To Download Click Here
Date:28-02-17
What Kenneth Arrow taught the world
Kenneth Arrow, died February 21, can be said to have shaped the modern discipline of economics, along with late brother-in-law Paul Samuelson. It all began with his pioneering, densely mathematical Impossibility Theorem, which proved that no ranked voting system can produce a result consistent with some seemingly innocuous features such as non-dictatorship, taking into account everyone’s preferences, these being consistent at the collective level and independent of irrelevant alternatives. The implications of this work, published 1951, were vast: it opened up the field of social choice theory, which kept some of the finest economists, including Amartya Sen, engaged for the next 30 years.
Arrow won the Nobel Prize, in 1972, the third and youngest recipient, for what came to be known as the Arrow-Debreau model, which incorporated competitive markets, with price taking players, functioning with full information: the basis of market economics. No sooner was this done, Arrow broke down each of the founding assumptions of the model, to demonstrate how markets could deliver suboptimal outcomes if, say, uncertainty or asymmetric information was at play. Thus, he founded the field of information economics that still dominates analysis of financial and other markets. He also spawned endogenous growth theory.
Son of Romanian-Jewish immigrants, Arrow’s concerns about social and economic discrimination pioneered the analytics of affirmative action. It was his insight that public perception of a group (Blacks, Muslims or Dalits, say) would be formed on how the statistical aggregate of each group was ‘supposed’ to behave, rather than on tests of individual talent or ability. He was prescient: the toxicity of discrimination will continue, without affirmative action.
Date:28-02-17
वैश्वीकरण की नई सूरत में कहां रहे भारत
भारत को अपनी नीतियां इस अनुमान के आधार पर बनानी चाहिए कि वैश्विक स्तर पर दक्षिणपंथी उभार का सिलसिला चलता रहेगा और पश्चिमी देश स्वयं को आर्थिक गढ़ में सुरक्षित कर लेंगे। बता रहे हैं नितिन देसाई
डॉनल्ड ट्रंप को अमेरिका का राष्ट्रपति बने एक माह हो गया है और इस अवधि ने उनकी जीत के बाद उत्पन्न हुई आशंकाओं की पुष्टि की है। उनके कदम उनके विचारों की ही तरह चरमपंथी हैं। वह अमेरिकी राजनीतिक व्यवस्था में मौजूदा रोकथाम के उपायों की बदौलत रोके जा सके हैं। यूरोप में भी दक्षिणपंथ उभार पर है और नीदरलैंड व फ्रांस में आगामी चुनाव में उसके जीतने की अपेक्षा जताई जा रही है। कनाडा जैसे अपवाद कम ही देखने को मिलेंगे।
जैसा कि एक माह पहले इस स्तंभ में दावा किया गया था कट्टïर दक्षिणपंथ का उभार कोई संयोग नहीं बल्कि बीते तीन दशकों में वैश्वीकरण की प्रगति का अनिवार्य परिणाम है। ऐसे में समझदारी का तकाजा यही है कि भारत में हम अपनी नीतियां इन अनुमानों को ध्यान में रखते हुए तैयार करें। यानी दक्षिणपंथ का उभार जारी रहने और पश्चिमी देशों में आर्थिक और सुरक्षा संबंधी तैयारी तगड़ी रहने का अनुमान।
आर्थिक मोर्चे पर इससे तीन चुनौतियां निकलती हैं। बढ़ते संरक्षणवाद और कम होते एफडीआई से निपटना, घरेलू मांग वृद्घि में तेजी लाना और बौद्घिक पूंजी तैयार करना आदि शामिल हैं। पश्चिमी दुनिया में घरेलू स्तर पर रोजगार संरक्षण करना दक्षिणपंथी राजनीतिक विचार के मूल में है। इसके साथ ही साथ स्वचालन और 3डी प्रिंटिंग जैसी तकनीक भी स्थानीयकरण को प्रोत्साहन दे रही हैं। इसलिए हो सकता है हमें चीन की तरह फायदा नहीं हो। चीन ने कारोबारी वृद्धि और आउटसोर्सिंग के साथ वैश्विक मूल्य शृंखला के विकास से बहुत लाभ कमाया। पश्चिमी देशों के शेयर बाजार इसे और बल देंगे क्योंकि हाल के दिनों में उन कंपनियों का प्रदर्शन कहीं बेहतर रहा है जो वैश्वीकृत नहीं हैं।
