Resolving the nuclear liability deadlock

By putting in place a comprehensive, fair and pragmatic legislation on civil nuclear liability, there is no reason why India cannot reap the long-term benefits of civilian nuclear energy and resolve a prickly foreign policy issue

On January 26, Barack Obama will become the first U.S. President to attend India’s Republic Day celebrations. It will also mark nearly 10 years since the first announcement on the India-U.S. civil nuclear agreement. In contrast to those heady days when the promise of nuclear power meeting India’s gargantuan energy needs was in the air, the present situation is bleak. A target of installing 63 Gigawatts of nuclear capacity by 2032 has been reduced to 27.5 Gigawatts and none of the landmark deals envisaged has been struck. The Civil Liability for Nuclear Damage (CLND) Act, 2010 which contains a speedy compensation mechanism for victims of a nuclear accident has been deemed responsible for this deadlock. Specifically, provisions on recourse liability on suppliers (Section 17(b)) and concurrent, potentially unlimited liability under other laws (Section 46) have been viewed as major obstacles in operationalising nuclear energy in India and bilateral relations with key supplier countries.

A question of recourse

Under Section 17(b), a liable operator can recover compensation from suppliers of nuclear material in the event of a nuclear accident if the damage is caused by the provision of substandard services or patent or latent defects in equipment or material. This is contrary to the practice of recourse in international civil nuclear liability conventions, which channel liability exclusively to the operator. Specifically, it contradicts Article 10 of the Annex to the Convention on Supplementary Compensation for Nuclear Damage (CSC), an international treaty which India has signed.

“U.S. President Barack Obama’s visit is an opportunity to address misgivings over the nuclear liability law and to also meet foreign governments and the supplier community halfway on the issue.”

That Section 17(b) is contrary to the global norm is undeniable. However when the global norm itself is inequitable, there are justifiable reasons to depart from it. The inclusion of Section 17(b) recognises historical incidents such as the Bhopal gas tragedy in 1984 for which defective parts were partly responsible. The paltry compensation paid to the victims was facilitated by gaps in legislation and an extraordinarily recalcitrant state machinery. This is not a peculiarly Indian phenomenon — accidents such as Three Mile Island occurred partially due to lapses on the part of suppliers. More recently, forged quality certificates were detected for parts supplied to nuclear plants in South Korea. That Section 17(b) incentivises supplier safety and reduces the probability of a recurrence of such instances is equally undeniable.

A step too far

India can retain Section 17(b) while ensuring compliance with its international legal obligations in two ways. First, the CSC allows countries to make reservations to certain provisions in treaties despite being signatories to them. India could make a reservation to Article 10 of the Annex to the CSC since it satisfies the requisite criteria for making a valid reservation under the Vienna Convention on the Law of Treaties, thereby excluding its application. Second, Article XV of the CSC implies that the rights and obligations of States under general rules of public international law are exempt from the application of the CSC. One such principle of international law is the “polluter pays principle” — applicable both to the state and private entities. The principle comes into operation via the mechanism through which compensation can be recovered from a polluting entity for the environmental harm it causes. Exercising either of these options will allow India to retain Section 17(b) without violating the international treaty regime.

However in pursuing the safety of supply, Section 17(b) goes too far in keeping liability for suppliers entirely open-ended. If liability on suppliers is unlimited in time and quantum, the possibility of getting adequate insurance cover will reduce. Even if such insurance is available, it could make nuclear energy economically unviable. To address this, Rule 24 of the CLND Rules dilutes the right of recourse conferred by Section 17(b) by limiting compensation payable by suppliers to a specified amount and for a specified time period. Both these are made standard terms of the contract entered into between the supplier and operator.

Though the end that Rule 24 seeks to achieve is justifiable, the means adopted are questionable. Rule 24 arguably violates Article 14 of the Constitution of India because there is no specific power in the CLND Act to limit liability in the manner that Rule 24 does. Further, the terms of the contract potentially dilute Section 17(b), which gives operators an untrammelled right to proceed against the supplier by way of recourse. It is a basic principle of law that a contract cannot violate the provision of a statute — if it does so, it is opposed to public policy. For these reasons, Rule 24 should be deleted. The limitation on time during which the supplier can be held liable should be inserted by means of a provision in the main Act. This will ensure that not just the end but also the means of limiting liability are legally tenable.

As far as the limitation on the amount is concerned, without Rule 24, the liability for each supplier potentially extends to the general liability cap of Rs.1,500 crore. If all suppliers have to be insured up to this value, insurance costs will be unnecessarily pyramided. To address this, countries with a history of nuclear power have in place mechanisms to provide for insurance coverage through international insurance pools where insurers, operators and states share the risks of an accident, providing access to a wide pool of compensation. There are about 26 such pools in existence, which also provide reinsurance to each other. Insurance pools typically require members to be signatories to an international convention (such as CSC), and to allow reasonable inspections of their nuclear installations.

While provisions for the creation of a domestic insurance pool for operators exist in Sections 7 and 8 of the Act and Rule 3, they need to be made explicit and amended to include suppliers in order to prevent the pyramiding of insurance premiums. This is particularly relevant to India’s domestic nuclear suppliers who would otherwise need to individually take out coverage, which would be prohibitively expensive. In order to access international reinsurance pools, the Central government could utilise the provisions in Section 43 and 44 of the CLND Act (Power to Call for Information from Operators) to establish a satisfactory inspections regime.

