21 June 2015

Name defaulting companies

Name defaulting companies
A front-page item in the June 14 edition of this newspaper ("Infrastructure companies' debt woes worsen") indicates that the debt burden of several Indian infrastructure companies has risen to unserviceable proportions. Contrary to expectations, public sector undertakings such as NTPC and Power Grid Corporation are financially healthier, with considerably lower debt-equity and higher interest-coverage ratios, than some private sector companies such as Jaiprakash Associates, Adani Power, GVK Power and Infrastructure, GMR Infrastructure and Lanco Infratech. Currently, the government's and the Reserve Bank of India (RBI)'s attention is focused on the extent to which debt-laden Indian firms need financial assistance and the consequent risk capital requirements of the banking sector. Public sector banks (PSBs) have higher levels of stressed assets than private banks, as they are more susceptible to pressures from government to lend for long-gestation infrastructure projects.
On July 15, 2014, the RBI issued a notification titled "Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries", which has come to be known as the 5:25 year scheme. This order appears to be designed to allow banks to revise the terms of long-term loans every five years over a 25-year period without having them classified as restructured. CRISIL has warned that about Rs 50,000 crore worth of infrastructure loans disbursed under this 5:25 arrangement would need lending terms to be further softened.
Although infrastructure development is needed, side-stepping of credit risk considerations on long-term loans ends badly for banks. No governmental or regulatory magic can make credit risk disappear. Financial engineering can at best slice risk and package it such that lenders can manage it better.
With this as the backdrop, the RBI followed up on its February 16, 2014, "Framework for Revitalising Distressed Assets in the Economy - Guidelines on Joint Lenders' Forum (JLF) and Corrective Action Plan (CAP)" with a notification dated June 8 this year and titled "Strategic Debt Restructuring Scheme" (SDR). It is farcical that the RBI felt the need to state a universally accepted basic banking norm in this order that the "general principle of restructuring should be that the shareholders bear the first loss rather than the debt holders".
The RBI's June 2015 SDR notification allows banks to take over 51 per cent or more of promoter equity within 30 days of reviewing a company's accounts. Of course, banks are urged to offload such equity stakes quickly since they do not have the expertise to manage the companies they take over. It is likely that takeover of companies under the RBI's SDR would be challenged in courts. For this and several other reasons, the government's intention to get a new bankruptcy code enacted - as announced in this year's Budget speech - should be implemented urgently.
The right to recompense for lending institutions should include interest or principal waived in the past. That is, restructuring agreements should require that if and when a company or related companies regain financial viability, they make good on the debt repayments that were foregone earlier. If the legal position on such rights for lenders is unclear, this should be included in the proposed bankruptcy code.
At the end of March 2015, total non-performing assets (NPAs) of PSBs were 5.2 per cent of disbursed loans and their stressed-assets ratio stood at 13.2 per cent - that is, around Rs 7 lakh crore. The total proportion of stressed assets, including private sector banks, is around 10 per cent. According to corporate debt restructuring (CDR) cells of banks, about 300 companies are looking to reschedule debt totalling Rs 3 lakh crore. For instance, Bhushan Steel is seeking extensions in the maturities of debt amounting to Rs 35,000 crore and banks have rescheduled Rs 7,500 crore of debt owed by Anil Ambani group's Pipavav Defence and Offshore Engineering. Separately, Mukesh Ambani-promoted Reliance Gas Transportation Infrastructure has refinanced debt amounting to Rs 16,000 crore, with repayments stretched out to 2030.
In the past 12 months, stock prices of companies overladen with debt, for example, Unitech, Jaypee Infratech, Jaiprakash Power Ventures, DLF and GTL, have fallen significantly, reflecting doubts about the ability of these companies to service their debt. And Essar Steel's Joint Lenders Forum is finding it difficult to reach consensus to recover about Rs 12,000 crore owed to them.
Taking a step back, Indian sponsors starting with relatively low levels of equity capital often invest across four or more companies. Debt is contracted for the balance-sheet needs of these four companies - and, say, three out of the four companies go bust. It is possible that one out of this group of four companies ends up doing well. The owners then default on loans for the first three companies, resulting in higher NPA levels all around, since banks cannot acquire assets of the fourth company, which is profitable.
The RBI's "Master Circular on Wilful Defaulters" of January 7, 2015, and notification on "Collection and Dissemination of Information on Wilful Defaulters" of April 23 provide enough wriggle room for large borrowers to make complex legal arguments that default was not wilful. Banking regulators in developed countries do not use such measures since in their jurisdictions there are comprehensive bankruptcy laws. Anecdotal evidence suggests that the RBI has resorted to this wilful defaulter mechanism because of the interminable delays in Indian debt recovery tribunals and corresponding appellate tribunals. In practice, some smaller firms end up getting terrorised by this wilful defaulter label. On balance, this distinction between wilful and other defaults should be abolished.
PSBs have to share the blame, too, because they usually delay decisions on debt rescheduling requests, converting manageable liquidity issues into solvency problems. Banks should be made accountable to respond to debt restructuring requests in a time-bound manner. If banks allow rescheduling, it should clarify that debt servicing delay was based on risks the borrower could not have anticipated.
To sum up, taxpayers can legitimately demand, as the ultimate lenders of last resort, that the RBI instruct banks to list on their websites estimates of the face and present value of debt that has been restructured. Such disclosures for borrowings with at least Rs 1,000 crore as principal should have a salutary impact on borrower and lender behaviour. The RBI should provide readily accessible summary information on its website about all corporate debt defaulters and the amounts involved. If there are any legal infirmities or ambiguities to providing such information, this should again be rectified in the proposed bankruptcy code.

