21 April 2015

Sons who won't leave home

A friend came visiting the other day, his normally optimistic demeanour not as sunny, his normally upright stance a little stooped. I was starting to wonder what could have gone wrong with this high achiever. He is in his mid-50s, at the top of his profession, completely self-made, happily married, his son is a graduate of a top American university and he lives in an apartment with a grand view of the Mumbai harbour. Judging by all these symbols of modern Indian life, he had "made it". SO why the drooping shoulders, why the clouded face?

"It's my son," he said, staring gloomily into his drink.

"Has anything gone wrong with your son?" I asked, alarmed.

After a long minute of further staring into his glass, he said, "He just won't leave home."

"He is in his late 20s; at that stage, I had moved out of my parents' home and set up on my own, I had made headway in my profession, found myself a wife. My son seem to have no interest in making a mark in any profession - he has no interest in seriously working with me, he has half-heartedly tried but not achieved the formal professional qualifications needed to be a full-time player in my profession. He is not interested in getting married. He continues living at home with us, he does not seem to have any interest in moving out to a place of his own. At his age, I moved out of my parents' home into a paying-guest accommodation and continued to live as a paying guest even after I got married till I could afford a place of my own. But my son does not seem to feel any such pressure."

Then it struck me. I have heard this conversation in the past two years with many other friends, all hard-driving self-achievers in a wide range of professions: some were doctors, others lawyers, others editors of well-known magazines, still others chief executives of public companies. What was in common was that they were all at the top of their professions, all came from modest family backgrounds, they had all risen to the top of their professions by creativity, imagination, drive - and relentless hard work spread over two decades or more. They had paid handsome amounts to make sure that their children had gone to Ivy League American universities for their undergraduate degrees. Now, they all had sons or daughters in their late 20s or early 30s living at home.

As I reflected about this new phenomenon, I realised that friends with such worries were not just in Mumbai or Delhi. One is the finance director and board member of a French government conglomerate; there are more than a few such successful friends in New York; and one even in Tokyo, a board member of a worldwide Japanese media company.

There is a Wiki devoted to helping with this problem: "How to get your adult children to move out". It poses questions such as, "Is your child taking advantage of the mixed feelings you may have about encouraging your child to move out?" On the one hand, you might enjoy their company at home, or you don't want them to struggle on their own; but, on the other, you worry that this is preventing them from being self-sufficient. This Wiki reports that when people ask their children whether they want to move out, they may get this familiar answer that they want to but. These buts could extend to "I am looking for the right job that can really use my talents" (check whether he is really making an effort at job hunting, advises the Wiki), or "I can't afford a place" (is it that your child can't afford a place, or that they can't afford a place as comfortable as your place?).

Haim Omer, a psychologist, says this phenomenon merits being called a "syndrome" and even found a name for it: "entitled dependence". He says that the phenomenon is so widespread that new terms have developed to describe it: "bamboccioni" (big babies) in Italy; "hotel mama" to describe the parental home, in Germany; "boomerang children" in Australia; "parasaito shinguru" (single parasite) in Japan. He says that these young men and women don't leave home and don't get married because "they only want to buy brand names and enjoy themselves and to live, as an ideology, at their parents' expense". He says that this is nothing less than a pandemic. His book, The New Authority: Family, School, and Community, presents a new model of authority in dealing with children for parents, teachers and the community.

There are other versions of this "entitled dependence". One version is when your child, approaching completion of high school, tells you that everyone else in her class is getting admitted to colleges like New York University, Stanford or Harvard. You end up spending Rs 50-60 lakh a year for the next four years to put your child through these expensive institutions. That's also when you realise that admissions to these famous undergraduate programmes are available to whoever is willing to pay the full fees. Another version of this is when a parent borrows Rs 35 lakh plus at 14 per cent interest to put his child through a masters in a British or Australian university. The endgame is that the child returns at the end of the expensive education and stays at home.