Sanctity of a special mechanism

Finally, Section 46 of the CLND Act contradicts the Act’s central purpose of serving as a special mechanism enforcing the channelling of liability to the operator to ensure prompt compensation for victims.

Section 46 provides that nothing would prevent proceedings other than those which can be brought under the Act, to be brought against the operator. This is not uncommon, as it allows criminal liability to be pursued where applicable. However, in the absence of a comprehensive definition of the types of ‘nuclear damage’ being notified by the Central Government, Section 46 potentially also allows civil liability claims to be brought against the operator and suppliers through other civil law such as the law of tort. While liability for operators is capped by the CLND Act, this exposes suppliers to unlimited amounts of liability. Obtaining insurance coverage for any future liability costs on account of claims by victims in such a case would be next to impossible.

Section 46 should thus be limited to criminal liability, and should clarify that victims who suffer on account of ‘nuclear damage’ can institute claims for compensation only under the CLND Act and not by recourse to other legislations or Courts. A clarification issued by the Attorney General’s office, if not an amendment to the law itself, will provide much needed assurance to suppliers while furthering national interest.

The issue of the liability law has, for far too long, been a thorn in India’s bilateral relations especially with the United States. Mr. Obama’s visit provides a historic opportunity to address these misgivings and meet foreign governments, as well as the entire supplier community, Indian and foreign, halfway on the issue. This will signal the seriousness of the Government of India in setting its own house in order and put the ball firmly in the court of the supplier community. By putting in place such a comprehensive, fair and pragmatic legislation on civil nuclear liability, there is no reason why India cannot reap the long-term benefits of civilian nuclear energy and resolve a prickly foreign policy issue, the time for whose resolution has come.

Can India catch up with China

In India’s noisy political democracy, the problems are compounded by the existence of multiple political parties with no coherent approach to development

The average Indian was slightly better off than the average Chinese in the initial years after Indian independence. But China’s approach to development has varied markedly over the last 40 years and has been so successful that it now ranks as the second most important economy in the world. India has made good progress but is still substantially behind China.

In the first decade of this century, India’s growth reached a take off stage that prompted many people to ask when India would catch up with its neighbour. It was also thought that democratic India may even overtake China. Will that dream come true?

China and India, despite being such large countries, accounted for only 4.5 per cent and 4.2 per cent of global GDP in 1950 in Purchasing Power Parity (PPP$) terms. The ratio of China’s GDP to India’s was 1.18 in 1913 ($241 billion/$204 billion); in 1950 it was 1.08 ($239 billion/$222 billion). Estimates of per capita income made by Angus Maddison and Dharma Kumar suggest that India might have had a higher per capita income. However, there was not a marked difference in the level of human development.

Both countries, in the course of history, have feared foreign domination, have considered the state as the driver of growth and have suspected the private sector’s initiatives. For India, the problems were achieving unity in diversity and accommodating various languages and religions in a democratic set up. On the contrary, China’s hard state enabled it to pursue a single goal with determination and mobilise maximum resources to achieve its goals.

Growth in China

China experienced many problems in initiating industrialisation, but after some hitches, it switched to an all-round emphasis on heavy and light industries, and had a more successful resource mobilisation strategy than India did. As a result, Chinese manufacturing grew at 9.5 per cent, twice as much as India’s rate, from 1965-80. Also, China managed its agrarian reform better than India did.

On the whole, estimates by Richard Herd and Sean Dougherty suggest that China grew at a much faster rate than India did during 1950-79, and Chinese per capita GDP was more than twice the rate of India’s. This is largely due to higher growth in Chinese labour productivity and capital deepening. By 1978, the per capita income of China was estimated at $979; India’s at $966. China had caught up with India over the 30 years, but not dramatically surpassed it.

“China has outrun India in every area of economic endeavour in the last 35 years, except in computer software industry and agricultural research”

Few people in 1978 could have imagined the monumental economic progress that China would make because of the economic reforms pushed by Deng Xiaoping. The reforms stressed the principle of “each according to his work” rather than “each according to his need,” professionalism and efficient economic management at all levels and the gradual introduction of policy changes to avoid problems in implementation.

Deng transformed agriculture first and then took on the industrial sector. He opened up the latter to foreign capital while making room for the growth of village and local enterprises. Jiang Zemin, Hu Jintao and now Xi Jinping have continued to follow Deng’s principles, but with some adjustments. China’s economic growth was also made possible by a very large net inflow of foreign direct investment, a sign of confidence in the Chinese economy by outside investors. China is the leading nation in exports and the second largest economy in the world. The country’s per capita income more than quadrupled, ($5,720 equivalent to about PPP $13,000) and abject poverty was completely eliminated (though income inequality increased). China’s Human Development Index has also risen from .423 in 1980 to .719 in 2013, according to the United Nations Development Programme 2014.

Against China’s success, India’s achievement, though significant compared to what it was before independence, is modest. India also took tentative steps to modernise its economy in the early 1980s, but these petered out. Freed from the constraint of food grain availability thanks to the Green Revolution, India did not manage to apply to its industrial sector the lessons it learnt in its agricultural revolution — using foreign knowledge, relying on the private sector and deploying subsidies selectively. Instead, foreign borrowing was used to ease the consumption constraint in the public sector and to cushion loss-making public enterprises.

Indian policy underwent directional changes in 1991. Prime Minister Narasimha Rao ushered in reforms which were implemented well by his Finance Minister Manmohan Singh, who then became the second-longest serving Prime Minister of India. Indian economic growth accelerated during the period 1995-2008, but could not maintain the momentum due to political paralysis of policies that were necessary for economic growth. Gross national income per capita in 2013 was $1,550 and India’s HDI increased from 0.369 in 1980 to 0.586 in 2013.

