No conditions apply

Cash in the hands of the poor can transform their lives. With bank accounts and an Aadhaar card for all becoming a reality, it is possible to transfer money directly to the poor and check middlemen who siphon away funds.

Cash transfers (CTs) come in many forms. They may be conditional or unconditional, selective or non-selective, targeted or universal. Some types of CT are as susceptible to misuse as the public distribution system, where, according to the Planning Commission, only 27 per cent of the expenditure actually reaches the beneficiaries.

Conditional cash transfers (CCTs) have become popular internationally. The World Bank has defined them narrowly: “[CCTs] are programmes that transfer cash, generally to poor households, on the condition that those households make pre-specified investments in the human capital of their children.” However, CCTs often have other behavioural conditions, such as the requirement for a pregnant mother to deliver a child in a hospital or to get her child vaccinated. Sometimes, conditions reach ridiculous extremes, as when a mother is supposed to “prove” exclusive breast-feeding before she can apply for a cash benefit. In Mexico, conditions have been associated with a high incidence of exclusion, as people entitled to the cash withdraw when they cannot comply with them.

Conditions are often difficult to implement and monitor. Each condition that requires a certificate becomes a road block and increases opportunities for corruption. Often, conditions beget more conditions, as they are primarily attempts at social engineering, in which a transfer is used as a carrot and stick, to be given or taken away, depending on whether the entitlement criteria are aligned with state-determined norms. This engineering is most often successful when local infrastructure, like schools and hospitals, is available; although in India, where village health clinics often have abysmal hygiene, CTs associated with hospital deliveries have resulted in multiple deaths.

Unconditional cash transfer (UCT) policies rely on people’s own initiative instead of directing them towards particular kinds of behaviour, expecting that people will use cash wisely for their own and their children’s development. A recent book, Basic Income: A Transformative Policy for India, by Sarath Davala, Saumya Kapoor Mehta, Guy Standing and myself, details the results of a survey carried out in 22 villages where UCTs were given to nearly 6,000 men, women and children, sent to their bank accounts and paid individually each month for 18 months. The rigorous study, conducted as a modified randomised control trial, seeks the answers to a number of questions on the effects of such a UCT.

 The two most commonly asked are: Would unconditional monthly cash payments be an effective tool to reduce economic insecurity and poverty? And would they be likely to lead to wasteful spending on private bads?

-reaction to the idea of CTs is, “The men will waste all the money in drinking, and will beat their wives to get their money too”. The facts disproved this. There was no increase in drinking among the families who received the transfers, nor was there any anecdotal or qualitative evidence to suggest this. In one tribal village, drinking actually went down. The sarpanch explained, “There is not much employment in these villages so men sit around playing cards and drinking. After the CT, they were able to buy seeds and fertiliser and now they work hard farming their land”. 

A heartening finding was that UCTs lead to growth and income-earning opportunities. This was especially true for the poorest tribal families, where 50 per cent said that they had used the transfers to make their lands productive, and the number of livestock in a village increased by over 30 per cent. Overall, more than 20 per cent of the respondents said they had increased their income-earning work. Multivariate analysis suggested that for women, receiving a basic income was strongly associated with diversification into a second income-earning activity combined with a primary one. Most families in India today, no matter how poor, want better education for their children. 

The CTs enabled children to go to school, often switching from a non-functional government school to a private one. There was a doubling of enrolment among adolescent girls in secondary schools. Nutrition improved, especially among the poorest tribal and Dalit families, with a substantial increase in food sufficiency. Further, as individuals were able to go to doctors when they got ill and afford regular medicine, serious health incidences in the villages declined. An emancipatory effect associated with CTs was that, with the increase in liquidity, reliance on usurious debt decreased. It empowered the most vulnerable — Dalits, women, the elderly, the disabled. UCTs are known as basic income internationally. They give people a choice and rely on individual initiatives to change social conditions. A basic income leads to holistic development and restores people’s dignity. It could be a transformative policy for India. -

India, Russia, here and now

When he met Russian President Vladimir Putin on the margins of the BRICS summit in Fortaleza, Brazil, in July, Prime Minister Narendra Modi apparently told him that every child in India knew Moscow was Delhi’s best friend forever.