Then there is the case of a driven lawyer from a very modest background who made a name and immense wealth for himself handling the hottest cases of the day. When asked what the secret of his success was, his answer, as befitting all self-achiever types is, "It is simple enough, I want money. I work for it and get it. There are many people who want it perhaps more than I do, but they do not work and naturally enough do not get it." When his son returned after an expensive education abroad, with an indifferent educational record after spending seven years there, he pushed him to join his legal practice. The son did this for eight years without any distinction, living with his parents, enjoying the lavish parties they threw, but found the legal profession "pointless and futile". The idling son, who could not find anything interesting in his father's profession, found something completely different to catch his fancy: the independence movement. This "son who wouldn't leave home", turned out to be the first prime minister of India, Jawaharlal Nehru

China, Pakistan launch economic corridor link worth $46 bn

and launched a plan on Monday for energy and infrastructure projects in Pakistan worth $46 billion, linking their economies and underscoring China’s economic ambitions in Asia and beyond.

China’s President arrived in Pakistan to oversee the signing of agreements aimed at establishing a China-Pakistan Economic Corridor between Pakistan’s southern Gwadar port on the Arabian Sea and China’s western Xinjiang region.

The plan, which would eclipse US spending in Pakistan over the last decade or so, is part of China’s aim to forge “Silk Road” land and sea ties to markets in West Asia and Europe.

Xi, whose visit to Pakistan winds up on Tuesday, said it cemented an “all-weather strategic cooperative partnership” between the neighbours.

Pakistani Prime Minister Nawaz Sharif said the corridor would transform Pakistan into a regional hub and give China a shorter and cheaper route for trade with much of Asia, West Asia and Africa.

“Friendship with China is the cornerstone of Pakistan’s foreign policy,” Sharif said in a speech.

The corridor, a network of roads, railways and pipelines, will pass through Pakistan’s poor Baluchistan province, where a long-running separatist insurgency that the army has vowed to crush will raise questions about the feasibility of the plan.

China is also worried about Muslim separatists from Xinjiang teaming up with Pakistani militants. Although Xi did not refer to the issue on Monday, he linked economic cooperation with security in a statement on Sunday.

“Our cooperation in the security and economic fields reinforce each other, and they must be advanced simultaneously,” he said.

Sharif added: “I assured President Xi that Pakistan considers China’s security as important as its own security.” Xi called for greater efforts to bring peace to Afghanistan, where Pakistan is keen to restrict the influence of its rival India.

The two sides also agreed to strengthen cooperation in civil nuclear energy, space and maritime technology, counter-terrorism and defence.

Common interests
Pakistan says China will provide up to $37 billion in investment for energy projects to generate 16,400 Mw of power.

Concessional loans will cover nearly $10 billion of infrastructure projects.

The planned Chinese spending exceeds that of the US, which has given $31 billion to Pakistan since 2002, according to the Congressional Research Service. About two-thirds of that was earmarked for security.

Despite Chinese-US competition for influence across Asia, they share interests in Pakistan. Both want a stable government fighting militancy, said Andrew Small, author of a book on China-Pakistan relations.

“China would like US support for Pakistan to continue, in terms of aid, selling arms, and other support,” Small told Reuters.

Few details of the projects have been finalised, and it is not only the Baluchistan insurgency that stands in the way of the ambitious vision becoming reality.

Xi may seek assurances that Pakistan will rein in corruption and that leaders from rival political parties are willing to make a long-term commitment.

“We should be cautious because of Pakistan itself, not China,” said Imtiaz Gul of the Center for Research and Security Studies, adding that Pakistan’s bureaucracy, political leadership and national unity would be tested as China seeks to build trade links.

Pakistani officials have said China’s government and banks, including China Development Bank and the Industrial and Commercial Bank of China Ltd, will lend to Chinese companies, which will invest in projects as commercial ventures.

Chinese companies investing in the projects will include Three Gorges Corp, China Power International Development Ltd, Huaneng Group, ICBC Corporation and Zonergy Corporation, officials said.

Sharif made ending chronic power blackouts a central promise of his 2013 election campaign and will be hoping for an improvement before the next polls in 2018.

