Narendra Modi govt clears defence projects worth Rs 80,000cr

The Modi government is cranking up clearances for long-pending projects considered critical to plug gaps in India's operational military capabilities. If the first two meetings of the defence acquisitions council (DAC) cleared proposals worth Rs 40,000 crore, the third one on Saturday gave the nod to projects totalling around Rs 80,000 crore. 

The DAC, chaired by Arun Jaitley on Saturday, gave the green signal to long-term projects like the Rs 50,000 crore project to build six new stealth submarines with foreign collaboration in India as well as deals for anti-tank guided missiles (ATGMs), "midget submarines" for special covert operations, Dornier aircraft, Russian Uran missiles for warships and the like. 

Significantly, it rejected the American "Javelin" ATGM offer despite the hard-sell by US defence secretary Chuck Hagel during his visit to India in August. Instead, it approved the purchase of the Israeli "Spike" tank-killing missiles, which had already been extensively trial-evaluated by the Indian Army last year. The likelihood of all this happening was first reported by TOI in its Thursday edition. 

"National security is of paramount concern for the government. All hurdles and bottlenecks in the procurement process should be addressed expeditiously so that the pace of acquisitions is not stymied," said Jaitley. 

The speed of clearances contrasted starkly with the feet-dragging under UPA on filling critical needs of armed forces. 

Take the project for the six new-generation submarines, which are to be armed with both land-attack missile capabilities and air-independent propulsion for greater underwater endurance. Grappling with just 13 ageing diesel-electric submarines, the Navy has been crying hoarse for this project to get underway ever since it gained "acceptance of necessity" way back in November 2007. 

But with the UPA government forming committee after committee to review the plan, which earlier included importing two of the six submarines to save time, even the global tender for the mammoth project could not be issued for the last seven years. It will take seven to eight years for the first of these submarines to roll out once the contract is inked. 

The DAC has now decided that a committee will identify within six to eight weeks the public and private Indian shipyards that have the potential to indigenously build the six submarines in line with Modi's "Make in India" policy. The RFP (request for proposal) will then be issued to the "compliant" shipyards, which in turn will tie up with a foreign collaborator, to submit their bids. 

Incidentally, defence PSU Mazagon Docks is already building the French Scorpene submarines, while the private sector L&T shipyard is helping in the construction of the country's nuclear-powered submarines. Both, therefore, stand a better chance than the others in bagging the big project. 

The project for the third-generation ATGMs, with fire-and-forget capabilities, will also be a major one. The DAC on Saturday cleared an initial off-the-shelf purchase of 321 Israeli Spike launchers and 8,356 missiles for Rs 3,200 crore. 

This is to be followed by transfer of technology to defence PSU Bharat Dynamics for large-scale indigenous manufacture since the Indian Army wants to equip all its 382 infantry battalions and 44 mechanised infantry units with these tank-killers. The Army is currently saddled with just second-generation ATGMs, and that too with a crippling 50% shortage in launchers and missiles. In all, the ATGM project would cost around Rs 20,000 crore. 

Another significant clearance was for the acquisition of two midget submarines or "chariots" for Rs 2,017 crore. These "underwater special purpose crafts" will be used for covert operations to land elite naval marine commandos or "Marcos" on enemy shores or installations.

Release Function of a Postage Stamp Commemorating Srimath Anagarika Dharmapala, the Great Buddhist Thinker and Visionary from Sri Lanka.

Minister for Communications & IT and Law & Justice, Shri Ravi Shankar Prasad Spoke at the Release Function of a Postage Stamp Commemorating Srimath Anagarika Dharmapala, the Great Buddhist Thinker and Visionary from Sri Lanka.

