

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ramesh@governancetoday.co.in

August 2016 I 41

INFRASTRUCTURE

Smart cities - Water security through integrated approach Arun Lakhani

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ndia’s 80 per cent urban population today lives in nearly 1,000 cities. But most of them live without basic amenity of adequate water. Case in point is the millennium city of Gurgaon or tony South Delhi. While Gurgaon authorities directed that no ground water would be made available for construction activities and developers would have to arrange for their requirement through tankers or treatment plant, we have instances of Basant Kunj, Munirka and other areas going dry year after year forcing people to call tankers for the basic requirement.

Government has just come up with a new list of 13 smart cities including Faridabad, Lucknow, Ranchi, Warangal and Dharamshala.

Aimed at improving the general quality of urban life, these cities are to provide people uninterrupted power and water supplies. It is a good initiative for which the government of Shri Narendra Modi should be lauded. But why these cities only as others are also entitled for the quality of life.

42 I August 2016

I come from a small town of Maharashtra that has seen only growing scarcity of water year after year. I have seen how life is impacted. I have seen water sources growing dry or getting contaminated by sewer. Largely, the responsibility for the same is on us. We have not valued the invaluable water and ironically more than half of the water pumped in for meeting any township’s requirement goes waste by way of leakage through obsolete 6-7 decade old tattered pipelines, house connections, theft or seepages. We have as a nation lost sight of maintenance of our assets, just adding new pipelines whenever we face problems. This unaccounted water or Non Revenue Water (NRW) is a great cause of concern for the economy that is growing fastest in the world.

Most of us will be surprised to know that out of top 20 cities 18 have more than the prescribed water supply of 135 literper person per day (LPCD). The two towns of Jaipur and vishakhapattanam still have 100+ LPCD. Where we are losing out is management of this precious resource. We are losing

over 50 per cent of water in the system by way of leakages, thefts, etc. what we call as Non- Revenue Water (NRW). And as we are not reusing the sewage treated water for non-potable uses like gardening, flushing, construction, industry, we are misusing the freshwater and increasing water demand, and are also contaminating the same fresh water sources by not treating the sewage properly. It’s a lose-lose situation as it also reduces revenue to municipal corporations.

Smart solutions for smart cities as aimed for by this government are available to fulfill our water requirements. Sustainable Urban Water management with integrated approach of tackling the whole cycle of water is required. The unsustainable exploitation of water by using it and giving back to nature in a contaminated form is coming back on us in a big way. We need to realize that only the cycle of water: www.governancetoday.co.in

source- treatment – efficient use (24x7 pressurized systems) -sewage collection – sewage treatment and reuse for commercial purpose - thus releasing fresh water, can give us water security in long term.

An example is Nagpur’s Orange City Water project, which is India’s first full city 24X7 pressurized water supply project, operational now in its 4th year. At the launch of Atal Mission for Rejuvenation for Urban Transformation (AMRUT) last year before the Prime Minister Shri Narendra Modi and 500 Mayors and 500 commissioners, the project was presented as the best water practice to be emulated in the country.

Indeed, I am proud to be associated with the project – the first full city 24x7 water supply project in India for Nagpur which was facing similar problems of water as of any other city in India. Out of population of 27 lakhs, till now more than 10 lac people has been www.governancetoday.co.in

benefitted in various ways like no water supply or alternate day water supply to daily supply, contamination removal, pressure improvement, etc. In the first phase focus was on getting equitable water supply across the city, and then convert areas into 24x7 water supply – over 2 lac people are getting 24x7 water supply now in the winter capital of Maharashtra.

In This PPP concession we have invested more than 50 per cent of the project cost of Rs 555 crore, other half is coming from govt. under JNNURM scheme.

The contract is very inclusive and envisages water connection to each house, irrespective of whether it is a bungalow, a flat or a zuggi. Sovereign rights like tariff (we have telescopic tariff), connection-disconnection and ownership of asset remains with Municipal Corporation. The tariff and fees to operator are delinked.

And the lifeline supply of 135 litres

per day per person is charged at a highly subsidized old rate. We have already improved billing by substantial volume, stopping leakages by changing large leaking valves, replaced over 500 kms of large-dia pipeline and over 100,000 house connections, installing flow meters. Once completed, I can promise that the city known for oranges will have continuous high pressure 24 hours continuous water supply for the next fifty years. We are doing similar projects in 5 towns of Karnataka and Pimprichinchwad.

The success of Nagpur project can be mainly attributed to onboarding of people. People on-boarding through massive campaigns “My City My water” involving 50,000 school Children, mohalla meetings on continuous basis, Jal - Mitras in every locality, etc. has ensured cooperation at the ground level.