Primary difference

The primary difference between the performance of the Indian and Chinese economy has been the faster growth of capital stock in China. With only a slight difference in the growth of employment, this translated into a more rapid growth of capital intensity. The growth of total factor productivity has also been faster in China. This appears to reflect a greater ease for labour to move out of agriculture into higher productivity sectors in China than in India. China has outdistanced India in every area of economic endeavour in the last 35 years, except in computer software industry and agricultural research.

Despite international border issues that still exist between India and China, the two countries are trying to create a cooperative relationship — China has become India’s largest trading partner in 2013, India’s trade deficit with China is about $38 billion, President Xi has offered $20 billion for investment in Indian infrastructure and other industries, and a 100-person delegation of Zhejiang province has signed MoUs with India totalling about $2.46 billion.

India will most probably overtake China as the most populous country in the world in 2030. China is better placed structurally than India for a good economic performance, but it is most likely to be much lower than its recent average performance of about 10 per cent a year. How much lower it would be would depend on its ability to maintain current labour productivity levels and the benefits likely to flow from its proposed trans-continental rail system and other transport-related activities. Troubles in China’s financial markets, a declining young and increasing older population as a proportion of the working age population, increasing wages in general and export industries in particular, costs associated with cleaning up serious environmental pollution, increasing competition from other countries in export industries using low-skill and semi-skill labour, lower savings rate and a possibly lower investment rate will have a negative effect on its growth.

India has an excellent chance of catching up with China if it can increase its labour force participation rate (particularly women), increase the average level of education, improve the quality of its labour force through special training programmes, reduce impediments to let foreign capital participate in its development process, design policies to cultivate a culture of entrepreneurship, and reduce corruption at all levels.

The problem in India has always been implementation. In a noisy political democracy, problems are compounded by the existence of multiple political parties with no coherent approach to development.

Prime Minister Modi, with his majority in Parliament, has an opportunity to reignite the engines of economic growth. Even if the Indian economy were to grow at 10 per cent a year, its GDP at 2011 PPP$ will reach only about 26 trillion in 2030; China can easily reach this by 2022. I don’t see India catching up with China in the next 25 years unless, of course, there is a massive failure of sorts in China

