Aug Vol49 No8

104

Transcript of Aug Vol49 No8

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About the issue

Arestructuring of bureaucracy has been on everygovernment's agenda and the latest in the seriesis UPA government under the leadership of the

Prime Minister Dr Manmohan Singh. But, there is onedifference. This time it is a man, who has been part ofthe official machinery in various capacities andtherefore knows its working and is in a better positionto attempt a course correction.

It is an accepted fact that the existing machineryof governance has failed. The success of our efforts ateconomic growth, development, social justice has beenlimited because the iustruments of administration areineffective, inefficient and not accountable. Manyinitiatives were und'ertaken to improve the system.Several committees and experts looked into it, butwithout much success.

In the schemes relating to development, it is thedelivery system at the grassroots which needs to beefficient, accountable and responsive. The lowerbureaucracy represents the face of the government.When aU plaus are, finalized for unemployment, food.for. work programmes, housing and sanitation, it is thedistrict rural development officer at the bottom whoholds the key to implementation. The reforms in thepresent shape are applicable to just the top 10 per centof the government. The critical question is whathappens to the remaining 90 per cent? Severaladministrative reform commissions have overlookedthis critical aspect of reforming the lower hureaucracy.This is the challenge before the UPA government. Herecomes the role of Panchayats which need effectivegovernance if important areas like health, educationand employment schemes are to succeed. This calldora major review of the organization structure ofgovernance at all levels,

To make the officials accountable, restructuring theinstitutions of governance comes cooperative so thatresponsiblities can be fIXed. Passing the buck betweenindividuals and organizations must come to an end.

Corruption in any form must be curbed. Thosecivil servants who indulge in corrupt practices must bepunisbed. However, there is a word of caution. As thePrime Minister observed while speaking in Parliamenton the introduction of Right to Information Bill, 2005,that there is a difference in decisions taken withmalafide intentions and those that are bonafide errors.In the present system the career of an. officer getsjeopardized even if one of his decisions goes wrong.This is more so where commercial decisions areinvolved. A system should not be allowed to developwhere officers become shy of taking qnick decisions onone pretext or the other.

With changes in our economy in the past years,new areas which are specialized in nature haveemerged. With globalization taking place, policymakinghas become a complex task and issues on patents,_WTO, IT, to name a few, require deeper knowledge.The moot question that emerges is - should top civilservice be open to experts? Bureaucracy should havethe best talent from specialized disciplines, Countrieslike the UK aiId New Zealand who have civil servicesystem like the Indian system too have reformed byallowing lateral entry.

It goes without saying that good governance needsto be at the top of the government's agenda. This alonecan raise our economic growth while reducing povertyand improving social justice. 0

.Joint Director (Prod): N.C. Mazumder

Cover Design: Deepayan Maitrae.mail: [email protected]

[email protected]; [email protected]: www.publicatlonsdlvision.nlc.in

NEWS FROM J & K 58

SHODH YATRA 78STEEL GRAVES OF ALANG 81AnkurGuptaGLOBALISATIONCAN HAVEA HUMANFACE 86TEA INDUSTRY AT CROSSROADS 88G. D. Bane~ee and Sarda Bane~eeNDC : TALKINGDEVELOPMENT 92IN THE NEWS ~ 97

J & K WiNDOW 54

LOKVAN/: EMPOWERING PEOPLE 72Hari Shankar SinghCAUTIOUS APPROACH NEEDED 75Sreekumar Raghavan ,SARITA: E.REGISTRATION IN MAHARASHTRA . 76

f!~ove~N~~E-GOVERNANCE REPORT CARD 60Sameer Kochhar, Gursharan Dhanjal

DOES E-GOVERNANCE MEAN GOODGOVERNANCE .. 67Yogesh Baweja

CITIZEN'S RIGHT TO CONVENIENCE ANDCOMFORT 70P. M. Kuriakose

CONTENTS

NATIONALFLAG AND ITS ORIGIN 49S. V.Taneja

REFORMING BUREAUCRACy 44R. L. Sudhir

ASSESSING lAS OFFICERS 46

REACHING THE POOR 47L. C. Jain

INNOVATIVETHINKING IN GOVERNMENT 34Sanjay Kothari and Rajesh Bansal

DEVELOPMENT GOVERNANCE 41Mahendra P. Srivastava

SECRECY AND GOVERNANCE 25Moushumi Basu

GOVERNANCE AND DEVELOPMENT 2Yoginder K.Alagh

CHANGING THE MINDSET 22Hasmukh Adhia

CORPORATE GOVERNANCE IN PSEs 29S. M Dewan

COMPETITION AND THE TOP CIVILSERVICE 9Arvind Panagariya

A QUARTET ON ADMINISTRATIVEREFORMS .... 15Y. R. K. Reddy

HOW NAZIR SAAB FOUGHT HIS MAJESTY'SCOLLECTOR 20L. C. Jain

Chief Editor: Anurag Mlo:ra

Editor: Dr Sapna N. Singh

Ass« Editor: Madhu R. Sekhar

Sub Editor: Manogyan R. Pal

Let noble

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-.ugust 2005

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Governance and DevelopmentYoginder K Alagh

While the needfor reform isuniversal, thereis hardly anyorganised debateand action on theoperationalisationof change. Thego vernflncedebate is in acui de ~acofideas

HE COUNTRY seems tobe in a questioning mode ongovernance structures. Thenotion that all our problemscan be traced back to the

political governance and the civilservice mechanisms is incorrect.Change has been rapid, expectations arehigh, technological and economiccompulsions are severe and systemperformance of an incremental kindseems unacceptable. The country usedto the experience of the freedommovement and the post independencedecades, with 'high commands', 'saintlyidioms', 'satyagraha' modes and'idealistic' goals, is not coming to gripswith the operational and functioningaspects of coalition governments anddecentralised institutions. There is anatmosphere of unease and unansweredquestions.

We attempt to lay down the borderswithin which governance systems areexpected now to function. We try to berelevant in the immediate sense, but theeconomist and planner refuses to alwaysoblige. Detailing the borders as we lookahead is relatively simple. The devil isin trying to work out the transitions toreach there from where you are.

The Indian political system and civil

service produced some extraordinarymen and women. They have beenpersons of letters, of the arts and ofhistory. They have conceived andimplemented green revolutions, givenextraordinary ideas in health, educationand literacy. They hav~~protected thetribal and the dalit, fashioned her/hisrights and fought for them. They havedeveloped new concepts of finance,scrutiny and audit of publicexpenditure. They have given impetusto- scientific and agricultural research.They have fashioned and followedthrough the nation's global agenda.They have followed through its deepestdreams of a multi-religious, multi-ethnicsociety, inherited from its freedomstruggle, by both creativel.ystrengthening its democratic andreconciliatory edifice and fightingthose who would destroy it byviolence. They have been at the heartof the young democracy's struggle forfashioning the velvet glove and themailed fist.

There have been women and men inIndia at the highest echelons of itsruling classes, who have beenscrupulous on the use of every paisa ofpublic money, whose picture has neverbeen published in newspapers at public

Mr Y. K. Alagh is former Union Minister and former Member Planning Commission. He was also Chairman of the Committee onReforms in Higher Civ~l Services.

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~expense and some of them have died onaccount of neglect. They have, however,been the exception, not the rule.

In every problem I am outlining, Ican truthfully say I know theexceptional institution and person, whohave worked out the solution. But theyare the exception, not the rule. It is theturnaround which is difficult.

In one's work dominating trends inrelation to governance can beperceived. Somewhat tentatively as faras the borders are concerned I wouldpropose that:

• As the State withdraws from directdelivery governance would need toestablish a regulatory framework forthe functioning of the economic andsocial sector; and also lay down theinstitutional framework, theincentive and disincentivemechanisms and fiscal structures forcivil society institutions to function,like decentralised, local institutionsof Government, Cooperatives,NGO's and newer 'mixed' forms ofsimilar organisations,

• Non-renewable resource scarcitieswill be far more severe particularlyof resources, like water, quality land,and energy and sustainabilityconcerns will be acute.

• There will be much greater emphasison the rights of individuals andgroups, including participatory formsof decision making. This in tum willdemand greater fairness and self-restraint in the use of Governmentpower. Related to it will be demandson transparency and right toinformation.

• There will be the demand forprotecting vulnerable groups, eitherthe historically underprivileged, orthe victims of marketisation,concerns for human rights andparticularly of specific groups suchas women, children, the minorities,

YOJANA August 2005

the Adivasis, the mentally andphysically challenged.

• On the flip side moderntechnology. will be see,n asproviding cutting edge knowledgebased solutions to emergingscarcities or problems, and thereforegreater use of informationtechnology, biotechnology, systemsnetworking, the new materials andstrategic management responses.

• Thoughtful groups wili seesecurity concerns becoming moreacute, arising from socio-economic political dichotomiesand resultant tensions as also themore basic i"ssues of energysecurity, food and water securityand institutional dimensions ofaddressing these.

Changing Role

The process of reform began in themid-eighties in India. The first phaseconsisted of eliminating price controlsand relaxing investment and foreignexchange controls. These were replacedby tariff and tax policies. The road mapwas outlined by Committee onReplacing Quantitative Controls byFiscal Methods or the NarasimhamCommittee of which I was a member.The emphasis was on domestic reformsand preparing Indian industry for globalcompetition, but there wasdiscrimination between industries witha view to encouraging self-reliance,production of mass wage goods, wasstill an objective, as also that of creatinga level playing field for efficient Indianindustries as the economy was subjectedto competition. Cement, aluminium,steel and a number of other industrieswere decontrolled and import licensingrelaxed. Tariffs were however high anddiscriminatory and there was the socalled 'savage' policy of taxation ofluxuries.

The nineties saw a more general

economic reform of the kind designedby the Brettenwoods institutions. Theexchange rate on current account wasleft to market forces, import control onproducer goods and intermediates waslargely abolished, tariff rates werestandardised and the average levelbrought down. Policies on sectoral andregional direction to industrialinvestment, MRTP control and controlson FERA companies were diluted orgiven up. The level of public investmentin industrial and infrastructural sectorswas drastically reduced. An earlierpolicy of restructuring and privatisingselected public sector industry waschanged to a general policy ofdisinvestments, with a initial emphasison selling profitable public enterprisesto the private sector, to overcome'initial resistance to purchase of publicsector equity'.

However, the abandonment of astrategic role of the State is wrong. Ibelieve that the trend to marketisationis correct. The process of liberalisationis now in its final phases with Indiaimposing the WTO regime in full since1998 and the Ninth Plan and Tenth Plancommited to financial deregulation andcapital account convertibility in aphased manner. Governance issues arenow different.

It is interesting that when Stiglitznow talks of counterfactuals that havesucceeded, and the theories that go withthem he discusses Poland and China,while in the early nineties the referenceswere also to India. In the second half ofthe nineties and the early part of thisdecade, Indian economists are wellrepresented in global journals, but thereis no perspective on India's experiencefrom an analytical point of view. Thisis definitely unfortunate from aknowledge point of view and sinceknowledge we know isa source ofgrowth and has practical consequencesalso.

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The withdrawal of the directeconomic role of the state in Indiawas accompanied by a consciouspolicy of decentralisation designed. inthe late Eighties of the last century,setting up of regulating bodies for theinfrastructure and industrial sectorsand a Constitutional third tier ofgovernment and tbe emergence ofNGOs and cooperatives in fields ofland and water, ru~al activities andsocial infrastructure.

Who will Guard the Guards?As far as the regulating bodies are

concerned, recently there has been asharp attack by a group which was ledby the Principal of the AdministrativeStaff College ofIndia. After the goodprofessional studies released for publicdiscussion by the Central ElectricityRegulatory Commission underDr. S. L. Rao, a professional economist,including a Discussion Paper on theprinciples of tariff fixation there hasbeen little worthwhile work and in facta number of state level Commissionshave acted in a fairly non-transparentmanner. The whole question of thestructuring and manning of these bodieshas been opened up for debate. In thiscontext I may be permitted a briefpersonal intervention. As Minister ofPower, the worst kind of pressuresfaced were in appointments. Togetherwith my Secretary, who later tookpremature retirement from the lAS andbecame Principal of the ASCI, Iappointed the Member PlanningCommission M. N. Srinavasan, the nononsense former Chairman AtomicEnergy Commission, as the Chairmanof an Advisory Committee to theMinister on senior appointments in thePower parastatals. The individualsappointed then implemented some ofthe largest expansions of capacity inpower generation and transmission atlowest costs. This transparentappointing procedure was introducedafter quite some introspection in the

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CERC Act introduced by me inParliament in August 1997. However Iam told that this provision has beenremoved in later legislation and theselection processes for suchappointments are now again chairedby political persons with theunedifying spectacle in some cases ofSecretaries to the Government openlylobbying for post retirement perks inthis form. The management ofregulation is obviously an issue ofhighest importance and needs to bediscussed openly and transparently.More generally the Committee Ichaired on examination and trainingreform for the Higher Civil serviceshas also argued that apart fromexamination and training reform, themanagement of civil services is thecrux of the issue.

The issues in decentralisation are ofanother kind. It should remain a matterof priority for State Policy to help thosewho help themselves in the core areasof local and global concern. Aspreparations of Tenth Plan showed, inrelation to targets, performance hasbeen well behind in the interrelatedareas of land and water. What are thecivil management and organisationissuesliereaf the locar level in the caseof problem which is at the heart of foodsecurity and employment and energysufficiency?

Problems partly arise because theexisting legal and administrativesystems and financial rules arestructured for formal organisation in thepublic or private corporate sector. Soare global financial institutions. Newerkinds of institutions with strategicmixtures of organisationl styles,cooperatives and corporates, NGO'sand governments, NGO's andcooperatives do not have a level playingfield for them. Recently a Bill had beenpassed in Parliament allowingcooperatives to register as companies,

,~based on the report of the High U:velCommittee on Legislation forCorporatisation of Cooperatives. (TheCompanies Second Amendment Bill,2002). Such innovative approaches arerare and in any case becomecontroversial. There are reform issueshere also. For example a loss makingsubsidized electricity system canunderprice a renewable group and driveit out of the market. The long-termproblem is reform in the sense thatsubsidies and protection given toestablished groups have to bewithdrawn. In the short run theprotection given to each group must bethe same.

The structure or incentive anddisincentive systems for thiskind of growth, should begin

with a taxonomy of complementaritiesof policy rules at different levels ofpolicy making like no level can sperlJmore resources than they have accessto. But resources, which are short orbinding constraints at national or globallevel, are elastic at local levels.However, their mobilisation requirespolicy changes at higher level. Forexample, it is easy to buy a tax-fee bondof the New York civic bodies, but verylittle attention has beeIrpaid-to-market~for local bodies bond paper indeveloping countries and the fiscalreform that has to precede them. Anexceptional effort by the AhmedabadMunicipal Corporation of floating alarge bond issue without sovereignguarantees is available as a case study.These issues are important because theState just does not have the money anymore.

We must emphasise that any debtrescheduling strategy will have to dothis must be linked to restructuringLocal Finance. The good schemes ofsupport to local agencies for land, waterand urban development in the last .budget and the Planning Commission's

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The Indian economy is growingrapidly and also diversifying. Forexample the share of agriculture inthe labour force has now fallen toaround 53 per cent. Again,urbanisation will need to bestructured in a fairly decentralisedmanner. All of this lead to differentchallenges in transport, energy, wastedisposal and urban planning issues. Ithas, however to be noted that theurbanisation pattern in India isdecentralised. While very small urbansettlements are not growing, the shareof smaller towns in Class I towns ishigh, (100.000+). Urbanisation hasbeen explained as the outcome ofboth centrifugal and centripetalforces. While the urban growth ratein the eighties went down from 3.8per cent to 3.12 that of Class I townswent up (6.39 per cent to 8.39 percent). It can be postulated that thesetrends will continue.

The preferred model is consistentwith the pattern of urbanisation withclusters of settlements around largeconglomeration. Policies should not beconcentrated only on rural output andemployment. In fact in a dynamiceconomy of the Indian type thedistinction between the village and thesmall urban settlement can be verycounterproductive and lead to all kindof projectionist distortions. A moreproductive mindset would be to orientpolicy to concentric circles ofprosperity around diversifying

Urban Settlements

burning poor quality coal areapparent underlining the criticalenergy situation in the country. Theglaring magnitudes indicate the long-haul for improving the livingstandards in the country. This alsobrings into sharp focus the hazards offollowing an unbridled consumeristpath both at the global and naionallevel."

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complex goal will be required in thisphase.

It is useful to begin with the kind ofproblemetiques the sustainabledevelopment framework studies bringout. The "Business As Usual Scenarios"bring out unsustainable outcomes.

The kind of growth discussedmeshes well with higher output, income,employment and trade levels. Improvedmanagement of water to cropdiversification. The typical sequence isa poor yielding mono inferior cerealeconomy, succeeded by a high yieldcereal and a commercial crop, or tree,crop. In the Indian case, exchange ratereform led to higher growth ofagricultural exports, before the EastAsian crisis cut down demand in thefastest expanding markets and recentevidence is that the districts sourcingnon-traditional exports have gonethrough a phase of land and waterdevelopment sequences. But suchpolicy complementarities have to beplanned for.

The issue here is the requirementof systems to be alert to fieldoriented developments. Such

systems have to constantly assessorganisational, legal and financialsystem requirements. It can be saidthis was always so. The pressingchange now is that the requirementsare to involve civil society in theprocess. This makes the networkingknowledge requirements moreintense. Abilities of communicationand having the energy to follow more

The last three problems essentiallyunderscore that the reform process hasto be fairly deep for widespread landand water based poverty reducinggrowth processes to take place. This hasto be rooted in the administrative andlegislative processes.

f1-rm;a of using exchange reserves forinfrastructure investments as public-private partnerships must be linked toState and local governance structuresand finance. Large sums of money areinvolved here. International agenciesare now lending for local schemes. Wemust study recent global policies andlink this with local finance.

YOJANA August 2005 5

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i

agricultural bases Jd growth centres.Such possibilities ire very real and

I

substantial in India. Transportation, landuse, infrastructurel' and technologydispersal policies call be oriented to thisobjective. In fact lit will be moresustainable. Slum populations are 25 to40 per c~,':lt lower in 'smaller Class Itowns as compared to million pluscities.

The public ma,nagement issuesinvolved in rapid anddecentralisedi urban growth are

so obvious that they do not needelaboration. Awaren6ss of technology,system interrelatiohs, decentralisedplanning foci, self ~eliant institutionswhich can producti,vely borrow andbuild and run systeins have all beendiscussed and ye~ only a smallbeginning made. Th~se are going to bethe great challenges bf the next phase.The ability to raise hnd use resourcesproductively will bileat heart of thematter.

Technological self-reliance' onI

mission mode, as in the past, willprobably also continhe as requirement

I

of the present of nat~onal security andother long-term objective. It has beenshown for example, that thedevelopment of ttie Param SuperComputer led to tHe withdrawal ofrestrictions on I export ofsupercomputers to Inepa. Again recentlythe Chairman of th~ Atomic EnergyCommission has Jointed out thatsanctions on India ~ade it more self-reliant in nuclear tJchnology. Thus,some mission-oriented efforts arenecessary in a wotId of restrictedtechnology access. I Since India haslimited reserves of uranium, but very

Ilarge reserves of thorium, a project likethe Fast Breeder Reactor Nuclear

I

Power Station, became a very importantpart of its search fori long term energysolutions, since it takes a major steptowards completing I the nuclear fuel

6

cycle, based on thorium, and thereforea relatively cheap and abundant sourceof power.

It would be naively optimistic to saypolicies for' introducing newtechnologies, which reduce financialand real resource costs, introduce newermore consumer friendly and sustainableproducts and help competitiveness, arealready established~ A beginning hasbeen made but a lot more needs to bedone. Temporary fiscal and monetarycomfort which improves rates of returnfor cost reducing technologies andnewer products, need more support.Standard setting, quality enforcementand organizational reform which makesall this possible, is also needed on amore larger plane, together withnetworks which hasten the process andfiscal sops to integrate these with themarket.

The scie.nce establishment mustseriously consider these issues. In theinformation and software area,successes are known: Growth rates in .exports of 60% annual, around 25% inthis depression year also. But to have18 of the 25 top technologicallycertified companies in the world and toprovide over a third of the softwareneeds of the Top 500 Fortunecompanies, as a recent Japanese studypoints out, is not to be scoffed at. In aOECD-ADB meeting on Technologyand Growth to which I was invited tospeak, India was shown in Paris as theonly exception to the global digitaldivide. (Seventh OECD-ADB AsiaForum, Paris, student June 2001).

Applications

Serious research during the lastdecade and a half has shown fairlyconclusively that the tremendousopportunities that are available with thenew technology requires groups andsystems which can manage itsinterdisciplinary nature, since

applications cut across areas ~biotechnology, communications andcomputerisation. If the preconditionsare available it spreads very fast, boththrough space and sectors in economyand society. But if the infrastructure isnot there, both physical and human, vastareas will be left out induding some inthe developed world. There is also theneed of quick response. As RicardoPetrella of the EEC's FAST Grouppointed out each generation ofinnovations is building on the corpsesof earlier ones. State and parastatalagencies find it difficult to perform inthis framework.

The point being made is thatwhether we discuss wide based ruraldevelopment or growth centres, thenature of public policy skills requirednow will involve much greaterreliance on technology at adecentralised level, networking andan ability to work with civil andcommunity groups. Thus the needwill be to champion reforms,facilitate community, private, focusedNGO/cooperative groups and to helpthe economy and society to integratewith the opportunities provided bywider national mid global markets,through productive activities.

Inthe rapid changes that will takeplace in the country and the world'n the 21st century, the Higher Civil

Services will as is obvious, have to beat the cutting edge of being theprotectors of the poor, the oppressed,the vulnerable and the underprivileged.The democratic urges arid aspirations ofIndia, enshrined in its constitutionand its legislation, will have to be metin a fair and transparent manner notonly impartially, but in spirit, byprotecting the rights of the poor,limiting the coercive power of theState. Safety nets w:ill need to bedeveloped and implemented as themarket economy expands. Poor

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~men, and the girls child, theminorities, the tribal and the Dalit,the handicapped and the destitute,will need special attention.

The Constitutional and legaldimensions of public administrationdetermine the powers, functions andaccountability of the government. Amajor change in the evolution of civilservices in India occurred with theadoption of democratic constitutionincorporating the ideas of rule of law,guaranteed rights and Parliamentarygovernment. The 73rd and 74thConstitutional amendments envisage afurther change in the same direction.Services under the Union and the statesfind a prominent place in theconstitution itself. An autonomousCommission with vast powers forrecruitment to the services is anotherimportant aspect which emphasises itsrole in constitutional governance.

Looked at in the above context.We need to understand thesignificance of rule of law and

the concept of limited governmentunder a written federal-typeConstitution. The values of theConstitution written into Preamble,Fundamental Rights. FundamentalDuties and Directive Principles haveto become part of the system. As aninstrument of governance the provisionsof the Constitution and its interpretationby courts constitute a point of referenceto all government action. These aresubject to judicial review which is thefoundation of rule of law under ascheme of constitutional government.

The primary agency of thegovernment to protect human rights,more particularly of weaker sections ofsociety is the bureaucracy because theyare the enforcers of the law. The Courtsteps in only if the executive fails toimplement the laws or implement itcontrary to law and selectively. A

YOJANA August 2005

constitution which proclaims secularismand social justic~ based on equalprotection of the )laws puts a heavyburden on government, both at thecentral and state level. Hence theimportance of constitutionalperspective.

Another dimensil~n which conditionsthe functioning of civil society inmodem times is the profusion of laws,national and interniational relating toeconomy, ecology!, technology andinternational treat~i obligations. Thechange in the concept of property fromsomething tangible to forms which areintellectual and intangible broughtalmost a revolution in the laws of tradeand commerce. Intellectual property lawand trade related intellectual propertyrights have become critical in economicgovernance globally. Added to this isthe information aUld communicationtechnology which threw up anew legalframework for doing business withinand outside government. Globalisationis happening not only in relation tomarket but in respect of all conceivableaspects of organisi~d life to the fastchanging legal climate in all thesematters influencing both policydevelopment and adiministration.

Yet another legal dimension• • • . • frmplllglllg publIc governance at alllevels is the jurisprudence of sustainabledevelopment. TheI'e are today legalparameters in the use of administrationhas to be accommodated withinsustainable limits. these are some ofthe significant legal perspectives whichare critical for civil slDcietyin the future.

Change Parameters

The purpose of this discussion hasbeen to draw out of the attributes thatwill be required from the system in theforthcoming period. These would

. include amongst others:

• A sense of visi(~n and direction inwhich the Indian socio-polity is

moving, including its very diversecultural pulrality;

• An ability to appreciate some ofthe real scarcities that are emergingas also the strengths of civil societyto cope with them;

• An ability to interface with modemtechnology, which provides thecutting edge to many solutions;

• At higher levels of the system anability to network with localgovernment institutions, non-governmental org"anisations,cooperative and other professionaland people's organisations;

• A sense of rugged professionalism,persistence and doggedness inpursuit' of objectives; urge tochampion beneficial change;energy to pursue objectives;

• A sense of fair play, honesty,political and systemic support;

• Compassion for the underprivilegedand above all; a commitment toIndia as envisioned by its foundingfathers.

l:woencouraging reports were thestatement of governmentintentions at the instance of PM

that the age of entry to the highercentral services will be twenty-six ortwenty five and not thirty plus as atpresent and empanelment for the jointsecretary will be earlier and on meritnot just seniority. In the vernacularpress in the city I live in, the loweringof age was reported as if the authoritieswere taking a benefit away. Theseproposals as the documents of theAdministrative Reforms Department puton net shows, are a couple of years old.They were acted upon by the NDAgovernment on account of the flak theywrongly in my opinion were not willingto face, although they are of highintrinsic merit.

The argument used against the

7

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proposal to reduce the age of entry isthat children from poor or scheduled

Icaste, Adivasi or OB[: background willbe at a disadvantage ds compared to thewesternized urban elite candidates. It is

ifactully wrong and it is important torecognize this as the debate starts or thereform will be a n09 starter inspite ofits advantages to the country. This wasthe major issue whenl the committee onreform of the highrr civil servicesexamination and training of the UPSCwas working on the proposal. There isno question that t~e broad base ofrecruitment for the higher civil serviceslike the lAS or the jpolice is a greatadvantage for India. Children comingfrom diverse social and economicbackgrounds lend a truly nationalperspective and an empathy for the realproblems of the [country whichcandidates from an affluent or elitebackground alone wquld never give.

i

The plain fact of the matter was thatcandidates with collyge degrees frombackward districtsl disadvantaged

I

communities and romen, in factdeclining as a share of the total as theage limits for recruitnient kept on risingwith the so called objective of ~elpingthem. The Zakir Hussian Center for

. iEducatIOn at JNU conducted a study ofthe private cost of ~reparing for theexams. This was mote than a lakh of

irupees per year. A child from a poorfamily would simply not have theresources to keep on preparing for theseexams year after year, in terms ofstaying in the city dnd not doing analternate job. So tUe children who

ilargely benefit from this concession arethose from the better off communitieswhich benefit from reservations. Inother words they are 'secondgeneration' candida~es from well offfamilies. Even thils would be anadvantage, had it not! been for the factthat good candidates from the reservedcommunities from b.ackward area, inother words, the firs~ generation ones

8

are available at younger ages. Asanyone who has conducted a large opencompetitive examination in this countryknows it is such a richly endowedsociety with talent that at the top you getoutstanding material and the differencebetween the highest ranks is very little.As a former. Vice Chancellor of JNUwhere tens of thousands of childrenapply I know that at each point there area number of candidates and thedifference between them is verymarginal. So really by reducing the ageyou still get very good material andmore important from the reallybackward areas and communities.

They are malleable, can betrained, imbued with a sense ofmission, given technological

skills and a sense of belonging to thesuper club, so that they performcollegially, the only reason we need anelite civil service. Entry has to be openbut then have to be the best andtogether. It is wrong to say that we don'tget the best for the job. We do and thechallenge is to keep them that way. Thecivil service has to be honed into a forcewhich supports India propelling itselfinto a global power house. They willhave to be technologically savvy, butalso sensitive to the rights of theircompatriots and support civil society tosolve its problems. They will have tonetwork, stand up for the rights of thoseravaged by the powerful and the bizarreand remain true to the ideals of thosewho freed this country and gave thepoor, rights. Men with smaller visionswant the civil service to serve theirsmaller interest. That is why the secondproposal to pick out the :best and putthem in a fast track need full support.

This pattern is followed by corporatesystems. Assessments every ten yearssome specialisation and the best trainingof the selected are followed elsewhereand should be implemented in thehigher civil services.

Progress on some of the parameteIfstated above seems easy as the technicalaspects have at least been outlined. Themore complex questions are theinstitutional ones. There is generaldisquiet on governance and yet verylittle discussion of known bottlenecks tochange and well known solutions toproblems. It can be genuinely stated thatwhile the need for reform is universalin acceptance, there is hardly anyorganised political debate and action onthe operationalisation of change. Thegovernance debate is in a cuI de sac ofideas.

There has not been much popularpressure on the legislature to accept theSupreme Court's judgement ontreatment of criminals in politicalactivity.

The proposal that while the politicalexecutive has the right to makeexecutive appointment, if unusualdecisions are taken, say a transfer in theless than three years, then a spokenorder must be placed on the file as tothe exact nature of public interestserved in the decision. I can say frompersonal experience that the most venalpressures are exerted at the time ofappointments. Also reform is easilysubverted.

Similair trends are known in otherareas. The Navratnas have beendecimated with party functionariesreplacing experts. Security concernshave been openly flouted. Civil serviceand systemic reform is on thebackbumer.

One is almost led to the position thatgovernance does not seem to matter.However in the long run" activism of thekind contained in a meeting of this kindwhich is primarily academic and notlargely action oriented is perhaps theonly answer. Detailing the rightquestions is terribly important in an areaof great vested interest. 0

YOJANA August 2005

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Competition and the TopCivil Service

Arvind Panagariya

A wit might say,that the ServiceSardar Patel hadintended to be the'Steel Frame of

India', has turnedinto a steel

armour for theprotection of itsown members

HE REFORMS during thepast two decades have comea long way towards puttingan end to the monopolies inIndia. For example, not only

has the private-sector monopoly of theAmbassador and Fiat automobiles beendealt a decisive blow, the public-sectormonopoly on telecommunications hasalso been stamped out. The results havebeen nothing short of spectacular. Fromthe 1950s models, the automobilesproduced in India have jumped into the21st century, with more than 120,000cars exported this past year. In thetelecommunications sector, telephonesused to be frequently without the dialtone or connected to a wrong numberand yet the wait for a new line wasseveral years long. Today, super-efficient cell phones are available ondemand and growing at the astoundingrate of 20 million sets a year.

Nevertheless, India is not fully freeof monopolies. Foremost among thepersisting monopolies is the IndianAdministrative Service (lAS) thatcontrols virtually all of the top civilservice jobs in the central and stategovernments. The Service was createdin the immediate post-independence era

as a part of the All India Services thatadditionally included the Indian PoliceService (IPS) and Indian Forest Service.At the time, there was a good case fora highly independent civil service thatwould deploy the brightest young menand women in the building of uniformpublic institutions across India. But thatobjective having been largely fulfilled,policy formulation having becomehighly specialized, and the Servicehaving turned into a lobby devoted toprotecting its own narrowly definedinterests, time is ripe for subjecting it tooutside competition.

Sardar Vallabhbhai Patel whochampioned the creation of the lASfamously described it as the steel framethat would hold the country together.His vision was thata significant fractionof the officers in the Service wouldmove back and forth between servingthe Centre and their respective states. Indoing so, on the one hand these officerswillieam about the needs of the peopleat the grassroots level and bring thisknowledge to bear on the policiesformulated at the Centre and on theother they will carry the broader visionacquired at the Centre to the states.Patel also thought that the officers of the

Mr Arvind Panagariya is Professor of Economics and Bhagwati Professor of' Indian Political Economy at Columbia University,New York.

YOJANA August 2005 9

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Service should have full independenceto speak their minds. A~his urging, theConstitution and the I relevant legalframework were designed to give theofficers maximum prdtection and jobsecurity.

Under the curreht rules, Indiansbetween ag~s 21 a~d 30compete for lent~y/futo the

Service in a countrywide' examinationI

conducted by the Union Public ServiceCommission (UPSC)'I. The upper agelimit is relaxed for the members of theScheduled Castes, S9heduled Tribesand Other Backward Q:lasses (SC, ST

Iand OBC). Originally, i2 per cent of thepositions were reserved for theapplicants belonging tel the SC and ST.

I

In the mid-1990s, the (j)BC were addedto the reserved catbgory and theproportion of reserved Iseats was raisedto 50 per cent.

Each successful, candidate isassigned to a state, which need not be

Ihis home state. He first undergoesextensive training Withlother successfulcandidates of his 'batch' and is thenposted in the assigned Istate. His careerpath is a reasonably l?redictable withone exception. Unless he is

Isuccessful in getting himself selected

I

as Joint Secretary at the right time, hespends much of hiJ career in the

. Iassigned state. I

The central govetmpent operates ona system of 'empanehhent' whereby itplaces the officers wiJ superior recordon a panel from whicll it draws it~ topcivil servants. Sepa~ate panels aredrawn for the positions' of Deputy, Joint,Additional and full SFcretaries. Withoccasional exceptidns, an officermissing the Joint ~ecretary panelremains in his assigned state for the restof his career. But efen so, he canminimally expect tb become fullSecretary in the state ~efore retirement.Officers empanelled fbr Joint Secretary

Ineed not all become full secretaries at

10

the Centre but they too are guaranteedto become secretaries in their assignedstates.

The Service has managed to offerthese guaranteed promotions by turningvirtually all senior-level positions at theCentre and in the states for its member.Once this is done only an lAS officercan fill it. The original objective behindthis provision was to empower theService so that it could smoothly carryout its mandate to build uniforminstitutions nationally. But with thepassage of time and the expansion ofthe number of lAS officers, guaranteedpromotions and the maintenance ofmonopoly on the senior positionsbecame the primary objectives of theService.

Even when a position is not a cadreposition but requires empanelment, asis the case with most Secretary andAdditional Secretary level positions atthe Centre, the Service captures it byensuring that only its members areempanelled. It is rare for individuals notbelonging to the lAS to be empanelledfor these positions. The expansion ofthe government into diverse activitieshas given the Service furtheropportunities to extend sway wellbeyond what is justified by thequalifications of its members. Forexample, it has gone on to capture manyof the top management positions in thepublic enterprises, banks and otherfinancial institutions at the central andstate levels.

Before I tum to the case for openingup the top jobs to outsiders, let mebriefly mention two important recentdevelopments. First, ironically, theindiscriminate expansion of the cadrepositions at the state level has itselfresulted in a decline of the Service. Theconversion of meaningless positionssuch as the Director of Stationary andStamps into cadre positions has led toa loss of the prestige of the Service.

.JiJ.Moreover, they have made it easier for .the politicians to remove an occasional"inconvenient" officer from moresubstantive positions to these'equivalent' positions.

Second, the original conception thata significant proportion of the lASofficers will alternately work at the localand central levels has largely been lost.At the Centre, the members of the morespecialized Income Tax, Customs andEconomic Services now fill the middleand junior-level positions, leavingmainly the top-level positions for thelAS officers. This means only a tinyfraction of the lAS officers actually getto work at the Centre. Thus, accordingto one estimate, there were only 25Joint Secretary level vacancies forapproximately 500 empanelled officersthis past year. Correspondingly, the lASofficers who gained entry into the lASthrough promotion from the stateservices or other channels and almostnever get to serve at the Centre'increasingly fillthe positions of theDistrict Collector. The idea that the topofficers at the Centre have a deepknowledge of the local conditions andthe top officers in the states have abroad national vision acquired whileserving at the Centre is now largelyfictional.

Open to competitionThe lAS is inherently an -institution

that promotes general rather thanspecialized skills. The system of entryat an early age through competitiveexaminations, coupled with no lateralentry, makes general intellectualachievement a key to success. But inaddition, the internal culture is outrighthostile to the acquisition of specializedskills. Youngsters within the Servicewho decide to go on leave to acquirespecialized knowledge and skills areoften told by their superiors upon returnthat they should not harbor any illusionsthat they can perform tasks that their

YOJANA August 2005

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••counterparts who did not take theirspecialized training cannot perform. '

The anti-specialization bias of theService is also reflected in the shorttenure of the officers in a post.According to one study, on the average,approximately half of the officers in the1990s were moved from their positionsin less than one year. Approximatelyanother quarter were moved in less thantwo years. The reasons for such rapidturnover are undoubtedly manyincluding the whims of the politiciansbut a primary factor is probably theunderlying assumption that the jobs donot require specialized knowledge andthat an intelligent officer with cornmonsense can rapidly switch among them.

This emphasis on general skillsmade sense when the economywas relatively small and the task

of administration simple. But today,with the economy grown manifold andglobalization progressing at breakneckpace, the tasks of the governmentare farmore complex, especially at the nationallevel. For example, among other things,the Finance Ministry must determine awhole range of macroeconomicpolicies, oversee the working of thefinancial and capital markets,coordinate the center-state financialrelations, formulate trade and foreigninvestment policies, and carry out thegovernment's disinvestments policies.Each of these tasks constitutes a highlyspecialized activity and encompassesseveral sub-areas of research ineconomics.

The same complexity alsocharacterizesthe tasks performed by theMinistry of Commerce. It mustrepresent India in the trade negotiationsat the World Trade Organization andforge multilateral agreements thatimpact the economy for decades tocome. It must design, negotiate andimplement free trade area agreementswith different trade partners. It must

YOJANA August 2005

design and implement the rules relatingto anti-dumping,safeguards,intellectualproperty rights and Special EconomicZones. It must also negotiate bilateralinvestmenttreaties.Again, each of thesesubjects is specialized. WTO alone-isafield that requires years of study andspecialized knowledge.

One may assert that the job of thebureaucrat is limited to theimplementation of the policies forwhich the generalized skills are all thatis required. But this assertion is in errorfor two reasons. First, in the IndianParliamentary system, ministers arechosen from among the Members ofParliament.Therefore, they are typicallycareer politicians and lack the deepknowledge and expertise required toefficiently administer their portfolios.This is unlike the U.S. Presidentialsystem in which the Presidentcan selecthis Cabinet from among the entirecitizenryand is therefore able to appointindividuals with vast knowledge of theportfolios they hold. Our ministerstherefore, rely heavily on theirsecretariesfor the formulationof policy.And when the secretaries themselveslack the specialized knowledge of thefield, we run the risk of blind leadingthe blind.

The second reason why the assertionis wrong is that the implementation ofpolicies is not a merely administrativetask. Policymakingeffectivelycontinuesbeyond the legislation passed by theParliament. Ministries must designappropriate institutions to enforce andimplement the legislation. For example,precisely how the anti-dumpingdirectorate should function within theexisting legal framework requires anunderstanding of the impact of anti-dumping on consumers, producers andoverall national interest. Likewise, oncea privatization policy has been adopted,its implementation requires anunderstanding of the benefits and costsof various modes of privatization. The

same goes for the regulatory agencieswhose role is proliferating with the endof the government monopolies in anumber of service sectors.

Defenders of the service, whoinvariably come from within it alsoargue that these days the lAS officerscan and do acquire specializedknowledge and skills. There is no doubtthat this is beginning to happen and itis a healthy trend. The presence ofspecialized officers in the departmentscan provide useful necessary check onthe policies being proposed andformulated at the top. Yet, this canhardly be the complete answer to theproblem. For one thing, as I have notedbefore, among the ranks of the S~rvicethere remains deep suspicion of thegenerally younger officers who acquiresuch knowledge. But more importantly,indepth knowledge required for thepolicy formulation at the top rungs ofbureaucracy in many of the technicalareas can simply not be acquiredthrough short training programsextending to at most one or two years.

But specialized knowledge andexpertise is only one reasonwhy the lAS monopoly over

top positions must be ended. There is asecond and perhaps even morecompelling reason for the change:competitive pressure is as muchessential to promoting excellence in thetop bureaucracy as elsewhere. For yearsnow, I have argued that we must amendthe Industrial Dispute Act to giveemployers the right to hire and fireworkers upon the award of a reasonable-severancepackage. The total absence ofsuch rights from firms with 100or moreworkers has left the workers in thesefrrrnsno incentive to work productively.The firms have had to often resort tocontract workers to perform the tasksthat ought to be performed by theregular workforce.

The guarantee of automatic

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12

Ipromotions and strong protection fromadverse actions un~er virtually anycircumstances has haa a similar impacton the performance ~f the lAS officers.A wit might say that the Service thatSardar Patel had intended to be the steelframe of India has t~rned into a steel.' + hi. f'armour lor t e prot~ctlOn 0 Its ownmembers. Thy absence of any

. competition, p\lnishment oraccountability has made many officers

I

arrogant and self-indulgent.I

When confronted with thesecriticisms, the reaction of many lASofficers is to blarrle politicians for

I

continuous interference. Whilepoliticians have indeed indulgedthemselves, this defence fails to cut ice

I

for two reasons. Fjirst, the strugglebetween the politician and thebureaucrat is often about who will wieldpower. In a dem0cracy, it is thepolitician that is ultibately answerable

1to the people and ilierefore should begiven greater latitude. He is after all theone subject to the ~ost draconian hireand fire policy: elJctions every five

Iyears. In contrast, tlie lAS officers areaccountable to no one.

. I . .

Second, in the struggle for power,sometimes thJ bureaucrat himselfplays tactically, tying the

politician in the complex regulatoryknots about which hb invariably knowsmore than the latterl Acutely aware ofthis fact, some polit~cians retaliate withthe only weapon they have-transfer ofthe non-compliant 9fficer to a positionthat preserves his grade but otherwiserenders him powerless. Harideo Joshi,perhaps the most dynamic ChiefMinister to lead Rajasthan, used to

I

confide in his friends that the secret ofhis success in getting things doneswiftly and efficien~ly was his formulaof two Ws: knowing 'What' needed tobe done and 'Who,1 could do it. If anofficer tried to throw regulatory hurdlesin his path, Joshi would pack him out

I

and look for an officer who would jumpknew how to jump the hurdles.

Indeed, one important reason whythe officers feel maligned by thepolitical interference is the absence ofcompetition. Competition is a two-waystreet. In a system in which at leastsome of those who fill the top positionscome and go, the ability of politician to'punish' them is curtailed. By actingarbitrarily, they risk losing their bestofficers. Part of the problem today isthat when an lAS officer is wrongfullyexiled to fill an inconsequentialposition, lacking any specialized skills,he is unable to threaten exit from thecivil service altogether.