For us the target is bring down August 2016 I 43

the Non revenue water from 60 per cent to 40 per cent in first five years and to further 25 per cent in next five years. In other words, availability for actual consumption doubles from the same supply source and revenue of local body increase. It is a win-win and doable. Nagpur’s experiment can be replicated in NCR townships or other cities in the country.

Today the 1,000 cities, where bulk of urban India lives, would require an investment of USD 45 billion and in the present mechanism where urban local bodies will be required to contribute 30 per cent of total, the resource requirement is huge, for these bodies. The way forward is a four P formula – Public – PeoplePrivate Partnership and Nagpur project is there for everybody to see.

The other most important aspect of the sustainable urban water management is sewage treatment and reuse for commercial purposesthus releasing fresh water currently being used by commercial activities, for drinking purpose.

Today over 38,000 million liters a day (MLD) sewage is released to nature without treatment – 12,000 MLD is going in Ganga alone. Such untreated waste is a major source of waterborne diseases. Over 21 per cent diseases are water born. As for costs, over 10 crore person days are lost due to water born diseases. The untreated sewage is contaminating all our fresh water sources like lakes, rivers, wells.

Why are we not treating sewage? There are basically three 44 I August 2016

challenges. First, urban local bodies do not have adequate funds to build STPs or even to run it if central government’s assistance is received for building it. Second, we lack total awareness about the damage it can cause. Third, it is not being seen by anyone – except the smell periodically.

In Nagpur I am proud to say that, we have converted these liabilities into asset.

NMC announced a 100 per cent privately funded PPP Sewage treatment plant on annuity basis, with rights to sell treated water to the operator. There is a revenue sharing formula, by which if the treated water is sold, then the corporation’s opex and capes both gets paid for, and corporation instead of spending money on sewage treatment earns some revenue out of it. The best

part is NMC will get 200 MLD fresh water reserves, which was being used by NTPC, augmenting its water supply.

Thus by converting sewage a liability, a cost center - into a valuable usable resource, water has converted into asset – a profit center.

At Vishvaraj, we have won this bid through open competitive bidding and are in the process of construction of plant, our discussions with NTPC are in advance stage for purchase of treated water. We are also pursuing similar proposal in Jaipur.

Government of India realizing the win-win for all stakeholders in this project and impact of such projects on “Swachh- Bharat mission”, has announced a national policy under which it will promote use of treated water within 50 kms of thermal power plants.

We are already in stress situation with water availability per capita dropping below 1,400 cubic meter, and fast approaching 1,000 cubic

meter mark which means water scarcity. Such integrated approach to water management supported by visionary policies will take us nearer to water security for our growing population, and will ensure a cleaner healthier environment for all our future generations.

The writer is the CMD of Vishvaraj Infrastructure. www.governancetoday.co.in

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August 2016 I 45

ECOLOGY

India’s forestry laws

Evolution from timber management to conservation with community based participation

Image source: Nationwide classification of forest types of India using remote sensing and GIS, C. Sudhakar Reddy, F. Rakesh, C.S. Jha and V.K. Dadhwal

Ritwajit Das

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ndia’s forest policy is one of the robust in policy landscape based on its overall comprehensive, implementation and workable implications. Forest policy of any country denotes some assured broad principles for the use of nation’s forest resources. Earlier the forest policies in India veered to concern timber production as the primary function of the forests. However, in today’s context, a multiplicity of interests 46 I August 2016

competes for forest outputs and correspondingly forest policies have become increasingly responsive to emerging demands. In this regard India’s forest policy landscape evolved substantially, from strict timber management protocols to incorporative community based local resource management practices.

Early initiatives Timber extraction and tree planting activities were taken up in

several parts of India in the early nineteenth century. However, it was not until 1864 when Dr D. Brandis was appointed as the first Inspector General Forest (IGF) of India that any undeviating forest policy would emerge. By 1870, the foundation of forest department had been laid, and a regular forest service began to function in the country.

The first forest policy of India which came out in 1894 had two important elements. First, according to it the singular objective of the management of forests was to be the promotion of the general well – being of the country. Second, the maintenance of adequate forests was dictated for the preservation of the climate and physical conditions of the country and to fulfill the needs of the people. The forest policy of 1952 laid stress on having at least 33 per cent of land area of the country under forest cover. However, its focus remained on sustainable timber production, without much emphasis on management of non-commercial species and Non Timber Forest Produces. It presented a major concept of self-sustenance for meeting the local and national needs and advocated extension forestry and underlined the importance of forest protection, wildlife conservation, contribution of forests in watershed management and their role in improving soil fertility and agricultural productivity.