Achievements of Ministry of Overseas Indian Affairs during 2014-15

Year-end Review 2014 ·        The Ministry has launched a software module for Transportation of Mortal Remains (TMR) of Indian Workers in Emigration Check Required (ECR) Countries. This software module can be accessed from the website of the Ministry www.moia.gov.in andwww.e-migrate.gov.in. ·        The Ministry, in coordination with other ministries/agencies prepared an action plan for facilitating the departure of the stranded Indians in Iraq, Libya to their respective destination. Repatriation of stranded Indian nationals in Iraq was started in the month of July, 2014 and continued during August, 2014. A total of 6,977 workers have been evacuated from Iraq and 3,200 workers have been evacuated from Libya. ·        From 1st April to 31stNovember 2014, Emigration clearance was granted to 497424 emigrants going for overseas employment to 18 Emigration Check Required countries.  ·        Overseas Indian Facilitation Centre (OIFC) held two Diaspora Engagement Meets in 2014 one in Manama, Bahrain and other in London, United Kingdom ·        OIFC signed four MoUs - two with Bahrain and two with United Kingdom. ·        UP has become Partner State of OIFC. ·        Plan Scheme on Skill Development for overseas employment was introduced during this year. Seven states namely Andhra Pradesh, Assam, Karnataka, Kerala, Odisha, Punjab and Tamil Nadu have been identified for implementation of the Plan Scheme. ·        One Social Security Agreement with Australia has been signed on 18th November, 2014 in Canberra (Australia) ·        Fresh registration certificate were issued to 24 Recruiting Agents under the Emigration Act, 1983, ·        Emigration clearance process had been completely computerized. Process of ISO certification of all 10 offices of Protector of Emigrants is under way. ·        Ministry of Overseas India Affairs has rolled out eMigrate project in all 10 POE offices in last six months in a phased manner. eMigrate is a comprehensive  on-line  web-based system covering entire spectrum of emigration ecosystem, i.e.,  Emigrants, MOIA,  Indian Mission, OWRC, Recruiting Agents and Foreign Employers. Till date more than 1.90 lakh Emigration Clearances have been granted under eMigrate system.  DIASPORA SERVICES              The Diaspora Services Division deals with all matters relating to Overseas Indians comprising Persons of Indian Origin (PIO) and Non-Resident Indians (NRIs), Overseas Citizenship of India matters, Pravasi Bharatiya Divas, Pravasi Bharatiya Samman Awards, Scholarships to NRI/PIO students in India and new initiatives to promote interaction of overseas Indians with India in tourism, media, youth affairs, education, culture among other areas. Pravasi Bharatiya Divas (PBD)             To connect India to its vast overseas diaspora and bring their knowledge, expertise and skills on a common platform, the PBD Convention – the annual flagship event of MOIA is organized from 7th-9th January every year since 2003.             Twelve PBDs have been held earlier in various places of India so far since 2013.             The 12thedition of the Pravasi Bharatiya Divas Convention was held at Vigyan Bhavan, New Delhi in January, 2014 with the Ministry of Youth Affairs & Sports as the Partner Ministry.  The theme was ‘Engaging Diaspora: Connecting Aacross Generations’. The 13thedition of PBD being held at Gandhinagar, Gujarat from 7 January, 2015, coinciding with the 100th Anniversary of return of the Mahatma Gandhi from South Africa to India. Regional Pravasi Bharatiya Divas (RPBD)             This Ministry organizes Regional Pravasi Bharatiya Divas (RPBD) to engage with the Indian diaspora who are unable to attend annual Pravasi Bharatiya Divas in India.  So far, 8 successful RPBD have been held at New York, Singapore, The Hague, Durban, Toronto, Mauritius, Sydney and London respectively eliciting enthusiastic support from the Indian diaspora and the local Government. 8th Regional Pravasi Bharatiya Divas (RPBD) Convention was organized in London, in October, 2014.  Compared with the past several RPBDs, RPBD London marked a significant and positive departure in attendance and the variety of subjects on which the Diaspora was engaged. The Government’s initiatives – Mission to Clean Ganga, Smart Cities, Skill Development, Solid Waste Management and overall infrastructure development were also discussed. RPBD London has set the stage for enhancing the engagement to renew partnership with the Diaspora. Know India Programme (KIP)              The objective of the Ministry`s Know India Programme is to help familiarize Indian Diaspora youth, in the age group of 18-26 years, project the developments and achievements made by the country and strengthening their bonds with their homeland.  KIP provides a unique forum for students and young professionals of Indian origin to visit India, share their views, expectations and experiences and to know contemporary India. The Ministry has conducted 29 editions of KIPs so far and a total of 903 overseas Indian youth participated in these programmes. The 30thKIP was held in 2014. The participants are selected based on nominations received from Indian Missions/Posts abroad. They are provided hospitality and reimbursed 90% of their economy class return airfare from their respective countries to India. Study India Programme (SIP)             Like KIP, Study India Programme (SIP) connects with the youth of Indian diaspora through educational institutions. Its enables Overseas Indian youth to undergo short term courses in an Indian University to familiarize them with the history, heritage, art, culture, socio-political, economic developments etc. of India. The focus of the programme is on academic orientation and research. Cost of boarding, lodging, local transportation, course fee during the programme and 90% of the cost of air-ticket by economy class is borne by Govt. of India. Gratis Visas by Indian Missions are granted to the participants. While this University the first (SIP) was organized in October, 2012 in Symbiosis University, Pune, Maharashtra with participation of 9 youths of Indian origin from four countries like Trinidad & Tobago, Malaysia, Fiji and South Africa. Conducted 2ndSIP in November, 2013, 14 youths of Indian origin. Scholarship Programme for Diaspora Children (SPDC)             Launched in 2006-07 the `Scholarship Programme for Diaspora Children (SPDC)` grants 100 scholarships upto US$ 4000 per annum to PIO and NRI students for undergraduate courses. The scheme is being implemented by Educational Consultants India Limited (Ed. CIL), a Government of India Enterprise under the Ministry of Human Resource Development. The scheme is open to NRIs / PIOs/OCIs from 40 countries. A total of 760 candidates have availed the scholarship since the inception of the scheme.             SPDC has been modified to do away with the "Common Entrance Test (CET)" for selecting PIO/OCI and NRI students for award of scholarships. Overseas Citizen of India (OCI) Card Scheme             The Scheme provides for issue of OCI documents consisting of OCI registration certificate and universal visa sticker to PIOs. Ministry of Home Affairs has proposed merger of PIO card and OCI card schemes. A Bill is likely to be introduced in Parliament. Voting Rights for NRIs             As per the electoral roll data 2014 published by the Election Commission of India, the total number of overseas Indian electors registered is 11,846. Tracing the Roots             The Ministry of Overseas Indian Affairs is running a scheme since October 2008 known as "Tracing the Roots" to facilitate PIOs in tracing their roots in India.             Scheme for Legal/ Financial Assistance to Indian Women Deserted / Divorced by their NRI Husbands             Issues related to desertion of Indian women by their overseas spouses are complex and sensitive. They also fall within the purview of private international law. To address this issue Ministry is creating awareness amongst prospective brides and their families regarding their rights and responsibilities and the safeguards to be adopted while entering into matrimonial alliances with grooms residing overseas. Migration Management Social Security Agreements (SSAs)             India has signed 20 SSAs with 18 countries. These Agreements provide for avoidance of payment of double social security contribution by Indian workers, totalization of contribution and exportability of benefits. Human Resource Mobility Partnership (HRMP)             A Memorandum of Understanding (MoU) on Human Resource Mobility partnership has been signed with Denmark. Negotiation on HRMP with the Netherlands has been concluded and it will be signed after the approval of PMO India-EU Mobility Partnership:             An International conference on India-EU partnership in mobility was organized by the Ministry of Overseas Indian Affairs in New Delhi from 21-23 February, 2009 to facilitate legal migration, combat irregular migration and proactively pursue bilateral and multilateral cooperation for maximizing benefits and minimizing risks from migration. To take the official engagement forward, EU has proposed a Common   Agenda on Migration and Mobility (CAMM) with India. The draft CAMM is under examination in consultation with Ministry of External Affairs, Ministry of Home Affairs, Department of Industrial Policy & Promotion and Department of Commerce. Major activities during 2014             An Indian delegation visited Tokyo (Japan) from 21-23 April, 2014 for the 5thround of negotiation to finalize the Forms and procedure for implementation of Social Security Agreement between India and Japan. Social Security Agreements between India and Sweden; and between India and Finland came into force with effect from 1stAugust, 2014. While it came into force with effect from 1stSeptember, 2014 between India and the Czech Republic. Delegations from Japan, Norweg, Canada and Quebec visited