Thursday, December 27, 2012


Agriculture provides significant support for economic growth and social transformation of the country. As one of the world’s largest agrarian economics, agriculture plays a crucial role in ensuring food security while also accounting or a significant share of India’s Gross Domestic product (GDP). It engages almost two-thirds of the product (GDP). It engages almost two-thirds of the workforce in gainful employment. Several industries workforce in gainful employment. Several industries such as sugar, textiles, jute, food and milk processing etc. depend on agricultural production for their requirement of raw materials. On account of its close linkages with other economic sectors, agricultural growth has a multiplier effect sectors, agricultural growth has a multiplier effect on the entire economy. In order to sustain agricultural growth for meeting food requirements of growing population, policies and strategies need re-orientation with appropriate response mechanisms to meet not only food grain and buffer stock requirements, but also, to ensure livelihood security in times of calamitous incidents both natural and human driven.

Deceleration in Agricultural Growth:
The share of agriculture in Gross State Domestic product (GSDP) has declined significantly during the last two decades. The agriculture sector in India accounted for 17.57 percent of the GDP (at constant 2004-05 prices) in 2010-11 compared to 18.9 percent in 2004-05. Likewise agriculture sector witnessed a growth of 2.1 percent during the Tenth Plan. The sector registered a growth of 5.8 percent in 2005-06, 4.0 percent in 2006 -07 and 4.5 percent in 2007 – 08. However, there was a slowdown in agriculture growth in 2008-09 to 1.6 percent. Plan wise growth rate of GDP and Agri. GDP is given in table 01.

Environmental Challenges for Indian Agriculture: Issues and imllications
The Challenges for Indian agriculture are, to increase production, while minimizing environmental impact. This includes conserving and protecting the quality of the resources that determine the performance of agriculture like land, water and air Reductions, in yield, although determined by many factors, may be partially a consequence of land factors, may be partially a consequence of land and water exploitation. Below are the observations based on limited information available on land degradation and the relationship between quality and productivity of soil.

a.Degradation of Land:
It is observed that land degradation is more or less a universal phenomenon spread across all the states. BY the early 1980s approximately 53 percent of india's’geographical area had been considered degraded. Water logging affected about 6 percent of the cultivated area, while alkali and acidic soils both affected about 3 percent. The major process of land degradation is soil erosion contribution to over 71 percent of the land degradation. One third of this land was degraded by human activities while nearly one half was degraded by a combination of human and natural causes. Recent research found a negative ad significant negative relationship between land degradation and food grain productivity in both the 1980s and 1990s.

b.Depletion of Ground water:
Water is another major constraint for Indian agriculture. During the green revolution period water consumption in agriculture has risen sharply as the net irrigated area increased from 31.1 to 54.68 million to 20.46 million hectares during the same period. Groundwater, one of the India’s major sources for irrigation, is being rapidly depleted. The problem of groundwater depletion has been reported from rainfed states like Andhra Pradesh, Karnataka, Rajastan, Madhya Pradesh, Chattisgarh and Gujarat.

c.Imbalanced Use of Chemical Fertilizer:
The use of chemical fertilizers is concentrated in the two major crops namely; rice and wheat; together they constitute nearly two third of the total chemical fertilizers use in the country. Similarly, the use is concentrated in states like Punjab, Haryana, Andhra Pradesh and Tamil Nadu, where the rate of NPK use has already gone beyond 100 kgs. Per hectare. Fertilizer application rose more than five-fold between 1970 and 2002. Imbalanced proportioning of chemical nutrients is a major problem associated with fertilizer application in India. It has been observed that heavy use of NPK has negative impact on environment.

d.Quality of Pesticides Used:
Pesticide consumption increased from 24.32 million tones in 1970-71 to 46.2 million tones in 1999-00. It may noted that about half of the pesticides registered with the Indian Pesticides Registration Committee are banned. Of course, this does not mean that all the banned products have the same effect on Indian soils. However, India accounts for one third of the cases filed with WTO on pesticide poisoning. Evidence suggests the needed for proper planning in order to promote and regulate pesticides use in the country. This finding has been supported by the fact that the farmers have only limited awareness of the hazardous effects of pesticides and at the same time have little information on the environment-friendly alternatives.

e.Impact of Climate Change on Indian Agriculture:
Climate change refers to the statistical variations in the properties of the climate system such as changes in global temperatures due to natural or human drivers over a long period of time. Climate change could drastically alter the distribution and quality of natural resources thereby adversely affecting the livelihood security of the people. Some of the major impacts are discussed below.

Impact on Crops:
There would be adverse impacts on yield and productivity o wheat and rice. 15-17% decrease in the yields of wheat and rice for a 2°C rise in temperature. Wheat, which is generally grown in the winter, is predicted to be affected more than rice. In wheat, grain number and weight is reduced due to prolonged high temperatures and drought conditions. Climate change is also likely to have significant effect on the quality of plantation ad cash crops such as cotton, fruits, vegetables, tea, coffee, aromatic & medicinal plants, etc.

Impact on Soil and Water Resources:
Availability and quality of both surface and ground water would have effect on quality and quantity of grain. Reduction in ground water recharge will affect irrigation potentials. Possibilities of salinetion of land due to se water ingress and salt accumulation result in to degradation of soil quality and moisture content.

Impact on Insects and Diseases:
Insects have very high degree of adaptability to climate change. Change in climate is likely to bring about a change in the population dynamics, growth and distribution of insects and pests thereby, upsetting crop-pest balance. These changes could lead to enormous crop losses in altered environment. Climate change would decrease plant defense mechanism and creates more favorable environment for pests and insects.

Impact on Livestock and Fisheries:
Impacts of climate change on livestock will be felt in the form of elevated body temperatures, increased respiration rates, decrease in feed intake, etc. Indirect impacts would be observed in the form of reduction in grazing land water availability, decline in available cattle feed, emergence of new diseases, etc. Thermal or heat stress would impact animal production and profitability in dairying due to lower feed intake, milk production and reproduction.

Impact on Livelihoods, Food Security and Economy:
The impact of climate change on agriculture has large detrimental effects on availability of food, livelihoods and the overall economy. Lack of sufficient income to purchase food is a major factor contributing to food insecurity; hunger itself contributes to poverty by lowering labor productivity, reducing resistance to disease and depressing educational achievements.

Key risks to Indian agriculture from climate change:
The agriculture and allied sector in India is exposed to potential risks arising from climate variability and climate change which are expected to exacerbate the stress on Indian agriculture. Major risks are such as, decline in yields, increased farm expenditure, reduced farm incomes and increased threat of food insecurity and malnutrition. Significant negative impacts are being projected in the medium – term (2012 – 2039) such as reduction of agriculture yields up to 4.5 – 9 %, fall in GDP growth up to 2% per annum and reduction of agriculture yield in long term.
Indian agriculture has major challenges to ensure food security for growing population, which is estimated 310 million tonnes of food grains in 2050, stagnation of net-sown area. As a result, agricultural productivity has been witnessing stagnation in recent years.

Policy measures to Sustainable Agriculture Development:
Fostering rapid, sustainable and broad-based growth in agriculture is a key priority keeping in mind the overall socio-economic development path of the county, especially in the light of existing vulnerabilities that relate to a shrinking land resource base, and issues emerging due to climate change. To overcome this problem we need strategic approaches which balance environmental health and economic profitability in agriculture to promote social and economic equity.
Sustainable Agriculture is a special kind of agriculture along with farming technique which makes maximum utilization of the environment without causing any form of harm to it. The Out puts from this sustainable Agriculture are devoid of any types of inorganic chemicals such as pesticides and insecticides. This farming technique uses the organic way of farming through the conservation of natural resources and maintenance of ecosystem functions. All these factors produce the products in a more environment friendly manner and are thus healthier for the consumers to consume . Following are the initiatives taken by the government.

Improved Crop seeds, Livestock and Fish culture
Biotechnology is an important tool for the development of genetic resources with greater adaptive capacity to cope with changing environments . It has huge potential for combating vulnerabilities in crops, livestock and fisheries. The rich indigenous genetic resources in the crops, livestock and fisheries sector should be conserved, catalogued and advantageously used while also conserving the agriculture heritage of the country. Relevant technologies should be used for rapid bulking of improved varieties of crops, livestock and fishes. Public partnerships should be promoted in development, management and dissemination of the improved varieties.

Water Efficiency:
Two-thirds of the cultivated land in India is rainfed and suffers from water scarcity. Effective management of available water , increasing water use efficiency and establishment of additional sustainable sources of water emerge as the primary issues that need to be addressed. Strategies and technologies under this dimension must be coupled with demand and supply side management solution to enhance water use efficiency for irrigation. The role of local institutions in managing water allocation and utilization will also be crucial for promoting efficiency. Policy instruments will have to be leveraged to encourage adoption of technologies for enhancing water use efficiency and to promote public-private partnerships.

Pest Management:
Pesticide consumption in India has increased over time and its injudicious use has created problem like development of resistant strains in insect and plant pathogens, resurgence of pest species, direct exposure to the applicator. Pesticide residues in feed and water affect livestock health due to direct and indirect exposure in the course of pest control measures . Strategies suggested under this intervention have to primarily focus on establishment of decision and information support systems for pest and disease surveillance, demonstration support systems for pest and disease surveillance, demonstration of best practices and quick response mechanism that are at par with the norms to deal with other disasters or naturals calamities.