Department of Posts, Ministry of Communications & IT has brought out a Commemorating Postage Stamp on Srimath Anagarika Dharmapala, the great Buddhist thinker and visionary from Sri Lanka. The President of India, Shri Pranab Mukherjee released the commemorative postage stamp at a function attended by the Minister for Communications & IT and Law & Justice, Shri Ravi Shankar Prasad, the High Commissioner of Sri Lanka to India, Member of Parliament Ms. Meenakshi Lekhi, Foreign Secretary, Secretary, Department of Post and other distinguished guests and dignitaries at Rashtrapati Bhavan today. Speaking on the occasion, the President stated that historically, India and Sri Lanka have remained natural allies and stamp release to commemorate the achievements of one of the apostles of Buddhism, Srimath Anagarika Dharmapala, will further add depth to the cultural ties between the two nations. In his address, the Minister for Communications & IT and Law & Justice Shri Ravi Shankar Prasad recalled that he was present in Sri Lanka on the occasion of issue of Commemorative Postage Stamp on the 150th birth anniversary of Swami Vivekananda by the Government of Sri Lanka, where an official of Sri Lankan government had shared the idea of a postage stamp on Srimath Anagarika Dharmapala. It is a pleasant coincidence that today this idea has taken the shape of reality and he has the privilege of being the Minister for the Department of Posts which is issuing Commemorative Postage Stamp on Srimath Anagarika Dharmapala. The Minister highlighted that Swami Vivekanand and Srimath Anagarika Dharmapala together represented the two great religions at the World Parliament of Religions held at Chicago in 1893. The honour extended to Swami Vivekanand by Government of Sri Lanka and reciprocal gesture extended by the Government of India by honouring Srimath Anagarika Dharmapala this year by Government of India shall take forward the illustrious legacy of collective wisdom and shared responsibility between India and Sri Lanka and shall continue to guide the entire Asia.

121वां संविधान संशोधन विधेयक, 2014

उच्चतम न्यायालय और देश के विभिन्न राज्यों के उच्च न्यायालयों में न्यायाधीशों की नियुक्ति के लिए संविधान के अनुच्छेद 124(2) और 217 के निर्वचन पर आधारित ‘कॉलेजियम’ व्यवस्था की जगह अब ‘न्यायिक नियुक्ति आयोग’ का गठन किया जाएगा। इस व्यवस्था को स्थापित करने के लिए संसद ने संविधान संशोधन (121वां) विधेयक, 2014 के साथ-साथ न्यायिक नियुक्ति आयोग विधेयक, 2014 को भी पारित कर दिया है, किंतु संविधानिक व्यवस्था के अंतर्गत इन दोनों विधेयकों पर अभी कम से कम देश के आधे राज्यों की विधान सभाओं का अनुसमर्थन आवश्यक होने के कारण इस पर राष्ट्रपति का हस्ताक्षर नहीं हो सका है।

