Strengthening accountability

In a significant judgment, the Supreme Court recently quashed a “two-judge committee” set up by the Chief Justice of the Madhya Pradesh High Court to probe allegations of sexual harassment against a judge of the court. By insisting on the strict implementation of in-house procedures in cases of complaints against judges, this judgment marks a step towards greater transparency and certainty in proceedings relating to judges. In this case, the charges of harassment were levelled by a former Additional District and Sessions Judge of the Madhya Pradesh Higher Judicial Service. Her writ petition claimed that the in-house procedure envisaged by the Supreme Court was ignored by the High Court. Looking at how the judiciary addressed her complaint, the Supreme Court concluded that the prescribed procedures were not followed, and ordered a fresh probe. This commendable move reasserts the Court’s seriousness of purpose in ensuring a gender-sensitive process of internal investigation on sexual harassment complaints.

One of the first investigations into judicial misconduct was the impeachment process against Justice V. Ramaswami of the Supreme Court, in 1991. That case brought to the fore the inadequacies of the impeachment process under the Constitution and made evident the absence of legal authority in the Chief Justice of India to take any action in such situations. In a subsequent case of allegations against Chief Justice A.M. Bhattacharjee of the Bombay High Court, the Supreme Court for the first time laid down an in-house peer review procedure for “correcting [the] misbehaviour” of judges. In 2008, these in-house procedures were employed in investigating allegations against Justice Soumitra Sen, leading to impeachment proceedings. The Supreme Court has now taken this prescription further by declaring that these procedures be widely publicised and made available on the judiciary’s websites. However, it has to be noted that apart from the far-fetched impeachment process prescribed under the Constitution, there is as yet no institutional design or statutory law that can adequately support a transparent process of judicial inquiry, so as to enhance the accountability and legitimacy of the institution. The courts continue to be insular, oblivious to the principle of open justice — a stand justified on the ground of safeguarding judicial dignity and independence. Be it over criticism against judicial appointments or judgments like Swatanter Kumar (2014) that prohibited media reporting of sexual harassment allegations made by an intern against a judge, the judiciary has often been too defensive, deflecting criticism and hardly acknowledging the need for transparent accountability.

India to reach replacement levels of fertility by 2020

Total fertility rate in 8 States below 2 children per woman

Fertility is falling faster than expected in India, and the country is on track to reach replacement levels of fertility as soon as 2020, new official data shows.

The 2013 data for the Sample Registration Survey (SRS), conducted by the Registrar General of India, the country’s official source of birth and death data, was released on Monday.

The SRS shows that the Total Fertility Rate – the average number of children that will be born to a woman during her lifetime – in eight States has fallen below two children per woman, new official data shows.

Just nine States – all of them in the north and east, except for Gujarat – haven’t yet reached replacements levels of 2.1, below which populations begin to decline. West Bengal now has India’s lowest fertility, with the southern States, Jammu & Kashmir, Punjab and Himachal Pradesh. Among backward States, Odisha too has reduced its fertility to 2.1.

“At 2.3, India is now just 0.2 points away from reaching replacement levels. Fertility is declining rapidly, including among the poor and illiterate. At these rates, India will achieve its demographic transition and reach replacement levels as early as 2020 or 2022,” Dr. P. Arokiasamy, a demographer and Professor at the International Institute for Population Sciences (IIPS), Mumbai, explained to The Hindu.

The news on the other key indicator in the SRS - the infant mortality rate (IMR) - is less positive. India’s IMR has fallen to 40 deaths per 1,000 live births, and 49 deaths of children under the age of 5 for every 1,000 live births, but at these rates is unlikely to meet its Millenium Development Goals for 2015. IMR has fallen faster in rural areas than in urban areas.

Among the metro cities, Chennai has the lowest IMR (16). Among states, Kerala has by far the best IMR at 12 deaths per 1,000 live births; the next best states, Delhi and Maharashtra, have IMRs that are twice that of Kerala.

Another worrying trend that continues is the unnaturally higher mortality rates both for infant girls and for girls under the age of five than for boys, a trend that runs contrary to the global trend.