Improves Farm Practices:
The most effective way to address climate change is to adopt a sustainable development pathway by shifting to environmentally sustainable technologies and adaptation of energy efficient equipments , renewable energy, and conservation of natural resources. Improves agronomic practices have the potential to help reduce farm level losses through improves soil treatment, increased water use efficiency, judicious use of chemicals.

Nutrient Management:
Plant nutrient management to increase soil nutrients and thus enhance crop productivity, it is a major technological challenge for ensuring food security and sustaining rural development. Soil health can be improved through several site and soil –specific management options. Application of integrated nutrient management techniques has been found to increase nutrient use efficiency by integrating and balancing the nutrient does in relation to nutrient status and crop requirement.

Agricultural Insurance:
Agricultural insurance is an important mechanism by which risks to agricultural output and income can be addressed . Crop insurance incentivizes farmers to adopts innovative options by spreading the risks over space and time. Deficiencies in the existing framework of assessment of crop damage and prompt settlement of claims need to be addressed so that a disaster mode of operational efficiency is institutionalized. Research and development activities for developing new insurance products in the light of new risk emerging from climate change also need to be taken up . An effective design and efficient implementation mechanism is required to ensure timely implementation mechanism is required to ensure timely benefits especially to the small and marginalized farmers.

Credit Support:
Adequate , united and timely credit support to farmers is essential for sustaining farm productivity, especially when it comes to small and marginal farmers. Easy and timely financial support provided to farmers can help in adoption of improved management practices including resource conservation technologies, diversification, and post harvest value addition processes etc. which would contribute to reducing risk and enhancing farm incomes. Facilitating providing financial support through input dealers, NGOs, Self Help Groups (SHGs) etc. Would help in providing access to credit to the needy, small and marginalized farmers, which facilitate them to manage the additional risks arising from climate change in a sustainable manner.

Inadequate marketing infrastructure , presence of large number of intermediaries, lack of market information and inadequate storage facilities result in huge post harvest losses in the food supply chain. Some of the major initiatives need to be taken up under this head such as ; creating market aligned production systems; strengthening post harvest management , storage, marketing and distribution system; strengthening timely access to farmers to quality inputs; strong farmer institution industry interface and encouraging food processing industries and greater exports.

Access to information:
Effective communication approached are very important for farmers to adapt with market fluctuation or climate change. Fresh strategies for management of information may be required to sustain production levels. At the level of the farm, focus needs to be on enhancing awareness of farmers as well as the developmental agencies with the latest scientific research, market information, and policy initiatives so that they are empowered to take informed decision for maximizing farm productivity.

Livelihood Diversification:
Livelihood diversification plays a major role in providing options of supplementing income from core agricultural activities by providing additional support to agricultural income under conditions of climatic and non-climatic stresses. The strategies under this dimension would aim to promote diversification of agriculture into other high value crops and horticulture; research, development and extension of crop-livestock farming systems; agro-forestry, crop-fish farming , etc.

The journey of Indian agriculture and its associated environmental problems has brought about recognition that future agriculture growth and productivity will have to occur simultaneously with environmental sustainability. The environmental challenges, especially in terms of land degradation and ground water depletion, water logging and excessive use of chemical inputs are posing problems for the future of Indian agriculture. To address the problems, policies have laid emphasis on promoting sustainable production system while at the same time , exploiting its fullest potential and thereby ensuring food security, equitable access to food resources, enhancing livelihood opportunities and contributing to economic stability at the national level.

Source: Kurukshetra

Tuesday, December 18, 2012


Time was when most villages in India used primitive means to light up their houses and cook their food. These villages were out of the radar of electricity.

Today, “almost all the villages in the country have been electrified,” in the words of prime minister Dr. Manmohan Singh . In his Red fort address on August 15,2012, he said the government would take steps to ensure that every house in every village would be provided with electricity in the nest five years-2017. Great news for the villagers!

However, performance and record so far have not been too encouraging.

According to a 2011 data given by the International Energy Agency, of the 1.4 billion people of the world who have no access to electricity, India accounts for over 300 million. Some 800 million Indians use traditional fuels – Fuel wood, agricultural waste and biomass cakes – for cooking and general heating needs. The Agency estimates India needs an investment of at least 135 billion dollars to provide universal access of electricity to its population.

At the time of independence, there were a total of 1500 villages which had electricity. The country had since marched ahead and achieved electrification of over 493,000 villages by the end of July 2009.

In fact , the government in 2004 had promised that it would provide electricity to all villages by 2012. The programme in 2004 had envisaged 100% village electrification by 2009 and 100% household electrification by 2012. But the targets were missed. The original target, according to the Planning Commission, had envisaged electrifying at least 156,00,000 households per year for the following three years.

Village Electrification

Rural Electricity involves supply of energy for two types of programmes- production oriented activities like minor irrigation , rural industries etc electrification villages.

According to an earlier definition, a village is classified if electricity is being used within its revenue area for any purpose whatsoever.

This definition of village electrification was reviewed in consultation with the State Governments and State Electricity Boards and a new definition was adopted. A village will be deemed to be electrified if electricity is used in the village for any purpose whatsoever . The number of household electrified should be minimum 10% for villages which are unelectrified, before the village is declared electrified.

Rural electrification was taken up in each of the Five year Plan. Each plan had programmes ear marked for village electrification.

While some of these programmes were implemented in certain designated schemes, others were implemented as routine plan implementation.

The rural electrification programme got a boost in the period of the third Five year plan, with the establishment of the “Rural Electrification is concerned, with some of the other five year plans not even reaching half of its slated targets of electrification. The first Five year Plan (1951-56): Support for irrigation Projects. Track record of rural electrification was 1 electrified village per 200 villages.

Five year plans

The second five year plan (1956-61): “Rural Electrification” declared as “ Special interest area “, and proposed to cover all towns with a population of 10,000 or more . Only 350 out of a total of 856 were eventually electrified. The third Five year Plan (1961-66) ensured the establishment of the “ Rural Electrification Corporation” and over 30,000 villages were electrified, as against a target of 37,000 villages.

The fourth and fifth five year plan (1969-74 and 1974-1979) focused on target areas such as energization of pump sets and also issued guidelines for village grind connectivity for all villages with a population of 5000 and above.

The sixth, seventh and eighth five year plan (1980-89 and 1992-1997) saw a number of projects such as “ improved chulhas or cook stoves”, “Bio-gas plants” etc. These plans also saw the establishment of the Ministry of New and renewable Energy or MNRE. This period saw the launch of “ accelerated rural electrification programme”
The ninth, the tenth and the current eleventh Five year plan (1997-2012) saw the launch of kutir jyothi Yojana and the Rajiv Gandhi Rural Electrification programme.

The rural electrification programme is currently under a comprehensive scheme called the “Rajiv Gandhi Grameen Vidyutikaran Yojana”, which was launched in 2005. This programme has taken over the hitherto existing schemes such as the “ Kutir Jyoti Yojana” and also adopted some salient features of the earlier electrification programmes and incentives of the Government such as , the Minimum Needs Programme, the Pradhan Mantri Gramodaya Yojana, the Accelerated Rural Electrification Programme and the Accelerated Electrification of 100,000 villages and one crore households.

The current programme envisaged the creation of a rural electricity distribution backbone with at least one 33/11KV sub-stations of adequate capacity in geographical blocks where these do not exist, a village electrification infrastructure with distribution transformers of appropriate capacity in villages and other habitations and decentralized distribution generation systems based on conventional sources where grid electricity supply is not feasible or cost effective.

The rural electrification programme aims at providing grid or centralized electricity to a many villages as possible and looks at a decentralized or distributed generation approach only in areas where grid infrastructure may seem difficult due to either tough or hilly terrains or remote areas which are not serviceable through normal transmission lines.

The rural electrification programme literally took off only in the mind 1950s, and saw a rather steep growth in village electrification in the 1960s, 70s and 80s up till 1990. The three decades between 1960 and 1990 saw close to 450,000 villages being electrified. This put the average number of villages electrified during that period at 15,000 per annum.

However , the period from 1991 to 2009 saw a huge slump in the speed of rural electrification, with just about 12,116 villages being electrified from a total of 481,124 electrified up till 1990 to 493,240 villages electrified up till December 2009. The average number of villages electrified in this period(1991-2009) was 637 per annum. In the mid 1990s and early 2000, India saw a wide range of reforms in the electricity sector, starting from unbundling of the various operations in the sector such as, generation, transmission and distribution amongst separate companies, privatizing some of the operations , introducing a regulatory framework both at the central level as well the state level and in the formulation and promulgation of a new electricity act to replace all the then existing laws governing the electricity sector.
The period since the mid 2000 continued to see a slump in the progress of rural electrification primarily due to the challenge of providing transmission and distribution infrastructure to rural areas. With the villages closer to the grid and the major towns and cities having already been electrified , what remained un-electrifies were villages which were far from main grid lines and towns. Experts say that the fact that the governments were determined to provide villages with centralized grid electricity connection and not look at decentralized models was the main problem of slow electrification and continues to remain the main problem.

The International Energy Agency estimates India will add between 600 GW to 1200 GW of additional new power generation capacity is equivalent to the 740GW of total power generation capacity of European Union (EU-27)in 2005.