Politicians may come and go, bureaucrats remain

Politicians may come and go, bureaucrats remain. As the poet says:
“Though kings and tyrants come and go
A soldier's life is all I know
I'll live to fight another day
Over the hills and far away.”
AS Ajit K Seth ended his extended 4-year-term term as India’s cabinet secretary on Saturday, prime minister Narendra Modi posted three tweets to praise one of Seth's initiatives in cabinet secretariat called “Art in Steps” before wishing him for the “new phase in his life”. For the low-profile bureaucrat who studied chemistry in St Stephen’s college in early 1970s and served two prime ministers -- Manmohan Singh and Narendra Modi -- as their cabinet secretary, it was mainly the art of good chemistry that worked in his favour. First, let’s read what Modi had to say for Seth on Saturday…
“After a distinguished career spanning 4 decades, Cabinet Secretary Shri Ajit Seth retired today. Best wishes for the new phase in his life”, was Modi’s first tweet. Then, the PM went on to praise Seth’s “creative effort”. “Ajit Seth ji shared with me about ‘Art in Steps’, a unique initiative at Cabinet Secretariat to promote art and spread message of cleanliness…Staircases were cleaned and along their walls paintings by officials and their spouses were placed. A creative effort!” PM said.
As Seth himself described, “Art in Steps” is an initiative to display paintings, photographs, and sculptures made by civil servants and their spouses. Those are being kept in the cabinet secretariat premises. “The walls of the corridors and staircases provide a good setting and the eye-catching exhibits are impossible to miss”, wrote Seth, as displayed in the corridors. In fact, the initiative which is also called “Stairing at Art”, began in the month of February 2015. The exhibits are replaced periodically and after being displayed for a couple of weeks, those are returned to the civil servants or their spouses.
When Modi came to power in May last year, many thought the axe would fall on bureaucrats who called the shots during the UPA regime. But to surprise many, Modi gave Seth a 6-month-long extension only to be renewed again for another six months. “It’s Seth, not (principal secretary to PM) Nripendra Misra, who knows the strength and weaknesses of each of the current union secretary. And prime minister Modi may ask for Seth’s frank assessment of each of the secretary before undertaking a bureaucratic reshuffle at the Centre,” BoI wrote in a post dated June 3, 2014 when Seth was given an extension. But as it turned out, Seth’s chemistry with Modi turned better every passing month. Seth made his presence felt in the corridors’ major activities despite the two Mishras (principal secretary to PM Nripendra Misra and additional principal secretary to PM PK Misra) advised the PM in all policy and appointment matters.
When Seth’s appointment as India’s cabinet secretary was announced in May 2011, BoI wrote: “When all powerful man in PMO Pulok Chatterji dictated terms in Raisina Hills during UPA-I, his batch-mate from the same UP cadre Ajit Kumar Seth was the resident commissioner in New Delhi’s Uttar Pradesh Bhawan. Seth had a higher rank in 1974 batch IAS merit list, but no one even bothered to bet on Seth that this man from UP might one day snap the country’s top bureaucratic job. For six long years, Seth -- known for his honesty and meticulous work -- remained a mere resident commissioner in UP Bhawan. Finally, he got the break when he was appointed as secretary, coordination and public grievances in cabinet secretariat in January, 2009. And the rest is history now…”.
But Seth proved everyone wrong. He managed both the regimes, of Manmohan and Modi, pretty well. When he was an OSD in the run-up to his elevation as cabinet secretary, Seth handled the Baba Ramdev crisis for the UPA government. It was June 2011. Seth was seen in Delhi airport’s Terminal-I along with the then cabinet secretary KM Chandrasekhar. The then UPA government took an unprecedented move to send four cabinet ministers, the then finance minister Pranab Mukherjee, telecom minister Kapil Sibal, parliamentary affairs minister Pawan Kumar Bansal and tourism minister Subodh Kant Sahay, to the Delhi airport to persuade the Yoga Guru Ramdev not to go for his proposed fast. But the move backfired. And Seth got his on-the-job experience just a few days before he took charge as the country’s top bureaucrat.
And as he exits now, the same Ramdev is a very influential person in the corridors. No wonder, Seth spent the last few days of his office in preparing for the coming International Yoga Day, the rehearsal of which is being conducted by none other than the Yoga Guru himself.