•   संविधान संशोधन (121वां) विधेयक, 2014 को विधेयक संख्या 97, वर्ष 2014 के रूप में 11 अगस्त, 2014 को लोक सभा में प्रस्तुत किया गया था, किंतु इसमें कुछ संशोधन किए जाने के कारण इसे 13 अगस्त, 2014 को विधेयक संख्या 97-C के रूप में पारित किया गया।
•   विधेयक को 13 अगस्त, 2014 को ही राज्य सभा में पेश किया गया और 14 अगस्त, 2014 को इसे राज्य सभा से पारित किया गया।
•  इस विधेयक पर राज्यों का अनुसमर्थन प्राप्त करने हेतु इस समय यह संविधानिक प्रक्रिया में है।
•   इस विधेयक के द्वारा संविधान से संबंधित अनेक अनुच्छेदों में संशोधन के अलावा तीन नए अनुच्छेद 124 क, 124 ख और 124 ग जोड़े गए हैं।
•   उच्चतम न्यायालय में न्यायाधीशों की नियुक्ति स्वयं राष्ट्रपति के द्वारा अनुच्छेद 124(2) के अंतर्गत उच्चतम न्यायालय के और राज्यों के उच्च न्यायालयों के ऐसे न्यायाधीशों से ‘परामर्श’ के बाद की जाती थी जिन्हें राष्ट्रपति आवश्यक समझता था, किंतु इस संविधान संशोधन के बाद यह ‘परामर्श’ अर्थात ‘सिफारिश’ अब ‘राष्ट्रीय न्यायिक नियुक्ति आयोग’ से ली जाएगी।
•   इसी ‘परामर्श’ शब्द की व्याख्या करते हुए उच्चतम न्यायालय ने सर्वप्रथम सुप्रीम कोर्ट एडवोकेट्स ऑन-रिकॉर्ड एसोसिएशन बनाम भारत संघ (1993) के मामले में ‘कॉलेजियम’ (मुख्य न्यायाधीश एवं चार अन्य न्यायाधीशों की समिति) व्यवस्था स्थापित करके निर्णीत किया था कि उच्चतम और उच्च न्यायालयों के न्यायाधीशों की नियुक्ति संबंधी परामर्श इसी समिति के द्वारा दिया जाएगा।
•  राष्ट्रीय न्यायिक नियुक्ति आयोग की स्थापना के लिए संविधान में नया अनुच्छेद 124 क जोड़ा गया है। आयोग का अध्यक्ष भारत का मुख्य न्यायाधीश होगा। इसके अलावा उच्चतम न्यायालय के दो वरिष्ठतम न्यायाधीश, विधि और न्याय मंत्री तथा दो प्रबुद्ध व्यक्ति (जो प्रधानमंत्री, मुख्य न्यायाधीश, लोक सभा में विपक्ष के नेता या सबसे बड़े विपक्षी दल के नेता से मिलकर गठित समिति के द्वारा नामित किए जाएंगे) इसके सदस्य होंगे। इस प्रकार यह आयोग 6 सदस्यीय होगा।
•  आयोग में प्रबुद्ध व्यक्तियों की नियुक्ति केवल 3 वर्ष के लिए की जाएगी जबकि शेष सदस्य पदेन अर्थात अपने-अपने कार्यकाल की अवधि तक आयोग के सदस्य बने रहेंगे।
•  दो प्रबुद्ध व्यक्तियों में से एक पद अनुसूचित जाति या अनुसूचित जनजाति, अन्य पिछड़ा वर्ग, अल्पसंख्यक वर्ग या महिला वर्ग के लिए आरक्षित होगा, जिसका नियमन अलग से नियमावली के द्वारा किया जाएगा।
•  प्रबुद्ध व्यक्तियों को दोबारा सदस्य के रूप में नियुक्त नहीं किया जा सकता है।

राष्ट्रीय न्यायिक नियुक्ति आयोग विधेयक, 2014

राष्ट्रीय न्यायिक नियुक्ति आयोग विधेयक, 2014 को लोक सभा ने 13 अगस्त, 2014 को तथा राज्य सभा ने 14 अगस्त, 2014 को सर्वसम्मति से पारित कर दिया। इस विधेयक को विधेयक संख्या 96 वर्ष, 2014 के रूप में गत 11 अगस्त को लोक सभा में पेश किए जाने और इसी रूप में संसद से पारित हो जाने के कारण इस पर प्रक्रियात्मक विवाद भी उत्पन्न हुआ है, जिसका मामला उच्चतम न्यायालय के समक्ष विचाराधीन है।

राष्ट्रपति के हस्ताक्षर के बाद इस विधेयक को ‘राष्ट्रीय न्यायिक नियुक्ति अधिनियम, 2014’ कहा जाएगा।

मात्र कुल 14 धाराओं में सिमटे इस विधेयक का मुख्य उद्देश्य भारत के मुख्य न्यायाधीश और उच्चतम न्यायालय के अन्य न्यायाधीशों की नियुक्ति तथा उच्च न्यायालय के मुख्य न्यायाधीश एवं अन्य न्यायाधीशों की नियुक्ति और उनके स्थानांतरण के लिए गठित राष्ट्रीय न्यायिक नियुक्ति आयोग के द्वारा अपनाई जाने वाली प्रक्रिया को विनियमित करना है।

राष्ट्रीय न्यायिक नियुक्ति आयोग का मुख्यालय दिल्ली में होगा (धारा (3))।

कानून बनने एवं इसके लागू होने के बाद सबसे पहले 30 दिन के भीतर केंद्र सरकार (राष्ट्रपति) न्यायाधीशों के रिक्त पदों की घोषणा करेगी और उनकी नियुक्ति के लिए राष्ट्रीय न्यायिक नियुक्ति आयोग से सिफारिश करने की मांग करेगी। उसके बाद 6 महीने के भीतर आयोग अपनी सिफारिश केंद्र सरकार को देगा और उसके एक महीने के भीतर न्यायाधीशों की नियुक्ति कर दी जाएगी।

