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TOWARDS A CASHLESS ECONOMY!
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4 I December 2016
18 Towards a cashless economy!
On Nov 8th when PM Narendra Modi spoke on national television banning old Rs 500 and Rs 1,000 notes, the country was sent into a tizzy. In one stroke, the bulk of the high value denomination notes lost their luster. Everyone rushed to nearest ATMs to take out as many hundred rupee notes as possible. Since then, banks have seen massive rise in deposits, long queues to change old notes with new and businesses at the lower levels of pyramid have to a moderate extent lost business. Some sections of the economy that have high dependence on cash payment, realty for example, are facing the heat and many daily wage earners are not getting employment as cash has evaporated from the system. Not to be left behind, political parties have announced their responses ranging from www.governancetoday.co.in
WHY RED CARPET FOR MNCS AND RED TAPE FOR DOMESTIC MANUFACTURERS Rajiv Nath Forum Coordinator, Association of Indian Medical Device Industry
support to the move to demand of roll back of the move. As is customary, parliament has been held to ransom by opposition parties and not allowed to function. On its part, the government is firm on its argument that the move will hit black money in the country and also give impetus to cashless transactions which will lead to more transparent transactions, with less evasion of taxes. Over the longer run, the government says, it will also result in lower interest rates, and reduce corruption in various sections of the society.
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THE HIDDEN TRUTH CHALLENGES IN PURIFICATION OF DRINKING WATER AND WATER TESTING E-WAY DELIGHT FOR REALTY CLEANING COAL BASED POWER GROWING SHORT THINK PINK JUGGLING AND EXCELLING KARNATAKA URBAN CO-OPERATIVE BANKING SUMMIT 2016: EVENT REPORT
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Editorial
Demonetization and the politics In India, nothing bypasses politics and no political activity is less than boisterous. In this light, the recent demonetization move of the government and the ensuing political one-upmanship is worth noticing. The move, which was made to check the black money and cash hoarders, has been defended by the government according to which the opposition to the move is totally unwarranted. On their part, opposition parties are claiming that the government’s decision has led to multiple deaths and that the government is not concerned about the well being of the poor. In all this brouhaha, the real point has been missed as is always is the case. Banning of higher denomination notes is a calibrated move to bring out the stock of black money in the system. While it is true that a large portion of black money is quickly converted into realty and gold or leaves the country to safe accounts in tax heavens, there is still a huge trove of money stashed in the country that requires to be dug out and brought into the system. The move attempts to do the same. There may be merit to the argument that the move could not eradicate the scourge of black money as it leaves the institutional system of creating black money intact, the move will definitely impact the stock that has already been created. What is more important for common man, however, is the hardship the move has brought on the system. The cash that has been sucked out of the system, is being replaced at a slow rate and as such, people are not able to get enough of cash to go about their daily life. The lack of Rs 500 notes has made routine shopping tough and the result is that retail market has taken a hit. But small businesses are not the only one to be hit. The construction sector, which has a high cash business segment, has seen activity dry up and daily wage workers who mostly get paid in cash, are forced to return home as employment vanishes. As cash runs dry in system, scuffles have been seen in many places. Undoubtedly, the preparation for rolling out the move could have been better. Hopefully things would improve in coming days, as government says. Another point, not getting enough attention amid bigger, more vocal and emotive issues is that this move is a nudge to move towards a cashless system, which is indeed a laudable intent. A cashless system would be more transparent, clean and would restrict the creation and sustaining of black money. It would also improve in tax collection and economy. But such a move could be challenging as the necessary infrastructure is still not well developed. People are not very comfortable is digital transaction as they fear for security of transaction. Thankfully, government is working on multiple fronts such as unified payment system and payment banks that intend to create an enabling environment. We hope that the problems of common people will vanish soon and the efforts of hurting black money bears fruit. Best regards
Ajit Sinha Editor-in-Chief www.governancetoday.co.in
December 2016 I 7
THUS THEY SPOKE We don’t disagree with the objective of fighting graft but it (demonetisation) was a monumental management failure the way it was done. It’s a case of organised loot and legalised plunder. Dr Manmohan Singh Former Prime Minister of India I am in favour of the decision to demonetise Rs 1000 and Rs 500 notes which will help end ‘2 number ka dhanda’ (illegal business)… I want an attack on benami properties earned through illegal means for more effective results against black money. Nitish Kumar Chief Minister, Bihar We don’t itch for a fight, but if someone looks at the country with evil eye, we will gouge his eyes out and put them back in his hand, we have that much power. Manohar Parrikar Union Defence Minister I want to tell the world community that while we will always put America’s interests first, we will deal fairly with everyone — all people and all other nations. We will seek common ground, not hostility; partnership, not conflict. Donald Trump President-elect, USA
I want to tell the children of Kashmir that they should read, write and learn and come to the mainstream… They should first understand that this (India) is their own country and then everything will be resolved. Nana Patekar Actor, Bollywood
I would urge all our big companies, multinationals to start employing sportspersons. That’ll give them support and security. Sachin Tendulkar Former Cricketer, India 8 I December 2016
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GOVERNANCE WATCH
National anthem in cinemas before screening of films
Andhra, Telangana top in ease of doing business
The Supreme Court recently ordered all cinema halls across the country to play the national anthem before the screening of films and that all present must stand up in respect till the anthem ended. It said the practice would instill a feeling within one a sense of committed patriotism and nationalism. Cinema halls should also display the national flag on screen when the anthem is played, it said. A bench of Justices Dipak Misra and Amitava Roy said it is time people expressed their love for the motherland. The bench said it is the duty of every person to show respect when the national anthem is played or recited or sung under the Prevention of Insults to National Honour Act of 1951. In its interim order, while awaiting a detailed response from the Centre, the apex court issued a complete ban on the commercial exploitation of the national anthem and the flag.
Andhra Pradesh and Telangana emerged as joint toppers in the ease of doing business, toppling Gujarat from the first spot to the third position. According to rankings by the department of industrial policy and promotion (DIPP) and the World Bank which was recently released, Telangana and Andhra ended the closely-contested contest with a score of 98.78 per cent on the 340 parameters that states were ranked on. In 2015 Index, Gujarat had featured at the top, with Andhra Pradesh at the second position and Telangana 13th. Chhattisgarh retained its fourth position in 2016 and was followed by Madhya Pradesh, Haryana, Jharkhand, Rajasthan, Uttarakhand and Maharashtra. These states were classified as leaders in the report based on implementation of DIPP’s 340-point Business Reform Action Plan. Among other major states, Odisha occupied 11th slot, followed by Punjab, Karnataka, Uttar Pradesh, West Bengal and Bihar which were classified as “aspiring leaders’’.
Government buildings to undergo green audit In order to check the environmental compliance and their impact on pollution and public health, the National Green Tribunal (NGT) recently directed all government establishments including colleges, hospitals, and courts to go through an environmental audit. The tribunal’s principal bench, headed by Justice Swatanter Kumar, has ordered the Union Environment, Forest and Climate Change Ministry, and Central Pollution Control Board to issue guidelines in this regard under section 5 of the Environment Protection Act, 1986, article 31 of Air Act and article 33 of the Water Act. The Environment Ministry’s notification will specify the exact scope of the audit. NGT’s order for an environmental audit of government buildings comes in the wake of several orders it has passed on air pollution in the recent past. “The purpose is that every government building should take necessary precautions to control pollution so that no hazardous result follows in relation to public health,” the four-member bench said. www.governancetoday.co.in
December 2016 I 9
GOVERNANCE WATCH
Delhi replaces Mumbai as India’s economic capital
Railways recognises third gender
Delhi has muscled out Mumbai as the economic capital of India, taking the 30th spot among the top 50 metropolitan economic entities globally in 2015, according to the latest data released by Oxford Economics. Mumbai is ranked 31st in the list. Oxford Economics said the Delhi Extended Urban Agglomeration (EUA) consisting of Delhi, Gurgaon, Faridabad, Noida and Ghaziabad had a GDP of $370 billion, in terms of purchasing power parity. By comparison, the GDP of Mumbai EUA (Mumbai, Navi Mumbai, Thane, VasaiVirar, Bhiwandi and Panvel) was pegged at $368 billion. Interestingly, Oxford Economics said Mumbai is unlikely to edge out Delhi as India’s economic capital in the foreseeable future. The global advisory firm’s forecast for 2030 shows both cities moving up the list of top metropolitan economies, with Delhi predicted to be at 11th spot and Mumbai holding the 14th position. However, Mumbai EUA with a lower population still scores over Delhi EUA in per capita terms.
Indian Railways and IRCTC have included “transgender as third gender” in the option alongside male and female in ticket reservation and cancellation forms. The decision, which was taken on a representation made by a lawyer will include the facility for reservations and cancellations, both online as well as offline. The Delhibased lawyer had made the representation after the Delhi high court in February had asked him to approach the Railway Ministry while disposing of his petition. The ministry in its circular referred to the direction of the apex court of April 2014, which had said that hijras, eunuchs, apart from binary gender, be treated as third gender for protecting their rights. Advocate Jamshed Ansari in his PIL before the high court had alleged violation of Article 14, 15, 19 and 21 of the Constitution by Indian Railway Catering and Tourism Corporation (IRCTC), by non-inclusion of “transgender/ third gender” as a gender option in its forms.
Haryana to open agro business school for farmers Haryana government has decided to open an agro business school to skill farmers and help them understand market trends with the changing scenario as well as sell their produce directly to consumers. Haryana Agriculture and Farmers’ Welfare Minister Om Prakash Dhankar made the announcement while speaking as chief guest at ‘Kisan Sangoshthi’ organised on the concluding day of 12th CII Agrotech-2016, in Chandigarh. He said that keeping in view the demands of the market, farmers should adopt the crop cycle and crop management practices. He said that an international fruits and vegetable terminus in Ganaur was being set up according to the geographical location of the state and emphasis would be laid on better packaging, minimum loss management and transportation management. A Special Purpose Vehicle was being set up for this. He said owners of various big companies are selling their produce by setting up stalls in the Agro-tech, therefore, farmers should also change their thinking and start selling their produce themselves in the market. 10 I December 2016
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GOVERNANCE WATCH
AIIMS first in Asia to opt for virtual autopsies In a first in the Asia continent, a digital radiological unit has been set up at Delhi’s AIIMS mortuary to enable doctors conduct virtual autopsies with the help of high tech digital X-rays, which can detect even the minutest clots and fractures invisible to the naked eye. The cutting edge technology is also less time consuming and promises to be a boon in cases where only skeletal remains are recovered. “The virtual autopsies are less time consuming as compared to the traditional postmortem and are minimally invasive allowing the body to be released for cremation or burial sooner,” said Dr Sudhir Gupta, head of the AIIMS forensic department. According to Dr Gupta, it is tremendously helpful in cases of decomposed corpse where it is difficult to ascertain the injuries by visual post mortem examination. The radiological examination can detect fractures and blood clots invisible to the naked eye. Often there are concealed fractures and injuries which are difficult to spot.
Goa set to be India’s first cashless state Goa is likely to become the first state in India to go cashless from December 31, as people will be able to buy perishables such as fish, meat, vegetables or anything else at the press of a button on their mobile. One has to dial *99# from their mobile phone, not necessarily a smart phone, and follow the instructions to complete the transaction. This system is being introduced to transfer money to small vendors who do not have swipe machines. Swiping of ATM and credit cards at shops and establishments will also continue. A drive to create awareness on how to operate the cashless transaction for vendors and small shops and the public has commenced in the state. While cash transactions are not being banned, the move is to encourage a cashless society. Also, there will be no minimum limit on the cashless transfer of money. Chief Minister Laxmikant Parsekar said no fees will be charged for any of these transactions over the mobile.