व्यापार और निवेश में उदारीकरण के सात दशक का चक्र अब उलट सकता है। बैंकिंग, बीमा और कारोबारी सेवा क्षेत्र मे उदारीकरण की मांग जरूर बरकरार रह सकती है। हमें सूचना प्रौद्योगिकी और इंजीनियरिंग सेवाओं को इसमें शामिल करने पर जोर देना चाहिए जहां इस समय चुनौती और जोखिम बढ़े हुए हैं। देखा जाए तो उच्च वृद्धि का हर दौर तेज निर्यात वृद्धि पर निर्भर रहा है। शायद हमें 7 फीसदी की वृद्धि के लक्ष्य को स्वीकार करना पड़े और घरेलू मांग पर हमारी निर्भरता बढ़ जाए बजाय कि निर्यात के। लेकिन इसके लिए आय का व्यवस्थित वितरण आरंभ करना होगा। कुछ वस्तुओं की खपत का रुझान ऐसा होता है कि कम आय वर्ग के स्तर पर उनकी खपत कम होती है, जैसे-जैसे आय बढ़ती है खपत में इजाफा होता जाता है और एक स्तर पर जाकर उसमें पूर्णता की स्थिति आ जाती है। अगर अमीर और अमीर होते चले गए तो ऐसी वस्तुओं की मांग में कमी आएगी क्योंकि एक तरह की स्थिरता का माहौल होगा। उनकी खपत की प्राथमिकता में तब्दीली आ सकती है। हो सकता है वे विदेशी वस्तुओं मसलन विदेशों में अवकाश आदि का विचार बनाएं। वहीं दूसरी ओर मध्यम और निम्र आय वर्ग समूहों में आय के वितरण में तब्दीली आएगी। इससे बेहतर आवास, बेहतर स्वास्थ्य, उच्च शिक्षा और टिकाऊ उपभोक्ता वस्तुओं का बाजार मजबूत हो सकता है। विश्वयुद्घ के पश्चात पश्चिम में जो तेजी आई वह ऐसे ही पुनर्वितरण पर आधारित था। कल के दिनों की उपभोक्ता जरूरतें आने वाले दिनों की अनिवार्य आवश्यकता बन सकती हैं। उम्मीद की जानी चाहिए कि आय के वितरण का पूंजीवादी दायरा कारोबारियों के अनुकूल नीति निर्माण में ध्यान रखेगा।
घरेलू मांग पर अत्यधिक निर्भरता कड़ी प्रतिस्पर्धा और घरेलू निवेश को नए सिरे से बल देती है। चूंकि बुनियादी ढांचा विकास में हम काफी पीछे हैं इसलिए भौतिक संरचना तैयार करने में निवेश आगे भी नीतिगत मुद्दों का केंद्र बना रहेगा। परंतु जन नीति और कॉर्पोरेट नीति की बात करें तो तो उसे यह समझना होगा कि आर्थिक प्रतिफल में सुधार का सिलसिला भौतिक पूंजी से बौद्घिक संपदा की ओर स्थानांतरित होना जारी रहेगा। इसके लिए मूलभूत शोध क्षमता व्यापक शोध क्षमताएं विकसित करनी होंगी। कुछ उस तरह की जिनको नवाचारी इंजीनियरिंग आदि के लिए नोबेल पुरस्कार मिलता है। इसके अलावा वेंचर फाइनैंसिंग और उच्च शिक्षा में बदलाव के लिए रचनात्मक सोच अपनानी होगी। इन तमाम उपायों की मदद से ही हम एक स्वतंत्र देश के रूप में कहीं अधिक बेहतर हो सकते हैं।
पयार्वरण संबंधी कूटनीति की बात करें तो पश्चिमी देशों ने जो दुर्ग तैयार किया है उसमें मजबूती कम और शोरगुल ज्यादा है। समान लेकिन अलहदा जिम्मेदारी और प्रदूषक ही भुगतान करेगा जैसे सिद्घांतों को लेकर उन्होंने जुबानी जमाखर्च ज्यादा किया है। अब अधिक खुलकर यह कहा जाएगा कि भारत और चीन को अधिक कार्रवाई करनी चाहिए। ऐसे में चुनौती का संबंध जनसंपर्क से ज्यादा प्रतीत हो रहा है। लेकिन तेजी से हो रही घरेलू खपत वृद्घि के चलते उत्पन्न पर्यावरण प्रबंधन के लिए जरूरी कदम नहीं उठाने की यह कोई वजह नहीं है।
सुरक्षा नीति के लिए उत्पन्न होने वाली चुनौती भी अनिश्चित है। फिलहाल हमें कोई विश्व व्यवस्था नजर नहीं आ रही है। मध्य एशिया के तेल पर अमेरिकी निर्भरता कम हो रही है और इसलिए आने वाले दिनों में इस इलाके में उसकी सैन्य मौजूदगी कम हो सकती है। ऐसे में तेल आपूर्ति की राह बनाए रखने के मामले में भारत की भूमिका चीन की तुलना में अहम होगी। अमेरिकी संरक्षणवाद और यूरोप की अंतर्मुखी दृष्टि के चलते मध्य एशिया चीन और रूस के हवाले रह गया है। चीन वैश्विक वित्तीय जगत में अपनी छाप छोड़ रहा है, वह विकासशील देशों में जमकर निवेश कर रहा है। अगर चीन अपनी अर्थव्यवस्था को खोलता है तो वैश्विक अर्थव्यवस्था में उसकी भूमिका और मजबूत होगी। क्या हम इसके लिए तैयार हैं? कठिन प्रश्न यह है कि अमेरिका के संरक्षणवादी रुख से कैसे