Wednesday, April 19, 2000, Chandigarh, India
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Political
volatility |
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POWER
SECTOR MESS
Transparency
Gender
factor in soldiering
The Gurdwara Bill
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POWER
SECTOR MESS THE present mess in the power sector is no sudden development. It is the cumulative result of the continuing failure of the state governments and the Centre (including the Planning Commission) in the discharge of their responsibilities over the past four decades. The main factors leading to this situation are: (i) Unrealistic planning. (ii) Poor implementation and ineffective monitoring. (iii) Confused policies and resistance to interaction with available professional expertise for remedial measures. (iv) Failure to enforce the provisions of the Electricity Supply Act, 1948, in respect of constitution and functioning of the SEBs, including tariff policies and financial regulations. (v) Creation of multiple organisations causing difficulties in the co-ordination of programmes. Since the very inception of planning physical achievement has been consistently, except in one plan, falling terribly short of the targets, the shortfall sometimes going upto 45 per cent. Did it not mean defective and unrealistic planning? Did not it call for rethinking? The unfortunate fact is that the persons occupying positions of authority and decision-making in the Power Ministry and the Planning Commission consider themselves infallible and experts par excellence turned overnight. What has been the experience of persons like Mr Salve and Mr Kumaramangalam to introduce untried policies enmasse by forcing the demolition of a structure in the form of the SEBs, the NTPC, etc, built over a period of five decades and the performance of which had certainly been reasonably creditable. The installed capacity had been increased by these very organisations from less than 2000 MW in 1947 to the present figure of nearly 90,000 MW. On the contrary, with all the loud talk and undue and unjustified concessions, the private sector has not added more than 3000 MW in the last eight to nine years against a target of 17,500 MW in the Ninth Plan which will end after two years. Except for K.L. Rao, the Ministry has never been headed by a person knowing something about the power sector. In fact, the performance during the Eight and Ninth Plans has been dismally poor because the Central government gave little attention to the public sector and has been singing songs of privatisation. Nobody at the Centre has spelt out in clear details the specific advantages of privatisation and the manner in which they can be achieved. The performance of the private sector in the last eight or nine years succinctly demolishes these claims. I had challenged Mr Salve for an open discussion with all his experts, Indian as well as foreign, but he had neither the courage nor the courtesy to accept the challenge. Again at a seminar in Delhi about five years back I had challenged the then Power Minister, Mr Naidu, that if the Central and state governments allowed to the public sector/SEBs half the concessions being extended to the private sector, the elimination of power shortage could be guaranteed. There was no response. Since the beginning of the Sixth Plan I have been analysing each Plan at its start, bringing out what could be the actual achievement, the deficiencies in planning and the remedies for improving performance. In each case, including the Ninth Plan, my estimates of actual achievement have been more than correct, with a huge shortfall in achievement against the Plan targets. Isnt it an indication enough that the planning process does suffer from the inherent deficiencies and that there do exist in the country professional experts who can at no cost assist in improving the power system performance? Nearly a year in advance of the start of the Ninth Plan I had submitted a blueprint for this plan with complete details of the capacity target, the financial requirements and resources and had suggested a discussion with a group of experts. There was no response. At the beginning of the Plan, I had made an analysis and sent it to the Ministry and the Planning Commission. I had stated that against the target of 40,245 MWs, physical achievement could not exceed 24,000 MWs. The performance of the first three years shows that the achievement would be even less than my assessment. What harm would it do if the government utilises the free services of persons who possess life-long experience and have been stalwarts in the profession. I had even suggested to and also discussed with the Planning Commission ways of improving the implementation of the projects and an arrangement which would cost nothing to the Centre but again without any action. The Electricity Supply Act, 1948, prescribes the qualifications for board members, but the Centre has never cared to watch that these provisions are honestly followed. The PSEB was once given a Chairman who had earlier been rejected for a post of clerk. Chairmen and members are often appointed with a tenure till further orders, and are often shown the door at the whims of political bosses for reasons unstated. How can such members and such boards achieve encouraging results? Then what is the meaning of the governments talk of SEBs performance? It had become abundantly clear more than three decades ago that the finances of the SEBs were getting into poor shape because they were not earning a 3 per cent return as laid down in the Electricity Supply Act. Except for constituting a few committees, which also recommended the enforcement of this provision, the Centre did not move a little finger to force the state governments to ensure that the SEBs earned a 3 per cent return. The factual position is that the SEBs were not permitted to do so by the state governments by blocking statutory tariff revisions, and