As they sit down for a longer and substantive conversation in Delhi this week, Modi and Putin know they have a problem. The geopolitical circumstances that bound India and Russia close together for so long have begun to change. The structure of the partnership, too, is looking less special amid extended stagnation. Modi, who has boldly moved to rejuvenate India’s ties with America and Japan and devised a more positive approach towards China, must now go back to basics on Russia and find productive ways of boosting bilateral relations in an adverse regional and international environment.

In Moscow, it was Putin who saved the relationship from becoming irrelevant to both countries. In the 1990s, India found it hard to get post-Soviet Russia’s attention, as Moscow sought to integrate itself with the West and build a “Common European Home” stretching from the Baltic to the Pacific. Much hard work of Indian diplomats and strong faith in Delhi’s political class helped sustain the relationship with Russia through the difficult decade. It was only when Putin took charge of Russia at the turn of the new millennium that the bilateral relationship took a turn for the better.

That Putin had a working relationship with the West made India’s task relatively simple. Unlike in the Cold War, Delhi simply had to engage both Russia and the West, dealing with each on its own merit. Modi, however, will find the going somewhat difficult as Russia’s relations rapidly deteriorate.

The tension between Nato’s relentless expansion eastwards and Moscow’s determination to restore its traditional sphere of influence in the “near abroad” has been gathering for a while and finally boiled over in Ukraine this year. The idea of a Common European Home stands shattered. Russia and the West are finding it difficult to restore the rules of the road invented at the end of the Cold War in Europe, during 1989-91, or devise new ones that are acceptable to both sides. If the crisis in Europe lasts too long and Russia drifts away from the West, there will be new constraints on India’s foreign policy. There is no question of Delhi supporting Western sanctions against Russia, but the secondary effects of these measures are likely to corrode India’s ties with America and Europe.

India avoided endorsing Putin’s annexation of Crimea by force in Ukraine and then legitimising it by a “referendum”. After all, Delhi is rejecting Pakistan’s demands for a “plebiscite” in Kashmir. But you don’t want to reproach your friends in public. Delhi, therefore, kept quiet, much in the manner that it refused to publicly criticise Moscow when it sent troops into Afghanistan in 1979.

a new Cold War between Russia and the West, India might find itself in a cleft stick. On the one hand, India’s economic stakes in the partnership with the West have rapidly grown and those with Russia, steadily diminished. Beyond the important defence and strategic trade, there is little commercial content in bilateral ties. Changing that has long been a priority for Delhi and Moscow. Modi and Putin, one hopes, can do better. The changing geopolitical dynamic, meanwhile, is casting a shadow over the strategic ties between Delhi and Moscow. When Soviet Russia made enemies around the world in the 1980s, Indira Gandhi began to reduce Delhi’s excessive dependence on Moscow for arms supplies and Rajiv Gandhi accelerated the search for the diversification of India’s strategic partnerships. Russia, however, retained its special position by supplying the kind of technologies no other country was prepared to supply to India. Consider, for example, Russian assistance to India in building the nuclear-powered submarine, Arihant. Although Modi is looking for stronger defence ties with the United States, there is no possibility that it can replace Russia in the near term. But India’s relations with Russia are complicated by one important consequence of the unfolding conflict between Moscow and Washington. It is Russia’s strategic embrace of China, which is likely to have many implications for India. For one, Russia has begun to boost defence ties with China and is exporting technologies and systems that it once reserved solely for India. More broadly, by lining up behind China on global issues, Moscow is making it harder to construct a stable balance of power in Asia. Worse still, an America preoccupied with Central Europe and the Middle East might be compelled to consider compromises with Beijing in Asia. 

