Future of coalition politics in India

The Nataka (Drama in Kannada) that unfolded in Karnataka has put the dharma of politics or more precisely coalition politics at an all time low. It is unfortunate that even nearly sixty years after enacting our constitution, we are unable to produce strong and committed political parties which can command majority support and run a stable government for a full five year term.

Karnataka had a congress chief minister from 2004 to February 2006 though congress was the second largest party (After BJP). The coalition was broken in 2006 and quickly JD(S) allied with BJP agreeing a 20-20 power sharing pact. A JD(S) CM was sworn in though he belonged to the neither the single largest party nor the second largest party.

When the JD(S) disagreed to transfer power in October 2007 as per the agreement.(Ideology??). There was high drama in the state. Subsequently after a month of hectic political developments JD(S) decided to realign with BJP. Now on November 19 they decided to again withdraw support to BJP for reason best known to them.

Where is the so called ideology in all these developments? A party (Read JD(S)) shifts stands between congress and BJP which have quite diametrically opposite ideologies in many aspects. It wobbles even when it is in alliance. These kinds of movements are completely in contrary to our democratic philosophy. Part of the blame is of course on the people of Karnataka for giving such a fractured mandate. But the political parties have used the people’s mandate to play politics of a very low order.

This is not the first instance of such political movements. We have had plenty of instances since 1993 in both the centre and state levels. We have seen shifting stands of AIADMK (with BJP), we have seen how BSP played its political cards recently. Not to forget are political dynamics in Kerala and Goa. But the one that took place in Karnataka became more conspicuous as Karnataka is one of the more progressive states in our country and more importantly the political dynamics was arguably the worst the country has seen so far.

Where do we go from here is the more important question that we need to ask ourselves. The country has by and large come to terms with coalition politics. It’s beyond question that “Coalition politics” is here to stay. But the country cannot afford to see the political acts that took place in Karnataka again and again. From political, Economic and moral grounds, such developments are certainly uncalled for. All political parties in Karnataka had their own arguments and explanations for the opportunist behavior exhibited by them. But none of the arguments sound plausible to masses in our nation. Public opinion has come down heavily on so called political leaders.

Does all this mean that we have to learn to survive with such political dynamics? Should the country come to terms with such politics? It’s unfortunate if such a thing happens. But it’s unlikely that these kinds of politics will eventually crystallize or institutionalize. Our country being young and increasingly becoming “Public-spirited” should not allow such developments to hamper the process of development that is heralding resurgence of our country.

A two party system looks ideal to tackle such situation. But we have all seen how political parties reacted when our former president mooted such an idea. Some went on to say it is an “Undemocratic” idea. So by and large, the idea will remain on paper and does not seem to be acceptable to political parties and civil societies. This is also unlikely to please the courts as courts have found a powerful tool of “Basic structure of constitution” to invoke when need arises. It is to be well acknowledged here that in a democratic set up like ours every person has a right to have an ideology which consequently manifests into multiple parties. So two party systems is undemocratic in a certain way.

One possible solution for this can be to do away with post poll coalitions or post poll alliances. Political parties have no moral ground to deny this law. Parties committed to ideology cannot vacillate between their positions. (We have seen how JD(S) has made shrewd moves to take political mileage between congress and BJP). Our political parties have ideology at least on paper. So they have to ally with one or the other party which have similar ideology before going for polls. It’s unthinkable that a political party can change its ideology at least on paper. A pre poll alliance will also give the electorate a fair idea of the inherent dynamics and mottos of political leadership.

To this a law like ‘Anti-defection’ law must be added, wherein the collating parties have no right to part or defect for the next five years. This will ensure a fairly stable government with collating parties sharing similar ideology.

This cannot be termed as anti-democratic. The argument is only on ideological grounds that the parties have evolved on their own without pressure. Proposal only  buttress the ideology evolved by parties.