Mr Modi's follow-through risks For India to make the most of Narendra Modi's ambition and energy, he must get New Delhi to keep up

Few analysts expected Narendra Modi to pay serious attention to foreign policy in the weeks and months after taking office. There was (and remains) so much to do on the domestic front to redeem the promises he made in his campaign that many, including this columnist, felt that it would be some time before the new prime minister got round to external affairs. Yet Mr Modi surprised us right from the word go: he shook up the stodgy diplomacy of the subcontinent before capturing unprecedented attention in Japan, the United States and Australia, and elsewhere.

Only curmudgeons will deny that Mr Modi has gotten off to a brilliant start in foreign policy, re-establishing India as a significant player in international affairs. Even Singapore's The Straits Times has acknowledged this, with its editors picking the Indian prime minister as the Asian of the Year 2014.

Mr Modi has raised expectations across the region. Such is India's position in regional geopolitics that countries ranging from Japan to Australia, Vietnam to the United States expect New Delhi to take their side in their disputes with China. Beijing, for its part, is likely to calculate that it can no longer count on India to be tentative in its Indo-Pacific engagement. As a result, geopolitics has become a few notches more serious for India, and with that come several risks that theModi government will have to manage.

First, India's foreign service is understaffed, which means that there is a limit to which it can follow through on Mr Modi's energetic initiatives. If diplomatic capacity does not catch up, the gap between the prime minister's promise and the foreign service's delivery can diminish India's credibility in the international arena. Even if the entire Indian Foreign Service(IFS) adopts Mr Modi's famously short sleeping hours, there is so much on their agenda that outcomes will suffer.

For India to take advantage of the openings and the opportunities Mr Modi has created, the government will have to urgently add both implementation and intellectual capacity to the ministry of external affairs. In the short term, the government could draw on talented officers from other civil services and the armed forces. Over the longer term, the IFS needs to be enlarged. Only the prime minister's imprimatur can make these changes happen.

Second, domestic politics can constrain Mr Modi's ability to deliver his part of international deals, much like they did his predecessor. The Rajya Sabha, where the National Democratic Alliance does not have the numbers, can throw a spanner in the works on any foreign policy endeavour that needs legislative sanction. Solving the impasse over the United States civil nuclear reactor sales ahead of Barack Obama's visit to New Delhi in January is in the mutual interest of both countries. Mr Obama is also keen on a climate deal. If he wants to move on these, Mr Modi will not only have to contend with parliamentary opposition, but also the statements of the Bharatiya Janata Party while in opposition, and the views of some of his own supporters. This is true not only for deals with the United States, but with Bangladesh, China, Japan and others.

Third, by courting the Indian diaspora, Mr Modi cannot avoid stepping into their politics. This is a double-edged sword and can get messy, especially where there is an expectation that New Delhi will intervene on their behalf in local political or ethnic disputes. Going to any extent to protecting the interests of Indian citizens is fine and called for. However, the slightest intervention concerning foreign citizens of Indian origin is an altogether different category and comes with different types of risks.

Fourth, India lacks expeditionary military capacity. The Indian navy is a significant force in the Indian Ocean region, has increased its operations and a decent expansion plan. This gives New Delhi some power in the maritime space, from countering seaborne threats like piracy to delivering humanitarian relief in disaster-struck regions. However, for diplomacy to have a sharp end, New Delhi must have the ability to readily land and sustain brigade level formations in regional conflict zones.

Fifth, Mr Modi's second most difficult foreign policy challenge will be to manage the tensions along the frontiers with Pakistan and China. It serves the Pakistani military establishment's interests - almost at any given time - to raise the ante along the Line of Control and embroil India in a border conflict. There is also the risk that some of Pakistan's terrorist proxies will carry out terrorist attacks on Indian soil. The government will face immense public and political pressure to respond forcefully. Whatever else such escalation might achieve, it will suck out most of the energy of the government's foreign policy apparatus, affecting the larger agenda Mr Modi has set.

Finally, the biggest foreign policy challenge for the Modi government is the task of restoring India's economic growth. There is no paradox here: for the favourable reception Mr Modi received in the world's capitals lies in their perception that India is part of the solution to their own problems. They look towards a growing India has extensive trade and investment with the world. After the novelty and the shine wears off a promising new government, it is the economic indicators that will matter. So growth is a foreign policy imperative.