Development of #CoalBed Methane

Development of Coal Bed Methane
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha in a written reply today that the Government has taken steps to explore and exploit Coal Bed Methane (CBM), Shale Gas and Gas Hydrates. For Underground Coal Gasification (UCG), the policy has not been finalized by Ministry of Coal.
In order to harness CBM potential in the country, the Government of India has awarded 33 CBM blocks under 4 rounds of CBM bidding and on nomination basis. Total prognosticated CBM resources for 33 awarded blocks is about 63.3 TCF (1792.43 BCM) of which so far, 9.9 TCF (280.8 BCM) has been established as Gas – In – Place (GIP). As on date, 8 CBM blocks have entered the Development Phase, 5 blocks are in exploration phase and for 4 CBM blocks grant of PEL from the respective State Government is awaited. 16 CBM blocks have been relinquished or are under relinquishment.
The Government has, on 14.10.2013, notified the policy guidelines for exploration and exploitation of shale gas and oil by National Oil Companies (NOCs) in their onland PEL(Petroleum Exploration Lease) /PML (Petroleum Mining Lease) blocks awarded under the nomination regimes. Under the first phase of assessment (3 years) 55 PEL/PML blocks (ONGC 50, and OIL – 5) have been awarded to NOCs. These blocks are located in the states of Assam (6 blocks), Arunachal Pradesh (1 block), Gujarat (28 blocks), Rajasthan (1 block), Andhra Pradesh (10 blocks) and Tamil Nadu (9 blocks). ONGC has drilled one well and spudded another well in Cambay Basin, Gujarat for assessment of shale gas/shale oil potential where coring has been completed. In addition, ONGC has collected cores from another 8 wells.
The National Gas Hydrate Programme (NGHP) was formulated by MoP&NG in 2000. The first NGHP Expedition – 01 was launched 2006, wherein coring was done at 21 sites in Western, Eastern and Andaman offshore areas to obtain information on presence of Gas Hydrates. The data so collected has established Gas Hydrates deposits in KG, Mahanadi and Andaman offshore areas.
NGHP Expedition – 02 is in progress wherein 40 wells shall be drilled/cored in KG and Mahanadi offshore areas to obtain information on sand prone Gas Hydrates. As on 31.03.2015, Logging while drilling (LWD)/ Measuring while drilling (MWD) operations have been completed in 12 wells.
A Multi Organizational Team (MOT) of DGH, ONGC, OIL, GAIL was formed by MoPNG to analyse the existing data set and suggest methodology for Shale Gas development in India.



Based on scrutiny of geo-scientific data, MOT has identified six prospective basins namely, Cambay, Krishna-Godavari onland, Cauvery onland, Assam-Arakan and Indo-Gangetic for assessment of Shale Gas potential. ONGC and OIL are presently permitted to carry out Shale Gas and Oil exploration and exploitation activities in the PEL/PML areas awarded under nomination regime.
The Shale Gas/Oil data generated by ONGC and OIL is reviewed by DGH and maintained by the National Oil companies.
Various agencies have estimated the shale gas and oil resource potential in selected sedimentary basins/ sub basins in India. The details are as under:
i.        M/s Schlumberger: 300 to 2100 tcf of shale gas in the    country (as available in public domain);
ii.       Energy Information Administration (EIA), USA in 2011: 290 tcf of shale gas in four basins namely, Cambay, KG, Cauvery and Damodar;
iii.      United States Geological Survey (USGS) in Jan’12: 6.1 tcf of technically recoverable shale gas in 3 basins, namely, Cambay, KG & Cauvery.
iv.      EIA, USA in 2013: 584 tcf of shale gas and 87 Billion barrel of shale oil in 4 basins namely, Cambay, KG, Cauvery and Damodar;
v.       ONGC in 2013: 187.5 tcf of shale gas in 5 basins namely, Cambay, KG, Cauvery, Ganga & Assam and Assam – Arakan;
vi.      Central Mine Planning and Design Institute (CMPDI) in Jul’13: 45 tcf of Shale Gas in Gondwana basin;
             The policy guidelines for exploration and exploitation of Shale Gas and Oil by National Oil Companies (ONGC and OIL) in their onland Petroleum Exploration License (PEL) / Petroleum Mining Lease (PML) areas awarded under the nomination regimes, was issued on 13th October, 2013. As per the policy, ONGC and OIL will undertake a mandatory minimum work programme in a fixed time frame for shale gas and oil exploration and exploitation. Under the first phase of assessment (3 years) 55 PEL/PML areas (ONGC 50, and OIL – 5) have been awarded to NOCs.