The way forward

Two countries with political systemsand civil services very similar to thoseof India that have tried. civil servicereforms are New Zealand and U.K.Traditionally, sacking and lateral entrywere extremely difficult and unusual inboth countries and the salary wasunrelated to the performance. NewZealand carried out a wholesale reformin the late 1980s by breaking up itshomogenous civil service into a set ofseparate departments and state-ownedenterprises. It placed a chief executive,appointed on a fixed-term renewablecontract, in charge of each of thesecorporate units. The chief executive wasmade the legal employer of all staff inhis unit with responsibility for hiring,firing, salary and discipline.Symmetrically, he was required to entera performance agreement with hisminister for the output he was expectedto produce.

The U.K. reform has been lessdrastic in that it did not disband thecareer civil service. The key changeintroduced beginning 1989, was tobreak up the civil service into coredepartments and executive agencies.The departments were entrusted withpolicy setting, resource allocation and

••regulation responsibilities and executiveagencies with service delivery underconditions specified in the frameworkagreements they signed with thedepartments. The agency chiefexecutives (and some otherprofessionals) came to be appointed onfixed term contracts and could be fromeither the regular civil service oroutside. Their salaries were de-linkedfrom the regular civil service salaries atlevels substantially higher than thelatter. The departmental civil servantsretained the traditional tenure-typecontracts.

In India, it is unrealistic to expect adrastic, New Zealand style civil servicereform. But experiment.ation with somechanges at the top is highly desirable.One minimalist approach would be toconvert all secretary and equivalentlevel positions (except perhaps thoserelated to the mainteIl,mce of law andorder and basic administration) at theCentre and states into fixed-termpositions with negotiable salaries andexplicit contractual obligations. Thepositions could then be opened to bothinsiders and outsiders based on a set ofpre-specified criteria. Such a changewill attract talented outsiders in theacademic, business and financial fieldsto the top government positions. Ifproperly administered, it will also allowthe most talented offilcers within theService to move to the top faster andthus infuse greater dynamism intopolicy making. Based on performance,contracts may be renewed. Thoseappointed from any of the civil servicesto these positions may be given theoption to return to their regular civilservice upon completion of the contract.

A I have argued for some yearsnow, my own preference is formore ambitious approach that

. opens all positions at the Joint Secretaryand higher levels at the Centre (andequivalently in the states) to competitiverecruitment. The key additional

YOJANA August 2005

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~antage of such an approach is thatit would encourage the most talentedyoung men and women to move backand forth between the government andoutside employment. Just as in SardarPatel's time it was crucial for theofficers to move back and forth betweenthe Centre and states, today, it isimportant for them to have the insideknowledge of both governmental andnon-governmental worlds.

Currently, since there are no lateralentry points, the decision to enter thetop civil service must be made at anearly age. If lateral entry is available atthe senior level, an individual can takeup a position outside the government inthe early part of his career and yet enterthe government later. Alternatively,under the current system, once anindividual has entered the Service, thecost of exit is prohibitive since he willnot be able to return to a top positionin the government again.

It is important to understand in thearea of civil service, the reform cannotbe piecemeal in the sense that one entryhere and one there to outsiders willproduce no change whatsoever. On thecontrary, it will give the reform a bad

name. The Service functions like amonopoly and it is r~latively easy for itto isolate solitary outsiders sucp. thatthey are effectively reduced to spendingtheir time reading the newspapers orwriting their research papers.

The entry of outsiders will have tobe complemented by two additionalsteps. First, even when the positions arenot opened to outsiders because the lASofficers have the right qualifications, itwill be desirable to precisely andexplicitly define the duties andqualifications of officers at the JointSecretary and higher level at the centreand Secretary and higher level in thestates and make this information public.This will make the senior officers moreaccountable to the public. Second, it ishighly desirable to start pruning theservice through a more rapid exit in thecase of irresponsible officers andreduced entry at all levels. The pruningshould also be accompanied by thephasing our of many superfluouspositions.

At the local level, there is no reasonfor the lAS or other civil servants torule. For example, the collector, 'sho isan lAS officer, currently rules at the

district level. The lAS officer is knownto commonly complain that the localMembers of the Legislative Assembly(MLAs) constantly interfere in theaffairs of the district. On the one hand,one can be sympathetic to the view thatthe officer cannot run the administrationsmoothly if the local MLAs fromdifferent parties pull him in opposingdirections. But on the other hand, 'theMLAs are the elected representatives ofthe people. The point is that in ademocracy, the elected representativesshould head the administration and it istime to consider making that transitionat the district and block levels.

The specific suggestions I havemade are not panacea and thegovernment will need to do a great dealof homework before it proceeds toundertake the reform. Yet, one thing iscertain: some reform that subjects theService to greater outside competitiongives increased role to the specializedtalent, is required. If you are notpersuaded, I challenge you to go andlook for the defenders of the Service.Chances are you will not find any. Andwhen you do, they will likely be themembers of the Service themselves! 0

?' ~ ~~o~ _'::"/ ,

_NE~J ;10 C~ange.CJ~erLa~sJo <~nsifresecre~~: PM. ."-~ ~ '"" ~~~~ ~~ ,

In ili~ backdrb'pof'a stiong byqg~~rnmenf}'a,~a'industryr;'t,?'deal.' . ba,f@ash agairis.t.;ihe outsourc~g,wi '.. .ber c~im~in;HeSonven;e~;the

Britain's The.Sun. newspaeer meeting':following ..ihe6ontrov~r~y.overpublishe<ia story alleging that aitIT., M the;le~~geof pers9naijnfoim~tion'6fworker:ln Delhi sold its repm'ter UK c~st6rri~rs. .' ~n.' ....,..confidential information on back Giving'details;'MediaAdvisor toaccouIlts,credit ca~d d'etail; an'd PM,.MrSanjaya'13aru said the PMpersoIlal' d'ata of"1000 Briti,sh askedtl'rDepartrn~~fand NASSCOMcustorriefs f~r$ 5600.; .;.; ..' t06(HISUlt,all sta~e,~Oldl::rsan~ give

Co~gerned ()ve~;jnstancesi.~f s~ggeS!~()nsfor""h~es ill'th~n~~istingleakage (jfpersonal i~ormation intpe biws,:"Heasked'thern;toensureih~t.there ..datapr~cessing in~~stry, the Prime ". reach~:. ecrl::cy,k~legalMinister,:Dr,Manm~han.Singh caIied of"co~lne,rGial.ari' ther. for changes in cyber;lawst0n1<lkednforrrla11b"n and atherillegal~tanster ofdataapunispahle formlJer crl . (1;to m emoffence and also 'en~t1re data secre9Y'pu ". . . . ','off~ri "riecd~

DrSingtireviewl::~th,e' stepsta1(eri I)t~:S:fl1ghY:srp the~~,;'O:" "A::'--'<X::"}_;' "

YOJANA August 2005

mai~tain highquaIity, confide.ntiali~yar;:d reliability hI the data processin,gbusiness. "Indianprofessiomtls have"built' theinsel ves:an enviable global:'

0',_" C • ,/ , ,'<

reputation through hard:\Vorki'\dedication and commitmentaIld theoccasional misguided lots oJ someindividuals should not be allowed todamage the high reputati6n- of allpiofess~onals", h~ said. ."':";",The!' NASSGOM Presidentl\1t\"Kainik who attendedthe~eetiilgi;aloQg with Union ITSecr~tary~;:Brij~h Kumar, assured Dr¥allII10h~";"Si~gh' that .the.'hl.dian .•••data. pr~~essing~iIldustry was fullycorrimitted tBensl.1te 'the:~ghest standflrd of data~fiv~c,y.

13

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14 YOJANA August 2005

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A Quartet on AdministrativeReforms

YRK Reddy

Economicreforms with ahuman facedo not

necessarily resultin welfare. It isadministrativereforms thatneed a human. .vIsIon

IKE MANY other aspectsof life, administrativereform is a journey and nota destination. The journeyhad. begun from the time

State was conceived and hastened, whenKautilya (Prime Minister ofChandragupta-32l B.C.-296B.C.) gaveshape to the principles of administrationmany of which are still valid in spirit.However, the journey has been ratherslow in the post-Independence era andin spurts at inflection points of politicalnecessities. Even the content of theannounced reforms have rarely beenoriginal in the post-Independence era.The British influence has not abated asis seen in the movement from public"administration" to public "management"assuming large scale corporatisation andacceptance of management principles thatsaw "citizens" as customers and had theindelible imprint of business processreengineering. The market-centricframework of the multilateralorganisations has also become dominantin the agenda for reform as reflected inthe suggestions for roll-back of the State,lean governments, outsourcingdevelopment of private sector, public-private partnerships, and civil societyorganisation to fill voids, and the like.

Thus administrative reforms are indire straits, if not cesspools, caused bylack of vision and original thinking thatmatches the Indian people, their needsand their unique institutions; lack ofsustained political will and lack ofclimate and competence to deal withentrenched interests. Consequently,inefficiency, red-tapism and large-scalecorruption have become a pandemic. Somuch so, people have lost faith as wellas respect for the polity andadministration despite having no otheroption in a democratic society. The poorquality of governance and high degreeof corruption have drawn adversecomments from all quarters includingthe Transparency International as wellas several Competitiveness Reportsamong nations.

Despite the depressing situation,there are several cases of marvellousreform that have drawn acclaim fromthe global community. These happeneddespite the daunting conditions commonto any reform. They are not characterizedby outstanding knowledge or skill alonebut more by strong aspiration,achievement motivation, great sense ofduty and strong public service valuesamong the concerned administrator.

Mr Y. R. K. Reddy is an expert in Corporate Governance and Advisor to Commonwealth, I.L.O., ADB and the World Banle.

YOJANA August 2005 15

Page 18: Aug Vol49 No8

16

IMuch churning on the political and

administration fronts is required to beable to truly reinvent ai'govenment thatmeets our aspirations. ,As a pointer tothe challenge confronting administrativereform,. the following are four articlesthat might appear dispJate but have the

I

same conclusion-hence the title"quartet". Quartet means, among others,four things that belong Ito the same unitor four voices saying things in unisonto give a special mean~ng.

Reforms and the aJt of plumbingI

Reform of administrative channels ismore important th~n mere policyreform IThe house is almost 57 years old.

We have been drawing water from theground but the overhe~d tank is gettingempty sooner than it Jsed to.The pipeshave rusted and there' are many leaks.At some places the leaks are at the samepoints as sewerage lekks. The residuesand mud accumulated over the yearshave constricted the ~iameter greatlyand the taps get only a trickle thesedays. The trees in the: compound havegrown and the roots have made theirway into the pi~es to take astranglehold. . I

We are using twicr the energy andground water these days and yet, thesupply at the taps is nbw just a portionof what it used to be. We realise thatthere are newer pipes in the market thathave smooth surface I for the water toflow with least resistance. Also, thelines we had made could have beenstraighter with le~ser bends andcouplings. There is a rhajor job on handif we want to live here.

/ . iEconorruc reform ;and developmentstrategies have been full of resourceaugmentation and allocation to new

Iprogrammes and projects. Theirmanagement, like plJmbing, has beenunexciting and had to be dealt with bythe executive at the lower levels.

II

Reform meant changing the policies andnot necessarily the practices, or thepipes. The slew of economic reforms islike designs for the tank and the borewell. What has been lagging behind isthe reform in administration, which is asclogged, rusted, long winded,crisscrossed, leaking and polluted as theold pipes.

Reform in our country has beenwrongly sequenced. It began with theeconomic reforms of the early 90s andopening up of markets withoutsufficient attention to the institutions,administrative processes and channels.In some countries like China,administrative reforms preceded theeconomic reforms and in some, theywere almost in tandem. The efforts atadministrative reforms, which beganwith the intuitive recommendations inthe 60s, have made little progress. Atthe operating level, the organisation andmethods (O&M) sections ordepartments in the government havebeen an apology to industrialengineering science, they were mutespectators to inefficient procedures thatnurtured high transaction costs andreduced welfare. There is very little signof the equivalent of whole scalebusiness process re-engineering inadministration.

Reforms in administration areobviously not easy. Often, softapproaches of selling ch;mge do notwork, as those currently enjoyingpower, prestige, and status will not wantto risk them. This is also obvious fromthe corporate sector. Change and reformcan be brought about by a'strong willedleadership, which must use the softmeasures only for smoother and quickeracceptance than as main levers forreform. The levers for reform areindeed in the power of the leadershipand its management. Intelligentleadership uses power tactically by firstco-opting the elite forces for reformingthe rest of the system. It may, in the very

end, leverage on the rest 'Ofthe systeJ»Jand the public to reform the elitistelements.

Regrettably, our political leadershipwas complacent even when it hadabsolute majority in the Parliament orthe assemblies. The entrenchedbureaucratic system has a cyberneticcharacter-it bends depending on theextent of power wielded by theleadership, which, in turn, sedates thelatter till power is lost. Thus, we havehuge number of people in defunctdepartments. There is little flexibility intransferring and utilizing manpower inactivities, which result in revenuemobilization or useful service to targetgroups. We have business rules andprocedures that beat all logic ofmanagement and engineering. The ruleslanguish along with several schemesthat are announced every year as part ofcompetitive populism. Schemes, rules,procedures and forms survive even asthe new ones add to the mindlesslabyrinth.

Development and growth are nolonger a function of publicpolicy choices, programmes

and resource allocations. They appearto be more dependent on how quicklyand effectively the channels are redoneand processes reengineered - with the.farmer, deprived and the poor in focus.Economic reforms with a human facedo not necessarily result in welfare. Itis administrative reforms that need ahuman vision an:d an aspiration toimprove the situation where it mattersmost. While some states havegovernance projects with fancy names,these have remained in relativelyunthreatening but highly visible areas.A few showcase studies andinternationally saleable stories ofcomputerised services will not changelife for the majority of people. Total re-plumbing of administration is.warranted-keeping the delivery targets,

YOJANA August 2005

Page 19: Aug Vol49 No8

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The steel frame will fight any reff},1J!1J.that hurts its interests, as the record"n "t' f' 'r' ' • J' P"', .!'" ; r" ,;,.;,; '.1"&howi"" tJIJ L),••1 11,.)\,'J('.LJ l"'! ,,;.f.,IJJ.;~1.

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Page 20: Aug Vol49 No8

first ARC (1966-70), whose criticalrecommendations have not beenimplemented. Apartl from the PayCommissions, in which administrativereforms are also cov~red, directly orindirectly, we had five committees inthe past four years, 106king at various

f "1 I. faspects 0 CIVI serVIces re orm.I

Experience since the 50s tells us thatsome convenient recommendations are

1

selectively accepted, without disturbingthe power structures land entrenchedinterests in civil services. There is 'steelframe' that eventually cages every such

• • .1COmmISSIOnor commIttee.

I

The Indian Admin~strative Service(lAS) was once described by SardarPatel as the steel fdme. He foughtvehemently for its I constitutionalprotection, for it to be able to exercisean independent voice for the benefit ofthe people and as a cMck on misuse ofpower by politicians. [ .

This framework, comprising4,200 servin~ officials, hasbecome I cybernetically

intelligent. As in the Terminator seriesof movies featriring ArnoldSchwarzenegger, the metal can take any

Ishape intelligently and protect itself. Itquickly occupies impohant slots, just as

I

liquid metal flows into any crevice,even those meant for the judiciary andthe scientists. It fight~ all intellectuals,

. l' d d I .specla IStS an omam experts asI

foreign bodies and meticulouslysubjugates all cadres,] by dynamicallyarranging the peckinlg order. It mustcome on top, each bme and every

• Itime.

Criticism is discohnted as acts ofprejudice and env~. Jibes, darts,

I

recommendations don't hurt thisintelligent frame. It iS

Ia marvel and an

inspirational modell for the rest ofbureaucracy. It sets tlie conditions andstandards for accept~ng and resistingreform. It overwhelms inexperiencedpolitical leaders. It makes political

18

leaders realize they are truly birds ofpassage, that must gather their wormand flyaway; it may even help the birdsgather the worms effortlessly. It dashesany ambitions for reform, bydishevelling new brooms and reining-inenthusiastic leaders, one way or theother. It will reform only thoseprocesses that do not hurt its largerinterests. The paradox is, the leadershave to rely on this very steel frame forany reform, while it refuses to shootitself in the foot.

The first ARC had given severalrecommendations to reform thegeneralist service to a specialist one.Except for the handful of officers whoassiduously pursued specialisations andemerged as worldclass professionals ineconomics, IT, public enterprisemanagement, energy, disaster and urbangovernance, the service remains super-generalist. The stream of intakecontinues and the attempts of the 70'sfor lateral entry have been largely givenup. Thus, it remains an exclusive order,that controls much of the economy.

The steel frame could be exclusivein another sense. According to a 1985study, the quotas for the SC and STcandidates were continuously unfilledand the data remains masked. Whileother minorities are over-represented incomparison to their population,Muslims are grossly underrepresented.Among the Hindus, upper castesaccounted for 68%. Shudras were amere 2%, with the largest contingentform AP. Women were under 8% of thetotal. With the concomitant urban bias,decisions may indeed be tilted towardsthe interests of the rich and powerfulthan the masses. The Alagh committeehas reportedly commented on the "rulermindset."

This steel frame has also insulateditself from the Central VigilanceCommission, as noted in a CVC studytitled 'The Indian Administrative

. ':w..)ServIce - A Study of the Current State'of Preventive and Punitive VigilanceMechanisms.' We now need a super-intelligent and mighty body forconceptualising and implementingreform. A permanent commission thatknows meta-reform. It must be hands-on, to stop fresh recruitment andgraduate strategically to a system ofspecialist streams and new cadres, withpossibilities of lateral entry. This is theonly way to bring in more relevantorganisational designs, diversity,accountability, public service values andenthusiastic performance, -toSUPPOFl- thelarger goals of development, equity andjustice. But then, the steelframe wouldhave factored this also by now!

Re-orienting Diplomacy

In a highly competitive businessscenario, it can provide specialadvantages

Michael Porter had described theimportant role of the government in hisseminal work on the competitiveadvantage of nations. In a later article,he had also drawn lessons fromcountries like New Zealand andgeographical regions such as CentralAmerica and Middle East. The basicroles of the government, he envisaged,include achieving macroeconomic andpolitical stability, improving themicroeconomic inputs and institutions,creating incentives and rules thatstimulate productivity innovation,fostering cluster formations andestablishing a challenging economicvision and action programme whichmobilizes government, business andcitizens. Recent conclaves onglobalization and governance alsoacknowledge the increasingly criticalrole of the government, in one form orthe other.

Porter called for the transformationof business and government interaction,from 'episodic lobbying' on specific

YOJANA August 2005

Page 21: Aug Vol49 No8

~ues, to more sustainable mechanisms.The current approach of governments,which is adversarial and paternalistic,must give way to a consultativedialogue on competitiveness, herecommended.

While much of his argument was todo with productivity-based competitionarising from within a geographicalregion, there are other planks forgovemments to support competitivenessin increasingly integrated markets of theworld. This has been indirectly shownin the matter concerning Airbus andBoeing. The rivalry betwe~n the two isa case study in commercial diplomacy.

Some believe that diplomats of theUK, the USA and France lobbybetter than the others to promote

the interests of their industry. Chinamay already be in the same league.This effort is different from thetraditional commercial diplomacy, oflethargic and patronising answers,signing ceremonies, maintaining theexim directories, or holding the rulesfor PDI. It is strategic. I recall the fIrstsecretary of an important HighCommission in India meeting severalpeople just to assess the pools ofknowledge in the biotech sector thatmay be underutilised or half-done andforgotten. He was strategising for hiscountry's efforts to take a lead in the

biotech space on behalf of theindustry in his country.

In a hyper competitive environment,business-government collaborationmust extend to special advantagesderived from the diplomatic channelsand presence. The next round ofcompetition may indeed be on howintegrated, fast and strategic thesechannels are. The competenciesrequired are a thorough understandingof the local markets and demand-supplydynamics; key competitors in importantproduct-market segments in whichIndian business has advantages;opportunities for strategic investments,joint ventures, acquisitions and largeexports; way to capture the mindsharefor Indian businesses on a competitivefooting; abilities to promote India-brand; get information on industrythreats and opportunities faster thancompetition and the like. Are theEmbassies and High Commissionsstructured and manned competently tocater to these needs?

The traditional roles and lowimportance given to the commercialfunction may not have changed despiteliberalisation, especially after theremoval of quantitative restrictions.Further, the Euro-US centrism inthinking may not have loosened, despitethe phenomenal opportunities availableelsewhere in the world. China appears

to have appreciated the importance ofsqueezing opportunities from whereverin the world. Further, undue attention toindustry poster boys would not havegiven way to helping the medium sectorand the small time exporter. Industryassociations also may have contributedto this sclerosis by continuing to beDelhi-centric lobby houses rather thanimproving competitiveness.

It's time the Ministry of ExternalAffairs benchmarked the Embassystructures, staffing, competencies anddeliveries with those who areaggressively promoting their industry. Itmust think of a delivery system thatcomprises an India-based strategicresearch/think-tank as back-office andan ace team at the delivery points,comprising specialists in businessstrategy, corporate advisory andfinancial advisory. This may needretraining the existing diplomats, aswell as new staffing criteria. Carl vonClausewitz implied that war was acontinuation of politics by othermeans. Now, diplomacy can indeedbe promotion of business by othermeans! 0

(This article is a synthesis of four articlesof Prof Reddy which appeared in theFinancial Express. It has been reprintedwith the permission of Indian ExpressNewspapers (Mumbai) Ltd. All rightsreserved throughout the world.)

'A~;~1~~t~~~~"<'" hav~,,<:~oDJet g to l~ok

:'fo~:~d ,.to. ~"animPr"< t ini~~~ve..aiili~dat 'a~dj"essing:t1l~<frobIe~s~6fsbcio~:econ0mJi~ disP~Tityamg~gtrib,~s, the g~tedPr()g;ess' Alli~ce;gov~rnmentat~the Ce.ritfe,has syf~pa'Cabin~t CObilllitteeon::'frlbal. Affairs(CqIA).' ,.;;;'" /,:~'

'fhe:ne and, headed b~~theJi I:;~ ,0'",'> ,", - ~;>_'.';; y, -"E'.' --'~

YOJANA August 2005

'>if':» Cab:i~Ft Com~ittee o~\;:Tribal:AffaiS~will eX~rrllne possibility o(

:;;'::intr()ducitig a .l~w.tb protecCtriba{!... rights.,rl

:%?;;'fF <;:,

;JJ!~ Add~~~s proble~sof lari~reforms.';J: . in tribaldomiliated areas

::~ Examf~e possib,I,fityof gi~i~g land~'.~:.' owniIlgpghts to tribals ..

~,'rq-" -

19

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Changing the MindsetHasmukh Adhia

Government workers have often farmore flexibility than they use.Government culture, however,discourages them from using it. Thereare few rewards for success beyond theintrinsic satisfaction of a job well done.There are, however, large risks infailure, ranging from attack in the mediato criticism in the parliament orassembly. The culture thereforediscourages government employeesfrom attempting anything notspecifically required, instead of

encouraging them to experiment withanything not specifically forbidden.These conditions make the governmentpainfully slow and too rigid in dealingwith rapidly changing problems ofgovernance.

The government employees areknown to be control-freaks, negative,objective and procedural. They haveimbibed a culture in which there is astrong belief that nothiJIlg can be doneto improve the governance and that itis safe not to be too pro-active. Mostemployees would like to do only asmuch as he is required for retaining hisposition and not being affectedadversely for promotion. This is truer ofpeople in the lower rank of bureaucracy,particularly the Class-HI and Class-IVpeople who are at the cutting edge levelof delivery of services by thegovernment.

Everyone in the country nowadays istalking of good governance andadministrative reforms but, very fewpeople realize that the key to goodgovernance lies in changing the mind-set of employees. In the background ofthe fact that such a negative mindset ofgovernment employees is the result ofcomplex work culture in thegovernment, there does not seem to bean easy solution to this problem. It

AVING A government thatworks is one of the biggestchallenges before allcountries of the world.When it comes to finding

the reasons for non performance,bureaucracy is by far the easiest targetof politicians, press, and people. Justprior to the passage of the Civil ServiceReforms Act of 1978 in USA, theNational Journal (USA) began anarticle about bureaucratic reform thisway: "Bureaucrats. If you are not oneof them, you probably can't stand them.You figure that they are lazy andoverpaid, that they arrive at work lateand leave early and take long lunchhours. But you can't do anything aboutit, because it's impossible to fire abureaucrat. "

Everyon~ in thecountry n~wadaysis talking 1of goodgovernance andadministrative

I

reforms, but, veryfew peoplf! realize

that the I key togood governancelies in changingthe minUset ofempl~yees

IMr Hasmukh Adhia, MS, is Secretary to Chief Minister of Gujarat.

22 YOJANA August 2005

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(~ctually becomes a chicken and eggstory- which should be changed fIrst-themindset or work culture. But the answerhere is easier than the chicken and eggquestion. Obviously, the employeesthemselves are going to be instrumentalin changing the work culture andtherefore change of mindset has to beattempted first before anyadministrative reform takes place.

E is something unbelievable but it is. a fact that about more than 70 per

ent of the present stock ofemployees (excluding teachers) in thegovernment have not been trained evenfor an hour in their entire career. Asagainst the salary expenditure of almost1,00,000 crore rupees by the central andthe state governments, not even 0.1 percent is spent on the training. Evenwhere there have been traininginterventions, the same has been in thearea of domain knowledge such asrules, regulations and procedures andthat too mainly for Class I and Class IIofficers. Certain categories of staff likedrivers and peons are not covered byany training whatsoever.

The need for changing the attitude ofgovernment servants was felt in the pastalso, but very little has been done so farin the country to address this issue. Insuch a background, the Government ofGujarat decided to address this issue ina big way and undertake a massivetraining of all its 5,00,000 employeesfor change of mindset. This trainingprogramme, which is the largestcapacity building exercise in the entirecountry, is called V -Governance(Vibrant Governance) Trainingprogramme. In Gujarat, it is popularlycalled Karmayogi training, since thisprogramme is a part of fIve-fold HRDinitiative of Gujarat call1ed 'KarmayogiMaha Abhiyan'.

This programme was originallyconceived in June-2003 by the stategovernment. A professional agency was

YOJANA August 2005

hired to undertake trallllllg needsanalysis for employees at all levelswithin sachivalaya as well as in .thedistricts. Focus groups meetings werealso organized to discuss the trainingneeds. At the end of this,' theprofessional agency was engaged forpreparation of course design andtraining manual.

The objectives of this trallllllgprogramme were stated as follows:

• To expose government employees tobe responsive to changes and adoptthem.

• Paradigm shift from processorientation to result orientation.

• To redefIne perspective and contextin order to adopt positive andproactive approach.

• Attitudinal/behavioural change .... asa professional and as an individual.

Based on these objectives a twentyhour course module of training wasdesigned by the professional agency inclose consultation with the stategovernment having the followingcomponents:

• Role effectiveness

• Citizen orientation

• Effective communication

• Personal and interpersonaleffectiveness

• Self motivation

• Improved work processes

This training module was to bedelivered to all government employeesover a period of four days with the helpof one trainer from government and onefrom the agency. The training module ishighly interactive in nature and allowspeople to give vent to their feelingswhich itself results into melting ofemotions and thereby change ofmindset.

A massive exercise of training oftrainers was undertaken. A total of

2,100 government trainers were trainedfrom among government officers andemployees who volunteered for this.Each one of these government trainersdelivered up to six batches of trainingto other employees. By end of March-2005, 1.25 lakh employees have alreadybeen covered under this trainingprogramme, which includes even peons,drivers, stenographers, clerks etc. Thisfigure also includes 25,000 policeconstables. The rest of the employeesare going to be covered by December-2005. A seperate training programme oftraining was prescribed for teacherswhich was delivered to them as part oftheir annual training. Two lakh teacherswere therefore, covered simultaneously,raising this fIgure of trained employeesto 3.25 lakh. The rest of the employeeswould be covered under this trainingprogram by December 2005. So by endof 2005 all 5,00,000 employees wouldhave been covered by this training.

The Sardar Patel Institute of PublicAdministration (SPIPA), the apextraining institution of the stategovernment was the nodal agencycoordinating this programme with theprofessional agency which was alsoengaged in certain logisticsmanagement. All the classrooms andequipments such as overhead projectorswere given by the government while allthe teaching aids were provided by theprofessional agency. The totalexpenditure on this worked out to beless than Rs 250 per employee,including the cost of training manualand logistic management.

Results

At the end of this programme whenwe analyze the results of the writtenfeedback received from these people,we fInd that 49 per cent of employeestermed it as 'Excellent' and 35 per centtermed it as 'Very Good', 14 per centtermed it as 'Good' and only 2 per centtermed it as 'Average'. But more than

.23

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:~DMINISTRATIVE REFORMS ANALYSIS

IJ

Secrecy and GovernanceMoushumi Basu

It is inchallenging the

barriers that existin the name of

secrecy that onecan truly hope to

build a more.progressIvesystem of

governance

HE PRACTICE of officialsecrecy that justifies thewithholding of informationby the State in the name ofpublic interest, presents a

strange paradox. For nothing is sofanatically clefended by the bureaucracyas the practice of official secrecy. Therecent rejection of an applicationseeking information on the number ofpersons executed at Tihar, the centralprison in Delhi, since 1947 by a privateorganisation, is indicative of the generalreluctance to part with officialinformation. In this particular case,information was refused on the groundsthat the disclosure of such informationcould have a 'prejudicial effect on thesovereignty and integrity of India andsecurity of NCT of Delhi.

This sort of blanket refusal,notwithstanding the amendments madein the Right to Information Bill (2005),raises important questions related to thehighly problematic relationship betweensecrecy and governance. Namely, whobenefits from secrecy or whom doessecrecy protect? Where do governmentsdraw the line between what informationshould be kept secret and whatinformation should be made freelyavailable to the demos? Whatdetermines the boundary between

'reason' and 'politics', the point atwhich disclosure ends and secrecybegins? Let us take a look at some ofthese aspects, examining the inherentcontradictions that exist between thepractice of secrecy and the objective ofdemocratic organization, greater publicinvolvement, transparency andaccountability in governance.

Official secrecy as a part of Statepractice has a long history that goesback to the ancient period. Secrecy wasmore or less identified with the personalintrigues of royals and in case ofoligarchies to affairs between smallergroups of men. The onset of democracyhowever saw a more refinedjustification for secrecy in the name ofwider national security.Institutionalisation of secrecy becamesomewhat of a political necessity giventhe compulsions of increasing popularrepresentation that challenged theexisting modus operandi of a closedsystem of governance. In Britaininstitutionalisation of secrecy forexample made it easier for theParliament to regulate the release ofgovernment documents including thoserelated to the affairs of the Empire. Infact the practice of secrecy in India is adirect fallout of the colonial legacy.Archival records of the East India

Ms Moushumi Basu is a visiting Fellow, University of Sussex, U.K.

YOJANA August 2005 25

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Company link the insti~tionalisation ofsecrecy with the I growth andconsolidation of the British Empire inIndia. It is another matter however thatwhile the Official Secr~ts Act (OSA) inBritain has undergone ~everal importantamendments, the OSA in India has

I

remained fundamentally unaltered.

IHistorically, while references to

secrecy may be found in the writings ofKautilya (3 B.C); foi our analysis, amore appropriate reference point wouldbe the year 1683. For it was in that yearfollQwing a brief ~nsurrection in

, IBombay, that the East India Company

I

formally established a. SecretCommittee to oversed its commercial

I

ventures .. Entrusted with the specificresponsibility of i issuing andtr~smitting secret instructions betweenthe Company's offices in London andcolonies elsewhert the SecretCommittee functioned as the

ICompany's War Cabinet till the finaldays of the mutiny of 1857, that

Iformally ended t~e Company'spresidency in India. While previouslysecrecy had been IJrgely a private

Imatter, with the 'resumption ofadministrative responsibilities by theBritish Crown, secreby became truly'official' and its practice an associatedprerogative of the colbnial state.

Itis important ~o note that themutiny of 1857 was massivelyresponsible for th6 establishment of

I

defensive mechanisms whereby theinterests of the Empi~e could be easilyprotected. In the late 1880s when thequestion of 'seditioni acquired a newgravity, the British government reactedby introducing specific legislation onsecrecy - the IndiaJ Official SecretsAct, 1889. By virtue of the fact thatlegislations passed id the name of theBritish Crown becaxhe automaticallyapplicable to the colclnies, the Official

I

26

Secrets Act 1911 passed by the Britishparliament following the Agadir crisisin Morocco, became operational inIndia. Between 1911 and 1923 therewere thus two separate laws on officialsecrecy simultaneously in force in India.While sedition and espionageconstituted definite bases, the practiceof secrecy brought in specific economicbenefits.

Two related examples may be citedat this point to illustrate the strategicimportance of secrecy in theconsolidation and perpetuation ofcolonial rule. The first concerns theexpropriation of resources from Indiaby the colonial state in the name of'public expenditures'; whereclassification of financial documentssuch as those related to Home Chargesas State secrets helped the governmentmanipulate its accounts in such a wayas to hide the wasteful expenditureincurred under 'borrowed' heads. Thesecond, concerned the regulation ofinformation on an event of strategicimportance - the Bengal famine (1943)and official responses to it, thatincluded diversion of food crops fromother parts of India to troops abroad,leading to severe food shortages andthe death of nearly three millionpeople.

Keeping this historical aspect inmind the Official Secrets Act as it existsin India today is largely a replica of thecolonial law. In that sense it is indeedironical that a practice that in partsupported the project of colonialismwas adopted without questioning itsrationale in post independent India. TheOfficial Secrets Act 1923 prescribeselaborate penalties for unlawfullypossessing and transferring a range ofclassified documents, sketches, models,plans and so-called sensitiveinformation onto third parties. The Act

also empowers the State to prosecu~persons on grounds of mere suspicion.,Additionally it also gives courts thepower to conduct its proceedings inprivate if need be, depriving the accusedthe relative advantage of a pu\>lic trial.The following paper examines some ofthe consequences of official secrecysuch as the growing contradictionsbetween transparency andaccountability and secrecy ingovernance to illustrate the dilemmasposed by the code in practice.

The overwhelming secrecy andmystification with respect toeconomic policy in India,

especially negotiations relating tostructural adjustment serves as arelevant illustration. Secrecy in therealm of economic policy is recognisedas a legitimate exception to the lawpertaining to disclosure of information.Section 8 of the Right to InformationBill (2005), exempts the State fromdisclosing trade and commercialsecrets, the disclosure o.f which wouldprejudicially affect the sovereigntyand integrity of India ... strategic,scientific or economic interest of theState. This effectively means that theState has the powers to effectivelycurtail discussion on importantaspects by exercising control over therelease of all information related toofficial policy.

The absence of readily availabledocumentation in connection withstructural adjustment constitutes arelevant example. StructuralAdjustment in 1991 it may be recalled,was introduced practically without amajor public debate on the subject. Thesame was the case of the Social SafetyNet (SSN) operation financed inDecember 1992. In both cases becausethe loan agreements were treated asstate secrets protected under the OSA,

YOJANA August 2005

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f.e was no binding obligation on theState to disclose the terms of referenceof the negotiated settlement. TheSupreme Court of India has in effect byexcluding economic policies from thepurview ofJjudicial review upheld thelegality, foreclosing all futurepossibilities of public litigation on thesubject of economic reforms.

Te peculiar case of restrictionson topographical mapsprovides another relevant

illustration of the same. The sale,publication and distribution oftopographical maps used extensivelyfor development planning the worldover are legally 'restricted' in India.While such restrictions were oncereasonable, imposed by the Britishwith the sole motive of consolidationand preservation of the Empire; theavailability of satellite imagery today,on sale in shops abroad, makes-restrictions on the sale and publication oftopographical sheets in India totallyredundant. Data collected through remotesensing, for every country in the world ismarketed on a commercial basis acrossthe globe. Thus while topographicalsheets of the Himalayan region maybe'restricted' information in India, the sameis freely available for public consumptionin the United States of America.

Similar examples exist in otherspheres of social life. In 2004, theSupreme Court of India for exampleturned down a petition that soughtdisclosure of information on thepurported safety violations and defectsin various nuclear installations andpower plants across the country. Thedemand for information on the subjectwas made after a report prepared by theAtomic Energy Regulatory Board thatdocumented about 130 safety relatedcases including serious accidents incertain nuclear plants in India, wasleaked. In its judgement, the Court

YOJANA August 2005

while acknowledging that citizens hadthe right to know, justified therestrictions placed: 'a matter, assensitive as the above, could not bemade the subject matter of a right toinformation.' It upheld the fact secrecyexecuted in the interest of publicsecurity constituted a justifiable and alegitimate exception to the general ruleof disclosure.

Which leads us to the importantquestion as to what constitutes a'reasonable' restriction. While legally.the right to information is a fundamentalright under Article 19( 1) of theConstitution, Clause (2) of the samearticle gives the State the power toimpose 'reasonable restrictions' inpublic interest. In other words, legallythe right to information is not anabsolute one. The State has the legalprerogative of imposing restrictions 'inthe interests of sovereignty and integrityof India', without necessarily qualifyingthe threat that justifies such action. Thechoice madeis largely a subjective one,as there exists no objective criteria fordetermining what constitutes'reasonable.' Section 8 of the Right toInformation Bill 2005 for exampleprovides for restrictions on the generalpolicy of disclosure which includesamong others :

• information, the disclosure of whichwould, prejudicially affect thesovereignty and integrity of India,security, strategic, scientific oreconomic interest of the State,relation with foreign State ...

• information, the disclosure of whichmay result in a breach of privilegesof Parliament or the Legislature of aState ...

• information, including commercialconfidence, trade secrets orintellectual property, the disclosure ofwhich would harm the competitiveposition of a third party ...

• information received in confidencefrom a foreign government...

• the Cabinet papers, includingdeliberations of the Council ofMinisters, Secretaries and otherofficers.

While the 2005 Bill marks a distinctimprovement over the Freedom ofInformation Act 2002, yet one cannotbut ignore the similarities that existbetween the old text and the new. Forexample, clause 8 of the Bill containsalmost similar restrictions to clause 8 ofthe previous act. As a result,notwithstanding the changes that havebeen made, many aspects of daily lifecontinue to be governed by the code ofofficial secrecy. While globally therehas been a distinct move to revokerestrictions placed on the disclosure ofinformation in the name of secrecy,unfortunately in India, the progress onground has been slow. The discussionon secrecy today is not simply about theneed for increased public involvement,but rather the case for greater publicengagement in areas itraditionallyfalling within the legal bounds ofsecrecy.

What is peculiar about theIndian case is the fact thatwhile the law in Britain has

undergone several amendments, therehave been very few changes made in theoriginal law pertaining to secrecy inIndia. The release of the official files bythe British government on the famousBlack Wednesday' (September 16,1992) episode, that saw the exit of thepound from the European ExchangeRate Mechanism (ERM), under therecently amended Freedom ofInformation Act, illustrates changingsensitivities towards secrecy in Britain.The d'ocuments reveal significantdisag~ee'!llents between MargaretThatcher and the Chancellor of the

"I

, ~xchequer Nigel Lawson, over Britain's

27

Page 30: Aug Vol49 No8

Idecision to join the ERM; the failure of

I

the succeeding government to make arealistic assessmeni of the potentialimpact of German Jnification on theBritish economy; laek of contingencyplans to deal with thelcrisis over interestrates (recession at home required lowerinterest rates while tJe need to keep the

Ipound within the ERM band requiredhigher interest ratJs); the Bank ofEngland's ill-advisJd move to spendaround $ 39 billion (ilpproximately £ 20billion) in purchasiJg pounds and the

Irecord loss of £ 3.3, billion in a single

Iday of Treasury m9ney.A case for similar disclosure of

negotiations leading to specific policyframeworks exists infIndia too. Many ofthe important ~iles concerningdevelopment in the early years ofIndependence remmA undisclosed to this

I

I

28

day. These include among others Cabinetfiles related to important policy decisionssuch as the rejection of the BhoreCommittee report, advocating a nationalprogramme of comprehensive primaryhealth care. In a society as economicallyand socially stratified as ours, the right toinformation has the potential to be acatalyst for social change. At presentwhere control over information assumesthe dynamics of a distinct power relationinvolving the abuse of position, money,muscle power; a right to information canserve as an instrument of real powerespecially for those who suffer itsconstant denial, on a daily basis.

The view that access to informationis a right is predicated upon therequirement of accountability, which itis argued, will be meaningless unlessexists a legal right for people to access

information. Disclosure of informa*in such a framework is identified as asocial good, creating the conditions andthe space for more informedparticipation by the collective in theprocess of policy making. In otherwords, disclosure works as anempowering tool for people to havecontrol over the direction of thedevelopment process, rather than simplybeing consulted about projects orpolicies decided elsewhere. The issueconcerning secrecy and governancetoday has more to do with the area orinformation the governments choose toopen up for wider public deliberationand scrutiny. And it is in challengingsuch barriers existing in the name ofsecrecy that one can truly hope to builda more progressive system ofgovernance. 0

YOJANA August 2005

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Corporate Governance in PSEsSM Dewan

Corporategovernancehas emergedfrom obscurityinto being acentral issue

in thecorporateworld

ORPORAlE GOVERNANCEhas fast emerged as abenchmark for judgingcorporate excellence in thecontext of national and

international business practices. Fromguidelines and desirable code ofconduct some decades ago, corporategovernance is now recognized as aparadigm for improvingcompetitiveness and enhancingefficiency and thus for improvinginvestors' confidence and accessingcapital, both domestic as well asforeign. What is important is thatcorporate governance has become adynamic concept and not static one.That is, countries and variousdevelopment agencies are striving tomake continuous improvements in thecorporate governance,.p,ractices to suitchanging business environment as wellas adapting it to individual businessatmosphere.

No one doubts the importance ofgood corporate governanc~ .. It hasassumed even greater iinporttffice after.' .the recent collapses of Enrdn': in theUSA, HIH and Onelel in AustHilia andhas stimulated considerabl~.' debate

j

about the importance of effectivecorporate governance in the privatesector. Following from 'theseexperiences, good corporategovernance practices are being

increasingly adopted for public sectorenterprises. As recent as last week, theOEeD . has adopted corporategovernance guidelines for state-ownedenterprises that are basedon its generalguidelines of corporate governance, butspecifically designed keeping in viewissues and concerns of state ownedenterprises.