As of December 2011, India has an installed capacity of about 22.4 GW of renewal technologies based electricity, exceeding the total installed electricity capacity in Austria by all technologies.

There are a few designated programmes, including renewable energy schemes that are now being implemented with some success.

Under Rajiv Gandhi Grameen Vidhyuthikaran Yojana (RGGVY) programme, 90% capital subsidy was provided for rural electrification infrastructure. The remaining 10% was loan assistance on soft terms by REC. The scheme , inter-alia, provided for funding of electrification of all un-electrified Below Poverty Line (BPL) households with 100% capital subsidy. The scheme aimed at electrifying all un-electrified villages over a period of four years and provides access to electricity to all rural households . India has over 600,000 villages and hamlets put together , with over a 100 million households in the rural areas alone.

The National Solar Mission.

The Government in November 2009 approved the Jawaharlal Nehru National Solar Mission , Which creates policy conditions for quick renewable energy diffusion across the country. 20,000 MW of solar energy is to be deployed by 2022 through leveraging domestic and foreign investments, engaging in research and development, manufacturing and deployment to make this sector competitive internationally. In 2010 the Mission has gained investments in 200 MW of grid-connected solar power plants, with another 500 MW to be implemented soon.

Wind and Hydro Energy Expansion

The Ministry of Non-conventional Energy sources has introduced generation – based incentives, where investors receive a financial incentive per unit of electricity generated over ten years. This should create a level playing field between domestic and foreign investors, which should drive more investment in this area. The Global Wind Energy Council (GWEC) estimates conservatively that the wind energy capacity in India could be 24 GW by 2020 and 30.5 GW by 2030. If all planned policies are implemented and all current targets met, capacity could be as high as 40 GW in 2020 and 108 GW in 2030.

Presently, small hydro (up to 25 MW) has capacity of over 15,000 MW in India . About 300MW per year (2,700 MW total) is being installed, with 70% of Investments coming from the private sector. Hydro projects up to 25MW capacities are termed as small hydro , and this energy stream has a potential of over 15,000MW.

The aim is to double the current rate of growth, including 500MW per year in the next few years.

Source: Kurukshetra


Environment and economy are interdependent and need each other. Development that ignores its repercussions on the environment will destroy the environment that sustains life forms. What is needed is sustainable development which will allow all future generations to have a potential average quality of life that is at least as high as that which is being enjoyed by the current generation.

The term ‘sustainable development’ was popularized in Our Common Future, a report published by the World Commission on Environment and Development (WECD) p.43”development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. Acceptance of the report by the United Nations General Assembly gave the term political salience and in 1992, leaders set out the principles of sustainable development at the United Nations Conference on Environment and development in Rio de Janerio, Brazil.

Sustainable development means convergence between the three pillars i.e. economic development, social equity and environmental protection. Sustainable development is a fluid concept and various definitions have emerged over the past two decades. Despite an on-going debate on the actual meaning, a few common principles tend to be emphasized. The irst is a commitment to equity and fairness As such priority should be given to improving the conditions of the world’s poorest and decisions should account for the rights of future generations. The second is a long-term view that emphasizes the precautionary principle, i.e., “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”. Third, sustainable development embodies integration, and understanding and acting on the complex interconnections that exist between the environment, economy, and society. This is not a balancing act or a playing of one issue off against the other, but recognizing the interdependent nature of these three pillars.

Many papers have been written on the relationship between economic growth and environmental preservation since R.C. d’Arge published his Essay on economic growth and environmental quality in 1971. The main questions arising before the environmentalists are: Is long-run economic growth compatible with environmental preservation? Is sustainable growth viable? What would be the effect of greater concern for the environment over economic growth? How do environmental externalities influence growth rate, and thus, what is the effect of environmental policy on economic growth?

These questions have been analyzed in many of these papers in the framework of stationary models and exogenous growth models. In this type of models, either there is no long-run growth or if there is long –run growth it is exogenously determined, so that environmental quality may have a negative effect on capital accumulation or no effect on the growth rate. In addition, in this literature the emphasis has been put on analysis of the efficient growth path without paying much attention to growth based on market equilibrium. Sincce the appearance of the new theory of growth at the end of the eighties and the start of the nineties, a series of papers has been published in which these questions are addressed in the framework of endogenous growth models.

Many studies have explored the development – environment relationship. The Environment Kuznet Curve (EKC) is one hypothesis that has elicited much attention (Arrow et al.1995). The EKC concept was put forward in early 90s by Grossman and Krueger (1991) as well as in World Development Report (Shafik and Bondyopadhaya 1992). This hypothesis establishes an inverted U-shaped relationship between economic growth and environment degradation. It assumes that environmental gradation increases when per capita income reaches a certain point, or the turning point.

Relationship between Environmental Kuznet Curve and Economic Development:

In the early stages of economic growth, the awareness of environmental problems is low or negligible and environment friendly technologies are not available. Environmental degradation increases with growing income up to a threshold level beyond which environmental quality improves with higher capita income (Dinda 2004).

Kuznet (1955) predicted that the changing relationship between per capita income and income inequality is an inverted U-shaped curve. As per capita income increases, income inequality also increases at first and then starts declining after a turning point (TP). So the distribution of income becomes more unequal in early stage of income growth and then the distribution moves towards greater equality as economic growth continues (Kuznet 1955). After 1990, the Kuznets curve got a new existence i.e. the level of environmental degradation and per capital income follows the same inverted U – shaped relationship as does income inequality and per capita income. The inverted U-shaped relationship between economic growth and measured pollution indicators) environmental quality) is known as EKC. Kuznet’s name was attached to the inverted U-shaped relationship kuznet curve which ascertains the relationship between income inequality and economic development. However, Panayotou (1993) first coined it as the Environmental kuznet Curve. The relationship can be shown by an inverted U – shaped EKC. The EKC establishes a long term relationship between environmental impact and economic growth. As economic development speeds up with the intensification of agriculture and other resource extraction, at the take-off stage, the rate of resource depletion begins to exceed the rate of resource regeneration and waste generation increases in quantity and toxicity.

At higher levels of development, structural change towards information-intensive industries and services coupled with increased environmental awareness, enforcement of environmental regulations, better technology and higher environmental expenditures results in leveling off and gradual decline of environmental degradation. As income increases, there is transition in the economy. Economy moves from natural process of economic development i.e. from a clean agrarian economy to a polluting industrial economy, and again to a clean service economy (Arrw et al. 1995)

Economic development can be traced back to the industrial revolution and to the industrial development in the modern world. The industrial revolution irreversibly changed the nature of labour, consumption, family structure, social structure and the thought processes of the individuals. The amazing thrust in the field of production, power, science and technology brought along with it even the bad effects of environmental degradation. Development may b defined as double-edged sword, which has far reaching effects on the environment. The ill effects of development are many but unlike the benefits, they are not visible and are camouflaged.

The following ill effects of development had been discussed in agenda 21 of the Rio Conference of 1992:

Atmospheric Pollution: includes (i) Smog caused by chemical reactions between pollutants derived from different sources, mainly automobile exhaust and industrial emissions, acid rain occurs when pollutant like sulphuric acid combines with droplets of water in the air, the water becomes acidified. (ii) Acid rain kills strees and harms animals, fishes and other wild life, green house effect or global warming is a common fact of atmospheric pollution. (iii) Global warming is increasing due to increase in carbon dioxide content in the air . This carbon dioxide builds up a blanket and traps the heat from going out which causes unusual heat in the earth’s surface. (iv) Ozone depletion is the major trouble of the development rather industrial development. Our earth is surrounded by layers of atmosphere, ozone gas which protects harmful ultra violet rays from coming in the earth’s surface is found in the stratosphere. The release of chlorofluorocarbons (CFCs) from aerosol cans, refrigerators, air conditioners etc. are continuously harming ozone layer causing holes and allowing the radiation to reach the earth.

Air pollution effects health in many ways, may be short or long term short term effects include irritation of eyes, nose, throat such as bronchitis pneumonia.

Marine Pollution:

Oceans are the largest ecosystem on earth. Seventy five percent of sea pollution is based on land activity.

Some major types of contamination are:

(i) Oil spills which primarily effects marine mammals and reptiles like turtles that need surface to breathe and breed. Adult fishes living near shore waters and juveniles in shallow water nursery and birds who live ear shorelines are vulnerable to adverse effects of oil pollution.

(ii) Sewage adds to suspended particles in the water column. This sewage is hard to detect in open coast but in semi-enclosed areas, their effects are devastating.

(iii) Garbage has huge effect on ocean life. Litters on land find their way to the oceans being carried by the wind; as a result tons of plastic bags, cigarette buds, bottles etc. are always floating in the sea. Sea turtles often mistake plastic bags with jelly fish which blocks their digestive system and finally leads to death.

(iv) Radioactive wastes – the world’s oceans have been dumping ground for radioactive wastes since 1944. Dumping of high radioactive wastes in the ocean is no longer permitted but low level wasters are still dumped in deep sea. May be in near future its devastating effect will be seen by our coming generations.

(v) Thermal pollution only affects the communities adjacent to the discharge. Electrical generating plants along the coastlines use marine waters for cooling purposes which leads to heated water being expelled in the marine environment, tropical areas are affected by thermal discharge. For e.g. mangrove trees in a heated bay will not reproduce.