Put simply, Russia’s conflict with the West pushes both of them towards a rising China and improves Beijing’s leverage in all directions. Making matters worse for India is Russia’s new strategic warmth with Pakistan. This has been in the making for a while. Quite clearly, neither Delhi nor Moscow can insist, any longer, on an exclusive partnership. The India-Russia political partnership, which had expanded from the 1960s, took place amid deepening Sino-Russian hostility and Pak-China amity. Given an unreliable America, Russia was India’s principal insurance against the security challenges from China and Pakistan. If Moscow continues to fight with the West and draw closer to China and Pakistan, there is a real danger that India’s long-standing romance with Russia might turn sour. Preventing an irreversible drift in that direction should be on the top of the agenda for Modi and Putin. As hard-boiled realists, Modi and Putin must acknowledge the new dynamic around them, find ways to limit its impact on the bilateral relationship and move quickly towards expanding the scope of their commercial ties and revitalising their cooperation in energy, defence and high-technology sectors. - 

Beijing’s southern moves

It is fair to argue that South Asia had not been a priority for China’s foreign policy, although China has been an observer at the South Asian Association for Regional Cooperation (Saarc) since 2005 and a strategic ally of Pakistan. However, China’s interest in South Asia has increased considerably. Its fresh bid for full membership to Saarc reflects South Asia’s growing importance for Beijing’s foreign policy agenda.

Chinese President Xi Jinping paid state visits to Sri Lanka and the Maldives in September. Xi is the first Chinese head of state to visit the Maldives since the establishment of their diplomatic relationship in 1972. Maldives President Yameen Abdul Gayoom was quoted by Chinese media as saying: Other South Asian states were wondering how the Maldives could invite a Chinese president to visit the tiny country. Similarly, Xi’s state visit to Sri Lanka was the first by a Chinese president after 28 years. It has now clearly emerged that China is more interested in South Asia than ever.

China’s growing interest in South Asia has been driven by three main strategic considerations. First, with its rising power, China is expanding its influence beyond its immediate neighbourhood, including South Asia and the Indian Ocean. Despite India’s displeasure, a Chinese nuclear-powered submarine docked at the Colombo port. For the first time, Beijing did not keep the stopover confidential. Instead, it termed the episode as “nothing unusual”. That means China is trying to make its military presence in South Asia a “usual” affair. But, like many pundits argue, China has not been deemed a South Asian state. Therefore, its presence in this region has always raised eyebrows. The Saarc membership will serve as a solution since it will grant China a “South Asian” identity, with which Beijing can play an insider role in the region.

The second reason for Beijing to be more involved in South Asian affairs is related to China’s “One Belt, One Road” initiative, the abbreviation for the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”. The “Silk Road Economic Belt” was first mentioned during Xi’s visit to Kazakhstan in September 2013, while the “Maritime Silk Road” was proposed when he visited Indonesia in October 2013. Since then, Beijing has tried to use the initiatives to establish a more integrated relationship with its neighbours by building transportation facilities.

The main purpose of Xi’s visit to South Asia in September, including India, Sri Lanka and the Maldives, was to promote the grand strategy, also dubbed as “China’s Marshall Plan”. So far, China has won public backing from some Saarc members, such as Pakistan, Sri Lanka and the Maldives. But China also needs a multilateral mechanism for accelerating efforts to construct the

“One Belt One Road” in South Asia. In addition to the recently launched Asian Infrastructure Investment Bank (AIIB), Saarc appeared to be an ideal platform for Beijing to rally support and concretise its ambitious diplomatic blueprint.

Third, China’s motivation to reach out to Saarc comes from its concerns about India’s eastward policy. The Narendra Modi government has renamed the “Look East” policy as “Act East”, in an attempt to build a deeper engagement with East Asia and Southeast Asia. It is not immediately clear precisely how India will act in the East. But India’s willingness to play an active role in the South China Sea, where China has overlapping claims with several countries, has alarmed Beijing. Despite China’s strong objections, India and Vietnam have cooperated in oil and gas exploration in the disputed waters of the South China Sea. China’s foreign ministry has commented, “If such cooperation harms China’s sovereignty and interests, we will resolutely oppose it.” It is also significant that the India-US joint statement, issued during Modi’s state visit to Washington, specifically mentioned the situation in the South China Sea, a move that clearly ruffled a few feathers in Beijing.

Moreover, China has expressed its discomfort about the increasingly strategic relationship between India and Japan. Disregarding Chinese concerns, India invited Japan to participate in the annual Exercise Malabar, along with the US, in the Western Pacific in July. It was followed by Modi’s veiled criticism of China’s expansionism in Tokyo. Although he did not name any country, the comment was seen as targeting China. Beijing has not been blind to these developments. It is reasonable, therefore, for Beijing to develop a southward policy as a countermeasure to put pressure on New Delhi and counter India’s eastward expansion.