SC to examine inviolability of Article 370 For the first time, the Supreme Court has agreed to examine the inviolability attached to Article 370 of the Constitution which confers special status on Jammu and Kashmir in comparison to other states. A bench of Justices S A Bobde and Ashok Bhushan agreed to take up this issue for scrutiny nearly a year after entertaining an appeal challenging a J&K High Court judgment striking down reservation in promotion to SC/ST employees of the state government. In the same judgment, the HC had termed Article 370 as inviolable by ruling that even Parliament had no power to amend the provision. This was questioned in a fresh application filed by the petitioner’s counsel. The bench agreed to make the Union government a party to the proceedings and asked the petitioner to provide attorney general Mukul Rohatgi with a copy of the plea. www.governancetoday.co.in
December 2016 I 11
GOVERNANCE WATCH
Class 5 and 8 students likely to face annual exams With a survey indicating the need for significant improvement in their learning levels, the Centre recently indicated that students of Classes 5 and 8 may have to appear for annual examinations. “According to an annual survey by the National Council of Educational Research and Training (NCERT) on the learning achievement of children in Classes 3, 5, 8 and 10, there is a need for significant improvement in learning levels,” Minister of State for Human Resource Development Upendra Kushwaha told the Rajya Sabha. “The survey also noted that the learning level of children depends on several factors, including socio-economic, socio-geographic, the educational background of the students, availability of basic infrastructure/amenities in schools, availability of trained and competent teachers in the schools and so on,” the Minister said in a written reply.
Complain online about cyber crime In a bid to tackle the menace of growing cyber crimes in the country, the Centre has decided to set up a mechanism under which people can file a complaint online and they will not have to visit a police station. Briefing the Supreme Court about the measures taken to handle cyber crimes, the government said a ‘Centre Citizen Portal’ was being designed and any complaint pertaining to online pornography, cyber stalking, online financial fraud etc could be registered on the portal. “The portal shall facilitate online reporting of any crime by the citizen. The complainant could be the affected person himself or a good samaritan who wants to inform an observed crime to the police. The service will be particularly beneficial to women, senior citizens or other minorities by providing them a convenient way to report the crime from the confines of their home or any cyber kiosk,” the Centre’s affidavit said. A complainant could access to the portal any time to view updates and he would also be able to forward his complaint to a higher office, if not satisfied with the action taken.
Corporates get MCI’s nod to set up medical colleges The Medical Council of India has permitted corporates and “for profit” institutions to start medical colleges in the country. Nearly two months after the Niti Aayog committee recommended privatisation of medical colleges, the general body of the council that met in New Delhi recently resolved to allow corporate companies to start medical colleges. If the Supreme Court-appointed oversight panel and the Ministry of Health and Family Welfare approve this, corporates can apply for new colleges, as per reports. At present, educational institutes are run by government or registered not-for-profit societies or charitable trusts. Foreign direct investment rules also prohibit investments from foreign companies in these societies or trusts. Though a group of doctors in the general body raised concerns that allowing corporates will further commercialise education, a majority of them said that allowing corporates will improve standards to the level of Harvard and Oxford universities. 12 I December 2016
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GOVERNANCE WATCH
Green nod to 90% projects in 2015 Union Environment Minister Anil Madhav Dave recently said over ninety per cent of projects got environmental clearance in the country last year as compared to nearly 54% in 2014. Informing this in the upper house of the Parliament, Dave in a written response to a question said, “Average percentage of such projects for the period from 2009 to 2014 was 87.79%”. The minister noted that 53.86% of the projects had got clearance in 2014 while 90.70% of the projects got the green nod in 2015. Replying to a question about impact of speedy clearances of development projects on ecology, he said, “The statutory provisions laid down for carrying out the process of grant of prior environmental clearance ensures that ecological security is not compromised”. Dave said, “The Environment Impact Assessment Notification, 2006 under the Environment Protection Act, 1986 governs the process of grant of prior environmental clearance for activities mentioned in the schedule of the notification.
Six new SEZs for IT, biotech approved The Centre has approved six proposals from four developers to set up new special economic zones across three states in areas such as IT and biotechnology. The decision was taken by the Board of Approval (BoA), headed by Commerce Secretary Rita Teaotia, in a recent meeting. The developers who got nod for new zones include Vaxenic India, EON Kharadi Infrastructure and KRC Infrastructure. GAR Corporation has proposed to set up two IT/ITeS zones in Telangana, while Vaxenic India wants to set up biotechnology and bio pharmaceuticals SEZ in the state. EON Kharadi Infrastructure and KRC Infrastructure too have planned to set up separate IT/ITeS special economic zones in Pune. Information Technology Park has got the approval to set up IT zone in Karnataka. The board has also given additional time to six developers and units to implement their projects. SEZs are export hubs, which contribute about 23 per cent in the country’s total outbound shipments.
100 government schools to get ‘international’ status The Maharashtra government has decided to convert 100 municipal and government-run schools into ‘international’ schools, in what could be termed as one of the most ambitious schemes in the public education sector. The development aims to bring government school students at par with international education benchmarks. The state-run international schools are set to be launched in June 2017. The schools will continue to offer education in vernacular/English medium. Institutions run by Tribal Development and Social Justice Departments will also be included in this scheme. An expert committee headed by school education commissioner is currently shortlisting the schools. The school education department has created a separate cell for international education within the Maharashtra state board. It is also hiring consultants from Cambridge University to chalk out a world-class curriculum, plan a teachers’ training program and develop support structures for the chosen schools. www.governancetoday.co.in
December 2016 I 13
GOVERNANCE WATCH
India seals Rs 5,000 crore howitzer deal with US
Made-in-India largest warship INS Chennai commissioned
India recently inked the $737 million (almost Rs 5,000 crore) contract for the acquisition of 145 M-777 ultra-light howitzers from the US in a government-togovernment deal. The Prime Minister Narendra Modiled Cabinet Committee on Security had cleared the deal for the acquisition of the first modern 155mm howitzers for the Army in over 30 years to break the Bofors jinx. The contract, of course, will also further consolidate the position of the US as one of the largest arms suppliers to India, having bagged deals worth over $15 billion since 2007. Of the 145 M-777 howitzers to be delivered from mid-2017 onwards, 120 will be “assembled, integrated and tested” in India with artillery-manufacturer BAE Systems selecting Mahindra as its business partner here. The 1.3-million strong Army has been demanding such 155mm/39-calibre ultra-light howitzers, with a strike range of over 25-km, for well over a decade now since they can be airlifted swiftly to “threatened high-altitude areas”.
INS Chennai, a Kolkata-class destroyer ship, was commissioned into the Indian Navy’s combat fleet recently. Defence Minister Manohar Parrikar commissioned the warship at the naval dockyard in Mumbai. INS Chennai is the largest-ever warship to be built in India. Built at the Mazagon Dock Shipbuilders Ltd in Mumbai, the ship’s construction also marks the end of the Project 15A to build Kolkata-class guided missile destroyers. The ship is equipped with a decoy that can divert a missile attack. Nearly 60% of the ship was built at Mazagon Dock, while weapons and sensors were brought from Israel and Russia. Destroyers are second only to aircraft carriers in projecting raw combat power. The ship is designed to carry and operate up to two multi-role combat helicopters. The Navy plans to become a 200-warship force with around 600 aircraft and helicopters by 2027. INS Chennai will be placed under the operational and administrative control of the Western Naval Command.
India test-fires nuclear-capable Agni-I ballistic missile India recently successfully test-fired its indigenously built nuclear capable Agni-I ballistic missile, which can hit a target 700 km away, as part of a user trial by Army from a test range off Odisha coast. The surface-to-surface missile, powered by solid propellants, was test-fired from a mobile launcher from launch pad-4 of the Integrated Test Range (ITR) at Abdul Kalam Island (Wheeler Island). According to officials, the launch of the intermediate range single-stage missile was “part of training exercise by Strategic Forces Command of Indian Army. The trajectory of the trial was tracked by a battery of sophisticated radars, telemetry observation stations, electrooptic instruments and naval ships from its launch till the missile hit the target area with accuracy. Agni-I missile is equipped with sophisticated navigation system which ensures it reaches the target with a high degree of accuracy and precision. The missile, which has already been inducted into armed forces, has proved its excellent performance in terms of range, accuracy and lethality. 14 I December 2016
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GOVERNANCE WATCH
Rs 2,000 crore package approved for PoK refugees
PV Sindhu wins China Open, her maiden Super Series title
The government recently approved a Rs 2,000 crore development package for displaced people of Pakistan occupied Kashmir (PoK) living in the country. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Home Ministry’s proposal to provide enhanced financial aid to 36,384 families, who are mostly living in Jammu region after their displacement from PoK after Independence. Each of these families will get around Rs 5.5 lakh as aid. The refugees from West Pakistan, mostly from PoK, settled in different areas of Jammu, Kathua and Rajouri districts. However, they are not permanent residents of the state in terms of Jammu & Kashmir constitution. Some of the families were displaced during Partition in 1947, and others during the 1965 and 1971 wars with Pakistan. The displaced people can cast their votes in Lok Sabha polls but not in the elections to Jammu & Kashmir assembly.
Adding yet another feather to her cap, Olympic silver medallist PV Sindhu clinched her maiden Super Series Premier title after edging out Sun Yu of China in the final of the $700,000 China Open badminton tournament recently. Sindhu, who became the toast of the country after becoming the first Indian woman to win a silver at Rio Games, continued her rampaging run as she lifted the prestigious title after beating Sun 21-11, 17-21, 21-11 in the summit clash that lasted an hour and nine minutes. World No. 11 Sindhu had come into the match with a 2-3 head-to-head record but then statistics counted little when she took the court at the Haixia Olympic Sports Center. Sindhu dished out a dominating game as she zoomed to a healthy 11-5 lead early on. The Indian looked sharp and athletic as she engaged in a fast-paced game to bamboozle her opponent.
India’s first payments bank goes live Heralding the era of payments banks, Airtel recently rolled out a pilot of its banking services in Rajasthan. Airtel Payments Bank Ltd. is the first payments bank to go live with over 10,000 retail outlets across the state functioning as banking points, the company said in a media statement. The bank will offer a hefty interest rate of 7.25 per cent to customers on their saving deposits. The high rate of interest could now be emulated by other payments banks set to launch next year that may want to better or at least match Airtel Bank’s rate. Generally, banks offer an interest rate of 4 per cent on savings bank account deposits and some private banks have offered up to 6 per cent on such accounts. Airtel said it plans to increase its merchant network in the state to 1 lakh by the end of the year. Payments banks are the brainchild of former RBI governor Raghuram Rajan, who came up with the idea of differentiated bank licences. www.governancetoday.co.in
December 2016 I 15
GLOBAL WATCH
Trump wins US presidential polls Republican Donald Trump recently defeated heavily favoured Hillary Clinton in the race for the White House, ending eight years of Democratic rule. A wealthy real-estate developer and former reality TV host, Trump rode a wave of anger toward Washington insiders to defeat Clinton, whose gold-plated establishment resume includes stints as a first lady, US senator and secretary of state. His win raises a host of questions for the US at home and abroad. He campaigned on a pledge to take the country on a more isolationist, protectionist “America First” path. Trump, who at 70 will be the oldest first-term US president, came out on top after a bitter and divisive campaign that focused largely on the character of the candidates and whether they could be trusted to serve as the country’s 45th president. The presidency will be his first elected office, and it remains to be seen how he will work with Congress. During the campaign Trump was the target of sharp disapproval, not just from Democrats but from many in his own party.
Bajwa takes charge as Pakistan army chief General Qamar Javed Bajwa, an expert in PoK affairs, recently took over as Pakistan’s new army chief succeeding Gen Raheel Sharif. The post of the army chief is said to be the most powerful in Pakistan. After taking charge as the Chief of Army Staff from Raheel, Bajwa promised to improve the tense situation at the Line of Control soon. He said he had a heavy responsibility on his shoulders. Bajwa took over the command of the army in garrison city of Rawalpindi, where outgoing military chief Raheel handed over the symbolic baton at an impressive ceremony. Several high level military and civilian officials attended the ceremony during which national songs and war anthems were played by traditional military bands. His appointment coincides with the rising tensions and heavy exchange of fire at the LoC. Analysts believe Bajwa’s announcement that the LoC situation would improve might be a reconciliatory gesture towards India.
