Opposition to National Investment Board

It is generally believed that the establishment of the proposed "€˜super" clearance agency, the National Investment Board (NIB), will do more harm than benefit. NIB is proposed to be established to fast-track clearances for large infrastructure projects, which is being seen as an infringement of the mandate and working of the Ministry of Forest and Environment (MoEF). The contention of the Centre for Science and Environment (CSE) that the proposed National Investment Board (NIB, will further dilute the regulations on environmental clearance. According to CSE green clearances in India were already too easy to get and seldom followed up with monitoring. Moreover, it is feared that NIB would destroy the existing environmental regulatory regime. The general consensus is that forest clearances should be enforced strictly and regularly monitored. Forest cover is shrinking and trial people are thrown out of their natural habitat due to mindless mining, both legal and illegal. Evidence of the damage to India's ecological infrastructure takes the form of collapsing fisheries, falling water tables, shrinking forests, eroding soils, drying lakes, crop-withering, heat waves, and disappearing species. Therefore, industry has to grow only after following pollution norms. There is no point allowing forest land to be diverted for industrial, agricultural or other purposes. It is interesting to note that Ministry of MoEF has expressed its reservations on the proposed super clearance agency, the National Investment Board (NIB).
Dr.C.Murukadas, The Times of India, Oct. 22, 2p12

Tamilnadu: Solar energy policy of 2012

At present Tamilnadu is facing acute shortage of power supply. The state government is taking various steps to end the power cut in the state. Indications are that in another 6 months time the state will be in a position to do away with power cuts and ensure the availability of adequate electricity for agricultural, industrial, commercial and domestic needs.   It has to be borne in mind that in 2005, Tamilnadu was one of the few Indian states with surplus electricity generation capacity, enabling the electricity authority to sell it to neighbouring states of Andra Pradesh & Karnataka. But in 2011 the situation was completely different and power cut has caused untold sufferings to the people, particularly to the industrial sector. At present there is shortfall in the supply of electricity in the state. The demand-availability gap is 3000 to 4000 megawatt. While the demand for electricity has gone up significantly, power generation has not kept pace with the demand. Tamilnadu has been embarking on ambitious plan of rapid industrialisation and economic development, which depends to a larger extent on the supply and availability of electricity. Tamilnadu now has a widely diversified base of industry and an increased domestic production of a wide range of goods and services.  Many manufacturing companies have come up in the state, especially in Chennai, Coimbatore, Thiruvallur, Kancheevaram, Salem, Thirupattur and Trichy districts, which raised the demand for electricity enormously.  Moreover, thousands of Medium, Small and Micro enterprises have come up   all over the state thereby causing substantial rise in demand. Recently many multinational companies have chosen Tamilnadu for establishing, especially Chennai and its surroundings for establishing manufacturing and assembling units besides  for locating their offices that has  also led to huge increase in demand for power. Moreover, Chennai has emerged as one of the largest destinations for   IT as well as IT enabled industries, which require huge quantity of uninterrupted supply of power. There has been large increase in demand for electricity due to rapid growth of commercial establishments, particularly in Chennai and other big cities. Recently, the state has witnessed the establishment of so many commercial complexes, shopping malls, departmental stores, hyper stores, which use vast quantity of electricity for lighting and air-conditioning purposes. Similarly, hundreds of thousands of shops and other establishments in wholesale and retail trading has come up all over the state.  Moreover, the state has witnessed the establishment of numerous educational institutions, which also led to huge increase in demand for power supply.  Likewise there has been phenomenal increase in the use of electricity for domestic purposes. Recent data show that there is growing domestic use of electricity due to accessibility to more and  modern domestic appliances and gadgets  such fans, air conditioners, air coolers, pump sets, mixer-grinders, wet-grinders,  iron boxes, washing machines, TVs, stereo sets, cell  phones  and so on. It has also resulted in enormous increase in demand for electricity in the state. Consequently, the  total demand has climbed steeply. Contd….