न्यायाधीश के रूप में नियुक्ति के लिए निर्धारित योग्यता का निर्धारण संविधान के अनुच्छेद 124(3) एवं अनुच्छेद 217(2) और न्यायिक नियुक्ति आयोग नियमावली, 2014 (निर्माणाधीन) के अनुसार होगा।

विधेयक की धारा 5(2) में यह प्रावधान किया गया है कि यदि 6 सदस्यीय राष्ट्रीय न्यायिक नियुक्ति आयोग के कोई दो सदस्य किसी व्यक्ति की न्यायाधीश के रूप में नियुक्ति का विरोध करते हैं, तो उस व्यक्ति के नाम की सिफारिश आयोग के द्वारा नहीं की जाएगी।

विधेयक पर विवाद

राष्ट्रीय न्यायिक नियुक्ति आयोग विधेयक, 2014 को इस आधार पर उच्चतम न्यायालय में चुनौती दी गई है कि इस विधेयक को संविधान संशोधन (121वां) विधेयक, 2014 के अधिनियम बनने के बाद ही संसद में पेश किया जा सकता है और पारित किया जा सकता है किंतु इसके पहले नहीं।

संसदीय प्रक्रिया के अनुसार यह तर्क सही और संविधान-सम्मत भी है। अतः याचिका को विचार के लिए स्वीकार कर लिया गया है।

वास्तव में राष्ट्रीय न्यायिक नियुक्ति आयोग की स्थापना करने का प्रावधान संविधान संशोधन (121वां) विधेयक, 2014 के द्वारा संविधान में अनुच्छेद 124-A को जोड़कर किया जा रहा है। अतः जब तक यह संविधान संशोधन पूर्ण और अंतिम नहीं हो जाता है, तब तक इसके अधीन कोई अन्य कानून नहीं बनाया जा सकता है।

चूंकि संविधान संशोधन विधेयक पर अभी संविधान के अनुच्छेद 368(2) के अनुसार देश के कम से कम आधे राज्यों का अनुसमर्थन (विधान सभाओं द्वारा अनुमोदन) तथा उस पर राष्ट्रपति का हस्ताक्षर होना शेष है। अतः यह विधेयक समय के पहले ही पारित करा लिया गया है।

दूसरा यह कि राष्ट्रीय न्यायिक नियुक्ति आयोग विधेयक, 2014 का विधेयक क्रम संख्या 96, वर्ष 2014 है जबकि संविधान संशोधन 121वां विधेयक, 2014 का विधेयक क्रम संख्या 97, वर्ष 2014 (97-C वर्ष 2014 के रूप में पारित) है। अतः पहले विधेयक की क्रम संख्या 98 हो सकती है किंतु 96 कभी भी नहीं।

•    नए अनुच्छेद 124 ख में राष्ट्रीय न्यायिक नियुक्ति आयोग के कृत्यों का उल्लेख किया गया है। इसमें इसके निम्नलिखित तीन मुख्य कार्य निर्धारित किए गए हैं-

(i) भारत के मुख्य न्यायाधीश, उच्चतम न्यायालय के अन्य न्यायाधीशों, उच्च न्यायालयों के मुख्य न्यायाधीश तथा अन्य न्यायाधीशों की नियुक्ति के लिए नामों की सिफारिश करना;

(ii) उच्च न्यायालयों के मुख्य न्यायाधीश तथा अन्य न्यायाधीशों का एक उच्च न्यायालय से दूसरे उच्च न्यायालय में स्थानांतरण करने का कार्य; तथा

