The Tribune, Chandigarh, India

Punjab’s fiscal mess
Why blame it on the Centre?

The Punjab Governor’s address to the assembly on Thursday was a reiteration of usual Akali demands: a higher share of Central taxes and transfer of Chandigarh to Punjab, among them. Mr Shivraj Patil must have felt uncomfortable reading out the anti-Centre agenda of the Akali-BJP government. As the Governor he has demanded the transfer of Chandigarh to Punjab but as the head of the UT administration, he is supposed to protect the interests of the City Beautiful. The Congress members’ walkout, without provocation, was as much a ritual as the address itself. The Congress MLAs just dubbed the address “a bundle of lies” but clarified that they held the Governor in high esteem.

The Akali Dal’s demand for more financial powers for the states could garner wider public support if it manages the state finances in a more responsible way. Because of their short-sighted, populist approach, the ruling Akali-BJP politicians avoid taking hard decisions, dole out subsidies liberally without limiting them to the needy and fail to check massive tax evasion and corruption. The extravagant ways of ruling politicians and bureaucrats drag the state finances to a new low every year. Punjab has piled up a staggering debt of Rs 63,000 crore.

The 13th Finance Commission has recommended a higher share of Central taxes for the states and also suggested a four-year roadmap for fiscal consolidation, which involves spending cuts and higher taxes. Disinvestment in public sector units is a strategy that the Centre follows to raise resources and states have been asked to do the same. These are politically inconvenient measures, which state leaders skirt for political reasons. Central aid comes with conditions which some states – Punjab being one of them – fail to meet and are therefore deprived of it. Funds tagged with Central schemes lapse due to poor governance and the self-inflicted cash crunch. There is no point in blaming the Centre without the Punjab government first setting its own house in order.

Politics of inauguration
Public projects fall victims

Politicians in power seldom miss an opportunity to ‘inaugurate’ anything under the sun. Seemingly, it matters little to them what they inaugurate as long as they are seen waving a flag, pressing a button, cutting a ribbon or pulling a string. So we have the spectacle of politicians and ministers ‘inaugurating’ toilets, a trial run of the Metro and even ‘halt stations’, an euphemism for irregular stoppages of a train. In Punjab a former Chief Minister and a former MP ended up inaugurating the two different ends of the same bridge in Gurdaspur, each unwilling to let the other get away with the ‘honour’. Whether such public exhibition assures them public support and votes or not, the countryside is dotted with stone tablets and plaques telling stories of politicians’ ridiculous games. It therefore was no surprise when the Uttar Pradesh PWD minister Naseemuddin Siddiqui inaugurated this week the same bridge twice. The first ceremony took place in Lucknow secretariat, where employees were hurriedly collected on the pretext of ‘Holi milan’ while the very next day the minister travelled to Rae Bareli to inaugurate the bridge all over again.

Mr Siddiqui’s haste was reportedly prompted by a report that the MP from Rae Bareli, Mrs Sonia Gandhi, had given her consent to inaugurate the bridge, built at her behest and with central funding. The temptation to upstage the Congress president appears to have prompted the decision. The UP government took the position that it could not be dictated to by the Centre in such matters. The Congress on its part fell back on an old, central government circular which stated that the inauguration of all centrally- sponsored projects would be finalised by the central ministry concerned. The BSP government exacerbated the situation further by preventing the union minister of state for surface transport, R.P.N. Singh, from reaching the bridge and taking credit. It is a dangerous precedent and is bound to strain Centre-state relations.

The inauguration of the bridge that fulfils a public need and was built with public funds should have been attended by representatives of all political parties as well as the state and the Union governments. But competitive populism clearly outweighed political decorum. Such political one-upmanship would have been comical but for the serious implications. It is indeed time to free public projects from the antics and machinations of political parties and politicians.