It is good to have a prime minister who revels in foreign affairs. But for India to make the most of Mr Modi's ambition and energy, he must get New Delhi to keep up.

Prime Minister’s Task Force on MSME

The Government had constituted a Prime Minister’s Task Force on Micro, Small & Medium Enterprises (MSME) on 2nd September, 2009, which submitted its report on 30th January, 2010. The report had made recommendations related to policy/programme support, institutional matters and legal/regulatory measures for the growth of MSMEs in the country. The recommendations cover the areas of credit, marketing, labour issues, rehabilitation and exit policy, infrastructure/technology/skill development, taxation and special measures for North-Eastern Region and Jammu & Kashmir. The Task Force recommended, inter alia, for expanding the coverage and for strengthening the schemes/programmes of the Ministry of MSME. Following the Task Force recommendations, the allocation of Rs. 10,330 crore during 11th Five Year Plan for the Ministry of MSME was increased to Rs. 24,124 crore for 12th Five Year Plan. This has provided a boost for the better implementation of various schemes/programmes of the Ministry which is being done subsequently.  Performance of MSME Sector As per the revised methodology suggested by Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI), on the basis of the data on Gross Domestic Product (GDP) published by CSO, MoSPI and final results of the latest Census (Fourth Census), conducted (with base reference year 2006-07), wherein the data was collected till 2009 and results published in 2011-12, the estimated contribution of manufacturing Micro, Small and Medium Enterprises (MSME) sector  to GDP, during 2010-11, 2011-12 & 2012-13, are 7.39%, 7.27% &  7.04% respectively. The Government aims to increase the growth and performance of the MSME sector by implementing various schemes / programmes. The major schemes / programmes are Prime Minister’s Employment Generation Programme, National Manufacturing Competitiveness Programme, Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Cluster Development Programme, Market Development Assistance Scheme, and Vendor Development Programme for Ancillarisation

Now, the big push Much work remains to get GST passed

The National Democratic Alliance has displayed admirable speed in chivvying India's 29 states and seven Union Territories into some sort of agreement for the goods and services tax (GST), which has now been introduced inParliament for legislative approval. The ambitious unified tax regime eluded the United Progressive Alliance government that had introduced the concept during its first tenure in the Budget for 2007-08; when passed it will probably be the most momentous tax reform since 1991. The fact that seven major states are ruled by the Bharatiya Janata Party has no doubt helped forge what is being called a "broad consensus". But there are disquieting signs that despite speedy Cabinet approval of the GST Bill and its introduction in Parliament, the target of April 1, 2016, to which the government has committed itself, may not be met.

For one, history has not been on the GST's side. Two target dates have come and gone - 2010 and 2013. These missed targets were the result of strong disagreements among the states of what to exclude from the GST regime (petroleum products and alcohol being favourites) and the compensation they would be paid for the tapering of central sales tax. In addition, there was, in many cases, a cussed resistance to change. Reports suggest that many of these issues have been resolved in the legislative package. But the tortuous progress of other significant reforms bills - such as insurance - does not raise hope for a speedy passage of the GST Bill. Being a constitutional amendment Bill (since indirect tax is on the Concurrent List), it may well be referred to a standing committee - which can be depended on to delay matters as indefinitely as its members choose. Even if the standing committee were to work with unprecedented speed, the Bill will still have to negotiate the Scylla of a two-thirds majority in the Lok Sabha and the Charybdis of a Rajya Sabha in which the ruling party at present lacks the requisite numbers. If a best-case scenario sees speedy clearance in both Houses of Parliament, there remains the byzantine process of ratification by all state legislatures before the Bill can be enshrined in the statute books. Then again, each state legislature will also have to amend its own taxation laws. All this must happen even as the really contentious issue of the GST rate is to be finalised. Since the GST will subsume a plethora of central excise and state taxes on goods and, for the first time, on services, the disagreements have been so fierce as to suggest further delays.