The Importance of Being #'Rurban

A categorical distinction is facing rough weather--that between urban and rural. If we take just agriculture, there is so much of the outside world that comes in not just as external markets but as external inputs. Further, many of our villages barely qualify as rural if we were to take occupation alone. So the earlier line that separated the farmer from the worker in towns is slowly getting erased. By now agriculturists are ready to accept that their future lies elsewhere, perhaps in cities and towns, perhaps also in household and informal industries. If they cannot make it to those places, at least their children should.
Dipankar Gupta (dipankargupta@hotmail. com) teaches at the Shiv Nadar University, Noida, Uttar Pradesh.
This is the text of my V K R V Rao lecture delivered in May 2014 in Bengaluru. A fellowship in Teen Murti Memorial Museum and Library got me started on this subject. I subsequently benefi ted from discussions with a number of scholars at the National University for Education Planning and Administration, New Delhi, and Shiv Nadar University.
Hard To Be Rural
India may not yet be quite urban, but neither is it rural. Perhaps, the clumsy term “rurban” might suffice for the time being; for time being it is, given the rapid transformation that is taking place in Village India.
When India became independent, almost 50% of the economy was rural; the latest figures tell us it is barely 14% now. The rate of growth in agriculture hovers around 2.5% to 3.5% per annum. This, as we can easily tell, is well below the gross domestic product (GDP) growth figures for the country as a whole. True, big farmers are now a rare sight in villages, but this blight does not affect big farms alone, but the agricultural sector in general. This should be seen alongside that the area leased in has fallen, according to the 59th round of the National Sample Survey (NSS 2006: Table 3.2). Sharecropping is more or less a thing of the past. Area under food crops came down between 1950–51 and 2009–10 from 80.7% to 73.5% (Red Book 2008: 35). Naturally, and it is almost predictable, between 1994 and 2001, real investment in agriculture declined by as much as 20% (Acharya et al 2004: 216). That this has been happening steadily over the years does not reduce the effect of its cumulative impact on agriculture. Quantity does yield to quality sooner rather than later.
Today, roughly 80% of landholdings in India are below five acres, and about 66% below three acres. Some of this must be credited to land reforms, for they have made the acquisition of large holdings legally suspect, but, in a great measure, one has to hand it to demography. What the abolition of zamindari (big landlords) set out to do was accomplished most comprehensively by population growth and subdivision of holdings. Where villages were once dominated by powerful landlords, today they are home to thousands of small, family farms. Family farms, by definition, have very little scope for hiring labour, except perhaps during the peak harvesting season. Large and medium farms are finding it hard to survive on land, which is why the ranks of small and marginal farmers keep growing (DACNET 2013; Chand et al 2011: 7; NSS 2006).
By now agriculturists are ready to accept that their future lies elsewhere, perhaps in cities and towns, perhaps also in household and informal industries. If they cannot make it to those places, at least their children should. Thus, while cultivators, in general, constitute about 44.0% of the rural population, this number rises to 63.6% if we take only those among them who are over 60 years of age (IAMR 2008: 233). Most small family farms are clearly being tended to by the older generation so that their young can go out into the big, wide world.
Agriculture is not outside market forces, nor do farmers want it that way. This is because almost all villagers are tied to the market for their needs and are not self-sufficient, as many peasant myths go. Not only is there now an increased dependence on cash crops, but also, as a consequence, a greater reliance on chemical inputs and pump sets. From 1981–82 to 2009–10, the percentage of cropped area to cereals and millets went down by more than 9%. The markets for jowar (sorghum) and bajra (millet) are nowhere near that for wheat or rice, and hence they are not favoured by farmers, who are looking for monetary returns.
When we come to non-food crops, a similar trend is seen. Between 1955–56 and 2011–12, oilseed production went up six times—cotton lint by about eight times, and sugar cane by more than six times. As with coarse cereals, jute, the poor person’s cash crop, only doubled in production in the same period. All this tells us where the money lies (RBI 2012a, 2012b). This increase in cash crop cultivation also meant a 25-time hike in the use of fertilisers and a threefold increase in multiple cropping. The number of pump sets went up from 2,00,000 to 25 million between 1960 and 2009, and so many of them are from China (Biggs and Justice 2011: 6). And why should they not?
It is for reasons such as these that another categorical distinction is facing rough weather—that between urban and rural. If we take just agriculture, there is so much of the outside world that comes in, not just as external markets, but as external inputs. This is the biggest difference from the past. Further, many of our villages would barely qualify as rural if we were to take occupation alone. All too often people continue to live and work in villages but are almost urban in terms of their work profile. So the earlier line that separated the farmer from the worker is slowly getting erased. This is why a labourer will seek work outside agriculture, for when he returns home after a day’s toil, say as a rickshaw puller, there will be money jingling in his pocket. Small change, one might say, but big money from the worker’s point of view. This is what prompts the poor villager to leave every morning for the bus stop or the village square in the hope that he will catch a contractor’s eye and his day will be made.
Rural Non-farm Income
As a result, there has been a tremendous increase in rural non-farm employment (RNFE) all over the country. What was once a secondary occupation for most villagers is often the primary one today. The NSS shows that the percentage of non-agricultural households increased from a pre-existing high of 31.9% in 1993–94 to 42.5% in 2009–10.
In 2009–10 the contribution of non-farm sector to the rural net domestic product was 65% (Reddy et al 2014: 10; Table 5; for an earlier estimate see Chaddha 2003: 55). Nor is this a story of the developed regions in India. The more backward the districts, the higher the proportion of men in household industries. In Uttar Pradesh (UP), for example, six times more men than women work in these manufactories and in Rajasthan the figure jumps to an unbelievable 10 times (Census of India 2001). When we examine the census data, we find that factories and workshops have quite a strong presence in rural areas. They dominate rural regions in states as disparate as Kerala, Punjab, Odisha, and Gujarat (Census of India 2001: Table H-1). A recent census of micro, small and medium enterprises (MSME) confirms the lively presence of enterprise in villages. When it is about registered units, rural India houses 45.2% of them, but in unregistered ones, there are as many as 60.2% in the countryside (MSME Annual Report 2012–13: statement 2.1; p 21).
This probably also explains why rural to rural migration is quite active. This is an area we do not pay sufficient attention to because the move to cities is much more dramatic in its outcome and numbers. After all, figures show that 29% of rural migrant households migrate from rural India and that 55% of them do so for economic reasons, with self-employment playing a major role in this (Press Information Bureau 2010). The rural rate of migration too is a respectable 26% (Press Information Bureau 2010), with nearly 91% of the movement coming in from other villages (NSS 2007–08 estimates it at 70%). We might as well underline that these migrants primarily fill the ranks of units that are categorised as “self-employed,” and in which, on an average, between two to five people work (MSME Annual Report 2012–13: statement 2.1, p 21). So, rural India is not just agricultural anymore and caters to the international as well as national urban market in terms of manufacturing. A large number of products—from bric-a-brac to clothing, to gems and jewellery, and now even to machine parts—which have a rural provenance are now available in urban households and markets.
