Dividend or nightmare

How many jobs must be created to realise our demographic dividend (or avoid a nightmare)? Half of India’s population is below 25. The worst-case scenario is that enough jobs are not created for the millions entering the labour force each year, and that this semi-educated mass becomes a force driving social conflict.

The reason that East Asian countries (especially China) rode the wave of the demographic dividend and dramatically reduced poverty is that they rapidly created jobs for those with education joining the labour force, as well as those leaving agriculture for better opportunities in industry and services, especially in export-oriented manufacturing.

But now that international demand has collapsed, India will have to rely to a greater extent on domestic demand to create jobs. Can the government’s “Make in India” programme lead to private industry and the service sector creating enough jobs to absorb those entering the labour force?

Fearmongers will tell you that 12 million persons are joining the labour force every year — or that one million entrants must be provided jobs every month ( that’s 30,000 new jobs a day). This myth-creating number derives from a misinterpretation of the National Sample Survey (NSS) estimate that 60 million people entered the labour force in the first half of the last decade, implying that the same number of people have been entering the labour force ever since. This is the modern version of the earlier scare that “population growth will overwhelm India’s economic growth”.

Population growth has slowed to 1.4 per cent per year. In fact, the zero-six age population was not higher in 2011 than in 2001. The implication is that though the population that crosses over into the working-age group is growing, it is doing so at a slowing pace. India’s demographic dividend will end in 25 years at most.

So, how many industrial and service-sector jobs need to be created every year over the eight year period, 2011-12 (the year of the last NSS estimate) to 2019-20 (the terminal year of the new government’s tenure)?

To set the upper limit of the labour force size, we assumed that the labour force participation rate of those with secondary-and-above education would, instead of remaining the same, increase by 5 percentage points. In that case, the size of the labour force would increase by about 63.6 million, an average of 7.8 million per annum. Providing employment to this number is achievable, since in the period 2004-05 to 2011-12, 7.5 million jobs were created in industry and services (the same as over 1999-2000 to 2004-05).

The number of jobs that “Make in India” must create is nowhere closeto the 1 million per month that scare-mongers are “warning” us about. The demographic nightmare can be avoided, provided the requisite number of jobs are created. It has been done before. The second point is that as young people get more educated, they will not want to work in agriculture (currently the biggest employer — it engages half the workforce). They will want semi-skilled/ skilled jobs in construction, which currently employs 12 per cent of the workforce and is exhibiting the fastest growth. They will want jobs (casual, regular or self-employment) in manufacturing or services. So non-agricultural jobs must be created.

 The third point is that a rising share of those educated, at least up to the secondary level, will be girls. The labour force participation rate for women in India is one of the lowest in the world. This is set to change, provided appropriate non-agriculture jobs exist, such as in garment manufacturing or modern services. Is the government ready to create the enabling environment to meet the demand for such jobs? The fourth point is that jobs have to be created, not merely for those just joining the labour force, but also for those leaving agriculture for better-paying construction-sector work.

 For the first time in India’s economic history, the absolute number of those in agriculture has been falling — since 2004-05. For the new NDA government, this is a very different reality from the one it faced between 1999-2000 and 2004-05, when the absolute numbers in agriculture actually grew by 20 million — a retrogressive development. Roughly five million people left agriculture for non-agri jobs during the UPA period. Jobs will have to be created for such migrants. However, this last challenge is in some ways the easiest to address. If investment in rural and urban infrastructure, housing and rural public works is sustained, the unskilled who leave agriculture will get absorbed in construction, as they have been for the last decade or more. But the first three challenges are much more serious, especially if the new jobs are to be organised-sector, formal jobs. Are the government and the private sector ready? 

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Nanowires to combat cell damage, breakthrough to prevent ageing

Nanowires made of vanadia can reduce cell damage in the human body, researchers from Indian Institute of Science (IISc), Bangalore have found. This breakthrough can help develop drugs that prevent ageing, cardiac disorders, and several neurological problems like Parkinson’s and Alzheimer’s disease. Vanadium oxide or vanadia is a form of vanadium, an element found close to titanium on the periodic table.