Thought for the Day

Planning is bringing the future into the present so that you can do something about it now. — Alan Lakein

ARTICLE

Food security in peril
Fresh state intervention in land use needed
by Abhijit Bhattacharyya

For a non-economist to talk on a specialised a subject as “agriculture economics” is always fraught with grave consequences, and one dared and asked some silly and irrelevant questions to one renowned professor of agriculture economics the other day. Let the readers judge as to whether the questions indeed were irrelevant or not.

What is the future of food security for 1.2 billion Indians? Why is fertile land doing such an unprecedented vanishing trick across the length and breadth of the countryside? Who all are buying this fertile agriculture land on either side of the national highways all the way from Delhi-Jaipur (265 km); Delhi-Ambala (202 km); Delhi-Agra (205 km); Delhi-Lucknow (524 km) and many other routes up to a depth of one km thereby destroying the standing agriculture forever?

Does India have a sustained prospect of food self-sufficiency in the near future? Especially since the population thereof, as projected by the Encyclopaedia Britannica, is likely to double in 44 years. A 2.4 billion Indians in 2053! Does it look rosy or scary?

On getting cold and ice cool indifference, nay virtual ignore, one asked oneself; when will the country be able to say with confidence and conviction that, “yes; rain or sunshine, India will make every Indian dine!” Honestly speaking, one gets a funny feeling today that perhaps we are failing our future generation.

Perhaps a huge food crisis looms large in the horizon. Perhaps the shrinking of cultivable and fertile land will be in short supply in near future.

India has always been blessed with eternal source of water by the nature’s gift, the great Himalayan glacial system. From time immemorial, the soil of India managed to feed all and sundry who endured to stay here. Yet, famines have taken thousands of lives in the past owing to “man-made” crisis.

Nobel Laureate Amartya Sen’s rise to fame and glory began with his perceptible observation on Bengal famine of 1943. He saw people dying on the roads of city and asked himself why are the people starving to death! He soon discovered the reasons. There was no dearth of food items. There was no case of crop failure.

There was colossal mismanagement in the distribution system. And this was manmade. It was an artificial creation for enhanced state of profit. Some middlemen took cover under the war system’s or machinery’s covert operation. Thus, despite sufficient production and a steady demand from consumers, the distributor’s channel (or the distribution) was diabolically choked. The prosperous, therefore, was fed, but the poor men at large were allowed to be bled.

Is India facing a similar syndrome in the 21st century? In this context, one needs to have a close look at the growth of population figures in India. From 31.70 crore in 1940, 35.75 crore (1950), 44.23 crore (1960), 55.50 crore (1970), 68.88 crore (1980), 84.61 crore (1990) to 101.86 crore (2000), India is projected by the Encyclopaedia Britannica to have an estimated 118.5 crore in 2010.

Against this background lie the lifeline — agriculture product and the land use thereof. Thus, whereas in 1992 India’s land had 23 per cent forest; 3.8 per cent meadows and pastures; 57.1 per cent was used for agricultural and permanent cultivation to feed 91.37 crore mouths in 1994.

In comparison, People’s China’s 119.23 crore population (1994 figure) had 13.6 per cent forested, 42.9 per cent meadows and pastures, 10.4 per cent agricultural and under permanent cultivation and 33.1 per cent other landuse (1991 figure).

Fifteen years later, however, India’s increased population of 114.85 crore (2008 figure) faced an increasingly decreased per cent of total land area being used; 53.6 per cent in temporary crop and 3.4 per cent in permanent crop; 3.6 per cent in pasture and 22.8 per cent overall forest area.

Interestingly, an important parameter of shrinkage of agriculture land could be had from the fact the “forced” migration from rural to urban areas pushed the percentage of the population from 25.7 per cent in 1994 to 27.8 per cent in 2006 at various city fringes of the country. Obviously, it does not require an expert eye of a trained economist to see the reality and ask “stupid” questions on the things to be faced by the nation in near future.