निपटा जाए। इस संबंध में कोई भी द्विपक्षीय समझौता आईपीआर, सेवाओं की बाजार पहुंच और निवेशक संरक्षण को प्रभावित करेगी। टं्रप भले ही सौदेबाजी में उस्ताद हों लेकिन उनके अतीत में टूटे सौदे और दिवालियापन भी शामिल हैं। लेनदेन पर आधारित रिश्ते टिकाऊ नहीं होते। उनका ध्यान तात्कालिक लाभ पर होता है। लंबी अवधि के रिश्तों के लिए सामरिक दृष्टि का होना आवश्यक है। अमेरिका के मौजूदा सत्ता प्रतिष्ठान में शायद बुश और ओबामा की नीति जारी न रहे। इसलिए हमें अमेरिका के साथ मजबूत रिश्तों और सहयोग के लिए कांगे्रस के समर्थन पर भरोसा करना होगा। आपसी लेनदेन के रिश्तों में तार्किकता की आवश्यकता होती है जो तथ्यों पर और समझौते की भावना पर आधरित होते हैं। फिलहाल जो वैश्विक परिदृश्य है उसमें सबसे बड़ी चुनौती वैश्वीकरण से दूरी के रूप में नहीं सामने आ रही है बल्कि यह उदारवाद पर हमले और विज्ञान एवं आधुनिकता को खारिज किए जाने से संबंधित है। दक्षिणपंथी उभार में यह जोखिम भी है।
Date:28-02-17
गलत शुरुआत
देश में व्याप्त रोजगार संकट को देखते हुए सरकार ने उद्यमिता और स्टार्टअप को बढ़ावा देने की हरसंभव कोशिश की ताकि देश के युवाओं की आकांक्षाओं को पूरा किया जा सके और रोजगार की मांग से भी निपटा जा सके। दरअसल मौजूदा व्यवस्था इन दोनों की भरपाई नहीं कर पा रही। यह सोच समझदारी भरी है लेकिन इसे ज्यादा से ज्यादा एक तदर्थ नीति ही माना जा सकता है। इसके क्रियान्वयन के कुछ पहलू भी चिंतित करने वाले हैं। सरकार ने इस दिशा में जो कदम उठाए हैं उनमें एक अहम घटक स्टार्ट अप इंडिया का भी रहा है। इसका उद्देश्य था नए उद्यमियों को बढ़ावा देना। स्टार्ट अप इंडिया पहल के लिए 10,000 करोड़ रुपये का फंडों का फंड 2025 तक बनाने की बात कही गई थी। इसका प्रबंधन भारतीय लघु उद्योग विकास बोर्ड (सिडबी) के हाथ में सौंपा गया। परंतु इसी समाचार पत्र में प्रकाशित एक खबर के मुताबिक इस सिलसिले में कोई खास जमीनी पहल नहीं हो सकी है। माना जाता है कि इसके लिए 1,315 करोड़ रुपये का फंड बना जिसमें केवल 110 करोड़ रुपये की ही वास्तविक प्रतिबद्घता जताई गई। जबकि केवल 5.66 करोड़ रुपये की राशि ही वितरित की गई। यह बात ध्यान देने लायक है कि इस फंड की घोषणा वर्ष 2015-16 के बजट में की गई थी यानी इसे ढाई साल हो चुके हैं।
यह धीमी गति सरकारी नीति के लिहाज से कतई अस्वाभाविक नहीं है लेकिन तेजी से बदलते स्टार्टअप जगत के लिए यह काफी धीमी है। वास्तव में इससे एक बात और रेखांकित होती है और वह यह कि देश की नौकरशाही की धीमी प्रक्रिया और गति के साथ नए जमाने की उद्यमिता को मदद दे पाना बहुत मुश्किल है। ऐसे में इसकी मदद से देश की आर्थिक तस्वीर बदलना और रोजगार के अवसर पैदा करना भी उतना ही कठिन है।
ऐसे में एक मूलभूत प्रश्न पुन: पूछा जाना चाहिए कि आखिर सरकार स्टार्टअप के चयन और उनको बढ़ावा देने के काम में शामिल ही क्यों हो रही है? जाहिर तौर पर यह सरकार के दायरे की बात नहीं है। हां, उसे एक मददगार माहौल जरूर तैयार करना चाहिए लेकिन उसका मतलब है लालफीताशाही कम करना और नौकरशाही का हस्तक्षेप समाप्त करना। इसके साथ ही बुनियादी, डिजिटल और भौतिक ढांचा तैयार करना चाहिए ताकि दुनिया भर के संभावित स्टार्टअप संस्थापक मिल सकें। इसके बजाय सरकार फंड जुटाने वाली की भूमिका निभाकर नई फर्म के बीच ऐसी गतिविधि को बढ़ावा दे रही है जहां संरक्षण और मदद के अवसर उत्पन्न हो रहे हैं। यह खतरनाक बात है। इससे देश के स्टार्टअप जगत की क्षमता कमजोर पड़ सकती है।
सरकार अगर स्टार्टअप की फंडिंग जारी रखती है तो इससे अन्य तरह की समस्याएं देखने को मिल सकती हैं। अधिकारी पहले ही कह चुके हैं भारतीय जीवन बीमा निगम को स्टार्टअप फंडिंग की अपनी प्रतिबद्घता बढ़ानी चाहिए। क्या देश की बचत का ऐसा निवेश उचित है? क्या यह एलआईसी का काम है? क्या उसे अधिक स्थिर निवेश की ओर ध्यान नहीं देना चाहिए? सरकार को स्टार्ट अप इंडिया की धीमी प्रगति के मद्देनजर इन सारी चीजों पर पुनर्विचार करना चाहिए। स्टार्टअप की फंडिंग के लिए सरकार की मदद चाहने वाली कोई भी व्यवस्था उन्हीं समस्याओं से दोचार होगी जो कहीं और निजी क्षेत्र को सरकारी फंडिंग में सामने आती हैं। मसलन विकृत पूंजीवाद, गलत आवंटन और देरी। सरकार को यह याद रखना चाहिए कि छोटी कंपनियों के लिए कारोबारी सुगमता बढ़ाना कहीं अधिक बेहतर मदद होगी। इसमें निजी पूंजी तक उनकी पहुंच को आसान बनाना और सरकारी क्षेत्र की वित्तीय मदद को कम करना शामिल हैं।