South Africa’s president survives political coup South African President Jacob Zuma remains in power, after having surprisingly survived a political coup that saw many of the African National Congress (ANC) members prepared to oust him from office. The 74-year-old leader, who remains unpopular even among supporters of the ANC, was also asked to step down by some of his cabinet ministers — in an obvious act of defiance that is likely to continue in the months, or perhaps years, to come. In a recent meeting, members of the ANC held a debate on whether or not Zuma should remain in office. The ‘robust’ debate reportedly turned intensely heated that a fight nearly broke among members of the Congress. The meeting, which dragged on for another day, ended with the deciding executive members of the ANC voting to keep Zuma in office. The latest political coup is not the first that Zuma had to face as president of South Africa, having survived many similar mutiny in the past. 16 I December 2016
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GLOBAL WATCH
Putin withdraws Russia from International Criminal Court Russian President Vladimir Putin has signed a decree to withdraw Russia from the International Criminal Court, which rules on such grave charges as genocide and crimes against humanity. Putin’s decree, published recently on the Kremlin’s website, came after the UN General Assembly’s human rights committee approved a resolution condemning Russia’s “temporary occupation of Crimea” and condemned Russia for rights abuses such as discrimination against some Crimeans. Russia annexed Crimea in March 2014 from Ukraine following a hastily called referendum, a move that led to crippling Western sanctions. A proRussia insurgency erupted in eastern Ukraine the following month, backed by Russia. Putin in 2000 signed the Rome treaty that established the Hague-based court but never ratified it. Analysts predict the Russian leader will act swiftly to test US President-elect Trump, who often referred admiringly to Putin during his campaign, on many longstanding points of dispute with successive American administrations.
Revolutionary Cuban leader Fidel Castro dies Former President Fidel Castro, who led a rebel army to improbable victory in Cuba, embraced Soviet-style communism and defied the power of 10 US presidents during his half century rule, died at the age of 90 recently. Castro’s reign over the island-nation 90 miles from Florida was marked by the US-backed Bay of Pigs invasion in 1961 and the Cuban Missile Crisis a year later that brought the world to the brink of nuclear war. The bearded revolutionary, who survived a crippling US trade embargo as well as dozens, possibly hundreds, of assassination plots, died eight years after ill health forced him to formally hand over power to his younger brother Raul. Castro overcame imprisonment at the hands of dictator Fulgencio Batista, exile in Mexico and a disastrous start to his rebellion before triumphantly riding into Havana in January 1959 to become, at age 32, the youngest leader in Latin America. For decades, he served as an inspiration and source of support to revolutionaries from Latin America to Africa.
Brazilian football team’s plane crashes in Colombia A chartered aircraft with 81 people on board, including members of a Brazilian club football team, crashed recently near the Colombian city of Medellin after reporting electrical failures. 76 people reportedly died and three of the soccer players are among five survivors. The British Aerospace 146 short-haul plane, operated by a charter airline named LaMia, declared an emergency at 10 pm on the fateful day. The aircraft, which had departed from Santa Cruz, Bolivia, was transporting the first division Chapecoense soccer team from southern Brazil. The team was scheduled to play in the first of a two-game Copa Sudamericana final against Atletico Nacional of Medellin. South America’s soccer federation extended its condolences to the entire Chapecoense community. All soccer activities were suspended until further notice, the organization said in a statement. Earlier reports had suggested that the plane ran out of fuel. www.governancetoday.co.in
December 2016 I 17
COVER STORY
The recent demonetization drive has brought focus on cashless economy
Towards a cashless economy! Anand Mishra
O
n Nov 8th when PM Narendra Modi spoke on national television banning old Rs 500 and Rs 1,000 notes, the country was sent into a tizzy. In one stroke, the bulk of the high value denomination notes lost their luster. Everyone rushed to nearest ATMs to take out as many hundred rupee notes as possible. Since then, banks have seen massive 18 I December 2016
rise in deposits, long queues to change old notes with new and businesses at the lower levels of pyramid have to a moderate extent lost business. Some sections of the economy that have high dependence on cash payment, realty for example, are facing the heat and many daily wage earners are not getting employment as cash has evaporated from the system. Not to be left behind, political parties have announced their
responses ranging from support to the move to demand of roll back of the move. As is customary, parliament has been held to ransom by opposition parties and not allowed to function. On its part, the government is firm on its argument that the move will hit black money in the country and also give impetus to cashless transactions which will lead to more transparent transactions, with less evasion of taxes. Over the longer run, the government says, www.governancetoday.co.in
cards, electronic clearing, payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer and Real Time Gross Settlement in India. While no country has gone totally cashless yet, and it may never be possible to eradicate cash completely from transactions, developed countries have gone for higher level of electronic payments which reduces the scope of creation of black money, is easy from cash logistics point of view and also saves money spent in printing and maintaining the cash in the system.
India runs on cash
it will also result in lower interest rates, and reduce corruption in various sections of the society. Amidst all the usual hullaballoo, however, what is pertinent to ask is whether we are really heading for a more cashless economy and if yes, what does it mean for a country like India, which has a huge number of people who are still unbanked. The population is still largely technologically illiterate and despite proliferation of cheap smart phones, the number of people using phones to do either banking or online shopping and paying in digital cash is too low for comfort. Most people are still not using their debit or ATM www.governancetoday.co.in
cards to do purchasing because the trust on the security of transaction and privacy of data shared online is low. But at the same time, there are definite and tangible benefits from cashless environment which are ultimately helpful for people at large. Then there are questions regarding the infrastructure to sustain cashlessness in semi urban and rural India. So, what does it mean to have a cashless economy? It can be defined as a situation in which the flow of cash within an economy is nonexistent and all transactions have to be through electronic channels such as direct debit, credit and debit
India is among the most cash driven economies of the world. Less than 5 per cent of all payments happen electronically in India. Nearly 80 per cent of all consumer payments in India are made by cash, whereas in US, 80 per cent transactions occur electronically. While lack of banking access has been cited as the reason for the same, the attitudinal aspect has not received enough attention. In an A.T. Kearney survey on consumer behavior at malls, close to 90 per cent transactions were found to be done by cash. This shows that even those who can use electronic transfers prefer using cash instead. Another example is e-tailers who are giving the cash on delivery (COD) facility to expand consumer base. Though the proportion of people opting for COD is decreasing, it still accounts for 60 per cent of transactions. Even the luxury retail segment sees most transactions in cash. In a report titled Cost of Cash in India, the Fletcher School of Tufts University presented some disturbing facts. It found that India had a very high ratio of currency in broad money, and a low velocity of cash, making its ratio of currency to GDP very high at 12.2 per cent compared to other major emerging economies such as Russia (11.9 per cent), Brazil (4.1 per cent), and Mexico (5.7 per cent). The study also found that the ratio of money held in bills and coins, to the amount held in demand deposit and savings December 2016 I 19
Indian economy is largely dependent on cash transactions
accounts in India was in excess of 50 per cent, much higher than Egypt (29.3 per cent), South Africa (8.9 per cent), and Mexico (8.7 per cent). What is not much realized and appreciated is that printing and maintaining cash in a system is a costly business. On an average, India spends Rs 21,000 crores a year on currency operation, most of which falls on the RBI and commercial banks. Some experts have put the direct cost of running a cash-based economy close to 0.25 per cent of the country’s GDP. On the logistics of cash, the Cost of Cash report says that Delhi spends 60 lakh hours and Rs 9.1 crore to obtain cash. Compared to this, Hyderabad spends 17 lakh hours and Rs 3.2 crore to do the same, which corresponds to fees and transport costs about twice as high as Delhi on a per capita basis.
Benefits are immense The cashless economy has numerous advantages. The greatest of these is that in such a system, all economic transactions are recorded 20 I December 2016
and money trail is established automatically in real time, making it almost impossible to generate black money. It also makes underground economies unsustainable which are not only damaging to the economy, but is also the primary conduit to finance anti national and anti social forces. Secondly, a cashless economy means low transaction costs as cashless transactions obviate the need to print, manage and move money around. Third, the lesser use of cash reduces money laundering and increases tax compliance. Another advantage of greater usage of electronic payments is that it increases the “velocity of money.” According to a Moody’s report, the impact of electronic transactions can lead to a 0.8 per cent increase in GDP for emerging markets and 0.3 per cent increase in developed markets. An associated benefit is the increase in spending. A Visa study of 2003 had estimated that a 10 per cent increase in electronic payments correlates with a 0.5 per cent increase in consumer spending. It also found that electronic payments
can achieve cost saving worth about 1 per cent of GDP. Cashless or low usage of cash also reduces the scope of pilferage from public services. In 2010, a report of McKinsey found that initiating electronic payments as a means of disbursing government services can reduce current payment inefficiencies estimated at Rs 1 lakh crore annually. From peoples’ perspective, cashlessness means no need to frequently visit ATMs, complete control over spending power as well as no risk of carrying currency notes in the wallet.
But is India ready? So, if there are so many advantages and benefits from going cashless, why have we not moved lock, stock and barrel in this direction yet? Surely, something is hindering this progress. Indeed there are very credible challenges in moving towards a cashless system in India. First and foremost, a large part of the population is still outside the www.governancetoday.co.in
banking net and not in a position to reduce its dependence on cash, even if they want to. According to a 2015 report by Pricewaterhouse Coopers, India’s unbanked population was at 233 million. Not more than half of villages are covered by banks. A related aspect is the prevalence of ATM or debit cards. Much of rural India is out of the debit card ambit and this is because the number of ATMs is itself very low and is highly skewed in favor of urban centers. Even for people with access to banking, the ability to use their debit or credit card is limited because there are only about 1.46 million points of sale (POS) which accept payments through cards. On a total POS number of over 10 million, this is miniscule and inhibits the willingness of usage of cards by public. Second, about 90 per cent of the workforce, and nearly half of the country’s economy works in the unorganized or informal sector, the set of economic activities that are neither taxed nor monitored by the government. It will not be easy for the informal sector to become cashless as merchants prefer not to reveal sales in order to avoid paying taxes. On the other hand, for want of better price, buyers find cash payments more convenient. Third, as the Payment System Vision Document of RBI said, unless the government payments are migrated to electronic platforms, the overall goal of cashlessness cannot move any forward. This is a governance issue and much preparation is needed in changing mindset of conducting business in government circles. Then there are problems related to attitude of people that emanate from poor literacy and awareness. Majority of India’s literate population is not educated beyond rudimentary level and for them, using electronic means of handling money is a complex task, even if the language of interaction is local. The low digital literacy naturally makes consumers averse to using digital payment means. Next is the set of technical limitations that inhibit the growth www.governancetoday.co.in
of cashless transactions. First of all, even though mobile penetration has gone up sharply over the last decade, smartphone penetration is still low which is an important component for digital transactions. This is also a price issue as the cost of smartphones has still not gone down to a level where a daily wage earner can afford it. Second, debit and credit card penetration is still low which is directly related to setting up of ATMs in the country, especially in rural areas. Third, the internet penetration and its reliability are quite low in the country, and so is the bandwidth
ever before. Mobile wallets have seen considerable traction, and people are increasingly using digital payment options to settle mobile phone, electricity and even taxi bills. A study by Boston Consulting Group and Google has revealed that wallet users have already surpassed the number of mobile banking users and are three times the number of credit card users. The BCG report also estimated that by year 2020, nearly $500 billion worth of transactions in India will happen digitally, using online wallets and other digital-payment systems, 10 times the current level.
Fear of data theft has inhibited online transaction in the country
availability. In such a scenario, it is not possible to guarantee the success of transactions made online. Fourth, The payment interface i.e. UPI is still at a nascent stage which cannot handle large volumes of transactions. Finally, the lack of proper cybersecurity framework is a big constraint hindering the move towards a cashless economy.