(iii)          यह सुनिश्चित करना कि सिफारिश किए गए व्यक्ति सक्षम और योग्य हैं।

•   तीसरा अनुच्छेद 124 ग को जोड़कर न्यायिक नियुक्ति से संबंधित किसी या सभी प्रकार के कानून बनाने की शक्ति संसद को प्रदान की गई है। इसी अनुच्छेद द्वारा प्रदत्त शक्ति के प्रयोग में राष्ट्रीय न्यायिक नियुक्ति आयोग विधेयक, 2014 भी पारित किया गया है और इसके अंतर्गत नियमावली का निर्माण किया जा रहा है।
•   उपर्युक्त के अलावा अनुच्छेद 127, 128, 217, 222, 224, 224A एवं 231 में जहां कहीं भी न्यायिक नियुक्तियों के मामले में मुख्य न्यायाधीश से ‘परामर्श’ लिए जाने की संविधानिक व्यवस्था थी, अब इस संशोधन विधेयक द्वारा उसके स्थान पर ‘राष्ट्रीय न्यायिक नियुक्ति आयोग’ शब्द रख दिए गए हैं अर्थात अब इस संबंध में देश के मुख्य न्यायाधीश या राज्यों के उच्च न्यायालयों के न्यायाधीश से ऐसी नियुक्ति में ‘परामर्श’ लेने की संविधानिक व्यवस्था हमेशा के लिए समाप्त कर दी गई है।
•   इसके पूर्व राष्ट्रीय न्यायिक नियुक्ति आयोग के गठन के लिए संविधान संशोधन (120वां) विधेयक, 2013 को राज्य सभा से 6 सितंबर, 2013 को पारित कराया गया था किंतु इसके कुछ प्रावधानों पर विवाद होने के कारण इसे लोक सभा से पारित कराने के पूर्व संसदीय समिति को भेज दिया गया था।
•  वर्तमान संविधान संशोधन (121वां) विधेयक, 2014 (विधेयक संख्या 97, वर्ष 2014) संसदीय समिति की सिफारिशों पर ही आधारित था।
•  इस विधेयक को सदन में प्रस्तुत किए जाने के क्रम में 121वां क्रम होने के कारण इसे 121वां संविधान संशोधन विधेयक, 2014 कहा गया है किंतु वास्तविक संविधान संशोधन के अनुक्रम में इसका क्रम 99वां होगा। अतः अधिनियम बनने के बाद इस संविधान संशोधन को 99वां संविधान संशोधन अधिनियम, 2014 कहा जाएगा।
•  इसके पूर्व अभी तक संविधान में 98 संशोधन हो चुके हैं।

Konkan Railway chugs through forests, hills and debt There is a huge demand for the railway line. The state-owned company wants to enter new areas, but first needs to service its debt, including funds borrowed 25 years ago

Days before his retirement 25 years ago, E Sreedharan, member-engineering, Railway Board, had planted the idea of a coastal railway in the mind of then railways minister George Fernandes. Sreedharan's proposal was unique in two ways.

It was based on the build-operate-and-transfer principle, a first for a government project in which two-thirds funding was required from external sources. Second, the 760-km track was to be laid through forests and mountains in the coastal states of Maharashtra, Goa, Karnataka and Kerala.

"It was such an enormous task that when we started the project, N Radhakrishnan (then financial commissioner, railways) said it would not be completed in 25 years. We did it in seven years," recalls Sreedharan, who is known more for his later work on the Delhi Metro. (A SNAPSHOT OF KONKAN RAILWAY)

Fernandes, who expressed his desire to build a Konkan railway and a Bagaha-Chittauni (Bihar) rail link on the first day of taking charge at the ministry, had to convince the then prime minister, V P Singh, and took it upon himself to iron out all bureaucratic hurdles. His efforts resulted in setting up of the Konkan Railway Corporation Limited(KRCL) as a public sector company on July 19, 1990, in a departure from the government's long-standing policy of operating the railways.

On October 15, 1990, the foundation stone was laid and Sreedharan became the first chairman and managing director of Konkan Railway on condition that he be allowed to handpick his team and work without interference of the ministry. The government gave Sreedharan a free hand and he began recruiting staff for the project. B R Kulkarni, who was working with Indian Railways, was one of his first recruits. Kulkarni was initially reluctant to come on board as he did not want to give up his quarters in Mumbai, but joined after Sreedharan managed to seek exemption from the railway ministry that Konkan Railway executives be allowed to retain their accommodation for two years.