Date:27-02-17
अमेरिका किधर
दुनिया भर में अमेरिका की छवि दो तरह की रही है। एक, विश्व में दबदबा रखने वाले सबसे ताकतवर देश के रूप में। दूसरे, लोकतंत्र के हिमायती, खुलेपन और आधुनिकता के सिरमौर के रूप में। लेकिन अमेरिका का जो उजला पक्ष है वह अब खतरे में नजर आ रहा है। बराक ओबामा को राष्ट्रपति के तौर पर लगातार दो कार्यकाल देकर अमेरिकी जनता ने अपने इतिहास की सबसे बड़ी खाई पाटी थी- श्वेत और अश्वेत के बीच की खाई। पर यह खाई फिर से खोदी और चौड़ी की जा रही है। इसलिए पिछले हफ्ते हुई भारतीय मूल के श्रीनिवास कुचिभोटला की हत्या को एक अलग-थलग घटना के रूप में नहीं देखा जा सकता। यह पहली नजर में ही हेट क्राइम यानी घृणा-अपराध का मामला लगता है। अमेरिका किधर जा रहा है? श्रीनिवास पेशे से इंजीनियर थे और अपने एक दोस्त आलोक मदसानी के साथ, काम के बाद, बार में बैठे थे। वहां एक अमेरिकी ने, जो कि नौसेना से सेवानिवृत्त हो चुका है, दोनों पर गोली चला दी। आलोक की जान तो बच गई, मगर श्रीनिवास की मौत हो गई। हमले से पहले, आरोपी से दोनों की संभवत: नस्ली मसले पर बहस हुई थी। उस वक्त आरोपी बाहर चला गया, मगर कुछ देर बाद बंदूक लेकर लौटा और उसने दुनिया भर को दहलाने वाले कांड को अंजाम दे दिया। गोली चलाते समय वह ‘मेरे देश से भाग जाओ’ और ‘आतंकवादी… आतंकवादी’ चिल्ला रहा था।
कोई भी आदमी जो बहस के बाद जान लेने पर उतारू हो जाए, स्वस्थ मन का नहीं कहा जा सकता। मगर क्या इस घटना को सिर्फ एक सिरफिरे का पागलपन कह कर उससे आंख चुराई जा सकती है? दरअसल, यह वाकया उस माहौल की एक खौफनाक झलक है जो अमेरिका की कमान डोनाल्ड ट्रंप के हाथ में आने से बनी है। यों नस्ली हिंसा की घटनाएं ट्रंप से पहले भी हुई हैं, पर उन्हें अमेरिका की रीति-नीति से जोड़ कर नहीं देखा गया। कनसास की घटना इसी मायने में अलग है कि इसे ट्रंप के रवैए से जोड़ कर देखा जा रहा है। विचित्र यह है कि आप्रवासियों के खिलाफ नफरत का माहौल अमेरिका को फिर से महान बनाने के नाम पर बनाया जा रहा है। अगर लगातार जहरीला प्रचार हो तो वह प्रचार तक सीमित नहीं रहता, उसके असर में आए कुछ लोग इतने उन्मत्त हो जा सकते हैं कि कुछ भी कर बैठें।
अमेरिका में ट्रंप के आने के बाद नस्ली हिंसा में 115 फीसद की बढ़ोतरी दर्ज हुई है। अपने चुनाव प्रचार के दौरान ट्रंप ने आप्रवासियों के खिलाफ जो जहर उगला, उससे और कैसा माहौल बनता? यह घटना भारत के लिए भी एक सबक है, जहां चुनाव के दौरान किसी किस्म के ध्रुवीकरण के लिए नफरत-भरे अभियान चलाए जाते हैं। अलबत्ता कनसास की घटना से यह नहीं मान लेना चाहिए कि अमेरिका एकदम-से बदल गया है। ट्रंप के खिलाफ लाखों लोग सड़कों पर उतर चुके हैं। कनसास की घटना में, एक अमेरिकी युवक इयान ग्रिलोट ने खुद गोली खाकर भी श्रीनिवास और आलोक की जान बचाने की कोशिश की। श्रीनिवास के परिवार की आर्थिक मदद के लिए इंटरनेट पर जो अपील जारी की गई, उसके फलस्वरूप कुछ ही घंटों में लक्ष्य से ज्यादा राशि इकट्ठा हो गई। यह सब बताता है कि आप्रवासियों को निशाना बनाए जाने के खिलाफ खुद अमेरिका के भीतर कितना विरोध है।
Date:27-02-17
The professor of impossibility
There is scarcely any field of economic theory that has not felt the impact of Kenneth Arrow’s seemingly complex models
Kenneth Arrow, who died on February 21, has been described by fellow Nobel Laureate Alvin Roth as “the Albert Einstein of economics”. It would be no exaggeration to say that virtually all modern economic theory rests in some way on his work.