During the same period, China too saw a perceptible change as its 133.84 crore people faced a shrinking land use as 13.5 per cent land was in temporary crops or permanent crops. China’s non-agricultural sector of pasture spread to 41.5 per cent and the overall forest area increased to 47.8 per cent of the total land use thereby giving a clear indication that Beijing was becoming an industrial hub banking on export economics which would tackle the food shortage, if any, through technology and import.

Understandably, therefore, Chinese search for farmland in foreign soil had to start with the fat foreign exchange balance of the country to be used for “long lease” from the poverty and penury afflicted willing warlords and landlords thereof.

For India, no such luxurious option appears to exist as yet. A foreign reserve kitty in the range of US$ 275-290 billion is never sufficient enough to be a safe cushion in a macro-economic slowdown era, especially since India has close to 1.2 billion mouths to feed every day.

What then could be the way out? A fresh mega state intervention in land use is the need of the hour. Of course, if the state itself becomes a problem instead of being an instrument to resolve a potential disaster, nothing perhaps can be done except to maintain a stoic silence in the face of a slow, steady and inevitable slaughter in the hands of those whose job it is to protect and not destroy.

The overall scenario indeed looks grim and gloomy! The sudden eruption of “land war” resorted to by all and sundry is destroying the best of fertile soils which feed the country. That agriculture has been the backbone of Indian economics since ages is too well known and well documented. And yet, high-yield variety of food grain and other crops have reached a plateau thereby raising a real possibility of acute food insecurity.

The main problem is the inability (should one call reluctance?) to enlarge the cultivable land to feed an increasing population. Thus, whereas world around acquisition of arable land is being initiated, in India arable land is reportedly dwindling. The countrymen should protest against this diabolical plot of grabbing fertile and arable agriculture land to the detriment of food security!

Who the grabbers are is widely known. It is time to identify and expose them in the interest of 1.2 billion Indians. India’s freedom and prosperity can be preserved essentially by food security. And the food security is in peril today.

MIDDLE

Myself, Dash!
by Raji P. Shrivastava

Candidate after candidate entered the chamber and faced the interview panel with varying degrees of confidence. The first question was invariably, “Would you like to introduce yourself?” This was merely to put the nervous at ease. All relevant personal details or professional milestones were already available to the panel as a three-page proforma submitted by the candidate at the application stage itself.

This innocuous question was interpreted by some as a chance to impress the hardboiled panelists. Others whose obvious skills lay in inorganic chemistry and not effective communication, fumbled their way through this simplest of all posers. However, one constant was that the torrent always began with, “Myself …(the candidate’s name)”.

“What is your name?” is the first question one faces everywhere when interacting with strangers. One would have thought that 14 years of school and three years of college on an average would have prepared even the most reticent or ignorant student for this commonplace situation. The answer that our textbooks have traditionally offered down the decades is, “My name is ….”. However, Myself Smita, Myself Jaswinder and Myself Hitesh probably forgot their kindergarten coaching and adopted this “modern” variant like an enthusiastic duck takes to water.

“It was quite alright until the multinationals came to our city and started placement drives,” said a Professor of English. So I began asking my corporate sector friends, “What is your name ?”, provoking strange looks, before I could explain, “I am merely testing you to see if you have acquired the multinational prefix ‘Myself’!”

But the corporate hotshots I am acquainted with disowned “Myself” completely. One sneered, “This is the by-product of an education where English is taught in the vernacular, in cities where shops teaching English speaking courses are located above popular vaishno dhabas.” Not really, I say. “Myself” is alive and kicking in Corbusier’s Chandigarh, with people from all vocations contributing to its wellbeing.

“Let us launch a war against this ‘Myself’,” thundered the head of the Education Department during a meeting of Principals, a few years ago. “We must teach our children how to answer these elementary questions. We must equip them with soft skills so that they sail through interviews and make good presentations. The future belongs to those confident youth who can talk their way through any situation. Let us have orientation sessions, workshops and seminars for them. Let us organise refresher courses and training of trainers. No effort must be spared to make sure that our children make the grade and doors open for them wherever they go once they finish school or graduate from college. This “Myself” business must stop at once!”