Many senior engineers and other staff joined, but they comprised only 10 per cent of the workforce.

"We realised that out of 100 people, only 20-30 people actually perform. A conscious decision was taken to hire a small but relatively young team of fresh graduates," says Kulkarni. So much so that at the peak of construction work, Konkan Railway had a mere 2,400 people working for it.

For the workers, the next seven years proved to be daunting, exciting and created life-long memories. Many, including Sreedharan, survived near-death experiences, which came at the time of blasting of the mountains. More than 2,000 bridges and 92 tunnels were built. Still, 93 people lost their lives.

But the actual problem was at the financial end. The seed capital from the Union government and four state governments dried up and Konkan Railway was rendered penniless. There was no money for construction work.

"The matter became worse when Jaffer Sharief (railways minister in 1991-1995) refused to part with more money," says a senior executive in Konkan Railway. The option left to it was to raise money from the market, but the Harshad Mehta stock scam had everyone apprehensive about investing money in new instruments. The financial situation was so dire that while inaugurating the Mangalore-Udupi section in 1993, the then prime minister, P V Narasimha Rao, announced that "so long as KRCL doesn't ask for money, the government will extend every support."

Though the Union government didn't give a paisa, it lifted the restriction on raising money through tax-free bonds - a facility only available to housing, power and finance companies. KRCL raised around Rs 2,000 crore through tax-free bonds. It promised 9-10.5 per cent interest on the investment, which was to prove costly for KRCL in times to come.

This, however, provided a window for employees to directly interact with people of the region where the railway line would pass. Such interactions helped win support for the project among the masses.

"After work, we used to go and sell bonds to people. They were very enthusiastic about a railway line in their backyard and extended unconditional support. Such was the affection that our chief engineers used to be invited as chief guests at local functions," says R V Jadhav, a junior engineer hired fresh from college.

Jadhav's colleagues recall how the construction of Konkan Railway had become a personal mission for every staffer. "We would work 14-16 hours a day, spending days together in camps at the construction sites. The biggest advantage was we were all unmarried and used to love any task given to us. This allowed us to skill ourselves in many streams."

Kulkarni says the staff of contractors had become part of the team. "They would reach sites by 5 am on Sunday. This was never seen before in any government project. When funds dried up, the contractors worked without payment for nine months. We all had a joint mission."

All the executives laud the role of the people and the state governments in achieving the feat. More than 70 per cent of the people had given permission for KRCL to acquire their land without waiting for compensation under the Land Acquisition Act. "We had promised them they would be given their entire money before we ran our first train," Sreedharan said. Around 45,000 people were affected by the railway line in the four states.

Future
The line become operational in 1998 and was an immediate hit. It not only linked the Central Railway, the South Western Railway and the Southern Railway but also reduced travel time between Mumbai and Mangalore by 26 hours. Similarly, travel time between Mumbai and Cochin and Mumbai and Goa was cut short by 12 and 10 hours, respectively.

Sanjay Gupta, director of operations at KRCL, says demand for services is so high that Konkan Railway is planning to convert the single line to a double track. "We are unable to meet the demand for both passenger and freight trains. Doubling the track will increase our capacity." Konkan Railway has already identified stretches where tracks will be doubled and has submitted plans to the railway board for clearance.

KRCL will also start electrifying the track so that trains can run up to 161 km an hour. "This is the only track in India where trains can run at such speeds. I have a little regret that we could not spend on technology to prevent slope realignment and boulders falling on the track. We could not do much because of shortage of funds. People after me should have looked at it," Sreedharan says.

During the monsoon, trains slow down for fear of derailment and stones rolling down the mountains. In the past decade, 10 trains have derailed, killing 78 people. The last accident involved a goods train going off the track on October 7. This halted traffic for more than 30 hours. "We have taken many geo-safety measures and train accidents have reduced," Gupta says.

Besides safety, Konkan Railway has to mend its rising debt and provide facilities for passengers at platform and stations. The executive says if the Centre accepts new accounting norms, the Konkan Railway books will be marked all red. It has debt of Rs 1,266 crore, besides loans of Rs 3,222 crore from Indian Railways. "The loan from the railways has been converted into preferred equity with no interest payment for the next 15 years," discloses one executive.