Creeping up on new technology Though on a broad, macro level, the infrastructure does not look promising, there are signs of positive developments which inspire confidence. Personal internet banking has become more popular in India over the past decade and more people are using mobile and net payment than
Also it felt that by the same year, the number of smartphone users in the country will likely be 520 million, and the number of internet users 650 million, twice the current number. The recent spurt of growth in digital payment system has come from non-bank companies offering payment services. Cellphone companies like Airtel and Vodafone offer facilities to transfer money using phones, while “wallet” companies like One97 Communications’ Paytm, and MobiKwik allow users to store money digitally and pay through their systems. As the acceptability of these wallets increase in hinterlands, the dependence on cash would naturally decline, though on a country wide level, the real, visible impact could be years away. December 2016 I 21
What needs to be done? Even though cashless transactions have gone up in recent times, it has remained an urban phenomenon as only in tier I cities there is a basic infrastructure ready. If the success has to be spread to smaller cities and to semi urban and rural areas, actions are required at various levels. First and foremost, and the easiest part, is to create an institutional and technical infrastructure to handle large number of online transactions with high level of reliability. It is good to see that the government has
decade. Bank, on the other hand, say that ATM machines may be out of order for a variety of reasons, from mechanical failure and paper jams, to software malfunction or lack of electricity, a common occurrence in India. Needless to say, poor ATM network discourages people to move towards greater usage of ATM card. On their part, banks will have to invest in technology and strengthen cyber security as online payments are most vulnerable to theft. People will only shift when it’s easy, certain and safe to make cashless transactions. As largest players in banking industry, government
UPI of National Payments Corporation of India is a sound initiative to increase cashless transaction
already made some progress on this front. It has got a large number of bank accounts opened and started direct benefit transfer is part of the overall idea to reduce cash usage. On its part, RBI has issued licenses to small finance banks and payments banks which are expected to roll out innovative banking solutions with higher technological input, which will encourage cashless transactions. The National Payments Corporation of India’s Unified Payments Interface which aims to make digital transactions simple, has started on a promising note, though technical issues remain. A tougher job will be to boot up the ATM network the country. India has currently near 200,000 ATM machines. Not only the numbers and reach has to go up, the service has to be improved too. In a survey of 4,000 ATMs that RBI conducted, it found that a third weren’t working. Banks have been expanding their ATM networks rapidly over the past 22 I December 2016
banks will have to take a lead in this regard. They will also have to take a lead in increasing the number of POS accepting card payments. Next, telecom companies will have to improve internet bandwidth reliability which could facilitate online traffic. Needless to say, the government will have to create conducive environment in which people can easily and fearlessly make online payments. Initial push is critical as it will decide how the drive towards cashlessness proceeds, both from institutional and infrastructure perspective. Though the confidence and control that people feel with cash in their pocket is hard to match, the future is of electronic transactions and sooner India moves in this direction, better it will be for economy, government, and people as well. anand@governancetoday.co.in
Digital d Dr Rajneesh Chauhan
T
he pros and cons of demonetization can be debated, but demonetization is here to stay. Demonetization is leading to democratization of digital payments. Demonetization drive is a shot in the arm for financial inclusion. Labourers, farmers, people working in unorganized sector – all are getting forced to use the banking systems. As per the website of Pradhan Mantri Jan Dhan Yojana, there are 25.6 crore Jan Dhan bank accounts and 19.5crore Rupaycards. The implementation of direct benefit transfer schemes (gas subsidies etc.) have also ensured usage of bank accounts. Demonetizationis dependent upon these underlying crores of bank accounts to help tide over the difficulties arising from demonetization drive. Demonetization is expected to give a big push to digital money. Usage of debit cards, credit cards, digital wallets, mobile wallets, online paymentsand other digital channels has increased manifold. However this is where demons of the digital kind start surfacing. Usage of digital money means more avenues for potential hackers and more number of digital frauds such as Identity thefts, passwords getting stolen, credit card frauds, phishing scams etc. Given that there will be millions of people who will be trying out plastic money for the first time, or using online transactions etc. for the first time, these people can be easy prey to cyber crime. More so, because many of these first timers are getting initiated into this digital world in an environment lacking adequate security precautions. These days, when you go to an ATM and enter your password, there are at least 2-3 more people in the ATM www.governancetoday.co.in
emons of demonetization
standing next to you in the queue. At a merchant establishment, when you enter your passwords while using your card, how many of us try to cover the number pad with our hand. PayTm launched app PoS but had to take it back for some time because of security concerns. In an environment where adequate precautions are not being taken, chances of cybercrime shooting up are high. Most of the ATMs in our country still run on old ATM software and Windows XP, an operating system version which even Microsoft does not support anymore. Only three months back, there were an estimated 30 lakh bank cards which were compromised in our country because of an ATM related malware. Further, there is a deep divide, a digital divide which exists in India. Even by liberal estimates of internet penetration in India, at most one–third of our www.governancetoday.co.in
population is covered by internet. This is a big gap. How do you bring the remaining population online so that they can also do online transactions safely. Getting elderly citizens, housewives to use internet in a secure manner has its technology adoption challenges. Digital divide is a demon and this divide has to be bridged for going digital. These demons go hand in hand with going digital. Going digital means living with these digital demons. Demonetization is helping us leap frog into an era of digital money. This is a time when the cyber agencies, banks, financial institutions, ecommerce companies etc. in our country should increase their vigilance against cyber crime. This is a time when individuals need to be made aware of cyber security issues so that they do not fall prey to these demons. This is a time to take digital bugs seriously.
Just like demonetization is here to stay, so are the digital bugs. World Wide Web In its origins at CERN, was designed to share information in a trusted community and hence security has always come as a distant afterthought. That is why digital demons have always been around. These digital demons, more than anything, are driven by human greed. How much we want to attribute these demons to demonetization is debatable. The combination of human greed and the demonetization makes it easy for digital demons to rise. As the popular Demons song goes “No matter what we breed, We still are made of greed…. It’s where my Demons hide, It’s where my Demons hide”. The writer is a faculty at FORE School of Management, New Delhi and teaches Information Technology
December 2016 I 23
24 I December 2016
www.governancetoday.co.in
www.governancetoday.co.in
December 2016 I 25
INTERVIEW
RIHO KRUUV | AMBASSADOR OF ESTONIA TO INDIA
OUR COMPANIES ARE VERY INTERESTED IN SHARING THEIR KNOWHOW AND E-GOVERNANCE SOLUTIONS
26 I December 2016
www.governancetoday.co.in
A small country located in Baltics, with a population of just over 1.3 million, Estonia has been a major global case study on how to implement effective and efficient digital governance. Estonia was among the first countries globally to apply emergent information and communication technologies in governance and delivery of public goods. Today, there are hardly any services that are not fully available online in the country. Anand Mishra, Editor, and Rajesh Mehta, Consulting Editor, Governance Today, spoke to Mr. Riho Kruuv, the Ambassador of Estonia to India, to find out more about the bilateral relations between the two countries and how they can cooperate on various matters. Mr. Kruuv is also the Ambassador Designate to Sri Lanka, Myanmar and Singapore. Prior to this assignment, Ambassador Kruuv held several high ranking positions in the Estonian Ministry of Foreign Affairs, in the Security Policy and Arms Control Division, Political Department and as Chair of the Estonian Export Control Authority. Prior to that, he served as the Chargè d’ Affairs in the Embassy of Estonia in Canada and as 1st Secretary at the Estonian Embassy in the United States of America. EDITED EXCERPTS: How do you assess the progress of relation between India and Estonia over last few years? This year, we celebrate 25th Anniversary of establishment of diplomatic relations between our countries but our relationship got a real boost after we opened our Embassy in New Delhi in 2013. Having a dedicated team tirelessly working for development in our relations practically in every field one can think of, is a game changer. There is a lot of goodwill imbedded in our relations both on political and economic fronts. Well, there is an issue of pending court case here in India involving 14 Estonian marine guards that were part of the crew of the anti-piracy ship and obviously, such cases work against the attempts of both of our embassies to boost trade and tourism. However, we haven’t put all eggs in the same basket and work actively in all those areas where progress is achievable. Fortunately, the list of these areas is a long one.
The growth in trade relations between the two countries has somehow not lived up to expectations. What are the reasons for the www.governancetoday.co.in
December 2016 I 27
same and how can it be improved in your opinion? India has enjoyed remarkable economic growth in recent years, also coincided with the growth of Estonian exports to India. In 2014 when our Embassy in India officially opened, Estonia’s exports to India were worth €40.4 million whereas in the first half of 2016, we exported goods worth €35.1 million. In relative terms to all Estonia’s exports, India’s share has grown from 0.3 per cent to 0.6 per cent in less than two years. I would like to hope that this is only the beginning. As the Member State of the
In 2014 Estonia and India signed a MoU to further cooperation in e-governance whereas Indian civil servants have attended training on the functioning and architecture of Estonian e-governance systems for some years now
European Union, we keep our eye on the negotiations of Free Trade Agreement between India and EU. Estonia is a strong supporter of free trade and investment policies and we hope that FTA negotiations can be finalized soon and bilateral investment treaties will be extended till the time FTA steps in. For a small export oriented economy, this agreement is very important to us in lifting our bilateral trade relations to new higher level.
Three years ago, Estonia came out 28 I December 2016
with the Foresight project. How do you see its progressing and what impact it has made on IndiaEstonia relations? Only a few years back, India as an economic partner was well known to only a small part of our business community. The India Foresight Project by the Estonian Development Fund was pivotal in finding a consensus that India will be one of the key future markets to explore for Estonian businesses. This very existence of the Foresight project gave a clear rationale for the decision to open our Embassy in New Delhi.
Estonia is a very strong player in technology and e-governance. How do you think this knowledge can help India in its e-governance drive? E-governance is an area where both partners can greatly benefit each other. e-Estonia as we like to call our country sometimes and the Digital India project are very similar in principle. We are aware of what a paramount difference digitalization of governance has made to the 1.3 million people in Estonia. We can barely imagine what a difference it can bring to the lives of 1.3 billion people in India. It is natural that e-governance has been a key area of cooperation between our two countries. In 2014 Estonia and India signed a MoU to further co-operation in e-governance whereas
Indian civil servants have attended training on the functioning and architecture of Estonian e-governance systems for some years now. In September this year, Honourable Minister of Justice and IT, Shri Ravi Shankar Prasad travelled to Estonia, and we had an opportunity to explore further ways how to increase this cooperation. It may happen that we will now look at how to bring our co-operation to a new level by exchanging more students and co-operating in R&D related to e-governance and cyber security. Needless to say, our companies are very interested in sharing their know-how and e-governance solutions, but they are unlikely to come to India unless they have been matched with a suitable Indian partner company.
What is your impression of the Digital India and Make in India plans of the Govt. of India? Based on your experience back home, how do you think it can be improved? Regarding Digital India project, it is wonderful to see that healthy competition has started between the State Governments in India. It is quite natural that not everything can be achieved on the federal level. In this regard, we are very keen to work with individual states to find ways that they could benefit from our experience in e-governance. As regards to the Make in India initiative, I can tell from Estonian experience that opening our country to foreign direct investment in www.governancetoday.co.in
the early 1990s was a key accelerator in the process of turning a rigid bureaucratic planned economy which we inherited after the collapse of the Soviet Union. To the present day, we are proud to have one of the most open free market economies in the world. This year, Estonia was ranked 12th in the world in ease of doing business. Cutting red tape, partially by digitalization of government has played a key role in this.
Increasingly, Indian companies are investments abroad, including Europe. What are the potential investment avenues for Indian investors in Estonia? Estonia has a fast growing IT, tech and startup scene and we have access to the whole of the EU internal market and especially to fellow NordicBaltic countries. In this field, we are happy to see that HCL, one of India’s IT giants, has recently opened an office in Estonia. We are working to bring similar enterprises in other sectors as well. Given that Estonia now offers e-residency to Indians which allows one to create and run an EU-based company in Estonia from a distance, we especially hope that many SME businesses will choose to open an office in Estonia, perhaps to be closer to their European or North American clients. Estonia can boast of a zero per cent corporate income tax on re-invested profits which greatly helps companies in a growth stage. We are also likely to relax our migration rules to ease moving to Estonia for people who are to work in a startup company. More details are www.governancetoday.co.in
available on same at www. indiain.eu.
