Friday, March 28, 2008
This context has to be kept in mind before judging what may well turn out to be the Sixth Pay Commission’s most controversial recommendation. To be sure, the Pay Commission does not favour a reduction in the number of earned or casual leave to which an employee is entitled. Nor does it propose switching back to the six-day week system, in vogue before Rajiv Gandhi as prime minister introduced five-day weeks in the late 1980s. There is no doubt that recommending either of these steps would have caused an even bigger controversy. Indeed, the Fifth Pay Commission had recommended a switch-back to the six-day week system and the government then lost no time in rejecting the suggestion.
But what the Sixth Pay Commission has done, thereby stirring up a hornet’s nest, is to abolish the idea of “gazetted” holidays, which in government parlance means days when all central government offices, irrespective of where they are located, are closed. Instead of “gazetted” holidays, there should be only three national holidays, says the Commission. In addition, employees will be given the option of taking leave on eight restricted holidays to be declared by the government at the start of the year. Heads of individual departments will be allowed the option of declaring the office closed for a maximum of two restricted holidays in a year based on local considerations (like transport availability or the nature of the festival) and in consultation with the employees. All employees will be deemed to have availed of their restricted holidays on those two days.
Thus, the total number of holidays for central government employees will be reduced from 171 to 165 days, if the Sixth Pay Commission’s recommendations are accepted. The loss of even six holidays will hurt the government employees, particularly when they realise that the actual increase in their pay packages has been fairly moderate. Though the idea of doing away with “gazetted” holidays (most of which are on account of religious festivals) is commendable, there will be many practical problems in implementing it. Employees may still be convinced and persuaded to accept a reduced number of holidays in a year. But the very thought of implementing the new system will give nightmares to heads of departments in various government offices.
Consider how the head of a department of a central government office in New Delhi will handle the situation. It is likely that the two restricted holidays when he would have the office closed will be for Holi and Diwali. That would mean that he would have to keep the office open on Dussehra, Christmas and on a few other religious holidays, even though most of the employees would have availed of their restricted holidays on those days. If the department is engaged in public-dealing, then the problem gets even more complicated. The head of the department has to deploy adequate staff to maintain the services, incurring additional costs on over-time payments. The government’s overall maintenance costs will also go up as offices can be closed only on five days in a year, compared to 17 days earlier.
This is not to argue that abolishing “gazetted” holidays is a bad idea. As a matter of principle, “gazetted” holidays on account of religious festivals should have been scrapped long ago. Most private sector companies manage with ten or even fewer holidays on account of these festivals and allow their offices in different regions follow their own schedule within an overall cap on the total number of holidays. If the private sector can manage this, there is no reason why the government or its departments across the country cannot follow a similar system. Decisions on all holidays except the three national holidays can be taken by the local offices in consultation with their headquarters. The local offices will also have to be empowered to take decisions on how to run their departments on days there will be poor attendance because of these restricted holidays.
The point is that the Sixth Pay Commission’s recommendation on abolishing “gazetted” holidays can be implemented only when the central government is prepared to take a host of other downstream steps to reform the administrative system. The Fifth Pay Commission also had recommended that government offices should remain closed only on national holidays and the employees should be given a larger number of restricted holidays. That recommendation was not accepted. The Sixth Pay Commission has made a stronger case for abolishing “gazetted” holidays. The government should not reject this idea without giving it a serious try.
Corruption is also when the political elite steal from the state. It means the state can’t train nurses or teachers. Nor can it pay judges properly, so the corrupt get away with it.
When corrupt doctors steal medicines from state hospitals and sell them privately, poor people are paying for treatment that should be free. If they can’t afford it, they do without.
Goods, people and money move around the world more than ever before. But too often public money finds its way into private bank accounts. Britain has pledged to:
Make sure that aid is used for the purposes it is meant for;
Help developing countries fight corruption;
Promote responsible business; and
Close the international loopholes that allow people to launder stolen money.
On top of that, the UK Government has set up special police units to investigate foreign bribery and money laundering.
Corruption is wrong and it hits the poor hardest.
Find out more about the agreements we made, at the G8 conference, on tackling corruption.
Read the United Nations Convention against Corruption, which the world's richest nations have agreed to implement.