Reactive Oxygen Species (ROS) are produced during normal cellular metabolism. When the level of ROS is elevated, normal redox state of cells is disturbed, leading to damage of cellular components, including proteins, lipids, and DNA. Oxidative stress caused by ROS is responsible for various conditions ranging from a simple premature greying of hair to serious diseases like cancer, diabetes, arthritis, ageing and kidney disorders.

“Many of the antioxidant-based drugs used to control ROS, also produce ROS, though at small proportions. So we wanted to concentrate on a mechanism that mimics the natural detoxification pathways,” say Prof G Mugesh and Patrick D’Silva, who led the research team.

In a paper published in Nature Communications, they have shown that vanadia nanowires actually mimic a natural
antioxidant enzyme, according to a Gubbi Labs release.ROS are helpful when their concentrations are optimal. They help in numerous biochemical reactions and act as critical secondary messengers in signalling pathways. They are also essential for the normal metabolism of the human body.

“The human body has numerous mechanisms to scavenge ROS, and specifically hydrogen peroxide. However, when people are suffering from a disease, the production of ROS shoots up, and the natural scavenging mechanisms are not able to cope with. In such cases, we may have to control ROS levels artificially,” says D’Silva.

The IISc team has demonstrated that when the ROS levels are too much for the natural defence system to handle, vandia nanowires can control ROS accumulation and stop the resulting cell damage. The entry of nanowires inside the cells is crucial because, the nanowires must get inside the cell to start their scavenging jobs.

Therefore, the researchers treated human cells from different organs and made sure through elaborate methodology
that the nanowires could efficiently enter the cells. This clearly shows that vanadia nanowires posses  detoxifying abilities for a variety of cells.Interestingly, vanadia in bulk and foam form do the exact opposite: they enhance ROS levels; hence the nanosize of vanadia is critical for its function. “It is remarkable thatthe material that generates ROS in bulk and foam forms, can actually destroy them at nanoscales,” says Prof G. Mugesh, elaborating on the significance of the research.

With the initial positive results, the discovery needs further studies before being translated into drugs that can be
administered. “We have shown that nanovanadia works at the cellular level. Next we want to focus on administering it in animals, and see how it performs,” say Mugesh and D’Silva.

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Rebel with a cause

Justice Krishna Iyer (or Krishna, as I was privileged to call him) was chronologically old but he remained an angry young person — angry at the injustice in the world, but intoxicated by local thoughts of justice.

For him, youth should be measured by the amount of pain one feels when coming across a new idea. The “shopkeepers of justice” (as he described conservative justices), are always truly old because they feel no pain when they encounter devastated or ruined human lives, whereas “activist judges” take human and social suffering seriously, and can also take human rights seriously.

Krishna was a connoisseur of ideas of and about justice. Almost singlehandedly, he rewrote the theory of crime and punishment in India. He measured the distance between colonial and postcolonial law by laying down standards to civilise the administration of justice. He detested the barbarity of total institutions such as the police, prisons and custodial institutions. Even when sparingly administering capital punishment, he inveighed against it and believed in making it very rare as an alternative to its total abolition; he outlawed solitary confinement and putting undertrials or prisoners in manacles. In many ways, he was India’s Jeremy Bentham.

Krishna believed that legisprudence (the wisdom of legislatures or the theory of legislation) should always be reinforced by constitutional jurisprudence (the principles of justice and fairness that judges develop), and jurisprudence in turn should animate demosprudence (the prudence that accentuates the constitutionally worst-off). He pioneered, with some other gifted brethren, the conversion of the Supreme Court of India into a Supreme Court for the people, for India.

His love of social action ligation (SAL) is well known. On the bench, he was a tower of strength for Justices P.N. Bhagwati, D.A. Desai, O. Chinnappa Reddy and others who believed in SAL and adjudicatory leadership. Off the bench, Krishna valiantly pursued lost social and human rights causes. He was a rebel with a cause and without a pause. He continued to remind justices that the disadvantaged, dispossessed and disenfranchised remain the justice constituencies of the Constitution of India, for whom justices ought to show an ethic of care, as well as of human rights. Krishna believed with the philosopher Hannah Arendt in the human right to have rights.

His penchant for judicial reforms is no secret. To add a little known example, in the wake of the Mathura open letter to the chief justice of India, Krishna said on the high bench that an ounce of judicial sensitivity is worth a tonne of judicial reform. This remains true.