However one may argue that, if we get a fractured mandate even under this law or if there are no pre-poll alliances and what if we end up with a fractured mandate. This looks unlikely as the electorate will be wise enough to gauge the political moods (after evaluating the pre-poll alliance). Fractured mandate looks unlikely. In case if such a thing happens, a re election becomes inevitable. However the electorate will learn to make their political decisions better if they witness one or two re elections in one or two states. This will prove to be effective in a long run in many ways.

Another solution proposed by many is in doing away with the anti-defection law. This may not solve the problem, but may prop up problems which we have already witnessed in our post independence history.

In ultimate analysis, all these measures are only external and coercive on the political parties. In the heart of hearts all Indians will look forward for a public-spirited, well tempered political leadership. We need politicians who can work without adding any more laws. But to work being loyal to their ideology and ultimately to principles enshrined in our constitution. We shall hope that such a day may come.

One man,One vote, No value..

“On 26 January, 1950 we are going to enter into a life of contradictions. In politics, we will have equality and in social and economic life we will have inequality. In politics, we will be recognizing the principle of one man one vote one value. In our social and economic life, we shall by reason of our social and economic structure, continue to deny the principle on one man one value” .

These were the words of Dr.Ambedkar in the constituent assembly when the issue of justice was discussed.

How true is the statement of Dr.Ambedkar almost 60 years since he made the statement? In fact today we have “One man, one vote and no value”.

We are today proud of slogans like “India shining”,” Indian at 60”, “Vibrant India” and so on. News channels were obsessed with the sensex hitting the 19000 mark from 18000 in just four trading sessions. Economists in India and abroad are obsessed with the phrase “India’s strong macroeconomic fundamentals”.

What Does India’s strong macro-economic fundamentals mean?

Are our policy makers proud of 77% or about 840 million citizens of India living with Rs 20 a day (About half a dollar according to national commission for enterprises in the unorganized sector?)

Are we proud that India ranks first in maternal mortality rate?

Does a strong macro-economic fundamental in India mean rank of 126 out of 177 in human development index?

The very day the Sensex crossed 19000, it was also declared that India ranks 94 out of 118 in global hunger index, behind Pakistan, China, Indonesia and even Ethiopia. We Public spirited citizens must hang our head in shame to know that a country like Ethiopia which does not have a growth rate equal to half of  India manages its hunger better  than India. There is still no comment about this by any top bureaucrat, Minister or even a well meaning NGO. What value are we associating with 800 million men and women of one vote with empty stomach?

No Indian can be proud of such dismal figures. The next day after the sensex crossed the 19000 mark, all top officials of the finance ministry including the finance minister swung into action at the news of a crash of about 800 points. There was utter mayhem in the capital market at the news of a discussion paper posted in securities and exchange bureau of India (SEBI) website. There was unprecedented discussion about Participatory notes, Derivatives and the future of offshore derivative instruments.

The next day our finance minister Sri Chidambaram addressed a press conference in New York to clarify issues regarding P-Notes to foreign investors. He sought to explain the Indian market problems to citizens of America (Where nobody in hungry) who were looking for a widow to use their legitimate/illegitimate money. He gave them confidence about the exact nature of FIIs and other instruments through which they can route their money into the Indian market. The whole press conference was telecasted live by many channels and analysis of the same was done in many forums after the press conference. Till date there is neither a panel discussion nor an exclusive program in any of the news channels regarding India’s pathetic performance in many social indicators released recently. 

Our government is more bothered about the Money of Americans and American interests. Our finance minister had to face questions from the American media regarding Investment instruments. Yet no journalist has approached the finance minister about the rank in Global Hunger index.

The government and RBI of late are extremely concerned about the appreciation of Rupee. Corporate houses are using all resources at their command to woo the RBI to intervene and stem the appreciation of Rupee. This is happening at the backdrop of the fact that oil prices have soared to $90 a barrel. Furthermore exports account to only 13% of our GDP.

Higher price of oil will gradually translate into price rise in many commodities and more importantly food. What impact will it have on already 840 million people of India living with Rs 20 a day? Is the government bothered about these people with one vote? (A stronger rupee will make the import of oil cheaper thereby reducing the price of many commodities).