Thus, while we have family farms that are proliferating in villages, we also have the rapid multiplication of self-employed enterprises. These outfits are the closest one can come to family farms in a non-agricultural setting. Therefore, there is an urban aspect in the village, much as there are rural aspects in cities, brought about primarily by migration from villages. We would be better off with the term “rural–urban nexus,” rather than “rural–urban continuum,” for one penetrates the other in such a fashion that a slide rule-like concept seems inadequate. Further, the very fact that there is a rural–urban nexus forces us to see the effect of the city on the village in ways other than that of acquisition (telephones, scooters, motor cars, coffee shops, and so on), and also in terms of the economy.
We cannot talk of rural India without calling out to the urban world. In the past, village field studies usually saw the town and country relationship as a one-dimensional phenomenon. For example, even in the works of Epstein (1973), it is the city that is influencing the village, but there is no word of the movement the other way. There are detailed descriptions in accounts of this sort that document how many motorcycles, TV sets, and coffee shops are in villages. But what they fail to point out is that villagers are not sleeping at the switch. They too are active agents who are keen to exchange their mud huts for urban shanties.
Nor can we really think of energising small farmers without radically addressing their felt needs and where they earn their real incomes from. This is because their economic and aspirational horizon is no longer confined to the village perimeter. As a result, there has been a diminution in the status of agriculture as an occupation. Family farms have, consequently, lost some of their esteem as a precious gift to be harvested in perpetuity. As needs have escalated, as scales of operations have increased, as inputs are getting costlier, the family farm is no longer what it was earlier cut out to be.
In the fitness of things, should we then not call the villager of today a “rurbanite”? Such a person has left much of tradition behind, though a fair amount is palpably present in a number of interactions. This makes the rurbanite a complex, multi-faceted, ambitious, and yet somewhat handicapped individual. There are a number of features that express this variegated term, but none better than the desire to get educated (Desai et al 2010: 80–81) and leave agriculture, and if possible, the village altogether. This is another reason why a greater number of literates tend to migrate from country to town (NSS 2008–09: H-ii). There has also been a steady rise in the migration of male workers from rural to urban India. In less than 10 years, from 1999–2000 to 2007–08, the number went up from 36.5% in 1999–2000 to 41.6% in 2007–08 (Kundu and Saraswati 2012: 221). In just one year, between 1999 and 2000, the proportion of people migrating for jobs jumped by as much as 15% (IAMR 2005: 303, Table 6.12).
All this goes to show that we need to check if the diacritics that once served so well in separating town from country are relevant any longer. It should not be surprising that over five billion railway tickets are sold every year in India. As anyone who knows this country will vouch, even this figure is an understatement, for most people travel ticketless on Indian Railways.
To understand the nature of rural dynamics, one must perforce look at the village as a part of a larger society. In traditional sociology, for instance, there was a great degree of attention to villages and village studies, but they suffered, in the main, from one serious flaw. For most of the scholars who worked on this subject it was their village that mattered most and India was a distant reality. There were, of course, many exceptions to the rule, but that was the rule. Even when some village experts looked at change, the overall orientation was one where the urban was impinging on certain aspects of rural life and changing it in cosmetic ways. There were tea shops, more motorcycles, more radios, and so on, but the village itself seemed more or less undisturbed. Fortunately, scholars today see little purchase in studying an isolated village—they would rather examine villages around themes that engage the country.
When examining this issue, it is impossible to ignore three major aspects that tumble out. The first is the emergence of small towns, and with it the enormous growth of the informal sector, particularly in terms of its contribution to the formal sector and to manufacturing. Second, we need to look at the growth of education, which is a necessary corollary to the first. Finally, an issue that cannot be overlooked is interesting changes that have taken place in inter-caste relations that upset most of our traditional views on the Hindu hierarchical system. Put all these together, stir it, and what you get is the rurbanite in more than one dimension.
Small Towns and the Informal Sector
That a large number of rural migrants find jobs in urban India as unskilled labour, working at things that many of their counterparts do in rural units, draws the village closer to the city in pure economic terms. As a corollary, it might be mentioned that small towns are growing at a very fast rate because real estate prices are lower there than in large metropolitan centres. The rural impact is very high in new million-plus and yet-to-be-million-plus towns. So when we talk about the nexus, we are really highlighting the interpenetration of rural and the urban, and not just a loose chain of relations (Bhagat 2011).
If we take enterprises that employ less than 10 workers, rural India follows close on the heels of urban India (IAMR 2009: 167). These are also units that service the export sector, both directly and indirectly. So our shabby manufacturing urban outposts with poor “rural” employees are actually integral parts of a global economy. It should also be noted that it is not as if only women work in such units, and in places like Himachal Pradesh and Rajasthan, the census records more men than women in household industries (Census of India 2001).
Unlike what we see in old Bollywood films, rural migrants generally do not come alone. They have a network that brings them to urban jobs and it is this network that supports them in between jobs. A network of this kind is nearly always community or region specific, which is why there are multiple networks criss-crossing one another in an urban site. Villagers long to belong to such networks, but I have also seen villages that are bereft of these long-distance ties. It is hard to explain why some villages are well endowed with such connections and others lack them. The distribution appears very idiosyncratic for a lot depends on chance, and chance alone.
In the last 20 years, a large number of cities have joined the million-plus club. In the Greater Mumbai urban agglomeration (UA), the 2001 census recorded a population increase of 30.47%, but it is now down to 12.05%. Likewise, growth in the Delhi UA slowed from 52.4% to 26.69%, and the Kolkata UA from 19.6% to 6.87% during the same time. What is, however, stunning is that between 2001 and 2011, small towns continued forming and growing rapidly. This is a fact that not many fully appreciate. The Census of India shows that 18 new cities with over a million people have emerged, but that is just a tiny part of the story. Besides the emergence of these big urban centres, there are 72 new class I towns and about 2,770 census towns (Census of India 2011). The last might look like a village at first sight, but has already developed enduring urban traits and that is where many rurbanites live.
Not only are the cities that have barely touched the million mark, such as Ludhiana, Varanasi, Bhopal and Kochi, growing in number, they are also assuming serious urban characteristics. In these aspiring big cities, a proportionately higher number of white-collar jobs are coming up than in full-blown megalopolises. According to a Federation of Indian Chambers of Commerce and Industry (FICCI)–Confederation of Indian Industry (CII) survey, in contrast to the older established metros such as Delhi, Mumbai, or Chennai, new managerial positions are opening up in smaller tier-2 cities. In Hoshiarpur and Meerut, for example, the increase is 100% and 133.3% respectively (Nayyar and Jain 2012: 21) This is probably why more than 50% of rural graduates prefer small towns to metros (Kundu and Mohanan: 13). This also explains why Surat, Patna, Pune, Jaipur, and Indore have growth rates exceeding 40%, much higher than that of Kolkata, or even Mumbai.