Arrow’s most celebrated contribution is his so-called Impossibility Theorem that appeared in his 1951 book, Social Choice and Individual Values. Arrow was interested in aggregating diverse opinions. For instance, suppose the government wanted to rank all the states in India in terms of the well-being of the country’s citizens. This ranking would draw on several other rankings — per-capita income, the performances of the states in life expectancy and literacy rate. There are an astronomically large number of procedures to arrive at the overall ranking even when the numbers of states and criteria are small. However, Arrow’s Impossibility Theorem proves that there is no procedure that orders these individual rankings into a satisfactory evaluation of well-being in the country. In other words, the theorem proves that meaningful aggregation is impossible from individual choices. Arrow showed that any procedure that satisfies two plausible requirements has to be dictatorial.
The Arrow impossibility result led to the birth of an entirely new field of research for economists and political scientists, called the social choice theory. The theory, whose development also owes a great deal to the work of Amartya Sen, explores the structure of voting procedures from several perspectives. Virtually all models to analyse political competition originate in some way or the other from Arrow’s impossibility result.
Arrow’s overall body of work is staggering in its breadth. One measure of its range is the fact that his Collected Papers published in 1983 run into six volumes. Each volume has a different title — Social Choice and Justice, General Equilibrium, Individual Choice and Uncertainty, The Economics of Information, Production and Capital, and Applied Economics. He wrote fundamental papers in these areas, resolving classical questions and providing a stream of new ideas that are now the bedrock of economic theory.
Arrow won the Nobel Prize in 1972 and is the youngest to have won the prize in economics. Interestingly, his prize citation only refers to his work in general equilibrium, prompting many in the profession to remark that he deserved two or three more Nobel Prizes. In his 1954 paper co-authored with Gerard Debreu, he settled a question in general equilibrium theory that had vexed economists for over a century. An important feature of markets is that there are “spillover” effects. A change in the wage rate will affect consumer incomes and the demand for commodities. That will, in turn, affect the labour market and the wage rate. Using sophisticated mathematical arguments, Arrow and Debreu showed the existence of commodity and factor prices that simultaneously ensure the equality of demand and supply in all markets (Lionel McKenzie arrived a similar result independently). This made the classical competitive model (price-taking agents and the absence of market imperfections) coherent; the model is now referred to as the Arrow-Debreu model.
The competitive model is clearly an idealisation and contemporary economic theory is largely concerned with investigating departures from its assumptions. Two such departures are the introduction of unobservable actions (moral hazard) and unobservable information (adverse selection) in models of interactions between economic agents. For instance, owners of firms are unable to monitor the risk-taking behaviour of managers, even though these actions directly affect the firm’s profitability. Similarly, while selling spectrum, the government is unable to observe the true valuations of the buyers of various units. Theory has sought to understand the efficiency costs of such imperfections and to design ways to ameliorate these costs. Arrow was a pioneer in developing research in these areas. His work guided policy in different parts of the world. His 1963 paper on the moral hazard in health insurance markets, for example, is fundamental to the understanding of the issues involved in devising universal healthcare schemes such as Obamacare in the US.
It is worth mentioning three other disparate areas (among many) where Arrow made foundational contributions. He
developed the standard measure of risk-aversion (called the Arrow-Pratt measure) in finance. He showed that discrimination against groups could persist even without an explicit “taste” for discrimination due to presence of incomplete information in labour markets. Such discrimination is referred to as statistical discrimination. Finally, together with the Indian economist B.S. Minhas (and two others), he developed a flexible form of a production function that Minhas later used extensively in the context of Indian agriculture.
Arrow continued to research till his last days. In fact, he wrote more than a hundred articles after his Collected Papers were published, branching into areas such as sustainable development and climate change. His intellectual powers were formidable and his speed of thought was legendary. In seminars, he was invariably ahead of the speaker, anticipating arguments and often finding better ones during the seminar itself. He was, however, unfailingly courteous and always generous to colleagues and students. He was a lifelong supporter of liberal and progressive social causes.
It is hard to imagine that there will ever be another Kenneth Arrow.
The writer is professor, Indian Statistical Institute, Delhi Centre, New Delhi
Date:27-02-17
From Plate to Plough: It’s not about loan waivers
Indian farmers are facing multiple crises. Punjab’s case highlights their problems.
THE ANSWER TO who will form the next government in Punjab is currently sealed in the ballot boxes. Meanwhile, there are reports that the Election Commission has written to the home minister, reinforcing its demand to make electoral bribery a cognisable offence. But what about the assurances made in election manifestos which promise voters the moon before the polls? The reference here is to Punjab’s elections where all major political parties have promised to waive farmers’ loans — that means any incoming party will be under tremendous pressure to fulfill its promise. And if this is done in Punjab, very soon, it will spread like an infectious disease across other states, taking the same shape as the 2008-09 mega loan waiver of the UPA government, which finally cost the exchequer Rs 52,517 crore.
If a loan waiver was the solution to the problems of the peasantry, there should not have been any farm distress after 2008-09. But those problems still persist, simply because their answers lie somewhere else.