The conference hall was packed to the brim and everyone nodded enthusiastically. One keen type raised her hand and said, “Sir, you are very correct. We shall all work hardly as directed by your goodself.” Irked by this priceless display of questionable English, the Director decided to make an example of her and send her immediately on a Good Grammar course. So he asked, “What is your name?”

The prompt reply: “Myself Chanderkanta, Sir !”

OPED

Budget to help raise food production
by Ruchika M. Khanna

When the budget proposals presented by Finance Minister Pranab Mukherjee made a substantial increase in the allocation for the sluggish agriculture sector, it was certainly not a populist political agenda. Behind this move is the urgent need to boost food production and feed the teeming millions.

With growth in this sector having plateaued for almost a decade, India has gradually moved from being food surplus to a food-deficit state. The government is grappling with the spiralling prices of various agricultural commodities – be it sugar, pulses, oilseeds, fruits or vegetables.

The buffer stocks of these items have dwindled sharply with the government releasing more quantities in the open market. To curb food inflation, the government has also been importing these at a substantially high cost. The high import bill of oilseeds, too, has prompted the government to seriously promote oilseed cultivation in rain-fed areas.

No wonder the government has decided to give a boost to the agriculture sector this year. The credit to agriculture is expected to go up from Rs 3.25 lakh crore in 2009-10 to Rs 3.75 lakh crore in the coming fiscal ensuring that more and more farmers get access to institutional credit. More institutional credit would mean that even small and marginal farmers can easily avail loans from banks, at a lower rate of interest to buy better quality seeds, fertilizers and farm equipment that can increase production.

Undoubtedly, the Finance Minister has given a serious thought when he decided to reward those farmers who have been regularly repaying their loans with an additional interest subvention of one per cent.

The reduction in farm interest liability to 5 per cent (from 6 per cent last year) and giving them an additional six months time to repay their loans will promote a good credit culture, besides helping banks control their non-performing assets (NPAs) on their books.

Had the repayment time of farm loans not been extended, the banks would have had to include these NPAs in their books during this quarter, thus affecting their annual results as most farmers have defaulted on their loan repayment owing to drought last year.

An additional allocation of Rs 380 crore to promote the Green Revolution in the eastern states, too, will help in increasing farm production, and in inclusion of these states in the national mainstream.

Rain-fed areas will now be developed to promote oilseed cultivation. A sum of Rs 200 crore has also been reserved for the conservation of natural resources like groundwater and soil, for long-term sustainability of agriculture growth.

The decision to invest in cold chain infrastructure, too, will help in curtailing losses in post-harvest handling and ensure higher returns to farmers. The direct subsidy to be given to farmers will bring in fiscal transparency.

But the additional budget allocation may not be enough to boost growth, especially when more and more farmers seem to be leaving farming for more renumerative professions.

With the rising cost of inputs, the latest being a hike in the prices of diesel and urea, farmers are under a lot of pressure.

To make its efforts sustainable for growth in productivity, the government needs to take a call on linking the minimum support price of crops with the wholesale price index.

The MSP should not be used as a tool to gain political ends (like a substantial hike in the MSP around election time and a minimal increase when political heat gets too much on rising prices).

This would go a long way in making agriculture economically viable, and to stop farmers from selling their agriculture land to developers for commercial use. Instead, the MSP has to be raised to a level that farmers should get attracted to growing more foodgrains.

Hikes in MSPs alone would not suffice in the financial uplift of farmers. The government needs to encourage private participation in procurement. For this, the taxation rate will have to be lowered and made uniform across the country to encourage agri-business houses to buy more grains from the market.

The government will also have to encourage farmers to form groups and start futures trading of agri-commodities. For this, the government will have to speed up bringing amendments to the Forward Markets Commission Act. Already, commodity exchanges like NCDEX, are promoting building farmers groups so that they have enough volumes to trade on the commodity exchange.