India in 2014regarding social security issue. Social Security Agreement between India and Australia was signed on 18 November, 2014 in Canberra (Australia). India Centre for Migration             India Centre for Migration (ICM) was set up as the Centre for Promotion of Overseas Employment (CPOE) and later rechristened as the Indian Council for Overseas Employment (ICOE). ICM is a ‘not for profit’ society established by the Ministry of Overseas Indian Affairs (MOIA) in July, 2008 to serve as a “think tank” on all matters relating to international migration. The India – EU II Project (Developing Evidence-based Management and Operations (DEMO) in the India-EU Migration Partnership) is currently under implementation. ICM organised a national workshop on international migration trade: Linkages & implications for India – EU Migrate in December, 2014 as part of the Project. Annual Conference of the Heads of Missions (HoMs)             The 8th Annual Conference of the Heads of Missions of Emigration Check Required countries was held on 10th January, 2014 in New Delhi. Mahatma Gandhi Pravasi Suraksha Yojana             The Ministry had introduced a Pension and Life Insurance Fund scheme called “Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) for Overseas Indian workers having Emigration Check Required (ECR) passports. Launched in UAE on 27th October, 2013 to encourage and enable overseas Indian workers and by giving government contribution to save for their Return and Resettlement (R&R), save for their old age, the scheme obtains a Life Insurance cover against natural death during the period of coverage. e-Migrate Project             The Ministry is implementing a comprehensive e-governance project on migration “e-Migrate” which aims to transform emigration into a simple, transparent, orderly and humane process. The Project is aimed at improving the quality of services to emigrant workers and will help reduce the access cost of service. Bilateral Memoranda of Understanding on Labour             Since the largest number of Indian expatriates are working in the Kingdom of Saudi Arabia, an Agreement on Labour Co-operation for Domestic Service Workers (DSWs) Recruitment between the Ministry of Overseas Indian Affairs and the Ministry of Labour of the Kingdom of Saudi Arabia (KSA) has been signed on 2nd January, 2014. The Agreement paves the way for a comprehensive MOU on manpower. Indian Community Welfare Fund (ICWF)             Overseas Indian Workers are estimated at over 6 million. The Indian Community Welfare Fund was set up in the year 2009 and is applicable to all Indian missions. The fund aims to provide the following services on means tested basis in deserving cases: ·        Boarding and lodging for distressed Overseas Indian workers in Household / domestic sectors and unskilled labourers; ·        Extending emergency medical care to the Overseas Indians in need; ·        Providing air passage to stranded Overseas Indians in need; ·        Providing initial legal assistance to the Overseas Indians in deserving cases; ·        Expenditure on incidentals and for airlifting the mortal remains to India or local cremation/burial of the deceased Overseas Indians in such cases where the sponsor is unable or unwilling to do so as per the contract and the family is unable to meet the cost; ·        Providing the payment of penalties in respect of Indian nationals for illegal stay in the host country where prima facie the worker is not at fault; ·        Providing the payment of small fines/penalties for the release of Indian nationals in jail/detention centre; ·        Providing support to local Overseas Indian Associations to establish Overseas Indian Community Centers in countries that have population of  Overseas Indians exceeding 1,00,000; and ·        Providing support to start and run overseas Indian Community-based student welfare centers in Countries that have more than 20,000 Indian students’ presence. The funds are also available for any other purpose considered necessary with   prior approval of the Ministry. The Ministry is in the process of further amending the ICWF guidelines keeping in view the needs of the Missions. Information Dissemination on Legal Migration             The intending emigrants face the difficulty in accessing authentic and timely information relating to overseas employment, role of Recruiting Agencies and emigration procedures etc.  Non-availability of such information makes the emigrants vulnerable to exploitation. Ministry launched the Overseas Workers Resource Centre (OWRC) to provide information and assistance to intending emigrants, overseas workers as well as their family members relating to all aspects of overseas employment.  The OWRC is operating round the clock a toll free helpline (1800 11 3090) to provide need-based information to emigrants and their families. Helpline from anywhere in the world at +91-11-40503090 in eleven languages is also available. To extend the services to support the Indian emigrants, an international toll-free line (8 000 911 913) has been established for calls from UAE. The total calls attended during 2014 (upto 8thDecember, 2014) is 1,27,216. Pravasi Bharatiya Kendra (PBK)             To commemorate the trials and tribulations as well as the subsequent evolution and achievements of the Indian Diaspora, Pravasi Bharatiya Kendra (PBK) is being established at Chankayapuri, New Delhi, at an estimated cost of Rs.94 crore. The Kendra, over time, is expected to become the focal point for social, cultural and economic interaction with and among all Overseas Indians. It will also serve as a research and documentation centre and host a permanent exhibition. The project started in, 2011, It is likely to be completed by early 2015. The Ministry is in the process of establishing a society which will be responsible for the day to day functioning of the Kendra. Prime Minister’s Global Advisory Council of Overseas Indians (PMGAC-OI)             The Ministry has constituted the Prime Minister’s Global Advisory Council of People of Indian Origin (PMGAC-OI) to draw upon the experience and knowledge of eminent people of Indian origin in diverse fields from across the world.  The Council is chaired by the Prime Minister.  The advice of the council is recommendatory in nature and serves as a valuable input for policy formulation and programme planning.             Prime Minister Dr. Manmohan Singh presided over the fifth meeting of the Global Advisory Council of Overseas Indian on January 8, 2014 at New Delhi. Protector General of Emigrants (PGE)             Operational matters relating to emigration, the provision of emigration services to emigrants and the enforcement of Emigration Act, 1983 are under the Protector General of Emigrants (PGE). The PGE is the statutory authority under the Emigration Act who is responsible for the welfare and protection of emigrant workers. He also oversees the ten field offices of the Protectors of Emigrants. Registration of Recruiting Agents             The Emigration Act, 1983 (Section 10) requires that those who wish to recruit Indian citizens for employment abroad shall register themselves with the registering authority, i.e. the Protector General of Emigration (PGE). As on 30-10-2014, there were 1347 existing recruiting agents. Trends in Emigration             There are about five million overseas Indian workers all over the world, more than 90% of whom are in the Gulf countries and South East Asia. There are 10 POE Offices working in the country including Rae Bareilly (Uttar Pradesh), which was inaugurated on 15th May, 2013. POE, Office at Guwahati will be operationalize as soon as the Government of Assam provides office space. Enforcement and Grievance Redressal             During the last three years, 85 Registration Certificates were suspended and 77 Registration Certificate had been cancelled. Prosecution sanctions were issued in 05 and 08 cases in 2013 and 2014 respectively based on police reports. Prosecution sanction from the Central Government is not required if the complaint against the unregistered agent is by an emigrant/intending emigrant or his relatives. 510 foreign employers have been blacklisted till date. Simplification of Procedures             Emigration clearance process had been computerized. During the year one POE office Kolkata, was declared ISO certified Six POE offices at Chennai, Delhi and Mumbai, Hyderabad, Cochin and Chandigarh have already been ISO certified. Permission has been granted for ISO certificates for the office of Jaipur, Trivandrum and Rae Bareilly during the current year. Protection and Welfare of Emigrants             Joint Working Group (JWG) meeting with Kuwait and Oman for welfare and safeguarding the interest of emigrants were held during the year 2014. A total of 6977 Workers from Iraq and 3200 Workers from Libya have been evacuated during 2014. The Swarnapravas Yojana – New Plan Scheme             The Plan scheme of MOIA,  namely the Swarnapravas Yojana will adhere to the broad objectives of skill development in India, as envisioned by the National Skill Development Policy 2009 and achieve the target of training 5 Million people by 2022 as laid down under this policy. The total project cost envisaged is Rs137 crore. A new budget head for the scheme has been introduced with a provision of Rs.20 crore for 2014-15.             The main objective is to position India as a preferred source country for skilled and trained workers in select sectors that face skill shortages in the international labour market, and in which India enjoys competitive advantage.             While emigration to other countries occurs from all parts of India, ten major states have been identified as origin of migrant workers. These are Uttar Pradesh, Bihar, Kerala, Andhra Pradesh, Maharashtra, Karnataka, Punjab, Rajasthan, Tamil Nadu and West Bengal. These ten states will be covered under the Swarnapravas Yojana during the 12thPlan period.