His presence and voice on the high bench and in the worlds of law reform, public activism and scholarship is known to us all; often, we find it hard to keep up with Krishna! He was active in every sphere. His home in Ernakulam was averitable Lok Adalat permanently in session. Which justice would lend his picture and name to a public hoarding on the way from the Kochi airport to the city with the motto: “Save the Street Children”? I was once asked to introduce him at a Gandhi Smriti in Surat. I said, one may dare do this if one could “introduce” a cyclone, a tornado, a volcano or tsunami. Krishna was a natural, elemental force with whom you gravitated or perished. Incidentally, he once surprised me by seeming to read a text, only to later learn that he was merely turning blank pages from a photo diary of Jawaharlal Nehru. Krishna’s sight may have been affected but his constitutional vision was intact. He didn’t live to see India become a just and caring state while still being a strong state, but he has done much, as a justice and a human being, to eliminate the conceptual distinction between India and Bharat. Even when the judicial handkerchief was small and tattered, Krishna valiantly followed Mahatma Gandhi’s counsel to wipe every tear from every eye. He accomplished the nearly impossible task of living well and taught many of us how to do the same. He continued to guide us by his luminous being and doing. Whether or not the Indian state belatedly confers the coveted Bharat Ratna on him, Krishna remains a jewel in the people’s crown. 

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UNEP report points to huge gaps in funding and technology

The first Adaptation Gap Report by the United Nations Environment Programme (UNEP) released on Friday morning here, says that even with emissions cuts, climate change adaptation costs are likely to hit two to three times the current estimates of  of $70-100 Billion per year by 2050.

The report say that failure to cut emissions will dramatically increase costs and new finance is required to avoid a significant funding shortfall after 2020. Anne Olhoff, lead author of the report said that 29 experts from 19 leading institutions reviewed data for the report and it primarily looks at gaps associated with long term global goals of adaptation. The Green Climate Fund could play a central role in bridging the future adaptation funding gap, she said. The technology gap spans across all sectors but are large in water and agriculture. 

Dr Saleemul Huq, member of the steering committee, said the easier part in the adaptation goal was the money part. The more difficult part is empowering the most vulnerable communities and make positive contributions.Adaptation funding needs are increasing rapidly and the issue of knowledge and adaptive capacity building is not just about money. Vulnerable communities are doing things on their own, he said. 

The adaptation funding gap can be defined and measured as the difference between the costs of meeting a given adaptation target and the amount of finance available to do so. The report comes at a time when countries in Lima are demanding an increasing focus on adaptation and funding and calling for an adaptation goal globally.

The report finds that, despite adaptation funding by public sources reaching $23-26 billion in 2012-2013, there will be a significant funding gap after 2020 unless new and additional finance for adaptation becomes available. Without further action on cutting greenhouse gas emissions,  the cost of adaptation will increase even further as wider and more expensive action is needed to protect communities from the intensifying impacts of climate change such as drought, floods and rising sea levels.

The fifth assessment Report of the Intergovernmental Panel On Climate Change (IPCC) says that existing global estimates of the costs of adaptation in developing countries range between $ 70 billion and $ 100 billion a year globally by 2050.  The report focuses on developing countries where adaptation needs are expected to be the highest and adaptive capacity is often the lowest. On the positive side the report notes that the amount of public finance committed to activities with explicit adaptation objectives ranged between USD 23 to USD 26 billion in 2012-13 of which 90 per cent was invested in developed countries. 

The report points to a number of areas for action and future analysis.

E-commerce vs kirana?

A young woman was setting up house in Mumbai recently. About 85 per cent of her budget was spent shopping at outlets run by chain stores or on websites - to buy white goods, brown goods, furniture … . The only items bought at the traditional retail outlets in bazaars were some electrical and bathroom fixtures and kitchen utensils. Yet business statisticians tell us that organised retail accounts for only seven per cent of the total retail business in India of more than half a trillion dollars. Perhaps this is because about three-fifths of such retail business consists of food items, and perhaps young working women in Mumbai are not part of any representative set.