The government also needs to bring in more area under agriculture production. Economist R S Ghumman suggests that large tracts of uncultivated land in Bihar, Orissa, Madhya Pradesh and Jharkhand should be brought under cultivation.

"With the states like Punjab and Haryana now being over cultivated, it is imperative that new areas be found, wherein Punjab's Green Revolution model can be replicated. This is the best way to increase farm production in India," he says.

Europe has a vacuum at its heart
by Mary Dejevsky

Something very strange has happened to the political map of Europe. A vast hole has opened up, bounded by Denmark to the north, Poland and the Czech Republic to the east, France, Switzerland and Austria to the south and the Benelux countries to the west – a hole the shape and size of Germany.

It is not six months since Angela Merkel led her centre-right CDU to victory in her country's general election, amid widespread lamentation that Germany's gain was Europe's loss. By continuing as Chancellor, she was now out of the running to be the new-style European president, a job for which she had seemed the ideal candidate in every way. The one consolation was that the reforms enshrined in the Lisbon Treaty would have time to settle down before Merkel, her stature enhanced further, might be free to lead the EU to greater things.

This might still happen. Merkel's personal history as an East German research scientist who came late to politics and chose the centre-right rather than the left remains as appealing as ever it was. But the first months of her second term as Chancellor have not been kind either to her or to Germany. When she popped up at an international women leaders' event last weekend, her appearance not only pointed up her recent invisibility – at least outside Germany – but prompted a tinge of regret that she might already be relegating herself to old-fashioned gender politics rather than taking her place in the global top flight where she belonged.

In one way, her half-year horribilis provides a glaring example of the need to be careful what you wish for. Merkel's victory in September was hard won. It was not sweeping enough for her to form a government without a partner, but she achieved the coalition she had campaigned for, with the free-market FDP. Which is where at least some of her problems began.

Although the FDP leader, Guido Westerwelle, had held that position for eight years, he had no experience of national government, and his party had been out of power for more than a decade. That the FDP's electoral showing was stronger than had been forecast made for the worst of several worlds. An assured, but in many ways inexperienced party leader, with his expectations boosted by his party's gains, Westerwelle pushed for a better deal – more of his people in government and more of his policies – than Merkel might otherwise have entertained.

Add to that the sharp change in the national mood since the FDP last shared power, and popular disenchantment with the out-and-out free market as a result of the economic crisis, and the FDP comes to look almost the least suitable partner for the CDU just now.

Merkel might also have banked on a better personal relationship with Westerwelle than she has so far managed to forge. In an ideal world, his flair for communication and flamboyance as Germany's most prominent gay politician would have complemented her common sense and low-key moderation. Instead, his incautious self-promotion seems already to have become a liability. Last week, a Chancellor renowned for keeping her cool showed her irritation after Westerwelle publicly criticised her emphasis on the social safety net. The rumour mill even has it that Merkel is "flirting" with the Greens. And that idea may be less fanciful than it might sound.

As a past environment minister, Merkel has always had a strong green streak, and improbable coalitions along similar lines function perfectly well at local level in Germany. Perhaps Merkel – as a former East German – misjudged her own appetite for the free market. Or is it rather a matter of political instinct: her sense that the FDP's low-tax, tough-love priorities do not suit these austere times?

Either way, it is by no means clear, after almost half a year, that the coalition Merkel campaigned for has turned out to her liking. Indeed, she could be forgiven for looking back to her former centre-left partners in the SPD, in particular the stolid Franz-Walter Steinmeier, with some wistfulness.

It is, of course, early days. But the air of solidity, modest expectations and give-and-take – the combination that made Merkel so popular in her first term – seems to have fled the German government just when it is needed most. The last coalition was widely seen as competent and effective, which is also why Germany's international stature rose. It now looks weak and divided, as well as introverted. And its impact abroad has shrunk accordingly.