While the term 'corporategovernance' has no single accepteddefinition, it is generally understood toencompass how an organization ismanaged, its corporate and otherstructures, its culture, its policies andstrategies, and the ways in which itdeals with its various stakeholders.Good governance requires a holistic,integrated approach to implementingthese components. The real challengefor any country or an organization is notsimply to define the various elements ofeffective corporate governance but toensure that they are holisticallyintegrated into a coherent corporateapproach by individual organizationsand well understood and appliedthroughout those organizations. Ifimplemented effectively, corporategovernance should provide theintegrated strategic managementframework necessary to achieve theoutput and outcome performancestandards required to fulfillorganizational goals and objectives. It .

Dr S. M. Dewan is Director General, Standing Conference of Public Enterprises (SCOPE).

YOJANA August 2005 29

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governance codes in order to faci~strict implementation of the setguidelines and thus avoid Enron kind ofcases in future. Accordingly, in Indiatoo DCA appointed Naresh ChandraCommittee, the report of which becamebasis of the Company's (Amendment)Bill 2003.

Keeping in view the dynamic natureof business development, the SEBICommittee on corporate governancechaired by Mr N.R. Narayana Murthydrew up a series of recommendations tomake corporate governance practicesstricter in India. Preamble of NarayanaMurthy Committee Report says,"corporate governance is the acceptanceby management of the inalienable rightsof shareholders as the true owners of thecorporation and of their own role astrustees on behalf of the shareholders.It is about commitment to values, aboutethical business conduct and aboutmaking a distinction between personaland corporate funds in the managementof a company". Subsequently, inOctober 2004, SEBI came out with therevised Clause 49 of the listingagreement for companies in stockexchanges, giving importance toindependent directors and revampingthe existing reporting practices .

Regardless of which framework isused, good corporate governance inboth the public and private sectorsrequires:

• a clear identification and articulationof the definitions of responsibility;

• a real understanding of relationshipsbetween the organization'sstakeholders and those entrusted tomanage it resources and deliver itsoutcome;s and

• support from management,particularly from the top of anorganization.

Corporate Governance in PSEsInitially, no one gave a thought to

having corporate governance guidelinesfor the public sector enterprises (PSEs),

Meanwhile the Enron debacle in USraised questions about corporate ethicsin the private sector. The Sarbanes-Oxley Bill (SOX) was passed in the USCongress following the Enron debaclewhich brought with it fundamentalchanges in virtually every area ofcorporate governance. Most of thecountries the world over sought to movetowards consolidating the corporate

• Should ensure that timely andaccurate disclosure is made on allmaterial'matters regarding thecorporation, including the financialsituation, performance, ownershipand governance of the company.

• The Corporate Governanceframework should ensure thestrategic guidance of the company,effective monitoring of managementby the board, and the board'saccountability to the company andthe shareholders.

The concept of corporategovernance initially emanatedfrom the Cadbury Committee

Report. In India, opening up of theeconomy in early 90s and increasingbusiness alliances called for adhering tointernational best practices. TheConfederation of Indian Industry (CII),an apex industry body, took upon itselfto establish a set of desirable codesearly in 1997. Later, recognizing itsgrowing importance, Securities andExchange Board of India (SEBI)appointed Kumar Mangalam BirlaCommittee to work on officialguidelines on corporate governance inIndian context. Based on the Report ofthis Committee, SEBI issued guidelines

. on corporate governance which coveredissues like composition of Board ofDirectors, Audit Committee and itsfunctions, remuneration of Directors,Board procedure, etc. The Departmentof Company Affairs (DCA) appointedtask force for establishing a Center forCorporate Excellence to develop atheoretical background of corporategovernance.

OECD has laid down followingbasic principleJ of CorporateGovernance:

Iis viewed as a mechanism of inbuiltcross and checks that ensure

I

dtransparency, competitiveness andefficiency in the dontext of global

Ieconomy.

OECD defmes coborate govemanceas "the system by which businesscorporations an! directed' andcontrolled. The corporate governancestructure specifies the distribution ofrights and responsibilities amongdifferent participant~ in the corporation,such as, the bpard, managers,shareholders and other stakeholders,and spells out the rules and procedures

I

for making decisions on corporateaffairs. By doing tills, it also provides

I .

the structure through which thecompany Objectiv~s are set, and themeans of attaining those objectives andmonitoring perfomiance".

i• The Corporate Governance

framework ~hould promotetransparent and efficient markets, beconsistent with the rule of law andclearly articulate the division ofresponsibility I among differentsupervisory, I regulatory andenforcement authorities.

• The Corpor~te Governanceframework should protect andfacilitate th~ exercise ofshareholder's rights.

• It should ensurd equitable treatmentof all shareh1olders, includ~ngminority and foreign shareholders.All shareholders should have theopportunity t6 obtain effectiveredress for violation of their right.

I

• Should recog?ize the rights ofstakeholders, eStablished by law orthrough mutual agreement and

I . .encourage aqtI ve cooperatIOnbetween corporation andstakeholders in breating wealth, jobsand sustainability of financiallysound enterpri~e.

30 YOJANA August 2005

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~mply because they were earliervirtually run like departmental concems.However, globalization andliberalization of the economic policythat led to opening up of the economyand increased competition vis-a-visprivate sector, both domestic as well asforeign, emphasized the importance ofcorporate governance for the PSEs.Further, the listing of shares of publicenterprises in stock exchanges requiredthem to adhere to the SEBI's corporategovernance requirements mandatory forthe listed companies.

However,when we talk of PSEs,we are talking of enterpriseswhich are very different in

character from the private sector, simplybecause PSEs have dual responsibilityof generating profits as well as meetingsocial objectives. In this context, it is ofutmost importance that the principles ofcorporate governance as developed forthe private sector are not blindlyapplied to the public sector as well.There is a need to appropriately definecorporate governance and adapt them tosuit public sector character not just interms of returns on investment to theinvestors but also all stakeholdersnamely employees, customers andsociety as a whole.

It is a matter of great pride andpersonal satisfaction that India, over theyears, has developed a system thatensures good governance in both publicand private enterprises. Necessarychanges have been brought into fromtime to time to bring our corporategovernance practices in line with theinternationally acclaimed practices tomake Indian industry emergecompetitive and efficient. Listedcompanies fulfill all requirements suchas compliance of SEBI Regulations onCorporate Governance. They arerequired to adhere to new accountingstandards, statutory audit-by-auditfirms, internal audit, other mechanismsrequired in Companies Act andguidelines of Company Law Board.Besides these, independent regulatory

YOJANA August 2005

authorities or boards have been setup invarious se.ctors to impart requiredtransparency to the functioning ofvarious industries. Policy decisions bythese authorities are binding oncompanies operating under thosesectors.

In addition to the guidelines that theprivate sector is required to follow,there are some more systems andmechanisms of compliance, which areapplicable to PSEs only. These are:MOU System, Review byAdministrative Ministry; Review ofAnnual accounts by CAG; Concurrenttransaction .audit by CAG; and,Vigilance Administration by CVe.These mechanisms have served theobjective of ensuring accountability andgovernance. In fact these havecontributed to greater credibility andinvestors' confidence enjoyed by thePSEs.

As long as these additional controlmechanisms have ensuredaccountability and transparency, theyare fine. But, it is experienced thatseveral features of the existing controlsand governance applicable to PSEs areinhibitive in terms of risk taking anddecision making and obstructs theirspeed of response to the businessenvironment. Multiple audits andcontrol mechanisms have beenidentified as obstructions in PSEs'efforts to take on their competitors.

The Comptroller & Auditor General(C&AG) conducts annual audit of allthe PSEs. In addition to supplementary/test audit, C&AG also conductstransaction/proprietary audit. Undersuch audit, the proprietary of thetransaction is subjected to scrutiny. Theauthority of such audit is not specifiedas far as Companies Act, 1956 isconcerned. The basic purpose of auditis to aid the management in addingvalue to the organization by providingthe stakeholders and the managementthe benefits of an independentevaluation. Audit should enable PSEmanagers to develop a new culture of

taking complex business decisions withspeed but without dilutingaccountability. However, it is seen thatmultiple and extensive audits not onlycause delays but also hangs like a'sword' on the head of the CEO anddeters him from taking business risks.In this context, there is a need to reviewthe audit by CAG in terms of its scopeand periodicity.

Similarly, the role of vigilanceadministration in PSEs to checkdeliberate irregularities and financialimprudence is beyond doubt, especiallywhen substantial national resources areinvolved. However, its scope andfunctioning needs modifications so as toallow for quick decision making and todiscourage mala fid complaints. Strictpunitive action is must against all thosewho try to misguide and misusevigilance commission to serve theirpersonal ends.

Intoday's challenging world ofcompetition, PSEs need to besuitably enabled to take bona fide

risks and timely decisions with theconfidence that they will be judged inthe overall context of the businessenvironment and the situation facing theorganization and not singularly by theirfailure in one or two decisions.Unfortunately, the PSEs today findthemselves in a cultural paradigm wherethe existing control mechanisms put apremium on not taking decisions ratherthan on making decisions whereasincreasing competition requires them totake calculated business risks. In thiscontext, the recommendations of the'Committee on Strengthening VigilanceAdministration' set up by the CVCunder the chairmanship of Shri ArvindPande suggesting streamlining of thevigilance system for CPSEs need to beimplemented.

It is evident that the many existingsystems and procedures areincompatible with the efficient andsuccessful operation of the PSEs in anincreasingly competitive economy,which requires them to continuously

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32

rearient themselves!. In' the newecanamic regime, they he being judgedfar their cammercial subcess ~d an thereturns they generate Ion the massiveinvestments in them, A strang andeffective public secto.r requiresdevalutian af full Janagerial and

'al ICo.mmerCI autano.my.,

Public secto.r entitie~ must adhere to. '>

six main principle~ in arder to.effectively apply t~e elements o.fco.rpo.rate gavernance ~o.achieve bettergovernance practices. j

. Three o.fthese elem~nts-lead~rshiP,integrity and co.mmitment-relate to.perso.nal qualities df those in thearganizatian. The o.th~r three elementsacco.untability, integratio.n andtransparency-are mainly a product af

j

strategies, sy~tems; p:olicies andprocesses in place, I "

The care issue cancerning carpo.rateI .:.

gavernance o.f. PSEs fS empawermento.f Baard. The Baard !'s the tapmanagement o.rgan respo.nsible fari~plementatio.n the Ibbjective af anenterprise. It has to. as~ure itself that thecampany (i) is being r?anaged properlyat the technacratic Ilevel. to. secureefficient resa~ce use ,and prafitability,(ii) co.nfo.rms to. the saciety's o.bjectivesexpectatio.ns and valu~s, and (iii) wauldachieve a proper balan~e amo.ng variousstakeho.lders and inte~est grpups.

The princiP.19S af carparate.I gavernance wauld require the'

Baard af Directo.rs af theco.mpany to. exercise the full autharity, Iin th~ go.vernance 0,( the camyanysubject o.nly to. the dili-ection; appro.val

I '.

and general cantro.l aflthe shareho.lders.As nated by OECD (1999) "Gaadcarparate go.verml~c6 shauld pravidepraper incentives far the B.oard andmanagement to. pursrte abjectives thatare in theinte~est af the campany anqsharehalders". i .

The pawer af PSE Baards to. takebasic palicy decibio.ns is marethearetical than real. The baards afPSEs are required to. tke approval fro.m,

I :

.1

the Ministries and Departments they fallunder even far routine day-ta-dayfunctio.ning af the co.mpany.Government appraval, amang athers, isgeqerally required far barrawingsrevisio.n af wages and benefits to.emplo.yees, investment, distributian o.fpro.fits, plans af develapment, capitalbudget, farming a subsidiary campany,el).tering i~ta fo.reign callabaratians andraising equity fram the market. Whatthe PSEs need to. successfully meet thechallenges af co.mpetitio.n areprafessianal baards that areautano.maus and capable o.f providingdynamic leadership.

~eing an par with the campetitars inbOth the damestic and glabal eco.namydemands ~,o.mplete auto.no.my indecisio.n making with regard to. businessadministrat~an like investment in jo.intventures aI;ld alliances, and decidingemplo.yeeco.mpensatio.n packagesincluding incentives far gaadperfo.rmance. That is, the bo.ards' afPSEs shauld be enabled andempo.wered with co.rfJ.plete functio.naland financial autanamy to. facilitatefulfilling business abjectives as per the6nvisaged visian and speedy prajectimplementatio.n.

Same af the impartant issues in'.empawerment af PSE baards includepawer to. acquire and ho.ld shares in anyco.mpany, in India and abraad to.facilitate ~usiness pramatian. Thiscal}ld be subject to. the limits specifiedfor JVs and subsidiaries. Navratna and

. iprofit !Uaking PSEs sho.uld be allawedto. qecide the salary and benefits o.f theempl~yees ..' They sho.uld also. beallowed to. have incentive schemes likepro.fit sharing or ESOBs. They shauldalso. be alia wed to. ratio.nalize them~pawer and design suitable VRS inarder to. sustain their campetitiveness~d profitability:

Once implemented, thesesuggestians wauld imply a truee~pawerment af PSEs. Hawever, theentire exercise. wauld bear fruit anlywith dismantling af the 'co.ntral

mechanisms' that are being used ~pressurizing the PSEs. The co.ntrals canbe dane away with witho.ut diluting thetrue rale and functian o.f theadministrative ministries. In fact, aratianalized and effective system afo.wnership and administrative cantro.lsho.uld enhance efficiency andcampetitiveness af the PSEs and makethem cantinue to. play a bigger role inIndia's ecanamic pragress. Accardingto. the Internatio.nal Federatian afAcco.untants:

"Openness is more than structuresand processes. It is also an attitude andbelief amongst key players, politicians,public servants and otherstakeholders.that information is to be shared and isnot owned by any particular entity-itis a public resource, just like publicmoney or assets".

Ebnef gavern.ance ha.s a very broadreach-go.ing well beyo.nd

anagement. Managing invalvesadministrative, supervisary andfacilitating tasks associated withangaing organizatiana.l aperatians.Thus, management is but lane part afgo.vernance. The Netherlands, Ministryaf Finance o.bserves that 'governmentgovernance comprises management-control-supe rvision-accountability'.That is, effective gavernance makesmanagement accauntable to. its manystakehalders, thraugh apprapriatemanagement structures, repo.rtingrequi\ements, cantral structures and themany ather elements af carparategavernance.

The' Canadian Jaint Co.mmittee anCarporate Go.vernanc,e argued thattransparency (o.r disclasure) is a muchbetter appraach than attempting to.regulate behavio.ur, if ane is seeking to.build a healthy gavernance culture.

Stand~ng Canference af PubJicEnterprises (SCOPE), the apex bady afthe PSEs in India, taak upo.n itself thetask af facilitating them unshackle fromthe unnecessary informal cantralmechanisms. It recagnized the need to.exaflline the carparate gavernance

.~

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'tMues as early as in 1996. It has, in alimited way, sensitized government andthe people in power, variousstakeholders like Members ofParliament, leaders of various partiesetc., about the onerous tasks that thePSEs have to undertake and the need tobestow their managements with fullempowerment. In 1997, SCOPEcornmissioned Prof Y.R.K. Reddy toprepare a perspective paper onCorporate Governance and PSEs, whichwas submitted, to the Government. InMay 2002, the then Vice President ofIndia Shri Krishan Kant releasedCharter of SCOPE Centre forExcellence in Corporate Governance.SCOPE has been organizingprogrammes on various issues ofCorporate Governance and need forempowerment in PSEs from time totime. This year, it chose CorporateGovernance in Public Enterprises as thetheme of the Annual Conference ofChief Executives of PSEs which wasaddressed by Hon'ble Prime Minister ofIndia Dr Manmohan Singh. DrManmohan Singh reiterated hisgovernment's commitment to a strongand effective public sector. He advisedPSEs to adopt good corporategovernance practices which hasemerged as a major managerial andshareholders concern worldwide inorder to enhance competitiveness andperformance. SCOPE is now planningto conduct a five day CertificationProgramme for Directors to sensitizethem of their role as IndependentDirectors on the Board of PSEs.

Over the years, the government hastaken various measures to improveaccountability and autonomy of publicenterprises. The MOD system,cancellation of a large number ofgovernment guidelines, delegation ofenhanced powers under the Navratnaand Miniratna schemes are some ofthese measures. The professionalizationof boards of directors was made aprecondition to ensure that theenhanced powers are used prudently.

YOJANA August 2005

Professionals were inducted on theboards of these PSEs and auditcommittees were also set up.

The issues of corporate governancepractices are seriously looked in by theUPA government for overall efficiency,productivity and competitiveness of oureconomy. It has announced severalmeasures of granting empowerment toPSEs. Setting up of Ad hoc Group ofExperts on Empowerment of PSEs andBoard for Reconstruction of PublicSector Enterprises are another twomajor steps taken by the government.However, much more needs to be done,especially since corporate governanceguidelines are continuously updated allover the world.

Last week OECD announcedadoption of corporategovernance guidelines for the

state-owned enterprises. India will haveto lake note of these guidelines andmake suitable modification in its ownset of practices in order to put its PSEson par with state owned enterprises inother countries. The OECD guidelines,recommended by its Council onCorporate governance in state-ownedenterprises include:

i) Ensuring an effective legal andregulatory framework for stateowned enterprises:

The legal and regulatoryframework for state ownedenterprises should ensure a levelplaying field in markets wherestateowned enterprises and privatesector companies compete in orderto avoid market distortions.

ii) The state acting as an owner:

The state should act as an informedand active owner and establish aclear and consistent ownershippolicy, ensuring that thegovernance of state ownedenterprises is carried out in atransparent and accountablemanner, with the necessarydegree of professionalism andeffecti veness.

iii) Equitable treatment of shareholders;

The state and state ownedenterprises should recognize therights of all shareholders and inaccordance with the OECD.Principles of corporate governanceensure their equitable treatmentand equal access to corporateinformation.

iv) Relations within stakeholders:

The state ownership policy shouldfully recognize the state ownedenterprises' responsibilitiestowards stakeholders and requestthat they report on their relationswith stakeholders.

v) Transparency and disclosure:

State owned enterprises shouldhave high standards oftransparency in accordance with theOECD Principles of CorporateGovernance.

vi) The responsibilities of the boardof state owned enterprises:The boards of state ownedenterprises should have thenecessary authority competenciesand objectivity to carry out theirfunction of strategic guidance andmonitoring of management. Theyshould act with integrity and beheld accountable for their actions.

In essence, these guidelines alsorecognize the need to grant fullautonomy to the boards of PSEs. Thatis, in keeping with the national andinternational trends, the rules of gamesrelating to corporate governance forpublic sector in India need to change.The board reforms or the empowermentof the boards of PSEs should beseriously considered and expedited inorder to help a large number of PSEsbecome global corporations., ..ManyPSEs like IndianOil, ONGC, GAIL,NTPC, BHEL etc have shownexemplary performance despite existingobstructions. What can these and manymore such PSEs can do for the countrywith devolution of full autonomy caneasily be imagined. 0

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J

I

I

Inno'1ative ThinkingGovernment

I

i

•In

Saniay KothariRajesh Bansal

The sqcio-economic I matrixis quite complex

Iand the~e is aneed to Ihave

lateral thfnking.In keepiftg with

I

this reality, theJ

Government ofI

Haryanp, hastaken a number

I

of policyI

initiativesI

HY INNOVATIVEthinking and if at allthere is a need ofinnovating thinking,then why especially in

Government?

The development pattern in theworld in the nineteen eighties can becalled as the industrial era. In this erafive Ms had to be managed i.e. Man,Money, Material, Machines andMethods. In India, Maruti UdyogLimited was established during thisperiod bringing in a new work culture,wherein all the managers/workers usedthe same uniform and shared their mealsin a common canteen. Today's era is theknowledge era and the biggest changehas been the declining importance ofmachines and the growing focus on manand mind and the raw material isinformation. In the new economy, thereal capital would be talent. Informationtechnology (LT.) growth in India ismore talent led and not export led. Asin the early nineties lot of talent wascreated, which was then found handy inthe later years of growth. A study doneby National Institute of Information

Technology (NUT) indicated that by2020, advanced economies like U.S.A.,European countries, Japan and evenChina would be short by millions intrained manpower but the developingcountries like India, Pakistan andBangladesh would have a huge surplusof trained population. The estimateshows that this figure for India wouldbe more than 46 million. Population,considered a liability in the past willnow be an asset provided the people arewell trained. Thus as globalizationperpetuates, jobs will move to thepeople of developing countries from thedeveloped countries either throughphysical movement or throughcommunication channels like satellite,fiber-optics etc.

The mindset in the government hasto change from the role of a directprovider to that of facilitator. In India,till the mid nineties gOovernment wasperceived as a model employer but nowthe government may have to function asan efficient centre fOordelivery ofservices which may have to becomparable with the private sector.

The Haryana Government has more

Mr Sanjay Kothari, IA~, is Financial Commissioner and Principal Secretary, Tourism and Public Relations, Govt. of Haryana andMr Rajesh Bansal is Management Consultant, Haryana Bureau of Public Enterprises.

34 YOJANA August 2005

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before independence. A section of The Government of Haryana insociety is of the view that these Acts December, 2003 addressed thesewere specifically framed from the point- issues and streamlined the procedure

~n three lakh state governmentemployees excluding the personsemployed in state public sectorundertakings. As per PlanningCommission of India figures, this comesto 16 employees per thousandpopulation and is the highest in thecountry. At present, the Government ofHaryana is in the process ofrestructuring/rightsizing its departmentsas well as public enterprises to achievethe larger public interest of providingservices at efficient cost. The field staffat the cutting edge level needenhancement of skill-sets but there isalso the need to bring changes in thernindsets of the people at the decisionmaking level.

In the year 2002, Government ofHaryana took the decision that oneweek training will be compulsory forevery official of Haryana CivilSecretariat atleast once in two years. Inaddition, one week training in HIPAwill be compulsory for each officer/official of Haryana Civil Secretariat oninitial recruitment/promotion to higherpost within three months of recruitment/promotion. The training is organized atDivisional Training Centre of HaryanaInstitute of Public Administration atPanchkula and also at the main complexat Gurgaon.

The emphasis on training is boundto increase the efficiency of staff andrejuvenate them for countering the newchallenges in their job. By the end of2003, almost all the staff of HaryanaCivil Secretariat has been impartedtraining. It is now being planned to givespecialized training in legal matters,policies and accounting procedures ofthe government.

Simplification of Laws!Procedures

In India the major Acts like Indian. Penal Code etc. have been framed

YOJANA August 2005

of view of a foreign ruler. To furthersubstantiate their arguments, theyemphasized that the first fifteen sectionsof most of the Acts give the basicobjects, the rationale and purpose offraming the Act and the subsequentsections from fifteen onwards mentionabout the penalty/punishment in casethe provisions of the Act are violatedand the authorities who could hear theappeal/revision etc. This gives theimpression that the government treatseveryone as a thief unless provedotherwise.

This is further reinforced by theprevalent practices in thegovernment, even after more

than fifty years of independence. Thegovernment asks for an affidavit forevery simple thing like date of birth etc.from the citizen. This means incurringexpenditure ranging from a minimum ofRs 50 to Rs 100 for getting thisaffidavit. In addition to this, the citizenhas to waste a lot of time and energy onthis and in case of an incorrect affidavit,it is seen that no substantial punishmentis given to the defaulter. Similarly, theprocedure for admission to anyeducational institution is quitecomplicated/cumbersome. Even, forclaiming benefit of various governmentschemes lengthy forms are required tobe filled alongwith affidavits and castelresidence certificates. They have to takeassistance for filling up this form andthis at times can lead to petty corruption.

All these instances show that thegovernment officials/ officers/ policymakers do not trust the citizens. It istime for the government to dispensewith such requirements so that it ismore people-friendly and thecommon man does not face this typeof harassment.

for issuing various types ofcertificates.

The significant decisions taken are :

• Powers to issue castel residencecertificates has been delegated toCircle Revenue Officer-cumExecutive Magistrate.

• The Heads of Departments havebeen delegated powers to issuecastel residence certificates forgovernment employees as well astheir wards posted at Chandigarh/Panchkula.

• The Scheduled Caste certificate hasbeen made valid for life andBackward Class certificate has beenmade valid for three years.

• To further simplify this procedure ascheme has been launched to issuethe residency and caste certificateto a student while he/ she is studyingin Class-VIII.

• The procedure for issue of incomecertificate has been simplified.

• The self attested mark sheets, casteand residency certificate can besubmitted at the time of applying foradmission in various educationalinstitutions as well as offices.

• The school headmaster/ head teachercan issue certificates for claimingbenefits of government schemes tostudents in village schools up toclass IX.

These are radical decisions and willgo a long way in making the life of acommon man easier and simpler.

Changing Role

11M Ahmedabad and lIT Delhihave conducted a study and brought

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,

out the India Infras~ructure Report2002. The primary finding of the report. h . IIS t at an ommpresent governmentattempting to do ererything frommaintaining law and order to providing

I

goods and services to people, is notfeasible. The business of thegovernment is to I provide goodgovernance at least cost. These findingsare fully supported bt the present day

I

position in Kashmir and the positionthat prevailed in P~njab during themilitancy in late eighties or earlynineties. There is Ino shortage ofresources in Kashbtir but due to

. IdIsturbed law and order problemgovernance has been adverselyaffected.

Here it can be added that in additionto good governance,! the governmentshould provide basic, infrastructure ineducation and health facilities atsubsidized cost. If w, study the patternfollowed in most of the developedcountries and some 6f the developingcountries, it can be clearly seen thatthese countries rtndertake roadconstruction projects! on a large scaleand levy toll to recorer the cost fromthe users/ common citizens. In tune withthe international trend, the Governmentof India started levying toll on nationalhighways and in retJrn has upgraded!modernized these I highways. Thegovernment has also imposed cess onpetrol! diesel and' the money socollected is used tOifund the goldenquadrilateral project and other roadprojects in the couhtry. The choicebefore most of the g~vernments todayis either to construct roads by takingloans or not to construct any roads.Majority of the goverhments have eitheralready resorted to bption one or areplanning to adoptl option one. InHaryana the state highways and otherconnected roads have been constructed!

Iupgraded by raising loans from

36

HUDCO and toll has been levied onthese roads. Haryana can today boast alarge network of wide and wellconstructed roads. The mindset of thetravelling public has also graduallychanged and they no longer mindpaying toll as now better roads enablethem safer, faster and fatigue freetravel.

Need for Reform

At present, most of the stategovernments have adopted therecommendations of the 5th PayCommission and are facing financialcrisis. In a paper presented by the

Planning Commission it has been statedthe state finances are under severepressure due to substantial increase insalaries, pension and interest payments.Pension liability of 14 major states hasincreased by two hundred times fromRs 100 crore in 1975-76 to Rs 20,000/-crore in 1998-99. After paying forsalaries and interest on previous loans,states have no money left today forplanned development or capitalinvestment.

One of the reason for this financialcrisis is that as per recommendation ofthe 5th Pay Commissions the staffstrength has also to be reduced which

has not been resorted to and as sdresource crunch has been caused inmost of the states.

State governments have beenborrowing to meet the day to daydemand and undertake the developmentactivities for quite sometime. Recently,Reserve Bank of India in a meetingof the State Finance Secretaries hasfixed a ceiling on the borrowings bythe state governments.

In view of the financial crisis, theGovernment of Haryana decided torestructure/ rightsize its departmentslaying emphasis on the followingpoints:

• Remodelling, winding up and mergerof the departments.

• Indepth examination of all the non-plan and plan schemes.

• Restructuring and re-.engineering ofthe government departments/organizations.

As a consequence or "tl1erestructuring exercise of governmentdepartments, the optimal strength ofstaff in different categories of posts ineach ,jepartment has been finalizedkeeping in view the present dayrequirements. As a result there may beemployees in some departments whoare under utilized and in excess of therequirement on the one hand and on theother there may be a requirement ofemployees in other departments. Thestate government has formulated apolicy to enable absorption of surplusemployees in departments wherevacancies exist.

With the gradual integration of theworld economies, the developed as wellas developing countries have startedundergoing vast economic changes.These changes have led to a decline inthe role of State in commercial activities

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~li privatization of State ownedenterprises. In India, till twenty yearsback it was presumed that the CentralGovernment! state government was in aposition to undertake any activity. Forinstance, when the Cotton Mills inGujarat went sic~, the Government ofIndia took over the management ofthese mills and National TextilesCorporation was formed. With thepassage of time it was observed thatrunning these mills was not possible andthey continued to incur losses.

In early nineties steps were taken foropening up the Indian Economy byallowing private investments. It wasrealized that the public sector either hasto perform! financially well or continueto serve the public purpose for which itwas set up in order to justify itsexistence. Restructuring/ reforming ofthe state public enterprises thus becamenecessary.

The Haryana Governmentaccordingly resorted to disinvestmentfrom state owned public enterprises e.g.Haryana Breweries Ltd, Haryana .Concast limited. Rightsizing in publicenterprises which were overstaffed e.g.Haryana State Federation of ConsumerCooperative Stores and also completelyclosed down those public enterpriseswhich were unviable and had nopossibility of revival e.g. Haryana StateHandloom and HandicraftsCorporation, Haryana State MinorIrrigation and Tubewells Corporation.However, keeping in view the interestof the employees affected as a result ofthese measures, the state governmentmade reservation in direct recruitmentof Group 'C' and 'D' posts for retrenchedemployees.

Contract Policy

While considering the restructuringproposals of the departments, it was

YOJANA August 2005

found that there are a large number ofunskilled jobs which could be easilyout sourced/ contracted out withoutcompromising the efficiency, at muchlesser costs as compared to regularemployment. The state government,therefore, decided that the departmentsshould contract out functions such ashouse keeping, gardening, cleaning etc.and resort to rationalization of postsavailable for discharging such functions.The existing employees handling suchjobs may be phased out over a periodof time and such activities/ jobs becontracted out in future.

Ex-gratia Policy

The ban on filling up of vacantposts in the government has beenimposed for more than three years butthis ban is not applicable to 'ex-gratiaemployment' i.e. employment givento the wards of deceased employees.This has created problems as freshcollege pass outs are not getting jobopportunities and in departments liketransport, the number of ex-gratiaemployees is so large that theefficiency has been adverselyaffected. The Government of Haryanain 2003 has come out with the newex-gratia policy and the main featuresare:

• Only 5% of direct posts can be givento ex-gratia employment.

• In case the dependants do not getthe job, they are entitled to Rs 2.50lakh as lump sum amount so that thefamily can subsist.

• Employees in the age group of 55to 58 years will only be entitled forRs 2.50 lakh.

• The wards of disabled employeeswill not get any employment andthese employees will be allowed tosuperannuate.

This policy is likely to benefit allsections of the society.

Education and Health Sector

The State is supposed to proyidebasic education to its citizens. Thebasic education means education uptoclass X and if we extend it further, itcan mean class XII but under nostretch of imagination it can includegraduate studies. It has been observedthat the fee in the degree collegeshave not been increased in the lastmore than 20 years. With the resultmost of the degree colleges are not ina position to provide proper sitting ,lab and library facilities. Due to thesubsidized fee structure all thosestudents who do not get admission inprofessional colleges and are notgainfully employed, take admission inDegree Colleges and pursue graduate/post graduate courses. In this process,they can not be employed in theservice sector and are also notsuitable for agricultural or industrialvocations and become totallydisenchanted.

If we compare it with the West, itcan be seen that these developedcountries provide basic education toall the citizens. The fee structure inthe Universities runs into few lakhrupees per year as compared to aboutRs 1000 per year in India. Thegeneral impression is that in the Westthere are usually three categories ofstudents who enroll themselves in theUniversities.

• Those students who are veryintelligent! bright and getscholarship from the Stat'e/different agencies.

• Those who undergo studies in daytime and do part time work in theevening.

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There is mistrust between the wingsof the Government. The impression ofthe Secretariat wing is that the

It has been observed that iIi most ofthe departments bulk of the work relatesto disciplinary action. It has been foundthat in the large number of employeesare chargesheeted for major penalty,either the draft charge sheet is notreceived from the concerned quarters orproper enquiry as provided under rulesis not conducted for years together. Thiscauses embarrassment to thegovernment and also demotivates theemployees. The government issuedinstructions in 2002 to the effect that asfar as possible action should be takenunder minor penalty and case befInalized within three months for quickdisposal of such disciplinary cases. Thisstep would not only speed up thedisciplinary cases but reduce the officework and ensure discipline in thedepartment. It has further been decidedthat the officer! official who proposesdisciplinary action should also enclose

• In some cases after marriage one ofthe partner studies and the othersupports him! her.

There has been a change in the mindset in this direction in India also. In allthose courses, where job opportunitiesare better, like Bachelor of ComputerApplication or Bachelor of BusinessAdministration the fee charged by thedegree colleges is substantially higherthan the fee charged for plain degreecourse. This fee structure is comparableto the fees charged for engineeringcourses. The Government of India hasalso allowed the colleges to getthemselves accredited from a committeeappointed by them and after this is donethe college is at liberty to fIx their ownfees. In this way the emphasis hasshifted to quality education linked withjob opportunity.

Previously, in India, the fee structurein the professional colleges like theIITs and medical colleges was alsohighly subsidized but in the lastdecade the fees in these instituteshave been raised substantially. It doesnot mean that the poor students cannotundertake these courses but because thebank loans are easily available in theprofessional colleges and the loanamount can be returned after the studentgets the job.

Similarly, in the health sector, aboutten years back the medical treatment ingovernment hospitals used to be free. Ingovernment hospitals only 50 paiseticket was required to be purchased forgetting a personal registration card!ticket and subsequently the x-ray,ultrasound and other tests were free.Though everything was free, thepatients could not avail these facilitiesas the x-ray, ultrasound machiries wereeither out of order or were not workingdue to shortage of films or otheressential items. Today, when modem

38

diagnostic techniques are available, thetreatment is done on the basis of theresult of various test! x-ray ultrasound.consequently, the doctors in thegovernment hospitals startedprescribing these tests from privatelaboratories which resulted in aunhealthy nexus between the doctorsof these hospitals and the staff ofthese laboratories, notwithstandingthe inconvenience caused to thepatients. Though the treatment wasfree the result was that the number ofpatients visiting these hospitalsreduced drastically.

Seeing this no win situation,awareness arose amongst the policymakers in the mid nineties that someminimum charges should be levied forall the tests. The charges includedmainly the cost of the fIlms! chemicalsand some token maintenance chargesand this amount is one fourth or onefIfth of the market rate for these tests!examinations. For instance, inChandigarh, PGI (Post GraduateInstitute of Medical Education andResearch) was levying the minimum testcharges previously but now ChandigarhMedical College and GovernmentHospital, Sector-16 have also startedlevying charges for all clinicalexaminations. Now in these hospitalsthe tests are carried out at subsidizedcharges and as a result the utility ofthese hospitals has improved. It is learntthat an advanced model of publicparticipation and proper running ofhospital is the Gwalior Hospital.

Good Governance Initiatives

The Government of Haryana hastaken number of steps for goodgovernance.

Directorate wing is incompeti;m1)whereas the Directorate wing thinks thatthe Secretariat staff only passes ordersbut does not guide taken them properly.Two major steps have been taken toremove this mistrust are:

• Adoption of single file system and

• The Administrative Secretaries havebeen asked to make monthly fIeldvisits so as to bridge the gap betweenthe field! directorate offices andgovernment.

In addition to this eachAdministrative Secretary has beenassigned a district in which he reviewsthe development schemes of the state ona periodic basis. The focus of thisexercise is on creation! maintenanceand proper upkeep of the governmentinfrastructure. In the Heallh Departmentthe maintenance and upkeep of buildingwork has been delegated to the fieldfunctionaries as a pilot project.

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Prison Administration

T.o meet the growing financialrequirements, the departments can n.ow

("llre draft charge sheet against the guiltyempl.oyee al.ongwith the pr.op.osal fardisciplinar)l acti.on. This step sh.ouldav.oid the delay caused due t.o n.on-fmalisati.on .of charge sheet.

Devi Rupak SchemeI

With the dawn .of this millenniumIndia has already cr.ossed the 100 billi.onmark in p.opulati.on. The gr.owingp.opulati.onhas a maj.or challenge far thec.ountry and as if this was nat en.oughthe c.ountry als.o has the problem .ofadverse sex rati.o with the number .offemale pppulati.on decreasing asc.ompared t.o male p.opulati.on. Takingthe specific case .of Haryana, there are6

I •8 I females t.o 1000 males and m theage gr.oup 0 t.o6 years it has came dawnt.o 820. Haryana has introduced theDevi Rupak Scheme and this schemeenvisages 'a m.onetary benefit .ofRs 500per m.onth .on sterilizati.on after the birth.of a daughter and Rs 200 per m.onth ifsterilization is dane after a san or twadaughtersl far durati.on .of twenty years.

Impact I

With the liberalizati.on .of ec.on.omyand p.o.orfinancial health .ofthe state thejab market in the private andg.overnm~nt sect.or has shrunk. As perIndia T.oday .of August 11, 2003 thepercentage annual gr.owth as perf.orecasts .of the B.oard .of India T.odayec.on.omists far 2003-04 sh.ows a 6.7 %gr.owth in Grass D.omestic Pr.oduct,6.75% in agriculture 5.6 % in industryand 7.4 % in services which issubstantially higher as c.ompared t.oprevi.ous years. As far as exp.orts arec.oncer~ed in the year 2003-04, thetextile industry, the aut.om.obile,pharm~ceuticals and the aut.opartssect.or is d.oing exceedingly well. (IndiaT.oday I December, 2003). T.o add t.othis Maser Baer is the w.orld's thirdlargest manufacturer .of .optical and

magnetic data st.orage discs and everythird tube in the w.orld is pr.oduced byEssel Pr.opack .of India. In the lastdecade the market size .of washing(machines have increased 228 times,Pers.onal C.omputer 13.5 times, cars 8times and TVs 5.4 times. It is nat thatthe picture is t.otally r.osy. The Centraland state g.overnment deficit are at anall time high and this restricts ability t.omake investments. The ref.orm processsh.ould c.ontinue but the impendingelecti.ons may h.old! delay the criticalref.orms.

In the Pris.on Administrati.onprivatizati.on can be dane in threewings. The h.ousekeeping w.ork can be

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privatized and if it works .out, theTransp.ort Wing can als.o be privatized.Further, the training .ofthe pris.oners canbe privatized by engaging either thev.oluntary .organizati.ons far training thepris.oners or engaging master craftsmenfr.om different field t.o train thepris.oners. Thirdly, the juvenile h.omescan be privatized by engaging thev.oluntary .organizati.ons instead .ofrecruiting regular staff. This can be .onlines .of the pr.oject that has beensuccessfully undertaken in Nepal.

think .of alternative ways .of raisingres.ources sa as t.ofully .orpartially meet.out the planl nan plan expenditure. TheForest Department far example, haslarge chunk .of land and if they

.undertake c.ommercial plantati.on in avery small area they can meet .out part.of,the planl nan plan expenditure fr.omtimber/ fuel w.o.od. If we further thinklaterally, at present in a state likeHaryana where land is expensive, thepris.ons in same cases are l.ocated in theheart .of the city and if a pris.on isc.onstructed .on the .outskirts .of the citythe .old buildings can be c.ommerciallyused. This w.ould nat .only fund thec.onstructi.on .of the new pris.on butw.ould als.o raise same am.ount far theexchequer.

G.overnment is kn.own t.o be slaw t.oreact t.o the process .of change. This isdue t.o divergent pressures .on thew.orking .of g.overnments. The p.olicymakers have t.o keep the aspirati.ons .ofpe.ople in mind .on the .one hand and .onthe .other hand the ec.on.omic viability/is t.o be als.o studied. In additi.on t.o theec.on.omicaspect, the g.overnment has t.okeep in mind a number .of s.ocial fact.ors.The s.oci.o ec.on.omic matrix is quitec.omplex and there is a need t.o havelateral thinking. In keeping with thisreality, the g.overnment.of Haryana hastaken a number .of p.olicy initiatives. Itis said that due t.o the ab.ove menti.onedreas.ons and the hirge size .of theg.overnment, pessimism sets in the mindset .of the G.overnment empl.oyees. MsKarina C.onstantin David fr.omPhilippines in EROPA C.onferencestated that every .one has t.o be.optimistic, .otherwise there will be n.ochange. Hence the need far inn.ovativethinking. Inn.ovative thinking ish.owever a dynamic process and it needst.o be sustained far all times t.o came inthe interest .of the present as well asfuture g.overnments and the public atlarge. 0

YOJANA August 2005 39

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YOJANA August 2005

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"ADMINISTRATIVE REFORMS.. PERSPECTIVE

DevelopmentI

GovernanceMahendra P Srivastava

IIHEREHAS always beenstress _on~ the issue ofgovernance. The -presentgo~ernance drive, however,

. . has given a new, direction tothe system of ecoIlomic, political. andcivil governance and has paved its waytowards accountability, transparencyaIld credible legal ,and judicial system.It. is a known fact that the governancerelates to the 'tmanagement of all ~uchprocesses in all spheres, be it theindividual, the household, the village, .the region or even the nation as a.whole".

The stress is on the development ofthe civil society and the institution, eachof whichis ,critical' for sustainingdevelopment at area and sector leveland also for building individualcapabilities (manpower groups) andencouragiJ?g private initi~tives. It is herethat the governance plays an ilnportantrole, as' it is the foundation ofdeveloping a civil society. Today thefocus is on integrated"governance. Thescenario has been looking forachievements; co~cen:s and challengeswithin each (economic, political andcivil) type of governance.

The focus, therefore, is to analyse

the issue of gove.rnance, whether'itisrestricted to "economic, political andcivil governance or to look at thesystem in it~ entirety". If is alsosupposed to view 'the' process of I

intermediation as' involvin'g ~continuous interplay of the abovementioned three elements, eachrepresenting a specific set of deliberatearrangements. Such opinion is backedby project 2020: a U.S. Intelligencereport, which has pr~dictedthatJndiaand China will emerge as new globalplayers in reshaping global trends."India is likely to outperfomithe rest ofAsia due to its inherent advantages, aiid .for accelerating those advantages, aneffective and efficient governance is asine-qua-non. It is, therefore, feasiblethat with economic, political and civilgovernance and also with an effectiveand efficient work culture, within theinstitutions, the economy will be able to 'grow and develop. ,Fora nationstruggling and swinging between A and8 per cent GDP growth the achiev~mentof an effective work < culture andgovernance would be a challenge andan opportunity for the development ofthe civil society.