Forest policy 1988 1952 policy was supplanted by the new and upgraded forest policy of 1988, which made a major departure from the 1952 forest policy by laying prime emphasis on conservation of forests and meeting the local needs of the people and their participation in the protection www.governancetoday.co.in

and management thereof. The new policy has redefined the priorities whereby the supply of wood as raw material from forests for industrial use, has been relegated in priority to the lowest level. This policy sets a national objective of expanding the forest and tree cover of India to 33 per cent of the total area of the country.

Conservation and protection of existing forests and restoration of productivity of degraded and encroached forests were also given high priority in the policy. The policy encouraged ‘joint management’ of forest involving village and rural population together with farm forestry and agroforestry schemes on private lands. The protected area network, consisting of wildlife sanctuaries and national parks were intended to be strengthened, and expanded as a major priority with the overall aim of holistic resource protection and conservation of biodiversity. Protection of rural subsistence needs as part of traditional rights and concessions was given priority over commercial and industrial use of forests. Nine state governments have formulated their own forest policies for achieving the various objectives envisaged with 1988 forest policy.

The alteration in the policy considerably affected the industries, which were getting preferential and concessional supply of raw materials from the government forests. Most of the states have revised the pricing regime for supply to the industries, to bring the prices nearly at par with the market rates. This has forced the industries to look for alternative avenues of obtaining raw material. Import of timber from of the countries is on the rise. The industries have also started obtaining a part of their raw materials’ requirements from private tree growers. It is hoped that in a decade or so, the linkage between forest-based industries and farmers for short rotation tree species, will develop to such an extent that dependence of these industries especially for pulp and paper, on natural forests will be reduced considerably. However, www.governancetoday.co.in

for meeting the growing demand for saw milling and plywood industries considerable areas will have to be regenerated/ planted in government degraded forests with comparatively longer rotation tree species like teak, sal, sisso, cedar, fir deodar etc.

As regarded promoting people’s participation in forestry, guidelines has been issued to state governments. Most of the states have accordingly issued government orders/resolutions facilitating participation of people not only in forest protection and management, but also in sharing of produce.

Policy exploration India’s forest policy principally purposes without qualifying the objectives, or articulating the nature and intensity of actions needed. For example, it doesn’t give time a frame to achieve the national goal of having 33 per cent of geographical area under forest and tree cover. However, failures to achieve some of the policy objectives have been due, mainly to ineffective implementation rather than inadequacies of policy itself. Although ‘forests and protection of wild animals and birds’ is now a concurrent subject, state governments ultimately decide the level of manpower and other resources required to manage and develop their forests and enforce forest laws. While GOI may emphasize the need for environmental conservation, the state governments are faced with their own revenue needs as well as the local pressure to meet the needs of forest dependent communities.

Government of India has prepared a 20 year National Forestry Action Program (NFAP) in the year 1999 according to which Rs INR 133,903 crores would be required for achieving the 33 per cent forest and tree cover, and other important objectives of the national forest policy of 1988. The action program addresses the issues of financial resources required, indigenous technologies available and to be adopted, capacity building and

transfer of technology.

The Indian Forest Act 1927, the Mines Act (1952), the Wildlife (Protection) Act 1972 (WPA), the Environment (Protection) Act 1986 and the Biological Diversity Act 2002 together provide basic legislative cover to the forestry sector, including fixing priorities for maintaining the existing forests, setting aside lands as protected areas (PAs), ensuring environmental protection, and conservation, and meeting the needs of rural and tribal people in pursuance of their traditional rights and concessions. Under the overall ambit of the central legislations, most of the state governments have enacted their own legislations for management of forests and PAs and trade in forest products in order to regulate the felling of trees grown on private lands and territories.

Erosion of principles of forest management Brandis’ work marked the arrival of scientific forest management in India in 1864. The notion of ‘sustainable yield’ coined by G Hartig, for preparing ‘working plans’ for the management of forests is deliberated as the true beginning of scientific forestry in the country.

Since then, the landmark process of managing forests scientifically was progressively institutionalized and the working plans were prepared after thorough estimation of the forest resources and related factors of the locality. Nevertheless, over the years, in the race for rapid industrialization, the working plans were given short shrift and ad-hoc management decisions prevailed.