Could you elaborate on the Innovation & startup culture in Estonia? What can India learn from Estonian Innovation & startup system and vice versa? The greatest difference between the startups in Estonia and India is the fact that more or less every Estonian startup has to expand abroad during an early phase to succeed. Indian startups, on the other hand, have a vast and rapidly-growing domestic market which may put them in a different place. What Estonians can apparently learn from Indians is how to do a sales pitch. In Estonia, we sometimes tend to be far too introvert and some companies, even after winning international awards which confirm that their product is the best of its kind tend to shy away from saying that our product is the best in the market. We would instead say something in the lines that our product is highly competitive. When Estonian business people explore India, they quickly learn that if we want to be successful here, we also need to get to make some noise even if we are self-critical at times. Ideally, we would like to see an innovation platform that will bring together different stakeholders in the startup ecosystems in Estonia and India and create opportunities for Tech Transfers, Startup Connect, Internships, Joint Grand Challenges, Co-innovation and Soft Landing services.
Estonia increase the people to people contact and tourist flow on both sides? India has made a remarkable move in recent years by offering e-visas to much of the world. This step alone has made India much more readily accessible for Estonian tourists and business visitors alike. Estonian Embassy in New Delhi has started to use VFS offices to allow people to apply for Estonian visas from 16 cities across India. VFS is a great example of how an Indian company can provide an excellent client service and therefore become the biggest visa facilitation service provider in most countries
Ideally, we would like to see an innovation platform that will bring together different stakeholders in the startup ecosystems in Estonia and India where they exist. We also continue to attract more students from India yearon-year whereas Estonia is still a relatively unknown tourist destination over here, something that I would like to see changing over the next couple of years. In March 2017, the British Airways will launch a Tallinn-London route which will start flying to Heathrow Airport twice a week and is expected to increase its frequency in a few months. We know the Indian tourist will enjoy travelling to Tallinn via this new destination.
How can India and December 2016 I 29
HEALTHCARE
The hidden truth We don’t speak about medical education and its role in nation-building Dr Dharminder Nagar
I
n 2014, when during the government’s first health budget, slogans like “Health for All” and “Health Assurance” were spoken about, with great promise. However, over the past three years, the allocation to the health sector, as a part of the GDP has hovered around a little over 1 per cent. The aim should be to raise this to the level that the draft health policy has set out for us: to 2.5 per cent of the GDP. With the private sector coming in, as it has in a big way over the last decade, this takes the percentage investment to 4 per cent of the GDP. Low investment means that at the very base, we do not have enough medical colleges to train doctors, nurses and support staff. Down the line then, we have only 0.7 doctors for every 1,000 patients. The World Health Organization guidelines stipulate that there must be at least 1 doctor per 1,000. The other problem that we encounter is the urban-rural imbalance. We don’t need data to tell us what is happening in rural India. Almost all care is happening at the primary level, with midwives and healthcare workers as the first point of contact with the community. They are no doubt doing the best possible job they can, but naturally, we need more doctors on ground, not just at a single primary healthcare centre where people come.
The need of the hour We need doctors who understand the cultural context in which they are working, doctors who wish to give back to the communities that nurtured them. 30 I December 2016
More AIIMS like AIIMS Bhubaneswar are required to improve healthcare facilities in
How do we get these doctors? The answer is staring us in the face: by setting up more medical colleges in tier II and III cities. This decentralizes healthcare, taking it to the people. At some point, and I hope not too far into the future, I would like to see government hospitals where people are not living on the street or the subway just outside, because they have come from great distances.
Doctors trained in certain areas are more likely to set up practice there, and so we will not see the kind of over-crowding and heart-wrenching pain of patients thronging state capitals or even the country capital, for secondary or tertiary care. What we will see is a flourishing of local talent that is just waiting to be discovered in these locations. www.governancetoday.co.in
A utopian situation I hope that the 70 per cent of our population that lives in rural and semi-urban areas continues to do so. We don’t want overcrowded cities and all the sicknesses that come with them. In fact, as people get tired of big-city problems, I see
The government setting up more AIIMS facilities will contribute to medical education in smaller urban centres. Medical education itself is seeing a shortfall in terms of the number of qualified people we need to add to the workforce versus the number coming out of these colleges. Needless to
Next steps The private sector is barely present is health education. This is primarily because when it comes to private players entering, there has been no discussion about private-public partnerships in the area. Many find fault with the government for not introducing tax incentives this year, but honestly, we first need a dialogue beyond a few conferences and meetings. The Indian healthcare market is worth US$ 100 billion today, as per the Investment and Technology Promotion Division, GOI. They have pegged rural India as set to be a big market. We live in a context where India’s population will probably reach 1.45 billion by 2028, according to the United Nations, where by 2026 we will have 168 million in the geriatric age group, and most importantly, where nearly 1 in 4 Indians risks dying from an NCD before they turn 70. The healthcare market is expected to grow by US$ 280 billion by 2020, as per the GOI.
Many find fault with the government for not introducing tax incentives this year, but honestly, we first need a dialogue beyond a few conferences and meetings remote areas
people moving out and into smaller cities, for a better quality of life. For this, we need to set up a good healthcare system in these places. The current high out-of-pocket expenditure means that people feel the need to work in metropolises to earn the kind of money they do just to afford medical care. With the government setting up colleges and hospitals alongside, this can be avoided. www.governancetoday.co.in
say, supply is much lower than demand. However, in our rush to bridge the urban-rural divide and to have a balanced India, we must not compromise on the quality our healthcare system is known for. After all, health tourism is also part of the bigger healthcare picture, and even if it does take a little longer, we must look at setting up these educational institutions as investments.
Another report, by FICCI and KPMG released last year, pegged the workforce in the industry at 7.4 million by 2022. To meet the demands of population growth and NCD rise, we need to take responsibility for medical education right now. The writer is the Managing Director of Paras Healthcare
December 2016 I 31
WATER
Challenges in purification of drinking water and water testing
Purifying and disinfecting water fully is a big challenge in India as most water treatment plants are not running to optimum operational standards
Dr Saurabh Arora
A
ccess to clean drinking water is a human right but providing safe drinking water to India’s teeming millions is a challenge of no small proportion. According to a report by WaterAid, an international organization that works for water sanitation and hygiene, more than 80 per cent of India’s surface water is polluted. Waste and industrial effluents are dumped into rivers, seas and lakes, agricultural run-offs that contain pesticides and fertilizers, road run-off, industrial leaks and the most horrific, untreated sewage flow into water bodies. Add to these the rapid depletion of ground
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water, variability in terrain in India, incongruity in the quality of raw water treatment and you have a cocktail of issues that pose a major challenge and which continue to derail drinking water purification and water testing systems in the country. Water is used for various purposes and accordingly testing and water treatment differ according to usage. The Bureau of Indian Standards (BIS) specifies water standards in India for various purposes; therefore drinking water and domestic use water quality standards must be as per IS:10500. Water used for processing food industry must follow standards as per IS:4251, and for irrigation
and recreation purposes in swimming pools, the standards must be as per IS:3328, packaged drinking water standards need to be IS:14543 compliant. BIS also deems it necessary that drinking water sources be tested regularly to know whether water is meeting the prescribed standards and to understand the specific water treatment needs. However, despite the standards being in place, water testing for these standards and water treatment is not followed regularly or systematically, nor is there any strict enforcement to carry out specified water treatment because it is either unfeasible or there is a lack of allocated funds from the www.governancetoday.co.in
government. This is why potable drinking water in India can hardly be called safe and despite treatment, it could still contain toxic chemicals, bacteria, viruses, inorganic minerals, heavy metals, etc. In some areas water has excess iron, and in others it has fluoride, salinity, nitrate and arsenic. Microbial contamination from unclean water supply causes lakhs of cases of diarrhoea, typhoid and viral hepatitis every year leading to many deaths. The Government of India might accept the WHO Guidelines for Drinking-water Quality but unless standards for drinking water are actually enforced there could be enormous risk to public health. Drinking water treatment involves treatment that varies according to the nature of use of water and contaminant vulnerability of the water source. The bitter truth is that most potable water supplied by civic authorities is undrinkable as it has not received the right water treatment or it is contaminated during the supply as on various locations, the water and sewer lines pass through the same route, often close to each other so the leakages and damages of pipe lines could easily contaminate the drinking water. In rural areas most households get piped water that is largely untreated and in urban areas people use their own private filters to purify water. The use of unsafe drinking water poses a huge threat to the health of citizens as can be seen from the rise in cases of waterborne diseases like diarrhoea, cholera, jaundice etc. The sad truth is that no civic agency is held accountable for lapses in providing unsafe water, says WaterAid India and so Indian citizens continue to suffer in the face of this casual attitude. This same contaminated water is also used in the food industry and so the risk to health could be passed on consumers from processed foods also. Because of this reason, the food regulatory body, Food Safety and Standards Authority of India (FSSAI) has strict standards for water that is used in the food industry. One of the important food regulatory requirements that all food business www.governancetoday.co.in
operators have to follow is to get the water they use in food preparation and processing tested so it is in compliance with BIS standards as well as potable water standards of FSSAI. There is no doubt that water quality is monitored by municipal boards which conduct regular water tests but the testing analysis is not made public. Besides surface water, groundwater is the major source of drinking water in our country with 85 per cent of the population dependant on it. However, ground water is deteriorating quickly due to massive over-exploitation mostly to meet irrigational demands and to fulfil extra water requirements in hot weather. Since there is a deeper
have been instances of heavy metals like lead, cadmium, zinc and mercury being reported in groundwater in Gujarat, Andhra Pradesh, Kerala, Delhi and Haryana. Jharkhand, West Bengal, Himachal Pradesh and Delhi have reported levels of DDT, aldrin, dieldrin and heptachlor that are in excess of prescribed standards. Organics contamination comes from a number of sources in India and one is from untreated sewage. A major portion of the sewage goes into septic tanks and pit latrines and these have become a major contributor to groundwater and surface water pollution. According to a CPCB survey, nearly 66 per cent samples of water have bio-chemical oxygen demand BOD values (used
The leakages and damages of water pipelines, especially those running parallel to sewer lines, could easily contaminate the drinking water
drilling of aquifers, drinking water sources are getting contaminated with natural contaminants like fluoride, arsenic and saline. The Central Pollution Control Board (CPCB) which monitors water contamination has reported arsenic contamination in 8 states, fluoride contamination in 19 states with high concentration of fluoride reported from Andhra Pradesh, Assam, Gujarat, Karnataka, Madhya Pradesh and Rajasthan. Salinity has been reported from 15 states, both coastal and inland, iron contamination in 19 states and nitrate contamination in water sources in 12 states. There
for measuring organic pollution) less than acceptable limits while 44 per cent of the samples indicated the presence of coliform. BIS standards say that there should be no coliform in drinking water samples. There are also new chemical threats to water quality known as persistent organic pollutants (POPs) which remain in the environment and cling to fat tissues of the body from consumed contaminated water. These are polychlorinated biphenyls used widely in capacitors and transformers and dioxins and furans used in the cement and pipe industry. December 2016 I 33
Waste and industrial effluents are dumped into rivers, seas and lakes, agricultural run-offs that contain pesticides and fertilizers, road run-off, industrial leaks and the most horrific, untreated sewage flow into water bodies making it unfit for all purposes
With such a wide variability of pollutants found in water sources, raw water quality varies accordingly. This means that water treatment methods require constant modification. In India varied treatments cannot be carried out as all the various methods of water treatment could be unavailable at water treatment plants or could be unfeasible due to lack of knowledge. There is also a deficit of trained technicians to understand which kinds of pollutants require which method of water treatment. One example cited by CPCB is that water treatment personnel lack the knowledge that Trihalomethanes (THMs) can be formed due to chlorination of organic matter which is actually quite basic. Most water treatment plants do not have the post of chemist which is especially required in the face of increasing pollutants and the need for differing water treatment requirements. Another challenge India faces in purifying and disinfecting water fully is that most water treatment plants are not running 34 I December 2016
to optimum operational levels. A study, conducted on the optimum status of water treatment plants in the country, throws up some astonishing data on the water treatment technologies and operational practices. Where the Operation and Maintenance (O&M) of water treatment plants is in the hands of private organizations in metropolitan cities, it works satisfactorily. However, the scarcity of funds to carry out repair of equipment and the casual way in which Public Health Departments and municipalities operate and maintain water treatment shows the true picture of the deterioration in quality of water services. According to a study the number and percentage of tested water sources varies greatly by State. The sampling protocols are not fully specified either and the proportion of negative water test results is very high which is contrary to the number of pollutants in water sources presented in studies. Negative sample results could be attributed in part to the fact that the sampling
of sources is limited to groundwater and protected wells and not to all sources of water. This limited water testing does not therefore provide full picture of the level of water quality from all sources. Moreover the majority of positive test results involve chemical contamination while the biological contamination reports are surprisingly few even though there are massive concerns about the sanitation in most rural environments and of sewage leaking into water sources in urban areas. In the face of so much water contamination and negligent water testing infrastructure, what adds to the woes is that there cannot be any enforcement of the appropriate water treatment to ensure water safety. While there is a realisation on the part of the government to provide water quality management, the progress on the ground is severely wanting. The Government of India has launched several programmes at the national, state, district, block and Panchayat levels to monitor water quality but their www.governancetoday.co.in
effectiveness is too low. One major problem is that there are too many government bodies, ministries and institutions tackling water issues. Co-ordination among all these agencies becomes a key factor in the success of the water programme which gets side-tracked if there are communication gaps. With the low level of education prevalent at the village level, to build awareness and train pancahyat bodies also require large scale organisation. Another challenge is the monitoring and testing of water so that water
and analytics in water testing capabilities are also not available in all locations. Another issue that needs addressing is that sometimes the analytical data is accurate but treating that kind of contamination is not viable or more modern water purification technologies are not available. The government recognizes that dealing with the issue of water quality is a major challenge. It aims to address the issue of water quality surveillance and monitoring by setting up more water quality testing
Board for Testing and Calibration Laboratories (NABL) and the FSSAI. These private laboratories have the latest equipment and technical back-up to carry out broader water testing services throughout the country. Along with this if water treatment plants are handed over to private players, like in a number of metropolitan cities, accountability will improve and the citizens would be provided fully purified and safe drinking water which is their right. All citizens must be aware of their right to safe drinking
If water treatment plants are handed over to private players, like in a number of metropolitan cities, accountability will become higher and the citizens would be provided fully purified and safe drinking water which is their right
sources can be assessed during all seasons of the year. This requires well-equipped laboratories and trained technicians as sometimes water testing analysis from field kits gives an inaccurate result. There is also a lack of adequately trained personnel and scientific planning to answer the new challenges that water contamination throws up on a regular basis. Modern techniques www.governancetoday.co.in
laboratories that are strengthened with qualified manpower, equipment and chemicals and which can provide a uniform and correct data that is sharable among all agencies dealing with water quality. What the government must not overlook is the fact there already exist a large number of food and water testing laboratories that are recognised by the National Accreditation
water and they must demand that government supplied piped water is clean and safe. Even the Indian judiciary interprets Article 21 of the Constitution, the right to life, includes the right to safe and sufficient water. The writer is the Managing Director of Auriga Research Limited.