The World Bank has d~fined;

IMr M. P. ~rivastava is former Manpower Management Advisor, U.N. (LL.O) and was also Consultant to Institute of Applied ManpowerResearch, New Delhi.

iYOJANA August 2005 41

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governance as the manner in whichpower is exercised in the managementof country'~ economic and socialresources. The Bank has identified threedistinct aspects of governance: (l) theform of political regime (2) the processby which authority is exercised in themanagement of a country's economicand social resources for developmentand (3) the capacity of governments todesign, formulate and implementpolicies and discharge functions.Similarly, United Nations DevelopmentProgramme (UNDP) has suggested thatgovernance among others comprisesmechanisms, processes and institutions. through which citizens and groupsarticulate their interests, exercise theirlegal rights, meet their obligations, andmediate their differences. Mahbub ulHaq, Human Development Centre hasemphasized that governance requireseffective participation of people inState, civil society and private sectoractivities that are conducive to humandevelopment.

U PA government is committedfor economic, political andci vii governance that are

conducive to human development, i.e.,the poor, backward, women, amongothers.

The present requirement is todiagnose: (1) what would be the idealmechanism and (2) institutionalarrangement for addressing the specificconcern of governance. In order to meetthe necessary requirements, it would beappropriate to study and analyse, thechanging governance standards, outlinethe "area of emphasis" and "relevantinstruments", The outcome of the study,need to be pursued for improvinggovernance both at the macro and microlevel of development.

The macro-economic managementof the central and state governments,and of the "public expenditure", alsohighlights the arrangements required for

42

the development of: (1) institution(2) delivery mechanism and (3) theframe of rules procedure andlegislation.

State governments with similararrangements, but with varying level ofgovernance have shown strikingdifferent development ranks in theprocess of development as revealed byIndia Today's second annual report onranking of states. The study shows, "thestates of north and the south providebetter quality of life and businessenvironment than states from otherregions".

This is further evident from reportwhich provides score, rank and changeinto various infrastructural developmentbetween 2003 and 2004. Reasons forchange, either way makes access toavailable basic services, such ashospitals, roads, schools either withease or difficulty. This informationmatters a lot since the above figuresplace equal importance on "adequacyand availability of amenities". Theabove ranking provides an indicator ofeffective management and performanceof institutions, delivery mechanism andsupportive frame of rules, procedures,among others.

In the north, it is a different kind ofpolitical governance that gives them a'head start' in economic development."The other surprising revelation of.thestudy is the deglamorisation of west" asthey are effected by 'diminishingreturns'. The study reiterates 2004trend that "small is not only beautifulbut also productive". States from thenorth and south provide bettergovernance and defy the cliche thatgood economies is in conflict withgood politics, said Prabhu Chawla inhis essay on "Act Local ThinkNational".

UPA government has severalchallenges. The issue of governance is

one among them. The governank::empowerment is based on the lessons ofthe past. The present action plan ofgovernance, however, is dependent onthe contingent instruments that have tobe taken up on priority. These includethe need to undertake:

- Institutional arrangement forplanning and development ofeconomic, political and civilgovernance.

III'" he process of institutional. , governance and work culture

. management has threeinterrelated issues. First theidentification of skills, knowledge,work attitude and efficiency inmanaging the social, economic orpolitical transactions in the society.Secondly, the management of the"delivery mechanisms", Thirdly, tocoordinate, the interrelated functionsof planning, development andexecution of the "supportive andsubordinate framework of rules,procedures and legislation".

These aspects are of primaryconcern for an effective governancewithin the context of set policies andnational development objectives. Italso requires pursuing strategies toimplement programmes in such a wayso as to meet the aspirations of thepeople engaged in differentdevelopment activities, for example,work strategies at area and sectorlevel and for different manpowergroups.

Area Specific Approach (Local,State and National level institutions):This approach is aimed at obtaining asynoptic view of "poor management ofeconomies, persisting fiscal imbalances,disparities in the pace and developmentacross national, state, district, localbodies and villages". More specifically,the objectives of the approach to areaspecific governance: would examine

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l\(trsecurity la,w and order problem,(2) social, religious, caste or evengender affiliations, (3) sensitivity,transparency, accountability atnational, state, local bodies, amongothers, (4) lack of credibility,incentives/disincentives for workers,(5) dilution of rules and procedures,(6) decentralization of processesthrough lodl bodies institutions(panchayati raj), and (7) environmentdegradation in urban area.

Sector Specific Approach: Theobjective of I this approach wouldexamine the issues of governance indifferent economic sectors (primary,secondary andl services) and also of theorganizational aspects, both at thenational, state and local level: throughseveral sub-approaches, for example,(1) The target setting approach is animportant condition for the sector-

Ispecific governance. It would be avehicle for progress rather than aburden on con;ununities that are alreadypoor (2) Skill requirements with dueregard to manpower problems (shortageand surplus) d>fthe sectors (3) Targetsshould guide the provision of facilitiesfor skill formation for the short, mediumand long 'term, if effectivelyimplemented.

Group Specific Approach(deveLopment of available humanresources): It would involve: (1) Thegovernance bf system of education,which need to be fully geared to meetthe demand of various types of skills fordevelopment (2) The governance oflabour mobility (rural-urbanmovement), inter-regional movement,seasonal movement and immigrationand emigration (3) movement betweenemployment, unemployment and under-employment and finally (4) unevenaccess to job opportunities. Efficientgovernance I requires efficientinstitutional arrangements at area, sectorand manpower group levels.

YOJANA August 2005

Elements of Governance Plan: Theplans, vary from situation to situationbut the nature and content, shouldcontain at least six different items:

- Planning of programme activities,and their anticipated products andproblems;

- Organisation and management ofprogrammes;

- Implementation schedule for themajor activities;

- Development and operating budgetfor the programmes;

- The roles and responsibilities of theparticipating agencies, institutionsand interest group and thearrangements for coordination andcommunication; and

Procedures and indices to be usedfor evaluation and monitoring.

rfJ overnance Plan is acomprehensive home grownprogramme. Governance

reforms can be implemented primarilyinto three key priority areas forexample:

- Public Expenditure ManagementReform. This has to be linked with

. the reforms in the budget process,involving fiscal discipline and allthat goes with it, improving therevenue profile, tax and customreforms, among others.

- The Public Sector Reform, whichinvolves redefining the role ofgovernment. This has to go withaccelerated privatization andliberalization, while governmentconcentrate on business ofgovernance.

The Economic Reform in the contextof suitable macroeconomicframework.

By the time these reforms, amongothers, become the engine of growth, itwould create an enabling environment

for the country to achieve eight per centgrowth rate. "Two thirds of India's GDPcomes from services and industry puttogether with services alone accountingfor little more than half. The huge dropin farm sector growth to a meagre 1.1%this fiscal from the last fiscal 9.6 percent did not dent the GDP". Ifagriculture, can grow at seven per centor higher, the manufacturing andservices and all other sub-sectors willaccordingly grow. The economy willcertainly make it to eight per cent assome of the reform measures are gearedtowards the pursuit of governancemechanism (budget) and support forproductive activities throughdiversification (economic sector).

The UPA government continuedimplementation programme of itsvarious reform measures; willeventually take the country to thepromised land. The positive. imp~ct ofthese reforms, if reinforced alongwiththe secondary reforms,(decentralization, and decongestion ofadministrati ve functions andrestructuring of judicial and legalframework), will improve the workculture and productivity of humanresources, among others. All thesereforms, (primary and secondary) willfoster governance-friendly environment,thereby, maintaining the proposedeconomic growth trend which thecountry is set to attain.

To this end, the UPA governmenthas proposed a Common MinimumProgramme to create a governance-friendly envirohment. To implement theprogramme, all the threads ofgovernance have to be woven together,just the right way, for the process towork. Strategies need to be built forimplementation. The value of definingtasks and their accountability cannot beoveremphasized. The challenge is notonly to sustain this but to see that thegovernance benefits exceed thedrawbacks. •

43

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ADMINISTRATIVE REFORMS IBOOK~

Reforming BureaucracyR L Sudhir

',amS'oiflry.Indian Bureaucracyat Crossroads

Review article by Mr R.L. Sudhir, lAS (Retd).

44 YOJANA August 2005

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filtJk. The travefogue of bureauc;acythrough various:' stages of politicaldevelopment in the country makes aninteresting reading. Bureaucracy trodon the delineated path during the first

Bureaufr~cy, ~oday,jsnowller~ near Weber'sHdeaf type' no~does it'conform to tile 'SteelFrame' as .conceiveqbySardat VaUabllbllai"Patel.

two decades of.independence andwon laurels for the achievementsrecorded during this period.Thereafter, it went astray and theJourney downhill started. Because ofits .own actions and inactions the

. bureaucracy lost its aura andimportance andear~ed the stigma of

';;being corrupt, inefficient, ineffectiveand self-cen tered.B ureaucr.acy,today, is nowhere near Weber's 'idealtype' nor does it conform to the;Steel Frame' as conceived by SardarVallabhbhai Patel. Pa~el had stronglypleaded for creation of All India

"Services with c'onstitutionalsafeguards, so as to provide aneffective centripetal force to counter

,"the centrifugal forces arising from the'staggering diversity otour country inrespect of religions, languages,

; ethnicity, and geographical locations"etc. The civil services were envisagedto. act as a bhlwark against the

Ibreakaway forcesand to keep the••c,ountry unit~ed.;Patel had conceived,,"the civil services as., a strong,:.independen{ and neutral' force that"would faithfully implement the; policies laid down by the electedJhepresentativesbut atthesame time

'i ~~~'.. _ . .;~ ..

they were expected to render honest.advice freely/and fearlessly.

The. three !llain'organs thatcomprised the Indian State were thelegislature, the executive and theJudiciary. The executive in turncomprised the elected executive andthe permanent bureaucracy. Withpowers and responsibilities clearlydemarcated no conflict wasanticipated between the differentorgans of the State. Things werehunky-dory during theJirst twodecades when each,organ performedwell. Thereafter the boundaries beganto blur, .the conflicts arose anddecline started. The politicalmastersfelt tempted to usurp the functions ofbureaucracy which meeklysurrendered instead of trying tocounter such tendencies for fear oftransfers and delayed promotions etc.The judiciary became proactive andassumed .the, role of bureaucracy insome cases. There are instanceswhere courts have given verdicts towin mass popularity. Such actionshave" further demoralized thebureaucracy and rendered.it moreindecisive and inactive.

ti~:e~;:::~T::.~r:jee:~sa~a~:. i. ~ to be implemented whichgave boost to the burgeoning ~fbureaucracy in its wake. Over theyears it has become an unmanageableand uncontrollable leviathan. With

"' ,.lack of controls, delayed disposal ofcases and. ultimate acquittals for wantof evidence, corruption became moreand more rampant. Nexus betweenpoliticians and bureaucrats andcriminalization of politics furtherworsened the situation, The tragedy.isthat all the three organs of the Stateare afflicted with corruption andinefficiency today. Even in thesociety in general there appears to beno respect for the old values and

ethical standards. Such is the sorryspectacle before us:

All these aspects have been dealtwith in the book. The article on "AllIndia Services : Decline, Debasementand Devastation", vividly outlines thefall and failings .of bureaucracy withthe help of a case study and facts andfigures taken from a particular' stateduring a particular period.

The despondency and despair'resulting from the foregoingdevelopments notwithsta~ding. there.is still a strong case for retaining [hecivil services as a unifying force inthe country. There are various wayssuggested in the book to revive andrestore the lost prestige and image ofbureaucracy and to rejuvenate it intoan effective instrument to promotethe welfare of the people and to

maintain the unity ofthe country. As :a first stl?P,let the like-minded peoplemeet and discuss the problem toevolve a strategy to remedy theprevailing situation. It will be:worthwhile jnitiating a dialogue at thehighest level with a view toconvincing the people and thepoliticians about the need forcomprehensive administrative,

. judicial and electoral reforms and forrestoring the falling ethical standardsarid loss of values in the society. []

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ITIS univerSal,lYaCknOW,ledg,edthata poorly implemented performanceappraisal system can often becomepart of the problem. The presentsystem of Annual Confidential

Reports (ACRs) for Indian Civil Servantsis a case in point. Unlike the private sector,performance appraisal for upstreamgovernment jobs is often subjective. Allthe talk of ACRs being used as "a tool toassist officers in improving theirperformance" is just that. It seldom formsthe basis of postings/transfers to keypositions.

New method of grading: Recently, thePrime Minister approved of a new annualscheme for assessing lAS officers. Called,'Performance Appraisal Report' (PAR), itwill soon replace the ACR in other publicservices. The appraisal will be done on aI to 10 scale (the higher the better) against15-20 indIcators the overall grade will bethe median of the scores for the variousindicators. Will this reduce the degree ofsubjectivity in performance appraisal?

The scoring can still be arbitrary,bearing little relation officer's actualaccomplishments. Never the less, the newsystem may be an improvement the ACRin two respects.

First, the superiors are now required torate an officer on each of about 15-20indicators.

This is likely to involve relativelygreater application of mind than the singlefinal grading (OutstandinglVery Good/Good! Satisfactory/ Poor) given under thepresent system.Second, the new systemgives scope for normalisation of PARscope facross states ( in the same way asthe UPSC normalises the marks scored bycandidates appearing in different subjectsin the Civil Services Examination)

This normalisation is necessary becauseperformance assessments are often culture-specific. In some states, the 'Outstanding'grade is given liberally while in someothers, it is given rather grudgingly. Thisplaces officers from the 'conservative'states at a disadvantage during the processof empanelment for the posts of JointSecretary and above in the government. Bycomparing the scaled up or down suitably

46

if considerable inter-state variations arenoticed. I

Assessment by an Eminent PersonsGroup: There is often a wide gulf betweenthe 'public reputation' of an officer and theratings given by his superiors in the ACR.The new system proposes to bridge this gapthrough an Eminent Persons Group (EPG)that will ascertain the officers' reputation interms of integrity, competence and personalqualities by seeking confidential inputs fromtheir peers, juniors, and intelligenceagencies.But safeguards'-need to be incorporated

to keep this system intact. The EPG shouldcomprise unbiased persons who are ofimpeccable integrity. The confidential inputsshould not be sought in an unscientific andhaphazard manner. The EPG should notform its opinions behind an officer's backnor be influenced by orchestrated petitionsor campaigns against him.

Each officer should be given anopportunity to make a 3D-minutepresentation before the EPG. indicating hisaccomplishments in the past five years.

This should be followed by another' 30minutes of structured interview duringwhich the EPG can clarify with the officerany complaints received about hiscompetence, integrity or temperament. "

The members of the EPG are to beselected by a committee including the PrimeMinister and the Leader of the Opposition.But this responsibility is best entrusted toan independent Constitutional authoritysuch as the UPSC. Over the years, theUPSC has been doing a commendable joband is already being consulted in I alldisciplinary matters relating to civilservants. It is only proper that its role beexpanded to include the appointment ofCentral State EPGs.

The tenure of an EPG is stated to be fiveyears, This is fine if the EPG is constitutedby the UPSc. But if it is to be constitutedby a committee involving politicians, thenif may be desirable to make the EPG'stenure co-terminus with the tenure of thegovernment that appointed it.

If the results of the annual PAR and theEPG's assessment vary equal weightageshould be given to score secured under each

mode of apraisal.

Participative appraisal: Internationalpractices in Performance appraisal requireto be participative. The officer and hissuperior in setting goals at the begining ofthe rating period and in appraising results.

Under the ACR system, the goals arenot set at all or set unilaterally by thesuperior. Further, the superior's commentsand the overall grading are keptconfidential unless there are certainadverse remarks, in which case, they arecomm1.!nicated to the officer and he isgiven a chance to represent against them.

This is bad practice because givingfeedback, positive or negative, is critical tomotivating officers to improve theirperformance.

Omission of the word 'Confidential'from the nomenclature of the proposedPAR system seems to suggest that it willbe an open and transparent system.

It would -be a big disappointment ifthings were otherwise.

Further, the new system promises toinvolve the officer examined in goalsetting, though it remains to be seen if thiswill be put to practice.

It is not clear under what circumstancesan officer would be allowed to representagainst the grading he has received.

In my opinion, representations. againstscores of 7 of less out of 10 may beallowed. The Prime Minister deserveskudos for attempting to reform this difficultarea of human resource management.

Although the proposed system does notaddress all the deficiencies of the currentone, of is definitely a step forward.

It is important to realise that the reformwill work only if officers have stable worktenures.

If an officer goes to two or three postsin a year, and if he has an equal numberof superiors in this period, then nomeaningful performance appraisal ispossible.

A minimum tenure of two years, and anaverage of three in a post is theprecondition fo delivering bestperformance. •

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Reaching the PoorL C Jain

IA IflER FIVE dec,d" ilie.. . government, with its vast

rural development. exten,;nn 'gende, In,ded

with thousands of crores ofrupees, is still clueless about how toreach the 'Poor. But in one fell swoopthe Orissa Gram Vikas has found theanswer, which I gathered during myfour-day visit to Ganjam, Orissa's mostpoverty stricken area. I was even moreamazed at the simplicity of theirapproach. "Why do you have to reachthe poor", asks Gram Vikas DirectorJoe Madiath. "Start with them," he said,"it is as simple as that."

The first village I visited was asmall-adivasi village with 80households. The village committeeexplained proudly that the entire villagehad been rebuilt, "every house is new".They explained that to start with, gramvikas had got them to just build toilets,one for each household. "We found thatthe toilets looked better than our hut.We decided to rebuild our houses. Weapproached gram vikas to help. They,however, put one that new houses willhave to be built for all the households,rich and poor. All must come together,raise a common fund, each householdcontributing an average of Rs 1000, thebetter off paying relatively more."

"On the strength of the common fund

and common undertaking for ensuringrepayment, Hudco gave us the neededhousing loan. To keep the cost of thehouses low, gram vikas helped us tolearn to make bricks locally, employingour own labour." Soon the entire villagewas reconstructed, the roads in-betweenwere widened with drains alongside.Kitchen drains were taken to a patch forvegetables and fruit around each house.Drains from toilets connected to asoakage pit. As we walked, the placesmelled so good, one could have anational seminar. As part of therehousing plan, a community hall wasbuilt and above that a modern guesthouse. "Why it guest house? We wantto invite doctors, engineers, teachers tostay in the village on weekends toimpart knowledge." In a corner, wasbuilt a grain bank.

Why a grain bank? "To assistfamilies in dire need we have revivedthe old village tradition. Gram vikasinsisted that the kitchen should have arunning water tap. To ensure that wehad to build an overhead tank and apipeline connecting all the 80households."

To fill the tank they impoundedwater from the adjoining catchmentarea. Good luck gave them sufficientwater not only for the overhead tank,but also surplus for irrigating the fields.

Mr L. C. Jain is former Member Planning Commission and an authority on Panchayats. The write up is based on the author's first hand. experience during his visit to Ganjam Distt., Orissa.

YOJANA August 2005 47

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Water in the fields gave a shot in theann to village production. Water in thekitchen and a toilet next to the houseliberated women from much of thechronic daily tyranny experienced bywomen across the country.

Sanitary conditions assured by cleanroads, clean drainage and clean waterfrom the overhead tank made an impacton health.

But toilets attached to each houseposed a problem. If the toilet was notkept clean even by a few, the villagewould stink. The village committeeimpressed on the householders, theneed to keep the toilet clean.Simultaneously, it mobilised thechildren to visit each toilet when theyreturned after school for 100 per centinspection. If any toilet was not cleanthey could collect a fine from the guiltyhousehold and the money went into thechildren's fund for sports equipment.Then came a stunning socialdevelopment. The committee told methat the girls from their village wererefusing to get married in villages whichdid not have individual toilets.

Neighbouring villages are not leftunaffected by this example. Soon avillage of 160 Dalit households startedto follow suit.

They also raised the common fundand assisted every single householdwith a new house, repeating thefacilities of a kitchen supplied withwater, a toilet, clean streets and drainsand a grain bank.

When 1 visited that village 1sighted some old huts and said, "Ah,so some people are still living in theold huts." They showed me the huts,which were empty. They chuckledand said, "We have kept some of theold huts only to remind ourselves ofthe conditions in which we wereliving before we rebuilt the village."1 walked into one of the new housesand was greeted by an old woman,who was the sole occupant of thehouse, resting on a mat on the floor,"Ma, how are you?" 1 asked, "I amhappy." "What makes you happy?"She pointed towards the ceiling fan:"That makes me happy, 1 can sleep somuch better."

We then drove miles away to thecoast at Gopalpur at sea, to a village of350 fisherfolk households. Enormous~ctivity was in evidence. All the 350houses were being rebuilt. There weretwo large brick kilns.

The village being a large one, theoverhead tank was quite high. Standingunder it the village committee suddenlygot an idea and looked very excited. 1asked why? They said they are thinkingof putting a searchlight on top of thewater tank. "When we go out in themiddle of the night for fishing we oftenlose sight of the location of our villagedue to darkness or storms. As thesearchlights guide ships, so will oursearchlight get us back to our shore andour families."

No end to their dreams. This is whatgram vikas has set in motion. It is not

N;VER BEFORE was alcoholsour in Amthaguda, an adivasivillage in Thuamul Rampur

block of Kalahandi district, until agroup of women decided that theyneeded an end to this menace.

Mukta Devi, 35, the leader of themovement against alcohol says,"Now we've got the power, thepower of togetherness of women."

Together, the women talked tomen-folk of the disadvantages ofdrinking, and then broke all the localalcohol making apparatus in thevillage.

Men who continued to get drunkwere caught, tied to a tree and madeto give a public apology along witha fine of Rs 51.

Almost 80 per cent of thevillagers have left drinking.

(Gram Vikas, Annual Report, 2004)

so much development goods which canbe seen aplenty, but a dynamic processof development which can only takethem far into the future. Not just the fewvillages 1 visited. Gram Vikas's reach isimpressive: districts 14, villages 363,households total 23, 120 of which areadivasi (40%), 9,232 and Dalits (18%),4,132.

1 would gift gram vikas a drum thatit can beat loudly and proudly. Ell

(Courtesy: Asian Age)

48 YOJANA August 2005

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National Flag and Its OriginS V Taneja

'O~-=>i'<~;c~_ ~~?""~-""--'",:,,~~'~I;j"'~""'-:O;f"-'~'~-"S'_'--",,',~-: :""':~~,--_--_:",_,{"_~-..--;;;:' -__ ;;:;S-0 .••.""",-_o.<',-',-~_~:~.-"T,_"~_y ~""'':''''''~''''}:'''',i'l''''{r'~.-_.-, """'''1~--:-:' '''''< o_~

¥, ,.iC(,,(~c:':"Arttdg'iiSfarl~~Ce'~Siry'fo~a~!N~tiO~$.c',¥il~~On~hdyeaie4fo~it.lt '/;:0'~i. ,(,(:c7t~ubt~:d';;~iA~,of:id~Xqt!-y~hi~bi{':1v~~tdrl:/e'''i1'~J~/9 d~st41y,It }v~ll.,he,¥"'n~fesfarE!o,~'usYn~~ci'J~" (afl;.s@m~u,llltiefl t~rw4om;ln~ia .is...thPirihome ..LF' :'if~;;r~f~iJfiei'~c~'}l'fE.~l!!;~!L~~~.y~:~,,:a~:;~t:!!~r:i:.:..,f'1~~(ltmaGa'~dhi

The evolutionof the IndianNational Flagreflects thepolitical

developmentsin the countryduring the20th century

HERE IS a little history aboutthe evolution of the flag inIndia.

In medieval times the rulers alwayshad distincitive flags, and we areindebted to Abul Fazal for a descriptionof the Royal Flags under Akbar. Weread of Shivaji having asopted BhagavaJhanda as his flag. After the Marathapower the British brought their own flagwhich remained in vogue for about twocenturies. Flag is piece of cloth, buntingor similar material displaying theinsignia of a community, an armedforce, an office or an individual. A flagis usually, but not always, oblong andis attached by one edge to a staff orhalyard. The part nearest to the staff iscalled the hoist, the outer part is calledthe fly. The flags of various forms andpurpose are known as colours,standards, banners, ensigns, pendants(or pennants).

Originally used in warfare, flagswere and to soule extent remain insigniaof leadersip serving for theidentification of friend or foe and asrallying points. They are now also

extensively empolyed, for signaling, fordecoration and for display. Because, theusefulness of a flag for purpose ofidentification depends on its blowingout freely in the wind.

Flag had equal importance in ancientIndia being carried on chariots orelephants. The flag was the first objectof attack in battle, and its fall wouldmean confustion if not defeat. Indianflags were often triangular is shapeand scarlet or green in colour, with afigure embroidered in gold or a goldfringe.

Mughal royal insignia included,however, other things besideds the flag,more especially the yaks' tails and thestate umbrella. Flags seen also to havebeen used in India as in China forsignaling. The flag is universally usedas a flag of truce.

The evolution of the Indian NationalFlag reflects the political devlopmentsin the country during the 20th century.The various political trends, waves ofenthusiasm can all be seen in the

Mr S.V. Taneja is poet and writer. He has written a number of poems on the beauty of Kashmir.

YOJANA August 2005 49

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people's attitude to the flag. The firstnational flag in India is said to havebeen hoisted on August 7, 1906 in theParsee Bagan Square (Green Park) inKolkata. The flag was composed ofhorizontal strips of red, yellow andgreen. The red strip at the top hadeight white lotuses embossed on it ina row. On the yellow strip the wordsVande Mataram were inscribed in'deep blue in Devanagari characters.The green strip had a white sun on theleft and a white crescent and star onthe right.

T:e second flag was hoisted inParis by Madame Cama (mostof the books mention Madame

Cama unfurling the flag at Stuttgart inGermany) and her band of exiledrevolutionaries in 1907. This wasvery similar to the first flag exceptthat the top strip had only one lotusbut seven stars denoting theSaptarishi. This flag was alsoexhibited at a socialist conference inBerlin.

By the time our third flag went upin 1917, our political struggle hadtaken a definite turn. Dr. AnmieBesant and Lokmanya Tilak hoistedit during the Home Rule movement.This flag had five red and four greenhorizontal strips arranged alternately,with seven stars in the saptarishiconfiguration super-imposed on them.In the left hand top corner (the poleend) was the Union Jack. There wasalso a white crescent and star in onecorner.

This indicated the aspirations ofthe time. The inclusion of the UnionJack symbolized the goal ofDominion Status. The presence of theUnion Jack, however, made the flaggenerally unacceptable. The politicalcompromise that it implied was notpupular. The call for new leadershipbrought Mohandas KaramchandGandhi to the fore in 1921 and,

50

through him, the first tricolur. Duringthe session of the All India CongressCommittee which met at Bezwada(now Vijayawada) about this time, anAndhra youth Pingali Venkayyaprepared a flag and took it toGandhiji. It was made up of twocolours. Gandhiji suggested theaddition of a white strip and thecharkha to symbolize progress. Thuswas the tricolour born, but it had notyet been officially accepted by theAll India Congress Committee.Ghandhiji's approval, however, madeit sufficiently popular to be hoistedon all Congress occasions.

In 1931, when the AICC met atKarachi, a resolution was passedstressing the need for a flag whichwould be officially acceptable to theCongress. A committee of seven wasappointed to elicit opinion on thechoice of a flag. And the year 1931was a landmark in the history of theflag. A resolution was passedadopting a tricolour flag as ournational flag. This flag, the forbearerof the present one, was saffron, whiteand green.

Saffron for courage and sacrificeWhite for truth and peaceGreen for faith and chivalry

It also carried a charkha in blue onthe white band. The size was threebreadths by two breadths.

This resolution for the first timeconferred official Congress recognitionon the tricolour as the National Flag.Henceforward it became our Flag andthe symbol of our determination to befree.

On July 22, 1947, the ConstituentAssembly adopted it as Free India'sNational Flag. After the advent ofIndependence, the colours and theirsignificance remained the same. Only'the Dharma Chakra, that is wheel ofEmperor Asoka, was adopted in place

of the charkha as the emblem on t~~flag.

Adoption of the National FlagThe President of the Constituent,

Assembly Dr. Rajendra Prasadappointed on June 23,1947, under hischairmanship an ad hoc committee todetermine the National Flag ofindependent India. Besides theChairman, the committee consisted ofAbul Kalam Azad, C Rajagopalachari,Shrimati Sarojini Naidu, K.M.Panikkar, K.M. Munshi, B.R.Ambedhar, Frank Anthony, B. PattabhiSitaramayya, Hiralal Shastri,Satyanarayan Singh, Baldev Singh, andS.N. Gupta. Since the Presi.dent felt thatthere was a strong feeling in the countryin favour of the National Flag adoptedby the Congress in 1931, it wasadiopted.

The designe of the flag prepared inaccordance with the directi.ons given atthe meeting of the committee wasapproved. It was decided that theHon'ble Pandit Jawaharlat Nehru shouldmove a resoultion in the ConstituentAssembly.

Partition PlanAs per the partition plan, freedom

was to dawn- splitting country into twodominions i.e. India and Pakistan witheffect from June 1948, but in view ofthe communal heat and frenzy whichhad no signs towards immediate haltand was spreading to more and moreareas, British government at the adviceof Viceroy, Mountbatten acceded toadvance the date ahead of the PartitionPlan. This aspect however, hadapproval of major political parties. Thedecision of British Govt. of July18,1947 was conveyed to 1he politicalparties in India towards transfer topower from June 1948 to 15th August1947.

Text of the Resolution moved byPandit Jawaharlal Nehru about the

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Pandit Jawaharlal Nehru showing the National Flag to theConstituent Assembly on 2200 July, 1947

~ ..~,1ional Flag andpassed by theConstituentAssembly of Indiaon 22nd July, 1947.

"Resol ved thatthe National Flag ofIndia shall be ahorizontal triolourof deep saffron(Kesari), white anddark green in equalproportion. In thecentre of the whiteband, there shall bea wheel in navyblue to represent theChakra. The designof the wheel shallbe that of the wheel(Chakra) whichappears on theSarnath Lion pilarof Asoka."

"The diameter ofthe wheel shallapproximate to thewidth of the whiteband. The ratio ofthe width to thelenght of the Flagshall ordinarily be2:3"

While moving the Resolution, PanditNehru said " ... So, when I move thisresolution, I think of this concentratedhistory through which all of us havepassed during the last quarter of acentury. Memories crowd in upon me.I remember, and many in this Housewill remember how we looked up to thisFlag not only with pride and enthusisambut with a. tingling in our veins; also

. how, when we were sometimes downand out, then again the sight of this flaggave us courage to go on. Then, manywho are not present here today, many ofour comrades who have passed, held onto flag, some amongst them even untodeath, and handed it over as they sank,

YOJANA August 2005

to others to hold it aloft. so, in thissimple form of words, there is muchmore than will be clear on the surface.There is the struggle of the people forfredom with all its ups and downs andtrials and disasters, and there is finallytoday as I move this Resolution, acertain triumph about it - a measure oftriumph in the conclusion of thatstruggle.

...But what type of wheel should wehave? Our minds went back to manywheels but notably one famous wheel,which had appeared in many places andwhich all of us have seen, the one at thetop of the capital ofthe Asokan column

and in many otherplaces. That wheelis a symbol ofIndia's ancientculture; it is asymbol of the manythings that India hadstood for throughthe ages. So wethought that thischakra emblemshould be there andthat wheel appears.For my part I amexceedingly happythat in this senseindirectly we haveassociated with thisflag of ours not onlythis emblem but in asense the name ofAsoka, one of themost magnificentnames not only inIndia's history but inworld history. It iswell that at thismoment of strifeconfllict andintolerance, ourminds should goback towards whatIndia stood for, Ihope and believe,

essentially throughout the ages, in spiteof mistakes and errors and degradationsfrom time to time. Sir, if India had notstood for something very great, I do notthink that India could have survived andcarried on its cultural traditions in amore or less continuous manner throughthese vast ages. I carried on its culturaltradition, not unchanging, not rigid, butalways keeping its essence, alwaysadapting itself to new developments, tonew influences ...

Therefore, this flag that I have thehonour to present to you is not, I hopeand trust, a flag of empire, a flag ofimperialism, a flag of domination over

51

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anybody, but a flag of freedom notonly for ourselves, but a symbol offreedom for all peole who may see it.And wherever it may go-not onlywhere Indians dwell as ourambassadors and ministers but acrossthe far seas where it may be carriedby Indian ships, wherever it may go,it will bring a message ofcomradeship, a message that Indiawants to be friend with every countryof the world and India wants to helpany people who seek freedom. Thathope will the message of this Flag,everywhere ...

We thought of a flag which wasbeautiful to look at. We thought of aflag which would in its combinationand in its separate parts wouldsomehow represent the spirit of theNation, the tradition of the Nation,that mixed spirit and tradition whichhas grown up through thousands ofyears in India. So we devised thisflag. Perhaps I am partial but I dothink it is a very beautiful flag to lookat purely from the point of view ofartistry, and it has come to symbolizemany other beautiful things, things ofthe spirit, things of the mind, thatgive value to the individual's life andto the Nation's life, for a nation doesnot live merely by material thngs,although they are highly important."

Supporting the resolution DrS Radhakishnan said, "The flaglinks up the past and the

present. It is the legacy bequeathed tous by the architects of our liberty.Those who fought under this Flag aremainly reponsible for the arrival ofthis great day of Independence forIndia. In, these difficult days itdepends on us under what banner wefight. Here we are putting in the verycentre the white, the white of theSun's rays. The white means the pathof light and control our conduct bythe ideal light, the light of truth, of

52

transparent simplicity which isillustrated by th colour of white.

Truth can be gained only by thepursuitf the path of Dharma, by thepractice of virtue. Truth-Satya, Dhanna-Virtue, these ought to be the controllingprinciples of all those who work underthis Flag. It also tells us that the Dhannais something which is perpetuallymoving ....This wheel which is a rotatingthing, which is a perpetually revolvingthing, indicates to us that there is deathin stagnation. There is life in movement.So even with regard to our socialconditions it is essential for us to moveforward.

The red, the orange, the Bhagwacolour represents the spirit ofrenunciation it is said:

"Sarve tyage rajadhannesu drsta"

All forms of renunciation are to beembodied III Raja Dharma.Philosophers must be Kings. Ourleaders must be disinterested. Theymust be dedicated spirits.They must bepeople who are imbued with the spiritof renunciation which that saffroncolour has transmitted to us from thebeginning of our history. That stands forthe fact that the world belongs not to thewealthy, not to the prosperous but to themeek and the humble, the dedicated andthe detached. That spirit of detachment,that spirit of renunciation is representedby the orange or the safforn colour andMahatma Gandhi has embodied it for usin his life and the Congress has workedunder his guidane and with his message.If we are not imbued with that spirit ofrenunciation in these difficult days, wewill again go under.

The green is there--our relation tothe soil, our relation to the plant lifehere on which all other life depends. Wemust build our Paradise here on thisgreen earth. If we are to succeed in thisenterprise, we must be guided by truth(white), practice virtue (wheel), adopt

the method of self-control ~;renunciation (saffron). This Flag tells us'Be ever alert, be ever on the move, goforward, work for a free, flexiblecompassionate, decent, democratic,society in which Christians, Sikhs,Moslems, Hindus, Buddhists will allfind a safe shelter'."

Winding up the debate in theConstituent Assembly, MrsSarojini Naidu spoke. "I

thought that the speech of JawaharlalNehru-so epic in its quality of beauty,dignity and appropriateness-wassufficient to express the aspirations,emotions and the ideals of ths House ..

I therefore speak on behalf of thatancient reborn Mother with herundivided heart and indivisible spirit,whose love is equal for her children, nomatter what comer they come from inwhat temples or mosques they worship,what language they speak or whatculture they profess ... Today I ask oneand all to honour this Flag. Chakra ofAsoka, the Magnificent who sent thismessage of modem ideal of fellowshipand brotherhood and cooperation? Doesnot that wheel stand as a symbol forevery national interest and nationalactivity? Does it not represent theChakra of my illustrious and belovedleader, Mahatama Gandhi and the wheelof time that marches and marches andwithout hesitation and without halt?Does it not represent the rays of theSun? Does it not represent eternity?Does it not represent the human mind?Who shall live under that Flag withoutthinking of the common India? whoshall limit its functions? Who shalllimit its inheritance? To whom does itbelong? It belongs to India. It belongsto all India. Pandit Jawaharlal Nehrutold us that India has never "beenexcluisve. I wish he had added: 'Indiawelcomes all knowledge from friendand foe alike'. Did she not? Have notall the cultures of the world contributed

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,All who owe allegiance to the flagwill enjoy equalhght olcitiz~nship,irrespective of caste or creed ... Our

. __~.. -v. ~~

Armed. Forces are a source of Rride to:7 '. '-~:' .~: t .~. ~ ,.~.:

the nation. They now belongffito thenation. ;1,twould be their dllty to guardand protect the honourof the nation anditi'flag:" '"., .i', 'Q

,,194j:befOre' a,'gathering 'bf one million';p'eo~~; ~;~li~ '~'his~tic ~9m~nt iffjvag~~beh,'\' " " ,..... " .,;;\~,,;. ;;r " .• 4:r.

~n 'I-!ono~r'ofth~\F~,g'\.',,>'4; p~ ,Ja~aha;lal ~~.ehr~ at_~e(tFo~~.unfuJlmg.theNatlOnaIFlag on'16th''7\ug~st f947'~aid.;\\ \~\1,,\,

'~e h~ve g\thei~d h~re orl'.a historit~"wcca~ion at thi~arictent~()rt to wini;,bac~,"

rwhafwas ours. This flag does not;1sy~60Ii~g thetnu~ph of inclivid~aIs 0'1:,,<:~~efongress'Jfbut .;the.t!iuII!ph '()f th~.whole' country. The free of India is the'

.'-. ,,~ ::;;, ,-{ .~.. ',>:' ill:.. J. '.

symbol of fredom'~and democ:;racy not

'onlYior J~dia\butf?r thf w~ole ~orldi";',India, Asia, and the world must rejoice

;"',i';;,. ':i ,:: L~ .,;"~ ; ,.~. ".1,

.bn rnlsgreatday:, ... You kn9w,.\yhat,haPl1fned du~g thf las127~ears~whe~.',we struggled and made sacrifices undef'.{this'flag':'.. What is worth "recalling isthat,we had taken a pledge that we shall

:'f '""", "?j. "', -,c,. .:~.:. .~

lay down our lives for the honour anatdig~ity 'Of ths flag and would'nev6r.~ " ~t

allow it to be lowered whatever might,....l"...t.be the consequences. That pledge has.beenfulfl1led.The'country has achiev~dfreedom under the brilliant leadership"and~guid~c~; of Mahatma Gancthiji. ..¥t.

'((, ';~L. -~,. 't;M 1:~ :}ij. ~'<\.On this day we must remember those'

wh~ have rdade sacrifices and siiffer~dfor%.thecause of, independnce. It is

. ~ .If. .-.~~.~.v,~ . 1.:needless for me to name "allof them, butI cannot help mentioning SubhasChandra Bose who formed the ,Indian

1 ~. -.v '. ~., '-''C. 'iF, .'';,',

NationaL Army abroad and foughtbravelylor tiie freedom of the cO,untry.He,hoisted this flag inforeign co~ntri~s•and' when the day came for hoisting iton'the Red Fort, he was not to 'see hisdream fulfilled ....

Joy Lit Up Gandhiji's FaceThe only place that celebrated the

15th of August with a sincerely felt joyand abandoment was Calcutta whereGandhiji had decided to pass thehistoric night. When the news wasconveyed to Gandhiji, a smile of joy litup his face.

The hoisting ceremony of NationalFlag at Shajehan's historic Red Fort wasto take place on early hours of 16thAugust 1947 by the first Prime Ministerof India. Pt. Iawaharlal Nehru. Pt.Nehru unfurled the flag on 16th Agust

Dr Prasad showed the Flag around.Proceedings came to a close with thesinging of "Hindustan Hamara", a poemby Iqbal and "IanaganamanaAdhinayaka" by Rabindranath. MrsSucheta Kripalani conducted thechorus.

Dawn of Freedom

"0 lovely dawn of freedom thatbreaks in gold and and purple over theancient capital of 'Prithvir~j', 0splendid flag of a new born India to beunfurled on the morrow over the RedFort of Shajehan. We pay you thehomage of our dedicated heart andhands and pledge ourselves to translateinto glorious deeds, the dreams thatwere our share and inspiration in thelong darkness of our bondage."

Mrs Sarojini NaiduAugust 14-15, 1947

The House approved it amidstacclamation. In presenting the Flag toDr Rajendra Prasad, Mrs Hansa Mehtasaid: "It is in the fitness of things thatthe first flag that is flying over thisaugust House should be the gift fromthe women of India."

August 15, 1947, and that this messagebe conveyed forthwith to LordMountbatten by the President andPandit Nehru."

YOJANA August 2005 53

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rice, maize, wheat, barley, pulses, oilseeds and tobacco. Thestate has large area under horticulture production and avariety of fruits like apple, cherry, guava, plum, apricots,walnuts and almonds are grown all over the state. It alsohas suitable agro-climatic. conditions for floriculture andrare species of aromatic and medicinal plants.

YOJANA August 2005

In terms of industrialization, most enterprises set up inJammu and Kashmir are small and medium-scale withprimary focus on the traditional sectors. The handloom andhandicraft industry is one of the state's oldest cottageindustries with all the three regions of JallmU, Kashmir andLadakh specializing in some particular form. The traditionaloccupation is silk, but it is difficult to sell Kashmir silkinternationally due to competition from China. However, thesericulture and silk industry has been defined by the

222236900

21475

Srinagar,Jammuand LehJarnmulUdhampur City

54.46%

Area (sq krn)Sex Ratio (2001 Census)RegionsDivisionsDistrictsTownsCivil AirportsRailheadLiteracy (2001)

Jammu and Kashmir: Facts and Figures

IIIAMMU AND KASHMIR h" ,kh natma!

m' resources and a large pool of entrepren~urial and

educated labour force, but has suffered from theconsequences of of misdirected economicpolicies, strained Indo-Pak relations, political

turmoil and armed insurgency. An approximately 4 mnincrease in population from 1981-2001 had brought asubsequent 39% increase in the number of workers whichcould not be absorbed fully by the state primarily due tolow levels of employment generation and minimal industrialand economic development.

Given its political and economic background, the levelof industrialization in Jammu and Kashmir has been lowwith agriculture and allied activities being the predominanteconomic sector. It supports almost 80 per cent of thepopulation, employs 70 per cent of the workforce andcontributes 60 per cent to the state economy. However theaverage land holding is low at about 0.83 hectares and thesector suffers from low productivity. The chief crops are

54

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have been undertaken to develop a system of roadways andtelecommunications. But given the rugged and mountainousterrain, developing roadways to the interior areas continuesto be problematic. There are two major road linksconnecting Leh to Manali and Srinagar respectively.