even forcing the SEBs to sell power below cost and sometimes free, without compensating the SEBs. That the SEBs have been still pulling on, is a credit to them. The entire responsibility for this disastrous financial scenario rests on the state and Central governments, and there is no earthly justification for blaming the SEBs on this account. If the type of pressure which the Centre is now exerting on the state governments to demolish the SEBs and inject the private sector through the so-called reforms under external pressure had been there for the compliance of these provisions of law, the present financial chaos would never have taken place. And the worst thing is that to save themselves from this glaring blame, the SEBs are sought to be demolished without realising that what would be demolished would be the power sector. The private sector controlling power supply upto 1950 was replaced by the public sector which was further strengthened with the establishment of Regional Grids and a National Grid with great foresight and stupendous efforts. The greatest misfortune is that persons with no experience and foresight and acting under extraneous pressures and considerations are bending backwards to demolish this most important limb of development of the national economy. Some of the experiments in this direction are not encouraging. The Orissa experiment is no model of success. Privatisation in Greater Noida (being under the largest private sector power utility in the country), near Delhi, is a miserable failure and consumers are cursing it. The present policy is one of escapism by not facing the reality and rectifying the shortcomings and loopholes in the existing system, but to bypass the problem through a completely haphazard new system, without being sure of its success, can be extremely dangerous for national development. It can be said emphatically and with all sense of responsibility that the remedies are known, but what is needed is the will at the Central and the state levels to improve the existing structure which has served admirably in spite of handicaps. This can be done by rectifying the shortcomings in the fields of planning, implementation, operation and financial controls in accordance with the existing laws which are quite adequate if honestly implemented and enforced, to ensure sound health to the public sector. The stress of the World Bank to disband the SEBs instead of insisting on the removal of hurdles in their way is a clear indication of the fact that the real interest of the Bank (probably, it is more correct to say the USA) is not so much the improvement of the power sector as to demolish the public sector and establish instead a strong Bank-supported and controlled private sector. This is an extremely dangerous game and highly detrimental to national interests. Such a strong private sector can enforce tariffs so high (not being under any control) that they would make our key industrial and consumer products costlier as compared to foreign products, thus forcing Indian industries to close down after which the field will be open for foreign multinationals to exploit the situation and demolish the countrys economy. The details of remedial measures have frequently been conveyed to the Central government by various professional organisations like the National Working Group on Power and also by experienced professionals. To put it briefly, three areas need to be attended to urgently in a professional manner. These are (i) a national policy on power; (ii) the planning process and national power plans; and (iii) ways and means of improving the performance of the public sector at the Central and state levels, pinpointing the responsibilities of each of them. Persons sitting in the seats of authority should not consider themselves as the sole centres of wisdom and expertise. A body of about 10 professional experts of the power sector (SEBs, NTPC, NHPC, BHEL) at the level of retired and working chairmen should be constituted and the above mentioned spheres of policy formulation finalised after detailed discussions with them. If the government is honest in finding a lasting solution to these problems, which will fit in with our countrys conditions, it need not feel shy of utilising the services of outstanding experts who are no less concerned than the government authorities with the efficient working of the power sector. (The writer is a
former Chairman of the Punjab State Electricity Board and
the All-India Power Engineers Federation). |
Punishing
people who save A DAY after the announcement of the exim policy, the Reserve Bank of India slashed the bank rate by 1 per cent to 7 per cent from the current rate of 8 per cent and at the same time it also reduced the interest rate on savings bank deposit from 4.5 per cent to 4 per cent. Along with the reduction in interest rates it also slashed the cash reserve ratio (CRR) by one percentage point. This is likely to release Rs 72,000 crore more for lending purposes by banks. The industry has hailed these steps for the simple reason that the government has been accepting their demands relating to the reduction in interest rates as they have all along been arguing that the cost of borrowing is higher in India. This is for the third time that the interest rates have been revised downwards in a very planned manner. A few months before the budget the interest rate on the Public Provident Fund (PPF) was reduced from 12 per cent to 11 per cent. In the budgetary proposals the interest rates on the General Provident Fund (GPF) was reduced from 12 per cent to 11 per cent. And now the RBI has reduced the bank rate by one percentage point which implies that the interest rates on fixed deposits of various terms would also go down by at least one percentage point. In other words, the government has accepted the long-standing argument of the industry that the high interest rates are coming in the way of industrial expansion. It has also