So far, the central government has shown considerable flexibility in acceding to states' sometimes unreasonable demands. It is critical that the states reciprocate. This is a practical necessity because without rapid agreement on all this, the vital information technology (IT) backbone that will integrate states' disparate value-added tax systems into an all-India network, a mammoth task for the GST Network, the quasi-government company that will implement the system, will remain incomplete. The GSTN currently faces a chicken-and-egg situation: it needs to get to work right away in appointing a service provider and testing a system that will involve 6.5 million dealers in myriad intricate transactions. All this takes time, the luxury of which the GSTN does not appear to have since it has been given April 1, 2016, as a hard target. Yet it cannot get started until these issues are sorted out and the law passed; no IT company will sign on until there is clarity on these multiple fronts. The GST is a critical component of the effort to improve India's "Doing Business" metrics. The states need to rise above their vested interests and help India make one great leap forward.

A Rs 12,000-crore year-end gift

How could India increase access to modern cooking energy for millions of under-served citizens while maintaining fiscal discipline? There has been considerable growth in domestic consumption of liquefied petroleum gas (LPG). Connections have increased by nearly 45 million between 2010 and 2013, and now stand at 160 million. Yet, the latest Census revealed that only 28.5 per cent of households reported LPG as their primary fuel for cooking. So the demand for cleaner cooking fuel is still largely unmet, while the subsidy burden keeps rising. The government will have to find a solution, which meets both objectives.

Much of the growth in LPG has been due to massivesubsidies associated with its domestic consumption. Currently, every household with an LPG connection in India, irrespective of its economic or social status, is entitled to 12 subsidised cylinders (of 14.2 kg each) annually. The subsidy amounts to more than half the cost. With rising LPG consumption, the fiscal impact and import dependence are both significant: the subsidy bill for FY14 stood at Rs 48,362 crore, about four per cent of the non-Plan expenditure of the recent budget, while import dependency for LPG has risen to a staggering 89 per cent.

The ostensible reason for the large subsidy is to insulate the common man from any rise in international oil prices and from domestic inflationary conditions. Fair enough, but does it work? Analysts at the Council on Energy, Environment and Water (CEEW) have a simple answer: not very well.

First, access does not seem to be increasing in proportion to subsidy spending. Despite more than 110 million connections in 2011, only 70 million households indicated LPG as their primary cooking fuel.

 

 

Secondly, much of the distribution is restricted to urban areas, which have more than 70 per cent of distributors, as well as LPG connections. Even the richest rural households get only about half their total cooking energy from LPG. In short, 80 per cent Indian households continue to use traditional fuels for cooking.

Thirdly, as a result, subsidies are misdirected. The richest 30 per cent of Indians benefit from more than half of the LPG subsidy. The poorest 30 per cent, by contrast, receive a meagre 15 per cent of the total subsidy disbursed.

Fourthly, since the rich benefit far more from LPG subsidies, the poor spend a disproportionately high share of their income on cooking fuel. The poorest 10 per cent of households spend as much as eight per cent of their monthly expenditure on cooking energy as against a mere two per cent and 3.3 per cent by the highest income groups in urban and rural areas, respectively. Even in absolute terms, urban households consuming traditional cooking fuels end up spending more than those using LPG.

The conclusion is that LPG subsidies have to be rationalised to make clean cooking fuel affordable for both households as well as the government. Reducing the limit on subsidised LPG to nine cylinders per annum per connection would create the fiscal space to increase LPG coverage. CEEW's calculations suggest that a cap of nine cylinders would be sufficient to cater to at least 70 per cent cooking energy needs of up to 90 per cent households. Doing so could save the government more than Rs 4,600 crore.

Further, we should consider excluding the top 15 per cent of households (by monthly per capita income, MPCE) from the LPG subsidy net. This would imply households with MPCE spending of more than Rs 3,900 per month in urban areas and Rs 2,000 per month in rural areas. Even at unsubsidised LPG prices, their cooking expenditure would be well within an affordability limit of six per cent of monthly household expenditure. Households could be identified in different ways, such as income tax, asset ownership (vehicle or specific appliances), or a voluntary asset declaration combined with a "Know Your Customer" type of verification. Once identified, direct benefits transfer should be combined with programmes to increase LPG availability in rural areas and awareness of its benefits. Such an approach could yield another Rs 7,500 crore of savings.