Steps taken by the Government to increase Tourist Arrivals into the country


As per the 2nd Tourism Satellite Account of India (TSA) 2009-10 and subsequent estimation, the contribution of tourism to total Gross Domestic Product (GDP) during the years 2011-12 and 2012-13 were 6.76% and 6.88% respectively.

The steps taken by the Ministry of Tourism to increase the arrival of tourists to India are:-

(1) Launch of Tourist e-Visa for citizens of 44 countries.

(2) Promotion of the destination through the Incredible India Campaign across the globe.

(3) Participation in major International Tourism & Travel Fairs & Exhibitions.

(4) Organising Road Shows to promote tourism destinations and products of country in major tourist source markets in collaboration with stake holders.

(5) Development and promotion “Niche Tourism” products.

(6) Creating an increased pool of trained man power in Hospitality & Tourism sectors for delivery of quality service to the tourist.

(7) Organising International Buddhist Conclave once in 2 years to show case the Buddhist Heritage and International Tourism Mart for showcasing the tourism potential of North East being held every year.

20 April 2015

Who's afraid of capital convertibility?

The issue of a completely open capital account, or full capital convertibility, saw a significant change in perspectives and positions after the financial crisis of 2008. Up until the crisis, the predominant global view on this issue, perhaps best reflected in the institutional stance of the (IMF), was that more convertibility and a floating were unambiguously good. All economies should move towards this objective, though they must be mindful of the macroeconomic, institutional and regulatory context in which it work to the economy's advantage.

However, after the crisis, the perspective changed. It shifted from focusing on the efficiency gains to highlighting the risks. The played a significant role in this transition, raising questions about the merits of unconditional and absolute convertibility. Massive volatility in capital flows and, consequently, in exchange rates could have significant and persistent impacts on the domestic economy in both the financial and the real sectors. A more pragmatic view on the convertibility issue would suggest that in such situations, governments and central banks must consider the use of some form of controls and market interventions to gain control over a potentially spiralling situation.

In other words, while the efficiency gains from convertibility may swing the argument under normal circumstances, the risks come to the forefront, particularly in countries in which an underdeveloped ecosystem does not provide adequate buffers to protect stakeholders against extreme volatility. If one is to characterise the current state of the debate, it would be in terms of this pragmatism. Don't lock yourself into positions that might cost you heavily in turbulent times. Always retain the capacity and instruments to protect domestic stakeholders from extreme volatility. And make sure that both domestic and foreign stakeholders know this and believe it.

India has moved steadily down the path towards full convertibility. In the pre-crisis paradigm, it was often criticised for being too slow and cautious. However, with the paradigm itself changing, there really isn't a clear benchmark to assess where India's, or for that matter, any country's framework stands currently. Both theory and practice in this domain are in a state of evolution, as reflected in the essays in a recent book* co-edited by Bruno Carrasco, Hiranya Mukhopadhyay and myself.

Theoretical developments are taking the debate in the direction of identifying capital account management instruments and time frames for their use that will most effectively deal with different sources of capital account and exchange rate turbulence. Practical perspectives, coming from central bankers who were directly involved in managing external turbulence, provide insights from the experiences of different countries about how specific instruments were used in different situations and how effective they were.

One might have thought that the pragmatic middle ground was now the dominant position in the debate and that research efforts were focused on refining the understanding on what kind of controls might work when and why and, very importantly, what will not work and why. Going by this yardstick, the Indian regime appears to be an eminently sensible one. There is a broad acceptance of the benefits of free capital movements. There is also an understanding of the different level of risks that different kinds of capital flows pose. Exchange rate flexibility is also part of the framework, but within certain boundaries. And the willingness to step in with a variety of interventions, both market-based and administrative, in order to deal with extreme volatility has been demonstrated.