Small towns also manufacture a number of products that may not attract the eyes of those who live in metros, but these are serious money-spinners. Ghari Detergents, for one, is an extremely popular brand that few people in Delhi or Mumbai might know about. It is produced and packaged in a factory not far from Kanpur and its turnover is higher than all the Godrej fast-moving consumer goods (FMCG), including Cinthol, put together. Then there is Sanjay Ghodawat, who runs a Rs 1,000-crore empire in Manakpur, which is a nondescript town about 160 kilometres from Kolhapur, another small town. In this connection, how can we overlook Tirupur in Tamil Nadu, which is the hosiery capital of India and has experienced enormous growth over the last 20 years (TNUIFCL 2011: 10)? Likewise, Agra, Bhiwani, Panipat and a host of other small towns are bustling centres of manufacturing activity, but almost always on the back of informal labour.
Many of these small towns were villages till yesterday and have broken with their official status as “rural” only recently. This makes a large number of “rurbanites” autochthones and they are joined by a large number of migrants from villages. This is simply because most growth is taking place there, which can be gauged from the massive increase in slums. In Pune, once a small town that was even looked at as a kind of “resort,” the slum population increased six times between 1971 and 2011 (DNA 2011). Delhi, Nagpur, Kolkata and Chennai have a lower percentage of slum dwellers than either Meerut and Pune, which have now taken second and third place respectively after Mumbai (Times of India2011; Ministry of Housing and Urban Poverty Alleviation 2011). Ludhiana, for example, has a slum population that touches 50% (Bengal Chamber of Commerce and Industry 1993: 6.10). Many small towns with a population of about 1,00,000 have beauty parlours and gymnasiums, Pizza Hut outlets and ATM machines. They also have a number of English-medium schools and management and technical institutes. As a matter of fact, it is hard not to find them even in slightly larger villages. This explains why graduates from rural areas tend to prefer small towns to the metros.
Is it surprising then that nearly 20% of India’s billionaires live outside metros?
There are probably many reasons for this shift to small towns. The most widely acknowledged is that of lower real estate costs. Equally important is that the kind of enterprises that are coming up there require low level skills, which freshly recruited villagers and resident rurbanites can easily muster. This explains the continuation of informal labour in our industrial workforce today, an issue to which we shall soon return. Also the smaller the urban area, the greater the proportion of land given to industry and mercantile activities. Cities with over 1,00,000 people have about 1.8% of its developed land devoted to commercial use, whereas in smaller urban areas, the proportion is almost 3.2% (Venkateswaralu 1998: 23). When we come to industrial use, we find again that while 6.8% of all land is devoted to that purpose in all states, it is only 5.1% in metros but as high as 14% in towns with populations between 5,00,000 and 1,000,000 (Venkateswaralu 1998: 23).
Take away a handful of companies in information technology (IT), telecommunications, and financial services, and it is hard to overlook that informal labour comprises about 93% of our workforce. This is a gold mine for small investors, looking for quick returns, with very little skill at both ends—management and labour. Not only is cheap labour pouring out of every vein, there is also no pressure to maintain proper records—if this means paying off a labour inspector, that is small change.
It is then to be expected that the dependence of the formal sector on informal/unorganised workers will grow over time in India. In 1999–2000, it was 37.8%, but it went up to 46.6% in 2004–05, and is still climbing (NCEUS 2007). When labour is ready to be hired for a song, it is tempting for business houses to rely on the informal sector. Besides, as everybody else is doing just that, it would be ruinous to play fair. If truth be told, this scruffy underclass contributes as much as 43% of our export earnings (Planning Commission 2002; Tata Services 2007: 35). Finally, consider this: The vocationally trained labour force is a stagnant 5% in India, but a staggering 95% in South Korea.
Education-Seeking Rurbanite
However, an important and necessary qualification for being a “rurbanite” is education. Notwithstanding the general ruination of the village economy, what stands out is the emphasis rural people place on education. That this is so strikingly close to what urban people do gives us another reason to classify the bulk of those who live in Village India as “rurbanites.” Whereas only 2% of Indian children went to private schools in 1980, today as many as 21% of rural children go to such institutions (Desai et al 2010). Clearly, the poor in the countryside are spending way above what they can actually afford to make sure their children get a better future.
True, rural literacy today is only 67.8% compared to 84.1% in urban India. Yet if one looks at the rate of growth of literacy, a different picture emerges. Literacy shot up in rural India at the rate of 14.75% between 1991 and 2001. This is nearly double the figure for urban India. Given the agrarian crisis that has lasted for decades, villagers believe that one of the most reliable ways of getting out of their rural confines is to seek an alternative in cities.
Small towns are also establishing educational institutes and technical schools and colleges. Obviously, there is a great desire among those who live there to better their lives. Moradabad has many such institutions and among them there is the Teerthankar Mahaveer University, the Moradabad Institute of Technology, Wilsonia Degree College, and English-medium schools such as Delhi Public School and St Jude. Hanamkonda in Andhra Pradesh has many colleges too, as well as institutes that specialise in pharmacy, technology, and business. In Kazipet, there is a Mary Convent School as well as a National Institute of Technology. Kuppam, another small Andhra town, is a kind of educational hub with engineering and medical colleges.
The above are only examples; almost every small town has an English-medium school as well as a technology and management institute of some kind. This is significant as it demonstrates a strong desire for upward mobility among small-town residents. The question still remains—is there a demand for skilled labour yet? Second, how good is the quality of these educational institutions?
There are two trends that should be placed next to each other—the increase in the literacy level of migrants and, at the same time, the overwhelming numbers of unskilled labourers that come in large numbers to cities in search of jobs. Shaw found both these tendencies in the making of Navi Mumbai. What was most striking in her presentation is the sheer number of unskilled labourers who were flooding into the city, increasing the density and number of unauthorised settlements (Shaw 2004: 122).
Interestingly, all-India figures show that a larger percentage (nearly 50%) of rural graduates migrate to small and medium-sized towns, but the total migration of this category to all urban centres is lower, at 44% (Kundu and Mohanan 2009). That the rate of literacy is increasing faster in rural India than it is in urban India indicates how serious villagers are about getting educated and leaving villages for urban jobs.
Once the ambition arises to leave the village to seek a better life, its natural cohort is the drive towards education. This explains why so many children are today going to private schools. When the family is small, parents can think of sending their children to more expensive private schools. Consequently, their dependence on government schools declines. When a poor family sends its children to private schools, it is a big strain on its finances. But private education in India has yet to reveal its hand and demonstrate its efficacy in employment and industry. The promise is there and a lot of hopes ride on it. So far the results have not been very encouraging, as even the organised sector is employing more informal labour than what it did 10 years ago. Yet, one might make allowances for all that and say it is still early days and the good times are round the corner.
New Caste Relations