Friday, March 07, 2008
Roads will lead to rural prosperity-Swaminomics-Swaminathan A Aiyar-Columnists-Opinion-The Times of India
What is the best way of reducing poverty? The UPA government has highlighted its rural employment guarantee scheme (NERGA). It has allotted huge sums to Sarva Shiksha Abhiyan (education for all) and irrigation. It has increased spending on rural electrification and health. And it ordains subsidies worth tens of thousands of crores for fertilisers, electricity and rural credit. But are these the best ways to reduce poverty and stimulate growth in rural areas? I have long argued that rural areas need, above all, connectivity. The cities have been connected to the global economy and have taken off. Do the same for rural areas, and they will take off too. Today, alas, many villages are not even connected by road or telecom to the closest town, let alone the world. Roads are not, of course, the only things that matter - other rural projects and policies matter a great deal too. But connectivity enhances the value of every other rural investment, since it empowers people through improved mobility and access. People can more easily buy agricultural inputs and sell their produce. Children can go more easily to schools, cattle can more easily get veterinary help, and the sick can get to health centres. Remote areas have, by definition, the worst connectivity. They are among the poorest and slowest-growing, but accelerate when given connectivity. Roads can incubate a thousand small businesses, and can convert villages into towns. Government staff are much more willing to be posted to places with good connectivity, so roads improve administration. Rural productivity cannot be high without roads, but can be very high with them. This was first demonstrated in India in Punjab and Haryana, which historically had the most dynamic rural economies and lowest poverty rates. Economist Ashok Gulati relates a conversation with M S Gill, who was agriculture secretary in New Delhi and development commissioner in Punjab before becoming election commissioner. Gill said that in developing Punjab, he concentrated on a one-point agenda: build all-weather ( pucca ) roads, and the people will take care of the rest. This approach succeeded. The green revolution in Punjab hinged not only on R&D but roads too. Indeed, the returns to road investment were even higher then than today. Gulati says that studies by IFPRI (International Food Policy Research Institute) in China, Vietnam and some African countries point to the same conclusion - rural roads do more for growth and poverty mitigation than virtually anything else. A recent IFPRI paper by Fan, Gulati and Thorat estimated the impact of different government programmes on rural growth and poverty reduction in recent decades. The poverty-reduction data for the 1990s are given in the accompanying table. Road investment gave the biggest bang for buck, followed by agricultural R&D, with education lagging some way behind. Subsidies on fertiliser, credit and power achieved rather little. For every million rupees spent, roads raised 335 people above the poverty line, and R&D 323. Every million rupees spent on education reduced poverty by 109 people, and on irrigation by 67 people. The lowest returns came from subsidies that are the most popular with politicians - subsidies on credit (42 people), power (27 people) and fertilisers (24 people). Exactly the same picture emerged when the researchers estimated the agricultural growth impact of these factors. Roads and agricultural R&D contributed by far the most to growth. Lower down came investment in education and irrigation. At the bottom came subsidies for credit, power and fertilisers. The IFPRI research paper did not estimate the impact of telecom, which had very little rural penetration in the 1990s. But rural telecom is now booming and has become a major force in increasing connectivity. I am sure it will have a huge impact. For decades, rural roads in India were neglected by most states. Besides, rural employment schemes, starting with Maharashtra's Employment Gurantee Scheme in the 1970s, created the illusion that durable rural roads could be built with labour-intensive techniques. In practice labour-intensive roads proved not durable at all, and those built in the dry season vanished in the monsoons. This finally changed with the Pradhan Mantri Gram Sadak Yojana (PMGSY) launched in 2000. This, for the first time, ordained mechanised techniques to provide high-quality, all-weather roads to 1.6 lakh rural habitations without pucca roads. It also upgraded roads that had collapsed. Panchayats were made responsible for maintenance. Conversations with experts suggest that this is one of the best-functioning programmes in rural development. In 2004, the UPA government launched Bharat Nirman, an ambitious infrastructure programme for rural areas. It aims to provide connectivity by having a pucca road, electricity, telecom and drinking water in every village of over 1,000 people. This overlapped with the PMGSY. Progress on Bharat Nirman has been spotty. But rural connectivity has at last become a high government priority, and this bodes well for the future. Let me conclude by recalling what economist Robert Chambers said back in the 1970s. "If I had money, I would use it to build roads. If I had more money, I would build more roads. If I had still more money, I would build still more roads."
Thursday, March 06, 2008
India is a land of small farmers. 650 million of her 1.2 billion people are living on the land and 80 percent farmers are owning less than two hectares of land. In other words the land provides livelihood security for 65 percent of the people and the small farmers of the country provide food security for over one billion of the population.