December 2016 I 35
INFRASTRUCTURE
E-way
delight for realty
The high-speed Agra – Lucknow roadway opens a new avenue of growth for real estate sector, besides allowing the commuters to save a lot of time while travelling and helping in decongesting the traffic on the alternate route 36 I December 2016
Ramesh Kumar Raja
I
t is true that infrastructure serves as the backbone for the real estate sector of any region and the realty of western Uttar Pradesh’s realty sector is expected to achieve newer heights as the much awaited Agra - Lucknow Expressway has formally been inaugurated. With the rising demand in tier 2 and 3 regions, this infrastructural development will allow untapped regions of the western UP to come into the limelight and further promote the real estate prospects in those regions. Apart from developing various regions along the expressway, this roadway will also allow the commuters to save a lot of time while travelling and also help in decongesting the traffic on the alternate route. The Agra - Lucknow Expressway will now serve as a seamless connecting link not only between these two cities but also between Delhi and Lucknow. The travel time between Agra and Lucknow has www.governancetoday.co.in
been reduced from the usual 7 hours to 3 hours now and between Delhi and Lucknow it has been reduced from the usual 9 hours to an astonishing 6 hours for now making it almost equivalent to rail travel. The entire stretch, which is six lanes broad, spans over a distance of 302 kms and has been built in a record time of 23 months by the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) at a cost of Rs 13,200 crores which was stipulated to go as high as Rs 15,000 crores. The expressway is designed to support speeds up to 120 kms per hour and will have automatic traffic management systems aimed at reducing road accidents and helping even at the time of dense fog. There are plans to expand this expressway into eight lanes and in order to facilitate this, all the bridges and underpasses have been made eight lanes. This will also help avoid traffic congestions and bottlenecks. It also includes four rail over bridges, 57 minor bridges, 13 major bridges, nine flyovers, 148 pedestrian underpasses and 74 vehicular underpasses. This expressway will be connected to the much-hyped Yamuna Expressway via an Agra Ring Road. It covers 10 districts, 236 villages and 3, 500 hectares of land. It connects Agra and Lucknow via Shikohabad, Firozabad, Mainpuri, Etawah, Auraiya, Kannauj, Kanpur Nagar, Unnao and Hardoi. Highlighting the connectivity feature even further, the expressway passes through two State and four National Highways, and five major rivers namely; Ganga, Yamuna, Isan, Sai and Kalyani. A green belt is also being developed on the sides of the Agra - Lucknow Expressway by planting trees on either sides and plants in the median as well. There are provisions of a 3.3 kms dedicated stretch which has been purposefully built on the expressway for jets to land and take-off in times of ‘warlike emergencies’.
Boost to realty With the saturation of major tier 1 cities in NCR, stakeholders, www.governancetoday.co.in
developers and buyers are looking out for options in tier 2 and 3 cities. The development in those regions is bound to be better as they are gifted with modern day architecture, equipment and manpower. Even in case of Agra - Lucknow Expressway, development along the corridor will allow the realty prospects to increase manifolds over the years. As the movement and footfall on the expressway will increase, the realty sector will look up in gradually; as was the case of Yamuna Expressway. Deepak Kapoor, President CREDAI-Western UP and Director, Gulshan Homz, says, “With the construction of this ultra-modern expressway, cities situated in and
With the saturation of major tier 1 cities in NCR, stakeholders, developers and buyers are looking out for options in tier 2 and 3 cities. The development in those regions is bound to be better as they are gifted with modern day architecture, equipment and manpower around this will open up new doors for industrial corridors in these regions. It’s a proven fact that with the better connectivity and good road networks, chances for development and growth of the regions increases. We have great expectations with these projects as we see lot of scope of realty development in the regions coming under these road projects.” Rajesh Goyal, Vice President CREDAI-Western UP and MD, RG Group, is of the view that the regions along the newly inaugurated Agra Lucknow expressway will be the new hotspot investment destinations in
the coming future enjoying excellent road connectivity along with rail and waterways. “The wave of development will rise to encapsulate not only infrastructural development but a holistic growth and once the expressway will be fully operational it will add to the attractiveness of the region eventually leading to the boost in the realty aspects of the region,” says Goyal. According to Ashok Gupta, CMD, Ajnara India Ltd., a robust infrastructure system ensures that we are able to move goods and services, but also people in the most effective possible way which helps in enhancing their efficiency. “Infrastructure is significant for economic growth, employment opportunities and access to markets and services,” says Gupta, adding that the high speed expressway will not only allow smooth travel options but will on the other hand open up new doors for infrastructural developments around the stretch. Ashwani Prakash, Executive Director, Paramount Group, states, “No doubt with the construction of such road networks, regions lying in the stretch of these highways and expressways will have improved connectivity and infrastructural development will get a boost as well. The scope of development of the regions in and around these projects is enormous and future will see vast real estate growth in these areas. Not just this, there is a huge opportunity for the setting up of industrial corridors and foreign investments along these highways and expressways due to connectivity benefits and transportation facilities.” Delhi is already fast reaching a saturation point. With the regions around national capital having sky touching property prices, the regions lying near this project will be bonus additions for home buyers looking for properties at affordable rates. Vikas Bhasin, MD, Saya Group, says, “There are lots of growth prospects in these regions once the projects are accomplished and the real estate sector of these areas too are anticipated to get a big boost.” ramesh@governancetoday.co.in
December 2016 I 37
ENVIRONMENT
Cleaning coal based power
NTPC’s Badarpur power plant, surrounded by residential localities, is highly polluting, says CSE
Anand Mishra
W
inter’s onslaught is not a particularly pleasant thing for those living in Delhi NCR. The level of air pollution shoots up invariably, days get hazy, breathing becomes problematic, schools close for a few days and then the news goes out of fashion on news channels and people get used to the pain. While immediate trigger every year is the paddy burning in surrounding areas, the more discreet and nationally widespread problem of air pollution which is thermal power plants, does not get enough attention unless there is a news about government closing some plant or the other under court orders. Only a few weeks back, Delhi government temporarily shut down Badarpur thermal power plant of NTPC as air quality in the city deteriorated too much and courts came down heavily asking the government what it was doing to fight the menace. Earlier this year, in the month of May, the government told Parliament that a total of 19 thermal power plants across India were found violating the environment guidelines, including on installation of pollution control equipment. In a written reply, the then environment minister Prakash Javadekar informed Lok Sabha that “Polluting industries including Power plants are required to install pollution control equipment to meet the prescribed effluents and emission standards as specified in the environment
38 I December 2016
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clearance, consent and the guidelines to control the emissions of highly polluting industries.” He had informed further that the CPCB has issued directions to the noncompliant thermal power plants. Out of over 200 thermal power plants of the country, about 116 are coal-based. According to the data, four of these plants are in Chhattisgarh, three each in Uttar Pradesh and Jharkhand and two each in Bihar and West Bengal. Andhra Pradesh, Gujarat, Maharashtra, Odisha, Rajasthan also have one such power plant. Fortunately, the problem of pollution from coal based thermal power plants, though not new, is not getting increasing attention which is a welcome development. But what makes these plants so bad and what are the options in dealing with these? A couple of years ago, the nonprofit public interest research and advocacy organization Centre for Science and Environment (CSE) conducted a study according to which NTPC, India’s largest coal based power producer, was way below the prevailing standards across various parameters. The study, titled ‘Heat in Power’ analyzed 47 plants over 16 states representing over half of the thermal power generation capacity and concluded that the Badarpur plant was the most polluting power plant of the country. The study analyzed and rated coal-based thermal power plants on multiple environmental and energy parameters and found around 18 of the 47 plants as having a score less than 20 per cent, based on approximately 60 parameters. It declared NTPC’s Badarpur plant, contributing about 8 per cent of Delhi’s power, as the poorest performing plant. The plant accounted for anything between 80-90 per cent of the particulate matter, SOx and NOx from the energy sector in Delhi. As per CSE, which advocated the closure of the Badarpur plant, the 767 acres fly ash pit beside the plant, has grown at an alarming rate. The report of the CSE generated www.governancetoday.co.in
wide public debate and is said to have played a role in government’s change of policies on various parameters including air pollution, water conservation, ash utilization and monitoring systems. The government proposed to control emissions of particulate matter (PM), sulphur dioxide, nitrogen oxides and mercury and also cut water use by coal-based thermal power plants. Experts say the proposed changes are significant as India currently has poor standards to check emissions from the thermal power sector. The new standards
Broadly, Indian thermal power plants are among the most inefficient and polluting of lots. The average efficiency of the Indian plants is under 35 per cent, one of the lowest among the major power producing countries and large number of plants operate at only 60-70 per cent capacity are estimated to cut PM emissions from new thermal plants (after 2017) by 25 per cent, sulphur dioxide emissions by 90 per cent, nitrogen oxides by 70 per cent and mercury by 75 per cent. The plant set up after 2003 will come under slightly relaxed norms. According to CSE, the new standards could lead to an 80 per cent cumulative drop in freshwater withdrawal by thermal power plants. Broadly, Indian thermal power plants are among the most inefficient and polluting of lots. The average efficiency of the Indian plants is under 35 per cent, one of the lowest among the major power
producing countries and large number of plants operate at only 60-70 per cent capacity. The CSE report had found that the average carbon dioxide emissions from Indian power stations were 14 per cent higher than the average in China. The Indian thermal power plants also utilize only 60 per cent of their fly ash generation and used a lot more water compared to the plants elsewhere in the world. Alarmed by the possible environmental impact of coal based power plants, government has sprung into action. Besides tightening emission norms, it has also made it mandatory for new coal based plants to operate on supercritical technology. The basic difference between supercritical and the subcritical plants, which constitute most of the country’s plants, is the boiler which makes it more efficient. In supercritical boilers, water directly converts into steam without wasting energy in first boiling water, thus reducing coal consumption and reducing carbon dioxide. For any foreseeable future, India would heavily depend on coal based power because of multiple reasons that range from low cost availability of coal to price of alternative fuels. As such, it is imperative that the country moves towards a cleaner and more efficient coal based power generation. This requires actions on multiple fronts, namely, tightening of emission norms, gradual but definite push towards clean coal technology, improving fuel mix to get better calorific results, higher capacity utilization, reducing water usage and increased utilization of fly ash. It is good that government is seized of the matter, but action is required at a much faster pace before any significant and visible impact could be felt on ground. Surely, air pollution will remain a problem in India for a long time, fixing coal based power generation sector could be a significant achievement. anand@governancetoday.co.in
December 2016 I 39
INTERVIEW RAJIV NATH | FORUM COORDINATOR, AIMED
WHY RED CARPET FOR MNCS AND RED TAPE FOR DOMESTIC MANUFACTURERS Medical device is a critical part of the healthcare security of a nation, especially so in a country like India because majority of people fall in low to middle income group. Here we need to ensure cheap but reliable medical equipments to keep the overall healthcare cost down and population healthy. The size of the Indian medical device industry is close to USD 10 billion (approximately INR 65,000 crore). However, India is a high import dependent country which not only threatens our healthcare security but also increases the cost of individual healthcare. In addition, domestic manufacturing of medical devices has been totally stressed. To find out the reason for this undesirable situation and measures needed to rectify it, Ramesh Kumar Raja talked to Rajiv Nath, Forum Coordinator of AiMeD (Association of Indian Medical Device Industry), the leading voice of industry and Joint Managing Director of Hindustan Syringes and Medical Devices Ltd, one of the largest manufacturers of disposable syringes in the world. Nath has also been instrumental in conceptualizing and setting up of India’s first dedicated medical device manufacturing park which is coming up near Vishakhapatnam. EDITED EXCERPTS: 40 I December 2016
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How serious is India’s import dependency in medical devices and what are its implications? Import dependency is huge and it has multi-dimensional adverse impact on the country and citizens. The Indian medical device industry is worth nearly USD 10 billion but our import dependency is close to 70 per cent and in high end electronic devices it is over 90 per cent. So what does it translates into? In simplest terms, it translates into vulnerable healthcare security of the nation, increased healthcare cost for citizens, huge outgo of foreign reserves and last but not the least - stunting of the growth of domestic medical device industry.