(vi) Eutrophication means release of extra nutrients into coastal waters. Fertilizers used on land are washed into the ocean through rivers: streams etc. Which may lead to the birth of phytoplankton blooms as red tides, yellow or green foams, a higher frequency unhealthy eco system. Toxicity of the recent blooms are increasing which has direct effect on the organisms that feed upon them.


means permanent destruction of indigenous forests and woodlands. Forests are home for many important species, they also play a major role in ecosystem. Forests produce huge amount of oxygen ,tend to help replenish nutrients in land and prevent desertification. Forest are also a main source of timber. If people exhaust their supply of forests, they will no longer be able to continue using them as the source of building materials, heating fuels and paper (Bragaw, 1999)


“Land degradation means reduction or loss, in arid, semi-arid and dry sub-humid areas, of the biological or economic productivity and complexity of rainfed cropland, irrigated cropland, pasture, range, forests and woodlands resulting from land uses or from a process or combination of processes include soil erosion caused by wind or water, deterioration of the physical, chemical and biological or economic properties of soil degradation is defined as human – induced phenomenon, which lower the current or future capacity of the soil to support human life . In drylands, soils are especially vulnerable to degradation due to the slowness of their recovery from a disturbance (“Desertification”, 2001)

Hazardous Wastes:

The generation of hazardous wastes is one of the major consequences of development. As defined by the High powered Committee Report, hazardous wastes refer to “ any substance, whether solid , liquid or gaseous form, which has no foreseeable use and which by reasons of any physical, chemical, reactive, toxic, flammable , explosive, corrosive, radioactive or infectious characteristics causes danger or id likely to cause danger to health or environment, whether alone or when in contact with other wastes or environment, and should be considered as such when generated, handles, stored transported, treated and disposed of.” Hazardous wastes are generally a by-product of the industrial operations which involve the use of heavy metals such as arsenic, cadmium, lead, mercury and processes which utilize different categories of oil and petrochemicals. The main difficulty is recycling of hazardous waste is itself very hazardous and is more toxic in concentration that the material recycled.

Climate change:

“ If temperature rise by almost 6 c over the next 100 years, then the rising sea levels, shifting weather events could cause massive traumas both for human populations and for nature” says intergovernmental panel on climate change (IPCC). A blanket of water vapour and other green house gases ( Carbon dioxide, methane, nitrous oxide) traps some of the sun’s radiation from going back causing warming of the atmosphere. The main cause of this global warming is carbon dioxide which is produce by burning of fossil fuels and another is methane which traps heat 30 times more than carbon dioxide. Methane emissions came from cultivation of rice , pipeline leaks, the flatulence of cattle and forest fires . It is predicted hat if global warming keeps on following the same pattern then a day will come when the glaciers and ice-caps will melt and cause the sea level to rise and tropical diseases like malaria will spread in the tropical climates.

Decline in the Bio diversity:

Biodiversity is often thought of as the variety of organisms on the earth. It also includes factors like ecological diversity ( the variety of ecosystem and ecological communities) and genetic diversity (the range of genetic difference found within and between species). All the three aspects are crucial for the success and development of life on the earth. Since environmental conditions are constantly changing, only diversity can ensure that some individuals and species will be able to adapt to the changes ( Biodiversity ,2001). All these have profound value for human beings. The value of biodiversity lies not only on direct use of the nature’s product but also the vast range of products prepared from these ranging from the food , medicines, fibres and materials. Biodiversity also guarantees a permanent source of new genetic materials for future breeding programmes. Life on the earth is currently undergoing a sixth mass extinction event. Its extent is only vaguely known, species are only recorded as extinct after their last individual has also died.

But from this we cannot draw a conclusion that development has only led to the degradation of the environment. Every coin has another side. It has been proved by many researches that development in technology has led to the saving of the environment in many ways. “ The invention of new technology is not necessarily a threat to the environment; rather it is usually the best hope of environmental improvement”(Ridley2002).

The world development report , 1992 linked the economic development with the environment. The main message of the report was the need to integrate environmental considerations into development policy making. The report argued that continued and accelerated economic and human development is sustainable and can be consistent with improving environmental conditions.

A more fruitful analysis of the relationship between economic development and environmental impact depends upon several factors as :

Specific Effects:

There are large differences in state level per capita emissions due to the enforcement of pollution laws and the use of outdates industrial technology . Low income states are still sources of emissions because of land conversion through burning and replanting of tree crops while high income states are emitting increasing emissions because of industrial and municipal wastes.

Production Structure:

Developed countries have fairly stable production structures, whereas rapidly industrializing and developing countries have unstable production structure. A change in the composition of consumption has resulted in a downturn in pollutants (Rothman,1998).

Industrial change:

Along with the economic development , societies advance with their social, legal and fiscal infrastructure that are essential to enforce environmental regulation (Bhattarai and hamming , 2001). Institutional changes triggered by citizens’ demand for cleaner environments are more likely to occur in democratic countries 9Shafik and Bandyopadhyay,1992).

Technological Progress:

Technological progress leads to greater efficiency in the use of energy and materials . Thus, a given amount of goods can be produced with successively reduced burden of natural resources and environment. One aspect of the progress can be better and more efficient reuse and recycling of materials, which (Coupled with greater efficiency in use) can yield large resource saving.

Research and development:

As income grows , people can adopt better and efficient technology that provide cleaner environment. This preferential behaviour of people should be reflected through their income elasticity. The income elasticity of public research and development funding for environment protection is positive (Komen et al., 1997).This indicates the key role of such public investments for environmental improvements in reducing environmental degradation. As income levels rise, decreasing relationship are found for some pollution indicators in developed countries. This effect of economic growth on pollution/emission differs substantially among high income countries. This also depends on the adoption of new technology.

Innovation and Adoption:

New technologies, unambiguously, improve productivity but create potential dangers to the society such as new hazardous wastes, risk and other human problems. These externalities are unknown in the early phase of diffusion of technology; in later stages regulation becomes warranted to address it . Once the technology is regulated , this may stimulate the gradual phase out of existing technology. So , a cyclical pattern arises in technologies, which first diffuse, then become regulated and finally are phased out by next generation of technologies (Smulder and Bretschger, 2000).

Technological and Organisational change:

Improved technology not only significantly increases productivity in the manufacture of old products but also the development of new products. There is a growing trend among industries to reconsider their production processes and there by take environmental consequences of production into account. This concern not only traditional technological aspects but also the organization of production as well a the design of products. Technological changes associated with the production process that may also result in change in the input mix of materials and furls (landmark,2002). The economy-wide reforms often contribute simultaneously to the economic, social and environmental gains ( Anderson and Cavandish, 2001; pasche,2002). Developing countries could learn from the experience of industrialized nations, and restructure growth and development (Munasinghe, 1999)-thereby avoiding going through the same stages of growth that involve relatively high (and even irreversible) levels of environmental harm.


We find that although there is inverse relationship between development and environment the developing (low and middle income ) countries of today have a unique opportunity to learn from the past history and thereby avoid some mistakes from earlier growth experiences. With increased awareness of environmental hazards and the development of new technologies in recent years that are cleaner than ever before , we might hope to see the developing countries turn their attention to preservation of the environment at earlier stages of development than has previously been the case.



The eastern region of India is all set to increase its share in the country’s rice production. The initiatives taken by the Central and the state Governments of the region have already resulted in an impressive increase in production of food grains with the area now turning into a food surplus zone from a food deficit one.

In order to address the constraints limiting the productivity of rice-cropping system in eastermindia , the government launched a programme ‘Bringing Green Revolution in Eastern India’(BGREI) two years back. It operates in seven states viz. Assam, west Bengal, Odisha, Bihar, Jharkhand, Eastern Uttar Pradesh and Chhattisgarh.

This programme , since its launch in 2010-2011 as a Prime Minister’s initiative based on the Inter Ministerial Task Force, has yielded remarkable results in rice and wheat production in the region . Under this programme Bihar and Jharkhand have shown quantum jump in rice production. Stupendous efforts have been made by the State Governments in extending technologies and practices to the farmers of the region for record production of rice and wheat.

The eastern region was selected for the project essentially to harness the region’s abundant water resources, necessary to enhance the production of food grains. Water management is the main problem in eastern India, not water availability . the premise is that with abundant water , it would be made possible to increase crop productivity if better agronomic practices are adopted, high quality seed is used and other inputs like fertilizers and pesticides are applied judiciously. While Punjab, Haryana and western Uttar Pradesh ushered in Green Revolution in India in the sixties, over – exploitation left these three states virtually depleted in terms of water resources. This became a major concern of the country’s agriculture planners.

Clearly , India needs to boost its food production to feed its ever-increasing population. The only way to ensure food security, a concern of every Indian, is to grow enough food grains domestically. The eastern region has the potential of setting in a new Green Revolution. There is no reason why it cannot become the food bowl of the nation, given the high priority and focus that the central and the State Governments are giving to BGREL.

Therefore , a bouquet of activities have been taken up that include block demonstrations of rice and wheat technologies in cluster mode approach; promoting resource conservation technology(zero tillage under wheat); creation of asset building activities for water management (shallow tube wells/dug wells/bore wells, distribution of pump sets); promotion of farm implements and need based site specific activities etc.

Adoption of hybrid rice technologies, line transplantation, SRI , micro nutrients, drum seeders are some of the success stories that have emerged from the hard work put in by the State administration in the region.