Policies driven by corporate globalisation are pushing farmers off the land and peasants out of agriculture. This is not a natural evolutionary process. It is a violent and imposed process. More than 1,50,000 farmers have committed suicide in India due to distortions introduced in agriculture as a result of trade liberalization. The killing of peasants in Kalinga nagar and Nandigram who were resisting land acquisition is another aspect of the violence involved in the forced uprooting of India’s farmers.
It is also depressing to know that the Government is also least interested to improve the lot of the farmers and the agricultural productivity. On the 26th of march 2007 while addressing the Confederation of India Industry (CII), Prime minister Dr Manmohan Singh stated that “ As I said recently in the parliament we have to recognise that in a country like ours, where the average size of land holding is small, there are limitations to what you can do to improve agricultural productivity”
Every Government institution, which should be looking after the welfare of the country and welfare of the farmers are launching an assault on the peasantry. The agricultural minister Mr Sharad pawar whose job is to look after the farmers and provide them livelihood security, has stated that farmers need to be “weaned” off the land . The deputy chairperson of the planning commission, Montek Singh Ahluwalia is talking of the feasibility of large corporate ownership farmland. While, the farmers of Kalinganagar and Nadigram has declared loudly and clearly that they intend to farm their land.
Globalisation and trade liberalisation policies have lead to privatization of land, water, forests, natural resources and above all the biodiversity. It is often the farmers of the country who share a close association with these commons.
Village commons well categorized as “wastelands” under the British revenue system since the colonial powers could not collect revenues from them. Today, these so called wastelands are being transferred to industry. These watelands are actually the common lands. Common lands are a significant form of natural resource endowment. It plays a vital role in maintaining the ecological balance, and more particularly in supporting the people, especially the rural poor in eking out a livelihood. However the contribution of common lands to the rural economy and more particularly in supporting the people remain unappreciated. They also provide the people with the necessary fuel and fodder. Now these common lands are being diverted for the cultivation of Jatropha, a plant used for making Biofuel.
Village commons, as pastures, as wood lots, as sacred growers, grow biodiversity, which serves the rural economy, especially the landless, for needs of fuel, fodder, medicine and food. Jatropha plantations provide no fuel, no fodder, no food, for the village community. Village commons now provide raw material for the fuel for the cars of the urban rich. This is a shift from equity to inequity from sustainability to non-sustainability.
Privatisation of such living resources merely deprive the common people, especially the poor farmers of vital needs to sustenance and livelihoods. It also imposes non-sustainable patterns on food production and agriculture.
Whereever the farmers have been deprived of their land and livelihood and wherever they have been forced into corporate agriculture, the farmers have been in distress, the soil has been destroyed, the water has been overexploited and polluted. Wherever the farmers and the rural communities have been pushed off the land for industrialization it has lead to violence and they have turned out to be breeding ground for naxalism.
Our Food security is too vital an issue to be left in the hands of a few transnational corporations with their profit motives. Food security for all is not possible within a global market system based on the dogma of free trade, competition and profit maximization. On the other hand Food security can be achieved if people within their local and regional economies feel responsible, both as producers and consumers for the ecological conditions of food production, distribution, and consumption and for the preservation of cultural and biological diversity where self-sufficiency is the mail goal. It is vital to note that a food secure and peaceful India is in the hands of her small farmers. Without the farmers India will be a food insecure, violent and undemocratic society
It is high time we move from Globalisation to localization, from aggressive domination to non-violence, from competition to equity and from understanding humans as masters over nature to humans as part of nature to achieve the larger goal of food security and food Sovereignty
If farmers don’t have to repay their loans, why do I have to pay mine?”
That’s the question Maheswar Jena of the village of Ankula in Orissa has been asking himself ever since finance minister P. Chidambaram announced a Rs60,000 crore debt waiver for farmers.
Jena, 38, had borrowed Rs95,000 for five years from State Bank of India to set up a shop. That was about two years ago. Since then, the business has failed. And now Jena wants the heavily subsidized loan — it carried an annual interest rate of 2.6% — to be forgiven.
The debt write-off, the centrepiece of the Union Budget, is threatening to balloon into a subprime crisis of sorts, complete with “moral hazard” and fiscal recklessness. In less than 48 hours after the amnesty was announced, the chief minister of Uttar Pradesh, India’s most populous state, had issued a full-page newspaper advertisement.