Post independence too, policies considered the forests as subordinate to the developmental needs of the nation and primarily as a source of forest revenue to the state exchequer. This trend continued till early 1980s during which period the conservation of forests as a national requirement, assumed importance. The national forest policy, 1988 recognized the importance of working plans for management of forest emphasizing that no forest should be permitted August 2016 I 47

to be worked without an approved management plan. Further realizing that the unlocked forest resources cannot be conserved by the government agencies alone without the active cooperation of the people living in forests and in the vicinity thereof, the Government of India passed a resolution in 1990 (subsequently reinforced in the year 2000 and 2002) for involving people in managing forests under the joint management programs.

The standard shift from production oriented forest management to conservation oriented management coupled with mandate to involve local people in achieving sustainable forest management has set a big challenge

in accomplishing the objectives of sustainable forest management.

Micro planning is an essential tool and should be adopted for village ecosystem management by involving local people, foresters, NGOs and the subject specialists.

Afforestation programs Besides protection of the existing forests, afforestation is the second major forestry activity undertaken by the State Forest Departments (SFDs) for regenerating the degraded forests and bringing more areas under forest and tree cover.

For achieving the goal of having one third of geographical area of the country under forest and tree

Agroforestry holds huge potential for livelihood for village and forest dwellers

before the forest managers in the country. The burgeoning population and the conflicting land use pressures necessitate a very cautious approach for forest management that can address international commitments (nonlegally binding), national objectives and more importantly, local needs.

The role of working plans has, thus, become more crucial. The National Working Plan Code (NWPC) released by the government of India in 2004 prescribes detailed guidelines for preparing a working plan that offers a host of information useful in integrating traditional forestry with current objectives of SFM through involvement of people.

Looking at future, firm tenure rights, share in harvested forest products, empowerment and autonomy to people’s institutions as well individuals are necessary 48 I August 2016

cover as envisaged in the successive national forest policies, a number of initiatives have been taken by the government of India and the states/UTs. Land under recorded forests being limited; the objectives of national forest policy can be achieved only by extending the afforestation activities outside the forest areas. To bring more areas under forest and tree cover, during 1980s a large number of social forestry programs were undertaken in most of the states. Many states opted for externally aided projects with major components of planting in private lands.

The future India is one of the few countries where forest and tree cover has increased in recent years transforming country’s forests

into a net sink owing to national policies aimed at conservation and sustainable management of forests.

As per the latest assessment, forests and tree cover has increased from 23.4 per cent in 2005 to 24 per cent of the geographical area in 2013. Government of India’s long term goal is to bring 33 per cent of its geographical area under forest cover eventually.

With its focus on sustainable forest management, afforestation and regulating diversion of forest land for non-forest purpose, India has been successful in improving carbon stock in its forest by about 5 per cent, from 6,621.5 million tons in 2005 to 6,941 million tons in 2013.

Initiatives like Green India Mission (GIM) aim to further increase the forest/tree cover to the extent of 5 million hectares (mha) and improve quality of forest/tree cover on another 5 mha of forest/non-forest lands along with providing livelihood support.

It is expected to enhance carbon sequestration by about 100 million tonnes CO2 equivalent annually.

These efforts have been further augmented by policies like National Agro-forestry Policy (NAP), REDD-Plus policy, Joint Forest Management; National Afforestation Program and proposed devolution of about USD 6 billion under Compensatory Afforestation to states.

India is going to one of the few countries in future that will not only restore its green cover but also substantially increase it. Forest not only play crucial supportive role against global warming but are also important to generate millions of livelihoods options for rural and forest based communities through MNREGA linked climate change adaptation programs, NTFP management, agro forestry and eco tourism.

The writer is an international consultant working in the area of environment, forestry, climate change and sustainable development

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ART & CULTURE

On the path to self-discovery Aparna Menon

T

he Weeping Girl: An innocent, feminine face in predominantly ochre hue, framed within unruly close-set curls; her eyes are downcast yet she appears to stare at you from within the frame of the canvas; tears tumble down onto her cheeks helplessly, mercilessly. She implores you to interrogate yourself and so also the society that you are a part of. It pricks on the conscience, gently at times and fiercely at other times. Long after this image has faded from the eyes, the haunting continues to linger in the mind and the heart. The gravity of the image is so overwhelming that you simply cannot ignore an ache within. A historical statement has been made!