However, for the stability in production full potential of this enormously resource endowed region has to be realized. Promotion of production technologies would need to be backed by effective marketing arrangements, procurement operations, power irrigation, value chain and rural infrastructure, institutional development for credit supply and lastly innovative approaches in extension to e able to reach out to a very large number of small and marginal farmers. Moreover the farmers should get the minimum support price for their produce and for that, the awareness about the grading standards should be extended to the farmers. A committee of Chief Ministers of these States has been set up to oversee implementation of BGREI at top level and to ensure that the scheme continues to receive high priority.


Business intelligence applications for better decision-making

There is a need for faster decision-making in an environment of increasing complexity and information overload. Business intelligence (BI) applications help enterprises take fact-based decisions rapidly by better utilising and presenting data from within and outside the enterprise.

This article describes the three broad phases in the evolution of IT applications for enterprises, from office automation to business intelligence. Most large enterprises have passed Phase 1 or 2 and are poised to reap the benefits of Phase 3.

Phase 1: Office automation

During the first wave of IT enablement of enterprises, various business activities and processes are automated (e.g. invoicing, stock-keeping, accounting, payroll and others). These IT systems commonly known as ERP (enterprise resource planning), MRP (material resource planning), CRM (customer relationship management), HRMS (human resource management system), etc., speed up the business process and provide quick access to information across the enterprise.

Typically, they maintain records in a database at the lowest level with all details of the transaction. They are used for data entry and operational reporting.

Phase 2: Data management

Over time as office automation systems mature and became pervasive, it becomes apparent that enterprise data is siloed and fragmented across the enterprise. Data management becomes even more challenging when there are mergers and acquisitions and multiple data sets need to be consolidated.

These pose several challenges such as poor data quality, incompatibilities between data sets, duplication of data and overheads in managing multiple systems. Consequently, the next phase of IT evolution is targeted at simplifying the information landscape of the enterprise.

Master data management is an approach to standardise data comprising tools and technologies for classifying, normalising, consolidating and aggregating data across the enterprise to provide a consistent view. Typically, a data warehouse is established to centralise company-wide information on a uniform platform. This warehouse can be accessed by tools for reporting and analysis.

Phase 3: Business intelligence

Business intelligence is the emerging class of IT applications that use information assets to aid in better decision-making. A variety of tools and techniques such as data mining, predictive analytics and data visualisation are employed to provide valuable insights into past, current and future business metrics.

BI applications serve a critical function in achieving operational efficiency, integrated planning and coordination and monitoring.

Here are the highlights of BI applications.

Single version of the truth:

It provides consistent information in real time across the enterprise, thereby eliminating debates on the validity of data. It also visualises information through meaningful dashboards to allow for coordinated decision-making.

Metric trees:

Business performance metrics are related to KPIs and are computed at various levels within the enterprise. Metrics are linked to each other to create a metric tree, which connects the low-level performance metrics with high-level outcome measures.

The golden triangle (budget, time and quality):

One can foresee impact of changes in specifications and business case. This helps to manage the trade-off between budget, time and quality.

Business modelling:

It captures business dynamics in robust and transparent models.

These are useful for sensitivity analysis, simulation and scenario-based decision-making.

Looking backward, moving forward: It does not rely only on historic data to look into the future, but integrates external and internal data for better forecasting and predictive analytical capabilities.

It is vital for enterprises to be well-informed and take quick, fact-based decisions in the dynamic marketplace. Business intelligence offers a ripe set of solutions that plug into existing IT infrastructure and bring out valuable insights.

Source: The HINDU

Monday, December 17, 2012

The Trouble With Hurried Solutions

The World Conference on International Telecommunication (WCIT) that concluded on December 14 saw much heated debate. Some countries wanted to use the International Telecommunication Union (ITU) to gain intergovernmental control of the World Wide Web. Some saw it as an opportunity to democratise the Internet, by replacing U.S. and corporate domination of Internet policy, with a more intergovernmental process. Others insisted that the Internet must be left alone.

The result is that after many days’ deliberations, there was no consensus. The amended International Telecommunication Regulations (ITRs) document has not yet been signed by over 50 countries, of which some like the United States have refused to sign altogether, while others have said that they will need to consult with their national governments before signing.

This article discusses the broader issue under question, which is, whether ITU is the best forum to solve the cross-border problems that arise in relation to the Internet.


The ITU has been creating international policy from the days in which the telegraph was prevalent. Although it is now a United Nations agency, its existence predates the U.N. As technology evolved, forcing the telegraph to give way to the telephone, the ITU created new standards for telephony. It even rechristened itself from ‘International Telegraph Union’ to ‘International Telecommunications Union’.

The ITU performs an essential role in ensuring that multiple states with their varying technology, standards and legal systems, are able to interconnect and co-ordinate. Its harmonising rules and standards make co-ordination easier and cheaper than having each state come to an agreement with every other state. The ITRs within the ITU framework facilitate co-ordination by creating binding rules for member states.

Some countries’ proposals for the amendment of the ITRs would have affected content on the Internet substantially. However, after prolonged negotiation, the final draft that was under consideration contained an explicit statement excluding such content from the ITRs’ purview. This draft also came with a resolution that made reference to states’ elaborating their Internet related public policy positions in ITU fora, which was a source of controversy.

Some of the initial suggestions like Russia’s controversial proposal would have given the ITU greater sway over the Internet, permitting it to lay down global standards. These standards may have encouraged countries to inspect data transmitted across the Internet to check whether it is undesirable content raising serious privacy and freedom of speech concerns, especially in countries that do not protect these rights.

The global standards created by the ITU would have permeated to the companies that create the web-based applications that we use, and the resulting law and technological choices would have affected individual users.

Internet governance

The ITU makes its decisions using a traditional model that only seeks consensus between governments, and this is far removed from the way in which the Internet has been governed thus far. Therefore, although expanding the ITU’s mandate to the Internet may seem natural to those who have followed its evolution mirroring the evolution of information technology, the ITU’s manner of functioning is viewed by many as being at odds with the more multi-stakeholder and ad hoc system used to build Internet policy.

In the 1990s, John Perry Barlow proclaimed that cyberspace was outside national borders, and questioned the authority and legitimacy of a national government’s attempts to govern it. Over the years, it has become clear that national governments can exert jurisdiction in cyberspace: filtering content, launching surveillance of users, and creating law that impacts citizens’ behaviour online directly and indirectly.

However, governments’ exertion of will on Internet users is tempered greatly by the other forces that have a strong influence on the Internet. User-behaviour and content often depend on the policies of major service providers like Google, Yahoo, Twitter and Facebook.

Key standards and functions like the allocation of domain names and developing of Internet standards are managed by organisations like ICANN and IETF, which are not governmental organisations. Features like user anonymity are based on technological choices on the World Wide Web. Therefore, governments face significant obstacles and counterbalancing power when they attempt to impose their will on citizens online.

The ITU can weigh this power balance in favour of governments. Many fear that more government power will lead to more censorship, surveillance and stifling of the innovation that is integral to the evolution of Internet. But others support ITU intervention, in the belief that an international inter-governmental regulatory body would be more accountable, and would prevent corporate abuse of power.

Several of the aforementioned corporations, as well as regulatory bodies under question, are headquartered in the United States. There are those who see this as excessive U.S. influence on the Internet, eroding the sovereignty of other states, which have relatively limited influence over what their citizens can transmit and access online. These people see the ITU as a forum that can democratise Internet Governance, giving states shared influence over the web. However, this shared influence is resisted by those who find that the U.S. influence offers them more leverage and protection for their freedom of speech, than increased influence of countries that threaten this internationally accepted human right.

Powerful arguments in favour of increased ITU involvement include highlighting the dangers of abandoning the Internet to the free market. It is true that markets need some regulation to guard against malfunction and abuse of power by stronger players. However, the significant question is not whether these markets should be regulated, but how they should be regulated. Unfortunately, many of the arguments that supported expansion of the ITU’s mandate failed to establish why the ITU is the best solution to the problems plaguing the Internet, rather than being the most readily available reaction.

Any regulatory intervention must have very clear objectives, and some estimate of its likely impact. The intervention must not be considered in isolation but in contrast with other ways to achieve the same goals. Although some of the serious transnational issues plaguing the Internet need international solutions, the ITU, at least in its current avatar, is not necessarily the best remedy. It also remains unclear exactly what effect ITU intervention would have on the Internet — whether it would really offer solutions as intended, or whether it would prove more detrimental than useful, condoning of human rights violations and slowing the blistering innovation that is characteristic of the Internet.

Lack of consensus

Therefore, some of the initial concerns expressed by the countries that refused to sign the ITRs were legitimate. However, the final ITRs document addressed many of these concerns. The dissent emerged over the insertion of text in the preamble that recognised member states’ rights to access international telecommunication networks. These rights, being expressed only in the preamble, are not enforceable, even if they express intentions that are unacceptable to some.

The debates at the WCIT made it clear that the world is not yet ready to come to a unified position on this subject. Perhaps the ITU’s continuation in its path towards increasing, and making effective, multi-stakeholder participation will be the unifying factor some day, if it evolves into a forum which everyone sees as sufficiently democratic, transparent and accountable for Internet policy.