Against this backdrop, the recent statements emanating from both the finance ministry and the Reserve Bank of India (RBI) about the aspiration to move towards full convertibility are significant. Equally significant are the apparently contradictory messages from the central bank, highlighting the risks intrinsic to a more open capital account. Based on the background provided above, I think that the debate has shifted from "more open versus less open", which was essentially a pre-crisis formulation, to "matching vulnerabilities with toolkits", which is the tagline for the post-crisis pragmatism.

From this perspective, I would argue that a constructive debate on the appropriate capital account management framework for India needs to address three major issues, each of which involves trade-offs. First, should all inflows be made completely free? Currently, there are restrictions, mostly in the form of limits on amounts invested by foreign investors in government and corporate bonds. These limits have been steadily raised, but caps remain. That outflows of debt investments can be destabilising was demonstrated in the 2013 episode. But if domestic market conditions for these securities are appropriately structured, foreign investments can contribute to increasing depth and efficiency. The policy objective here should be to create domestic market conditions that will minimise the potentially destabilising effects of foreign investment. We need to figure out if such conditions exist and can realistically be created; if not, some prudence, in the form of caps, may continue to be justified.

Second, intervention by the in the currency market achieves multiple objectives, but they are not necessarily aligned. Is it being done for the purposes of reserve accumulation, which then provides a bigger buffer against external shocks? An unobjectionable motive, but in the process, the RBI shoulders the responsibility of containing exchange rate risks, thus absolving other, particularly private, stakeholders from mitigating them. The critical question is: how is exchange rate risk most efficiently managed? Do market-traded hedging products offer the best prospect, in which case the policy focus needs to be on rapidly developing these options and ensuring that they are being used for purposes of risk mitigation. Or, all things considered, is there a public good aspect to exchange rate risk, which justifies a major role for the central bank in the process?

Third, in episodes of high turbulence, what is the right sequence of intervention and where should the process stop? On the one hand, there are enormous reputation risks for the policy establishment if an attempted defence of the currency should fail. On the other, there are equal risks associated with not trying at all. Further, there are longer-term consequences of steps taken during the management of a crisis. Obligations taken will have to be met some time and risks may be pushed from one part of the system to another, manifesting much later.

The short point is that a debate on convertibility in the current context needs to be exploring answers to questions such as these.

A mix of old and new:NITI Aayog


The NITI Aayog will surely continue to both formulate plans and engage with the states
The has been abolished. A new body in its place has been set up - the (NITI) Aayog. Fresh responsibilities, too, have been outlined for the NITI Aayog, indicating what kind of role it could play in the coming months. But more significant and revealing are the details in the for 2015-16 that show the government's financial allocations for the NITI Aayog.

First, it would be interesting to take a look at the new set of responsibilities for the NITI Aayog. The overall task of setting national development priorities with the active involvement of states has been entrusted to the new body. It is expected to foster cooperative federalism and prepare credible plans at the village level and aggregate them progressively at higher levels of the government. There is also a hint that the new body would provide support to the government through its advice and research work and even build itself to be a think tank.

All this might appear a little vague. But what could provide some clarity are the two words that have been used by the government in articulating the new responsibilities of the NITI Aayog. And these are: Plan and states. What this means is that whatever else the may be doing, it surely will continue to both formulate plans and engage with the states. What these plans would be and what the nature of engagement with states would be are issues that the NITI Aayog will have to work out. Similarly, the government will have to decide if it would permit the NITI Aayog to determine the allocation of central resources to states or act as a forum of discussion of Centre-state issues.

It, therefore, appears that the NITI Aayog will not be completely different from what its predecessor was. There are other indications as well that support such an assessment. For instance, even though the Planning Commission has been abolished, the planning ministry continues to remain in existence. You might wonder what the need for a planning ministry would be when the government has bid goodbye to the planning era. And an even more important question: What role would a full-fledged minister for planning play when there is no Planning Commission?

Probably, restructuring institutions are easier than reforming the council of ministers. One possible reason for retaining the planning minister could be to have a person who could be present in Parliament to address questions and issues concerning the NITI Aayog. If that is the only reason for having a planning minister, then why not have the prime minister, who is the chairman of the NITI Aayog, or a minister of state in the Prime Minister's Office to do that job in Parliament? Or has planning not been completely abandoned?