been argued that the reduction in interest rates will spur economic activity. Whether it will actually provide a push to industrial activity, one has to wait and watch as the time lag before this reduction can have any impact is, on an average, about six months. Therefore, by the busy season credit policy is announced in September we should be able to know its real impact. However, going by past experience, it is highly unlikely that it will really lead to any significant expansion in economic activity. On the face of it the argument that economic activity is not expanding because of high interest rates is doubtful. Interest payment is only one component of the total cost of production. The other factors of production like labour and materials are relatively cheap. In other countries where interests are lower the cost of labour and materials is much higher. But these countries never argued that the wages and the cost of materials be brought down to make their product competitive. Therefore, to argue that interest rates in India are higher than interest rates in other countries and for that reason our production costs are relatively high does not carry much weight as the relatively cheap labour and cheap raw material offset the disadvantage of high interest rates in the case of India, as the cheap interest rates offsets the disadvantage of expensive labour and raw material in the developed countries. The real reason for asking for a downward revision of interest rates is the fact that Indian industry has not yet been able to gear itself to make efficient use of all the resources as the foreign industry is. They are not yet aware of the need to use economically the available resources including the borrowed funds. In fact, a large number of our companies are in the habit of diverting the borrowed funds into unrelated channels or activities, and because of the ability to windowdress the balance-sheet this diversion of funds are rarely detected. For instance, the money borrowed from banks to meet the short-term working capital needs are many times used to make speculative purchases at the bourses. Even after almost one decade of economic reforms most of the industrial houses have not developed any strategy to make efficient use of borrowed capital. Therefore, it is difficult to say that the increased availability of funds at reduced interest rates will give a big push to industrial activity in the country. It is likely that a large part of borrowed money will either be diverted to other unrelated activities to make short-term speculative gains or it will be used to retire the high cost debts raised earlier, it will seldom be used for expansion activity. In fact, the downward pressure on interest rates is also due to the convergence of interests of the government and industrialists. It is common knowledge that the government is the largest borrower of funds in the country. The PPF and GPF funds which are savings for an average citizen are, in fact, public borrowings by the government; the funds collected through the GPF and the PPF go directly to the government account. Apart from these direct borrowings, the government also borrows from commercial banks through the medium of short-term and long-term bonds, etc, to meet its current expenditure. These borrowings and interest payment over the years have accumulated so much that the government is almost caught in a debt-trap wherein it has been borrowing to repay its earlier loans. Therefore, the government has also been very keen to reduce the interest rates for it will reduce the cost of public borrowing. One percentage point reduction in interest rates on the PPF and the GPF, and new bonds will result in the savings of thousands of crores of rupees on government borrowings. This one reason was sure enough to bring down the interest rates. As in any game, there are always some winners and some losers. In this game of interest rate cut, the winners are the industrialists and the government while the losers are the average citizens who save money for their future needs and for their old age. The reduction in the interest rate while reducing the cost of borrowings to the industries and the government will, in effect, reduce the earnings on the savings of the general public. The sufferers will be the old people, the widows and others who are solely dependent upon interest earnings of their savings. The younger people may also feel that their savings are not growing as fast as they should. It is likely that the aggregate domestic savings may also go down as some people may not find it attractive to save in the banks. In India, provident fund and term deposits in banks are the major forms of savings as both the capital market and the mutual fund sector are not highly developed. In developed countries people invest their savings either in equities or in mutual funds which give them a very high rate of return, much higher than the interest rates on term deposits in the banks. Some of these mutual funds are also known as pension funds because the money is so invested as to ensure a relatively higher rate of return. In India, both the primary and secondary capital markets are highly manipulated by speculators and, therefore, the equity market has not been able to become an alternative to savings in the banks. The most important question, however, is that why the Reserve Bank of India should dictate the savings bank rate to the banking industry in this era of liberalisation. Like any other central bank it should only fix the bank rate and free all other interest rates, including the savings bank rate, to be determined by the demand and supply of funds. By imposing savings bank interest rates it is forcing the banks to adopt a similar pattern of interest rate structure. Let the savings public
decide in whatever form it would like to keep its savings
depending upon the rate of interest being offered by
various banks on various kinds of savings instruments.