Source: The HINDU

Tuesday, December 11, 2012



Manufacturing growth in India is much below than what it should be. The employment and output generation in organized and unorganized manufacturing sectors exhibit a major imbalance. The share of the industrial sector in GDP has stagnated around 20-21% from 1991-92 to 2002-05, and thereafter actually declined to about 18% in 2010-11. The transformation of the agrarian economy directly to the one dominated by services, bypassing manufacturing has been a matter of concern for policymakers. This has inter alia, entailed a lop-sided growth with low employment elasticity of manufacturing growth and low value addition per unit of labour and capital. There is scope for improving efficiency and productivity in Indian manufacturing sector, only if India benchmarks itself with the globally competitive advanced nations. Benchmarking against the most competitive economies is mandates, if India needs to compete with the manufacturing giants in this era of globalization. India has, for various reasons, failed to expand its manufacturing base and capitalize on employment creation in the manufacturing sector . Several earlier attempts have not yielded the desired result of promoting growth in the sector. But the key to success will be policy implementation, but there are several challenges.

India is also not known for exports of manufactures and in a number of manufactured goods the country is not internationally competitive. National Manufacturing Council (2004) came up in 2006 with the National Strategy for Manufacturing. The Strategy paper not only identified a set of 12 challenges facing the sector ranging from general frame work conditions such as macroeconomics stability, and strengthening education and skill, infrastructure development to the needs for specific policies for promoting investments in technology and innovations and for increasing the usage of ICT in the manufacturing sector and improving firm level and specific industry level competitiveness. In order to deal with these challenges the paper made a number of general and specific recommendations. Following the publication of this government has also announced a number of sector specific policies , for instance , with respect to the automotive and telecommunications industry to name a few. Further , a number of general framework conditions have been created through the successive union budgets. A case in point is the raising the research and development (R&D) subsidy scheme to 200 per cent of the volume of R&D conducted and extending it to all industries. It is against this background of policies that yet another document called the National Manufacturing Policy (NMP) finally led to the clearance by the cabinet on October 25, 2011. Although , this is a well-crafted policy document having its various sections or parts clearly delineated, it does not contain a great deal of new ideas compared to the strategy document released almost five years ago. The NMP does indeed have a number of Merits even if at the same time it is in parts a mere repetition of various measures already taken by other policies.

Job Creation Target

The Policy document begins by setting the goals or targets for the Manufacturing sector in India :
(i) In a nutshell it aims to increase the share of the manufacturing sector in India’s GDP from the present level of about 15 per cent to about 25 per cent by 2025. (ii) And in that process creation of 100 million new jobs is an integral part of any attempt to take advantage of the demographic surge that the country is now experiencing.
(iii) The policy aims at improving local value addition by ensuring that the industry has most of the components, spare parts and raw materials locally available. No specific targets are fixed on value added and so the goal is expressed in vague terms which makes its monitoring virtually impossible. The average value added to the value of output ratio during the period 2000-2001 through 2007-08 works out to merge 16 percent. If this number is accurate, it refers, indirectly, t the import dependence of the manufacturing sector. The policy document alert one to this important issue of local value addition as a necessary condition for the manufacturing sector to increase its size.

In order to achieve these goals or targets, the policy prescribes appropriate policy action on five issues:
(i) encouragement to foreign investment and technologies,
(ii) improvement the competitiveness at the firm level,
(iii) reduction the compliance burden on industry, especially with respect to procedural and regulatory formalities,
(iv) encouraging innovation, and
(v) effective consultative mechanism to ensure mid-course correction. However , it should be pointed out that all these have been rehearsed elsewhere in other policy pronouncements ad even in the institutional structures established in the very recent past. Though, the mention of a consultative mechanism for mid-course correction is refreshingly new. In order to achieve its goals, the NMP proposes two new institutional mechanisms. The first its National Investment and Manufacturing Zone (NIMZs) and the second is a Manufacturing Industry Promotion Board (MIPB). The latter essentially to ensure coordination among central and state ministries.

The National investment and Manufacturing Zones (NIMs)

Global experience shows that clustering and agglomeration of manufacturing units provides distinct advantages as it gives substantial economies of scale in the use of industrial infrastructure, enhances supply chain responsiveness, provides easier access to market and human resources , and substantially lower logistic costs. This concept was operationalised earlier by the government through special economic zones, which catered broadly to the export sector , and cluster development schemes formulated for the small and medium enterprises. The new manufacturing policy attempts to further broad base these efforts by using the cluster approach as one of the key instruments to catalyze the growth of manufacturing as a whole . NIMZs will be developed as integrated industrial townships with state-of-the –art infrastructure and land use on the basis of zoning, clean and energy efficient technology necessary social infrastructure and skill development facilities.

These can lead significant cost savings as well as improved productivity from :
(i) increased supply chain responsiveness because of manufacturing consolidation near suppliers,
(ii) decreased time-to-market as companies can more effectively leverage the capabilities available with vendor in the cluster,
(iii) better and cost – effective availability of labour and also reduced talent recruiting efforts because of the power of cluster in drawing labour, and
(iv) lower logistics cost due to proximity of customers and /or suppliers etc. Economic analysis shows that these benefits can convert into 5% to 8% cost advantage for plants in the hubs compared to stand-alone plants. What are the ingredients for industrial hubs which build and sustain competitiveness over a long period of time? Seven States – Tamil Nadu , Maharastra, Andhra Pradesh, Gujarat, Uttar Pradesh, Punjab and Karnataka-account for roughly 70% of all factories, employment and capital invested in manufacturing building an industrial hub in one of the Under-penetrated states would call for a more comprehensive effort and set of policies to provide the ‘hard’ enabling environment for success.

These should be active support and integration between SMEs and the large firms they supply. This can lead to emergence of new cooperative structure with smaller enterprises connected to large enterprises rather than merely selling at marker prices, development of shared services and training centers so that these value chains get benefit of both scale advantages of large enterprises and scope advantage from many small members with different capabilities. The final ingredient of success of an industrial hub is the development of its knowledge centre and the innovation ecosystem . The key to building such knowledge centre is location of (or close linkage to ) one or more universities and research centre within the hub. The emergence of Bangalore as the Silicon Valley of India has been driven by the location of prestigious institutions like the Indian Institute of Science and the large number of central research and technology organisations n the city. Industrial hubs will have to necessarily play a key role in making this happen. Providing land and other incentives is necessary but not sufficient . Setting up successful hubs call for much more in terms of enabling infrastructure, supply chain integration and perhaps most importantly, building a knowledge centre, and capabilities to evolve with changing times.

The first phase of NIMZ will be established along he Delhi-Mumbai Industrial corridor(DMIC). The DMIC project covers six states- Haryana , UP, Rajasthan, Madhya Pradesh and Gujarat, accounting for 43 per cent of GDP, 50 per cent of industrial production and exports and 40 percent of total workforce.

Size of NIMZs

A typical NIMZ will be of at least 5,000 hectares in size and will be chosen by the state government from its own land or through acquisitions. The preference will be for non-agricultural land with adequate water supply. States will have to wnsure that at least 30% of the total land will be utilized for setting up manufacturing units. If needed , the states may reserve a certain share of the land for MSMEs. Ownership of an NIMZ will either be with the state government , a State Government undertaking in joint ownership with a private partner or under any other appropriate model. But whatever be the ownership model of an NIMZ, the state government will ensure that the land provided to the manufacturing units can be mortgaged by the prospective allotted for securing financial assistance from banks and financial institutions.

Administration of NIMZ

The administrative structure of NIMZ will include four entitles, namely an SPV, a developer, the state government, and the Central Government . An SPV will be constituted to exercise the powers, discharge the functions and manage the affairs of the NIMZ . This SPV can be a company, depending upon the MoU between stockholders. The CEO of the SPV will be a senior central or state Government official. The SPV will include an official /expert conversant with the work relating to pollution control/environmental protection. There will also be representation to the industrial units functioning in NIMZs. The main functions of the SPV will include maser planning of the Zone, preparation of a development strategy and an action plan for self-regulation to serve the purpose of the policy, formulation of rules and procedures for development, operation , regulation and management of NIMZ a and their enforcement . Further, NIMs will function as self-governing and autonomous bodies as the State government will designate them as industrial townships under Article 243Q© of the Constitution . thus NIMZs will provide developed land with adequate infrastructure and the needed ecosystem for promoting world class manufacturing activity.

Flexible Labour Policy

NIMZs will put in place a comprehensive and liberal exit policy that will promote productivity while providing flexibility by reducing some of the moving rigidities in the labour market and by ensuring protection of workers’ rights as laid down in the statute. Firms operating in NIMZs will have a job loss policy to insure workers against loss of employment in the event of closure or retrenchment. This policy will be used to make compensation payment to workers at the time of closure or right sizing . similarly, the SPV will help redeploy labour from one unit to another in case of closures. To deal with the ensuring job losses , the NMP proposes a suitable compensation to be paid to the workers through the operation of two alternate funding schemes, the job loss policy and the sinking fund. Under the former , the firms that are operating in NIMZ may insure their workers against loss of employment in the event of a firm that has to close down or reduce its workforce consequent to the activation of a redundancy scheme . Under such circumstance the insurance policy will be used for payment of compensation to the affected workers. It truly breaks new ground when it talks of an insurance policy that would facilitate payment of retrenchment compensation without recourse to lengthy legal processes and early closure of an unviable unit . The second scheme , known as the sinking fund, is also to be funded by contributions as decided by a Special Purpose Vehicle (SPV). A certain minimum level of money commensurate with expected liabilities will at all times be maintained in the sinking fund and the fund must be continuously replenished in case amounts are drawn from it . Both the schemes are only applicable to those workers who are in continuous service in the affected firms and on. The NMP has also some specific provisions for redeployment of assets of firms which have been declared sick and this will be decided by the SPV created with the narrow purpose of dealing with industrial sickness.