Medical device was chosen as one of the lead sector to spur ‘Make in India’ mission but nothing much appears to have happened on the ground. Medical device production within the country has not picked up. What are the reasons? There are many reasons, roadblocks and legacy problems which have to be cleared. Piecemeal reforms or short-sighted measures are not going to work. Biggest problem has been the failure of successive government to create a distinct legislative and regulatory framework for governing this sector and failure to nurture a supportive eco-system for medical device manufacturing within the country. You will be surprised to know that medical device sector continue to be governed by the Drugs and Cosmetics Act, 1940 which was legislated to govern the pharmaceutical sector. Nowhere else in the world, medical devices and medicines are kept in the same bracket for the simple reason that www.governancetoday.co.in
they are two very different fields, having different requirements despite being part of the common healthcare architecture. AiMeD has been demanding a new governance regime for medical device sector for a long long time but despite many consultations and representations and assurances, nothing appears to be moving in the desired direction. We keep coming back to square one.
What have been the suggestions from AiMeD to rectify the situation? And what has been the response from the government? This government has been more proactive than previous governments in hearing the concerns of the industry but then one needs to act on the suggestions. Mere consultation is not going to yield desired results. If we want medical device manufacturing to revive in the country, then the entire medical device manufacturing eco-system has to be looked afresh. Some suggestions, which the government is already aware of, are as follows:
• Separate set of legislations and regulatory framework for medical device sector It’s high time, policy makers realize that you cannot govern medical device sector with the same set of laws and personnel expertise as is used to govern medicine production. Medical device is pure engineering . Also Regulations should be used as a Make in India enabler and not disabler - there’s an incorrect proposal in drafted Rules to distort definition of Manufacturer to include trading and marketing companies and legalise pseudo manufacturing.
• Duty Rationalization Our taxation structure is such
that it makes imports cheaper and domestic manufacturing expensive! One cannot have viable domestic manufacturing if imports remain cheaper simply because of duty benefits. The current Inverted Duty Structure whereby the Import of Medical Devices is at 0 per cent Basic & 0 per cent SAD in most cases and 5 per cent Basic & 0 per cent SAD in some cases whereas the Import of Raw Materials & Components are at Peak Duty Rates. This structure has to be reversed and a basic minimal duty of 10 per cent applied on all imports of devices.
• Buy India Policy Many Countries have a Policy to encourage Domestic Manufacturing; even USA has a Buy American Policy. While the honorable Prime Minister has shared his enthusiasm to have a ‘Make in India’ Policy, it will be good if Indian Public Healthcare System has a 15 per cent Price preferential ‘Buy Indian Policy’ in line with World Bank financed Tenders. If GOI considers this benefit for procurement financed by World Bank it should also consider this for GOI financed procurement.
• Full legislative and governmental support to domestic labeling and certification system for India made medical devices Why should our public tendering for medical devices accept only US or European certifications? AiMeD in collaboration with Quality Council of India now has a world class ICMED certification for medical devices. This ICMED certification must be made the primary and universally accepted norms for public tendering across the country. This will bring down the cost of certification, cost of devices and enhance our export competitiveness too.
What has been the impact of the liberal FDI policy for this sector December 2016 I 41
Rajiv Nath with Andhra Pradesh Chief Minister N. Chandrababu Naidu after signing of MoU for India’s first medical device park
which was announced a year back? Has it been able to attract much investment or manufacturing? Again the FDI policy announced with much fanfare last year has been flawed one and a piecemeal kind of step. The government permitted 100 per cent FDI in both greenfield and brownfield projects. While we are fine with 100 per cent FDI in Greenfield projects but the government still needs to first correct the import, labeling and trading rules and duties. Government should have put a rider that at least 60 per cent of overall goods being sold by a foreign company in India have to be manufactured within the country. Unless, this is done, I firmly believe that manufacturing of medical devices within the country will never take off and India
42 I December 2016
will continue to be heavily import dependent. Greenfield projects will just become trading units of MNCs. The decision to permit 100 per cent FDI in brownfield was incorrect as it would make Indian units vulnerable to takeovers and after the takeover, they will just be used as a labeling units. Anyway, before permitting 100 per cent FDI, the government should have at least created a level playing field between domestic manufacturers and MNCs or importers. Today, the entire taxation regime or governance regime is heavily tilted in favor of imports or MNCs. So how can domestic manufacturing flourish?
AiMeD has often voiced its concern regarding over pricing of imported medical devices and how Indian consumers are being fleeced? Can you
please explain in some detail please? Today, MRP of imported devices are being fixed arbitrarily to jack up the prices and kill domestic competition. Because higher prices for a similar imported devices as compared to domestic ones in practice means higher markups for the trade chain. So they will promote only imported devices through conniving medical practioners and hospitals and will never talk highly of domestically produced ones. So one hand, consumers end up paying more and on the other hand, domestic manufacturing suffers. And often, imported equipments do not carry any MRP at all! This is even a bigger concern. This malpractice can be controlled by levying 1 per cent Cess of Excise Duty (C.V.D.) on the MRP. Tax the excessive trade margins as a disincentive.
www.governancetoday.co.in
MALNUTRITION
Growing short Scourge of stunting hits tribal children in Madhya Pradesh, says new analysis Ramesh Kumar Raja
M
adhya Pradesh has often been in the news for cases of malnutrition. A recent analysis by Down To Earth, the Hindi magazine of Centre for Science and Environment (CSE), an environmental think tank, has found that stunting, which reflects chronic under-nutrition, is also very high among tribal children in the state. An alarming 50 per cent of children in Alirajpur, Dhar, Dindori and Jhabua – the four districts where tribals constitute 50 per cent of the population – are stunted.According to international non-profit Save The Children, Madhya Pradesh tops the nation in the number of malnourished children under the age of six – in 2015, 60 per cent of its children were malnourished, while 74 per cent were anaemic. Experts are now seriously alarmed about the high incidence of stunting in the state. They believe this is the result of several years of nutritional insults – poor diet, chronic hunger, and infection. While the condition of underweight malnourished children can be reversed with good food and care, such a turnaround is not possible for those who are afflicted by stunting. The analysts point out that this could be indicative of a bigger problem. They have found that stunting is high in all tribaldominated areas across the country. “Decades of hunger and stunting seem to have altered the stature of tribal people, forever,” says the study. It says the vicious cycle that leads to stunting begins in the womb – the unborn foetus does not get the necessary nutrients, because most mothers themselves suffer from severe malnutrition. The researchers behind this analysis say that forests were
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TRIBAL POPULATIONS IN OTHER STATES ALSO AFFECTED • 45 lakh children – mostly tribals -- suffer from stunted growth in MP, says the study • Government policies to blame, as they have blocked access of tribals to forests which used to provide nutritive foods • Decades of hunger have led to this stunting, which is also being seen in other tribal dominated states in India. While height of average Indian has increased by 4 cm over the last century, that of a tribal has decreased
traditionally the main source of nutritious sustenance – including meat -- for tribals, who would be able to extract close to 150 different varieties of food from forests. Today’s PDS and cheap food rations do provide food security, but nutritional security is still a distant dream for them. With the forests made out of bounds for tribals, their primary source of nutrition has dried up. A 2013 report by the Central government says 72 per cent of tribal women never get to eat even one fruit in a week. According to Richard Mahapatra, managing editor of Down To Earth “Official policies, which have barred our tribal populations from the forests – their traditional source of food and nutrition – seem to be responsible for this severe malnutrition and stunting that afflicts these populations.” ramesh@governancetoday.co.in
December 2016 I 43
AWARENESS
THINK
PINK
The increasing incidence of breast cancer in Indian women is an issue of major concern
Ramesh Kumar Raja
B
reast cancer is today the leading cause of cancerrelated deaths in Indian women. Cancer specialists say not only is breast cancer incidence increasing in the country, but cases of more aggressive cancers that are difficult to treat are also on the rise. According to estimates of World Health Organization (WHO), roughly 144,937 women in India were detected with breast cancer in 2012 and 70,218 died of it, making it one death for every two new diagnoses. With the incidence of the disease rising by more than 20 per cent since 2008, India is expected to have a whopping 200,000 new cases of breast cancer per year by 2030. “The shifting epidemiology of breast cancer in India is a matter of concern and demands greater research and analysis to determine its causes and consequences. There is consensus among the medical community that as compared to 10 years back, the numbers of patients reporting breast cancer has increased, their median age has decreased and the incidence of 44 I December 2016
more aggressive cancers, especially triple negative breast cancer has also increased,” says Dr PS Dattatreya, Consultant Medical Oncologist, Omega Hospitals, Hyderabad. Triple-negative breast cancer refers to the breast cancer that does not express the genes for estrogen receptor, progesterone receptor (PR) or Her2/neu. “This means that it is not driven by any of these factors and hence does not respond to treatment targeting these. Since most targeted therapies and chemotherapies usually target one of these three receptors, triple negative breast cancer is much more difficult to treat. We have seen a rise in number of patients reporting this type of cancer. More often than not relatively younger women (those under 50 years of age), are diagnosed with more aggressive cancers,” adds Dr Dattatreya. It is disheartening to note here that the survival rates for younger women are actually lower than older women because the former tend to have more aggressive cancers that grow rapidly, are more invasive and have poor prognosis. “In a number of cases, patients
who report such aggressive and invasive cancers have a mutation in BRCA 1/BRCA 2 genes. These genes in normal cells have a tumor suppressing ability; however, when in people who carry a mutation in these genes, risk of breast and ovarian cancers is significantly high. People who have more than one cancer patients in their families are recommended to undergo a genetic test for gene mutation. Knowing whether they carry a mutation or not helps them be better prepared to deal with the disease,” says Dr Dattatreya. While genetic predisposition is the main cause of breast cancer, the risk of the disease is also magnified by a number of lifestyle factors. These lifestyle factors responsible for rising breast cancer incidence in India include adoption of western lifestyles involving excessive smoking, drinking, and sedentary habits; delayed age of marriages and child birth for women; late age of first term pregnancy or no pregnancy (nulliparity); reduced durations of breast feeding or no breast feeding as well as late menopause. Pregnancies and breast feeding are mitigating www.governancetoday.co.in
BREAST CANCER CAN BE DEFEATED BY STAYING ALERT Almost half of the breast cancer deaths in India can be preventable if the disease is presented on time. Regular screening not only saves lives by diagnosing the disease at an early stage, but also allows doctors to undertake less toxic and less disfiguring treatments: • Monthly self examination starting at 25 years of age: Once in a month after completion of menstrual bleeding, it is recommended that you conduct a self examination to rule out any lump, or change in shape of your breast area. • Clinical breast examination is recommended every three years after one turns 25. • Clinical breast examination with mammography yearly after the age of 40 years. • Undergo genetic testing for BRCA 1/BRCA 2 genes if more than one family member has been diagnosed with cancer. This will help one know her risk.