 Contn….Thus, the demand for electricity has climbed steeply and reached 11,000 MW in 2011; but concerted efforts were not taken during 2006-11 to increase power generation capacity.  As a result, at present but the supply is around 7000 to 8000 MW from all sources. The demand availability gap is 3000 to 4,000 MW. Moreover, consumption is set to rise dramatically over the next few years for industrial, commercial, agricultural and domestic needs. It is estimated that by 2015 Tamilnadu will require more than 15000 KW of electricity and by 2025 the total demand for electricity will be around 30000 KW. According to Vision 2023 document, Tamilnadu will add 30000MW by the end of the Vision period (2023)—20000 MW through new thermal generation capacity and 1000 MW through incremental renewable capacity (including 5000 MW through solar power). It seems that the Tamilnadu government is very serious to end power cut in the state. Taking into account the overall requirements and possibilities of augmenting power supply, the Tamil Nadu government on Saturday unveiled a new solar energy policy, envisaging generation of   over 3,000 MW of power, exclusively from solar power, in the next three years. Christened as 'Tamil Nadu Solar Energy Policy 2012,' the new initiative of the government, with a slew of encouraging features, finds opportunity in the rapidly declining solar power costs and aims at tapping at least 1,000 MW through solar power annually in the power-starved state. The intention of the new solar energy policy is to “make solar energy a people's movement just as it did earlier in the case of rainwater harvesting.” Electricity comes from many sources. Although numerous sources exist, the primary ones include coal, natural gas, hydroelectric, petroleum, nuclear power, wind power and solar energy. These energy resources fall into two main categories, often called renewable and non-renewable energy resources. The difference between renewable energy used for electricity and nonrenewable energy consists of the infinite amount of available renewable energy.  Although wind power is the main source of renewable energy, its supply is unsteady and erratic.   Solar energy remains the most potent source of renewable since the available amount remains infinite. Therefore, the Tamilnadu government has taken the right decision to encourage the generation of solar power on a large scale. If  effective measures are undertaken, solar power has great potential to solve the power supply problem in Tamilnadu in the coming years, nay decades!

Dr.C.Murukadas, The Times of India, Oct., 2012

Colleges told to meet 6% of needs through solar energy

World faces 'dangerous' economic cocktail: OECD

Many of the economies around the world are in an unstable situation. It is feared that continued recession in Europe and other parts of the world would be felt around the world. India can’t completely insulate its economy from the crisis in other economies because the integration of its economy with the rest of the world because of liberalisation and globalisation. Therefore, the reports that growth rate of the country may be below the anticipated level is not surprising. Nevertheless it has to be borne in mind that the impact of world economic crisis is not severe in our country compared to European nations. That is not to sate that we can be complacent. However, we have to move cautiously with neo-liberal economic reform. That is, there is a strong case for India to abandon neo-liberal policies and for continuing an interventionist policy, which would insulate the country to a larger extent from external shocks. It has to be noted that for the common people, who form the bulk of the population, growth rates have no meaning or any relevance because they are seldom benefited by higher growth rates. It is a fact that a greater proportion of the benefits of higher growth goes to only the upper strata of the society Moreover corruption and black money are the serious scourges facing India, which are acting as a road block to ensure inclusive growth and development of the country. Corruption and black money are also the root cause of growing inequality and deprivation. Huge amount has been appropriated from the people of India by exploiting and betraying them through corruption and money laundering. If this huge amount of black money and property comes back to India, the entire foreign debt can be liquidated. And after paying the entire foreign debt, India will have huge resources to invest in development programmes and welfare measures. Dependence on FDI can be substantially reduced. If corruption is controlled, generation of black money can be controlled to a large extent. Of course, for significant dent on corruption and black money there should be change in the mind set of politicians, bureaucrats and the public. The government has to take determined efforts to root out corruption and black money, besides taking steps to reinvigorating the economy.''

Dr.C.Murukadas, The Times of India, Oct. 18, 2012

Inflation has again shot into limelight.