Some Critical Issues

(a) However, the NIMZs raise some important issue :
(i) land acquisition, which in the light of recent instance in west Bengal and in Odisha, is a point of irritation and delay,
(ii) although the NIMZs are supposed to be different from Special Economic Zones (SEZs) in the sense that they may not provide its occupants with tax concessions, there are a number of tax concessions, there are a number of tax incentives and these will also add to the tax forgone by the exchequer, and
(iii) the NIMZ is based on the theoretical belief that firms located in a cluster are ore innovative than those that are not , as the possibility of technology spillovers is higher in a cluster besides other economic benefits that agglomeration would bestow upon its constituents. Public policy induced clusters are , on an average , less innovative than natural or historical clusters. Very often different Central and state ministers work at cross purpose .

(b) The big question is whether the Government can muster the political will and moral authority, to bring about a consensus among the stakeholders in the new policy regime . The first question : can we really create NIMs and if we can, why not make the whole country a NIMZ? If we can provide good infrastructure , progressive exit policies , business friendly approvals, etc., why not provide these throughout the country? Creating NIMZs could be harder than making the whole country NIMZ, for instance, because of games that states and the Centre could play. Unfortunately, this is yet another attempt at a band aid type policy formulation and if one expects that this will provide an impetus to industrial revival to significantly enhance the manufacturing sector’s share in GDP and employment, one may be sorely disappointed. How is a set of incentives , administered by bureaucrats better than a deregulated environment in which capital is free to enter and exit any business? If anything the one big impediment to industrialization is the set of labour laws that discourage any employer from hiring labour: Once hired getting rid or workers is a nightmare.
The critical issue is whether enclave-type development of industrialization in the country is the only way forward? Should we continue to have one layer of enclave after another? In this world of scaffolding , it seems, we will have to think of industrial castles without having walls. But it is the industry rather than the government that would have to innovate and evolve these new models for manufacturing New design philosophies would be needed for design or easy assembly or finish and for easy repair as well as new ways for partnering with small or microenterprises to share profits ‘ equitably’.

(C) The most elegant policies or economic growth are no proof against a governance structure that is held hostage to a combination of administrative sloth and the rapacious rent seeking behaviour of its rulers in both the state and the central administrations. That is the challenge that awaits the Government, which has unveiled a policy to give a leg up to the manufacturing sector , not just for exports but local consumption as well .Its conceptual underpinnings are flawless. Excellence in manufacturing is achieved , ideally, in an ecosystem involving people-not just those directly engaged in manufacturing but their dependents as well, the satisfaction of whose personal and professional needs requires a parcel of contiguous land that is much larger in scope than anything conceived under the present policies for export promotion.

(D) Corruption is not the forbidden fruit in Indian politics, but its life blood. It is not enough to slap down the hand that reaches out to break the bank; we need a total transfusion to cleanse the body. It is not sufficient to look up for leadership. We need Indian industry to take the lead in this reform, with the conviction that we can, indeed overcome. India lacks the environment in which such enforcement can occur. If anything the NMP can turn into another instrument of patronage and runaway corruption; friends of ministers and politicians can be rewarded with land, credit and all the help at the hand of the government. There is a good chance that cronyism will be the end point of the NMP. Perhaps, this is harsh judgement but recent policy-making experience gives enough reasons for skepticism.

Administering various incentives could quickly

Degenerate into another kind of licence and quota system. In theory there are no grounds why one industry or one firm should get preference over another when it comes to doling out incentives. In fact, experience shows that it is impossible to align administered incentives with performance: these incentives can soon turn into rents, and an altogether different and unproductive type of ’competition’ can emerge.
Gujarat has cut down the compliance cost of environmental norms for industries by grading districts on the basis of pollution control measures needed. Tamil Nadu has exempted 135 categories of industries from the State Water Act. These are some of the best practices the National Investment and Manufacturing Zones (NIMZs ) want to replicate to give industries the cutting edge to face international competition. The NIMZ document , for instance , quotes the example of Haryana where industries set-up under the Water (Prevention and Control Pollution) Act,1974.

(E) Management practices in Indian are often weak, by measurable criteria, and with measurable consequences in terms of reduced financial success. More broadly , lack of best practices in supply chain management and attention to innovation. Lack of trust along the value chain of Indian manufacturing and specific practices that contribute to the lack of trust , such as delays in reimbursing suppliers. Hence, problems in India’s manufacturing go beyond the obvious problems in the policy environment. There are several inferences to be drawn from these detailed surveys and analysis. First , inefficiencies in management are mostly likely indicators of lack of sufficient competition policy. More broadly, it needs an overhaul of the legal frameworks governing the doing of business in the country. This is happening, but slowly.

Second, a more robust system of financial intermediation needs to be built. There are two aspect of this . One is lubrication of the supply chain, through short-term credit from financial institution of - this needs to be complemented by more efficient legal enforcement of contracts and associated financial obligations. The other is better access to financing for investment and innovation. This will require innovation in legal structure for providing such finance, including venture capital. India’s financial sector needs to do a much better job of serving small and medium firms: this issues is outside the area of manufacturing policy, but critical to the success of manufacturing . Third, the extreme shortage of skilled workers in India. The problem extends from traditional education at all levels to a wide range of vocational and practical training. Manufacturing policy will not succeed without correcting this problem of skilling the population .

(f) Currently, a manufacturer in India has to comply with 70-odd legislations and file returns periodically, the total returns amounting to more than 100 in a year. Though , the National Manufacturing Competitiveness Council (NMCC) started functioning from January 2005, nothing much is heard about the work done by it . No wonder then that in recent years, Indian corporate houses found it easier to acquire manufacturing bases abroad instead of dealing with the plethora of problems within the country.

(G) The first detailed chapter of the policy deals with the rationalization and simplification of business regulations . The solution proposed is not to simplify, but to propose exemptions for the units set-up within NIMZs. The corollary appears to be that it is fine for the existing manufacturers to be regulated heavily, while new units are freed up through exemptions.

(H) Putting the onus of finding such a locale on the State, with the given riders , at a time when the union Government has not got the proposed land Acquisition and Rehabilitation Bill passed in Parliament would make the birth of NIMZs an intractable one. This coupled with the candid admission in the policy that the infrastructure development of the zones will in a large number of cases be made by private developers there is a need to provide appropriate financial support / incentives to the developer raises the spectre of how many a developer in the SEZs had cried foul over withdrawal of several spurs or cited other disabilities after roll-out of the SEZ Act 2005. Till date, the SEZs with formal approval are 585, the notified ones being only 143 , even as 33 developers exited after duly refunding the duty benefits derived.

Comparisons between the SEZ and NIMZs may be odious but the fact remains that any policy support to a select few is a flawed approach. Such a state of policy-induced aberration is not only discriminatory but also profoundly unsound, promoting pockets of a few growth centres with the rest reeling under unconscionable burden and stagnancy.

(I) What the country need is a coherent plan for planned urbanisation, to house ever-growing numbers of industrial and service sector enterprises and migrant from villages who man these enterprises . The NMP is a weak substitute as it merely envisages the creation of seven new town and, that too, in select states. What manufacturing growth calls for is a ration policy for planned urbanisation, efficient infrastructure and sensible labour laws. Let us work for these , and shun hollow policies.


The government should provide infrastructure and leave the rest to markets . Critics are not wrong in stating that the National Investment and Manufacturing Zones(NIMZs) are nothing more than SEZs in a new garb. Create the required skills and human capabilities among rural migrant and urban poor so as to make the growth process more inclusive ; increase domestic value addition and technological ‘depth’ in manufacturing enhance the global competitiveness of Indian manufacturing through appropriate policy support; and, finally make the industrialization process more environment – friendly encouraging energy efficiency, optimal utilization of natural resources and restoration of damaged degraded ecosystems.

Be it SEZs, PCPIRs or NIMZs there are all desperate attempts by policy makers seeking to increase the share of manufacturing in India’s national income without having to deal with the political economy of a backward-looking trade unionism and the populism of left-of –centre parties. If every state government can offer an environment as conductive to business as the one Gujarat one does are really need these zones. However , since India’s competitive populism is going to come in the way of a sensible national industrial and labour policy, which would in fact benefit labour and business , politically constrained governments will have no option but to offer these escape route for industrial development. India needs manufacturing sector growth for a variety o reasons ranging from job creation, enterprise and technology development to the needs of defence and national security. Any policy that helps deserves a try.

Change in necessary in many areas for India’s manufacturing sector to reach its goals: industrial relations, land acquisition, the regularly framework and so on. These improvement must happen widely around the country, not only within the proposed New Manufacturing and Investment Zones , for the country to realize its ambitious overall growth and employment targets. Action will have to be taken in the states, where local laws and conditions must change. For changes in the industrial relations’ climate and labour laws the involvement of unions is essential. Fr change in land acquisition and environmental laws, concerned civil society organisations must be involved. So, the implementation, involving producers, stakeholders and many ministries of government , in the central and the states is required to accelerate manufacturing growth. Ratan tata has observed that the government would face several hurdles in its implementation of the National Manufacturing Policy (NMP). Various ministries that are involved in successfully making the policy work are the ministries of labour, environment and finance . The first phase of the national Investment and manufacturing Zone has been planned to be set-up along the Delhi Mumbai Industrial Corridor , seven NIMZ have been notified along the DMIC.