The possibility of a CRR hike in the next monetary policy review is already doing its rounds in the corporate houses. Businesses are bothered about the tightening of credit. It’s been almost four months since the Radhakrishna committee on agricultural indebtedness submitted its report. Till now there has been no appreciable move by the government to improve the credit needs of the Farmers.

  

Government has been just pushing Mantras like “Privatisation”,”Disinvestment”,”Washington consensus”,” Washington consensus plus” and so on. Of what good value has all these been to the impoverished masses in India?

It is high time that the government takes into account the condition of large masses of people wretched in abject poverty with a vote and no value rather than wooing foreign investors without a vote but with unnecessary value. We must spare no effort to raise the standard of 77% of the population of our country from clutches of hunger. If we fail to do so in near future, we will make the statement of Dr.Ambedkar conspicuously pronounced in centuries to come.

India's concerns on appreciating rupee

Since April last the rupee has moved up sharply from Rs 44 to a dollar to its current level of between Rs 40 and Rs 41. Thus compared to few months ago, the Rupee has become stronger against the US dollar by between 8 and 10%. Such sharp increase in the value of rupee vis-à-vis dollar over a short period of time is bound to have a considerable impact on companies and businesses that have dominant overseas revenue/expenditure stream.

Last month Infosys technologies lowered its profit and revenue outlook for 2007-08 although it raised its guidance in terms of dollars marginally. Here the rupee's recent rise is the issue. Its earnings from software exports expressed in dollars would be worth less in rupees. TCS, Wipro and Satyam followed suit reporting pressure on their gross margins in the wake of stronger rupee. These companies are reporting loss in profit despite the fact that they hedge their funds in international banks and institutions .

The appreciation of rupee in recent weeks has put few of our monetary economists and obviously the non IT exporters also in a spot of bother. Exporters are worried about declining profits and monetary economists are worried about sustaining the current account deficit in the wake of less rupee value for our exports.

While their apprehensions are duly acknowledged, few more equally fundamental macro-economic concerns need careful considerations.

Inflation:

Rising prices are affecting millions of people throughout the country. Inflation has hit the poor and the poorest the hardest. Ours being predominantly a rural nation needs to address issues concerning the largest section of the society on priority. Skyrocketing inflation numbers which crossed 7% in the early months of this year has put considerable pressure on many families. It is important to note here the though the inflation number reduced to around 5% in the recent weeks, it is not the time to be complacent. The official inflation numbers based on whole sale price index is not the actual measure of the kind of pressure experienced by families across length and breadth of the nation. A more realistic measure namely the consumer price index (Which is the official measure of inflation in many western countries) is still hovering above the comfortable mark. Though it has dipped in the recent weeks, the value is still more than 7%.

            

The situation can get complicated if food and cash crop do not register a significant increase compared to 2006-07. The monsoon is satisfactory so far, but the flash floods and accompanying loss of crops in parts of U.P., Karnataka and Rajasthan in recent weeks is likely to put considerable pressure on production of pulses. If this case emerges, large scale imports of pulses will become inevitable.

Indirectly, inflation also becomes a reason for a stronger domestic currency. Higher inflation will result in higher interest rates(because of increased demand of money and also by intervention of central bank to tighten the supply side of money).The recent hike in CRR to 7% will only add up to the higher interest rates of the bank. The higher interest rate will buttress the capital inflow from outside the country. This will further add up to liquidity in the system resulting in inflation. This is exactly opposite to what the doctor ordered. The RBI will again have to resort to hike in CRR or in open market operations. For a year now, the RBI is resorting to hiking CRR at regular intervals and also running out of government securities. This is not a very healthy sign for the road to capital account convertibility. So the RBI is caught up in the vicious circle of sterilization-capital inflow-sterilization. In other words, an increase in interest rate is bringing more capital flows, to stop this capital's entry into the system, the RBI increases CRR which will again bring in more capital. How the RBI will cope up with this is being curiously watched by the academic world.

Moreover, the high Repo rate regime is not helping control inflation either. The relative ease with which the business and international banks can borrow funds from outside the country with lower rate of interest is not putting any pressure on commercial banks to borrow from RBI. This technique inevitably brings in foreign exchange leading to making the rupee dearer vis-à-vis dollar.