The village that could be a town

Is India 47 per cent urban, or 31 per cent? While everyone compares levels of urbanisation between countries, few realise that every country defines urbanisation in its own way. Standard criteria involve population size and density.

Using only these, India’s urbanisation would be much higher than the widely known 31 per cent official rate. India, however, is among the few countries to apply a third criterion while classifying a habitation as urban — that at most 25 per cent working males should be in agriculture. If one just adds the population with villages that have more than 5,000 people, urbanisation would jump to 47 per cent. If you include villages with more than 2,000 people, the ratio would be 71 per cent.

Definitions are usually created to aid policy and one can venture a guess on why early policymakers in India chose this one. They may have thought that habitations dependent on agriculture needed to be administered differently. However, the assumption that rural means agriculture is now already anachronistic. Three years ago, we estimated that only a fourth of rural output came from agriculture as against nearly half in 2002 — this ratio would likely be lower now.

One of the problems with Indian commentators has been their instinctive aping of the West (and now also the East), irrespective of what is really needed in India. Simplistic assumptions that equate urbanisation with higher productivity confuse cause with effect, and also the end-goal with the path.

There is also an illusion of control, with Central administrators far more confident of their ability to plan the living styles and standards of a sixth of humanity than any change manager would think was realistic. While China seems to have shown one model of rapid urbanisation, its sustainability is yet to be proven, and its approach may be harder to replicate in a purely democratic set-up like India’s.

It is also likely that India’s growth will be less manufacturing-intensive and more focused on domestic demand than China’s was. A more diffuse urbanisation is therefore more likely in India than the mega-cities that we continue to struggle to manage and yet, all our policies seem to aspire towards.

Towns and cities are basically densely populated habitations that allow cheaper access to services like education, health or entertainment through economies of scale, and also benefit from the network effect of organisations and employees in close proximity. Employees have alternatives in seeking employment, as do employers when they hire for a diverse set of skills. Not surprisingly, urbanisation became necessary for humans only when manufacturing and services started to dominate output.