Source: Kurukshetra

Direct Cash Transfer : The New Trend Leveraging Aadhaar for Electronic Transfer of funds

Switching over from subsidies on food , fuel, fertilizers etc to direct cash transfer seems to be the new trend of reaching out to the poor. Jharkhand has been selected as the first state to experiment with this idea of electronic cash transfer or direct cash transfer. The government would leverage Aadhaar (Unique Identity Number) for this purpose . The Prime Minister recently announced the setting up of the new mechanism.

Jharkhan has been selected as, it is also first state to adopt micropayments, using the Aadhaar linked bank accounts in 2011. This was used in paying NREGA, wages , scholarships, and old age pensions in some of the districts, Similar initiatives have been taken by other state as well. In Tripura’s Mandwi district, payment under Indira Gandhi National Old Age Pension (IGNOAP) is being done via Aadhaar enabled system.

A pilot project on Aadhaar based delivery of LPG cylinders (domestic) by three oil marketing companies Is being conducted in Mysore. A similar exercise for kerosene is being done n Alwar district of Rajasthan.

Institutional Mechanism; For cash transfers to be rolled out huge capacities would have to be built at all levels. A ministerial committee headed by the Prime minister and including the ministers of finance , information technology, health , besides Planning Commission and Unique Identification Authority of India (UIDAI) officials , has been set up to steer the programme and avoid delays in decision- making.

A national executive committee of secretaries will meet frequently to coordinate action and to ensure that timelines are kept. An implementation mission and committee will finalize details relating to the design and operation of the cash transfer system. There subcommittees on technology, financial inclusion and electronic benefits transfer (EBT) have also been proposed. While he subcommittee on technology will define the standards and architechcture required , the finance panel will look at the banking ecosystem. The EBI committee will look into audits of governments systems.

Benefits of using Aadhaar enabled system: Subsidy payments and benefits under different schemes amount to almost Rs.3 trillion , roughly 3.5% of the gross domestic product (GDP), according to government estimates . It has been often pointed out in the past that only a part of the subsidy and welfare scheme reaches the intended beneficiaries.

The Prime Minister recently issued a statement enumerating the benefits of using
Aadhaar-enable system for transfer of subsides, wages etc. He pointed out that using this system will improve targeting, reduce corruption, eliminate waste, control expenditure and facilitate reforms.

The Prime Minister has also been encouraging to increase the pace of enrollment of people on the Aadhaar system to speed up reforms. Till now, more than 20 crore Aadhaar numbers have been generated ad the total numbers have been generated and the total number of enrolments has crossed 22 crore. The target for Aadhaar is 60 crore, and the remaining half of the population is to be covered by National Population Registry.

The Government is expecting significant change in extending benefits to the targeted population once the entire population in registered .
Electronic Benefit Transfer (EBT) has already begun in many cases. The Government and RBI have issued Guidelines to Banks For implementation of EBT. Pilots are under implementation, including in AP, Chhattisgarh, Punjab, Rajasthan, Tamilnadu, West Bengal, Karnataka, Puducherry and Sikkim.

The pilot programs of Direct Cash transfer Via Aadhaar need to be spread out further to states not using this system currently as well as to many other government schemes.

Electronic Benefit Transfer (EBT)

EBT aims at making the process of transferring the benefits (Cash) of welfare schemes from government to beneficiary from a paper based, cash driven system to an electronic direct transfer system. The EBT began around three years ago , pilot projects were rolled out in a few states to route government social welfare payments through bank business correspondents to the beneficiary, electronically , via hand-held devices using biometric smart cards. EBT account is a type of no frills account where holders would only be able to make withdrawals . A ‘no-frills’ account is a basic banking account either with nil or very low minimum balance as well as charges that make such account accessible to vast sections of population.

Source: Chronicle

Friday, November 30, 2012


In current context of sustainable development concern is mounting over an ever growing list of environmental issues across rural India. By tradition, Indian society and culture values personal hygiene but gives little importance to clean and healthy community environment. Human excreta is regarded as the most hated object and anything connected to latrine is considered so defiling that one is supposed to take a bath immediately after coming out of the toilet and before going in to kitchen due to psychological and religious taboos. Sanitation is, therefore , regarded as a matter of individual initiative and not a collective obligation of the community and under this socio-cultural background, environmental sanitation has sadly been given the lowest priority.

For a healthy living we all require a healthy environment and sanitation is regarded to be one of the core components of the same. As far as the concept only with the various methods and technologies of safe disposal of human excreta, the Central Rural Sanitation Programme of India has updated and upgraded the perception of sanitation by incorporation the components like liquid and solid waste disposal , food hygiene, personal hygiene in the context of health improvement, school and home sanitation, and safe water and garbage disposal . In short , sanitation is being considered as a comprehensive initiative for a healthy environment with in a community with the top priority of separation excreta with its host of biological pathogens, from contact with human beings as well as plant and animal life.

Now coming to the environmental concern of a rural nation like India where about 70% of its people live in the villages- these days the question of improving the sanitation in villages in gaining much attention of both the people and the government as inadequate sanitation always puts an adverse effect on the environment; without a clean, safe toilet close to home people are forced to live in an unhealthy and unpleasant environment. One gram of faeces can contain ten million viruses, one million bacteria, one thousand cyst parasites and about a hundred worm eggs – so the danger of disease is massive and when any waste is exposed and clean water and hygiene education are limited, all people in the community are vulnerable to illness caused by faeces. On the other hand if we look into statistics then it shows that every year around 1.8 million children mostly from rural areas, die of diseases such as cholera , typhoid and dysentery caused by unclean water and poor sanitation’ in this regard rural women and girl are the most disadvantaged section as in absence of a well-built toilet at home , they often have to wait till dark for going to the field for open defecation which make them vulnerable to illness as well as sometimes to sexual-assault. Moreover sickness due to insanitary condition takes children away from school and adults away from earning an income .Medical expenses make massive demands on the limited incomes of the rural poor.

Rural Environment:

The deteriorating rural environment is not only creating problem for rural population but also emerging as a threat to urban India, since rural India is the key provider of agricultural and other indigenous products being consumed being by the big cities.

Rural lifestyles have close links with nature and its resources. Thus the environmental problems that manifest in rural areas of the country are largely due to over-use or misuse of resources mostly because of sheer poverty, ignorance and lack of alternatives. The denudation of vegetative cover due to expansion of agricultural activities , indiscriminate collection for firewood and the overgrazing by cattle and other livestock and consequent soil erosion are good examples of the impoverishment of environmental resources. Rural communities are generally resource conscious and the amount of the waste generated in villages is , therefore, much less than in urban centers. Also the nature and composition of waste is different in villages from that of cities. Most of the waste generated in villages is from individual households, whereas in urban areas, commercial establishments and institutions are also an important source of waste in village households is much higher than that in the cities. This is mainly because of different life styles, consumption patterns, food habits, etc. Traditionally, the village communities never considered anything as waste and had well-managed waste management system which allowed for maximum recycling and reuse of waste. However , with increase in population , the qualities of waste have increased several fold , where as the resources available for its management such as land availability for composting of organic waste- have diminished over time. These wastes are therefore, now dumped in the open and are managed unscientifically, leading to problems of environmental sanitation in rural India.

Realizing the adverse impact of sanitation on environmental as well as for recognizing and encouraging the efforts of Panchayati Raj Institution under Total sanitation Campaign, Nirmal Gram Puraskar (NGP) was initiates by the Government on October 2, 2003. A’Nirmal Gram’ signifies an ‘open defecation free’ village with all houses, schools and anganwadis having sanitary toilets besides awareness amongst communities about the importance of maintaining personal and community hygiene, good sanitation and clean environment. But when we look into the very recent statistics, we notice that out of 2.5 lakh gram panchayats of this country, only 25,000 have received ‘Nirmal Gram’ status- which signifies that only 10 percent of Indian villages have full sanitation coverage.

Sanitation coverage

Taking into account the difference research finding and survey-result on total sanitation campaign, it can be suggested that increasing sanitation coverage in rural areas would require more clarity of the issue and understanding of the rural sensibilities . Building toilers is just one half of the battle; the other half is to make people use them. Merely building latrines. It must be combined with hygiene education which is designed to encourage changes in people ‘s personal behavioural pattern and outlook as well as to block the faecal-oral transmission route and reduce the spreads of diseases. This is the high time for the social scientist to look at society’s collective blindness towards the practice of open defection and the reluctance to change. Despite the high rate of urbanization- the rural population is still characterized by ignorance and poverty, and the attitudes of these people are mainly influences by age-old cultural beliefs and values. So to protect rural environment on sustainable manner through proper environmental sanitation , rural people need to change their attitudes and beliefs toward the whole issue. Lastly it may be concluded that though concern is mounting over an ever growing list of environmental issues across the nation but compared to urban India, we can still find a much better , safer and cleaner environment across the villages of this country, where one can at least breathe contentedly in fresh air.