           

The finance ministry has rightly acknowledged that the present inflation is due to the supply side constraints. So this situation is not going to ease out immediately if tackled purely from the domestic platform. Imports are the only solution to ease the present supply side bottleneck.

It is estimated that subsidies on select petro products in 2007-08 are likely to exceed 60,000 crores. Also, the supply constraints due to inadequate output of Wheat, Pulses and Edible oils will fuel inflation if imports in required quantities cannot be secured. Inadequate supply of essential products coupled with high crude prices may push the whole sale price index inflation again to over 5%.

A stronger rupee will make our imports cheaper. Inflation targeting becomes much easier with a stronger rupee. If the RBI continues to intervene in the exchange rate market as it is been doing in the past few weeks to contain the appreciating rupee, it would actually be hampering the inflation curbing process. RBI certainly needs to protect our exporters, but its intervention to contain the appreciating rupee will be desirable when inflation (particularly primary goods prices) becomes sustainable and supply side of essential commodities augmented.

            

Most of India's export earnings are trough software and services. Businesses of these goods and services operate at greater profit margins. So an appreciating rupee must not hurt their profit margins to alarming levels as compared to alarming levels of inflation hurting millions of people. Yet the software companies are complaining about their reduced profit margins in spite of hedging their funds at reputed financial institutions.

Dr Y.V.Reddy, governor of RBI in his inaugural address at a conference on advances in open economy macroeconomics held on 19 March in Mumbai said "If the domestic inflation rate of an economy, however low it may be, is higher than the average inflation rate of its trading partners, it puts pressure on exchange rate. In this context, the question of simultaneous balance of internal and external sector becomes a major issue if flexibilities in the economy are less than adequate. The conduct of monetary policy inevitably involves a careful judgment on relative weights assigned to domestic and global factors and conduct reassessment and rebalancing of these in response to evolving circumstances." We must note here that India's inflation is more than double compared to our primary trading partners ( U.S.A and U.K). Commensurate with this our central bank should keep itself away from the exchange rate market. On the longer run the market forces will automatically take care of exchange rate once the inflation difference between trading partners reaches manageable levels and movement of funds across seas stabilizes.

It's worthwhile to note here that the export earnings of India contribute to about 13 to 15% of GDP. The monetary authorities should not hurry up and express great apprehensions over appreciating rupee.

One needs to acknowledge and appreciate the row of measures taken by RBI in its monetary policies and our government in its supply side and fiscal policies. As the gestation period of these policies are long, the RBI needs to wait till these bears fruition before it again contemplates about buying dollars.

At the moment its better that RBI keeps itself away from the exchange rate market and allows the market forces to operate. On the other hand Fiscal and monetary authorities can take a few steps to help market forces stabilize exchange rates.

1)       Ban the dreaded Participatory notes (PNs). As suggested by Tarapore II, foreign institutional investors (FIIs) should be prohibited from investing fresh money raised through PNs. Existing PN holders should be provided an exit route and phased out completely within one year. This will have dual advantage-a) Huge quantities of illegal foreign currency   is stopped from entering India thereby reducing the supply of dollars and b)Prevents non SEBI registered  Indian brokers from hoarding illegal cash.

2)      A cap on external commercial borrowings will do a lot of good. Last week the government did introduce such a measure. It is a good sign. But these measures should be made more strict.  

Current account deficit:                                                                                

Certainly, there will be a heavy impact of a stronger rupee on our current account deficits. A weaker rupee can certainly cover up large deficits while a stronger rupee earns less rupee value for our exports.

RBI predicts a current account deficit of around $10 billion for 2007-08. In 2006-07, The CAD was not much lower at $9.6 billion. This rosy picture is due to net increase in invisible receipts almost equal to the growth of trade deficit. Merchandise trade deficit is only widening despite robust growth in the manufacturing sector and yet the current account deficits are balanced by net invisibles, foreign institutional investments and foreign direct investments.