Politically,driven by ahistory ofconflict, theregion haswitnessedcontinuousfighting since1989. It cameclose to a warwith more thana million troops deployed along the border after an attackon the Indian Parliament in January 2002. However, aculmination of continued international pressures and therealized economic costs of such a crisis led to both Indiaand Pakistan taking steps to negotiate peace. The first stateassembly elections since 1987 were held in Jammu andKashmir in the fall of 2002. November 2003 saw theenforcement of a total ceasefire along the LaC whereastransportation lines were reopened by January 2004.January 2004 also saw the government initiating talks withthe All Parties Hurriyat Conference. In February 2004 bothcountries held their first formal talks. in three years withKashmir high on the agenda. After the decision to launcha landmark bus service across the ceasefire line dividingKashmir, April 2005 saw the first passenger bus from bothsides of the Lac.

55

Restarting the Bus Service

The resumption of the bus service in April 2005 betweenSrinagar and Muzaffarabad has given civilians from bothsides of the LoC a chance to meet for the first time since

Electrification has been undertaken in all the principaltowns, including Leh, and a majority of the villages. Thenecessity of power generation for industrial developmentand the abundant water resources has led to power for thispurpose being provided by hydroelectric and thermalgenerating plants based on available local raw materials.

Given the significance of the tourism industry as one ofthe main drivers of economic and sustainable developmentfor Jammu and Kashmir, tourism infrastructure andconnectivity has also gained considerable importance inrecent times. Within the railways system, the NorthernRailway of India terminates at Udhampur. The governmenthas made considerable investments related to the extensionof the rail lines to accelerate socio-econo~ic developmentof the state and promote national integration. Efforts havealso been made to improve air transport to the state withinvestments being made in the extension and upgradationof the Srinagar airport, which has already been declared aninternational airport. Furthermore, a number of initiatives

government as one of the potential areas for investment. TheGovernment is also exploring some new areas like foodprocessing, agro-based units, and metallic and non-metallicproducts. There are about 20 public sector units (PSU) inthe state.

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G~Healing Touch Philosophy the government has addressedissues related to improving the power situation, expeditingdevelopment and economic activity and buildingdevelopment infrastructure, all of which would also aid inthe flow of investments by wooing investors. Major issueswith regard to the same have been addressed in theIndustrial Policy 2004 whiCh will provide the necessarystimuli for industrial growth and be reviewed in 2015.

BI" I, ot~nt~al and attract~ve investment oppo~tunit~es,'Wl eXIst III many areas III Jammu and Kashmrr whIch'J~: have been identified based on their sectoral

contributions to GDP and employment absorption capacity.

The tourism sector has been one of the oldest and mostsuccessful sectors of the state of Jammu and Kashmir witha number of business interests linked to its development andgrowth. In the last 14 years this industry has sufferedseverely in the face of armed insurgency and it is only withrecent developments that the situation has improved. Thestate is now witnessing some of its highest tourist arrivalsin almost 15 years. Recognizing the revenue potential ofthis sector the government has given it industry status andundertaken various initiatives for its revival.

Given that the characteristics of ecotourism make it aperfect case for Jammu & Kashmir to apply in its tourismdevelopmental plan, the state would need to move towardssustainable ecotourism. Along with addressing the issues ofsecurity and development, substantial attention also needsto be focused on the associated infrastructure required forpromoting this segment. In view of this Public-PrivatePartnership have been suggested for the development andupgradation of infrastructure and other related projects.

To make the current thrust on economic recovery andindustrialization a reality, one of the main issues that needto be addressed is that of power generation. Jammu and

, Kashmir 'has abundant water resources and great potentialfor hydro power estimated at 20000 MW. Of this. less than10% has been exploited and efforts are being made toeffectively tap and harness the untapped hydropowerpotential of the state. In order to bring greater private sectorparticipation a new policy has been announced in executionof mini and small projects and 12 projects with 68 MWinstalled capacity have already been recognized.Furthermore the Jammu and Kashmir State PowerDevelopment Corporation has undertaken the execution of9 micro hydroelectric projects with installed capacity of11.22 MW. Furthermore development of infrast~uture forimproved transmission and distribution is also beingundertaken. Tremendous potential exists in this sector whichcan be effectively harnessed through suitable investments.

Investments Key to Sustainable Growth

the Partition of India in 1947. It has been seen as the fIrststep towards the peace process in Kashmir and the latestamong the measures undertaken to ease tensions between

the two countries.

After the commencementof the bus service, it isproposed that trucks couldbe allowed to ply on bothsides of the LOC. This islikely to start the process of

""',trade and economicactivity between both sidesof Kashmir. Specifically,

an integrated development of projects using Public-PrivatePartnerships, as has been described in this document,would require backward synergetic linkages for supplyof raw materials and partial/fully processing of goodsthat may be required for projects. This could createenhanced trade linkages between Kashmir across theLoC. There is also scope for the exchange of technologyand skills.

FurtherInore, the opening up of borders of northern statesof India, particularly Jammu and Kashmir, could gaingreater access to Central Asian markets. Joint Venturescould also be set up in the infrastructure and informationtechnology sectors which could prove to be benefIcial forboth countries. The climatic conditions of the state coupledwith the knowledge-based characteristic of the IT and ITbased industry make it a potential investment area in thecontext of Jammu and Kashmir. Moreover, making use ofthe abundant water resources in the region, both sides ofKashmir could also harness and distribute hydropowerjointly thereby addressing their energy requirements.Furthermore, joint tourism undertaken by the two in theHimalayan region would also provide substantial benefItsand a boost for the tourism industry in Jammu and Kashmir.

Sustainable growth and economic recovery to a largeextent depend on a rise in investments without whichemployment creation, higher productivity and greater,incomes can not be achieved. In the case of Jammu andKashmir the need for investments also becomes essentialto catalyse and sustain the process of economic recoverythat has already begun.

A number of recent efforts have been made by thegovernment to create an environment for stimulating growthand socio economic development through attractinginvestments from both within and outside. Within the

56 YOJANA August 2005

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Agriculture in Jammu and Kashmir is the principal sectorof the economy. Agriculture and allied activities supports.. almost 80 per cent of the population, employs. 70 per centof the workforce and contributes 60 per cent to the stateeconomy. Within this sector, horticulture occupies an.. important position in the farming syst~m as it earns annualrevenue of approximately Rs 50 crores and is a sourceof employment to thousands of people directly andindirectly. Therefore it is safe to say thai economicdevelopment would depend to a large extent on theprogress cif this sector. In line with this, the governmenthas gi~en the horticulture sector the highest priority.'However, value addition in agriculture related primaryproduce through development of integrated Agribusinessprojects is required and should be given a priority status.These projects can be developed in the spirit of PublicPrivate Partnerships.

Information Technology is another area where therecan be substantial investments. Identified as one of thesunrise sectors, there exists substantial potential for thedevelopment and growth of this industry. In terms oflocation and geo climatic conditions the state of Jammu andKashmir proves to be ideal. Furthermore the industry isprimarily knowledge based and to this extent, can absorbthe unemployed and educated youth of the state. The costsassociated with setting up a software unit are also relativelylow. However the growth of this sector would requireuninterrupted electric p~wer, High speed internet broadbandand IT connectivity, facilities for the training anddevelopment of local youth and an environment conducivefor the future growth of this industry. Some of these issues.have already been addressed in the Information TechnologyPolicy of 2004. A number of incentives are being offeredfor investments in this sector. Furthermore efforts have beenundertaken for huma~ resource development and setting upof IT infrastructure in terms of Software Technology Parksand private sector participants.

This is the first article in the series "InvestmentOpportunities in Jammu and Kashmir". It is based onthe document brought out by Yes Bank for PHD'Chamber of Commerce and Industry (PHDCCI) for itsCentenary Partnership. Summit with the Government ofJammu and Kashmir. The document was released by theState Chief Minister, Mr Mufti Mohammed Sayeedrecently in the Partnership Summit held in Srinagar.

YOJANA August 2005 57

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...----------N-.,'i -ii,-r--J-&K---""'----.,-j-I'--,•.•..,..',.','.••.,••,1.'1°'l ews2 rom".',!!, ,

• Amarnath Yatra begins ' !,

Di/votees pray at the Amariiathca~eshrine.;ffTIi'e ann'!t",~~. ,:-' ',~',<, --,:-i.,~ )' :,;',~,t",' '.: ; "jj/!!'!' '",,' -~, _',~:: :.'

~pilgrimaie to'thecave(shrine, a(I12,800 feeiin ihe,.'It: .",'-- _.:"",h:. ,. ':fr.' , :t:";"i':_ 'J ':,'f.,~- l~'"

"lH. im....alayas in.YJ..,ammu a.n.."d I'...ashm,'...r..'"b,e....gan....,,',o..'..,.',.n,,'.,',,',','.1.,..u,'.ne..,2.,,,_. ,,' ""'",,<., -,.' 'if,,: " ",~ .;,,1: ,-.--\ft'f<t;-" ,.. ;.,.+--

~Th~llsandsiofdevoteef.,are e~lec{ed to~r}~~~ th~')i shrine' within. aItwo~in01irhperi~i$f!!~i~i'-~ : ";-,_ ,-" .';-ii'.'- -'--i',.'J;" .,: /._ .. ~"'0' .:.";, >_"'~-~~,

The two month long annual pilgrimage to the holy caveof Amarnath began from Baltal on 21st June.Elaborate security arrangements have been made forthe yatra. Army, para-military forces and local peopleare patrolling the area to maintain tight security.Nearly 5 lakh pilgrims are expected to visit the cavethis year.

• The British Government is expected to take a freshlook at its travel advice on Jammu and Kashmir afterthe External Affairs Minister Mr Natwar Singh raisedthe issue with his British counterpart Mr Jack Straw inLondon during Mr Singh's recent visit. Currently, theBritish Foreign Office advises its citizen against travel

to J&K with the exception of Ladakh via Manali or byair to Leh. Mr Singh told reporters that Mr Straw hadpromised to take a 'sympathetic' look at the matter. Hepointed out that major attraction such as Sri nagar,Gulmarg and Pahalgam were quite safe .

• The J&K Government is to provide electric power toeach domestic unit by 2007. Under the Government'snew policy for achieving self-reliance in powergeneration, 10 mini hydel power projects are being~-,:,"constructed in Baramulla district, with a total generation

",~ capacity of 32.50 Mv. Two grid stations, one each at-.:~' Chandak and Draba would be se' up in Poonch at an- estimated cost of over Rs 84 crore to provide 132 Kv6 line to the border district. The State Power Minister,

Mr Mohammad Sharief Miraz said during last year,seven new sub-stations were opened, small transformersinstalled and nine additional snow-affected villages wereprovided electricity.

• The annual plan outlay for Jammu district for 2005-06has been fixed at Rs 84.61 crore.

It Under the PM's Reconstruction Plan, the StateGovernment has formulated a comprehensive project tostrengthen the basic infrastructure and streamline thedistribution system of power supply in border districtofKupwara. New Receiving and Grid station would beconstructed besides installation of transformers and Rs240 crore will be utilized to improve the power supplyin the areas.

• The Jammu & Kashmir Government has formulated acomprehensive plan for the cultivation of medicinalplants across the state in a large scale. In the first phase,a Rs 5.56 crore "Vanaspati Van" project has been takenup for the cultivation of medicinal plants at Ganderbal,

58

Shikaras participate in a 500-metre race on the Dal Lake at th~ Aquatic Sports Meet 2005 organised by t eJaml,!u and Kashmir police in Srillagar, i: ;, ;;:<~

YOJANA August 2005

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30 kms from Srinagar. The Centre has released Rs 1.50crore for the purpose .

• The Centre is to set up 14 more colleges across J&Kunder the PM's Reconstruction Package. Two of thesewould be exclusively for girls. The Human ResourcesDevelopment Minister, Mr Arjun Singh said this inSrinagar after the Northern Zone review meeting ofcentre-sponsored schemes in elementary and adulteducation .

• The Cable Car Corporation Ltd. (CCCL) of Jammuand Kashmir has decided to begin work on the Rs 20crore Mubarak-Mandi Bagh-e-Bahu cable car projectin Jammu. Mubarak Mandi (Durbar-e-Aam) is aheritage complex while Bagh-e-Bahu is a garden. TheCorporation has also decided to acquire land for thejob from the Shankaracharya (Kashmir), Patnitop(Jammu) and Baisern-Pahalgam (Kashmir) Cable CarProjects .

• The J&K Government has used over Rs 111 crore fordevelopment works under the MP local area schemeout of a total sanction of Rs 141.50 crore betweenDecember 1993 and May 2008. Out of a total fundutilization of Rs 111.81 crore, under the Centrallysponsored Member of Parliament local areadevelopment programme, Rs 76.21 crore was usedby Lok Sabha Members and Rs 35.6 crore by RajyaSabha MPs.

Waheeda's Guide to Kashmir"{'~;>"" ":Y,"\:_::_" :"~~::,., '\::,. __ -.':°

0';'<',>;_ ,:~r~:':_.,'- ",:~~~;:,_,,:'N~;'oneWan orp';;~>cTheprime or basic thing it,,:elF!':;:'. .- -]fit,:, "',' -'0.'::" -',"': .. -. ",' .'-'i" "J.;

f~~asuccess.fj11 li/e/s to getg~?de1lfcation SO\f:~:"asto land d plum"job": ..Wah~eda Rehman:;Z:~,,Y'/:~~"""_" r\.~:, '., ,. '?';,i';;, <,,/~~-'. ):, l%~_~: '~_,::,_~'~'::lfi>

"Ct}After former:~1iss Um~erse Stishmit(S~n, itwas i~e turn '''Sf legendary~;,"Bollyw~'6d actre~~",Waheeda Rel1man to :~\.. ,'~pend so~etime with orphans in Snnagar? .

.,...:#~he Was on a~~hvate,~{~it t~:Kashnni;~~:

.'i1ndmei,j~round30 children of::;Raha6•..g~ar" , a~h~lter'f~r orph:ilis and~idow~;~;:'iat~;furi~tion"?rg~niz~d;?y the 1CentralS'~}R~seive1'Police Forcel(CRPF). Ms,

,c~':,~",_ ' '~-'/-Rf~----'<",.?,~~,-fF' _: >, <;c' ":' "',:~~~'

,RelJman$~aid?rphan s!~dents ne~dedto.~~:'?e encouraged,and ev~ryone"shoulg{'c'ontributefo/iheir welfare. She said~'

\.'.'The b~St9or priiri~ thing [6r a ~h~cessful'~'t,¥e is to get good ~ducation so asto land ."; Wakeda Rd[;,an ;:;;er;;cti~gwith omhan.rpluni'job". I . U:. asked.film.~kerstoshootin Kashmir a~

C--"'0", $ O~'i~,;~, '<'>~i-:: 'f1l ;;~"'~f> ~'~<;;,::; _~. .':_,~',::"~~,',::,'"';':,' ">;:": "<:~:>:,~"[;-;JJ~0:;i-,":'\?':)~:-;- ,,'

[;~•• She told the.studentsi!hat they'sho\l11.:i~: hciw.... she visited the Valley.26 years bacl~ to shoot a film.~gt...fee!.",..l.onely:'.'.'D..., on't fe.•el that. you art(orphans::: in .

'0 00 'I. .', Ka:shmiri~a wonderful place. She/said that now\Vith peace~lof us~e thepr?genyof God',;, shesmd. ,', process injull swing and return of nOrmalcy, Bollywood':";;icNostalgic ~bou; Ka:hmir, Waheeda:Rehmari.recali~d producers would make a beeline to the Valley for shooting.

-,',C"> .. '",' ',,';" ,', ,;,'" ""f_;,...:._"_:.-~" "~'" "c';,;""''''" '",";,,>"

YOJANA August 2005 59

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Mr Sameer Kochhar is CEO, SKOCH Consultancy Services and Mr Gursharan Dhanjal is also from the same firm.

YOJANA August 2005

Samea KochharGursharan Dhanjal

the number of processing stages havebeen cut froIll18 t06 for papenyorkfor"imports and'from 15 to:,5 inthecase ofexp?rts. Digital signatures, an.~beingworked on, and a payments gatewayalre~dy exists. The 6ustoms website gets100;000 hits a day, with:exporters/importers filing th~ir d~)cuments Jthis

"".,,,'" . ._. - ~ ,j.

'way,andthen checking the status as':well::.fo[ querie~ like "have thegoods.1been cl~area on a'.without-inspectionbasis, or'do they n~ed to b'e inspected;physically?::. A~d'the success of proviqingtitizens, alL services like birth/death'~ertificates and payment of taxes:. through a citiz~h facilitation c~ntre at:theKalya~ .Dombi~ili Municipal~orpor'ation (KDMC) has goLthegovernment to ~omlTIit itself to'lrolling out a similar'sedup ,in 240,more mtil1icipalities across the state:-".,) e'<-

In the case of the N atipnal Securities:Depositor{Limited (NSDL),one of'

. - .;i'~,- " " 'C --:~

the first pim-Indian e-'governance'solutions, the cost of Selling shares ,i~enfrom,2,5 p~Tcent .of' each.'transaction's v'alue.to a mere 0.2peri~2~nt; an,d the. dail y"~ohlIne .of, shareshas gone up from'Rs 400 crore ill"'1991 to~:a rriind bogglingR~ 50,600-crore today!

T[IAS been several years .sincethe first e':'governance projectbegan in the country, ~ndthereare 6'vera jh~ndr~d suchprojects today, thOl{gh only

,about h~I(6f these.,w~?ld7qualify,as e~'governance p~ojects i~. the senseJheyj ha~e adir~ct ~nte~ace,'with citize~s or.other consumers of such services. The

1rest, though 106selYclassified ~nd~; the: s~"metItle;'(lfereally ¥ISproj.~cts~'like. the computerisation 0t policerecords.Spending on e-go~~martce;'acc&rdil1g to

; ou r.• re......•..searchha s. gone .. u.p by an;impressive~25~er;;~enf or soann~ally,from around Rs I,500'crore ir12002.toan.estimat~d Rs i,200 crore'~xpectecl

) ~.~ "F'

~thi.sye(1f' .' . ...."Anecdotal evidence .suggests:that

.even if elected governrrlenis don't work,"e-g'ove~nments certainly~do.From a. situation where, railway tickets sold in'black,coII1puteri~ed .reservation:'.has~meant this :is not ai all possible today.t Similarly, ~hile thecustomsdepartrtenf"was khown for both itscornJptioI1 aswe'll a,s d~lays,pnline Jilingand. clearances 'have'resulted in a situation,where, in 23 customs offices allover thelfcountry, over 95 per. cent. o;L allipaperwork relating!O ipp~rts:tandex~orts is now filed in !his fashiontand

E-Governance Report Card

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( 1'---" And, after 'Bhoomi' became such a

big success (over 10 million Karnatakafarmers have got copies of their titledeeds from this), it was replicated inMaharashtra, Haryana and Gujaratfollowed suit with 'Bhu-Lekh' and'Bhu-Lekh Soft' (96 lakh record ofrights and 51 lakh land accounts havebeen entered into the system inGujarat), and Rajasthan has its 'ApnaKhata'. In other words, e-governanceprojects are no longer just a fancy orcool idea for those who want to showoff, nor are they merely a source of bigorders for hardware/software vendors;they're now an integral part of anyserious governance effort.

Assessing e-governance

For every project that's workingwell, however, there are likely to be asmany, perhaps even more that havesimply failed to take off. According toinputs received from our earlierSKOCH round-tables, at least 30-35rural ICT projects are in the doldrums

,YOJANA ,August 2005

today (when's the last time you heardof Madhya Pradesh's 'Gyandoot' thatwas hailed by one and all when itstarted?). There are several assessmentprojects in various stages of planning/implementation for e-governanceprojects and to suggest strategies forscaling them up.

Over a period of the last two years,while conducting various round-tablesand conferences on e-governance,'certain project names have kept comingup again and again as examples ofsuccessful projects - these includeprojects like 'Bhoomi', 'Sarita', andmore lately, 'KDMC' and Uttaranchal'scomputer-aided education programmecalled 'Aarohi'. Though just a littleover two years old, 'Aarohi' has alreadycovered 1,420 schools in the statebenefiting over 5 lakh students and p~sspercentages in the state have gone upsignificantly, from 35 to 50 per cent inthe case of high school students.

Before we set up doing ourevaluation, we asked our panel of experts

to prequalify the best projects, and thenlist out various parameters on which theyshould be judged. They came up witha list of 21 projects; each of which weev'aluated by getting user responses. Tokeep. it simple, we asked users to rankeach project on a score of 1 through 10for each of the 14 parameters.

A word of caution before wedescribe the stupendous results got fromour survey. The 21 projects we chosewere the best -executed according to ourpanel, and so the sample is alreadyupwardly biased. Though it must bepointed out that if our panel came upwith a list of 21 out of around 40-50citizen-oriented genuine e-governanceprojects, this itself points to one kind ofstory. We should also add that justbecause a project is not here doesn'tmean it isn't good, it may just be thatone of our panel wasn't aware of. Thisneeds to be stressed because, somemonths ago, a trade magazine earnedthe ire of one serious practitioner of e-governance when his project was

61

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ranked lower than some other project!We didn't poll users of the 'Bhoomi'project as the Public Affairs Centre inBangalore has done a good job of this,and we've just drawn upon theirfindings on 'Bhoomi'.

O.n an average, our samplereported a score of 8.1 (out of

. 10) for the decline incorruption as a result of the 21 e-governance projects. While the scorewas 10 on 10, or one hundred per cent,in the case of projects like the CitizensInformation Centre (CIC) in Assam thatallows citizens to file their requests tothe government online and getdecentralized delivery nearer theirhomes, or even in the case of 'Aarohi',it needs to be kept in mind that suchprojects are not the type where heftybribe demands are made anyway.What's heartening is that for variousland record projects, where bribes arerampant, the scores on the decline incorruption were pretty good as well.Uttaranchal's land records projectcalled 'Croun' scored 7 out of 10 in thisregard, Andhra's 'LRMIS' (another e-governance project for land records) dideven better with a score of 8, andKarnataka's 'Bhoomi' (going by thePAC survey) would have got over 9.The impact of railway computerisationin lowering corruption got a score of 9,'Sarita' got a score of 7, and 'KDMC'scored 8.

For all the concerns that a largeilliterate population, which has hardlyany familiarity with computers, thecountry appears to have taken to e-governance remarkably well. For our 21projects, the parameter 'ease of use'was given a score of 7.8 out of 10, and8.3 for 'user-ship'. An area that needsto be worked upon, though, is thesomewhat large variation betweenprojects within a state itself. In Assam,the 'Tax Information Management

62

System' (TIMS) project that does taxmanagement through computerizedcheck-posts has a score of 7 when itcomes to 'ease of use' but a 'user-ship'score of just 4. Yet, the CIC in the samestate has a 'usership' score of 8. Apossible explanation of the low 'user-ship' of TIMS, of course, could be thefact that it is new and not all themodules have been implemented at all

. Sales Tax gates besides the fact that'staff competence' and 'staff behavior'also have a score of 4 as compared to7 or 8 in the other projects in the statepointing towards a need for bettertraining.

In a country that has large tractswithout electricity, and even larger oneswithout regular electricity supplies, andpretty bad infrastructure like roads,what's especially encouraging is thequality of most e-governance projects.Most projects rate the adherence toService Level Agreements (declaredtime in which a service is supposed tobe delivered or the contracts signedwith the vendors on 'uptime' offacilities, and so on) as very good - so,if a machine is supposed to beoperational for 20 hours a day or theservices are being delivered in apromised time frame, it will be prettyclose to that. The SLA score for the 21projects is 8.3, and it is 10 on 10 forprojects like the railways ticketing,'Aarohi' and the 'Craun' inUttaranchal. It is not clear if this is onlya reflection of the good work being putin, or if the SLA obligations are lenientto begin with.

Another cause for optimism is thefact that consumer satisfaction is veryhigh. The overall score for satisfaction,or 'alignment with user expectations', is7.5 and goes as high as 9.5 on the countof affordability. It is this factor ofaffordability, in fact, that has ensuredpanchayats and other bodies that have

installed e-governance projects h~;actually benefited in.monetary terms. InMaharashtra, after 'Sarita' maderegistering of property much easier,property registrations rose 27 per centin 2002, and in the case of the TamilNilam land records programme, whileit cost Rs 2.5 crore Ito set up, theauthorities have already collectedRs 3.7 crore in payments from privateusers.

While all the projects are scoringhigher than 5 which is a very good scorefor any user feedback basedmethodology, the score for some centralprojects like Kisan CaJll Centres andAgmarknet have the potential to scorefare higher. Call Centers are supposedto help farmers tackle technicalproblems by giving phone-in advice andAgmarknet is supposed to providefarmers all information on prices,weather and so on. Agmarknet alreadycovers 735 mandis and is supposed tohave detailed information of prices,arrivals of crops in the 'Mandis' or thewholesale markets, and so on. This inthe case of the Kissan Call Centers canbe explained due to the fact that it isarelatively new project and thepromotional activity on it has not yetstarted, therefore the usership isrelatively low. For Agmarknet, onepossiblity is that the 'Mandis' still don'tdisplay the information well enough forobvious reasons-in one case, we sawthe Agmarknet terminal hidden behinda pile of oranges. Another is that, unlikethe case of lTC's e-choillpal, farmerscan't actually sell their produce onAgmarknet as yet. Therefore generatingmore awareness and adding morefunctionality to these projects can helpbuild on the good base ah"eady created.

Project findingsThis year's winner is Uttaranchal's

computer-aided education program'Aarohi' which has resulted in a sharp

~YOJANA August 2005

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~e in the government school results.According to a government official weinterviewed, at the intermediate level,the pass percentage has risen from 45per cent to 64 for the intermediate, andfrom 35 per cent to 50. at the highschool level.

'Aarohi' scored 8.9 marks out of 10in our 14 parameters, and here too, itcould have scored more as it got a meretwo marks under the heading 'singlewindow access to many services' -butthe fact is that it is not meant to be asingle-window clearance anyway. Dueto the need to keep the basicexamination criterion similar across alle-governance projects, however, we hadto retain this criterion for 'Aarohi' aswell. Once you adjust for this, however,this would put Aarohi's user-satisfactionat around the same for 'Bhoomi' (basedon the PAC results).

The number two slot, which meansa score of 8.7 on all the parameters isshared by many projects together. TheRailways computerisation of ticketingproject scores this, as does Bangalore'sonline bill payment facility 'Kaver-e-com' and Maharashtra's KDMC. Therailways project scored a perfect lOon'user-ship', 'simplicity of procedure'and 'affordable cost of service'. KDMCgot the same score on 'ease of use' ,'user-ship', 'alignment with userexpectations' as well as for 'affordablecost of service'.

Tamil Nadu's land record systemTamil Nilam as well as its RuralDelivery System are close on

their.heels with a score of 8.6 out of 10.The Rural Delivery System designed byProfessor Ashok Jhunjhunwala of llT-Madras, comprises of rural kiosks(costsRs 50,000 a piece) that allowvillagers to use the internet, do video-conferencing (usually with technical

;. experts in the towns on their.agriculture-related questions, for

r./YOJANA August 2005

instance), and so on. Also on a pilotstage is a rural ATM that costs Rs50,000 as opposed to around Rs 10 lakhfor the imported machine, as well as adiagnostic kit that allows remote userssitting in the kiosk to be examined by adoctor through various instruments thekiosk has like the blood pressuremachine, the stethoscope, thethermometer and so on.

While the results differ from oneproject to another, broadly speaking,projects that concentrate on delivery ofgovernment services like 'Sarita' andKDMC score between 8 and 9 out of10. In other words, e-governance isdefinitely the next wave as far asdelivery systems are concerned-contrast this with a 10-15 per centsuccess in reaching the target group inpublic distribution programmes like thePDS, and the giant stride forward isobvious. Such projects also score in asimilar manner when it comes toreducing corruption.

Other innovative delivery systemsare TIMS in Assam as well as the TINat the central level. Curiously, bothscore around 6.8 marks. This is perhapsto do with the fact that both projects areaimed at reducing tax evasion and so arenot so popular with the users. Both scorevery high on the 'time savings' area.

While the SKOCH survey didn't pollnon-users at all, the Public AffairsCentre's study on 'Bhoomi' didprecisely this, and found the differencesbetween the two groups of users andnon-users was quite stark. So, forinstance, two thirds of 'non-Bhoomi'respondents said they had paid a bribeto get their land record as opposed to amere three per cent in the case of'Bhoomi' holders. 85 per cent of'Bhoomi' users said they found the staffcourteous, a figure that was zero in thecase of the 'non-Bhoomi' respondents(two-thirds felt the service was

mediocre and a third felt it was bad).While 78 per cent of 'Bhoomi'respondents did not meet anygovernment officials (except the'Bhoomi' staff), the figure was zero forthe non-Bhoomi lot, and 61 per cent ofthem met between 2 to 4 officers to gettheir work done.

While the benefits of e-governanceprojects are obvious, a host of states arequickly trying to crank up such projects.Since most are talking of huge amountsrunning into thousands of crore rupees,detailed cost-benefit analysis is calledfor. What's been attempted is an initialassessment.

Recommendations• Built in e-governance schemes: To

be built into all projects that haveclear deliverables for citizens. Makethird-party six-monthly monitoringof such projects mandatory andpublicize the results. Evaluation tobe against pre-set criterion, fixedbefore the project takes off.

• Design projects to suit citizenneeds: Over half the e-governanceprojects are not adequately focusedon the needs of citizens. One reasonwhy projects like Bhoomi have donewell is that they are easily accessibleby users at various places unlike thepassport or driving license onewhere users still have to go to thegovernment offices.

• Stress on staff training: With alargely illiterate population, certainlycomputer illiterate, in rural areas andsmall towns, it is critical that staffersmanning the kiosks know how to usethem.

• Insist on business process re-engineering: If the old systems ofproviding services or clearances forcitizens are merely replicated in thecomputerized system, this is notgoing to help. Any e-governance

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~1!!fjJmN ~ <=> 00:iiJ] SilliililflliSY 4\i'i9'$;IitQIO ~ am ~ ~SingleWmdow Speed of

TIme Savings Access to Low Rectilica. Alignment Affordable Reduction Stafl;

Ease of User- Speed of Simplicity of Compared Many Incidence tion of Witb User Cost of in Bebavi- Compe-

State Project Use ship Delivery SLAs Procedure to Manual Services of Errors Errors Expectations Service Corruption our tence Tolal %

Assam TIMS 7 4 9 9 8 10 7 3 3 9 10 8 4 4 95 68

Assam Aamar Sewa 9 8 7 9 9 9 8 6 2 9 9 8 7 8 108 77

Assam CIC 8 8 7 9 9 9 8 6 1 9 7 10 7 8 106 76

Vttarancbal Aarohi 10 10 10 10 10 10 2 8 7 10 10 10 9 9 125 89

Uttarancbal Land Records 7 6 9 9 10 8 2 8 1 9 10 7 7 8 101 72

Delhi Passport" 4 10 5 7 2 3 3 5 4 2 10 5 4 7 71 51

Delhi , Driving Licence 3 10 6 9 5 9 2 9 1 6 10 6 4 7 87 62

Centre ," Agmarknet 4 2 2 7 7 9 3 8 2 1 10 10 6 8 79 56

Centre " TIN 7 8 8 8 7 9 2 8 2 5 7 9 8 9 97 69

celltre' Railways 9 10 9 9 10 9 7 9 7 9 10 9 6 9 122 87

Centre Customs. 10" 107 7 7 6 7 7 6 3 7 3 3 7 90 64

"'," ....

Centre Centers" 7 2 6 3 9 9 5 7 4 5 10 10 6 8 91 65

Andbra Pradesb CARD 8 10 9 9 9 9 6 7 6 8 10 8 7 8 114 81

Andhra Pradesh e-Pancbayat 8 10 9 9 9 9 5 7 3 8 10 8 7 8 110 79

Andbra Pradesh LR;MIS 9 10 9 9 9 9 6 7 3 8 9 8 7 8 111 79

Bangalore Kaver-e-com 9 10 9 9 ') ') 5 9 7 9 10 10 8 9 122 87

Bangalore Koveri 9 10 9 8 9 9 4 7 8 8 10 8 7 8 114 81

Tamil Nadn Tamil Nadn 9 8 9 9 9 9 8 9 8 9 10 8 , 7 8 120 66

Tamil Nadu Rnral Delivery 9 9 9 9 9 10 8 8 8 8 7 10 8 8 120 86

System

Mabarasbtra Sarita 10 10 8 8 9 9 5 8 8 9 10 7 7 8 116 83

~1abarasbt[ii '''- KDMC 16 16 8 8 9 9 'I 8 8 10 10 8 7 8 122 87

Total 163 175 164 174 173 183 112 153 96 158 199 170 136 165 2221 76

~ 713 (j) !OO m CiJ im lE)' .ID m CD '" Gi •...'. "W. I'U3 ~

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User Ratin~:Sof e-Governance Projects'100

project has to re-work the existingsystem fIrst.

• Private delivery agents: Projectsthat have fared the best are thosethat move closer to citizens, asopposed to those who expect thecitizen to continue to approach thegovernment as they did in the past.In Assam, citizens can file theirrequests from mandal-level officesand this then goes in e-mode to thecollector's office, and the clearancesget mailed back to the mandaI office,and then onwards to the citizen. Incases like Rural Delivery Systemsin Tamil Nadu, a pilot project has- kits for medical diagnostics inkiosks, and citizens will be able toget examined by qualifIed doctorsin the city while remaining in theirvillages. Private operators will run thekiosks more efficiently than thegovernment and will even come upwith new projects, as ICICI Bank didwith Prof Jhunjhunwala's rural ATM.

YOJANA August 2005

• Publicity is critical: Publicity wouldgo a long way in increasing usership.Since projects like Agmarknet andeven Kisan Call Centres have lowawareness amongst users. In onemandi SKOCH visited, the terminaldisplaying prices was hidden behindthe vegetables-something that wouldnever happen if users were moreaware of the project and how itwould benefit them.

• Affordability: The highest scoresare on the parameter of affordability.The primary reason is that in mostprojects nothing extra is beingcharged from the citizen for the e-delivery of services. To keep theseprojects viable the followingmeasures would go a long way:a) Keep the choice of technologiesaffordable while ensuring that theinfrastructure does not follow atwo year obsolescence cycle andremains relvant at least for fiveyears at a time.

b) Reduce replication ofinfrastructure by clubbing thesame infrastructure for multipleservices. Ditto for applications.If an application is already doingwell in one area there is no needto reinvent the wheel.

• Penetration: The penetration ofsuch delivery systems has to be asubiquit'ous as that of STD boothsfor the citizens to be able to accessservices anytime anywhere. Yet, theonly possible solution to make thisviable as a business proposition i~to have a wide array of servicesavailable from a single window.

• Increase spending: While thespending on e-governance is postinga 23% increase year on year, theoverall fIgure is still very low andthe number of sites still far and few.Given the fact that these projects aredelivering so well, there is a need tosubstantially hike this spending. 0

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66 YOJANA August 2005

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Does E-Governance meanGood Governance ?

Yogesh Baweja

E-Governanceis not

synonymouswith goodgovernancebut is a toolfor the latter

-GOVERNANCE IS the useof information andcommunication technology topromote more efficient andeffective government,

facilitate more accessible governmentservices, allow greater public access toinformation and make government moreaccountable to citizens. It involves newstyles of leadership, new ways ofdebating and deciding policy andinvestment, new ways of accessingeducation, new ways of listening tocitizens and new ways of organizingand delivering information and service.

The primary condition ofimplementing the e-Governance is thatthe government should be of democraticor partially democratic nature as thedictators or totalitarian systems neitherneed inputs from the masses nor do theyhave to justify/explain their decisions tomake them acceptable. On the otherhand, in a democracy, the governmentcannot be divorced from the will andaspirations of the people. The otherimportant requirement is that theeconomy should be of free nature or themixed one as it gives opportunity to theindividuals to think big and 'out-of-thebox' and show their enterprising nature.The system of bureaucracy, whichworks on the principles of rationality,neutrality and anonymity, helps indelivering the goods. The system should

be guided by the principles oftransparency, efficiency, accountabilityand welfare of the society. Though theseprinciples may appear to be utopian, yete-Governance can help more inapproaching and attaining them morethan the conventional system ofgovernance.

Due to growing awareness, people'sexpectations in India, have increased.They expect the public sector andpublic services to be at par with, if notbetter than, the private sector. Thecomparisons with standards and normsof the developed countries areincreasing. The government must,therefore, be seen performing and-delivering results. IT is certainly among.the better tools for this purpose. Thiscan lead to competitiveness, toinnovations that are so essential forreforms. Moreover, the informationsystems become the interface betweenthe government and the citizens,thereby ruling out face-to-faceinteractions and providing a standardlevel of service. The interface tends tobecome non-discretionary and availableanytime, anywhere and to anyone.Various functions and aspects of thegovernment in the country are beingconverted into electronic or networkedforms. But general standards andpractices are still evolving.

Mr Yogesh Baweja is from the Indian Information Service.

YOJANA August 2005 67

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E-Governance aims to putinformation and communicationtechnologies to the service of goodgovernance - that is transparent, fair,effective, accountable and receptive tothe aspirations of the citizens. Its effortsshould aim to achieve a Simple, Moral,Accountable, Responsive andTransparent (SMART) government.

It utilizes the ICT tools and theworldwide web for deliveringGovernment information and services tocitizen and business. It involvestransformation of public sector, internaland external relationships through web-enabled operations, IT andcommunication technology to optimizegovernment service deli very,constituency participation andgovernance.

Benefits to Citizens• Access to all requisite information -E-Governance projects provide 24hours, 7 days a week online accessto government services to all thecitizens; i.e. a 24 hours 'one stopshop' for all government informationservices comes into effect.

• Blurring of the boundaries ofgovernment departments - E-Governance projects ensure that theboundaries of Governmentdepartments become blurred and toa large extent invisible. TheGovernment offices are presently .spread out, geographically as well asfunctionally. This causes a lot ofhardships to the common man. Forexample, if a man has to go abroadfor employment, he may have tointeract with the Police, the Ministryof External Affairs, the Ministry ofOverseas Indian affairs and theMinistry of Human ResourceDevelopment etc. But if e-Governance were to be applied andthe applicant were to go through awebsite, he would not have to runfrom pillar to post or understand thehierarchies and business transactionprocesses in various departments.

• Reduction in end to end time - Thee-Governance projects can ensure

68

that the citizens aspiring to contacta government office and wishing toget a service from it will have toundertake minimal physical visits.These visits can be at one'sconvenience. The time taken fromthe start of an activity to its end getsreduced as there is no scope ofrelegation of duties, jumping of thequeues or any excuse of not gettin'gthe things done. The service this wayis hassle free and without anybotheration. All the in~ractionsbetween the business and thegovernment can be processed byusing IT.

• Adequate redress mechanisms- Thee-Governance projects have aninbuilt grievance redressalmechanism. So, one does not have tolocate or wait for the grievanceredressal official, as is the practicein the conventional set-up.

• Reduction in transaction costs- Iftime is money, then e-Governance isthe surest way of laughing all theway to bank. The people not onlysave journey and waiting time butalso most of the services through thee-Governance are provided ataffordable charges.

• Transparent process- The e-Governance projects ensure clarityand transparency in all transactions.They leave a trail of eachtransaction. So there is not mudlscope of fiddling with the system orits undermining.

• Restoration of citizens' faith- Itinvolves participation of everycitizen in the governance, therebygiving impetus to the democraticvalues and strengthening the beliefof the people in the system.

• Equality of Access and Facilities-The e-Governance is all the morebeneficial to the disadvantagedsections of the society who due toeducational, economic or socialinabilities and inequalities cannotaspire and attain the accessibility andfacilities to which they are entitled

to. The e-Governance system wo~.'-:in an egalitarian manner, whereindividuals are treated at par witheach other, with not much scope offavouritism, corruption, nepotism orhigh handedness.

• Removal of the middleman- E-Governance cuts off the role ofmiddleman or broker. It purges theintermediaries who thrive on red-tapism, complex web of rules andlaws, and networking, but ofdifferent type. Liaisoning betweenthe service providers and thebeneficiaries, which has developedinto an art and a necessary evil in thecountry, has no role in the systemwhen ICT takes over.

• No scope of discretion- E-Governance cuts off discretionarypowers, as all the decisions aretransparent an~ accessible to one andall, all the time. The e-Governancestrengthens and facilitates, at thesame time, the right to informationof the people as envisaged in therecently passed bill by Parliament.

• No need to be a master of thegovernment procedures- E-Governance shields the citizens fromtrying to understand the labyrinth ofbureaucratic hierarchy.

• Greater participation in nationalefforts- E-Governance tends .toproduce greater democraticengagement where it is able toaccept the creativity and initiative ofcitizens. People can freely and fullyparticipate in providing feedbackand suggestions for the improvementof the system.

• Easy to follow up- E-Governanceprojects provide citizens withdocuments which can be used forsubsequent follow ups andcorrelating various data of theindividuals.

• Bringing the have-nots into themainstream- For bridging the ruraldivide, such technology can beapplied that makes rural access

YOJANA August}005

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~ j b'~nexpensive and ro ust. Th~re aree-Governance applications that drawa large clientele that pays for theservice, ensuring the projects'economic viability. If NGOs andprivate organizations are involved,they can catalyze & manage thecommunity building process. Thecontent of such projects shouldempower rural citizens and enableformation of communities.

Benefits to the Government

• Improved productivity and services.Decisions and follow up action canbe traced and tracked, leading tompre accountability. Since, thesuccess can be gauged objectively, itwill curb the heart burning orprocrastinating habits among theofficials. All these can lead to highlymotivated group of officials. E-Governance can lead to betterutilization of time for productivework. The quality of services beingdelivered by the Government can seea quantum jump, thereby enablingthe Government to take head-on thecompetition from the privateorganizations.

• Improving Finances. It can help incost cutting, by curtailing the growthof excess manpower, deleting certainsteps, simplifying the procedures andputting an end to duplication ofefforts. There will be lessestablishment tasks, less file workand less decision taking steps

• Cutting the Flab- E-Governance canhelp the Government in synergisingthe functions of its variousdepartments, thereby affectingeconomy and reducing the wastefulexpenditure. Government agenciescan benefit by interconnectedinfrastructure by sharing and usingcommon databases. There can beelectronic registration, electronicdelivery of services and electronicway of connecting to the people,thereby reducing the requirements ofspace, manpower and infrastructurefor the government.

YOJANA August 2005

• Adaptability- E-Governance offersflexibility and situationcustomizability to the government.The government processes can bemodified and made adaptable to thechanging organizations, policies andexternal environment. It can help inreengineering and optimization ofwork processes.