In the ad, Mayawati, who uses only one name, expressed her displeasure that the finance minister hadn’t forgiven the debt of artisans, weavers and other small, self-employed professionals.
The chief minister was also disappointed with Chidambaram because he had done nothing, she said, to alleviate the misery of cultivators who had borrowed from moneylenders. These people wouldn’t benefit from a waiver of bank loans.
Mayawati didn’t specify how the humble farmer should be extricated from the clutches of the loan shark. But others have. Following Chidambaram’s move, agriculture minister Sharad Pawar advised farmers not to pay loans they have taken from unauthorized moneylenders. These contracts, he said, should be cancelled.
The minister couldn’t have come up with a better proposal to kill Indian agriculture once and for all. If the loan sharks are bankrupted, where would a small farmer get money to buy seed and fertilizer?
According to a 2003 assessment of farmer indebtedness conducted by the government, eight out of 10 farming households in India have 2ha (4.9 acres) of land or less; slightly more than half of them have no debt.
As for the rest, half of each household’s average Rs9,000 debt is to “non-institutional agencies,” which is the government’s euphemism for moneylenders.
The smaller a farmer’s land holding is the more indebted he becomes to the loan sharks. This is not by accident.
The formal credit-delivery system, which in villages consists of government-owned and cooperative banks, lends hardly any money to marginal farmers. The latter have no alternative except to agree to pay usurious interest rates — often 100% a year — to individual lenders.
And farmers aren’t alone.
Jena, the failed Orissa shopkeeper, was fortunate to have obtained cheap funds under a special government plan that seeks to promote self-employment among educated jobless youth. Not everyone is so lucky.
Almost every small business owner in the fast growing economy is hungry for credit. Effective interest rates of 50% a year and more are quite common even as the State Bank of India’s published prime-lending rate, the one at which the bank lends to its best customers, is 12.25%.
Surely it can’t be easy for any business to survive — let alone thrive — when borrowing money is so expensive. But the reality is that there’s demand even for such high-price credit.
The investment boom in India is very real and — as the building of new airports, power stations, subways, roads and public amenities gathers momentum — nowhere close to peaking.
It’s the supply of credit that’s a trickle. If the small and medium-sized enterprises saw their loans waived, their equity in the business would increase. They would be able to borrow more money from lazy bankers who prefer to invest in government securities than support real businesses.
I’m, of course, being facetious. But politicians in India are deadly serious. PTI has reported that for Jammu and Kashmir, Chidambaram’s debt waiver for farmers may also apply to loans taken for horticulture and animal husbandry. A writ petition filed in the Supreme Court by Manohar Sharma, a New Delhi advocate, says that in its current form Chidambaram’s plan is just an “election fund”.
Polls are expected to be held this year for the national Parliament; as many as 10 state assemblies will elect their legislators in 2008. A dangerous game of brinkmanship has begun with grave implications for fiscal prudence. In Maharashtra, the Shiv Sena, the main opposition party, has demanded that the entire debt of all farmers should be forgiven; Chidambaram’s proposal offers full relief only to those families whose land holdings are tiny.
There is a message here for the urban middle class in India. Perhaps it should stop paying its mortgage and credit card loans and hope that these, too, would get written off by politicians as they get greedy for votes.
This is only the beginning of the silly season of brazen appeasement of voters in India. Jena shouldn’t lose hope
Saturday, March 01, 2008
Kerala has witnessed one Harthal and a few local protests in this month itself. Sometimes it is felt that the state known for its welfare policies is very much in tune with the holidays packages to the employees of public sector enterprsies by accomdating hartal calls. The Popular wiki article shows the word Harthal has a Gujrati origin (http://en.wikipedia.org/wiki/Hartal). The economics of the Harthal is not only the accumlataed loss of money on that day but has also given the birth to interesting websites like http://www.indiamarch.com/Content-25/HARTHAL-SCHEDULE.html. Economic survey at the national level reflects on the number of lock outs and the number of man days lost in last year in India as a result of strikes and Lock outs(http://www.business-standard.com/common/news_article.php?leftnm=beco&bKeyFlag=BO&autono=315332). Some other studies show that there are 80 Shutdowns in 18 in last four months (http://mutiny.in/2008/02/20/80-shutdowns-in-18-months/). If some one is interested to simulate Harthals, here comes the model (http://acm.uva.es/p/v100/10050.html). finally, these are the reasons for Harthals (http://youtube.com/watch?v=UymeNOyNV9s)(sorry, my dear non - Malayalee freinds)