According to securities and exchange board of India (SEBI), Aggregate investment by FIIs up to mid July in 2007-08 was to the tune of $8.45 billion considerably (more than 200%) higher than $2.8 billion a year ago.

It is however true that portfolio investment is not sustainable on a longer run. They are volatile. These investments can reverse as easily as they come even amidst strong macroeconomic fundamentals.

But certainly they can act as an immediate solution. As the rupee is appreciating and inflation yet to sustain, there would be more dollar inflows due to weaker dollar in terms of portfolio investments(The value of stocks growing higher in terms of rupees meaning more dollar value of the stock) which will cover the deficits caused by stronger rupee in our exports. On the flip side the very same investment can again cause appreciation of rupee. While this is true, the phenomenon can be controlled over the course of time.

The finance authorities can think of diversifying these investments into manufacturing sector. Our Current account on BOP is largely balanced by heavy foreign institutional investment. This is not a very encouraging situation. The very fact that huge merchandise trade deficits are balanced by net invisibles and FIIs mean that India is acting as a bank to foreign funds. There is growth of 200% in FIIs year on year compared to 9% growth in GDP.

So what is the solution? These heavy investments must be diversified. A window must be channelised to productively use this money(Our forex kitty is more than $200 billion). Investment of this money in interest bearing assets outside India as well as in India will at the same time a) prevent appreciation of rupee by reduced supply of dollars in India b) provide much needed funds for infrastructure development (Estimated to the tune of $320 billion in the XI plan) c) Reduce the growing deficit in merchandise trade deficit by easing the infrastructure bottle neck over a course of time.

A few monetary economists have expressed apprehensions over this issue. They are skeptical about the idea and bothered about the volatility of such funds. A risk however cannot be ruled out, but even if a few investors choose to withdraw their deposits, fresh investment into India is bound to continue for at least the foreseeable future (till 15-20 years). International rating agencies like Goldman Sacks and S& P have given Investment grade to India. In the wake of such macro economic fundamentals, investments into India are likely to continue into the foreseeable future.

To conclude, RBI and other fiscal and monetary authorities must move away from traditional instruments, come out of vicious circle of Sterilization-Capital inflows-sterilizations and creatively use the inflowing capital as real capital to fuel the growth of Emerging and enlightened India.

Climate Change; G8 and India, the road Ahead.

5.9 Billion! Yes, 5.9 billion tones in the total amount of carbon dioxide that the so called most developed nation in the world " America" emits on an average annually. Compare this figure with the annual emissions of India. India's annual carbon dioxide emission is roughly about 100 million tones. This is about one fifth of that of America. India does not even find a place in the top 20 polluting countries of the world. In spite of these self explanatory figures, American president George W Bush in the recently concluded G 8 summit pointed at India and China and said that; if the problem of climate change has to be combated, then India and china have a major role to play. President however, did not make any commitment from his side.

It is well acknowledged that china being the second largest emitter of green house gases after America does have a big role to play in combating the menace of global warming. However, India's emissions are a minuscule in comparison to that of American or global emissions.

In the recently concluded G 8 summit, America instead of atoning for the dangers it has created for humanity, pointed fingers at the developing nations to act on the problem. There was absolutely no commitment from America to act on the affirmative to reduce their emissions. There was no mention of any transfer of technology to the developing world or easing the patent rights. Instead the G 8 leaders called for lowering trade barriers in the Asian countries and early conclusion of the Doha round negotiations. These are the perils of a uni-polar world.

Furthermore, America has not even agreed to cut back their emissions by a meager 5% by 2012, which is one of the requirements of the Kyoto protocol from which she withdrew in 2001. A reduction of 5% emissions by the USA would be almost equivalent to practically zero emissions from India which houses 17% of the world's population.

In this backdrop, what can we expect from America? Practically nothing. Regional groupings like the G 8 are a mere talk show to majority of the world's population. There are absolutely no commitments by any of the world's leaders to atone for the kind of tensions that they have created in the world. However even though countries like Germany, Japan and others agreed to an unbinding resolution to cut their emissions by 50% by 2050, America did not even agree to such unbinding resolutions. An absolute attribute of a uni-polar world.