With the support of some South Asian states, it’s likely only a matter of time before China secures full Saarc membership. India is left with few options but to seriously examine the implications of China’s entry. Being the dominant power in South Asia, India should probably manage China’s presence with a mindset of open regionalism. Despite blocking China’s full entry to Saarc, Delhi should mull over the possibilities of making China’s activities in South Asia complementary to India’s own neighbourhood policy. This is a more pressing challenge for India.

Bullet train’s success fires China’s nuclear export drive

After successfully competing for high-speed rail links abroad, China now wants to develop world class nuclear technology — a move that would not only lighten its carbon footprint, but also help it emerge as a major exporter of atomic power.

Last week, China decided to set up an undisclosed number of shore-based nuclear power plants, lifting the bar on new ventures that was imposed in the aftermath of the March 2011 Fukushima nuclear disaster in Japan.

The London-based World Nuclear News website reported that days after the Fukushima accident, China’s State Council decided to halt approvals and licensing for new reactors until a safety plan was in place. It also sought assurances that existing plants were adequately designed, sited, protected and managed. Li Pumin, the spokesman of the National Development and Reform Commission (NDRC), China’s top economic planner, announced that all projects will comply with the highest international security standards.

Currently, China runs 21 nuclear power reactors, generating 19,095 MW of power. An additional 27 units are under construction, which would yield around 30,000 MW of electricity, when completed. Yet, it is estimated that China would need to set up another 13 reactors, if it is to meet its 2020 target of generating 58 GW of atomic power.

The post-Fukushima drive for nuclear energy has been significantly spurred by the clean-energy target set by President Xi Jinping, who had announced that China is focusing on peaking its emissions by 2030, before its carbon footprint begins to slide.

Nuclear power generation has come into sharper focus because of some of the problems that China has recently encountered with renewables. Last year, China, the world’s largest producer of wind energy and solar power, was unable to utilise 11 per cent of wind power capacity because of grid problems.

Buoyed by its successes in developing relatively cheaper, but first rate, high-speed trains, Chinese planners are now looking at replicating that experience in the field of nuclear exports. A magazine article published by the China National Nuclear Corporation (CNNC) proposed structural changes, capped by the formation of a new state-run investment company that would steer investments in overseas nuclear power projects.

Last month, the China Nuclear Engineering Corporation (CNECC) and the China General Nuclear Power Group (CGN) were given a go-ahead to jointly develop the homegrown Hualong One power plant. Its developers say that the plant has exciting export potential, especially in the Global South. On December 4, China and South Africa signed a financing framework agreement for the construction of a new nuclear power plant in South Africa, as well as an agreement on nuclear personnel training.

On Wednesday, CGN is hoping to raise $3.16 billion from its Initial Public Offering (IPO) in Hong Kong — a move that underscores the growing confidence among Chinese companies to raise their domestic nuclear profile and compete in overseas markets.

Artificial enzymes suggest life doesn't need DNA or RNA

• Researchers have developed artificial enzymes from genetic material that does not exist in nature, called XNA, an advance that hints at the possibility that life could evolve without DNA or RNA.
  DNA or deoxyribonucleic acid and ribonucleic acid or RNA are two self-replicating molecules considered indispensable for life on Earth.
  "Our work with XNA shows that there's no fundamental imperative for RNA and DNA to be prerequisites for life," said Philipp Holliger of the Laboratory of Molecular Biology in Cambridge, UK.
  XNA or xeno nucleic acid created by Holliger's team contains the same bases - adenine, thymine, guanine, cytosine and uracil - on which DNA and RNA rely for coding hereditary information, 'New Scientist' reported.
  In DNA and RNA, the sugars are deoxyribose and ribose, respectively. Holliger made new types of genetic material by replacing these with different sugars or other molecules.
  In the new study, researchers showed that XNAs can also serve as enzymes - indispensable catalysts for speeding up chemical reactions vital for life.
  One of the first steps towards life on Earth is thought to be the evolution of RNA into self-copying enzymes.
  The XNA enzymes can't yet copy themselves but they can cut and paste RNA, just like natural enzymes do, and even paste together fragments of XNA.
  Holliger said that RNA and DNA may have come to dominate Earth by chance, simply because they were the best evolutionary materials to hand.
  "You could speculate that on other planets, XNAs would dominate instead," he said.