Still, the growing presence of retail networks is hard to miss, in the (also) growing number of shopping malls and elsewhere. Apart from the Future Group, Shoppers Stop and chains run by India's big business houses (they are all there - Tata, Birla, Ambani, Mittal, RP-Sanjiv Goenka …), there are also speciality outlets like pharmaceutical store chains that, one hopes, are assurance against the supply of fake drugs. Foreign retail chains, reluctantly allowed limited entry, have begun to make their initial moves and, like Ikea, intend to spend big money - sometimes in the billions of dollars. Meanwhile, the big investors can't seem to get enough of the action when it comes to shopping websites - whether Flipkart or Jabong, PropTiger or Urban Ladder. As for publishing, Pranab Mukherjee's book is available only online. In case you haven't noticed, India's retail business is changing, fast.

As with all such change, there are tensions and disputes. Big organised retail is lobbying against the discounting practices of the websites, the government is looking at whether the operations of the websites are on all fours with the law, and the "radio taxi" companies are complaining about the entry of operators like Uber (but also offering discounts in order to compete). Whatever the specifics of these issues, it is hard to argue that change must be stopped.

And so, one wonders: whatever happened to the politicians' oft-stated worry about the fate of 14 million neighbourhood mom-and-pop stores, and the people they employ? Retail trade is the biggest provider of jobs after agriculture and manufacturing; using that argument, politicians blocked foreign investment in the retail business for years on end. Quixotically, though, they did not stop home-grown chain stores from taking root. So was the fuss about local kirana stores, or giving the domestic big boys a protected market
The permission to foreigners to come set up shop, when it was finally given, was hemmed in by riders - how much of the goods sold must be locally sourced, in which cities and states they could do business, and so on. Quite a few states have refused to allow foreign stores, some of them even reversing earlier policy decisions that gave the green light. So it is strange that, when both small and big brick-and-mortar stores are threatened by the emergence of e-commerce, no one is concerned about job losses. Perhaps it is easier to sound off against big bad Walmart than against faceless international financiers of young domestic entrepreneurs who have launched e-commercebusinesses.

Once again, technology has forced the no-changers to risk looking like Luddites. The Left ended its opposition to computers only after the birth of personal computers made it look foolish; ditto now with the advent of e-commerce. In between, foreign investment rules for the media were made irrelevant by rapidly growing traffic on news websites. It is time to take a more open view of the sector, and tap into the advantages of organised retailing - the assurance of quality, the development of supply chains that aid efficiency, and the birth of new vendors whose goods would add to exports by feeding into international supply networks. The net impact might even be an increase in employment

Modi, CMs to discuss Planning Commission

The discussion between Prime Minister Narendra Modi and state chief ministers this Sunday on the sequel to thePlanning Commission is likely to focus on four broad areas.

These are cooperative federalism, Centre-states relationship, future of the five-year planning process, including the ongoing 12th Plan, and what the Commission's replacement should be.

Officials said the CMs have been asked whether they want continuation of the present system of five-year plans, annual plans and state plans or are for junking all of these.  

The meeting will be in two parts. In the first half, the secretary of the Planning Commission, Sindhushree Khullar, will give a presentation on the current state of the Commission and the work being done byit.
“In the second session, Prime Minister Modi will meet the CMs without their aides,” an official said. This is expected to be for about two hours.

Some officials said views were also being sought from some former members and former deputy chairmen of the Commission, on contours of the new body.

In a brief intervention in Parliament on Friday, the PM said the new body to replace the Commission, would be in sync with the changing times. He said the government would involve knowledgeable people and those who could provide new ideas to redefine and restructure the Commission.

“I have convened a meeting of CMs on December 7 for detailed discussion. In the Planning Commission also, there had been discussion on how to bring it in tune with the changing times. Taking all these aspects into consideration, plans are afoot towards a new shape (of the Plan panel),” said Modi.

After his address to the nation on Independence Day, this is the first time the PM spoke in public about the need to reshape the Commission.

In his I-Day speech, he had signalled abolition of the Commission. Thereafter, discussions were held between experts and economists on a new structure. Officials said the new body was to, tentatively, be called ‘Neeti Aayog’ (Policy Commission). It is to comprise four major departments — Direct Benefits Transfer (DBT), inter-state councils, Unique Identification Authority of India, and programme evaluation. Each department will be headed by a secretary.

Some departments are currently under the Commission's charge, with their functions involving other ministries. For instance, the nodal body for DBT is the Planning Commission, while its function on direct cash transfer for cooking gas cylinders is managed by the petroleum ministry. In the case of inter-state councils, some of these are handled by the home ministry.