There is an element of bad luck here. The international gauge of competence in the latter part of Ms Merkel's first term was how a country responded to the global economic crisis, where Germany's domestic good, if conservative, management served it well. The global crisis has now come home to the euro-zone, where the role of Germany, as the biggest and strongest economy, is seen by everyone else as central. But it is not seen so by Germany, which would prefer to operate as just one member of a collective. Being seen to bail out an improvident Greece would go down extremely badly with German voters, while its reluctance to do so infuriates Greece – as pointed remarks about war debts show all too clearly. No wonder Germany wants to stay in the shadows.

— By arrangement with The Independent

Inside Pakistan
Army dominance on the decline
by Syed Nooruzzaman

Indeed, the Army retains enormous power (in Pakistan), but with the emergence of a proactive judiciary, an energised media and a growing civil society, power is now being shared and the Army’s monopoly is gradually decreasing….” This is how retired Lt-Gen Talat Masood, in an article in The News, describes the changing power structure in Pakistan. This can be seen as the fallout of the successful movement led by lawyers for the restoration of the judiciary’s status as it existed before the imposition of the November 2007 emergency.

It seems even the Army is scared of the judiciary and civil society supported by the media, which has been forcefully asserting its right as the watchdog of society. The latest case that can be cited in support of this argument is Tuesday’s ruling of the Pakistan Supreme Court giving the government just two weeks “to furnish a detailed report regarding the whereabouts of the missing persons”, according to Daily Times.

The missing persons number around 1600, picked up during the Musharraf regime for their alleged links with the Baloch nationalists and militant groups. They have never been produced before any court of law.

The court’s significant directive has come following a number of petitions filed by the affected families, the Human Rights Commission of Pakistan and others. This is an indirect but major challenge to the Army, as the ISI and other powerful intelligence agencies are under the control of the armed forces. Justice Javed Iqbal, who headed the three-member apex court Bench, asserted, “The law will take its course irrespective of who is who….”

The case of missing persons

An editorial in The News says, “It would appear that the government has difficulty in retrieving these persons. The limited evidence that exists suggests that they were ‘picked up’ by (intelligence) agencies at various points in time after 2001 and put in illegal detention centres. The agencies, it seems, are still unwilling to divulge what became of them.”

In the opinion of The Nation, “the determination of the court gives hope to the missing persons’ friends and families, who have been running virtually from pillar to post to get their loved ones released… Most important, this augurs well for the rule of law.”

Under the circumstances, it may not be easy for the government not to comply with the court’s order. Prime Minister Yousuf Raza Gilani has assured the Pakistan National Assembly that all the “missing persons” will be freed. It is, however, feared that many of them may not be alive. Whatever the reality, Islamabad can no longer escape the responsibility of giving the details about these persons.

Gone are the days when it would sit back over a court order. Recently the government had to meekly accept what the Supreme Court Chief Justice wanted on the issue of appointment and promotion of judges.

Now the Pakistan Army is indirectly in the dock. If it fails to help the government to comply with the court’s order, it will risk the eruption of the people’s ire against it. The situation is taking an interesting turn.

Uneasiness on Indo-Saudi ties

Pakistan, it seems, is feeling uncomfortable with India and Saudi Arabia trying to improve their relations in different fields. This impression can be gathered from the comments carried in various Pakistani newspapers following Prime Minister Manmohan Singh’s successful visit to Riyadh.

Business Recorder says, “May be, the Indians had thought, wrongly, now that Iran is in the line of American fire for its nuclear programme they would be scoring a bull's-eye by outlining a kind of US-India-Saudi Arabia security plan for the region.”

The paper, however, reacted differently on economic issues, saying that “Indian potential as an economic partner of Saudi Arabia is considerable and that is where the two governments are seriously engaged. The two sides have agreed to cooperate in information technology, space science and such other frontier technologies, which in turn, is likely to increase joint ventures from the present 500, in which the Saudis have invested something like 20 billion dollars.”

Whatever the Pakistanis may think, the Saudis are nowadays more pragmatic in building their relations with different countries. Why should they compromise their interests because of Pakistani sensibilities, not based on reason?