Inter-caste relations too were bound to be affected by the changes in the rural economy. As big landlords are largely creatures of the past, their sway over village people has diminished almost entirely. The village oligarchs of old who ruled and terrorised the poor folk are not to be seen. Instead, we find a mass of small cultivators of nearly every caste, including the Scheduled Castes (SCs). As most agricultural holdings are now really family farms, there is hardly any scope to act as village patrons, or as despots.
That being the case, the hierarchy that dominated caste interactions had to undergo a major modification. The most important being that no caste today can actually guarantee a vote bank, nor compel other castes to do its bidding. While this was possible in the past, it is not so today. One can get a clear indication of this from that the once subjugated castes are no longer afraid of loudly expressing their heritage and identities. Doing this would have been dangerous business a few decades ago, for it would have brought physical humiliation by rural oligarchs, and a denial of favours and jobs. That the earlier poorer castes are willing and able to express pride in their heritage shows how far we have come from traditional conceptions of hierarchy.
Not only did Brahmins get undermined in villages—that was easy—but also the traditional Kshatriya communities that dominated rural India. Now, every peasant and many artisan castes claim Kshatriya status and get away with it. Naturally, this has had the greatest effect at the political level, even as caste considerations continue to stay uppermost when people think of marriages and rites of passage. In this matter again, the rural Indian is thinking and acting much as an urban person would. This once again justifies the term “rurbanite,” and we now explain at some length why such a case should be considered.
Thinking beyond Caste
There are several reasons why a rurbanite is usually forced to think beyond just caste. The principal reason why such a person can act this way is because the weight of rural oligarchy is off. It is now possible for a villager to think politically like an urban person would and act on his or her own judgment. Just as in the case of the fragmentation of landholding, demography plays an important role, albeit from a different perspective.
Except for Maharashtra, where Marathas, of one kind or another, constitute about 33% of the population, nowhere else in the country does any one caste dominate any constituency. Many journalists, academics, and other assorted experts go by popular impressions and believe that Jats, or Gujjars, or whatever, dominate certain regions of India. They then link this preconceived notion to electoral outcomes, which is why they are, more often than not, proved wrong when the votes are counted.
West UP, for example, is hastily assumed to be a Jat stronghold, but this caste only comprises between 8% and 10% of the population. Likewise, while the Yadavs are said to dominate in the rest of UP, their numbers barely cross 12% to 15% in most parliamentary constituencies. In Bihar’s Madhepura region, which is supposed to be an impregnable Yadav bastion, only 23% to 25% of the people there are from this caste. Even so, the refrain that caste numbers determine elections keeps surfacing. This is probably because it is easy to comment, write, and appear knowledgeable if an exotic explanatory variable is used. Castes as vote banks may have held at a time when some castes ruled over others as the nature of landholdings were tilted seriously in their favour. All of these are things of the past and to talk of vote banks today belies a certain alienation from reality.
Under the existing demographic conditions, where no caste has a clear numerical advantage, most voters are forced to look at candidates outside their castes. The big reason for this is that nobody wants to waste a vote. In any constituency there are usually two viable candidates, and about five to six castes of equal population strength. Even die-hard casteists would find it difficult to vote for a fellow caste politician because that contender may not be a likely winner. Such people are often forced to opt for somebody who does not belong to their caste so that their vote does not go in vain. This is the logic of demographic numbers, and it has little to do with caste sentiments.
To complete this story, one must also add that political leaders are the ones who think along caste lines most of the time. This is especially true when distributing election tickets, appointing their election agents, and firming up their goon squads. These are the people who will do all the dirty work for their leaders—the walling, postering, and bullying. It is this tie between caste and political leaders that gets represented most often by journalists and sundry academics because they spend most of their time with the supposed newsmakers of the day. Naturally, they are quick to conclude that voting takes place on caste lines, for this is how leaders operate. If they pay attention to the empirical fact of caste numbers in electoral constituencies, they may not come up with such an easy correlation.
From a distance, especially from an urban perch, or from the courtyard of a political bigwig, all SCs and Other Backward Classes (OBCs) tend to look and think alike, as if an organic bond compels them in that direction. This myth needs to be exposed. During the Marathwada riots in 1979, when the Mahars were the object of Maratha wrath but not other SCs, many Mang and leather workers chalked their caste names on their huts to escape Maratha raids.
Mayawati is, by popular consent, a leader of the Jatavs, but there are huge tracts of UP such as Kanpur, Lucknow, Allahabad, Gonda, Rae Bareilly, Pratapgarh, and Sonbhadra where SCs, other than Jatavs, are numerically stronger. So it is not as if all SCs happily jostle together when they set out from their homes to the polling booth. Only this can explain why in 2002 the Bahujan Samaj Party (BSP) did not win a single seat in Sonbhadra district of UP, one of the districts where Jatavs are fewer in number. But then again, Mayawati won every seat there in 2007, only to lose half of them in 2012. Therefore, even at the level of SCs in UP, there is no clear caste correlation (Gupta 2007: 3388–96).
The other factor that creates an optical illusion, leading to the conclusion that the relation between caste and politics is unproblematic, is social capital. In West UP, the Jats, and in East UP, the Yadavs, had for long dominated in terms of being the most literate, best connected, and politically most active. This is why other castes lined up in front of their doors for favours, even for something as minor as writing a petition to a government department. This naturally magnified the presence of Jats and Yadavs, giving the impression that they were everywhere, but that was some time ago. Now most peasant castes (the so-called OBCs) are getting connected on their own to the outside world, in more ways than one. Consequently, other OBCs now have their own virtuosos, their own literati, and their own connections. They no longer need a Jat or Yadav to forward their demands and push for their claims. So, if one were to visit UP and Bihar today, it is not difficult to spot tensions between OBCs up and down what was once a clear hierarchy of power and privilege. They are no longer the leading elite of the peasant communities, which is why the caste calculus falters even more when we use it to understand elections (Gupta 2000: 148–76).
What holds for the OBCs applies to the SCs as well. Over a period of time, just as in the case of the peasant castes, individual SCs have generated their own social capital and produced their own clutch of literati, schoolteachers, police inspectors, businessmen, and so on. They do not need the Mahars or the Jatavs to help them through as they did earlier.
On account of this elite rivalry, or the competition between social capital at different levels, no caste can be said to represent a broad swath of jatis (social groups) in an area as big as a parliamentary constituency. This has further loosened the stranglehold of ritual hierarchy in villages, allowing even ordinary humble folk to aspire to “rurbanite” status. This is clearly a transitory stage, as even the term suggests. Even so, by looking at transformations in India through this optic, our resistance to accepting important social changes in our country is lowered. At the same time, certain myths, misconceptions, and blind intellectual positions, whose base has long since drifted away, come under the scanner.
The “rurbanite” will yet teach the urbanite a lesson or two in social change.