• Better decisions- E-Governancefacilitates the prompt feedback fromthe people and field staff, which canbe collated and analyzed quickly,and decisions can be accordinglytaken. The promptness andresponsiveness of the government tothe ground realities and people'saspirations can go a long way inmaking our nation a developed oneand meet the economic, social andpolitical goals, as cherished by ourfounding fathers. There can be betteridentification of priorities and betteraudit and analysis of data. There canbe accelerated and transparentgovernment decision process

• Weapon against the corruption- E-Governance leads to increasedtransparency, accountability andpredictability. Transparency in date,decisions/ actions, rules, proceduresand performance of governmentagencies can be introduced.Automation of processes takes awaydiscretions, leaving little scope ofcorruption. E-Governance canbecome a weapon against corruptionthough it may not guarantee the endof corruption.

• Re-engineering of processes- E-Governance involves processreengineering which can lead toradical alteration and redesigning ofgovernment processes and help inachieving dramatic improvements incritical measures of performance likequality, speed, service and cost. Itenables the organization to breakaway from conventional wisdom andorganizational boundaries and usethe information technology tointroduce new processes. The bestpractices prevalent in the framework

of the culture, environment and timecan be adopted.

• No loss of important data- E-Governance projects, the world over,qre being designed with stringentsecurity features. The data is notonly well protected but also itsbackup is maintained at variouslocations, so that in case of anyeventuality of fire, flood, earthquakeor attack etc, the data can beretrieved and the function of theorganization does not come to astandstill.

• Aesthetic working environment- Theimage of a government office canundergo drastic change afteradoption of e-Governance. Therecan be paperless workflows andadvanced multimedia communicationtools. The ambience will also changeand so will the work culture

Better office management- E-Governance can help in bettermanagement of the office and inter-office interactions. There can beshared pool of data and information.Standardized documentation canlead to effective supervision. Therewill be fewer needs for consultations& personal follow up.

• Change in orientation - E-Governance can lead to improvedquality and customer orientation ofgovernment services. Ever.yindividual, at some stage or theother, has to come in contact with thegovernment. A change in orientationleads to overall increase in theproductivity of the nation.

E-Governance can use IT as avehicle to create a knowledge societyleading to the improvement in life of acommon man. It can enhance the citizenservice delivery, improve the internalefficiencies of governance/administrative units, and makegovernment operations moretransparent. The internal efficiency ofthe government can go up substantially,by enhanced workflow, better

(Contd. on page 79)

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Citizen's Right toConvenience and Comfort

70

P M Kuriakose

YOJANA August 2005

networking etc. The e-Seva centresprovide online transactions from 8 AMto 8 PM on all working days andholidays which has an automaticelectronic queuing system reducing thewaiting time for the customer. Thecitizen can pay all the bills listed belowfrom any of the e-Seva centres. Thus heneed not go round several offices andcan save valuable time.

Some of the Services available atthe e-Seva centres are:• Electricity Bills• Water Bills• BSNL Telephone Bills• Property Tax payment• Filing CST & GST Returns• Collection of examination fee• Filing of IT returns• Issue of Birth and Death

Certificates and Registration ofBirths and Deaths

• Reservation of bus tickets and issueof bus passes

• Sale and filing of passportapplications

• Sale of non-judicial stamp papers• Trade license applications• National game tickets• Sale of EAM-CET, DIET-CET,

B.Ed, Law-CET and I-CET etc.• Collection of Reliance and Tata

telephone bills.• Western Union Money Transfer

LECTRONICALLYDELIVERABLE services(e-Seva - e-Govetnance) isa Commissionerate createdfor effective use of

Information Technology to improve thesystem of governance and providingmore efficient, transparent, respectiveservices to the citizens taking IT to thecommon public. It is a one stop shop fora wide range of citizen friendly servicesthrough the State-of-the-Art technology.The objectives of e-Seva are to providequality, cost effective services with aninnovative accessibility of informationto citizens.

E-Seva is an e-Governance initiativeof Government of Andhra Pradeshoffering different services to the citizensat one counter. This project rendersservices to the citizen through integratedCitizen Service Centres and internet.There are 46 e-Seva centres and 33 RTCcentres across twin cities of Hyderabadand Secunderabad serving thepopulation of over 10 millions.

The e-Seva project has beenimplemented based upon the success ofthe Pilot Project named TWINSlaunched in December, 1999. Thirtyone service centres were set up as jointventure between Government andPrivate Partner also known as PublicPrivate Partnership (PPP) model. Whilethe former provides premises withfurniture and counter operators the latterprovides software and all hardware

E-Seva is aninitiative of thegovernment ofAndhra Pradeshwhich involvesoffering differentservices to thecitizens at one

counterMr P.M. Kuriakose is from the lAS (Andhra Pradesh Cadre).

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56,314,;62;~~9

.,55,245

27,~~54,55;558

I IName of theDepartment

Agnculture(02.07-2003 to 20-05-2005)

Other Dep3{tJ11ent

Education /' Recruitment /Miscellaneous

Total Calls'

Benefits

:f;f

_ __ It;~:::F~sible.' (redressable ,~ased i!".on policy changes &blldgetll.~llocation)' ;,

S&lved grievlllces.. ',;.•...;1', '.

Toiltipo. olgrievances. . .registered "F " . H<'(20-02-2004'to 20-05-2005) l'As per the figures shown above 91

per cent of the cases have been solvedby the concerned departments(including Agriculture department) anda remaining of 9 per cent of the casesare pending as on date.

The e-Seva is a unique experiment ofthe government. It provides easiercustomer access increasing servicevolume, getting better information onoperation, reducing employeecomplaints, and reducing time spend onnon-customer activites. The e-Sevaservices ultimately eliminate face toface interaction between thegovernment and citizen to the extentpossible by increasing the value ofcitizen self-service and two-way flow ofinformation, so the citizens will cometo enjoy interconnection withgovernment. The citizens can conducttheir transaction from any of the 46 e-Seva centres in the twin cities ofHyderabad and Secunderabadirrespective of their residence.Transparency in service provision hasbeen the major benefit wherein thecitizens are spared of the hassles usuallyassociated in dealing with multipleadministrative departments each with itsown plethora of rules and regulations,and thereby saving a lot of their time,effort and money. 0

c) Education, elections, info calls/results, etc

Pa rishka ramE-Seva has provided a call centre

totally wherein a citizen can dial a tollfree 4-digit No 'UOO' through BSNLfixed lines for schemes, educationrelated news e.g. admissions, fees, datesof reopening, counselling, results, etccan be accessed. Citizens can alsoregister grievances pertaining tomunicipal services, welfare departmentsetc. The highlight of the call centre isthe presence of agriculture scientists toadvise farmers on seeds, fertilizers,pesticides, cropping pattern, rainfall,water level in the reservoirs, etc. Thecall centre also provides medical advicethrough governmental doctors who havebeen specially deputed to call centre forthis purpose.

Results of Call CentreaJ Agriculture

As on 05-01-2005 the Agriculturewing had answered.

;.. Total calls answered (02-07-2003 to 20-05-2005) - 55245

;.. Aggregate average calls permonth - 2511 (approximately)

;.. Overall average calls per day-84

b) All Departments (Grievances)The details are enclosed to this

report. However, the abstract ofperformance is as follows:

areas. Each kiosk is linked toAPONLINE through a dial upconnection. Most of the web services onAPONLINE can be availed through thekiosks. The services vary frominformation, download of forms,telemedicine to payments of utility billsetc.

'3".,",18

2372

',28

25 .

214'283<270;;229

RTAworks

Transco •Year

2001':200220032004:'.

:'TJpto Mayc05

"';;:'TheQ~~~ofe-~~va Wi1l~Jiectly'lW~rtain tlil'~evancls orplaced at tile e-Sevacentresi~ as inen~oned below;$.tatement showing. the status\& written 'grievan~s

0; ~,+: -',O',O~_ - .',,,_< _":>~~

e-Seva CentresThere will be two managers working

in two shifts each who ensure efficientand prompt services having overallmanagement and maintenance of centre.The accountant collects cash from theoperators at each counter in the intervalof every one hour and handsover thetotal cash/cheques collected from all theoperators to the pick-up agency of theend of the day. The operator keeps thesystem ready for rendering service tothe customers handling cash andcheques with a decent customer friendlyrelationship.

e-Seva has come up with the projectof Rajiv Internet Village by setting upkiosks known as Rajiv Internet Centresin the villages. The idea is to bringgovernment to the doorstep of thecitizens residing in rural and semi-urban

• Sale of digital certificates andmovie tickets

• Service of Labour DepartmentHUDA, Police and APHB.

The Government also expanded e-Seva centres in all municipalities with249 centres covering 116 municipalitiesin the state keeping them in theadministrative control of the concernedDistrict Joint Collector of the 21districts. Presently the e-Seva centresare providing 150 services of Central,state and private sector in the state. Allthe departments should make e-Seva.The participating departments shouldprepare their database servers andinternal networking modules. Thedepartment should provide one routerport for leased line module and anotherport for ISDN module for e-Seva ofeach district level server.

YOJANA August 2005 71

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Mr Hari Shankar Singh is presently working as B.D.O. in Rural Development Department, Government of D.P.

Empowering People

YOJANA August 2005

Bari Shankar Singh

officers was constituted to study similarinitiative of e-governance andempowerment of rural people throughself sustainable use of information andcommunication technology in thedistrict Jhalawar (Rajasthan) and Dhar(Madhya Pradesh). What lhe study teamexperienced at Dhar and Jhalawar wasas follows:

• Transparency in system• Accountability• Public grievances redressal systemfoolproof

• Effective MIS• Public services at the door step ofvillagers

• Single window system of publicutilization

The weakness in this system was thatnetwork was not available and data wasupdated through emails. Electric supplywas erratic so strong UPS backup wasneeded. The kiosks at Aklehara subdi vision of district Jhalawar wasperforming the same task of landrevenue and mutation which wasperformed by the sub divisiongovernment Computer Center itself.After the transfer of dedicated officers,the system of e-governance was notperforming with same accuracy andaccountability.

The visionary District Magistrate ofSitapur, Amod Kumar deliberated onthe strength and weaknesses of theseefforts and a more effective co-

E ARE said to be livingin the age of informationrevolution. E-govemancerepresents the strategicand systematic use of

modem information and communicationtechnology by a government to improvethe efficiency, transparency andaccountability in its functioning andinterface with the people. Over the lastseveral years, governments haveincreasingly been using technology toredesign and restructure departments andprogrammes, and change the way theyplan and manage their affairs, deliverservices and interact with variousstakeholders. Governments are deployingthe technology to become increasinglyresponsive to the people.

In August 2002 the Government ofIndia announced that it wouldimplement a comprehensive programmeto accelerate e-govemance at all levels ofthe government to improve efficiency,transparency and accountability at thegovernment people interface. Thegovernment of India subsequentlyapproved the National e-governanceAction plan for implementation during2003-2007. The plan seeks to lay thefoundation and provide the impetus forlong term growth of e-govemance withinthe country.

In consonance with the purpose,intent and spirit underlying National e-governance action plan, a team of three

'Lokvani' is asystem of not

just better waysof doing oldthings, but

radically newways of doingpreviouslyunimagined

things

Lokvani:

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(~inated and in consonance with theaspirations of the poeple "Lokvani" e-governance project was launched inNovember 2004.

A society by the name of "Lokvani"was constituted to implement the e-governance project under thechairmanship of District Magistrate,Sitapur to reduce the bureaucratichassles and for proper co-ordinationwith district administration andeffective use of system.

District Sitapur, a place of religiousimportance is situated on Lucknow-Delhi National Highway No. 24 and is89 kms. from the state capital. The totalpopulation of the district is 36.19 lakh(2001 census) and area 5743 sq.km.District Sitapur is backward in respectof social development indicators likeliteracy, infant and child mortality, lifeexpectancy. Even at the low level ofdevelopment considerable difference insocial development indicators areobservable among blocks social classesas well as success. Remote rural areas,schedule castes and women are sufferingto a great extent from the pervasive socialunderdevelopment. The prevailing levelsof social development not only causegreat deprivation to large masses but alsoconstrict their human capabilities tobenefit from the opportunities availableto them. "Lokvani" to a limited extent isimproving the human capability of thepeople.

ObjectivesThe main objectives to achieve the

e-governance vision "Lokvani" are:• It was made clear from the beginning

that this project must be financiallyviable if it has to survive. So aunique public-private partnershipwas started. Kiosk were establishedby private persons.

• Establish single window system(computer kiosks) to access variousgovernment services and informationat the doorstep of villagers.

• Increase the transparency andaccountability of departments andreform governance of citizens relief.

• Giving practical shape to right to

YOJANA August 2005

information Act, and also creatingsustainable employment opportunitiesfor the educated unemployed youthof district Sitapur.

• Reducing the cost of service deliverythrough reduced duplication of effortsby individuals an departments.

Resource MobilizationOnce the vision of delivering e-

governance "Lokvani" services wasdecided for Sitapur the project neededresources for implementing it. Atpresent 21 "Lokvani Kiosk" centers arerunning at subdivision and block level.The sum of rupees 75 lakh have beenproposed for kiosk establishment atNyaya Panchayat level on 50-50 basisby public private partnership under thescheme of Rastriya Shram VikasYojana. It is worth mentioning here thatthe entire expenditure for the "Lokvani".network was managed without anyspecial budget provision from thegovernment.

It is the conjunction of thetechnologies of the computer,telecommunication and the internet thathave propelled the informationrevolution. National Informatics CenterSitapur (V.P. India) with the help ofState Informatics Center, Lucknowobtained the software and designed itaccording to local needs. Theinformation related to variousdepartments was made available to"Lokvani Kiosks" via central NICserver. The kiosks were given login!password to enable them to dial up toNIC server. Technology is a mirror ofsociety, and reflects its priorities andvalue system. As these values areenshrined in the politics and culture ofa society, its technology will benaturally shaped by these factors. Theinternet technology has tremendouspotentials to promote a well informedcitizen and democratic culture. It isnotable here that Hindi software is soinformative and accurate that it is beingpraised by aU who have used it.

Democracy empowers the people toactively participate in the decisionmaking process of the state in respect

t~ matters of general interest to them.At the operational level, this is achievedindirectly through their electedrepresentatives. The pre-condition forits success in the existence of a wellinformed citizenry which can makeintelligent choices between variousalternatives. And what better meanscould there be to ensure this than tomake oceans of information available topeople at .their doorstep throughLokvani network.

Instead of coming all way to thedistrict office, the citizens can now availso many information at the tehsil andBlock level. Services like land records,arms license application status, GPFAccounts of teachers are availableonline now. The most popular service isthe online submission, monitoring anddisposal of public grievances/complaints. The popularity of thisgrievance redressal system can begauged by the fact that within fourmonths of its working, 7000 complaintswere received till February 28 of which3600 have been disposed. The efficientsystem of Lokvani not only givespeople an avenue to track the progressof their grievances but also provides theD.M. an effective tool to monitor theperformance of various departments.Lokvani also provides the informationon various government schemes,government prescribed forms, details ofdevelopment work in the district, oldage pensions, list of scholarshipsbeneficiaries, allotment of foodgrains toKotedar, allotment of funds to GramPanchayats.

"Lokvani" has been a system offundamental leaps in innovation. Notjust better ways of doing old things butradically new ways of doing previouslyunimagined things. The fusion ofcomputing and communicationsspecially through the internet hasbroken the bounds of cost, time anddistance. Communications changeeconomic competition, empowermentand culture. The real wealth of a nationis its people and the purpose ofdevelopment is to create an enablingenvironment for the people to enjoy

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long, healthy and creative lives. Humandevelopment is a process of enlargingpeople choices. Information kiosks of"Lokvani" and its connectivity caneffect significant changes in behaviouralpatterns of a population. Many forms ofinformation relating to education,health, development schemes, landrecords, do significantly influence therural population. As it is to be expectedan increase in awareness level ofvillagers enables them to recognise theirstatus as citizens, their rights and alsoduties towards the community and theState. Such an enlightened approachsupported by both family and society canbe catalytic factor in improving actualdelivering public goods and services.This also results in transparency andaccountability iIi public discourseamong the rural people.

Emerging ScenarioThe emerging themes of the Lokvani

project which attract attention are asfollows:

• Lokvani use has been more akin toAmartya Sen's CapabilityEnhancement Approach. Sen takesa human and people centric view ofthe goals of development by lookingat degree of deprived sections ofsociety as a result of application ofthis technology. The servicesprovided by Lokvani not only tosimplify things for villagers andspread e-governance awarenessamong them, they are also promotingeconomic activity and creating newjobs. Economic self sufficiency is amust for a system like Lokvani. Soevery kiosk should be developed insuch a way that its functioninggenerates additional income to kioskowner. It is also suggested that afund of atleast 20 lakh should beprovided at the district level forproper functioning of Lokvani.

• If state government intends toimplement the Lokvani project inevery district of U.P. then it shouldprepare a monitoring detail of thisproject in each district at the statelevel. This will reduce the

74

dependence of the system on oneofficer. It will also enhance betterco-ordination and effectiveness ofthe Lokvani.

• Most state governments have startedusing it to improve efficiency andmake administration more citizencentric. It is, therefore necessary thatnot only e-governance plans areprepared and funds allocated toimplement them, but it is alsoimperative that progress is alwaysmonitored and the direction ofchange tracked so as to apply mid-course corrections. In factmanagement of change offers greaterchallenges than its initiation.Government of Andhra Pradesh hasdone a marvellous job for this. It issuggested that two boards ofdistinguished professionals from theprivate sector in addition to two topgovernment functionaries beestablished at district and state level.Social activists and eminent personsof repute should be made membersof the board.

• It also suggested that Lokvaninetwork should be initiated in all 150backward districts of India. It willaccelerate the pace of developmentand information revolution inbackwards districts.

• Uttar Pradesh is very different frommuch of India and district Sitapurwhere "Lokvani" is functioning isbackward as indicators of humandevelopment are concerned. Thesocial failures that have hindered thedevelopment of Uttar Pradesh (e.g.widespread illiteracy, pervasiveinequality, endemic corruption andthe suppression of women's agencyin society) are very much prevalentin district Sitapur. Lokvani shouldbe used to usher and deal with allthese problems in a better way withthe support of state and CentralGovernments.

• Redressal of grievances is gainingpopularity in Lokvani. It.is seen thatmany complaints without genuinereasons are lodged to "Lokvani" dueto political enmity of Pradhans and

local officials. It is suggested ttht-Jcomplaints without much substanceand less gravity should be discarded.

o Complaints against governmentofficers should be on affidavit. Thisis necessary in case enquiry againstcomplaints is found to be baselesssuit case/FIR can be lodged againstthe complainant.

• Many complaints are lodged byproxy names due to enmity withinrival groups of villages. The practiceshould be stopped by directing thekiosk owners to lodge complaintonly after verifying the identity ofthe complainant.

• Corruption is rampant in theprevailing bureaucratic system. It issuggested that Lokvani complaintenquiry about graft should beconducted by impartial officers.Many officers take undue advantageof as enquiring officer arLdthemselvesare involved in corruption.

• The experience of e-governance inKamataka, Andhra Pradesh, TamilNadu, Maharashtra should beassimilated in "Lokvani" to make itmore effective, people friendly andharbinger of pace of development.

• It is also suggested that privatepartners should be invited to makeinvestment for opening the e-governance system on the basis ofuser charges. Two models which areoperative in system are-BOO (Buildown operate) and BOOT (Build ownoperate and transfer) they should beadopted.

~

e success of "Lokvani" networkcannot be judged by irnmediateresults. It raises social awareness

regarding matters of development,Government Schemes, public utilitiesand other problems which are deeplyrelated to the democratic rights of thepeople such as information aboutgovernment's financial system. Thevalue of technology can not be divorcedfrom value of its application. The mind-set of the government officers/servantsneeds to change. Then only "Lokvani"can instruments like be harbinger ofdevelopment. 0

YOJANA August 2005

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Cautious Approach NeededSreekumar Raghavan

Kerala State Electricity Board.

National VisionIn IT implementation in the

government it is the department headsconcerned or private solution providerswho decide what technology or solutionis to be adopted for each project. Everygovernment needs to have a CIO whowill hold the responsibility forimplementing C2G and G2C projectsadopting the best practices and at thesame time not bleeding the scarcegovernment resources. This will ensurethat department heads do not undertakeIT implementation in a haphazard wayand fail to pass on the benefits to thecommon man.Considering the complexity of the

information technology sector, in termsof technology, applications andsolutions available, it would not be wiseto entrust. e-governance projects to asmall group of people.

Critics argue that crore of rupees ~ There should be an empoweredhave already been spent of e- panel consisting of a cross-section ofgovernance projects and the citizen has major stake holders-governmentnot gained any major benefit. There is officials, solution providers in thestill no consensus about the deployment private and public sectors, hardwareof open source and proprietary vendors, people's representatives,software. Complaints regarding IT scientists and others. This panel shouldimplementation are surfacing one by evolve a national vision for e-one. The most recent example being the governance and continuously advise,problems in the billing software assist and coordinate the e-governanceimplemented on Microsoft developed activities in the country. 0by PriceWaierHouse Coopers for the (Courtesy: The Hindu)

In many large organisations it hasbecome a practice to have a high-profilechief information officer or chieftechnology officer who holds theresponsibility of sourcing the bestpossible hardware, software andapplications suited for the company.Sometimes, these officers also find aplace in the board of directors.

Many government departments intheir eagerness to catch the ITbandwagon installed PCs and their ownlegacy software applications withoutany vision regarding its futurescalability and interoperability. Theresult is a set of independent databasesthat are not compatible with each other.

of the departments identified on apriority basis to have interoperabilityimplemented are Treasury, Hospital,Employment Exchange, Registrationand Land records.

The National Informatics Centre(NIC) has already started work on theinteroperability framework for theCentral and State governments as therealisation has now come that databasesof one department should be compatiblewith another all over the country. Some

Interoperability

But if e-governance were to be trulyeffective, then individual applicationprogram of one department should beable to 'talk to' another applicationprogram installed in anotherdepartment. Interoperability of e-governance projects is thus of vitalimportance if the citizens are to feel thebenefit bf IT in day -to day life. In otherwords, every IT project should have aclear government to government (G2G)interface before a meaningfulgovernment to citizen (G3C) solutioncan be implemented.

HE CENTRAL and stategovernments are spendingcrore of rupees every year one-governance with theobjective of ensuring

efficiency, transparency and bettercitizen-friendly interface. In certaincases, such as land registration, motorvehicles department, railways and utilitybills payment centres, there has been amarked improvement in the quality ofservice offered to the citizens.

YOJANA August 2005 75

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,

E-GOVERNANCE .. · ...:.. : IN' ,', ,,' '" " I

YOJANA August 2005

"~:.':'"'

TIATIVE

•In

To begin with, the Registration andStamps Department, for instance, is thehighest revenue-generatilng departmentfor the state government - contributingnearly 15% of the states' tax revenues.From another perspective the largepublic interface of the department leavesit always in the critical public eye. Andthe poor image of the department hadbeen due to very poor client satisfaction.For example, according to a review ofJuly 2000, more than one milliondocuments were pending for registrationfor various reasons, some for more thanfive years and more than 15 millionregistered documents had not beenreturned to the parties form 1985onwards. The system bred inordinatedelays, harassment and corruptionleaving a very bad aftertaste for all thosewho queued up at its window.

When the problems are identified itgets simpler to tackle them. Theobjectives were simple. Popular amongthem were as follows:

• Develop a simple, speedy andreliable registration process andbuild consistency and uniformity inthe process;

• Provide transparency and automateall the back office functions in thevaluation of the properties;

• An easy, reliable and cost effectivearchival system and effective search,along with facility for search of theprevious 12 year transactions and setquality and time standards;

• Provide backward and forwardlinkages with the land records and

ALK OF evolution takes ona serious turn, wheneverserious topics take centre-stage. In other words,evolution of individuals is

one thing but that of an institution is quitea different matter. This goes for the roleof the 'state' as well. Over the years, the'state' must have grown many timesfrom they, say, 'City State'. But apartfrom the size, very little has changed orevolved. As far as 'governance' isconcerned 'state' has very little to offer.In the Indian context, specially, very fewexpectations are there from the 'state',perhaps that is why more and moreemphasis is being laid on administrativereforms focusing on governance.

One such attempt was done inMaharashtra, namely, "Public PrivateParticipation: An Experiment in e -Registration". Good governance aidedwith technology results in 'e'governance. At a different plane e -governance is about the vision and thescope of the entire gamut of relationshipsbetween citizens and government. TheIT policy of the government ofMaharashtra aims at augmentingcomputer literacy among its staff. Thesecond phase is to use new technologiesto provide the people with a moreconvenient access to governmentservices, goods and information. The ITpolicy puts the focus on departments atcutting edge, interaction with citizensapart from being high revenue earners.These are-Revenue Department,Registration Department, Sales Tax,Transport, Excise, etc.

Governance,simply speaking,does not needadjectives like'good or 'e' orany other. Theonly touchstoneshould be

satisfied smilingfaces

Sarita : E-RegistrationMaharashtra

76

Page 79: Aug Vol49 No8

II,.IIi;

8-B~~',,!,.......,.tf'ibsite~;M[iSh'fa)jBJl1aWai11!Ci)"irli;ne'~b Anahcrbiatf-;.'.: 'j:...Ji~:,,_:""':f'_ RP, '->'f,.' ~.rll nt ') run h~)t1;" ;;:.!5~ JUfll}olJil"l!!orlJ s,?liJJ)'Ir;q-:;;>, hal; t)fHJ01'}

I .Note- M:embership_tbrdugb.;(Entlianceoljest'JQIiII,yJ )!M oib~([J!9411cSi28486.8L-.._' .__.__ ._._~. . . .c. __ . . -' . . __ .1

Page 80: Aug Vol49 No8

Groundnut machine andtrench digger

~;8':;js-': ;;0,,;., -. --';;, <i:. :.""V USPR'(rn4'N (~2)~~~'i

.1.gff~i2ity~~?~~Rajasthan: He:has,been2mv()lved;iri.~the business Offarnt,tool~iortl1ep~stifourteenyears~ liT ni~kes'tfe#bb~digging 'and;grolmdnut d,iggi~glrnachilles~s w~ll' as'bthet airicul~al~fann impletnents..ProbleI11sthafYll~llfjfaCed;dUri~g.•tl1~.de~elo~mentor~isjinnov~tiOitweI'e firrcanciaLc?l}straintsJ;nd araila~ilityiOfra,wmateri~S':~!1t;.~~.reniember~with. g~retitude,the

? ~nancialat1d c~ns~ntI11~ral'iup~~, ifferejj .by;MrRakinlli~d,in ~ech~.,411ringtheproc~ss!Orthifinn~v~tiQ~s familyandJleig~b0uisal~~stR6d,?y hillI d~rin(tough: times~~d ..tleigh~ou~s:,eve~.helped~?imto~~e'machipe to' di~tan~\pla~est*sting.HeJlas. ()ffen~dhi~serVi

,q!berJnnovator~fori;lmIi~ovin{innovations;';,.' .....".. .

~(:Genesis / "

!rTWO:thii~sO#R~j~~th~h~~'soil ~d grQundnuti~,gr()~n'the state''Vhel~rOC~~s()f,:gr "digging ••.irIvol~es idigii~gground,and'seiilraf ! tl1~!:grfiomthesd:iI:!:i3frt ...,.....

~ ,'< 4, <, "'i;1:;-

78 YOJANA August 2005

Page 81: Aug Vol49 No8

(

~:,;, '~:;;:'_:/".,~ . ':<("';': ":'-, '':>!~Y,.' :'" j~{~;\:1 ',' :~~~;'J.~ :," '..fO:,.,:,,'. )"~~;~'~w"~'". ~t.i','*. >:;f'~<.. ..~Sti ~". '("\,,,:~~e.,\~:' ~~~.:f~l>:,:, 'O\t0j':;,.'. m~\ll~~}

1?~;ween l~perceIl~'~p t~..2~\~e.r c~I1tl \Rs.,\~(OO p~{.day,l~~us ..m~19ng~~ ;vers~~\?'oHhe'lrench di~~ingtnac~nei.o~,their~~,Fes.t;.;~~siii~\~evenat:{l pl;an~~.~mepr~!it. F~r,~~oth~~\\.fannet~j,~ irequi;~da tr~pk t~,\11~. hir~~ "foraverage~ight q1.(~~tals15~low; the I :also,4itis ag<;odbar~~ as th~yspend\ \transpbrting~t from;one pl~~e to'~()und (1(.pe~ :erit;9f th~b~estpir \ only~s lS00Wtead ot,fRs4000il1at therj ianother, as. it IT}()vedoni~.at asp~ ofliectare)tneansa;l()~S of~s 12,OOQ, 'wo~~4have t()pay to~~)abb~~..,; r3k.m/~r. Tpis'proved'to be rather~.hiph is,a'hUg6~'~p1oun~.to~anf, ' ", ., ,',.<" , ..\;,;~! expefl~ive.Kh~made re,odifi~ai~~Ilsinfwmer. Manual harVesting tflk~s upJ9 ! ...,.., "':"",\.1 Ithe gearbox so\thatit isnow.possible:

<'M,.,. -'~>,;' "', .."..,0 ,/;.--. :,-" ~\:.\, j '~;~.-~~"", ,',c(~.,; :, ..:,.,' ;.; .,,~"';;':.' ",>.',~ ~ ',~,;;,:,. ";/": ,',-',,:,., ''', ",S()peopl~workin5at Rs~(), per da.~I' So Jar, y-uslif hass~ldmot~than 15',\ \ to mo~e themacpmeatthe sPee<.lof at~removegrounetri~~jn ofle:~ectareihl ;units of th{smachiJ:ieto C tHe 10caH ttractoi(lOk[~per hour); TheimP;oved .at,day. dihoUiis~botli's<::~~ce aijal harriiers. HeiWants t6Ystarta'1J~sin;~s;' jmod6{of thisrnachine,i~cosiliet than

:',0',-"" ' .' .. ' ",;,~.,.",:+," "",>'."" ..",s,..r, ~ '~ '-,' ..... ,;~';" .,' .~:<.,.<. ;),'~::",>'~"'''': "><;t~. ..,.1~inf ", ,";;,' .' ',', ',' ,:::.: ',,,, '. ~;,~

~xpensiv~in the,drsert ai~~ and t~~~ witlitihis in~?vation,g!ovide~~'he get~;; !the earliero~~, by R~lS,OOO\~O Rs'Qperation'is tedious as the soil hasio; . financial iiMp:He~!saiso.\~pen toi i16,OQO, but s1.lchisitsd.emandthat ill,1J~,sifted~d eac~, gf6undn~1has to~ l!parf~,?rship~;';\,NIF.~!~' file~~~pateni,~ !ay~he. has'I1lanufa~fured soldpicked by'hand.lyIost fari1lershaie, ,apP1!cationfor this Inllovation:; d\\: Ifive. such machines.\,c',;." ',<','.'--'. -:'~>;', ",'! '~;:,i;;> "","".,,,', __'~' >iE-. '''-''''s>'' .:)<:> '1~»' '~'#f~ *" _-:;">;i;>i,,,',~ .. ~~; ~"",""-,_.. ,w,~4~Xv~

l~geland\~?ldings'iI1the~~31{gre~~~r; I ""p,.f1:.,.~ ~ "If the readers know of anythan two hectares and gomgup to 501 ;,1\:,"'::'; i'

,.'+0' '"" "", • ...,"'.' '.'"j,'.'. """ ..;\Y' ',.", I one who has solved a local.~ectareS)and tHe,re is.~need~t,: ',Apart froIT}the grouridgl!~\;~iggin~\ Ii technological problem in a';cgmplet~l1.g the~~rves(~~fasf.;isllmasgine,hJ~\~as ma~~;som~ ...~9difi~~J \j creative manner or know of,PossibleinQctobt?r,sothat,s()w1flg can' ;plb~~hs an~,Jrendi,~ggingIT}achiIl~S:~' someone who has very richb,e'comvleted fo~:~he ne*j.seas~rl ~Hi~.trench"~~gging"1rtaChine.;i~mOrr.1 traditional knowledge in any~hiCh s~imm~9}atelY'J'!l~mac~~ llfle~~ble, c~s!ceff@~.t~ve an~canb~~ field of survival, they may please

)levelop~.~byYu~~f addre~~es all tp~l a~cped to,~ytract~& The ~f~akdowJl;1 send the details or even the~ove pr~"lems. It;isan e)(~ellent)"~yl ,rat~andfuel~~onsuillgtionisl~wer tli~~~ contact information to NC (8tbimproveproduB~vity, c':l;tcosts~dl hha~'iof tl1e~~.9ther.~~ailabl~ tren{;;~l and D), NIF, Post Box 15051,address~e lab01it~hortag~.Some~?fj d~g¥ers'l-!eh~s~l,sodey~.i~ped~~' Ambavadi, Ahmedabad - 380the farm~t~ who ~~ve bo~g~tthiS~t I; n{~fP~sm.f?r incre~sing the,;speed ',6tJ 015 or by email ataiso IO~5it;out t~;~thersatjllie ratel~f Itr~~~h digif~g~m~siiines. 'q1r ~arli~f'~ [email protected]".

'"'' '" "';:-" ":': ",:"<'- ....,L':;,' "'-~':,,~;-e-':: ',:," t];{.'1"'::.C) <;>;~'f{:;;;,: "j;,__ --'\;.",:'~' '.x,.;,:--,;

(Contd. from page 69) Does E-Governance Mean Good Governancedocumentation management, moreknowledge based policy formulationand collaborative inter-departmentalreal time information sharing.

In USA, 23 % leT Projects weretotal failures, 28 % were successesand the balance were in between. InIndia, the e-Governance started lateand with initial birth pangs, but now,it has gained direction andmomentum and the process isbecoming seamless. The people havetasted the success of some of theseprojects like e-seva and Arohi and areyearning for more. There is unanimityamong the policy makers, officialsand the people about the benefits ofthese projects. There is a strong beliefthat these projects, if implemented well,have a great potential to take India onto the path of success and glory and

YOJANA August 2005

make people happy.

The only handicap in the e-Governance system is that in India,there are a large number of illiteratesand even a larger number of computer-illiterates. Thus, e-Governanceapplications have to be designed andoperated in such a way that they areeasily and equally accessible to theliteracy-challenged users. Further, theapplications should be preferably inlanguages and use as much aspossible intuitive graphical andconversational interfaces.

E-Governance is not a short cut toeconomic development, budget savingsor clean, efficient government. It is notthe "Big Bang', a single event thatimmediately and forever alters theuniverse of government. It is a reformprocess of transferring governance to be

more citizen-centered. Technology is atool in this effort.

E-Governance cannot solely be astrategy for reducing the cost ofgovernment though there can be onevaluable results. In short term, e-Governance applications will not lowercosts for the government itself thoughthe reduced costs and increasedconvenience may take place for citizensand business. E-Governance is notabout technology and investment inInformation Technology alone. Itbasically leads to re-engineering of theprocesses behind the screen thatactually deliver the services. Thus e-Governance is not synonymous withgood governance but is a tool for th~latter. While fmalizing an e-Governanceproject; one has to keep in mind as whatkind of good governance will beachieved through it. 0

79

Page 82: Aug Vol49 No8

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I ,~flnL; Y~,i(JkHlrt J~T 'nOc'J1.ff~~ej~lAad~ts..~.....po.SIU..v...es.•..rl.o£..:ad...vts.Jtot.be\:suPPI..I~dib¥ithe ad'£,.em.frs.:;.,~~,~.,.,~??1-.:1] :~.t#.'5.~. . .' . nart,= xtt. tHU~ 1(;eil f Lt,'t:4" :, I '1 'I ", ..

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d Hitl '.I'.)f1J..'ll~'/U!i bf,V ..Mfl.teritU!t%!Paym~PH9,~'llel}t ~~i);.,',dt1k>••U? 'it.< 'J~b'@;1.,1U:$I{' ,.:;Innl .....;:~" J~'Jl;ID. :;,;.>1'

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80

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gnfqof5\!~7b ~HfJ o,'j ~~'.Jud~jd! !)~)~I.L;q r-'nd]i')~ e.f.fl1,l~~,?\"JiJtl,W,,~~p~tfpi~n;?~;d;);~l}~'

IN.g!llYJA~>>glfr,ol1!lnll~\}'lieJ~f::!'htfi~~tivitYtIg\\S~9Jr~~P-PI~;,$in,g'~s~w:Q@9f~4W~9&M~\9pjrg m;'i-,~j,9,J;l.;~;;JirY.9~JiH:j~Fmpcontractors bUY]FH~£9m~~~i9g~4;,~hi.n~from rich multinational MNCs who geta fair price fofikJfi.i vg~~e\f~qilmlIlerd1the; w0rlcl.ellysliijJ-IDreakingLThe)WestemBort'{tbwni'0f ,M,<!qgrin 'GuJafrat, i~flt~;hll1gest,!Snip~br.eakingJsitei,mfthe)wotld'.JItJiscthe'gIayeyar.41iorra1mostllia:lf,ofi,the;wO'l1ld~s:!'sohipsdjAlafirg~sl !shiI>~bretLMer.s,receive .aC2shipgrea"qhuclayt i1('bjrb.e:

~}Sra~w.~~{~doi~?f\g~~~~~,fW.5;cnm,~fid .bolb. .' '> - ,

,10V) .1.;~~:}n.f~iJd?u(n~j~U1J;b bfIE \(l.T1b ,G

5riTn'e fl~'(;'O'il'cH ti>6'ii sCin1t u 'Al~h gi 'tJpe'deplb'tabI6! 1ll1'6lpHlte 'is "if olirr~ir'b~ach'where lonejsee'~ lh'ug~f.ii6nrliUlks(hatlng',,,r,,h'.lI"t'Ub(ll"Wr,') "J" 't.J"'f.l't'li":' II'Lt.. ;,;.(ser.veu'; uv Uefler pdT "0 - elf ' level;ferrYiIig ;carg~%acrossi 'tHe seven; Ise'ds~nd«. iJ'Waitirig'iliekrsfbw .hila: solid id&illi'£fp'fhe" l1i'Ha:g)i8f :1tiitiar6'ds 'of ip()orvJor'kets;.f1The' W6rk!ers; ate :dxposed t6s6vefaiqtyp~s')or il1at'it'dbus \';l1Hriitals'ana' failles >in<l:hefci6u~se o;frtti~ii;WotiVTI1ey'Jare;ptoViae'd~wiili' HiiAihl'al;'safetY~ppat1aru~V:\wliicliiriCli.Ides'1ightj shoes,aWd~'adcrotWhead cbver a'Hn~h: Veryrgv,p!w'(f!i'r 'jglcW/est,' ''fac~j frii'a;skS"'and::jd1 ni .D~);,-,,: ~:ld1 Or qu 1Jf!-:J ;.::/)r:;.:!..-:d\L.~

.:~lrlU.\!;J)i!--:~,:,!~-:i :','-# ,j::;"Ji~:;/,

w6tih irilUlons'(ofrtlC:iilars{Thesteel;hrrdotbl:ipfmetalirptotlticts fare s01\.:lt6:f6rgers'ana :steeh~astefsiwh6' fuelt!it.art'd!recycll'rItlfCNjeLfe1\1semb ,..fiT dJ!1J;r;j~J;:

bbr!,1!::;:;.:i:i:;

HOUGH SHIP-BREAKING::!,might)not! s()und[ascglbribus[land)(s.aY:V¥Lasf'B~0t~ch~arn.d')InfoiII\ation'H'Fe.chn o.logIY.\i6~ndia'r(tapdpridei1itself d.\~,

olairtring Jthe illumbetJ.oh"elspot,'Jeadi:ngthe W9rld :iii \'disemb0 wling (~il tedv~sseils; which!,~el sent(t@;.JndiaT~ftel'th~ir:Jia:st r;rites:q Trhe';iIndtistr,y,~ is):alau.crativegoneJ and (\JmpIOlfS) thousaljids'in India. Moreover, it, i:s)Jnohju'stbaUabout destruction. It creates several

" ' n" ,', r. '"I'tfi8ti~abd~J d'i"Miiti6s bf\~~f~p~&etal{vh'llih(i[~ rb~~c'f6H\lna.Jtg~trs~&'(If;,O!flbnU,JHi rru.:;,:j.'{.t:ii:-;(k. HJiibnl'td ?~H1~)fH~~~;~:

'r::J([I~a}~~gplJ~J}M~~ts:s£¥~J?:~g,~p,eI}J:As;an integral part of Environmental Lj\%and Policy. There are many sources 'offrazardous~wa~1:~anti\tlrany'forms18f itt(jo~f'Itilliay1beGliHI:iiicipali solidL\v:'a~tg

" i ~ ' ,disCl'iatgedCfromJh0tisehOlds anti 'Mi'iig&

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~ }. , 1 " •

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'to nOiJi~jJ!~HJ1~jtqrni '10 rH:::lckrlq t (:1.5JHBj~d}j~,,,~rfJ ni ;:,v/.Gn ':fJL '~.tI~~H.rl-r'jdj~rt\f/

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protective eye wear. Apart from theblatant infraction of labor safety rules,the activities at Alang are in completebreach of Environmental Laws andregulations, national and international.

The Problem of ship-breaking can beseen from many angles. There is a clearhuman rights angle, that too can bedivided into human rights of labour i.e.their safety versus the broader humanright to safe and clean environment.There is a clear environmental angle tothe problem. This includes the concernsof safety of marine and aquatic eco-systems in the vicinity of the ship-breaking yards and also adjoining lands.Then there is the trade and safetystandards angle. The developed worldhas passed the buck to the developingworld and at the same time saving theirskin from being burnt by the hazards ofship-breaking. The focus of this paperwill be the environmental concern thatpertain to ship-breaking.

Environmental Risks

At the end of their life-span ocean-going ships are scrapped, primarily fortheir recyclable steel content. There areabout 45,000 such vessels in the world,each year about 700 of them are sold tobrokers for scrapping in Asia.

Ship scrapping, or ship breaking, isa dirty and dangerous business. Notonly is the cutting and removal of thesteel structure extremely hazardouswork, but almost all of the vessels nowslated for breaking contain hazardoussubstances such as asbestos, paintscontaining lead, other heavy metals likecadmium and arsenic, biocides, as wellas electrical and other materialscontaining polychlorinated biphenyls(PCBs). While asbestos, lead, cadmium,arsenic and dioxins contaminate theground, living area and agriculturalareas adjacent to the scrapping beach,a considerable portion of the toxicsubstances end up in the sea, in thesensitive inter-tidal zone.