It was clearly pointed out by the inter government panel on climate change, an agency of the UN that the brunt of the climate change would be experienced by the eastern countries in general and India and other far east countries in particular. Norway, it was pointed out would be completely submerged in another 40 years. So who is paying price for whose mistakes? The IPCC further called for a coordinated effort by all nations to combat the menace of climate change. The so called developed nations have not been sensitive enough to these alarms. The recently concluded G 8 summit and the conference held in Bangkok last month could not come out of any specific norms or guidelines or schemes to combat climate change. Remember, IPCC has pointed out that the world has only 8 years to correct the situation or else, the situation may go out of hand and may lead to irreversible changes.

Now, where do India and other developing nations go? As pointed out by Russian president Vladimir putin, Russia, China and India together produce more than America. So regional groupings like between Russia, China and India or BRIC or BRIC plus South Africa and Mexico would do more good to humanity than the G8. Countries of these groupings have potential to emerge as superpowers in future. This is the ideal time for these countries/groupings to act together and prove their strengths. A consensus among them on larger issues like climate change can prove to be a great benefit for the world at large. These can be more effective than mere talk shows by countries like America. Brazilian president Lula's proposal for an annual G-5(Brazil, China, India, Mexico and South Africa) summit is commendable and is in the right direction to combat the perils of a uni-polar world. Even though in a longer run if these countries go on to pay the prices for the sin committed by the developed ones, it would be worth the sacrifice for the cause of humanity.

In particular, what are India's options? Sky is the limit for Indians. India has been blessed with rich natural resources, exemplary human resources and excellent technological power which are one of the best in the world. Ancient civilization, wisdom and science, entrepreneurial skills of the present generation and loads of diversity speak volumes for the nation we are. A rightful mix of policies and action can do a world of good.

We must tread on higher growth trajectory. It is an excellent achievement for India to have reached the 9.4% growth in the 2006-07 fiscal. We must aim higher. But this high growth must come in an environment friendly way. Not only GDP but green GDP must reach 10%.Below are a few measures that we can adopt to make our livelihood greener;

1.       Green tax as envisioned by Dr.R.K.Pachauri, chairman of IPCC is a novel way of taxing polluters.

2.       Higher property tax on buildings built by aluminum and glass.

3.       Introduce environment cess on steel, concrete and aluminum.

4.       Property tax relaxation on buildings built by environment friendly materials like flyash bricks, soil cement blocks, filler slabs, earthen masonry etc.

5.       Making rain water harvesting mandatory to all buildings including residential houses.

6.       Incentives to farmers growing sugarcane, oil seeds and Corn.(Though few people have expressed apprehension about it, at the moment it looks like a good option to grow raw material for bio fuel)

7.       Greater impetus on research on renewable energy. We must also encourage scientists working on third stage nuclear reactor and fusion reactors. High pay, abolition of reservation in appointment and promotion of scientists working in this area can do a lot of good.

8.       Encouragement to research on finding ways to burn coal more efficiently.(Though this technology is available in the west, they are not ready to part with it owning to strict IPR regime).

9.       Strict policing on vehicles violating pollution norms.

10.   Introduction of Environment science subjects to create awareness among the youth and children from primary school up to graduation.

11.   Encouragement to recycling plants with tax sobs.

12.   Check leakages in public water distribution system.(It has been estimated that 30% of water in Mumbai and Bangalore is lost through leakages).

13.   Setup a ministry for recycling. Or at least a vertical in the department of renewable energy to look into the issues concerning the feasibility and implementation of recycling.

14.   Impose very high tax on conspicuous consumption like resort stays, Business class travel etc.

15.   Impose a kind of tax on television advertisements which flaunts conspicuous consumption.

16.   Introduce padma awards for excellent farm and building practices.

17.   Introduce padma awards for spreading environmental awareness.

18.   Like NCC and NSS, voluntary groups in schools and colleges can be set up to spread environmental consciousness.

19.   Make the municipal authorities in cities completely autonomous, free from political control so that they can come down heavily upon people violating building codes.