None of this will happen voluntarily. The government's attempt, since August, to do so has received very poor response. Instead, targeted direct benefit transfer might help to reduce market distortions at the distributor's end. If the government feels particularly brave, a differentiated subsidy for middle-income households and below poverty line (BPL) households could be attempted. In fact, the subsidy for BPL households could be even increased while making net savings for the government. The Jan Dhan Yojana could further support benefits transfer by covering the entire LPG consumer base. In pursuit of "good governance", a more rational LPG subsidy programme would be a good start. It would be more equitable for the purposes of increasing access to cleaner cooking fuels for poorer households. It would have positive impacts on indoor air quality (the second biggest reason for premature deaths in India) and the health of women. And it would help the government with its attempts to cut down the fiscal deficit. Savings of at least Rs 12,000 crore ($2 billion) should be a perfect year-end gift for India.

India's tech transformation - Making workers the winners

New technologies will force millions of workers to acquire new skills. Rapid technology advancements will also help India's less-educated workers leapfrog to productive work

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Will India’s large, young population – its demographic dividend – turn into a demographic disaster as millions of workers are displaced by technology? New research from theMcKinsey Global Institute examines the impact of 12 technologies (including the mobile internet, cloud computing, the automation of knowledge work, digital payments, verifiable digital identity and the Internet of Things) and concludes that, indeed, the application of these technologies will force millions of workers to acquire new skills, as the jobs they perform are rendered obsolete. Yet, rapid advancements in the same technologies will create new opportunities for millions of workers, including many less-skilled ones, and help them raise their incomes.

Globally, the automation of knowledge work, or machine learning and intelligent applications, can generate a 40 to 50 per cent productivity gain in work that involves processing data and information, interacting with customers or making decisions. In India, we estimate that automation and digitisation across sectors could drive productivity improvements equivalent to the output of some 19 million to 29 million workers in 2025 (five to eight per cent of India’s non-farm labour force). These workers cut across functions such as clerical and customer service, business process outsourcing and information technology, as well as those in manufacturing supply chains, the construction sector and workers engaged in retail trade and transportation.

The overall impact on net job creation could, however, be neutral to positive as technology opens new geographical markets and under-served segments of consumers. But the labour market will adjust to fill potential jobs only if workers are equipped to shift to the more value-added work. Education and skill-building systems need to be up to meeting this challenge.

 

 

 

Technology itself can provide solutions. Skill-building courses can be made available in small slivers — short online modules that workers can take at frequent intervals, focussed on what employers need and are willing to pay for. Adaptive learning systems that customise lessons according to how each student performs, simulated learning that uses technology to impart vocational skills such as welding and nursing in a virtual environment, and hybrid education models that combine MOOCs(massive open online courses) with classroom teaching, could help 18 million to 33 million more Indians acquire job-related skills by 2025.

Technology-enabled labour marketplaces help better matching of jobs and skills, creating millions of micro-entrepreneurs. As digital technologies achieve mass adoption, India’s legions of small-scale, unorganised and independent service providers can use the internet to reach new customers, establish their reputations, collaborate with others, and get more work. Project-based or piecemeal work assignments could be funnelled to technology-based aggregators representing large numbers of professionals such as designers, tax specialists or teachers who want part-time or temporary employment. Certified service providers (such as trained and licensed electricians, nurses or taxi drivers) could connect with customers and find decent paying work.

Rapid technology advancements will also help India’s less-educated workers leapfrog to productive work. Advancements in voice, language, and graphical interfaces will make complex knowledge and expertise available to workers on inexpensive hand-held devices that are easy to navigate. Even a semi-skilled person could become a knowledge-enabled worker in fields such as health care, financial services and logistics, or functions such as marketing and inventory planning, with just a few weeks of basic training in using these tools. Such workers can be deployed in local communities to deliver essential services. In Uganda, for example, the Grameen Foundation equips its community knowledge workers – well-regarded members of local farming communities – with smartphones that have weather, commodity prices, crop management and disease control-related apps. The workers share knowledge with other farmers and train them to use the apps themselves.

Several factors must fall in place to improve the odds so that technology becomes a positive force for the labour market on a large scale. Partnerships need to flourish, for instance, between technology companies, domain experts who can impart skills (such as agricultural universities or colleges of alternative medicine) and organisations with grass-roots experience. Standards and certification systems must evolve to help build mutual trust between customers and service providers in order to clear the market. And in addition to high-speed internet access, the widespread use of digital payments and verifiable digital identity will be essential to ensure that workers end up as winners in the race against technology.