20 June 2015

Yoga and its Benefits

I normally never talk about the benefits of yoga, because I consider all the greatest benefits as the side effects of yoga. People may initially come for yoga because it offers a variety of health benefits and a way to become free from stress. Physical and mental benefits are definitely there – one can experience remarkable changes within their physicality and their mentality. There are many people who have come out of their chronic ailments quite miraculously. There are definitely benefits in terms of being peaceful, joyful and healthy, but that is not the essential nature of what it is. The real thing about yoga is that it makes your experience of life so large and all-inclusive that instead of being an individual, you become a universal process. You will see it will yield phenomenal results.

When the physical dimensions of yoga were first taught, it was expounded as to how to align this human system to the cosmic geometry. We are looking at the geometry of creation. If you get the geometry right, if it is all perfectly aligned, all the friction is taken off. Internal friction means you are working against yourself; you are an issue by yourself. When you are an issue by yourself, what other issue can you handle? Everything is stressful. You should not be an issue in your life. If you have other issues, let’s deal with it. There are many other challenges in the world. The more activity you take on, the more challenges will happen endlessly. But your own body, mind, emotions, energy should not be stumbling blocks in your life.

If these are properly aligned, suddenly this body and this mind can do things that you have not thought possible in your wildest dreams. Suddenly people think you are superhuman. If you are aligned with the geometry – whether it is business, home, love, war, whatever it may be, you will do it with a certain level of efficiency and competence. This is because in a most essential way, somehow either consciously or unconsciously, you found the geometry of that. On the surface it may look like understanding, but in a most fundamental way it is the geometry of the existence. Somewhere you hit it off by getting the right geometry.
Yoga means the mechanics of life. Understanding how this human mechanism is made and how to use it in a way that it moves towards freedom, not towards entanglement. Now, how to hold the body? Just learning to hold the body right is not a simple thing. You remember in the 70’s and 80’s when you got a television in your home, there was an aluminum antenna on top of your house. If it is aligned properly, the whole world pours into your sitting room because you got it into the right position.

Similarly, this body has a tremendous capability. If you hold it right, you can download the whole cosmos. This is yoga. The word yoga means union. Union means the distinction is gone between what is individual and what is universal. There is no individual and there is no universal, everything has become you – that means you are in yoga. Not because you imagined something, but because you perceived. Perception will happen only if you are in the right way, otherwise it will not happen. Learning to hold this body right is like adjusting your antenna – if you hold this right, the whole existence pours into you. It is a tremendous instrument of perception.

The Benefits of Yoga in one’s life:

Yoga does not mean doing a particular practice or twisting your body. Yoga means any method that you use to reach your higher nature. The technology that you use is referred to as yoga.

Why yoga is needed in one’s life? Of course there are physical benefits. This can do many things to a person, including improving their health and making the body more flexible. But with a healthy body you can still be a mess in your life. There are more people on this planet healthy and miserable than unhealthy and miserable. At least if you have a disease, you have a good excuse, which most people do not even have. With yoga, health, physical and mental wellbeing will happen for a person. People can find quite miraculous health benefits by doing simple processes of yoga, but that still does not fix life.

As long as you exist here not knowing all the dimensions of what this human being is, you will live a very limited life full of struggle. Once you come into this world with a human body and intelligence, you are capable of exploring all the dimensions of what this life has to offer. If that is not done, then the being suffers because it has been restricted to physicality; it has not experienced the other dimensions of what it is. This is the nature of life. The moment you restrict it, it struggles.

Today, string theory and modern science is talking about eleven dimensions to life. In the yogic systems we have always been talking about twenty-one dimensions to life. If you can do so much with just the three dimensions that are available to you right now, if you had twenty-one dimensions, you would have enormous freedom with life. You would handle your life with so much ease because all the dimensions are alive and within your experience.

The real thing about yoga is, it makes you all inclusive. It makes your experience of life so large and all inclusive that instead of being an individual you become a universal process, which is a fundamental longing in every human being. Wherever you may be, you want to be something more than what you are right now. It does not matter whether you think you are at the peak or at the bottom, still you want to be little more than what you are right now. If that little more happens, you want to be a little more and little more. What is it that you are seeking? You are seeking boundless expansion. This boundless expansion can never happen through physical means. Physical means a defined boundary. If you remove the boundary, there is no physical. This boundlessness becomes a possibility only if a dimension beyond the physical becomes a living reality with you.

If a dimension beyond the physical is constantly there in your experience, then you are free from the physicality and you are free from the very process of life and death because all these are subject to the physical. Freedom means what? To be boundless and boundless can never be physical. The whole process is aimed towards bringing and maintaining an experience beyond the physical within you. Once you are in touch with it, instead of being just a piece of creation, you are becoming a creator of your life.
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18 June 2015

Nowcast and Insurance Web-Portals for Farmers

Union Agriculture Minister Launched Nowcast and Insurance Web-Portals for Farmers

Union Agriculture Minister Shri Radha Mohan Singh, today said that a number of applications which have been completed and passed through all the required checks and audits are now ready for nationwide rollout. Few of the services we launched include Insurance Portal and Weather alert service NOWCASTThe Ministers of State for Agriculture, Dr. Sanjeev Kumar Balyan and Shri Mohanbhai Kalyanjibhai Kundariya were also present on the occasion. Brief about the portals are as follows:

The Mission Mode Project in Agriculture under National e-Governance Plan (NeGP-A) aims to achieve rapid development of agriculture in India through the use of ICT by ensuring timely access to agriculture related information for the farmers of the country.  Twelve clusters of services  including Information on inputs; Soil Health;  Good Agricultural Practices; Weather; Livestock, Fisheries: Marketing: Scheme Information; Training etc. have been identified and development of Web based applications on various components of these services is being undertaken before their roll out in the States with required local customization. 