20.   Official vehicles for bureaucrats and other government officers can be switched from high energy consuming vehicles like Honda and Hyundai to other energy efficient vehicles like Maruthi etc.

In addition to these, our government must stop looking at the west for all our problems. The recently held G8 summit is the testimony for their efficiency. The nuclear deal with USA in on the verge of a collapse thanks to some impossible clauses by Washington. Reprocessing rights are integral to the three stage nuclear program envisioned by Baba.Reprocessing spent fuel which helps in using thorium as nuclear fuel will go a long away in reducing India's dependence on fossil fuel for her energy needs. This means reducing pollution by leaps and bounds. But America, the so called most progressive state in the world is against this. But still wants India to cut down emissions.

            It is better we follow our look east policy not only for trade but also for other kinds of socio-economic-politico cooperation.

            It is high time that the world at large becomes more sensitive to the issue of climate change. Regional groupings should move from mere talk shows to evolving macro guidelines to combat problems engulfing humanity. Otherwise inconvenient truth will obviously become inevitable.

Human capital formation and reservations.

India being an ancient civilization and heterogeneous community is the breeding land for many religions and castes. Our strength is derived in its unity, and again our unity rests in harmonious coexistence of all the individuals with different affiliations (religious and political). Fraternity enshrined in the preamble of our constitution should be the harbinger for the citizens of our country to inculcate in themselves tolerance and harmony.

However, it is very unfortunate that even after almost 60 years of independence; the concept of reservations is deeply rooted in the minds of people of India.

In response to the writ petitions filed in the Supreme Court, the centre on May 02, 2007 tried to justify the enactment of 93 ^rd constitutional amendment, introducing clause 15(5) in article 15, to facilitate framing of laws to provide quotas for socially and educationally backward sections.

On the reasons for bringing such an amendment, the central government said it "does not violate the basic structure [of constitution] and is, in fact, intended to strengthen it by providing meaningful equality of educational opportunity by eliminating the existing inequality."

The exaggeration in the argument of the centre is understandable in the light of historical reasons. We do understand the kind of deprivation experienced by some sections of our society in the past and in some cases even today. But is the Government really bent upon achieving social and economic justice. Are the policies really commensurate with the principle of equity?

The fact that reservations is provided for SCs, STs and other under privileged classes at the school, college and even at higher education level is very understandable and just (however we shall not discuss here the validity of the exact percentage). They have every right to claim reservation at this level. This policy is certainly commendable and even commensurate with the policy of "Equity" wherein we are creating enough and just opportunities to all social sections of the society to have access to good education.  

Furthermore the amendment to article 335 gives the underprivileged population relaxation in the qualifying marks as well. To add to this there is even relaxation on the age to these so called sections of the society. Things are fine till this point.

But this does not complete the concatenation of privileges. Once educated on par with the general category, reservations are also provided at the entry and promotion level of employment.

Once educated on par with the general category and so called upper classes, is there any social, moral or intellectual reason for providing reservation at the employment level? The ideology of "Equity" takes a terrible beating here. After education, everybody irrespective of caste of creed is assumed to be at the same intellectual level. At this juncture, concept of reservation at entry and promotion level of employment will create animosity among different classes of society and will not be commensurate with the ideology of Fraternity. Certainly this is in conflict with the government's principle of equity and integration as it argued on May 02,2007.

The article 16(4A) gives even consequential seniority to a person promoted from the reserved class. This is certainly unjust. This article implies that once promoted, a reserved class candidate has perpetual seniority and a person belonging to general candidature lands up in an impasse. The government is also trying to persuade the private sector to adopt reservations in their respective enterprises. Does the government think these policies will contribute to fraternity, equity and integration among different societies of our nation?

On the other hand these are creating animosity between different sections. The animosity is only likely to increase in future if no corrective action is taken.

The architect behind liberalization is our honourable prime minister. Being one of the greatest economists and a great leader, he is driving our nation into a double digit growth rate. Excellent strategies like SEZs are flourishing under his able visionary. [The catch point is apart from the financial crisis in 1991, the government opened up markets to create competition under the World Bank pressure].