However, these networks form and develop on their own, mostly due to local factors, and centralised control is unlikely to be fully effective. Throwing money from New Delhi to distant towns to modernise bus fleets or build that extra flyover may help some egos and manifestos, but one must explore ifalternative methods of improving the productivity of our citizens would be more effective. As in most aspects, the country is already moving in the right direction, irrespective of outdated government policies. The construction of roads linking villages and a sharp rise in rural tele-density and electrification are creating economic clusters away from the big cities. The upcoming surge in broadband penetration through 4G networks is likely to accelerate this process. Even in the last decade, population growth in almost all the large urban centres was less than urban population growth — a large part of urbanisation happened due to a 60 per cent increase in the number of towns. About two years ago, I remember visiting a village in Madhya Pradesh as part of my research. Nearly all the houses were pukka, that is, made of brick and cement; every house was electrified and many had inverters. Every household had at least one cellphone, there was a satellite TV dish on nearly every roof I could see, and I was told many had air-conditioners. Apparently three-fourths of the households had a motorcycle, and six had cars. Although I could not verify it, the presence of a giant water tank (the type from which, in that classic scene from the movie Sholay, Dharmendra’s character Veeru threatened to jump if he did not get Basanti’s hand in marriage) suggested running water in many houses. One of the hottest selling items in the well-stocked grocery store was “Gulab Jamun Instant Mix”, an aspirational consumption item for urban middle-class households when I was growing up. It made me wonder how this “village” offered a quality of life in any way inferior to some of the “towns” I have seen in India. Or for that matter, the chawls and slums right outside my building in Mumbai. Would classifying this habitation as a “town” have resolved some of the shortcomings too? Schooling seemed primitive, and high-schoolgoers had to go to the nearby town, but even within the big cities children do travel 15-20 kilometres each way for good schools. Town was where healthcare was too, even though an ambulance-on-call service made things a lot easier. About the same time, as part of our “India’s Silent Transformation” project, our team members had been visiting villages across states. They heard many stories like: “The first engineer from our village lives in Bangalore, and earns Rs 25,000 a month, but lives in shared accommodation and saves almost nothing; I earn only 10,000, but I live like a king,” or “Once the road to our village came up, I didn’t need to stay in the town where I work — I now commute from my village home.” A change in policies can improve the pace of such changes. To start with, the definitions and legal framework — given that most benefits of urban living seem to arise from population density and size, it may be time to jettison the third mandatory criterion of urbanisation, and start thinking of India as 47 per cent or even 71 per cent urban. Creative slogans like “urban infrastructure in rural areas” should be unnecessary. It’s unfortunate that our policies presume thousands of habitations don’t deserve urban amenities, whereas in most other countries they would have. China seems to have dropped this agriculture-related requirement after 1999. If that redefinition proves to be too tricky politically and administratively, it would help to give “Census Towns” municipal governments instead of village councils. These are habitations that the government still calls villages, but the Census Bureau finds now have all the characteristics of a town. Their number nearly tripled between 2001 and 2011, and they are now half of India’s 7,935 townships. That’s half of India’s townships governed by gram panchayats (village councils). More than 90 per cent of the nearly 2,800 new towns that were formed in the last decade are “Census Towns”, and as jobs move away from agriculture, this trend is only likely to accelerate. Just ensuring that state governments accelerate the process of creating municipal governments for these habitations would be a big step forward. Devolving more powers to urban governments and making them more directly and politically responsible for urban infrastructure is likely to be more effective than trying to control development through Centrally administered schemes. -

National Programme for LED-based Home and Street Lighting

PM launches: • Scheme for LED bulb distribution under domestic efficient lighting programme in Delhi • National Programme for LED-based Home and Street Lighting

Prime Minister Narendra Modi today described the LED bulb as a “Prakash Path” – “way to light,” as he launched a scheme for LED bulb distribution under the domestic efficient lighting programme in Delhi; and a National Programme for LED-based Home and Street Lighting. The Prime Minister also symbolically replaced one bulb in South Block, with an LED bulb. Replacement of all bulbs in South Block with LED bulbs will enable savings of 7000 units of energy each month. Speaking on the occasion, the Prime Minister called for making energy conservation through the spread of LED bulbs, a people’s movement. He noted that it is much more economical to conserve power, than to produce power. However, he added, it is much more difficult to conserve power, than to produce power, because while one producing entity can produce a large quantity of power, it requires the active participation of crores of people to conserve that amount of power. Therefore, he called for generating awareness among people for the same. He called for extensive involvement of celebrities and eminent citizens in these programmes, who could motivate people to adopt LED bulbs. The Prime Minister said these programmes launched today also represent a challenge to manufacturers, to rise to the occasion, and produce LED bulbs without any compromise on quality. Suggesting innovative ways to generate awareness and spread the message of energy efficiency, the Prime Minister said gifts such as diaries and calendars on New Year should be replaced by gifts of LEDs. Companies could distribute LED bulbs along with dividend payments, he suggested. The Prime Minister called for setting district level goals, and to prioritize this scheme in all towns with population above one lakh. The Prime Minister said involvement of entrepreneurs, eminent citizens and common people in this programme would represent an act of patriotism – as it would reduce import bills, and an act of social service – as it would save the environment. The initiative is part of the Government’s efforts to spread the message of energy efficiency in the country. LED bulbs have a very long life, almost 50 times more than ordinary bulbs, and 8-10 times that of CFLs, and therefore provide both energy and cost savings in the medium term. The Prime Minister launched a web-based system to enable consumers in Delhi to register requests for procuring LED bulbs under Domestic Efficient Lighting Programme” (DELP). Consumers can register either through the programme website (www.eeslindia.org/Delhi-Launch) or by sending an SMS to a designated number. Shri Narendra Modi also handed over two LED bulbs to one common citizen of Delhi – who was the first person to register. LED bulbs shall be distributed in a phased manner from March 2015 onwards. The entire project of installing LED bulbs for domestic and street-lighting in 100 cities is targeted for completion by March 2016. In Delhi, LED bulbs will be provided to all domestic consumers at an initial payment of Rs. 10 each and recovery of Rs. 10 each for 12 months from their electricity bill. Hence, the cost for an LED bulb to domestic consumer will be Rs 130 through this programme due to bulk procurement, compared to the current open market retail price in the range of Rs. 350-600 for LED bulbs. The estimated annual savings for households in Delhi per LED bulb will be Rs. 162. The LED bulbs will have a warranty of 3 years.