Take the case of Punjab. The state has been a forerunner in agriculture since the Green Revolution. Its agri-GDP registered an average annual growth of about 10 per cent during the first four years of the Green Revolution (1966-67 to 1969-70). But during the period of the current government, agri-GDP growth dropped to 1.5 per cent per annum (2007-08, 2014-15, latest available data), which is even lower than the national average of 3.2 per cent, and way below the best performer, Madhya Pradesh, whose agri-growth stood at 10.9 per cent per annum during the same period (see graph).
Notwithstanding the fact that Punjab’s per ha productivity is pretty high, the moot question is — where did Punjab go wrong, and what sort of policies can get it back to a high growth trajectory on a sustainable basis?
First, Punjab seems to have become a victim of its own success. Grain, primarily wheat and rice, occupies 80 per cent of its gross cropped area (GCA), with almost the highest productivity in India. This was great when India was suffering from food shortages; however, the situation today is completely different. After 2007-08, India emerged as a net exporter of cereals. Stocks of cereals crossed 80 million tonnes (mt) on July 1, 2012, more than double the buffer stock norms. As a result of this “abundance”, the increases given in minimum support prices (MSP) of wheat and paddy were very meagre. That brought down the profitability of these crops, and thus, the income of Punjabi farmers.
Just to give a flavour of the MSPs in India vis-a-vis some neighbouring countries, the MSP of wheat in China was $ 385/MT in 2014-15, in Pakistan $325/MT versus India’s $ 225/MT. Similarly, for Indica rice, China gave a support price of $ 440/MT against $ 320/MT for India’s common rice.
Punjab’s peasantry suffered due to bans on exports of wheat and rice (during 2007-11), stocking limits on private trade and heavy taxes and commissions imposed on purchases of wheat and rice from the state, which are as high as 14.5 per cent. In a country where one per cent tax on the purchase of jewellery creates an uproar, it is ridiculous to have a 14.5 per cent tax on basic staples like wheat and rice. The net result of this misguided policy is that the food processing industry, which can add value, feels extremely reluctant to enter Punjab — most roller-flour mills in Punjab buy their wheat from Uttar Pradesh.
Second, although Punjab was the first to build a good marketing infrastructure for wheat and rice, it failed to create similar facilities for perishables like fruits and vegetables (F&V). As a result, the prices of perishables remain volatile, increasing the risk of farmers who feel reluctant to shift to high-value agriculture. Only 3.4 per cent of Punjab’s GCA is under F&V, compared to 8.3 per cent at an all-India level. There is a limit to augmenting farmers’ incomes through cereals, unless a lot of value addition is done.
The state has to shift towards high-value horticulture and dairy to benefit farmers. Punjab has one of the highest milk productivity rates in India, but the share of milk production processed by the organised sector is just 10 per cent, compared to 20 per cent at an all-India level and 53 per cent in Gujarat. This speaks of the need to ramp up milk processing facilities in the state.
Third, the most critical problem of Punjab agriculture is its depleting water table, primarily dipping due to paddy cultivation during summer. The nexus of ground water irrigation-free power-assured procurement are sending the wrong signals to farmers. The water table declined by 0.7 metre per year from 2008 to 2012. Currently, 75 per cent of blocks in Punjab are declared “dark blocks” where water is over-exploited. It looks as if the current generation is taking away the water rights of future generations.
With one kg of rice consuming 3,000-5,000 litres of irrigation water, exporting common rice is not a very wise proposition for Punjab’s agriculture. This has to be rationalised; government should incentivise technologies like direct seeding of rice and drip irrigation in rice. Pilots in these areas show savings of 30-50 per cent irrigation water. The promotion of high-value agriculture necessitates investment in cold storage and processing, much of which can be operated through cost-effective solar power.
Instead of giving free power, the state can reward the peasantry for saving power through cash incentives, which will also help in checking water depletion. Hopefully, these issues will be taken up by the new government in order to take Punjab to a higher level of prosperity.
Gulati is Infosys Chair Professor for Agriculture and Roy is Research Associate at ICRIER
Date:27-02-17
Protecting the rights of tribals
Even as bilateral investment treaties are strengthened, domestic legislation must be implemented
Recently, Ras Al Khaimah Investment Authority (RAKIA), an Emirati investor, initiated an investment treaty arbitration (ITA) claim against India under the India-UAE Bilateral Investment Treaty (BIT), seeking compensation of $44.71 million. This claim arose after a memorandum of understanding (MoU) between Andhra Pradesh and RAKIA to supply bauxite to Anrak Aluminum Limited, in which RAKIA has 13% shareholding, was cancelled, allegedly due to the concerns of the tribal population in those areas.
Similarly, in 2014, Bear Creek Mining Corporation initiated an ITA against Peru under the investment chapter of the Canada-Peru Free Trade Agreement, claiming violation of the investment obligations due to the withdrawal of mining concessions, allegedly as a result of the protests by indigenous peoples. These cases present an opportunity to evaluate the impact of the obligations of the host states under BITs on the rights of the tribal people.