82

Almost all ocean-going ships, whileowned or operated by companies indeveloped countries, are being scrappedin the Asian countries of India,Pakistan, Bangladesh, Philippines andChina. At Alang, as in other Asian ship-breaking locations, ships are simplydriven onto the beach during full moonhigh tides. Then, without dry-docks orheavy lifting equipments, the massivevessels are cut up by a cheap labourforce of thousands of impoverishedworkers using nothing more than handheld cutting torches, hammers, saws andchisels.

Half of the world's ocean going fleetends up in Alang-about one vesselarrives here each day. Most of the restgo to similar ship breaking sites inPakistan, Bangladesh, China and thePhilippines. Around 700 ships arescrapped each year. Depending on theirsize, and the current prices of steel, theships are sold for up to several millionsof dollars each.

The 40,000 workers in Alang,mostly migrants from the poorestsegments of Indian society, eam aroundNew Zealand $3 worth of rupees perday.

Protected only by their scarves andlight shoes, the workers' conditions inAlang are very poor. Only a few wearhard hats, rubber boots and gloves. Notonly is the job one of the mosthazardous in the world, but life in thefIlthy shanty city is plagued by frequentand often fatal diseases as well as thecontinual risk of serious accidents andinjuries. Explosions from cuttingtorches in contact with residual fuelsand lubricants are common, as areaccidents from falling steel beams andplates. Nobody has kept records of thetoxic exposures and deaths in Alang.Pulitzer Prize winning journalists fromthe Baltimore Sun say there is about onefuneral per day in Alang. Officialfigures indicate that one particular

incident, a fire onboard a vessel thlm-)was being scrapped in April 1997,claimed 16 lives.

Hazardous Waste

Hazardous waste disposal and wastemanagement are governed by stringentlaws and international conventions inmajority of the world's nations. Theissue however is the manner in whichthey are implemented. But beforereaching any conclusions on whether itis a problem of implementation orwhether there are flaws in the substanceof the law itself we will give anoverview of the legal framework thatexists in India.

The problems associated withhazardous wastes start at the conceptual'level itself. So far, there is no uniformlyaccepted international definition forwhat constitutes hazardous wastes.Different substances are hazardous atdifferent concentrations, at differenttime scales.

Article 2 of the Basel Convention onTrans-boundary Movement ofHazardous Wastes and their disposaldefines wastes as follows:

"Wastes" are substances or objectswhich are disposed of or are intendedto be disposed of or are required to bedisposed of by the provisions ofnational law.

So the onus of defining the ambit of'waste' falls upon the National Law.

In India, the Hazardous Waste(management and handling) Rules,1989, as amended in 2000, classifyvarious categories of wastes in theschedules. In order to classify any wasteas hazardous, it is usually subject toevaluations based on its attributes suchas nature, composition and inherentcharacteristics. Thus, parameters suchas flammability, ignitability, toxicity,corrosivity, re~ctivity, infectiousness,radioactivity, etc. have been proposed'

YOJANA August 2005

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( L d d . 'fi'<t!lu use to eSlgnate speci IC wastes ashazardous. This may create a conflictbetween the national and theinternational law in respect ofhazardous wastes.

Till recently, neither the States northeir SPCBs had any scientificallyacceptable plan of action for dealingwith wastes containing such substancesor chemicals, by reducing theirproduction, rendering them innocuousor containing them safely in facilitieslike engineered landfills (burial).Hazardous industrial wastes, in fact,have been disposed of in low lyingareas in the name of land filling, orsimply illegally dumped on public orabandoned lands, in rivers or oceans.

E.n addition to such hazardous wastesgenerated as a result. of industrial

rocesses within the country, thereare the further dangers of imports ofhazardous wastes brought from othercountries for purposes of either genuinerecycling-where even authorizedindustries do not observe the necessaryprecautions-or sometimes fordumping, i.e. for final disposal. Highcosts of treatment of disposal of suchwastes in industrialized countries;scarcity of land there; and argumentsthat it is better economics to exportpollution to developing countries havebeen responsible for such dumping.There is an increasing syndromereferred to as "NIMBY", i.e. "Not InMy Backyard", in the developedcountries. After several instances ofsuch dumping of hazardous wastes inthe developing countries were reported,the international community begannegotiations to prohibit such practicesin the form of the Basel Convention forTransboundary Movement ofHazardous Wastes.

Before negotiations were concludedon the Basel Convention, the HazardousWaste (Management and Handling)Rules, 1989, were notified under the

YOJANA August 2005

Environment (Protection) Act, 1986, toregulate both the indigenouslygenerated and imported hazardouswastes.

The HW Rules, 1989, and the BaselConvention together aim to dealadequately with the problem ofhazardous wastes and their responsibleand environmentally safe handling inthe country. However, neither of thesewas effectively implemented. In mostparts of the country, authoritiesappeared to be ignorant or poorlyinformed concerning the deals of theHW Rules, 1989, or the provisions ofthe Convention. An internationalorganization, Greenpeace, first drewattention to the import of hazardouswastes into India in violation of theBasel Convention. Later, the ResearchFoundation for Science, Technologyand Natural Research Policy filed itspublic interest petition alleging thatsuch illegal imports of hazardous wasteswere continuing. It is only after theintervention of the Supreme Court thata High Powered Committee was set upin late 1997.

The Hazardous Waste (Managementand Handling) Rules, 1989 wereenacted pursuant to the rule makingpower vested upon the CentralGovernment under Sections 6, 8 and 25of the Environment Protection Act,1986. The HW Rules provide forcontrol of generation, collection,transport, import and storage anddisposal of wastes listed in the scheduleannexed to the rules.

The Central Pollution Control Boardstarted work on preparing an inventoryof Hazardous Wastes in 1993. It alsopinpointed the major sources fromwhich hazardous waste emanates. Threebroad classifications of hazardouswastes were made, wastes which wasre-cylible, incinerable and disposable.All in all, over 7 million tonnes ofhazardous waste is generated in India

(MoEF, 2000), out of which 5.2 milliontonnes is destined for disposal on land.There exist certain knowledge andinformation gaps.

The hazardous waste inventoryexercise carried one by the state isproving to be a one time effort. Theindustrial sector is constantly growingand there needs to be incessant upgradation of such an inventory so thatwaste management plans can be framedaccordingly. Conducting environmentalimpact assessment becomes an exercisein futility in the absence of acomprehensive waste inventory.

In December, 1997 the CPCBprepared guidelines for regulating ship-breaking activities. The objective withwhich these guidelines were preparedwas to minimize the pollution thatemanates from ship-breaking activitiesby putting the onus on authorities toimplement and ':EnvironmentManagement Plan" and a "DisasterManagement Plan". Some of theauthorities that were entrusted withvarious duties were: Gujarat StatePollution Control Board, MaritimeBoard/Port Authority, CustomsAuthorities, Ship-Breakers' Associationand the Ship Breaking Industry.

Government PolicyCentral Pollution Control Board has

taken up a project during the year 1999-2000 for quarterly monitoring of seawater at Alang Coast, to assess thewater pollution load due to the shipbreaking activities. The parameters likepH, SS, O&G and COD are analyzed inthe laboratory.

The Gujarat Pollution control board,as per the CPCB guidelines, is entrustedwith the following takes, inter alia:

• Issue of Consent under the relevantsections of the Water Act and Air Act.

• Issue of Authorization underHazardous waste (M&H) Rules,1989.

83

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",oIf<1l~(lilti.friG~tiqnl0 <;>Jo,,~:GHfF,C~30pfJ.brld,[[l!l!IgQMS.j2Wa,sr~,bW~t~;tj ~!l<jl,x&lfJbfJEolJ~ti9Jr,'i)fl;i 111.\;)10):) J2 if5 Yr::;r1T

• Ensuring the complf~We~ rgi¥6re-lfiillr\'{1'provislon:Junderilie} !BFA,,; rl9B6:i

f~W~pim] \~ljih~d~}id~ti~"?&;t~li:;ntnafl~~Jihgg{ch;alibiufaf m9fi{fbHR~'f)fT\'..f..UJ'"!'(ft ,.ljj'l~'~"'J"''-'f)' J :.;q .,'ct"',r.,?< ~~-~"n-..;(;i',-r"'. of \Vater q)laIi,ty Of seawater:. ':~' ,qJJ Jfi13.?2r.-:Jt1f :;'l'J oJ ;~b5:J.n S-.l:HiJ titfJ2.

'I' h~(@ujar.at Mariitime(BoaI,HtlsQ;!n'lhlfs f1a::,fO'le f 1;.dLpla ygi;n<i;h'elpingr>rTlO(i1itF(j12:potlidtioii} f(l:i,mijs'hip,,"l

bte-a<ktngw ;a<cti!'V.itiJe~lSf(Fhce2nC:l?QBig;ultleli'ne's'j;'ehtru.s't; the '!tiI1()'\vin'gifuncti OIl'S) rtrportl the;' S tll:tb:;M,kri~imce'

~,0¥"P;; "I'] \,()P r '''J',IIT'L''''3f! •.d<.J •. J.~ '..;.I , " ,',-.J-.l,,,I_, __'_"_ ~J.

.~ito ~j5r~v~~€:Jnet£~ssat)kJiriffM@(tfiiFe!{!Jifac-irifie~dihG'l [j&in~jliw~fer 2slipplyli)'j'(fra:in':ig'e1:and~r6iid L'de¥elOpmertl'j rl 'N

H;dJ no iJu {iof] ::)[lJ :)~~;i[ninffrt ((1 .,..:j;'-/}

':;J9ir,)Wul~im~irT~H~9f:(S~rfb;l~n~mg')i 9s~mtPr~jp h?p!~nna~iHfl2'r.~WiJS~j

Rules, ,1991. ,- ," .jfj::J:.fif(Z;'tl\ifJ:i 1)[1).: lil:Jrtl.'}i.qrflf.5l'Ih' provide) necessary infrastgmture:nifo}u C'0iirm'on" rpdH utionr,:C'p-ntli@fdl ifac1ititie's; i1induding.rltihat rlk1lpdjjh'e:J1[treatm~ritJ ,at :domestic] wastewater:1mgenetiafedj'frerH wovkeCcGlon:YT lana~mctlmmon, '{I i',haliaFaOu!>roQ\lwa:stt1iJoimanage'tnent!/FaeiHti~sj; ,!'Jij!IOdwA

V'r);JH!wf gl'iill""rq ni'P ,,,', h.""The'statUs of c6inp1laIicebfCPCB's

Guidelines during~first: rev.iew,aneetirfg(May,,:,?~) ~:jl~laslqnq»;s,:",' i", '!Ie,",_,j..d.,!. •••. J~'...•'•..1 .() .•~•• tJ.~~ 1.f.)jn,J~hJ J ':-td,~.J._J

.?(Nb 'JSlgmt1~antitiIiailg~g(lihljpolllitibnG3?sde'natib'0itn Wllulg 1:wereP c5b?e~~(f:)lr1So1i'd;>!wasteis'I;W~renfbiina; V6JJbeqiraumpetll a'tLfuth;;eiisfi6feV1 iOG 'J.:Jli:;w

jAi' ~rJ::n"''JJ'qCirfT c~rJi"ir)B end;;.';y!•• ' ,bil' spiif~ge ran'd' air iJolluir6n, chasI,n tYj~~V IhFiE :J Ii) u,t..J:'> DnE 'C) :i:J',_J .G(~ ~liQ

been observed during the c/ltting_'f10JB"lfJOt':1 St.lJ

operation, No pollution control,bTlfi'€!dsulfesJ n3'~!lJt~S:jglHeD@PCBh~J~""u"1'<i '''''Ii'; I"hill" (Jfy!'pt-" ~d"'I)<"H.<'"- -, gUlue Iues;- .aU'-uv<oIfJaao. e ' Y"111<O

shitP6r~aidng;!asso'Cilitit1>h~'t :"dJ rlJiw

~11;NHace;'i6r~6~\llirlffig!2:ro'rfs6ik\\iifs1yetJ:)1'O{i-{jebri[~~'Wdj,'6~ve.fPCB~!mA1Yper'1) fintorrn~tj9J\.,ttte) ihdiFjdqql uIPJ~ ,weI;~,2:dn}th~ fpt9~e$s ~.Q(fprocM~ghGgJl~ent

application from GPCRq'5Q I

~] ~g)IJil~~h!l.o.~pi.~%3w;aSIy~m9Mllb~1.l,?.!l'.(IN:~P.g;.;s,i;r~'f i ::;ril dIr.~d.1!State;LgbveIinm~nt has' formeu':-<i!

Committee under the chairmanship'of Bhavnagar District Collector, for

ir,?(.R cn-f-t t1r(" (JQ{J f ;"'''11,.61 \'/,[1'11" -s~.IT':'~ffectl\re"ihipl~Iiieiltiltibn of 'th~~~I;:CPCB,G{{id~1~BJ~',~(lJ[lO,Un~!f!(:)rn (f16::d n....'IJ"1 """-":•.~ t fl if'/{ ,.T! J'~J;:> lj ~'-'I,~-:.:!)i,'

':In''Acididon:to a'concJin f6tfhe;~:..~n.l.djtf.J~':~n'!i~;lftt1)ff/) ?~;l?!.;'N ;':1.V~LnC.~,gnerv~ro.p'mepr,,,, m,ai,n,!~}lJ~n,~~ ,.~t~~ct u~ii~~~lJs'~1et'C u~~c'(h~~fth' isJJ~g''iC:::;;I1P 1.0 -[:jf:L1f:J[I .1..~V3",I!Otl_ :rtinUO') erEP'~Jr~r1BuBtirr,ff?:R&ffll~r:3ehY!~tgp ~2t~rj11Ng¥. J~~er~tw~ u~~~?~~1jpel goryYll91aYr9?~,Atcf,~drN:,g,PP~scM~I' ,t~e.J8-~Hl"~.,J,;' ..J .,~ ~'l.j~ .•!.;-,. -.J,J ,_" .t~.,,,,t!"'J\..l"jJ.:i

~hrtP7t~re,,'!f~rL)s~~i~oEW[~01.,I,\~~9~Wc~n"f~rl:~lMemorandum-'br, U:1derstaildIn u>'M~IJ':tq 2riOI2IVUICf Jfll 'iO ,Veil:' J 2,:-Jf!~~,\'y IiWIth .the concerned State MantIIuet.f;fIOIH-,j!!'t:)JG.I nJ\ .f10J.iJf:);/no:) ~Hil

~j~~~ }}hl~~Ji~'t(Il:;!jme~~\)?Nl~lf{A~~~]9t~ftrgday8Kt~,fr~yt~39ns (!1~VH~r:~~~;SNfPWfgBfWb9Vs df rm~l~hmD9r~~1?~y,ard. A set of. codified ".safety,fl:~ne:J?'j>i .:)rn :'15j[~,JJJon,~~!':.i'--;!1n~J j,''J2,fia~rffi~~M~?J1srs.~~ghq J~ls;9)jb~ (;~\TI~lft~.tmV!H~Hrf?J}mp(~m~rL~fl~g1hJtr~~?r',be,in lines. of MoD made hetwe,en8~'kirNlitrihAi~:'~6~8f(CiMB);j~8~5g,.;~\f! ~fjnj)lJ;S.GfIJo ?tYOGfHl ig-~jjju [jJU~J.

~f~WHnSNNoIt.~e})k~,f~r;rti};~~9)~i~H~,~mi~~!LlY~ffI~.p~jta:)[7j~(~~'1(~l~~,~~;lf!*,~sgsi~fisn:)&~:~r~tJ))"l h~"",(,g '[,-,iff !'i' A~~~r the '::Ha~~d~-~si:~~f~S~li(Manufacture, Storage & Import),Rules;~r989',l; h '{1eiliHed1sMetyltipoi1'forehemi8al.(~ I eX':de~liiiigfi iIllfe'sHlifuHpi~seriBeal 'iIi mk \Ai. ~6lie'diMeJ' r1e'eli:g; tobe 1pte)Jarefii;l toiisiflehrlg::.'thatiLPG!gasi"s5:Jse'd&noctittihg:J6peratibffS;fllie';totiila1ntlufif' iOfcgllt!st()otJf!f6ii~! cihs't~t&filllits'ih ian)iirea::m'ay'h6~~tl tliHluah'tliYsj:YebHr~tPin, (th~\H<'iobve rtle dtidiie'd!Rules;'; hn~jMili~ref0f&,qde~iFe~Ptha:tfan~0ff:sh'eP)iM~teffM~iiag'emdit PlanHj~prepared by districtj~utlf1'j~ti~~)f0tJrtliearea Jnl,question.. '[ <I 1 ~'''1'tHhUCC C.IH10-.J nOI!UJ. 0: _I lETlf.r~}-_)~)r1!

'(fcllin,e,' rQ",ja.J~h,~,a;f!H'!P!tldi}P l!!ic;l;J;~Pl:lil!J,!~lYr:'~Q~mp(>t3ip,~~J]~}mt~slAljI!'9JfliU:J<fJlt.h9ril~!~,&liIk)~W~\lriJilgWAt;:l~.,9f~~¥!H.1m-Ie.IJ~i.JigJl:m~»te;v$~t~~y!dnd~1Jip,7lj>PM.1}i.;IJ,g r! a{::Jl y;i.I:ci.,~1';':) IJFh~.jjQ)\4~o+~~mp9~~;r,(lq~MbJ~fa,Wj)Mg~~9:,entQ!-.C,<irW~,ii;q.p,fl: .i'1~gJJ!!!ti9I!(>i-r~gi:!f4:iI1gi9gIl,4U9!9.~W9r.~ 91 aJl~w.p.rPF~aKWg Y!lgl~'il}n:c!y~i.lt~i9pntr@hjVR@~3tq~Q1,1jw;at,M¥i!~

~9;u.;<;l;~JA,::t)itt9,~;l?~,~19M!I?c¥Ht9~1~r'iCiJ}liW;?;t}4aTI!iWt; ~Ewr4;Wre'{,~nr;iRll\9,fjtl{~l&fJggjdem$ltq~J~~fetYi~ W,y!fSlf~;9ti'X-9rk~fs'cf,n91 prR!ect,i,qn of &1i\v.irmVp.,~Widuring ship-breaki.~g:D'ifl<;M.ylW,,~~)JRegulations, 2000, The terms used indVe1relgllf'afi&hs':JgUcli ,i{~1rs1iip', ISRlp-1Yt~aRihgna8Uvtrjfes !JSta,~ep8fi titilyfiiG5Hfrelr Baata;iete 'kref1d1::fiiferdrcifi:Jflie

'"'''~)!Jl:1'',.f,\< cl" 'I"tli'" 'llJ' "fi' '."'."fb"l" d';',{rego atIOu'S"ITI" . e'.ue 111'hI'vt:"C 'ause:H6vJher? !asutegar&1 otlidr: fi'efii1ihbIiWtHe)tegtilati6Wsrth[.e!'~e~oitlofotfletJ iiietslwIiitH:g'dvehi(~~g2ifi81itbisn~ticllagAif)(Pte~t!f{tibn 1~htd){!cJntt01:OfIPol.ifUti'oh~1A•..l.~'l '1"'8'1r'%fC"J,i""""nilff;A dJt''''D''8'8'''-'l"\.L:'l, ,I. '-'7 ' : .••.cxp'rOSl'vc; lfi'\;;' ,~J i" . -~,.

Expr6sivgfI{dlds; ~983~¥lrcfotie~ W6tl;ft948(J it!t1sb{!~finder [)Rtf¥~~fTi198)It~:FlaZ'aWtou s (}Wa'stfe u~M~ka'g'bfueh:tI[&HanlfliiliD'Rule's' il 989/ipettdl'eilfIi) Wolf1934 Petroleum.Rules 1976 Pressure{i~~~~i~H~Jji~~nIT~8(1~~!db~h[jtIel1;iTl?UDfH TO' )1.r.I?,'}'r H 2J? j):Hl~1;-:;iJ3JJ Iregulations and, rules, framed under'n ,PJ ,-y""nwy) "l[1' '1'I1Jf',N' ?4?,'y«n(~Athese 'ae'ts' ancf.~;'Iies, and "also 'ofh'er10 ?noqrrH 10 2T5J}HhO TJd1TjI ~)fH ~j''LS

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'"'''' ~'A't6fiF!:: ihi~P'abt)'{1.efmiIiHHti~tlJ::il ~liiiysl?'ie is'Hgiijitlia{'tftete) mrJ~npl'e~bfr'61(ldfHi)ia~i6nillhiJtlrfltfiktin"-g) ~hHtHRihenl~rre gHfJHhiP W6~Jflol!Jl{MatabJif~btl~lti:&s lwillE&'fiJi?f1rlWetfak'iWq1Wl{h~fJ':JSmfp'j}f>;~akYNg'iiia~IAtYYTh~'11iU,~iWeuiWi M-bItaH;~'bYiilirmea~&J~rThiWllikeiilUJ J2c6tlliflli~i&~rn:)aN6Ifid[ebHVgtldB#s,r'~6vdrnhf~JtifNag1dm~Wt? 3BiftP6r]j[kRalmgiJ~Radi'~~Em!fBfrh-l&~d~h~)Wic;Hf~'1fR6 f1~i1gi~:nU;~~~Hlhgf#~~l]iJfvs;iJn:1i~?li~df~glii~tidfU ar~yMBa~l~fnt't!II?:E~'HY~&:&%1lf~Jand,fMoi~foclWblh1&~d6M~Gb~t.ili'¥~F'firUPih'iirw\i~tbrrtBJlliHjJiif, . I {., ' "fn 01'J31 )f1i/1 ?rJnfyt.).,\'r~r ~'n -cnr:"::F"('lroi"o ;lr-.q;;s'OI. 'One J:mp1':ta'fiVe' step dlaf'ls"'tl'te

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° .?"ri~B\f.l ~j'!{ J~qf:"\t.~Hwould requITe tremendous'manpowennrh~;fRrm:J~,f9JlJlt9I!llg:ffi.n\W~es.o%~gmrrds~i!~k'llH!;#':)WP4~Q;rf!J~At 'Q,i!'S,9 !:I;r~g~n&WY~Dg,jp'd1;YitrY 1~1J.£h;ca,;~i;i;mp1J;lr~wlswg~hiqg!!$[!h~Ji.KyJi!W gf,Jl1011,sflIlqs"ii) i11>1

Page 87: Aug Vol49 No8

C--k.ather the way out must be toenforce environment protectionmeasures, have well trained andsensiti ve officials of the Stategovernments, pollution control boardsand maritime boards to perform theirduties well.Proper hazardous waste disposal

should be incentivized and not justenforced thorough pecuniary andpunitive coercion. There should beincentives for ship breakers to disposeoff hazardous wastes properly. Certainpolicy gaps can be pointed out in thisregard. The emendment rulespromulgated by the Ministry ofEnvironment and Forests in the years2000 and 2002 dealing with hazardouswaste management fail to provide any

incentive waste reduction orminimization effort. Industries haveshown reluctance to adopt suchmeasures. Maybe incentives such asproviding financial and technicalsupport to ship-breakers to set upincinerators and other apparatus for safedisposal of hazardous solids, liquidsand gases.

Certainknowledge and date gapscan also be detected. Apartfrom a reliable and up to date

inventory of hazardous wastes, India ingeneral lacks the proper infrastructurefor proper disposal of hazardouswastes.This also includes inadequate staff atstate PCBs assigned for supervisinghazardous waste management.

So it is not really a tale of jade<;llaws, but not even ineffectiveimplementation that has lead to risingconcerns over handling andmanagementof hazardouswastes.Whatis needed is institutional strengtheningand training of various officials. Wastereduction and mitigation should begiven fillip as this would lead to relativeease in waste management. After allprevention is always better than cure.So a combination of strict guidelines,which are already in place as regardsthe ship-breaking industry and effectiveimplementation-which could meanproper allocationof funds for guidelinesenforcementagencies-must be workedupon. Comprehensive approaches suchas EIA should be adopted too. 0 .

,...•....•......,•......;\.••....•......•...•.........,•.....,••.....•.., ."X,..:.,"..,','"'~ t7ha,.,.,~.t.....•.' ,..0..1.•,sso.ethnes•.:ehxuIltISa,c..•..b•......•..a...............•..a...•••:b.111.0.:osg..ia..C,.,,.bp..a••.'.0~..lus..ytt . What' is thecrite'Ha fO;'selecting ttie' composition of.theSehsex"has b!~ni~".VV'j . < 340 S~nsex;stoc~'?',,',;.,~:"" reyisedl~times, ofwbichs~venha~e, Stbck selectiorifor"~he S~~sexf~ ~en plate sin~e20g2.' if::

signifies that.the in~exhaScross~d a driven by.Im.......•....•.p.rov..e.~ent..:;transP.•.aren.c,.,.y.........D~es the Sen~~~r~flect;the tot~I:n.•...ew tm,'eshold;The rise al.s,.Ofuels the .... . '. ',. ",' ',." :..,\' ,and simplicity. TIle key qualification market trend?: ",'.anticipationthat the indeican move ,'criteria are:'..' ....."up still frirther.Th~rise iIldicatesan ".."TheS.ense,r. d()~~ pr()vide,.cllliflcrease in rllarketcapitalization and • TIle stocg sho~dhave1een~~ted,~~ mdicationof market direction but itis,thewealthforstockmark~t inveStors. B~E [or:.6 mQ~.thsan.aits?-,lll0n* not a'fullmark~~'.indicf.ltor.ItsLI-rowever,it does not me~n th~t all averag~" fre~.t fl~at :"'rI1ark7:~' di~erg~n~e)Vi~;,t~~I~roa~~r:Il}atk:t'~vestors gain'Nhenthe Sensex moves'; capitali~von~~ould~e atleastq~' naSb~n'~vid~nt'0~'ill~y ~?ccasi~h,yp antllose~money whe~ it comes,; of:l~~~€psex"';~: .':~:': ....rl:;;;' iIltther~~nt€~s~:<e~~is~seactivity:,~own.'The'Sensex "is a,'complex:: e' ~ecoiripany~hould;be a. ~a erliil' in.:mid.:'sap.lst~5ksi~srea;ed. This'isbarometer of stockmarket sentiments... '. its:industiygr~~p.r:,~' ....~~:"... r~t1ected.in,th~;(:lh-:e.~gen9~.{)f'SeIl$,eX....... .t., Th'est&k sh0U!dranl('amonftfiet()p;' anHBS~2~WC~;;i~dex;1' .. •..!l,What is Sensex ? 100 listed companie;onothetiasis~f;The .tiroader.ilidices'lBS¥7100•.~d

The Stock Exchange Mumbai 6 month.:aver'~ge:nmarket BOSE-500 are more' ref1ectiveof'(BSE) launched a 30 stock index in capitalization 0(75per cenLweight) overallinark~~treIld.Thii:said, .the1986 comprising large and a~d 6 month average daily turnover Sensexcoiitinues to tie a key indicatorrepresentative companies whose and impact cost (25 per cent weight). .of market sentimentand direction asa'stockswere actively traded. ThisBSE e The stock should ha.vebeen traded, large '.proportion of' marJcetSensitive Index of 30 stocks is barring exceptional tircum~tanc~s; c~pitalii<itionandsectorrepfl::sentation'popularly~alled Sensex. The'base 0tl,each:tradiri'g.day:in thejiast ~ix isaccounted fo~inindexcoIllpanies ...A.year for the index is 1978079and the months:!' .. ';'."0:'" large p~ of'Illar~et'a~tivfry is alsobasevaluet:l00.'In othe~ words,leTIle4Ind~x Co'mmitteesh~uld',be' concen1nl.tedin.thes~cOunters;,.Rs 100 invested in the inaex in f?78- s~tisfieti~with{the cJmpan~:s tnltk::The,¥storyofthe~ense~makesi~,:79 isRs 7,000 now. Thus, the index ,: record.,;.;;,":' agood:,b~nchmai~"'forevaluatingprovid~s a j)enchill~k representationje, . T~e. I~.~exCom~ittee,.''''of t~'e long-term 'ret~r?sf~()mt~eI~dianli'of gi()wth stocks",; exc~~ngem~ets ~yeryq~kt~r~?revi~,w m~ket..;Theinaex.,.w'as,thefirst. ofit~'~vertifue: :;::~,the;,comp(;siti6n. TiJl dat'e; the~p:dip:ttiecb~~~.; ., '0. ,:;:,.0

c',",' >"'C '~/o~,:, CeO'_\' ,',,_o"~ 'y~;_",;-,. <;~ ;;;\F~

YOJANA August 2005 85

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An interview with Prof Jagdish Bhagwati of Columbia University, USA, by Manu N Kulkarni. Prof Bhagwati was in Bangalore recentlyto deliver the Krishna Raj. memorial lecture.

Globalisation Can Have aHuman Face

YOJANA August 2005

body-of course it has a face, a bodyand legs.

The globalisation face will smileonly if the legs and the body are in goodshape. There are many players inmaking the face of globalisation smile.The body consists of !the corporategroups, the State, the market, thescientists/innovators/technologists andthe civil society groups. The Statethrough its instruments of goodgovernance form the legs and if they areweak, globalisation is also weak.

Bodies like the WTOare at beststandard sellers but the ultimatedecision-makers are the governments ofthe developed and developing countries.There is no use blaming global playersand we have to blame sovereigngovernments.

Wealthy charities have now turned toagitating about trade issues with muchenergy but little understanding. WhenOxfam agitators at the WTO meeting inCancun in 2002 paraded about wearingthe masks of G-8 leaders, this proposedthe witticism that here were a bunch ofdummies masquerading as otherdummies!

Oxfam's annual spending is over

liIManu:rN[.K(ijj{a:m;::lYou have been£......-;:,.,;'*~~~'-,-g;::~<>«liJ\i;~_V+;;i~,:

a great champion of globalisation and.your latest book DefendingGlobalisation is a testimony to that. Butmany civil society groups are opposingit. What are the virtues and vices ofglobalisation? How much human is thehuman face in it?

Ifl~~~aisfi'ifBh5!li~!!illG10balisati oncan have a human face and there aremany cultural and social dimensions ofit apart from economic dimensionswhich are often depicted in harmfulterms. Many NGOs feel that because ofglobalisation child labour has increased.ILO has estimated that nearly 200million children under 15 are' at work.Child labour is historically inherited andhas been long standing and should notbe attributed only to globalisation.

Child labour is rooted in poverty andwherever globalisation translated intogeneral prosperity and reduces poverty,it accelerates reduction of child labourand enhances primary schooling andliteracy which in turn-enables rapidgrowth. So we have here a virtuouscircle. Often globalisation is blamed forthis wicked child. exploitation.Globalisation is like the human

.sovereigngovernments

There is no useblaming globalplayers/or-theweaknesses 0/globalisation.We have toblame

86

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(,--,;.$350 million and that of Action Aid is $140 million. Likecorporations they are under pressure to diversify into newareas of public policy regardless of expertise as they pursuefund raising opportunities. But they are dangerous if theyspeak from incompetence since they wear halos that thecorporations do .not.

m!~~lml1T~There are also some NGOs whooppose globalisation because of its impact on environment.

Itlr~n1!!!r~!!!jsI have always believed that the best'policy is to combine free trade (or a freer trade!) with anappropriate environment policy. There are "money valu~"and safety issues like the hormone-fed beef and geneticallymodified products.

Then there are moral values like tuna caught with netsthat kill dolphins or shrimp caught without the use of turtle-excluding device. In both greens feel that trade rules putenvironmental regulators at a disadvantage. GM foods inthe US are treated as safe based on scientific evidence butEurope and its NGOs feel they are unsafe based on theirsentiments. Sentiments cannot and should not replacescience.

gB'~~lEl Recently you have been honouredby the Indian government as an outstanding NRI and howuseful is the dual citizenship for NRls granted by theGovernment of India?

1lii"~J1BiiII!mrgCitizenship is just a piece of paperand NRis have no voting rights in India. I believe in whatI call "Bhagwati Tax" for the NRIs if they hold Indian andthe other country's citizenship, and they should pay incometax to the Indian government as is done by the US citizens.There is no citizenship without responsibility and by payingtax in India NRIs contribute to the nation building in India.

.iW;~'1(~w.!!1!lYou have always been quoted as apotential Nobel Laureate, how do you feel about it? Whatare your childhood memories of Gujarat?

IlIf~mU!DlilllIt is all matter of luck and God'swill. I have always felt that if I miss it I will be the secondGujarati after Mahatma Gandhi not to get it! My father wasa school teacher in Baroda and he was a God-fearing manand used to sing bhajans and was therefore calledBhagwati. That is how I have become a Bhagwati!

.G;:fNlK~~.:'Thank you Prof Bhagwati for yourIJjt'!:>~~",df~~_~"-,"'~~~,tItime and for this conversation.

(Courtesy: Deccan Herald)

YOJANA August 2005

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Mr G.D. BaneJjee is Deputy General Manager, NABARD, Mumbai and Ms Sarda Banerjee is Research Associate, Mumbai University.

YOJANA August 2005

GD BanerjeeSardtl Banerjee

In order to attain long-termviability of tea industry, targetsshould no longer be productionoriented, but shall aim at reducingcost of production, improvingproductivity, value addition, productdiversification and marketability. Itfurther states that one must concentrate

being produced is not price competitive.This has resulted into plainer varietyforming the bulk of exports, therebydamaging India's reputation as a sourceof quality tea. One of the importantreasons why Iridia is not cost-competitive is the nature of plantations.Some 70 per cent of plantations in ourcountry are over 30 years old and 45per cent over 50 years old. The oldplantation gives poor yields not onlybecause they are old but also they areplanted with low yielding plantingmaterials and their resistance to pestsand diseases is poor. The reason forrecession in tea industry is surplusproduction (especially of common tea)the world over. The plateau off ofdomestic consumption and comparatively• higher production costs, only speaks ofa multipronged approach that isurgently needed.

HE INDIAN tea industry isin many ways at crossroadsand faced with a number ofcritical problems basicallythe low price realization and

high cost of production. Towards theend of 20th century, domesticconsumption reached a plateau, leadingto a marked fall in the prices, down touneconomic levels. This has resulted inIndian tea industry pass through acritical phase.

There are many factors responsiblefor the present crisis. The mostimportant factor has been the failure oftea to keep pace with the cha'ngingtimes. Traditionally, coffee was themajor competitor of tea, but now teafaces major threat from the soft drinks.Another major factor is the lack ofknowledge about the health relatedbenefits of tea. Besides launching theNational Tea Campaign "Pi yo MoreChai", private companies should alsomake efforts to promote not only theirbrand but also tea as a whole.

Faced with stiff challenges fromother tea producing nations like Kenya,Sri La~a, Vietnam, etc., India needs tobe price competitive. But quality of tea

Better pricerealisation fortea, criticallydepends onincreasing of

market share andalso creating a

niche in the valueadded segment to

productinnovation

Tea Industry atCrossroads

88

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II~on increasing the productivity ofexisting gardens rather than establishingnew plantations with hugeinvestments. There should becontinued efforts towards furtherincreasing the profitability of teagardens through repLanting/rejuvenation and mechanization ofoperations.

The main thrust should be on qualityso as to make our teas competitive inthe light of opening up of the economyunder theWTO agreement onagriculture. Thrust is to be given onimproving marketing capabilities aswell as substantially improvingpackaging and value addition.Conversion to organic methods of teagrowing is to be encouraged.

Information technology needs to begiven due consideration for makingavailable ready information to the teaindustry and for promotion of ourproduce in other markets. We shouldalso explore new markets for teaexports rather than depending on a fewmarkets.

Strategies

The strategies are to

• enhance production through verticaldevelopment measures such asreplantation, rejuvenation, pruning,filling of vacancies with bettervarieties, etc.

• improve the productivity of small teagardens,

• emphasize on irrigation and drainage

• augment tea processing facilities byconstruction of new tea factories

• modernize the existing tea factoriesfor ensuring production of clean teaswithout any trace of foreign materialin end products,

YOJANA August 2005

• encourage product diversificationand creation of facilities for dualmanufacture of tea (orthodox andCTC),

• encourage value addition andproduction of instant, ready-to-drink.tea, decaffeinated tea and specialityteas,

• ensure adherence to the prescribedinternational and domestic SPS(Sanitary and Phyto-sanitary)standards for tea,

• make higher investment on R&D andtransfer of technology,

• reach technological advances tosmaller estates where potential forimprovement is the best,

• reduce packaging costs and usealternative and inexpensive•packaging materials,

• explore the possibility of setting upof modem packaging and blendingunits within India with foreigncollaboration,

• support for promotion of valueadded teas in overseas market byexporters, importers to takeadvantage of IT tools for vigorouspromotion,

• encourage organic tea cultivationand production of green teas,

• InItIate special promotionalprogrammes in thrust countries,

• need to continue an intensive genericpromotion campaign within thecountry so as to increase the percapita consumption and to arrest thedeclining trend in domesticdemand. A strong and vibrantinternal market will create thenecessary synergies for expandingthe export market,

• reduce the cost of production byimproving productivity andminimizing wasteful expenditure toincrease profits from the existingplantation. The competitiveadvantage of tea industry dependsprimarily on quality of manpowerand quality of Indian tea.

Long-term prices depend on supplyand demand for tea available inmarkets. Thus one must identifymarkets based on global predictions ondemand and ability to pay premiumdemand by different types of Indian teasand develop specific strategies forfocused markets and allocate funds inthese markets. There is need to build onvalue perceptions around Indian teawith Darjeeling as flagship and launchpromotional campaign in major marketsand provide legislative protection forteas of Indian origin along with Indiangeographical indications such asDarjeeling, Assam and Nilgiris. Furtherattempts may be made to launch Indiantea logo as a mark of quality andspeciality tea together with extensivepromotion of speciality teas by way ofusing website as a marketing tool tohasten the buying process. Emphasismay be shifted from product toquality based on appearance, cup-page, ecology, and sensitivity to biochemicals, health benefits andlifestyle.

Long Term Health

Long-term health of tea gardensdepends on infrastructure for

• value addition,

• provision for duty free facility toexporters,

• support for purchase of foreignbrands/distribution arrangements/warehouses in foreign markets byIndian companies.

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Further traditional markets forprimarily bulk tea must be retained.A drive to locate large growing'segment of consumer markets acrossthe globe has to be further launchedand strengthened. We must promoteour own global brands and secure along term markets for Indian tea inorigin.

Government may further considerduty free imports of capitalequipments/machinery for packagingof tea bags, instant tea, ready to drinktea and canned tea machinery andduty free imports of filter papers fortea bags and remove infrastructurebottle necks and improve infrastructurefacilities (ports, customs, banking,insurance, etc.)

Provision of incentives for valueadded teas, launching promotionalcampaigns for Indian teas in thrustmarkets, conducting market service toassist Indian exporters in theirmarketing efforts and deputation ofdelegations to prospective countries toenhance contract for exports as well asto study strategies followed bycompeting producer countries are someof the other areas to be strengthened. Inorder to increase India's exportpotential,the option of importing tea forre-export will have to be kept open, asworld blends will require teas fromother growing areas.

A separate focus on tea bags isessential. One of the highest

. value added emergingmarketsis instant tea and ready to drinkbeverage.With a view to making Indiaa global competitor in value added teas,there is need for setting up of theblending, packaging and processingfacilities at internationally competitivelevels. Globally competitive canninglines, processing equipment andbranded/privatelevel option needs to be

90

organized. This is a highly. technological area and an edgein thisfield would open up sophisticatedmarkets in future.

Research to be further strengthenedon:

• integrated nutrient management,

• forecastingmodel for pest incidence,

• energy conservation,

• product diversification and valueaddition,

• tea and human health,

• transfer of technology,

• establishment of chain of qualitylaboratories in the important teagrowing regions,

• irrigation and drainage,

• biochemical analysis and qualityimprovement,

• soil management and organiccultivation of tea,

• packaging, eco-preservation andother related areas,

• biotechnological aspects and

• pesiticide residues, metals, myco-toxic and connected research work.

Development areas include:

• setting up of a training center andadvisory centers for the benefit ofsmall tea growers in NE region,

• opening of new development officesof Tea Board for closer interfacewith the small growers in the non-traditional areas,

• strengthening the eXlstmg fieldoffices of the Board,

• setting up of nurseries for supply ofplanting materials to the smallgrowers,

L)• setting up of demonslration plots,

• organizing study tours, workshops,seminars etc. and

• institutionof productivityand qualityawards.

The issue relating to costreduction and improvement inquality of tea has to be

addressed properly. Although 80 percent of the total production is nearlyconsumed within the country, India isone of the five major exporters of thisuniversal beverage. South Indiaaccounted for nearly 601 per cent inquantity terms and 40 per cent in value.terms. Unfortunately our share in theworld trade has suffered a decline from.around 1/3 in 1970 to 18 per cent in2004-05. The export performanceduring the year has been somewhatunsatisfactory. There was decline inexport by 12 per cent compared to theprevious year. Though dc~clerationinexport in quantity terms is only amoderate 3 per cent, decline in pricerealisation has been over 9 per cent. Itis also a matter of concern to thegovernment that the share of valueadded tea exports to total exports hasbeen registering an increase. Ininternational front there has been atremendous pressure on commodityprices particularly for tea, coffee andspices. This has been despite theopening of markets and theliberalisation process set in motion inall the countries particularly in thedeveloping ones. There seems to be aglobal oversupply.

Better price realisation for tea,critically depends on increasing ofmarket share and also creating a nichein the value added segment toproduct innovation. There is agrowing need for value addition totea at the post harvesting stage.Keeping in view the new markets and

YOJANA August 2005

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l .---emerging preferences of theconsumers all over the world, there isa need for urging upon the teacommunity to lay emphasis onproductivity with definite focus onpackage of measures rather than mereincrease in production. The effortshould therefore be on R&Dinstitutions working in tandem withthe market leaders and consumergroups who have become extremelyquality as well as cost conscious. Themessage conveyed by them is loudand clear-innovative or stagnant.One should evolve dual strategy andshould improve competitivenessthrough productivity increases toimprove our market share intraditional tea segment and create amarket for value added tea products._ It is against this background theGol has worked out the price

stabilisation scheme which isexpected to benefit a good number ofproducers of important cash crops.Hopefully, the implementation ofsuch schemes would arrest violentfluctuations in the market prices ofthese products and lend overallsupport to the growers. It requirescooperative partnership ofgovernment and business andfarmers. Then only sucharrangements will succeed. At thesame time one is also aware of thefact-going by the experience ofcountries like Brazil, Ghana andothers-such interventions do notnecessarily guarantee stabilisation ofprices or adequate return to thefarmers. It is essential that in this freemarket economy the farmer shouldalso get to organise themselves onmoreprofessional and viable lines to

deal with the emerging situations.