factors as they reduce the risk of breast cancer. More number of pregnancies, longer duration of breast feeding are breast friendly factors. Similarly, physical inactivity, obesity and sedentary lifestyles are other major causes of increasing breast cancer incidence. The good news is that survival rates have improved in recent years due to the availability of highly improved therapies and treatment protocols and adoption of a multidisciplinary approach to treatment has helped a lot. In fact, the survival rates in developed countries such as the US, Japan and Sweden are more than 80 per cent. In western countries, regular screening programs have succeeded in early identification and treatment of a large number of women. “Today, it is possible to successfully prolong the life of a patient using a multi-dimensional approach to treatment, especially if the disease is diagnosed in stage 1 or stage 2. Targeted therapies and new drugs such as Trastuzumab have provided a more comprehensive approach towards treating difficult cancers. However, late diagnosis remains a major challenge in India and survival rates here are among the lowest in the world. More than 60 per cent of patients are diagnosed in stage 3 or 4 by when www.governancetoday.co.in
from highly treatable cancers also lose out the battle because of late detection. Absence of a community based screening program in India puts the onus on individuals. Unfortunately, the number of cases will further increase in the coming years because of a series of lifestyle factors discussed above. There is immediate need for more cancer registry centers in the country to gauge the true extent of the problem. With the national health policy yet to catch up with the looming epidemic of breast cancer, the government needs to redouble its efforts to encourage women forward into getting themselves checked because early detection is a big solution. The important thing is to spread awareness and
BREAST CANCER DRUG 25% CHEAPER NOW The government recently capped the price of exorbitantly priced trastuzumab, a life-saving drug used in breast cancer, at Rs 55,800 per injection, over 25 per cent lower than the innovator Roche’s drug, Herceptin at Rs 75,000 per dose, among other oncology drugs. This is the first-ever instance of the drug pricing regulator, NPPA, fixing a ceiling on the biological breast cancer drug. The second significant medicine brought under price control is Pegylated Interferon used in cancer and hepatatis C treatment, with a ceiling price of Rs 14,515 per 100 mcg. The price revision follows key medicines used in cancer, Hepatitis B and C, being added in the National List of Essential Medicines earlier this year. According to Kiran Mazumdar-Shaw, the Chairperson and MD of Biocon, which markets trastuzumab, CanMab, the move will benefit retail patients, and those who cannot procure the drug at a discounted rate, from a government (CGHS) or institutional scheme. Two years ago, Biocon introduced CanMab at Rs 57,500 per 440 mg injection, while Zydus Cadila did it recently at Rs 65,000 per dose. However, health activists say the NPA move may not be very beneficial. “Pharma companies charge high premiums for branded biological medicines such as anticancer drug, trastuzumab to maximize profits. The current system devised by NPPA of fixing prices based on an average MRPs of the brands in the market works against patients and consumer interests and leaves essential medicines out of reach for most. The ceiling price for the breast cancer drug trastuzumab listed by the NPPA is Rs 55,812 for 440 mcg and does not bring any relief to patients and their families who are going into debt or going without the treatment due to the costs,” according to Leena Menghaney, a lawyer on the health rights of communities. the cancer has spread to more than the immediately affected region (locally advanced breast cancer) and is no more curable,” points Dr Dattatreya. Most patients who are suffering
break the myths surrounding breast cancer, and empower women to demand timely detection and proper treatment. ramesh@governancetoday.co.in
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ART & CULTURE
JUGGLING AND EXCELLING
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Nandini Sinha
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t doesn’t matter too much that how many roles you take up in your life, but how well you play your parts. Very few are the people who give their cent percent in whatever they do and showcase the best out of them. Chennai-based Bharatanatyam dancer, journalist and presenter Jagyaseni Chatterjee is among the few people who always strive to give their best be it on stage or writing for newspapers. It is very interesting that how things began for her some years ago. Jagyaseni was born to a Bengali couple based in Kolkata. Just like any other child, she was exposed to all sorts of extracurricular activities like painting, Rabindra Sangeet, badminton and swimming. But the young girl settled on dance. “It was dance that I didn’t quit and somehow it became a natural part of my daily life. Be it exams or any festival, dance classes gained priority”, she says. Today Jagyaseni is a graded Bharatanatyam artiste of Doordarshan and presently pursuing M.Phil in the Indian Music Department, University of Madras. She divides her time between dance and writing for various media houses. At the tender age of five, Jagyaseni started learning Bharatanatyam. “During my graduation in geography from the prestigious Loreto College, I did my Arangetram under Kalamandalam Venkitt and Preetha Venkitt and went on to doing MSc in Human Rights from Calcutta University”, she says. It was then she moved to Chennai to advance her learning because Chennai is the place if one wants to make a mark in dance. But all the waiting and toiling finally paid when she met Dr Lakshmi Ramaswamy at Madras University. “One day she came and asked me, “I have a Friday kids class, would you mind coming and opening the door on time because the teacher comes from a distance and the students wait outside.” I agreed as my evenings were free after the university classes. The environment of dance was so luring that within a week I asked her if I could learn from her. The door opening duty landed up opening a whole new road for me and I became a student of Sri Mudhraalaya. Dance now has a completely different perspective. It is not about moving your body in rhythm, it is about creating an impact, in others and your life”, she says. But how did she take up writing? “It was more a necessity to meet my expenses in Chennai while continuing with my dance learning. So I started with being a food critic for neighborhood newspaper, and then took up a job in an English monthly magazine in Chennai and then joined a reputed media house as a sub editor”, she says. Jagyaseni agrees that her prime interest was suffering because of it. “I quit my job and started freelancing. Yes, managing the stress of both careers becomes difficult and stressful at times, but all the stress vanishes when I have a cup of filtered coffee made by my teacher. I have even finished articles sitting in the make up room or during rehearsals. Jokes apart, there is nothing more satisfying than finding each day taking you one step forward. My writing enables me to meet new people, visit places and dance gives me a roller coaster ride every moment. What else can be more enterprising than having a life full of ever new surprises and challenges”, she says. Meanwhile something strange was taking shape in her. She always likes to spend time with kids. “So when my teacher gave me the opportunity to take classes for children as part of my own learning module, I was thrilled. Many a times I have learnt through the questions the kids ask. It feels great when children look up to you, the responsibility becomes more. Responsibility not just as a dance instructor, but also for their overall development. Moreover their selfless affection is a fantastic stress buster”, she adds. Jagyaseni has a busy schedule ahead. “Come January I am performing for Krishna Gana Sabha, a dream platform for all budding dancers. I owe it all to my teacher who is a researcher, dancer, teacher, choreographer and is my inspiration and idol” says the 29-year-old who recently received Tarang Padma title. The writer is a freelance art critic
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KARNATAKA URBAN Co-OPERATIVE BANKING SUMMIT 2016
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he Karnataka State Co-operative Urban Banks Federation Ltd., along with Governance Today, successfully held Karnataka Urban Co-operative Banking Summit 2016, Golden Jubilee Celebration & 63rd All India Coop. Week in Belagavi, Karnataka, with the aim to discuss the present challenges and future prospects of cooperative banking sector. The summit brought together cooperative banking department of Karnataka along with top cooperative banking players in the country under one platform to deliberate on the cooperative banks’ progress. The summit also saw representation from leading IT players which emphasized on the need to accelerate the adoption of high end technology in the sector. The two day Summit was Inaugurated by Sri H S Mahadeva Prasad , Hon’ble Minister of Cooperative & Sugar, Govt. of Karnataka. In his inaugural speech, he stated that Karnataka is in front line in Indian Cooperative movement. The Summit is presided over by Sri D T Patil, President, the Karnataka State Co-operative Urban Banks Federation Ltd. In his speech he mentioned the Federation is in front line in Indian coop apex institutions. Sri H K Patil, Hon’ble Minister of Rural Development & Panchayat Raj, Govt. of Karnataka and Former President, of The Karnataka State Co-operative Urban Banks Federation Ltd. Inaugurated an exhibition that highlighted some of the best available technologies for the cooperative banking sector that will assist the UCBs in addressing present challenges and facilitate IT inclusion to enable growth and sustainability. Federation’s Golden Jubilee Souvenir was released by Sri K B Koliwada, Hon’ble Speaker, Karnataka Legislative Assembly. In his speech, he mentioned about the urban coop banks’ services to the middle & lower income segments of our society. During the event, Sri Ganesh Hukkeri, MLA, released the documentary made on Federation activities. Also, Dr. Shekhara Gowda Mali Patil, the President of the Karnataka State Coop Federation released the Federation’s founder’s portrait. Introductory speech was delivered by Sri B S Paramashivaiah, Vice President, KSCUBF. Sri Suresh Angadi & Sri Prakash Hukkeri (both members of parliament), Sri K M Aiyappa, Registrar of Coop Societies in Karnataka and all the Directors of the Federation were among the chief guests. The inaugural session laid emphasis on the present scenario of the urban cooperative sector (UCB) in banking. Panel discussions also included the importance of leveraging technology in the sector and elevating the position of UCBs by relying on cyber security and risk management technologies. The summit was also attended by some of the top names in corporate sector namely Religare Health Insurance, Intellect Design, Infrasoft Technologies, National Payments Cooperation of India, C-Edge, Epson, Iffco Tokio, ISYX Technologies, Manipal Technologies, List Software, SBI DFHI Limited, BankMill, Contech Instruments, Dadajee Dhackjee Infotech, Dhanlaxmi Safe, Esspee, Giesecke & Devrient, Grandmaster, Quantum Equipment, Maxsell, Madras Security Printers, Processware Systems, Somayaji Technolabs, Ashlyn Chemunnoor Instruments, and Lada.
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