Protection under law
The United Nations Declaration on the Rights of Indigenous People (UNDRIP), adopted in 2007, for which India voted, recognises among other things indigenous peoples’ rights to self-determination, autonomy or self-governance, and their right against forcible displacement and relocation from their lands or territories without free, prior and informed consent. In addition to the UNDRIP, there is the International Labour Organisation (ILO) Convention concerning Indigenous and Tribal Peoples, 1989 which is based on the “respect for the cultures and ways of life of indigenous peoples” and recognises their “right to land and natural resources and to define their own priorities for development.” India is not a party to this, but it is a party to the ILO Convention concerning the Protection and Integration of Indigenous and Other Tribal and Semi-Tribal Populations in Independent Countries, 1957 which is outdated and closed for ratification.
At the domestic level, the Constitution provides autonomy to tribal areas in matters of governance under the Fifth and Sixth Schedules, which is further fortified by the Samatha v. State of Andhra Pradesh & Ors (1997) judgment where the Supreme Court declared that the transfer of tribal land to private parties for mining was null and void under the Fifth Schedule. The framework for protection of the rights of tribal and indigenous people is further strengthened by the Recognition of Forest Rights Act, 2006 which protects the individual and community rights of tribal people in forest areas and their right to free and prior informed consent in event of their displacement and resettlement.
Investment promotion
While the legislation for the protection of the rights of tribal people are in place, they are regularly flouted as has been highlighted by the Xaxa Committee report of 2014. Instead of ensuring that tribals are not ousted from the land to which they are historically and culturally connected, the state becomes more concerned about fulfilling contractual obligations towards the private investor. This means that constitutional and legal principles are discarded. This is evidenced by the increasing number of MoUs being signed by natural resources-endowed states with investors for facilitation of developmental projects. For instance, Chhattisgarh and Jharkhand have reportedly entered into 121 and 74 such MoUs, respectively, with various private players as of 2014. All this materially alters the role of the state vis-à-vis the tribal people as the state prefers economic expediency at the cost of the rights of tribal people.
For economic development, states invite investments not only from domestic investors but also from foreign players whose interests are not only protected under domestic laws but also under the BITs. The purpose of BITs is to give protection to foreign investors while imposing certain obligations on the host state. For instance, if a development project involving a foreign investor in tribal areas leading to acquisition of tribal land is met with protest, there may be two possible scenarios. One, the State government due to socio-legal and political pressures may yield to the demand of the tribal people to the detriment of the foreign investor, which is what has happened in the case of RAKIA. Two, assuming that the government continues with the project, the judiciary may order the cancellation of permits given to the foreign investor, which is what happened in the case of Vedanta in 2013 (Orrisa Mining Corporation Ltd v. MoEF and Ors). In both cases, foreign investors may drag India to ITA claiming violation of obligations under the BIT, such as fair and equitable treatment or indirect expropriation. This perceived threat of ITA against the state may compel the latter to refrain from implementing tribal rights in the development project area.
Conflicting interests
A recent report of the UN Special Rapporteur on the Rights of Indigenous Peoples recognises three main reasons for the serious impact that foreign investments have on the rights of indigenous people: failure to adequately address human rights issues of tribal people in BITs; the perceived threat of ITA for enforcement of investor protection; and exclusion of indigenous people from the policymaking process.
What then are the possible options available to India to tackle these issues? First, none of the 80-plus BITs signed by India contains even a single provision on the rights of tribals. Even the 2015 model Indian BIT does not contain any such provision. Thus, to avoid ITA cases by foreign investors, the government’s approach should be to include provisions relating to the protection of indigenous people in BITs. There are many examples from around the world: Canada, in many of its BITs, has several exceptions to protect the rights of indigenous people. The Trans-Pacific Partnership agreement also incorporates the rights of the Maoris from New Zealand. Since India is going to renegotiate its existing BITs, it should create a special exception for taking regulatory measures for protecting the rights of tribal people, in which case it should have a textual basis in the BITs to derogate from investment protection obligations under BITs.Second, the strengthening of BITs must go hand in hand with the implementation of domestic legislations for the protection of the rights of tribals, where the state does not consider tribals as impediments in the development process. Third, as far as possible, tribal people should be given representation even in investment policymaking.
Pushkar Anand and Amit Kumar Sinha are Assistant Professors at the College of Legal Studies, University of Petroleum and Energy Studies, Dehradun
Date:27-02-17
What exactly is a money bill?
Or, why we need to reconsider the Aadhaar Act, with all its implications for privacy
The Supreme Court will begin hearing final arguments next month on a writ petition challenging the validity of the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Act, 2016 — or the Aadhaar Act. The proceeding, initiated by Jairam Ramesh, a Member of Parliament in the Rajya Sabha, primarily questions the legality behind the Union government’s move in introducing the Aadhaar Act as a money bill. Through this categorisation, the government had the law enacted by securing a simple majority in the Lok Sabha while rendering redundant any opposition to the legislation in the Upper House of Parliament.
Imperils liberties
During preliminary hearings, the Supreme Court has suggested that it isn’t entirely convinced of the merits of Mr. Ramesh’s petition. But a closer examination will only show that the introduction of the Aadhaar Act as a money bill contravenes the bare text of the Constitution. In this case, the breach is particularly disturbing, because the legislation imperils our core liberties, in manners both explicit and insidious.