Controversies have also surfaced over the status of the vice-chairman and members of the NITI Aayog. It appears even as its vice-chairman will enjoy the rank of the Cabinet minister, his pay and perquisites will be equivalent only to those offered to a Cabinet secretary. Likewise, its members will enjoy the rank of a minister of state but their salaries will be the same paid to a secretary in the Union government. What does it mean for the NITI Aayog vice-chairman's status as a permanent invitee to the Cabinet meetings? Remember that the deputy chairman of the Planning Commission was an invitee to all such Cabinet meetings.

Equally interesting is the financial outlay for the NITI Aayog's secretariat for this year, estimated at Rs 52 lakh, compared to Rs 42 lakh spent on the secretariat of the Planning Commission in 2014-15 and Rs 25 lakh in 2013-14. The overall expenditure on the NITI Aayog for this year would be around Rs 88 crore, compared to Rs 93 crore in 2014-15 and Rs 78 crore in 2013-14. So, what is going on about institutional reform? And where are the financial savings that the creation of a leaner body like the NITI Aayog was to have generated?

The government has of course saved some money by doing away with the Independent Evaluation Office that was set up in 2011-12 to assess the effectiveness of the government's flagship development programmes. Have the flagship programmes too been wound up? Not really, even though the funding pattern for some of them has changed and the states have been asked to cough up more on financing some of them. So, who will evaluate these programmes?

In short, whatever role the government may want the NITI Aayog to play, it should articulate it more clearly. Equally important, there is an urgent need for some reforms of the council of ministers and the rules of business framed by the government for the NITI Aayog.

‪#‎PrimeMinister‬ to confer awards in public administration on ‪#‎CivilServicesDay‬

Prime Minister to confer awards in public administration on Civil Services Day
The Prime Minister, Shri Narendra Modi will confer the `Prime Minister’s Awards for Excellence in Public Administration’ for the years 2012–13 and 2013-14 to outstanding initiatives in Public Administration on the Ninth Civil Services Day which is being held here on April 21, 2015. To mark the Day, a two-day programme organised by the Department of Administrative Reforms and Public Grievances, begins on April 20, 2015 (AN).

A number of outstanding initiatives in Public Administration in three categories – Individual, Team and Organisation - have been selected for the award for the year 2012-13 and 2013-14, from across the country. Under this scheme of awards all officers of Central and State governments, individually or as a Team or as an Organisation, are eligible. The award includes a medal, scroll and a cash amount of Rs.1 lakh. In case of a team, the total award money is Rs.5 lakh subject to a maximum of Rs.1 lakh per person. For an organisation, this is limited to Rs. 5 lakh.

Unlike previous years, the Civil Services Day which is being held on two days this year, focuses on ‘Minimum Government, Maximum Governance’ with specific sectoral emphasis on Social Sector, Housing, Employment & Skill Development and Agriculture. The related sessions would be chaired by senior Union Ministers viz. the Union Minister of Raiways, Shri Suresh Prabhu, Minister for Skill Development, Entrepreneurship & Parliamentary Affairs, Shri Rajiv Pratap Rudy, Union Minister for Human Resource Development, Smt. Smriti Zubin Irani and other dignitaries Vice Chairman, NITI Ayog, Dr. Arvind Panagariya and the Professor from Indian Council for Research on International Economic Relations, Dr. Ashok Gulati. A number of eminent speakers in the respective fields are expected to deliberate on these issues of contemporary relevance and seek to address the challenges before the Civil Services in India and re-inventing government for efficient service delivery.

During the event, a book on Best Practices – Tomorrow is Here’ will also be released by the Prime Minister on April 21, 2015.

This Day is being observed by all Civil Services to rededicate and recommit themselves to the cause of the people, since 2006. It provides a unique opportunity for introspection as also for working out future strategies to deal with the challenges being posed by the ever changing times. 

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UKPCS2012 FINAL RESULT SAMVEG IAS DEHRADUN

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