Also Konkan Railway's profits have been continuously declining (see graphics). KRCL wants to finance its burgeoning debt through more roll-on, roll-off services where loaded trucks drive on and off the train and by venturing into other construction areas.

"The profit margin in roll-on roll-off is thrice that of ferrying passengers. But we are under pressure to run more passenger trains for political reasons," the executive adds.

The company is expecting to earn revenue from laying tracks and operating trains from Jaigarh port to Ukashi (near Ratnagiri in Maharashtra). KRCL is also working to develop lines for two NTPC plants. The company is also working on the Jammu-Udhampur-Srinagar railway line. "We will bid for more such projects. It is where our engineers' hearts lie."

MSMEs - separating wheat from chaff Do not look for easy interventions to help small-scale enterprises - carry out the reforms that will let them grow big

Realisation that the small-scale industries (SSI) reservation had failed to deliver on employment creation while impeding export growth led India to systematically roll back that policy beginning in 1997. While we have barely reached the tail end of the rollback with 20 items still remaining on the reservation list, the old view that small-scale enterprises are the silver bullet that will solve India's jobs problem has resurfaced. We are being advised to forget about labour lawreforms and labour-intensive manufacturing in the organised sector and count instead on micro, small and medium enterprises (MSMEs) in the manufacturing sector for good jobs for the masses.

Possibly, these commentators feel exasperated by the hesitant response of large-scale firms to the removal of theSSI reservation. But the hesitant response is due to yet another layer of regulations embedded in Indian labour and exit laws. These regulations have continued to hold back entry of large-scale firms into labour-intensive sectors, such as apparel, footwear and electronic assembly. The apparel industry remains overwhelmingly populated by small, low-productivity firms with the result that much smaller Bangladesh and, recently, even tiny Vietnam have surpassed India as exporters of this product. Chinese apparel exports, of course, remain more than 10 times those of India.

While not all firms have to be large for a country to succeed in the global marketplace, a significant number of them do. Small and medium firms usually flourish in sectors in which large-scale firms are flourishing. The latter operate in the global marketplace, where they must compete against the super-efficient firms. The competition in turn forces them to constantly look for cost-cutting technologies and management practices and seek high-quality inputs at competitive prices. Small and medium firms within the sector must then shape up as well either because they must compete with the large ones directly or because they are their ancillaries.

In manufacturing, India officially defines micro-enterprises as those investing Rs 25 lakh ($40,000) or less in plant and machinery. Small manufacturing enterprises are those investing between Rs 25 lakh and Rs 5 crore and medium ones those with investments between Rs 5 crore and Rs 10 crore. The corresponding categories for services enterprises are defined by investments in equipment of less than Rs 10 lakh, Rs 10 lakh to Rs 2 crore and Rs 2 crore to Rs 5 crore.

These wide investment ranges imply that the MSMEs constitute a highly heterogeneous amalgam. A key fact is that the vast majority of them are tiny low-productivity firms whose owners are not capitalists in waiting. For most part, they generate barely sufficient income for their owners to get by and, with rare exceptions, lack the ability to create good jobs.

The MSME censuses reveal that 95 per cent of all the MSMEs are micro-enterprises. With less than Rs 25 lakh invested in machinery and equipment, these enterprises serve local markets within a few kilometres of their location. Little is known of the quantity and quality of their output, or of their sales profiles since they are not registered even with district industry centres.

At the other extreme, few reform sceptics are even aware that many small and medium firms bear the full brunt of our pernicious labour and exit laws. According to ongoing research of economists Rana Hasan and Nidhi Kapoor of the Asian Development Bank, 10 per cent of the organised sector manufacturing enterprises officially defined as small employed 164 or more workers each in 2010-11. Among medium enterprises, 50 per cent employed more than 128 workers each in the same year. These enterprises must naturally comply with the full range of labour and exit laws principally aimed at large corporations.