While the research efforts leadingto sustainability in production,enhancement of productivity andimprovement in overall quality of teain terms of biochemical parametersare in progress. It is imperative thata greater thrust is given to the frontierarea of biotechnology. Currently, thisresearch is being done on micropropagation, somatic embryogenesisand protoplast isolation and fusion.Attempts are now being made to startmulti-institutional projects on in vitrobreeding and genetic transformation,molecular characterisation of teacultivators, development of protocolfor transgenic production of teaplants, characertisation of clones forthe enzymes of flavoured path wayfor cateching synthesis. 0

lII[~:~~~einvest~fni~subsidy" "nfrastfuct~~7iICOS tgPIprojeci~:A'Ildhra pi~aeSh, Punjal,l,.iuppersj;e ."{i"

and Hi~~ch!ll praae~~ilarethe Othe.i~l[''infra;t~three ,l~t~~t beneficiar~es underthe~il" agepcie~:Central's7ctor scheme known~s,"f; th"S treng, ',tneninglDe;yelopment o,l~',',TTi.'ii't'i.

el. ," '. ' " ...•, capt a

AgricuHuraliil.,inarketingiil" !i.f. ,....... , .. In." marJnfrastr~.cture Gr~ding an infras TStandardisation". d I

',KetaIi'':Tamil Naau,ii:ked 'tPra~ei~'and Uniori'lTtmitory 'Agriia~,Andama.~land [email protected] we CommItnotified"earlier, for assistance una directthe sCllem~, it was ()fficially stated' ..:lcomJll~here. Ti..'" "11.. ."l"compeli

,~» ,i:;~~ 'Gjt

By,i'C .. this ,~'~otificati?ritll~:i ptivainfrastr~~.iure project;;in all. tli~seil ..states will now bt' eligible f(;)rinvestrh~ntsubsidy of25 per cent 6(.

•.•the'capit!ll cost up tdil~s 50 lakh ori:~10 ~:. ~.:.~

YOJANA August 2005

Thels.•.can. alsl,)'ie 'ugr..frnis~}ion':i'projfcts'i~~.rf~pect()fl'th~ii"fJ(isttngl:1rharkets"~~~.~.~~.u~'::s "f~heii.~2!

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NATIONAL DEVELOPMENreOUNCIL',. ",,' :', •~EPOR1'"r ~ % !!~ .' ;:;" 1 I

YOJANA August 2005

.~!rlefMi~~tersur;g~dto dOU~le,~iCultu~81oUtpll[tiiD10 y~r~'

<",' ----~<:~ ",' -'os;-,' -, '.' :~,-~" - --S~S:'Jf

• 9~,~riot ~~hieve~enthpj~~',<:ta~et of ~,~1<per"t~~t' gro~<;. '

,~fi - <

• O;er£ome;<electrid~ shorql~~b'Y',attracting <jpublica:n,~l:'p,p~atese~~9~ inv,e~.nent ",,~:.<

• FInancial" heaUh: of theel~ctricityagenci~;igthe siat~<has to be ,restoredLj,i

, ""' ' PM~onN C ,--I ~ ~ A>~ ~ ' ~

and private funds in the sector. "Forthis, the financial health of theelectricity agencies in states has to berestored, which can not beaccomplished without a reduction ofAT&C (Average Transmission &Commercial) losses 10 percentagepoints in two years and focus onproviding quality power at appropriateprices" he said.

Emphasizing the need to improvegovernance at district levels, the PrimeMinister said it was necessary that civilservants should be entitled to aminimum tenure security.

The Planning Commission hasadvised the Centre to correct the farm

Deputy Chairman at NDC

• Asks Government to correct farmpolicies

• Power sector weakest

Pointing to deeper problem inagriculture strategy, Dr Singh promisedto plough investment in the farm sector,including inputs supply, credit,diversification of corps, betterproduction practices and improvedpost-harvest management. Cooperativecredit, according to Prime Minister, willbe the mainstay of financing thefarming sector. He sind, funds would bepumped to complete irrigation projects,take up new ventures, manage water inrainfed areas and adopt watershedprogrammes in drought prone andwasteland areas.

Unfortunately, actual performance ofagriculture appears to have deterioratedeven further and will possibly notexceed 1.5% per annum during the fIrstthree years of the Plan. In thesecircumstances, it is hardly surprisingthat a perception has grown that thebenefits of growth have bypassed asubstantial section of our people,particularly those living in rural areas"said the Prime Minister.

Outlining the policy directiontowards doubling the agricultureproduction in ten years, Dr ManmohanSingh mooted the idea of creating aNDC sub-committee to work out thenecessary steps.

Turning to infrastructure, Dr Singhpicked up two specific areas. One wasthe dire need to overcome powershortage and the other the need to createan environment to attract both public

Talking Development

The Mid-Term Appraisal (MTA)showed that the performance of theeconomy was well below the target,averaging 6.5% in the last three years.

HE PRIME MINISTER hastold the NationalDevelopment Council(NDC) that the 8.1% growthtarget of the 10th Plan

cannot be achieved. Inaugurating thetwo day 51 st meeting of the NDC inNew Delhi on 27th June, Dr ManmohanSingh said, "we can, and should aim to,achieve higher growth. OurGovernment set a target of takinggrowth to somewhere between 7-8%and this is what we should aim for thelast two years of the 10th Plan.However, even if we achieve thisacceleration, we cannot achieve theoriginal 10th Plan target of 8% growthover the plan period as a whole."

The two day meeting was convenedto approve the MTA of the 10th plan.It provided an occasion for ChiefMinisters, Governors and CabinetMinisters to take stock of the state ofthe economy.

92

Dr Singh expressed concern ondeceleration in agricultural growth rateafter mid 1990s. "Agriculture hadgrown at 3.2% from 1980 to 1996. Itdecelerated to 2.1% during the 9th Plan.The' cornerstone of the 10th Planstrategy was a reversal of the decliningtrend in agriculture and with a target ofagriculture growth. at 4%.

Page 95: Aug Vol49 No8

Upolicies to arrest the decline in growthin the sector.

In his presentation at the NationalDevelopment Council meeting, theDeputy Chairman Mr Montek SinghAhluwalia projected a grim picture ofthe farm sector and outlined thecorrective steps required for highergrowth while detailing the massiveinvestments that were required toimprove the country's infrastructure forachieving a higheroverall growth rate.

Dr Ahluwaliasaid while urgingthe Government tohave a re-Iook atthe efficacy of theexisting strategiesfor both irrigatedand dryland areas.In particular, hemade out a case forimposing usercharges on water asthe current levy was only a fIfth of theoperation and maintenance costs and therural poor had not benefIted from it. Hesaid some states had taken to raise watercharges and are undertakinginstitutional reforms such as theestablishment of regulatory authoritiesto determine water tariffs andparticipatory irrigation management.

Dr Ahluwalia said "The policy offree and very cheap power obviouslycontributes to the problem byencouraging exces~ive withdrawal ofground water. The Mid Term Appraisalcalls for a move towards more rationalelectricity pricing". He also suggestedthat electricity for agriculture should bepriced differently in areas where groundwater has been severely depleted.

Turning to the "massive"infrastructure investments required insectors such as power, roads, ports,airports and railways, Dr Ahluwaliasaid "success would lie in innovative

YOJANA August 2005

action by both the Centre and the states.Public investment in infrastructure mustbe increased, but the total investmentneed of these sectors in the years aheadare so large that they cannot be met byrelying on public resources alone."

The inadequacies in infrastructure inthe rural and urban areas, he said,affected the country's ability to competewith cheaper imports as also inpenetrating export markets.

Advocating a need to take intensivereforms in the power sector, DeputyChairman said "Power sector is theweakest part of the country'sinfrastructure". He said that unrealisticlow tariffs which are partly responsiblefor fInancial unviability in distributionsegment, apart from leakage and theftand deliberate under billing, have to betaken care of.

He outlined the positive aspects ofthe economy while giving an overviewof the corrective action required tobring the economy back on track in linewith the targets of 10th Plan.

FM at NDeThe Financial Minister Mr P.

Chidambaram has asked stategovernment to intensify their efforts tofind investible resources that spurgrowth. He also urged then to fIrmly.establish link between expenditure andmeasurable outcomes to avoid wastefulexpenditure.

He asked the Chief Ministers to goahead with reform in the pensionscheme as otherwise, the liabilities ofthe Centre and states would soon beunbearable burden. By 2009-10, thejoint liabilities on this account alonewas likely to be over Rs 100,000 crore.Mr Chidambaram told newspersonsafter making his presentation at NDCthat the Pension Fund Regulatory andAuthority (PFRA) Bill has already been

referred to aParliamentaryStandingCommittee andnine states apartfrom the centrehave implementedthe new definedcontributionpension scheme.These nine statesare AndhraPradesh,Chhatisgarh,Gujarat, Himachal

Pradesh" Jharkhand, Madhya Pradesh,Manipur, Rajasthan and Tamil Nadu.Four other states namely Assam, Orissa,Kerala and Punjab are also consideringintroduction of the new pension scheme.

In his presentation before the ChiefMinisters at NDC, Mr Chidambaraminformed that existing pension systemcovered only 12% of labour force. Asmuch as 88% were uncovered due tolack of individual choice, portabilityand multiple fund managers andcoverage.

The Employees Provident Fund(EPF) covered only 3.70 crore peopleor about 9% of the work .force, whilethe government scheme, GPF, covered120 lakh people (2.8%) along withSpecial Provident Fund covering 21lakh or 0.5% ofthe labour force. ThePFRDA Bill, now before theParliamentary Committee, is for settingup a statutory regulator to promote old-age income security by establishing,

93

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developing and regulating pensionfunds said Mr Chidambaram. TheFinance Minister said a regulatoryumbrella was necessary to protect theinterests of workers and a statutoryregulating body with penal powers wasa necessity to sustain memberconfidence.

Monitor agri credit flow: Pawar

The Agriculture Minister Mr SharadPawar has called for close monitoringof credit flow to the farm sector by statechief ministers to ensure expansion ofcredit cover for farmers.

Speaking at. the NationalDevelopment Council (NDC)meet, MrPa war 'said that the government hasdecided to reschedule agriculture loansworth Rs 10,000 crore to benefitfarmers in distress. He said that CMsshould personally monitor credit to thefarm sector to avoid such distresssituations.

"Despite the significant step-up ofcredit flow, it remanis unfortunate thata significant number of farmerscontinue to depend to a large extent onnon-institutional sources at exploitativerates of interest ranging between 24%and 36%", the Minister said.

Continued interest by CMs in asystematic review of credit flows to thefarm sector can vastly improve things,Mr Pawar said.

Mr Pawar said the Centre too will

94

have to bring about changes to easeprocedural rigidities and the excessivesecurity oriented lending system of thebanks, that create entry barriers foraccess to formal credit.

He said the government remainedcommitted to further step up credit flowby more than 30% during 2005-06.

Mr Pawar in his presentation tostates, pointed out that agriculturegrowth could be accelerated throughincreased investment by public andprivate sectors, increased productivityof crop, livestock and fisheries,diversification of agriculture, promotionof horticulture and allied activities,reduction of post-harvest losses,development of markets by promotingcontract farming and direct marketingand increasing agricultural exports.

He added that on-going irrigationprojects should be speeded p, water useefficiencies through dip and sprinklersshould be encouraged, water-sheddevelopment on large scale should beundertaken and rural credit cooperativesystem should be revitalized.

States Speak at NDeStates want the Centre not to

discriminate against performing statesin fund devolution.

Pointing at.anomalies in the existingpattern of fund devolution, the states onthe first day of NDC meeting asked theCentre not to discriminate against

L)performing states and comes out with aproper mix of borrowing programmes.

The Tamil Nadu Chief MinisterMs J. Jayalalitha observed that the 12thFinance Commission has already givensubstantial amounts as grants to certainstates which have not done well. Shesaid if a state could move faster with ahigh growth rate, it should be allowedat higher level of debt.

Saying that the 12th FinanceCommission's recommendations to shifttowards market borrowings wouldcause repayment problems in the longterm for state, the Rajasthan ChiefMinister Ms Vasundhara Raje said amix of various form of borrowingsshould be worked out.

The Maharashtra Finance MinisterMr Jayant Patil said the Centre requiredto ensure that the average cost ofborrowing is equal across the country.

Exhorting confidence over an upbeatinvestment climate and resurgenttourism industry, the Jammu & KashmirChief Minister Mr Mufti. MohammedSayeed sought fiscal incentives to speedup economic growth and greater centralassistance to boost agriculture,irrigation and small scale units.Demanding continuatiolll of Centralincentives to sustain investors' interest,he sought support for industrialdevelopment and specific funds to setup industrial areas.

The states also demanded correctiveaction to reverse the slow down trendin agriculture. The Andhra PradeshChief Minister Mr Y.S.R. Reddywarned that critical weakness inagriculture has reached a crisis. He saidthe employment situation in the statewas challenging.

The Uttaranchal Chief Minister MrN.D. Tiwari said its science centres forfarmers would be reoriented to stress onnew methods of agricultun~.

YOJANA August 2005

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NDC endorses corrective reformstepsThe National Development Council

(NDC) has endorsed the correctivereform steps and social sector initiativescontained in Mid-Term Appraisal(MTA) of the 10th Plan. It hasidentified poor agricultural performanceand weak state finances as the majorproblem areas hindering economicgrowth.

Accordingly, at the instance of thePrime Minister Dr Manmohan Singh,NDC has decided to set up two subcommittees, one on agriculture and theother on finance to look into debt reliefto States.

The Prime Minister also directed thePlanning Commission to prepare the

YOJANA August 2005

"Approach Paper" for the 11th Plan andplace it before the NDC later this year.

The Sub-committee on agriculturewill be headed by Mr Sharad Pawar,Agriculture Minister and will drawimplementable action plans with theobjective of accelerating performanceof the farm sector which has beengrowing at a rate less then half of thetargeted 4%. In his closing remarks atNDC on 28th June, the Prime Ministersaid the Sub-committee will be givensix months to submit its report and itsrecommendation will be used whileframing the 11th Plan.

The second sub-committee, which ison restructuring of goveniment debts tostates, will be chaired by the FinanceMinister, Mr P Chidambaram. -It willlook into relevant issues, especiallyregarding the debt arising from theNational Small Savings Funds (NSSF).

Explaining the need to set up thesub-committee on finance, the PlanningCommission Deputy Chairman, MrMontek Singh Ahluwalia told newsmenthat while the Twelfth FinanceCommission (TFL) hasrecommendation on restructuring ofdebt, there are no recommendations oncumulative debt of states arising dut toborrowing from the NSSF. This is animportant aspect of the financialproblem faced by states heavilydependent on the NSSF and has to be

addressed.

Dr Manmohan Singh also proposedsetting up of an expert group to developconcrete proposals for restructuring thecentrally sponsored schemes (CSS). DrSingh pointed out that many ChiefMinisters had either demanded transferof CSS or their amalgamation into fouror five broad heads with freedom todevelop locally relevant programmes.Dr Singh added that agriculture andirrigation have been a common priorityin all Chief Ministers' interventions.

Consensus on 318 InitiativesBriefing news persons after the

conclusion two day NDC meeting, theDeputy Chairman Mr Montek SinghAhluwalia said, "there was a broadconsensus on the 318 policy initiativesoutlined in the MTA". While 59 of themwere the priority items of thegovernment to be taken up during theremaining two years of the Plan Period,the rest were meant for implementationin the medium and long terms.

While some Chief Minister voicedreservations about "certain specificissues" such as subsidy rationalization,there was "near unaminity" in theMTA's assessment of the economy andits direction in future.

CMs' suggestions acceptedThe Prime Minister accepted many

suggestions made by Chief Ministers

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especially on the revival of the farmsector. He emphasized the need to focuson outcomes while strengthening themechanism for monitoring andevaluation of develoPIllent programmes.

Key Messages

According to Dr Ahluwalia, theMTA has three key messages:

• Doubling the growth rate inagriculture

• Increasing outlays for social sectorssuch as education and health

• Building infrastructure throughPublic-Private Partnership to step upindustrial growth.

eM's Reservations.

Dr Ahluwalia said some ChiefMinister had reservation aboutrationalization of user charges forwater supply and power and onreducing subsidy. The MTArecommendation on the need for aregulatory mechanism on waterpricing was not well received. It wasclarified that the Planning Commissionwas not for complete recovery of costsbut only what was spent on operationand maintenance.

Food Subsidy

On Food subsidy, some ChiefMinisters also expressed reservations.Clarifying the position, Dr Ahluwaliasaid "what we are looking for is thatsubsidy should be better targeted andonly deserving people should benefitfrom the subsidy regime.

The Chief Ministers agreed on theassessment of the economy as project inthe MTA. They also agreed on thedirection outlined in the document forcorrecting the shortfalls. All ChiefMinisters appreciated and welcomedthe stress on agriculture, infrastructure,education and health.

96

• Madhya Pradesh

MPs should also get concessions:Gaur

Industrial concessions available toUttaranchal and Himachal Pradeshshould also be allowed tobackward states like MadhyaPradesh. The banking network inthis state is poor resulting in cashpayment of salaries. Therefore,transaction tax on cash withdrawalsby the government agencies shouldbe stopped.

• Chhattisgarh

Give Special Status : Raman

I want to develop Chhattisgarh as thefruit basket of the country. This stateshould be given special status.Inclusion of only eight districts ofthe state under National Equi-development Scheme (Rastriya SanVikas Yojana) is not correct. Thisshould include Koraba and Koriaalso.

• Uttaranchal

Allocation should be made in thebeginning of the year: Tiwari

Agricultural, hOlticultural and hydropower projects top the priority list inUttaranchal. Considering therequirements of the hill states, roadconstruction standards in BharatNirman Yojana should bereconsidered. Allocation under Foodfor .Work scheme should be done inthe beginning of the year.

• Uttar Pradesh

Agro loan should be available at 2-3 per cent: Yadav

In view of the conditions of thefarmers of Uttar Pradesh, interest

rate of agricultural loan should ~)upto a maximum of 2..3 per cent.

• Jammu & Kashmir

Everything is normal in Kashmir -Sayeed

Private sector will invest Rs 5,000crore in the Valley this year. Numberof tourists will also touch 10 lakhthis year. This conveys the messagethat everything is normal inKashmir.

• Bihar

Poor conditions in Bihar - ButaSingh

Most of the mineral and forestresources as well as major industriesfall in Jharkhand. This made thecondition pathetic in Bihar. Evenafter five years of their division,properties of both the sltates have notbeen separated.

• Tripura

Lack of infrastructure is the biggesthurdle : Manik Sarkar

The National Railway Project whichincludes extension of railway lines toAgartala should be completed byMarch, 2007. Eventually, it shouldbe extended to southern tip ofTripura. Vast reservoirs of naturalgas in Tripura need to be utilized.Constitutional provisions may bemade to ensure that larger funds aremade available by the Centre foremployment programmes. The stateand the North East will be benefittedif Bangladesh is persuaded to allowtransit facility to Indian goods. Inaddition, border haats may beestablished along Tripura-Bangladesh border to meet the localcommercial needs. 0

Special Reports on NDC:Compiled by Editorial Team (Yojana)

YOJANA August 2005

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In the News•

. ---- .

settlement in theRs 100,000 crore Atnbaniempire. Thesense~cwas not~able to s(IStain atthat level.for a longtime. IVended tl1~.day at aC~ewall-iline high o~.6984.55.~\gaining78.03p6ints fro~' its previous close.'iBut not'befon~..the sensex hit a n.ew all-time high o~ 7001.15~in intra~day trades. Shares of Rellnace indbstries th.~:

,Sensex'ssecondhiggest c()nstituent,jumped7;5% to ai

record;Rs 645:70 and Indian Pterochemicals Co. Ltd 'rose '7;% to R~;.167.60. '$oththe 'c;ompanid&;are no~.controlled by Mukesh Ambani. The share. price of AniI>Amban,i, contrpl!ed frrmsnoticedeven higher growth.Relina:ce Ener~surged l~% to Rs705.90 anD,.Relina~.-CapitaI;rose 30% to Rs 308. " '; •

DeciSi~)DSTaken by Umon Cabmet on 16~6.2005~~~: ' ,~",' ,', , "~ \~

• Thi!;Union C~binet hai'decidedto allowpftblicatiorii:o(facsirnily'editions ,of foreign newspapers and'jo~rnals in/India, without allowing the. access 'tqIndian cont~ht or advertisements. The:;f~csiIDil~geditions hayet() be exactly theSatne as theft Joreigiied~~on. The)1iwillneither be all0\',7edto rais~ revenuestht~~gh adv~rtisement~om India..-(only for Indianf;ge<i~tions)nQrcan theypuhlishnews lind current affairsre~f>rtsorigiI!,ating froG}India sp~ificallyjn the Indi~ 'edi~ons. The Cabinetrelaxed!foreign investment;'

c, '-'::\"~C -~ \'~~:_ _ " ' "- '" ::,: , 2'<J

npplls in print media by allowing non~resident;Irld~ans, persons of Indian origin, overseas corpora1;e:~es and~ognized';foreign i~stitutionslinvestoi~l(.FIi};to invest'in the sector within the 26%limitJor'n~~sand c}lITent affairs. Until now, Oldy foreig~media comp~ies were. allowed to invest irithe 26%caI5'~;;:.. . ",,' " •..•.

;';:>0 .•; '''~

'. A,.proposal'::for mergt'fr of public sector:Jn.dian ITOI)

an~i,Steel Cdlllpany and Steel Anthority of India hait~ll approved,

• ~~gove~ent has ~~cided to restore aw.easureofc.fUri~tional and financial autonomy to prestigiou~.'itiJ6tutioris"o{higher learning. such as IITs and lIMswi1;hUnion'Qabinet approving a ,modified block grantsclj~ine forflIndingtIiese institittions. ' '2,'~+ ';;-r+ " - 0 <

• TI1~,Cabinet has give9 its approval to anlendingthed~i.~enship'Act 1955,',to allowdual ci~nship to

.'~ple of Indian origin who migrated abroad aifuit, - --- ,;,," ~ "£;' >

lndia andSingaporehave taken a giant~tep in eXPandingtrade relation by signing ,a comprehens~ve EcdnomicCooperation Agr~ement (CECA). Signing the,accord,

((the Prime Minist~r Dr lVlanmohanSingh a~d hisSingap?recounterpart, MfLee Hsieu>Loongsaid itwould boost ties' between the nations. CECAisintegrated package comprising trad~ in goOds and'services, agreemenron inveStments, rrlutual recdgnitionagreement in services and ~cooperation agreements in

,customs, science and te~hnologYr educatipn, e-commerce, intellectual pro~rty and llledia. ' ,

• "India, U~A ink defence ~~ct>::,

Upgradirigtheir defence ties,Indiaand~tbe UnitJt:States !

of America have signed a' ten-year agreemerit thad'.,envisages stepped'up military cooperation in';variousl

fields indluding joint weapd~ produdtion, tectinology I", _' _ .'.' - _t;P-o:::?" ~

transfer and collaboration on missile defence: The!': agreemellt calls fOf' mainta$ing secijIity and' '~tability,l, defeating"terrorisn'i~' preventing the sptead of weapons I

of mass destruction and {Jrotectingihe free flow ofl.commer(fe via Land, air ansI sea. ",>' " '\, ,i;;"'. ,!The government has hiked petrol and Qiesel by,Rs 2.50,and Rs2.00 a litrerespectiv.~ly. The ()t1compaqieswereJ

" allowed to effect;the increase from1lrid nigh~!of 20th 1:'June aft~r a gap of more thanseveW month&duoog !

which the'Indian basket of crude oiL reached ,'$52.831,lmark. The prices!pf kerosene and have hot beenl

, - _', ,; 0" : " _' ~ 0' ~ ~

. changed:!: " ';i~!j I" "'7' ~ i

• The ow~ership ro~ on the l'lakhcror~Reliance'efupirelCwas res~lved on:18th June, after .~tnbani8~thers,1eMukesh and Anil, reached ,an "amicalJi~ settlelllent" onl

dividing the assets. As per the announcemehiCwaae by;.!; their mother Mrs. Kokilaben Ambani kesh Wi~retainl

Reliance';IndustriesLirnitedand !PC hereas &il wilvlget Relinace Infocom, Reliance Energ5,.'Lirnit~'(REL)1

• and Reliance Capital.. ';'!~~ ,"The 130 years old Bombay 'StockEichange'!:~reatedlhistory :on 20th June. The<benchmarK Sense~:hit the!:magicai'7,OOO level for the fi:rst timeiti'intra~da~;tradinglas bulls scrumbledto buy. Reliance stotks aft~rIS~ June!

YOJANA August 2005 97

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the coun"try become a republic. The proposedamendment will allow the Qenefit to all person ofIndian origin and their children who migrated to othercountries - baring Pakistan and Bangladesh- after26th January 1950. This applies only to countries'which allow dual citizenship in someform or other.

• To help the production of contamination free cotton,the government has approved an increase in the 1

overall target under mini missions III and IV of theCotton Technology Mission, for development of 250market yards, modernization of 1000 ginning an~pressing factories and installation of 200 gradinglaboratories.

• Fulfilling a long demand of overseas Indians, thegovernment announced on 29th June promulgation of anordinance to grant citizenship to persons of Indianorigins other than those who had ever been nations ofPakistan and BangIa Desh. Earlier the Cabinet approveda number of measures in the health sector. This includesa Rs 184 crore plan for upgrading facilities at theJawahar1al Institute of Post graduate Medical EducationResearch (JIPMER), Pondicherry. A world class drugresearch institute in Lucknow will be set up at a cost ofRs 190 crore. A grant of Rs 504 crore has been approved.from the Global Fund for HIV/AIDs, TB and Malariafor providing anti-retrovival druges ofHIVI Aids patientsin Tamil Nadu, Andhra Pradesh, Karnataka, Delhi,Maharashtra, Manipur and Meghalaya, Another grantof Rs 317 crore has been cleared for anti-malariaactivities in West Bengal, Orissa,- Jharkhand, Assam,Tripura, Arunachal Pradesh, Meghalaya and Manipur.

• New Law to Shield Women

The Union Cabinet has cleared a major Bill which willgive all women in household legal protection act justagainst domestic violence but even the threat of abuse.It will also give them rights to stay in their matrimonialhomes. The shelter provided by the Protection of womenfrom Domestic Violence Bill not be limited to spouses.It will cover women who are, or have been in arelationship with the abuser where both parties havelived together in a shared household and are related byconsanguinity, marriage or adoption. It will cover

" members of a joint family, even "sisters, widows, mother,single women or women living with the abuser".

• The Cabinet has decided to constitute a Group ofMinisters (GOM) to draft a new Act to replace theexisting Foreign Contribution (Regulation). Act.

• The Centre has approved the creation of a joint venturebetween the Hindustan Aeronauatics Limited (HAL) and

98

French firm Succma Moteurs to manufacture spares andpart of civilian aircraft engines.

• Jute Cess for North East

. The Government has decided to exempt the jute assetsof the North-Eastern region/States from cess for aspecified period in a bid to boost their business andhelp increase the economic growth in the region. For

"the purpose Jute Manufactures Cess Act 1983 will beamended.

• Railway Staff will continue to get free passes for travel.The Cabinet has rejected a railway panel's proposal todiscontinue this facility.

• Global Development Network

The Cabinet has approved the establishment ~f GlobalDevelopment Network which would address theproblems of national and rural development.

• The government has approved Indian Me:dicine andHomeopathy Pharmacy Bill 2005 seeking to set up acentral pharma-cy council to regulate education andpractice of pharmacists of ayurveda, siddha, unani andhomeopathy.

• The government has fully exempted construction of portand processing of gems and jewellery from service tax.Service tax relief has also been given to the shippingindustry and for infrastructure projects. Individualsenjoying taxable service abroad too have been spared.Nine new services have come into the net from JUlie16. A 10.2% Service tax will be imposed on servicessuch as club membership, construction of residentialcomplexes, transportation of goods through pipeline andsite formation among other. With the latest notification,the tax net are dredging .of rivers, ports, harbour and "backwater, survey and map making other than those bygovernment departments, cleaning services other thanfor agriculture and allied sectors, packaging, andemailing list compilation and mailing.

• The Haryana government has enhanced theunemployment allowance for orthopaedically, visually,hearing and speech impaired as well as the mentallychallenged and blind educated youth of the state. It hasbeen increased to Rs 600 per month from Rs 300 permonth. .

• The Karnataka government has cleared proposals for.establishing 13 new heavy industries in the state and afive star hotel in Bangalore. The proposals envisage aninvestment of Rs 13,942 crores. The new industrieswill create over 1.90 lakh jobs. A majority of the

YOJANA August 2005

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• ~The Madhya Pridesh Cabinet has endorsed the Madhya;~,PradeshjPanchayat.Rajand Gram Swaraj (amendment)ordinance2005.With this amendment,the State Election

,Commi.~sion wotlldconduct the elections ofup-sarpanch'pf GraI1lPanchayats and the Chairman and ViceChairrn~ of Janpad andZila Panchayats.

• A womencooperativeb<lllkwil1,,1Jesetup)nd it w6rildbe run by wOmenthemselves: .••.. !'

• Children wouid be provided health cards andth~irhealth check up would be conduct{ldat reg~larinterVals.

• 33% of the post of teachers will bettserveqforwomen.

/

• A rebate of 10 paise per unit'in electritity bills incase,the domestic connection is in the name of aworri~n. ./ /

;- C';tf

\iIldustri~haveb~nprop~~ed in rural areas with a focus • The ilniform, allowance for girlshasl:leen doubled>on nortH'Karnataka. ~~. up from RsJOO to ~200 p~month.

.he An~a Pra.~esh g()i~~rnmenthas deCideda five ,. Bicy~les wiril~begiVe~free of cost to girls stu&entspercenereserv~tion for,~kuslilPsin edlJcation~nd ! belonging, toweakerLsection 'of class VI, VII and!employment. Itis'based()n the recommendations of the VIII",who d6. notha~e a middle school intheirBackward Class~s Conumssion. ~~ ~~ ~~ ~., villages.

• iOiI and NaturaLGas Corporation (ONGC)'has chaiRed ; .J''Haryanllgovemrpent has decided to waive off pel1dingat plan to set upt\vonewgrassroot refineries of 5 milJion j'~electridty billsof farmers of Rs 1600 crore. ~.

~tonne per annuIll.capadtyeach atBarmerin Rajasthan • ~GSPCfinds biggest gas reserves In IndIaand Kakinanda in Andhra Pradesh. ~

~;,GujaratState PetroleumCorporatipn Ltd. (GSPCL) hasmade thy country's biggestgas discovery 20 billioncubicfeet (bC;f),wortt.l$50 billion in the Krishna Godabari(KG) basin in Andhra Pradesh. The Gujaratgoverrnnenthas named the project asi"Dean Dayal" (Saviour of the

{poor). The commercial production of gas is expected to~~beginrrom end'2007. (.

• The AiidhraPradesh govetftmenthas sanctionedincrease..in dearness relief to pensioners and an ad~hochike ofRs 25.per month to parHime aSsistants and village

...servants w.e.f. January 1, 2005. TheDAhiketogovenuri~nt staff, those of the local bodies and alliedinstitution,including universities,who are drawing 1999 Ipay-scale, will be'at 2.424% of tpe pay working outto .a cumulative 36.81%. It will be at3% cumulative 67%)in casepf teache~s of affiliated degree colleges.

• Describihg it an~'making history", the Clllef Minister :of Andbra Prade~h, Mr Y.S. Raja.Sekhara..Reddysaidthe foundation f6r the Country's first Mega FaD, a .massive semi-conductor unit in Hyderabad on 28th June.The project is promoted by Nano-Tech Silicon I[ldia .Pvt. Limited. The first Mega Fabis being'taken up ata costof$600 nlillion andis expeCtedto 1Jecompleted

.in 15 months. I1'1s likely to generate' 20,000 jobs."

• The Centre has again imP9sed Deenon the sale of non- .iodisedsalt.

.In an effort to accelerate personal computer (PC)penetration in the country, Department of Information

~~~Technology has launched a CD, which includes basic>software tools and fonts in Hindi. ,TheHindi CD wouldbe dis~ributed free of cost to the public. on

,www.ildc.govjn Fonts for 24 Indian langUages would'be ready. within six months for public distribution.

• Promising a growth rate of 6.25%, thi;;Jharkhand I. The wi~ild Ban:k will release soon $250 milliongovernrpent has'presented a budget ofR.,s12,42~.33 ! ';(Rs l,i~5crores)10an to!Karnatakaas part of the second.c;roreforthe current fiscal: Though no ~~~have -been,~:instalm.ent of me $1.1 billion loan for states economicproposed, the target of reaJ.1zation:OfcoIll.iIletCialt¥es . : JtrestrucIDring plan;has been pegged at Rs 2:300 croie. ,. ~ "1," .,~ ~.~'I ."The Centre has launcheda commodity Soochana Kendra

• 'The Haryana gov;emmenthas annO~nCedjJ~yntive~'for ,,:;at Vasht, Murnbai It is a common market place for.the empowerment of women. TheSe arefonowing~,;:participallts from.mandies across the country for price; -'" -- --'''-,:' ,.----,-{,.;,

and krlowledge.dissemination. It is a joint venture of"Multi C;pmmodityExchange of India Ltd (MCX)and'!Nation~i' Spot Exchange for Agriculture Produce

~:i(NSEA:r).

.• 1~0TheOri~$agoveIDD1entand the Sou,thKorean steel major. fPohangSteelCompany (POSCO) have signed a\" .imemonindum of understanding to set up a 12 million

",tonne steel plant in the part .of town of Paradip.

• Project to be completed in two phasesPlantto reach full capacity by20l6

YOJANA August 2005 99

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Trade and services continued thetifarai' witli 11.4%.Financing, insurance, real estates and business servicegrowth continued at 7.1% during 2004-05.Manufacturing grew by 8.6% through the January - ; ,March quarter, starting from 10.5% in 0ftober - ,December. Slowing from 10.5% in October-December. j

• 'Orissato provide 600 million tones of iron toPOSCO

• Centre to earn Rs 89,000 crores over 30 years.

• Estimated cost is $12 billion (Rs 52,000 crores).This is the single largest foreign direct investment inthe country so far. j

• The project is likely to general direct employmentfor 13,000 people and indirect emploYtnent for35,000 people.

• Ms Punita Arora has become the first woman Vice-Admiral in the Navy. She has taken over as DirectorGeneral of Medical Services in the rank of SurgeonVice-Admiral. She was earlier the commandant of theArmed Forces Medical College (AFMC), Pune.

• Doordarshan to offer two new music channels - onedevoted to Carnatic and the other to Hindustani - on itsfree to air Direct-To-Home platform. AIR has release"Akashvani Sangeet" CDs and Cassettes of M SSubbulakshmi, Ariyalcundi Ramanaya Iyenger andAtathur Brothers. /

• The decks have beeh cleared for the second phase ofFM broadcasting in the private sector with UnionCabinet approving a revenue sharing model, in whichthe emphasis is more on the growth of services then ongenerating reverse. The cabinet also decided to allowforeign radio stations to pick up states in private FMstiltions within the existing ceiling of 20% of foreigncapital. But the ban on news continues. The governmentwill offer 330 new FM licences in 90 cities.

• Per Capita Income up by 5.2 % : CSO

The latest. figures released by the Central Statistical 'Organisation (CSO) point out that the economy's growthrate was 6.9% during 2004-05',(fiscal year) as against8.5% in the previous financial year. Interestingly, percapita income rose by 5.2 % to Rs 12,416 during 2004-05 as against Rs 11,799 in 2002-03.

F~growth in crucial as it generates a fifth of our .GDP and supports more than 600 million people.Agriculture proves to cause of concerns with a growth 'rate of 1.1% during 2004-05 as against 9.6% in 2003- i

04.

100

./

• The European Space Agency (ESA) will partner withthe Indian Space Research Organisation (ISRO) forIndia's unmanned mission to the Moon planned forlaunch by 2007-08. The ISRO Chairman Mr GMadhavan Nair and the ESA Director General Mr JeanJacques Dordion signed on agreement to Ibis effect inBanglore.

• The government has constituted an Inter-State TradeCouncil, to boost international trade. It has decided toconstitute the council to ensure a continuous dialoguewith state governments and Uni:on Territories oninternational trade. The Commerce Ministe~rMr KamalNath is the Chairman of the Council.

• The Central government has decided to set up a decidedtask force for the conservation of tiger and wild lifesanctuaries in the country. It will also recommend thestrengthening of laws against poaching.

• The Panchayati Raj Ministry has initiated an action planto establish rural business hubs. The thrust areasidentified fro development are based on utilization oflocal resources and needs of locals. The states identified

, ,/for a rural business hubs of locals. The states identified,:t-

for a rural business ,hubs are Pujnab, Uttaranchal, Kerala,Karnataka, Jammu and Kashmir, Rajasthan, WestBengal, Uttar Pradesh and Chhatisgarh. The core areasinclude processing of agricultural produce, developmentof handicrafts and handlooms, establishment of smallpower planats based on biomass and promotion of biofuels etc.

• The recons6tuted Board of Trade in its first meetinghas decided to set up fme working groups to addressimportant trade issue, namely expert promotion schemes,trade facilitation, sectoral initiatives, manufacturingbottlenecks and special economic zones. In the meeting,Prime Minister set a trade target of $500 billion by2010.

• Bhagidari Gets UN Award '.

Delhi government has been awarded pre~;tigious UNPublic Service award for its "Bhagidari" programmesfor partnership with the citizens. It has won the aWardfor 2005 out of 215 nominations for'itl1P'[ovingtransparency, accountabiling and responsiveness inpublic serviCe.

• Centre announces Gujarat package

Terming the flood,situation in Gujarat as, a "concern forthe nation", the Centre has announced aid of Rs '500crore for the State and pledged more, assistance.

YOJANA August 2005

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13 November, 1960

~~theyi~.y, does not belOn.~'.g....to the men of sixty I'and abpve. Not tot,he adenauers, the .Macmillans, the Khrushchevs, the De \Gaulles,. the ~ehr:~s, the Titos and theSuka~os. It is a world, they say, where the :Nasse!s and the Nkru,mahs (and of courSe jthe Kennedys and Nixons) will be reCkoned Ias elder statesmen. And some at least cando without 'experience'. James Thurber, iafterhis eyesight failed, claimed he could Idraw better without thi'handicap of vision.' !Sometimes experienc~ can be a handicap, ,

Will the World of;Younger Men'be a Ibetter place? ;

And will an India where younger menare in control be a bettter place?

The average age of the Council ofMinisters at the Centre may be going up.But in Delhi as in the States there areseveral young men who have already earnedtheir spurs (even if we needn't name them.)But~hy should the age of only politiciansbe thought of when',talking of youth andage? Our engineers-like the lads of Rourkelaor elsewhere-are mostly a young lot. The I

collectors in the districts, the executiveengineers, the superintendents of police and, I

at the other end, the economic and policyadvisers, are much younger these days thenthey used to be. The average age of the ;bright men in our atomic energyestablishment must be very low. Then whydo young men fancy a grouse?

~

e truth about youth and age is that.." vitamin pills and the growing branch

.. of medical science called geriatricshave demolished the functional difference ,between the two. The question should nowbe not how old a man is but how well canhe function. Charlie'Chaplin is still going ,strong while there is a very old man of 28in my office. A Canadian physician hasjustassured us that men in their mid-sixties canlearn and adjust as much and as fast asyoUriger people. '

A heartening thought -and not a very ,surprising one-with' the yougest elder of .ourland due to step into his seventy-secondyear tomorrow.

1"llh "" •.'l i,V,l n,,).,u;, ••••~qJ u •.•••m';W~r Hn ••<~lf'U!u

rt.s,nePtt<n,~/Ol'AinllUldnUtIu~"fl~

to;.:,,~""::"~i.~"~~~~

'~.'.r.~., ."'1'J '",%"

G~~.~.y.l\:1tattler< alt1l.d~;Gre,ei1l(fc " -*, '$

"-,~' ",' < ~'i':r~wO' JANA dodderers ;tt all the chances; no:t;,', 1. . '~onder things d~tin't get done because they" )m,m,1 """", •••• "" ",;," '" .••••PI"""', (;,,,.~,,,.,, )~ere entrusted;t~. people who. had no sap

,::.:':"-:.=':: .~".... :and only gout oiAiabetes.,~-~ -1j-~.-.'N....'.' ot u~usu.~.',a.."•..,.•..I ...t.hO~ghtS.our.'friend was; addmg '.nothmg to Lawrence..' ,... Durrell's';The only rums of a great

';\~untry are its great men." He was doing•'~othing to disprove the verdict of an oldOxford don (Whose brother rose to be'British Prime Minister): "None of us isiiifallible, not even the youngest."

, Just the previous evening, a foreign~newspapermall was giving me his'impressions of the three steel mills.

.,Rourkela, he said, filled him with bothconfident misgivings. Why, I asked him.

"There are young fellows there,twentyeight, thirty or at the most thirty-two,:who are the cockiest technicians I have everseen. In my country the men in command,of such giant machines are rarely youngerthan forty or forty-five. But these fellows areconfident they can do as good a job as theGerman engineers whom they are replacing.They might run a going plant all right. Butsupposing there is a breakdown? Formyself I should prefer more experiencedmen in such places."

More experienced men. What is this"thing called experience? Does it come from

He was thin all right, and young and age and age alone?1 under thirty. He had burriing eyes-which is The most powerful country of the worldsomewhat unusual in Delhi where people has just chosen a young man as itsgenerally have well-fed, underworked, lazy,. president. It w<is no battle between youth

: gray eyes. But the eyes, though burning. '.;.'.andage. Both'candidates were young, andI burned with'll small fire. 'There was no fear '. 'they could not claim any 'experience' ofI of our man turning a BernardShaw or doing public life dating back beyond the end of: the Joseph to himself. It was comforting. World War II,What is the measure of

"Call no man able until he is half-dead." experience in such a situation-what oneThe further words of' our young' has done actually and where one has been,

, philosopher-I couldn't help overhearing or what one has made out of all the chances: them although I am noeavesdropper-'one has had?. abridged rather than expanded the sweep of Some of the leading international, the statemt:nt. He was only railing against journals have been speaking or:the Worldthe seniority system ingovermrtent offices; of Young men. The world of the 1960's,

Irn[jALL NO man able until he is00 'c .. half dead." The man who

'. uttered this was not one of, I..' those whose sayings, wise and

otherwise, are printed ini dictionaries of quotations, but a young busI philosopher.

, I looked over the turban and shouldersof a hefty Sikh in front of me to see whatsort of man this four-wheel epigrammatist

! was. Was he thin or was he stout?

Printed and Published by Director, Publications Division, Prof. Umakant Mishra and Printed at Tara Art Press, B.4, Hans Bhawan,B.S. Zafar Marg, New Delhi.110 002, and Published at Patiala House, New Delhi-110 001.

Page 104: Aug Vol49 No8

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