Originally, Aadhaar was conceived as a scheme to provide to every Indian a unique identity number, with a purported view to enabling a fair and equitable distribution of benefits and subsidies. There is little doubt that the scheme’s introduction, with no prior legislative backing, was a flagrant wrong, and was completely unjustifiable as a measure of democratic governance. For this Mr. Ramesh’s party, the Congress, must take full responsibility. But, when a draft of a statute was eventually introduced in the Rajya Sabha, in December 2010, it was done so as an ordinary bill. This meant that both Houses of Parliament had to provide their imprimatur to the bill for it to become law.
Nonetheless this draft legislation contained serious misgivings, so much so that a parliamentary standing committee released a detailed report differing with the government of the time over critical aspects of the bill, particularly its treatment of concerns over privacy and protection of data security. In the meantime, given that the Aadhaar project was being implemented even without statutory support, public interest petitions were filed in the Supreme Court challenging the project’s legitimacy. In these cases, the court issued a series of interim orders prohibiting the state from making Aadhaar mandatory, while permitting its use only for a set of limited governmental schemes.
In March 2016, the Union government withdrew the earlier bill, and introduced, in its place, as a money bill, a new draft legislation, titled the Aadhaar (Targeted Delivery of Financial & Other Subsidies, Benefits & Services) Bill, 2016. This categorisation was extraordinary because a money bill, under India’s constitutional design, requires only the Lok Sabha’s affirmation for it to turn into law. Right on cue, within days of the bill’s introduction, the Lower House, in complete disregard of the Rajya Sabha’s protestations, passed the legislation, as Act No. 18 of 2016. This law, Mr. Ramesh now argues, is patently illegal, because its classification as a money bill infringes the Constitution’s mandates.
A money bill is defined by Article 110 of the Constitution, as a draft law that contains only provisions that deal with all or any of the matters listed therein. These comprise a set of seven features, broadly including items such as the imposition or regulation of a tax; the regulation of the borrowing of money by the Government of India; the withdrawal of money from the Consolidated Fund of India; and so forth. In the event a proposed legislation contains other features, ones that are not merely incidental to the items specifically outlined, such a draft law cannot be classified as a money bill. Article 110 further clarifies that in cases where a dispute arises over whether a bill is a money bill or not, the Lok Sabha Speaker’s decision on the issue shall be considered final.
Flawed counterpoint
The government’s response to Mr. Ramesh’s claim is predicated on two prongs: that the Speaker’s decision to classify a draft legislation as a money bill is immune from judicial review, and that, in any event, the Aadhaar Bill fulfilled all the constitutional requirements of a money bill. A careful examination of these arguments will, however, show us that the government is wrong on both counts.
To be fair, the assertion that the Speaker’s decision is beyond judicial review finds support in the Supreme Court’s judgment in Mohd. Saeed Siddiqui v. State of UP (2014). Here, a three-judge bench had ruled, in the context of State legislatures, that a Speaker’s decision to classify a draft statute as a money bill, was not judicially reviewable, even if the classification was incorrect. This is because the error in question, the court ruled, constituted nothing more than a mere procedural irregularity.But there are significant problems with this view. Chief among them is the wording of Article 110, which vests no unbridled discretion in the Speaker. The provision requires that a bill conform to the criteria prescribed in it for it to be classified as a money bill. Where a bill intends to legislate on matters beyond the features delineated in Article 110, it must be treated as an ordinary draft statute. Any violation of this mandate has to be seen, therefore, as a substantive constitutional error, something which Siddiqui fails to do.
There are other flaws too in the judgment. Most notably, it brushes aside the verdict of a Constitution Bench in Raja Ram Pal v. Hon’ble Speaker, Lok Sabha(2007), where the court had ruled that clauses that attach finality to a determination of an issue do not altogether oust the court’s jurisdiction. That is, the bench held, there are numerous circumstances where the court can review parliamentary pronouncements. These would include instances where a Speaker’s choice is grossly illegal, or disregards basic constitutional mandates, or, worse still, where the Speaker’s decision is riddled with perversities, or is arrived at through dishonest intentions.
What Aadhaar Act shows
A simple reading of the Aadhaar Act would show us that its contents go far beyond the features enumerated in Article 110. If anything, it is the provisions in the legislation that pertain to the Consolidated Fund and its use that are incidental to the Act’s core purpose — which, quite evidently, is to ensure, among other things, the creation of a framework for maintaining a central database of biometric information collected from citizens. Ordinarily, a draft legislation is classified as a money bill when it provides for funds to be made available to the executive to carry out specific tasks. In the case of the Aadhaar Act, such provisions are manifestly absent. The Speaker’s decision to confirm the government’s classification is, therefore, an error that is not merely procedural in nature but one that constitutes, in substance, an unmitigated flouting of Article 110.
In many ways, Aadhaar has brought out to plain sight the worryingly totalitarian impulses of our state. The government has argued, with some force, that Indian citizens possess no fundamental right to privacy. This argument, however, is predicated on judgments of the Supreme Court that have little contemporary relevance, and that have, in any event, been overlooked in several subsequent cases where the court has clarified the extent of the liberties that the Constitution guarantees.
Right to privacy
Privacy is important not merely because it advances the cause of equality and freedom but also because it is, in and of itself, a treasurable value. A failure to protect privacy adequately can have disastrous consequences that affect our abilities to determine for ourselves how we want to live our lives. And the Aadhaar Act hits at the core of this value. It permits the creation of a database of not only biometric information but also various other private data, without so much as bothering ab