Mr Hasan and Ms Kapoor also find that firms with less than 20 workers each employed 73 per cent of all manufacturing workers but produced just 12 per cent of the total economy-wide manufacturing output in 2010-11. That is to say, 27 per cent of all manufacturing workers in firms with 20 or more workers produced a staggering 88 per cent of the total manufacturing output. Well-paid jobs are concentrated in these overwhelmingly organised sector firms.

Findings from the Employment and Unemployment Survey of 2011-12 confirm this inference. According to it, workers in firms with less than 20 employees are paid Rs 1,581 a week on average. This wage is just a third higher than the modest Tendulkar poverty line for a family of five, confirming that the vast majority of the small firms lack the wherewithal to create well-paid jobs. In contrast, manufacturing firms with 20 or more employees pay a wage more than twice the poverty line.

A key reason why small firms remain stuck at low productivity and, therefore, low wages is that they are too small to take advantage of modern technologies. In apparel, for example, Mr Hasan's and Ms Kapoor's ongoing work cites a variety of machines and tools available for pre-sewing, sewing and post-sewing operations. The costs of these machines are for the most part out of reach of the smaller firms. But the harsh reality is that these machines are essential for the manufacture of high-quality apparel in sufficient volume for just-in-time delivery that buyers in the global marketplace demand.

It is all too seductive to think that there are easy interventions that would turn micro-enterprises into manufacturing dynamos. The reality, however, is that 50 years worth of interventions on their behalf have not produced any tangible results. Each time we want to intervene yet another time, we tell ourselves that it will be different this time. But, alas, we unwittingly end up encouraging small firms to stay small and unproductive.

Support to the MSMEs should be about incentivising them to grow larger and competitive in the global marketplace. It should not be turned into yet another social programme that perpetuates weak and inefficient enterprises. If good jobs are what we seek, it is a folly of the first order to lean against the Schumpeterian process of creative destruction. At the end of the day, we will need flexible labour and exit laws for the success of not just large firms but small and medium ones as well

Nirbhay will be backbone of ‘cold-start,’ say experts

Nirbhay, India’s first long-range subsonic cruise missile, which was test-fired on October 17, can be a game-changer in India’s strategic calculus, defence analysts and strategic experts feel.

Capable of flying at a tree-top altitude for over 1,000 km, Nirbhay can carry out surgical strikes and thus back up India’s “cold start” doctrine that envisages limited, precise strikes across the border. The introduction of nuclear weapons in the subcontinent has virtually stalled a conventional Indian response to Pakistan’s cross-border terrorism.

“India is confronted with the problem of developing a strategy to counter Pakistan’s ‘first-strike’ and continuing proxy war,” says Dr. Monika Chansoria, Senior Fellow at the Centre for Land Warfare Studies. She points out that Pakistan cites “India’s conventional military threat” to maintain its own offensive strategic posture and India will have to develop a response to this.

In this context, “cold start” has been put forward as an offensive doctrine by the Indian strategic establishment. Though “officially denied,” its presence is widely acknowledged in strategic circles.

In the event of an Indian offensive, a volley of missiles flying low can effectively take out key command and control centres, blunting the resistance to the advancing armoured columns.

“The successful indigenous development of Nirbhay cruise missile will fill a vital gap in the war-fighting capabilities of our armed forces,” Avinash Chander, Director-General, Defence Research and Development Organisation, said after the test launch on October 17.

Defence analyst Rahul Bedi observes that Nirbhay will be a force multiplier to the in-waiting “cold start” doctrine, but the doctrine itself is a non-starter as of now for lack of critical assets such as artillery, armour and helicopters. The Army has to fast-forward acquisition and induction of these platforms.

In the short-term, experts believe that Nirbhay, along with its shorter-range supersonic sibling BrahMos, will form the backbone of the doctrine.

IAS MAINS Current affairs based essay,SAMVEG IAS DEHRADUN

Important essay for IAS 2014 mains based on current affairs 

1) INCLUSIVE GROWTH-most effective way for all round development of india.

2) SWACHHCHA BHARAT: comprehensive approach in all dimension requires people participation to produce result rather mere sloganeering.

3) India's foreign policy:democracy,demography,demand(3D) is key to rise of india.

4) MOM : India's scientific achievement is necessary for economic and democratic development.