One would like that at the time of busy season credit
policy the Reserve Bank of India will free the savings
bank rate of interest also. This will not only lead to
efficient allocation of funds but will also force the
companies to use the funds efficiently.
INFA |
Transparency TRANSPARENCY, these days, is the buzzword both in the world of fashion and the domain of babudom. The Fall/Winter Collection Shows of Indian fashion designers held recently in Delhi reminds one of Lin Yutangs saying, Womens fashions represent the eternal battle between the admitted desire to dress and non-admitted desire to undress. And, lately, the non-admitted desire has been constantly winning the battle in all catwalk expositions. Maharashtra Governor P.C. Alexander helplessly uttered the words after one such fashion display: If the idea is to project, I dont see where the fashion is. If the idea is to project the clothes, the clothes are missing too. Earlier, the skimpiest of dresses was bikini what it revealed was suggestive and what it concealed was vital. Like that couplet in Urdu. Khoob parda hai ke chilman se lage baithe hain, Saaf chupte bhi nahin, saamne aate bhi nahin Today, nothing is left to imagination, it is transparent Show All. On the other side, the much hyped Tell All transparency in babudom is still in burka enveloping it in such a way that it sees the public but the public cannot see what is behind. The other day I happened to meet a very senior surgeon. Now superannuated, he appeared disturbed. I enquired the reason for his distress. He said that he had made a representation to the government for grant of certain allowance which was due to him. He was sure of getting the benefit because it had been given to some of his colleagues placed in similar circumstances as he was. He got a standard single-line reply from the government: Your application has been considered and rejected. He went to see the Joint Secretary concerned and asked: I want to know what have you considered and how have you rejected the points that I had raised in my application. The Joint Secretary refused to tell him anything and said that the reply that had been sent to him was final and correct. He said: Well, where is the transparency? The Joint Secretary replied,: The transparency is that you are in my office and that you are seeing me. Had there been no transparency I would not have allowed you in and you would have faced the opaque walls. Transparency in babudom? Less said the better. Even collectively taken decisions are not transparent, says one known honest and straightforward retired engineer. He narrated an incident where a decision not in the interest of the State Electricity Board, but in favour of a private individual, was shown in the proceedings of the meeting as having been taken when he had gone out for a minutes to ease himself. All this and then the
jargon-studded language adds to the fog. Instead of
saying, Go to the Left, we, in the office,
say, It is your right or left, but right is not
right, left is right. Right? |
Gender
factor in soldiering THE US army is embroiled in a sex scandal in which, the highest ranking female general, Lt-Gen Claudia Kennedy, has filed a sexual harassment suit against a fellow general for groping her in her office. Confirming this and calling it another sex scandal, US Defence Secretary William Cohen, as reported, has said: Since the complaint has been filed, Im not in a position to comment other than to say we maintain a zero-tolerance policy that no harassment at any level is going to be acceptable or tolerated and that the process should go forward and will go forward. Sex scandals have become quite common in the US army. The reason behind this is that America has a large percentage of women i.e. 11 per cent in its volunteer forces. This provision was introduced by the US Congress in the early eighties at the instance of a strong womens lobby. Almost all senior officers in the US army, loath this system of working where comradeship in arms between men and women leads to the girl-friend, boy-friend scenario in units. This, the generals say, affects discipline, creates intractable administrative problems, besides lowering the fighting potential of the army. This raises a pertinent question: Should women be enlisted in the armed forces? To answer this question, we have to examine their contribution and the risks that they are exposed to both in war and peace time units due to their gender. At the time of the induction of US forces in Saudi Arabia in 1990, a former Marine officer, who turned journalist said: Women could play their part in the rear areas, but soldiering was something best done by men. He went on to say that he was not alone in expressing misgivings about what would happen if women