Barring few negatives, the concept of liberalization and consequent globalization has yielded rich fruition to our nation's economy. But the same great statesman is also moving policies of reservation not only in education but also in employment and promotion. Is he not curbing healthy competition within the country while encouraging competition between foreigners and Indians?

Our country is facing severe shortage of skilled scientists and engineers. ISRO, the leading R & D institute in India is in severe shortage of manpower. Recent articles published in leading national dailies report the lowering standards of foreign diplomats and Bureaucrats who are considered as steel frame of administration. With this backdrop, if our government does not take corrective action, we may be heading for a crisis, "The crisis of human capital."

Climate Change and India

This was the article that i wrote for The Hindu Business Line. An abridged version was published on 03, May 2007. 

Our Indian planners find themselves in a fix in the wake of the fourth assessment report of the U.N.Intergovernmental panel on climate change. On one hand our economy is growing at a robust 9.2 percent and has bagged Investment grade by reputed international rating agencies. On the other hand, we are facing a huge environmental threat. The fourth assessment report testifies a crisis in the making for south Asia in general and India in particular if businesses go as on today.

So what are our options? Do we put brakes on our economic growth? Do we radically transform our manufacturing process? The latter will not happen overnight and is not an immediate solution. The former will be paying a price or atoning for mistakes which we never committed.

Pointing fingers at India and china for increasing the emissions of Green house gases and forcing them to put a cap on the emissions is clearly unjust. India is doing exactly what the so called developed countries did a century ago. It is true that India has maximum reliance on fossil fuels for her energy needs.  But at the moment she is helpless and fossil fuels are the only immediate available window for her growing energy needs.

Our way ahead must be carefully planned and holistic. Today we stand as one of the world's economic powers. Along with strong macroeconomic fundamentals, we have a very strong lobby in the world and particularly in America. We must put these to good effect to clinch our objectives at the international level.

 India must use her international lobby to cajole the industrialized economies to act on the affirmative to control the emission of green house gases. The developed countries who are responsible for damage caused should act with urgency and seriousness to atone for it. India must lead the developing economies in pressurizing the industrialized nations to correct the damage by reducing their emissions of dangerous gases and other suitable measures.

Professor Stern, a former chief economist at the World Bank, has developed an economic model to show that stabilizing emissions to a level of about 550 parts per million of carbon dioxide (nearly double the quantity in the atmosphere at the start of industrial revolution) appears possible with an investment of just 1 percent of GDP by 2050. In the backdrop of such affirmations, it is high time that the industrialized economies act with some concern and accountability to make space for developing economies like India and others.

On the domestic front, parallel to moving on to the higher growth trajectories, we must develop innovative and greener technologies. Fillip to research activities in harnessing tidal, wind, bio and solar energy would bear rich fruition in near future. Heavy impetus must be given to research and development activities in developing our thorium based third stage fast breeder nuclear reactor. Great emphasis must be laid on creating environmental awareness among the youth and children.

Though environmental sciences are thought in most science and engineering courses, adequate justice has not been done to the subject. Students learn the subject strictly from the examination point of view and the teachers do the lip service to satisfy the former. There is an urgent need to transform such out of place systems. I have taken part in seminars and talks on environmental issues in reputed institutions where beverages and snacks are served in plastic tumblers and plates. Disappointing are few students who take part in such seminars do not even know that the air conditioner in the hall is emitting chlorofluorocarbons and expensive deodorants and body sprays they use do not do much good either.

Environmentally concerned people ought to be rewarded and recognized. For instance, the property tax on people who make use of environmental friendly materials like use of fly ash bricks, soil cement blocks etc or adopt rain water harvesting techniques can be reduced. People must be encouraged to use energy efficient materials.  Bourgeois community using high energy consuming materials like glass and aluminum (Aluminum and glass consume almost 150 times the energy of regular masonry structures) must be heavily taxed.

It is high time that the Indian community becomes sensitive to climate change. If we do not take urgent measures in combating environmental pollution, if convenience rules over concerns, inconvenient truth will be inevitable.