Urgent need for an Insurance Portal enabling speedy processing farmers’ queries on Insurance and also their application for Agricultural Insurance cover has been felt in the wake of recent adverse weather conditions in some parts of the country and losses suffered by farmers due to their non-awareness about insuring their crops. As per the prevailing provisions Farmers can insure their crops under 3 schemes viz. National Agriculture Insurance Scheme (NAIS), Modified National Insurance Scheme (MNAIS) and Weather based Crop Insurance Scheme (WBCIS).  Besides this, Coconut Palm Insurance Scheme (CPIS) also is applicable in some parts of the country.  However, statistics of the year 2014-15 shows that only about 20% gross cropped area was insured.  Major reasons behind such low coverage inter alia include ignorance among farmers about insurance products & procedures and sometimes inordinately high rates as compared to NAU.  Both these factors often work in a vicious cycle to the detriment of farmers. 
Therefore, a beginning was made in the year 2012 by having an insurance calculator on the farmers’ portal (www.farmer.gov.in).  Unfortunately, not much headway could be made because very small time window existed in most States for data entry to be completed well in time before the cut-off date.  Therefore, a new web-based Portal (www.farmer.gov.in/insurance) has been developed to enter essential information under 3 major schemes viz. NAIS, MNAIS and WBCIS in an expeditious, accurate and non-repetitive manner.  An Insurance Calculator has also been provided along with graphical dashboards with drill down facility down to notified units. The farmers will be able to browse through   data-base of agriculture insurance companies to get details of various insurance schemes notified in their area and premium applicable to them. Facility for online entry of various provisions of insurance schemes notified in different districts by the insurance companies and the concerned states would minimize errors and facilitate quick response to online query raised by farmers on different aspects of the scheme. Detailed procedure has also been given on the home page of the Insurance Portal www.farmer.gov.in/insurance. In the second phase an online interface for filing insurance applications and scrutiny of the same by banks is also proposed to be developed.

Information on weather and agro meteorological advisories are generated and disseminated by India Meteorological Department (IMD) under the Ministry of Earth Sciences through their website and also by their 130 Agro Met Field Units (AMFUs) operating across the country.  However, these advisories being generated in advance and cover a larger area, their accuracy always has a limitation due to local agro-ecological variations.  To tackle this situation IMD has set up 17 Doppler Radars which feed information into Weather Stations regarding extreme weather situations like thunderstorm, squall, hail etc.  146 of these Weather Stations are regularly generating data for these extreme situations.   However, these warnings relating to extreme weather situations generated by IMD are valid for a period of only 3 hours on their website.  Farmers in the affected areas (which lie within a radius of 50 Kms. from each of these 146 Weather Stations) could not get this information in time because of limitations in accessing the IMD Website at farm level. Therefore, an innovative initiative has been taken by DAC in the name of NOWCAST.  Under this initiative, the extreme weather data originated from IMD is being moved to mKisan portal using a web service. From mKisan Portal warnings regarding extreme weather conditions are automatically and instantaneously transmitted by SMS to farmers located in affected district/blocks.  This technological break-through is a collaborative effort between mKisan Portal developed by DAC, weather technologies adopted by IMD and GIS Portal of NIC. Advance Warnings issued so far are also displayed on the Web. 

17 June 2015

"Housing for All by 2022" Mission - National Mission for Urban Housing

"Housing for All by 2022" Mission - National Mission for Urban Housing
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for launch of “Housing for All by 2022” aimed for urban areas with following components/options to States/Union Territories and cities:-
a) Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource;
b) Promotion of affordable housing for weaker section through credit linked subsidy;
c) Affordable housing in partnership with Public & Private sectors and
d) Subsidy for beneficiary-led individual house construction or enhancement.
Central grant of Rs. one lakh per house, on an average, will be available under the slum rehabilitation programme. A State Government would have flexibility in deploying this slum rehabilitation grant to any slum rehabilitation project taken for development using land as a resource for providing houses to slum dwellers. Under the Credit Linked Interest Subsidy component, interest subsidy of 6.5 percent on housing loans availed upto a tenure of 15 years will be provided to EWS/LIG categories, wherein the subsidy pay-out on NPV basis would be about Rs.2.3 lakh per house for both the categories. Central assistance at the rate of Rs.1.5 lakh per house for EWS category will be provided under the Affordable Housing in Partnership and Beneficiary-led individual house construction or enhancement. State Government or their para statals like Housing Boards can take up project of affordable housing to avail the Central Government grant.
The scheme will be implemented as a Centrally Sponsored Scheme except the credit linked subsidy component, which will be implemented as a Central Sector Scheme. The Mission also prescribes certain mandatory reforms for easing up the urban land market for housing, to make adequate urban land available for affordable housing. Houses constructed under the mission would be allotted in the name of the female head of the households or in the joint name of the male head of the household and his wife.
The scheme will cover the entire urban area consisting of 4041 statutory towns with initial focus on 500 Class I cities and it will be implemented in three phases as follows, viz. Phase-I (April 2015 - March 2017) to cover 100 Cities to be selected from States/UTs as per their willingness; Phase - II (April 2017 - March 2019) to cover additional 200 Cities and Phase-III (April 2019 - March 2022) to cover all other remaining Cities. However, there will be flexibility in covering number of cities in various phases and inclusion of additional cities may be considered by the Ministry of Housing & Urban Poverty Alleviation in case there is demand from States and cities and have capacity to include them in earlier phases. Credit linked subsidy component of the scheme would be implemented across the country in all statutory towns from the very beginning.
Dimension of the task at present is estimated at 2 crore. Exact number of houses, though, would depend on demand survey for which all States/Cities will undertake detailed demand assessment for assessing actual demand by integrating Aadhar number, Jan Dhan Yojana account numbers or any such identification of intended beneficiaries.
A Technology Sub-mission under the Mission would be set up to facilitate adoption of modern, innovative and green technologies and building material for faster and quality construction of houses. The Technology Sub-Mission will also facilitate preparation and adoption of layout designs and building plans suitable for various geo-climatic zones. It will also assist States/Cities in deploying disaster resistant and environment friendly technologies.
The Technology Sub-Mission will coordinate with various regulatory and administrative bodies for mainstreaming and up scaling deployment of modern construction technologies and material in place of conventional construction. The Technology Sub-Mission will also coordinate with other agencies working in green and energy efficient technologies, climate change etc.
The Technology Sub-Mission will also work on the following aspects: i) Design & Planning ii) Innovative technologies & materials iii) Green buildings using natural resources and iv) Earthquake and other disaster resistant technologies and designs.
In the spirit of cooperative federalism, the Mission will provide flexibility to States for choosing best options amongst four verticals of the Mission to meet the demand of housing in their states. The process of project formulation and approval in accordance with Mission Guidelines would be left to the States, so that projects can be formulated, approved and implemented faster. The Mission will provide technical and financial support in accordance to the Guidelines to the States to meet the challenge of urban housing.
The Mission will also compile best practices in terms of affordable housing policies of the States/UTs designs and technologies adopted by States and Cities with an objective to spread best practices across States and cities and foster cross learning. The Mission will also develop a virtual platform to obtain suggestions and inputs on house design, materials, technologies and other elements of urban housing.

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