The banking agenda Follow-up steps needed to end government interference

The outcomes of the two-day "Gyan Sangam" in Pune, at which the prime minister, the finance minister and the governor of the Reserve Bank of India met public sector bankers, portend a significant and positive change in theIndian banking environment. For many years, observers have voiced increasing concern about the state of what still is the largest segment of the banking system. The tendency of government to influence lending activities, both directly and indirectly through such infamous devices as loan waivers, has been a persistent worry. More recently, the huge build-up in non-performing assets, in large part attributable to massive exposures that banks took to infrastructure projects at the insistence of the government, is proving to be a hindrance to the banks' capacity to lend to their traditional business clientele. The situation clearly calls for some drastic changes. Immediately, more capital is needed to shore up fragile balance sheets. From a more structural perspective, the entire ownership and governance framework needs to be rejigged.

The ability to get more capital from non-government sources is unquestionably related to governance reform. Given this, the most welcome announcement from the event was the broad acceptance of the recommendations of the committee chaired by P J Nayak, which had suggested the creation of a holding company to exercise the government's ownership rights. This entity, rather than the ministry, would then take on the responsibility of monitoring performance; it would potentially buffer bank managements from direct interference by the government. Essentially, greater autonomy and independence are expected to create a stronger commercial orientation. To reinforce this, banks are being asked to discover niche strengths and focus on them. On its part, the government will step back in terms of its role in board appointments and, eventually, look at reducing its shareholding to less than 51 per cent. The explicit commitment from the prime minister to put an end to interference may well be the high point of the meeting.

However, as positive as these developments are, it is best to view them through the lens of realism. From the control perspective, over four decades have shown how tempting it is for the government to use the banking system for its political ends. Good intentions to end this are all very well, but the resolve will be tested sooner or later. A good signal to send would be to appoint apex board members of unquestionable merit and give them fixed terms. Subsequently, board members of individual banks must also be seen to be free of government patronage. From the managerial viewpoint, bringing in professionals from outside is necessary but not sufficient. A smattering of outsiders will not be an effective instrument of change. They will have to be inducted in large enough numbers and at a number of levels to have an impact. The demographic transition that the banks will go through in terms of large-scale retirements over the next five years is an enormous opportunity to completely re-engineer organisational structures and processes. This opportunity must not be lost. Finally, there is the question of weak and small banks. Consolidation is being mentioned, though in somewhat hushed tones, but closure isn't. Some difficult and politically challenging decisions lie ahead.

Legal reforms: One step forward, but a long road ahead

The one great leap forward on judicial reforms so far has been the presidential assent to the 121st Constitution Amendment Bill on New Year's Eve, enabling the setting up of a judicial appointments commission. It scraps the present collegium of judges.

In view of the persistent conflict between the judiciary and the executive over primacy in this field, it is most likely to be challenged in the Supreme Court.

In August, the court had asked the Bar to hold back till the presidential assent before challenging the law on the ground of violation of the basic structure of the Constitution.

WHAT TO LOOK OUT FOR

Possible clash between judiciary and executive on the Judicial Appointment Commission Filling up of 300-odd vacancies in 24 high courts Raising the budget allocation for judiciary

In the light of the persistent conflict between the judiciary and the executive over primacy in this field, it is most likely that its Constitutionality will be tested in Supreme Court.

While that might provoke another confrontation between the judiciary and the executive, the core problems of the judicial system have not yet been touched by the new government.

The top spot in judiciary's wish list would be a hike in the budget allocation from the present pittance of less than two per cent. Successive chief justices of India have lamented this neglect and warned of the impending collapse of the system. Linked with this is the gross number of vacancies in high courts (300 in 24 courts), subordinate courts and tribunals. With the government holding the purse strings and giving little priority in working the system, 30 million cases are pending. Prisons are overcrowded - mostly with those awaiting trial. One urgent task is to build a database on these subjects, so that the way forward is lit. Around 40 tribunals were set up to offload high courts' work.

However, their infrastructure is grossly inadequate. Judicial members are few and these quasi-judicial bodies are said to be a sinecure for retired civil servants.

The country has long dreamed of attracting international arbitration. However, the Arbitration and Conciliation Act has been afflicted ever since its inception in 1996 with the same syndromes as the civil courts. Corporations prefer to settle their conflicts in London or Singapore. The amending Ordinance has few provisions to cure old maladies.

Passing laws has been so difficult in recent times that law-makers cannot even tackle low-hanging fruits like repealing colonial statutes citing "His or Her Majesty".

Judges, too, can also do their bit. Adjournments are given easily, hearing in a single case goes on for weeks, corporate appeals seem to break queues, courts sit less than half the days in any calendar year, punctuality is at a discount, and judgments are delivered often by the judge on his retirement day.

These ills can be cured by the judges themselves if only they could think out of the box.

The only major initiative the Supreme Court has taken recently was to set up a "social justice bench", whose working will be keenly watched in the coming months.