Inflation has again shot into limelight. For the week ending March 29, 2008, the rate of inflation soared to a 10-month high of 7.81 per cent. Of course, inflation is neither a new phenomenon nor confined to India. Historically, galloping inflation and steep rise in prices have brought havoc and untold sufferings to the people at different times in various countries, besides causing the downfall of many governments. Taking into account the long–term trend in the movement of prices in India, it can’t be held that the current wave of inflation is unprecedented, for there were earlier periods in which the county had to confront with much higher rates of inflationary spiraling of prices. But, at present, inflation has caused widespread distress and evoked unanticipated attention. While the public outcry against price rise is widespread, the opposition parties have seized the opportunity to embarrass the government and the ruling combine by organizing agitations, road/rail blockade and even courting arrested. Moreover, the media, both the print and the electronic media, have shown unusual interest in highlighting inflationary spiraling of prices. As a result, today everyone has inflation on their lips! The views on the causes of current inflationary pressure in India are diverse and conflicting. While the economists, planners and others try to explain the plausible causes of inflationary pressure in terms of theoretical formulations, the politicians have made the issue theatrical. According to BJP, the current inflationary trend “is not a natural calamity, but a man made crisis by the UPA.” The Left parties view that inflationary spiraling of prices is due to neo-liberal economic policies of the government; they cite, among others, futures trading in essential commodities, foreign direct investment in the commodities market, weakening of the Public Distribution System, lack of steps to strengthen the essential commodities law and failure to roll back the oil price hike. The government blames the global rise in prices as the villain. According to Mr. P. Chidambaram, Finance Minister of India, the general price rise witnessed in the country recently is largely due to costly imports of essential commodities. That is, the rising global commodity prices, both food and non-food, has pushed up prices in the country. Among others, two features draw attention to the impact of the current inflation. One, although the country has witnessed a steady rise in the growth of output and income, almost the entire addition to national output has gone to a small section of the population, which is keen to attain the standard of living of the affluent sections of the population in the rich countries in Europe, America and elsewhere. That is, the vast multitudes of people have scarcely seen any discernible rise in real income so that they can sustain the impact of rise in prices at least to a certain extent. Thus, in addition to the usual fiscal and monetary measures, many shot term as well as long term measures will have to be undertaken in order to prevent inflation becoming an irritant to the people and a blot to the government. The short term measures, among others, are: 1) strengthening the Public Distribution System (PDS) and steps to bring additional items and more people under the PDS; 2) ending speculative trading in food grains and other essential items; 3) stringent action against hoarding of essential commodities: 4) preventing the entry of corporate and multinational traders into retail trading; 5) ban on forward and futures trading in essential commodities; 6) discouraging foreign direct investment in the commodities market: 7) curbs on procurement of food grains from farmers by private companies and traders, and stopping direct procurement by corporate and multinational corporations

Dr.C.Murukadas, The Times of India, Oct., 2012

Farm to fork: a misleading epithet

Farm to fork is a misleading epithet used by the government and multinational retail giants like Walmart to hoodwink the people. As far as India is concerned it is impracticable to directly procure from farmers by the foreign retail giants because of the extremely small size of the farms. Walmart and other retail giants must have to buy in small batches from small plot-holders in a country where most of the farms are less than 2 hectares. That means contracting with thousands of farmers will still yield only a few thousand tonnes. In  North America, Europe and Australia  retailers like Walmart can buy from a few hundred farmers who provide hundreds of thousands of tonnes of produce between them.  The  local Indian mega corporate retailers, at the start of their retail trading business, had proclaimed that they would model their trade on “Farm to Fork” concept, i.e. buying directly from farmers and selling to the consumers. But a study by RFSTE/ Navdanya revealed that Reliance Retail was very much found to procure food items from mandis. Available information indicates that the practices of other corporate retail giants do not differ from that of Reliance   Retail.  Therefore, there is no guarantee that the multinational retail giants will not resort to such a trend. Experiences show that nowhere in the world have the farmers who supply goods to big retail chains benefited. It  is difficult to understand how they would benefit, when the big retail players like Walmart look for the cheapest possible suppliers. To begin with, they might offer higher prices, inputs and finance; but that would be only until they are able to eliminate the traditional channels of supply. Ultimately the farmers will have no choice but to sell to big players -- at any price as happened in many countries. For instance, in Western countries, 110 buying desk of big companies control the flow of goods from 3.2 million farmers supplying to over 160 million consumers. A detailed examination of information available on the impact of allowing multi-brand global biggies including Walmart, Carrefour and Tesco into countries such as Indonesia, Thailand, Brazil, Canada, Germany, etc., indicates that they will ultimately eliminate competition and will indulge in monopolistic practices; finally putting the farmers under their clutches.  .  Evidences show that farmers in the West have paid a big price, with hundreds of thousands forced to   abandon their farms, due to corporatisation of the farming sector, along with corporate control of the purchasing side among processors and retailers. Therefore, there is no point in giving this stake (i.e. multi-brand retail trading) to the foreign retailers, albeit to cater inflation. India might receive some foreign direct investments; but this will make the situation even worse by displacing the farmers leading to increase in rural unemployment and poverty. Given the already over-crowded agriculture sector, and the stagnating manufacturing sector, and the hard nature and relatively low wages of jobs in both, many million Indians are virtually forced into the services sector, particularly in retail trade.

Dr.C.Murukadas, The Times of India, Oct. 16,2012.