Sasi Krishnan

Weeping Girl

Suffocation in Sophistication

The Preacher

Creating moving statements through profound works of art such as The Weeping Girl has been more than a craft, rather, a way of life for Sasi Krishnan, the contemporary artist from Kerala who couldn’t have been happier doing anything else than making art that is eloquent and resonates with life’s myriad shades and meandering paths. The 5-day exhibition that commenced on 25 July 2016 at the Durbar Hall at Cochin, conducted as

part of the Philaesthoism Movement of Art founded by the Artist himself, concluded on 29 July 2016. On exhibit were a string of 33 amazing pieces of art aptly titled Mind, Space and Beauty in total reflection of the suite of works on display.

For those who visited the gallery, Mind, Space and Beauty was essentially a landscape of thoughts that revealed the ingenuity of an artist whose tryst with art though

serendipitous is nearly three decades old and dotted with experiences that are good, bad and ugly, as they say.

His journey has been verily one of self discovery and introspection more than the business of artmaking as we know in the context of the world today.

Over time the definition of art has undergone colossal changes.

The boundaries of art and daily life have merged to pave way for a

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August 2016 I 49 www.governancetoday.co.in

seamless exchange between the two.

In absolute synchronicity, Sasi does not fail to observe the glint of art in every object around him, in every situation that he finds himself in and so also in the transience of life. For the Artist, there is nothing good or bad; there is only inspiration in everything; there is an opportunity behind every pain and joy - an opportunity to create yet another piece that talks to the world.

He channels his observations and experiences into works that showcase many dimensions and carefully weaves them into the fabric of each canvas.

Each oeuvre is thus born out of a compulsive thought and a continuous creative process that causes ripples in the viewer.

The 33 paintings that were on display dealt with different subjects that take birth within the human mind and also converge within the human mind. There were a number of paintings exploring different angles of the life of a girl child growing in a society that often chooses not to

of mothers and daughters, finds universal resonance. This beautiful work is a tribute to motherhood in particular and womanhood in general.

There were a set of other works that talked about man as the master of camouflage. Man’s mind, brilliant yet multi-layered engages in a dramatic masquerade to protect, defend and affect as the case might be. He fiercely protects his inner quarters and its histrionics behind layers of veils. Ironically this very closely guarded mind lay bare within Sasi’s impeccably crafted frames!

And then there were works that dealt with human ambitions, the many inner contradictions, conflicts and confusions of life set against the backdrop of the technologically forward world. Blending shades of satire and lament, here man was more than once portrayed as a victim of the technological progress he has set forth in motion with his sharp intelligence; as a mere toy in

Maternal Attunement

hear her voice while she fights for her rightful space in a galaxy of scheming adults. The unkind, the unnerving were all portrayed to equal measure but so also was hope - an experience akin to looking through a Kaleidoscope.

Meanwhile, there were also a few less grave pieces like Maternal Attunement which highlights the special bond between mothers and daughters. They are shown engaged in an endearing dialogue. Strokes that follow no particular fashion run across the canvas obscuring the faces of the mother and the daughter yet the mood is palpable - this simple painting depicting a daily moment in the life www.governancetoday.co.in

50 I August 2016

condiments that go into the making of a peaceful inner self which is the key to a peaceful world. This inner peace is what has been projected onto majority of his works.

He is a compelling narrator, who experiments with art by magically rearranging his observations on his canvas, playing upon the complexities of human perception and reality.

At his hands, simple interactions, intricate dramas of life, the mundane and the extraordinary, all acquire an almost ethereal life within the gallery space. Each experiment is his effort at unearthing different dimensions of his very own self and hence he calls this an unending journey of self-discovery more than anything else while making no hiding of the fact that he does not plan his tomorrows.

He dons many hats with adroitness - he is a sculptor, cartoonist, writer, director of art for short movies and much more. Before embarking as a full time artist, he dabbled in quite a few non-artistic

Lover of Freedom

the hands of gadgets that rule his world.

A careful study of Sasi’s works reveals to an astute lover of art, the passion, sensitivity and deftness with which he approaches the subjects of love and beauty in human relationships. This concept that runs through his works as a recurring ideological motif has been named Philaesthoism by the Artist himself.

So what is Philaesthoism?

Conceived at the turn of the millennium, Philaesthoism is an ideology that blends into art, the subtle elements of love and beauty.

Sasi firmly believes that these are the

professions but eventually found the calling of his life in Art. Sasi is currently based in the Middle East where he is an art educator at an Indian School and also runs his own studio apart from conducting exhibitions and creating art for Corporates in different parts of the world. Working out of a modest studio a part of which is also his home, he creates magical works while the rest of the world goes about negotiating life in the Middle East which is both - magic and art!

The writer is an award winning author, poet and corporate art-critic.

She writes about paintings, sculptures and music August 2016 I 50 www.governancetoday.co.in

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