First ‘green diesel’-powered flight

A Boeing aircraft has completed the world’s first flight using ‘green diesel’, a sustainable biofuel made from vegetable oils, waste cooking oil and animal fats.

The company powered its ecoDemonstrator 787 flight test airplane on December 2 with a blend of 15 per cent green diesel and 85 per cent petroleum jet fuel in the left engine.

“Green diesel offers a tremendous opportunity to make sustainable aviation biofuel more available and more affordable for our customers,” said Julie Felgar, managing director of Environmental Strategy and Integration, Boeing Commercial Airplanes.

“We will provide data from several ecoDemonstrator flights to support efforts to approve this fuel for commercial aviation and help meet our industry’s environmental goals,” Ms. Felgar said in a statement.

Sustainable green diesel is widely available and used in ground transportation. Boeing previously found that this fuel is chemically similar to HEFA (hydro-processed esters and fatty acids) aviation biofuel approved in 2011.

Widely available

Green diesel is chemically distinct and a different fuel product than “biodiesel,” which also is used in ground transportation.

With production capacity of 800 million gallons (three billion litres) in the U.S., Europe and Asia, green diesel could rapidly supply as much as one per cent of global jet fuel demand.

“The airplane performed as designed with the green diesel blend, just as it does with conventional jet fuel,” said Captain Mike Carriker, Chief Pilot for New Airplane Product Development, Boeing Test and Evaluation.

On a lifecycle basis, sustainably produced green diesel reduces carbon emissions by 50 to 90 per cent compared to fossil fuel, according to Finland-based Neste Oil, which supplied green diesel for the ecoDemonstrator 787.

The flight test was coordinated with the U.S. Federal Aviation Administration, Rolls-Royce and Pratt & Whitney, and EPIC Aviation blended the fuel.

Being middle class in India

Are differences within the middle class, in income, education, and cultural and social capital, so wide as to render moot any ideological or behavioural coherence to this group?

Over the next two months, The Hindu will release the findings of a new survey on the aspirations and anxieties of ordinary Indians. The survey is the latest round of a multi-year panel study sponsored by the Lok Foundation and carried out in collaboration with the Center for the Advanced Study of India (CASI) at the University of Pennsylvania, in conjunction with the Carnegie Endowment of International Peace. The “Lok Surveys” aim to track the attitudes of Indians over the next several years, as part of a significant new effort to understand the social and political reconfigurations taking place across Indiatoday. CMIE, on behalf of the Lok Foundation, conducted face-to-face interviews of 69,920 randomly selected Indians across 25 states and union territories between January and May 2014. Because our sample is about two-thirds urban and one-third rural, 2011 Census data is used to reweight the sample to ensure urban/rural representativeness.

The rapid growth of the Indian economy over the past three decades has led to a substantial expansion of India’s “middle class”. This has triggered a robust debate over who in India actually belongs to the “middle class,” its size, composition, and political and social behaviour. This is a debate with serious implications for economic growth and governance since a range of scholarship in diverse settings has shown that the middle class is an important driver of a country’s economic, political and social development.

But is the middle class anything more than simply a large group whose income makes it neither rich nor poor? Are differences within the middle class, especially in income, education and cultural and social capital, so wide as to render moot any ideological or behavioural coherence to this group?

This also happens to be a debate with no easy answers because social class is a conceptually complex measure; there is neither a universally accepted definition of middle class nor widely available data on the income of Indian households, as opposed to their consumption patterns. But even if acceptable measures and hard data could be marshalled, they would still be ill-equipped to nail down a rather elusive concept: whether Indians actually believe and behave as if they are part of the middle class. Self-identification of class status is important because it suggests the possibility that Indians may behave in ways that are actually at odds with material realities.

To investigate this, the latest Lok survey asked respondents from across the country whether they considered their family to be a “middle class” family.

To our surprise, nearly half (49 per cent) of all survey respondents believed their family is a middle class family. There was, as one would expect, great variation in responses across states. For instance, while 68 per cent of respondents in Karnataka believed their family belonged to the middle class, just 29 per cent of respondents in Madhya Pradesh felt the same. Self-identification as middle class is expectedly more prevalent among urban respondents (56 per cent) but the share of rural individuals claiming to be middle class is also remarkably high (46 per cent).