got involved in combat. As soon as women started coming home in body bags or the Iraqis captured a few and raped them, we would see an end to it, he further quipped. The Gulf war was the first large-scale war fought with womens participation in it. Among the US troops in this war, 8 per cent were women who not only contributed their share to the victory of the allied forces but also figured in the list of casualties and POWs. Of the 13 women killed, five were battle casualties and two women were captured by the Iraqi army. What the former Marine officer said came out to be true in the Gulf war. The two women who became POWs were Major Rhonda L. Cornum and Specialist Melissa Coleman. They had a horrifying and unspeakable experience at the hands of the Iraqis so much so that Major Cornum was not spared even when she was in great agony with both arms fractured, knee smashed, and a bullet in her right shoulder as a result of downing of her helicopter. The indecent sexual assault of these women POWs has put a question mark on the feasibility of women being allowed to go to combat. It is their gender that puts women at a great disadvantage in battle. For, they not only become victims of sexual assault by the enemy in the event of becoming prisoners but they also run the risk of losing their chastity at the hands of their male colleagues. In Saudi Arabia when men and women soldiers of the American army shared tents, dug-outs and trailers, it provided enough opportunity for romance to both the sexes. This gave rise to stories of sexual abuse of several female soldiers by American men. One thing that clearly emerged from the Gulf war was that the women proved their mettle as members of the US armed forces. Their regret, however, was that they were not considered as combat soldiers for the reason that women were prohibited from taking part in combat. But this rule was proved wrong in the fast moving Gulf war where it became difficult to draw a distinction between the frontline and the rear echelons. Women in sizeable numbers formed part of the forward supply bases and support units which met large-scale needs of combat units. Ms Deever and 129 other women in her Marine Support Unit wore helmets and flak jackets and carried rifles. Her job being to hook up field telephones, she had to move between positions even at night though her superiors wanted her to work at a switchboard. But she chafed at this idea and said: I want to go out just to learn my job better as I joined up for adventure. Many women soldiers echoed Ms Deevers sentiments. It seems men were more worried about the safety of women than the women themselves. Ms Jacqueline Bowlings husband a fellow Marine, who was at a nearby post, was not happy that his wife was so close to the front. I guess thats where the male ego kicks in, said Ms Bowling. The same spirit was exhibited in the Gulf war in the US Navy, in which 24 logistics ships were opened to women in the late eighties. The US supply ship USS Niagara Falls which was deployed in the Gulf, met the logistics needs of all the ships engaged in combat. Under US law women cannot join ships which are directly involved in fighting. Most of the 31 officers and enlisted women on the Niagara Falls felt that this law was discriminatory. It is ironic that the best ships they have opened to women are the last ships that men want, said Ensign Elizabeth Thomas, a graduate of the US Naval Academy. The enthusiasm displayed by women in the air force was no less than what it was in the other two services. Undeterred by the risk of being shot down, they flew aircraft and helicopters on logistics missions in and out of the battle zone. Notwithstanding the patriotism of women soldiers, the American armys decision not to open enlistment in the combat arms to them is right because a sudden pang of regret is bound to be felt when women soldiers get killed or are taken prisoners. Although the Geneva Convention clearly lays down that a POW cannot be bodily harmed or ill-treated, in practice things are different. Baghdad had denied the International Red Cross access to the allied POWs during the Gulf war. Denying entry to women in the armed forces for the reason that they run a risk of sexual harassment will be unfair. If they are there is the civil services, they should also be taken in the armed forces but only in the administrative services and static establishments. Some sexual harassment cases, of course, will come up from these services and establishments which can be dealt with under the law. We had rightly opened
entry to women in the administrative wings of the armed
forces in 1992. As far frontline soldiering, despite
womens derring-do, it should remain a male
preserve. |
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