In between, the role and functions of the Commission were gradually reduced. Its financial might was clipped through a recent circular by the finance ministry, which directed major ministries and departments to furnish their Plan Budget estimates for 2015-16 directly to it.

Planning minister Inderjit Singh told the Lok Sabha planning was relevant in India and the Commission should come to grips with emerging social realities to reinvent itself. He noted states had moved away from allocating government resources in a command and control system, to a more complex role of mediating through policy action and providing favourable conditions for private investment, public goods and essential services.

A $400-bn plan with fair returns will ensure 24X7 power

Power Minister eyes billion-tonne coal output, 100 GW of solar power capacity and $50 bn investments in T&D segment in next five years

A massive overhaul of the power sector is underway with the government planning to bring in a series of amendments to the Electricity Act of 2003 across all segments of the power value chain within the current session of Parliament.

“I am looking at a billion tonne coal production, 100 Gw ofsolar power capacity and investments of about $50 billion in the transmission and distribution segment in the next five years,” said Piyush Goyal, minister of state (independent charge) for power, coal and new and renewable energy, while addressing Confederation of Indian Industry national council meeting, organised in the capital on Saturday.

The Union Cabinet had in November approved the launch of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for ensuring 24x7 power supply.

The Rs 43,033-crore scheme would separate agriculture and non-agriculture feeders, facilitate judicious rostering of supply to agricultural and non-agricultural consumers in rural areas, and strengthen sub-transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers. 

In a bid to boost renewable energy, which is targeted to be 15 per cent of the energy mix by 2020, the government is set to impose stringent penalties on errant discoms who fail to meet renewable purchase obligations.

This will be clubbed with a renewable obligation on generators by which all conventional power producers likeNTPC will have to be accountable for some proportion of renewable power.

Significantly, while the minister highlighted the need to revive gas based power projects in the system to create a balance of base and peak power, he also spoke in detail about the reforms and corrective steps being taken to address coal supply and evacuation issues. Some of the steps he cited included increasing the number of rakes involving an investment of $ 1 billion and rationalising coal linkages and swapping to optimise costs and save almost Rs 6,000 crore.

Reforms are also being planned for the floundering distribution companies. The government is providing provisions whereby the entire discom set up will be unbundled. While there will be a government distributor of power to ensure that power is provided to the weaker section of society, competition will be introduced and the private sector role in the sector will be expanded.

Highlighting that the coal and electricity sectors are reflective of the change in governance that the new government has brought about some achievements, he said, “The electricity and coal production has risen by 11.3 and 10.2 per cent, respectively, during the June-October 2014 period.”

Elaborating on how focusing on outcome-oriented actions and time-bound execution has helped in the resolution of key issues, he said, “With hydel capacity being challenged due to a poor monsoon, the government was faced with the Hobson choice of consuming the available stocks and generating more power. The electricity sector was able to increase production by 20 per cent during the June-July –August period.”

He said the coal ordinance is a step in the direction of setting right a wrong of 20 years. Another issue that was resolved satisfactorily through a dialogue with the industry was the issue of anti-dumping duty.

"Going forward, I see a flourishing domestic renewable energy manufacturing industry co-existing with a massive development phase which will achieve the ambitious target of 100 Gw by 2022. This is also reflective of our commitments to environment and climate change.”

Talking about Re-invest, an initiative of the ministry of new and renewable energy to catalyse investments in the sector, he said, “The government is hoping to come forward with a clear cut road map on how to achieve the 100 Gw solar target at Re-invest, which is scheduled in February 2015. We urge the industry to evaluate the business propositions in this sector, make commitments towards green energy and join us in making India a solar super power of the world.”

Discussing the innovative financing models and the new framework that the government is now evaluating, he said, “Innovative financing models have helped make solar energy a viable business proposition. We are looking at graded tariffs to achieve grid parity; provide investors a fair return on investment over the lifecycle of the project and bring in an entity to provide power purchase assurance to investors.”

Emphasising on the business case for investments in renewable energy, particularly for large investors, he said, “Factoring in accelerated depreciation benefits and leveraging the strong balance sheets to avail of the benefits of lower interest rates will help reduce the cost of solar power downwards of Rs 5 and on a par with conventional power. This can change the whole economics of the business.”