Anti-graft laws will soon cover private sector

Much has been written on economic development in recent years, and a great deal of research has been done by international organizations and individual scholars about the process and trends of economic growth. It has be, however, noted that economic development is a continuous and complex process which involve the interaction varied and numerous factors which are interrelated and interwoven. The main factors of economic development are natural resources, manpower (human resources), capital formation and entrepreneurship (organisation) and technological advancement. The rate of economic growth of a country depends upon the degree of conjuncture (coincidence) of these factors. In addition, the role of government is also equally important in stimulating the process of economic development. The government of a country should desire for rapid economic growth/ development and improvement in the well-being of the people. That is, it should frame appropriate policies and take effective steps to carry forward the goals of economic development. Even a superficial examination of the history of economic development of various countries reveals that the proper governance and clean administration has facilitated rapid economic development. Lack of proper governance and corrupt administration has also proved to be hindrance to development and improvement in the general level of living. Today, India has the distinction of one of the most inefficient and corrupt administration in the world. Not only that a significant proportion of the investment leaks into the hands of corrupt politicians and greedy bureaucrats from the top to the bottom. Much worse is that due to corruption, nepotism and inefficiency implementation of most of the projects are delayed. At present the level of governance in India is at the lowest ebb. The numerous cases of scams, scandals, frauds, money laundering and other shadow activities indulged in by corrupt politicians, especially the ruling party, and their kith and kin and corrupt bureaucrats have naturally affected the efficient and effective allocation of the resources and their utilisation. Dr. Manmohan Singh is reported to have failed to curb various scams, sandals and frauds perpetuated by crony capitalists and greedy politicians and bureaucrats. As a result, resources of the country have been looted by crony capitalists with the active support of corrupt politicians and connivance of bureaucrats. The country is reported to have lost lakhs of corers of rupees, which could have been used to promote investment and provide welfare measures to the down-trodden people. The criticism is that Dr.Singh has been keeping silence over the organised looting. By notifying the decision to allow 51 percent FDI in multi-brand retail Dr. Manmohan Singh has skillfully diverted the attention of the people from the ill-famous coal gate scandal and numerous other scams, scandals and frauds took place during his Prime Ministership.

Dr.C.Murukadas, The Times of India , 16th Oct, 2012

FDI in multi-brand retail to help farmers: Sharad Pawar

Union agriculture minister Sharad Pawar  has a misconceived notion that FDI in multi-brand retail will cut down post-harvest losses to farmers and bring investment in cold-chain facilities. The stated purpose of liberalising FDI in retail is that it will attract investments for modernising India’s supply-chain infrastructure, especially for the agricultural sector, in turn, providing better returns to farmers and small agro-processing units through enhanced direct sourcing as well as curbing inflation by reducing wastage. The argument is that the giant foreign retail chains will squeeze out the middlemen thereby providing higher prices to farmers and at the same time provide large investments for the development of post-harvest and cold chain infrastructure. In India, the relaxation of regulations already allows foreign direct investment in cold-chain infrastructure to the extent of 100 percent. But there has been modest increase in foreign direct investment in cold storage infrastructure. According to them, the cold storage infrastructure will become economically viable only when there is strong and contractually-binding from organised retail. The risk of cold storing perishable food, without an assured way to move and sell it, puts the economic viability of expensive cold storage in doubt. The condition for making at least 50 percent of the total investment in ‘back end’ infrastructure under the proposed FDI scheme is being cited to argue that this would lead to more cold chains and other logistics, benefiting the farmers. But experiences of other countries, however, show that procurement by various multinational retailers do not benefit the small farmers. “Over time, they receive depressed prices and find it difficult to meet the arbitrary quality Standards.  Experiences show that nowhere in the world have the farmers who supply goods to big retail chains benefited. Walmart is reported to be planning a series of partnerships with small and mid-level suppliers in India across product categories to create a big list of private label brands that will be priced substantially lower - as much as 10-15% - than established products and brands. The move is part of the company's strategy to go deeper into the into those states which do not allow Walmart to set up shops. It also signifies that Walmart is going against its original commitment that that will directly procure from the farmers and hence the farmers will get better price. According to Mr. Jain 95% of what they sell will procured from within the country. But what is the guarantee that Walmart will continue to do so. In fact, in other countries, including the United States, Walmart is selling cheap Chinese goods.  Walmart has already has a joint venture with Bharati. It is alleged that Bharti-Walmart is illegally carrying out multi-brand retail trade despite being permitted only to carry out wholesale cash-and-carry or wholesale trade in the country. On the basis of the suit filed by environmental activist Vandana Shiva, the Delhi High Court sought replies of the Centre, Bharti-Walmart and Bharti Retail on a plea for a probe against the firms for allegedly carrying out retail trading in the multi-brand sector in violation of India’s existing FDI policy. Thus, even before getting permission to operate, Walmart has violated Indian rules and regulations and has unlawfully involved in multi-brand retail trading.

 Dr.C.Murukadas, The Times of India Oct 13, 2012