Survey results

Two things are striking about this finding: the contrast between respondents’ self-perception and objective reality and differences on the rural-urban axis (Figure 1). We disaggregated our sample into five income categories, based on self-reported annual household income. While any such classification is admittedly blunt, the results are nonetheless illustrative. Whereas respondents are more likely to self-identify as middle class as household income increases, a sizeable proportion of respondents across all income groups believe they are part of the Indian middle class. 47 per cent of lower middle-income respondents self-identified as “middle class”, while half of middle income and 54 per cent of upper middle-income respondents did so. Expectedly this declined to 48 per cent for those in the highest income bracket. Most surprising 45 per cent of those who were in the lowest income bracket self-identify as middle class, barely 3 per cent less than the richest income group.

Even within the same income categories, however, there are marked differences between rural and urban India. There could be several reasons for this. For one, we are comparing nominal incomes and not real incomes, given the much higher cost of living in urban areas. Second—and this reflects disagreements about whether a coherent middle-class identity comes about due to social or economic factors or is instead the result of political factors—ascriptive identities (especially caste) are more salient in rural relative to urban India. Historically, the “middle class” construct has been a production of the forces of industrialisation and urbanisation.

Middle class belonging also increases with educational attainment: the more educated one is, the more likely she is to claim to be middle class. However, 47 per cent of individuals with less than 10th standard education—those we typically do not associate with middle class status—still claim such an affiliation. Those numbers are surprisingly large and, as with income, urban-rural differences are notable.

But the extent of “middle class” identification is striking, not simply because of its size or the fact that it seems to run counter to households’ own economic realities, but also because it appears to have powerful experiential effects on respondents’ social attitudes.

Across a range of measures, those who believe they are middle class are markedly more upbeat about their status in life today as well as their prospects in the future (Figure 2). When asked whether they believed their household’s economic conditions are getting better, 62 per cent of self-proclaimed “middle class” respondents answered in the affirmative, compared to 48 per cent for those who feel they are not among the middle class. When compared to those who believe they are not middle class, larger proportions of so-called “middle class” respondents believed that their children will have a higher standard of living than they enjoy and that their family’s social status has improved in a generation. Furthermore, they are more bullish in their assessments of the country’s overall progress and India’s economic conditions as a whole.

Class replacing caste?

The factors driving such large middle class self-identification are less clear. In a status conscious society, as caste weakens as a marker of status, could this be a sign that class markers are taking its place? What might be some consequences of self-identifying as middle class? Could it be, for instance, a factor shaping occupational mismatches between aspirations and jobs in Indian labour markets as one of us has shown in a related work (Aggarwal, Kapur, et al, 2012)? If so, it could explain the fact that in fast growing urban areas where there is a large unmet demand for good blue-collar skills (such as carpenters or plumbers), which can give incomes that would place the person in the lower middle class, young people often prefer a lower paying “white-collar” job as a shop assistant.

The “middle class” moniker may also be affecting what people do with their money and how they define their roles in society. There is considerable evidence that, to the extent class reflects a person’s place in society; it impacts both consumption levels and product choices. Our finding that middle class self-perception makes one more optimistic about the economy bodes well for consumer spending since the extent to which people are sanguine about their economic future influences their discretionary spending.

Another contested terrain shaped by social class is political behaviour. The Lok survey indicates that, for all the talk of “middle class” support for the Bharatiya Janata Party (BJP), the evidence is not clear-cut. Self-proclaimed middle class Indians were only marginally more likely to have voted for the BJP in the recent general election. We find starker differences when measuring class objectively through income, education, or occupational criteria — with those on the upper ends of the spectrum (those with at least a 10th standard education, a “bourgeoisie” occupation, or with annual household income above Rs.7,20,000) more in favour of the BJP.

Three structural changes occurring in India — service-sector led economic growth, rapid expansion of urbanisation and higher education — are undoubtedly resulting in a massive expansion of the middle class, however defined. The political and social consequences will depend on whether this middle class emerges simply as a social formation or as a self-conscious political force, whether progressive or possibly even reactionary.