The patent puzzle Indian licensing of patented drugs is a win-win

Most of the policy issues discussed to take forward the "Make in India" campaign centre around removing domestic roadblocks that hamper manufacturing. In the case of pharmaceuticals, however, the hurdles are unusual. India has an advantage in making drugs - both generic and underpatent - cheaply, and this has resulted in their widespread global use through both regular exports and smuggling. Particularly sought after are newer products for treating non-communicable diseases like cancer that make an enormous difference in the quality of care. However, significant barriers to the manufacture and trade in pharmaceuticals still constrict the sector's growth.

Around a decade ago, then United States president George W Bush's emergency plan for AIDS relief procured and delivered antiretroviral drugs (virtually all generics and many made in India) to several African countries cheaply. Today, buyers' clubs have sprung up all over the world to smuggle in cheap copies of new cures manufactured mostly in India. Some of those involved have been prosecuted, including in China, as those drugs have not been certified by the respective country regulators. In India, the pharma company NATCO, after a celebrated court battle, secured the compulsory licence to manufacture a drug for the treatment of a type of cancer. On the other hand, drug consignments of Indian firms headed for South America have been seized in the past in the Netherlands during transshipment. Meanwhile, the proportion of counterfeits in Indian-made drugs in Africa has been abnormally and worryingly high, a continuing indication of holes in Indian companies' quality control.

Indian law has been designed to address the practice of "evergreening", extending the life of a patent by coming up with a new form of a known substance that does not improve efficacy. The right to allow the manufacture of a patented drug through compulsory licensing on public health grounds involves the payment of royalty, though far less than what a manufacturer can earn elsewhere. In the United States, prices are 50 per cent higher than what even European governments are able to negotiate for procurement for their public health services. United States manufacturers blame the high prices on the complexities of modern chemistry and high cost of securing regulatory approval; naturally, firms charge what they can and must. But if a patented drug that is too expensive for developing countries can be licensed to low-cost competent firms, then that, after all, adds to the global revenue of patent-holders through royalties. Developed economies have competent policing, so that the entry of such low-cost products meant for the global poor can be stopped at their borders. There is, of course, the fear among patent-holders that such practices, if permitted in one country, will set a bad example (countries like India, Brazil and Thailand will learn from each other) and soon there will be a demand for cutting prices in the United States also.

Reforming FCI or cutting back food security?

The Shanta Kumar Committee on restructuring FCI has suggested the reach of the National Food Security Act be curtailed to 40 per cent of the population

The National Democratic Alliance government set up the high-level Shanta Kumar Committee to restructure and reform the state-owned Food Corporation of India. Instead, the panel ended up providing a road map to restructure the entire farming and food security policy of the government. In doing so, the panel has re-ignited the debate that ran like a fire in a pine forest through the entire second tenure of the United Progressive Alliance government: should the National Food Security Act be as minimalistic as possible or should it be an expansive reform of the existing public distribution system?

The Shanta Kumar Committee has made many recommendations on changing what FCI does and how it does it. But it is the big-ticket recommendations on food security that stretch the terms of reference given to the panel to the limits. The panel suggests that in the medium term, the country should move towards cash transfers instead of distributing subsidised grain through FCI. This would also mean that the government's role of buying grain from the farmers at minimum support price will be substantially reduced.

In the short run, the panel has suggested that the National Food Security Act be curtailed. Instead of providing subsidised grain to at least 67 per cent of the population across the country, the law should provide 7 kg of grain per person (instead of 5 kg) at a much lower subsidy to a maximum of 40 per cent of the population. Instead of rice being sold at Rs 3 per kg and wheat at Rs 2 per kg, the committee has recommended that this price should be half of the minimum support price provided to farmers - that works out to a three-to-four time increase in the price of grain provided to the poor.

The panel headed by senior Bharatiya Janata Party leader Shanta Kumar has moved substantially away from the promises the party made in its 2014 election manifesto as well as its position on the floor of Parliament when the National Food Security Bill was debated. BJP said in its manifesto that " it has always held that 'universal food security' is integral to national security. BJP will take steps to ensure that the benefits of the scheme reach the common man and that the right to food does not remain an Act on paper or political rhetoric."

Several BJP Members of Parliament, including Finance Minister Arun Jaitley, had earlier berated the bill for spreading the social security net to fewer people than what was required. Some had even asked for universalisation of the scheme along the lines the Right to Food campaign (closely associated with some of the National Advisory Council members) had advocated.

Even Prime Minister Narendra Modi, then the BJP chief minister of Gujarat, had hit out at the National Food Security Act for being less beneficial than being marketed by the UPA government. Before the Bill was passed, he had said, "The method of selecting beneficiaries has been that you set the criteria, do a survey and then identify who the deserving families are for the scheme. Your food security Bill is such that you have already decided a cap on the number of the beneficiaries. And now you are forcing this cap on the states and telling them to find families who fit into this upper limit. This reverse sequence will never let this scheme become a success."

He was then referring to the UPA government's decision to provide subsidy under the National Food Security Act to 67 per cent of the population. The states were left to provide subsidy to any extra beneficiaries they chose to bring under the ambit of the Bill.

Taking a U-turn
The Shanta Kumar Committee has recommended just the reverse of what Modi as Gujarat chief minister had said. It too has advised an artificial cap imposed by the Centre and suggested the number of beneficiaries be restricted to below 40 per cent of the country's population.

In fact, the Right to Food campaign has claimed the panel's recommendations, if accepted, would lead to the NDA government imposing a de-facto poverty line of Rs 29.2 per day per person of expenditure in rural India to determine the limit on number of beneficiaries of the scheme, crimping the scope of the Food Security Act. In other words, their calculations based on the latest National Sample Survey data, suggest that any individual spending more than Rs 29.2 per day in rural India and Rs 46.75 per day in urban India would not be eligible for benefits under the Food Security Act.

Shanta Kumar has justified his change of stance, claiming BJP had just supported it because Parliamentary elections were around the corner. Media reports have quoted Kumar as saying, "When the Act came in Parliament, many thought 67 per cent coverage was quite high. But you know the political situation ahead of the elections. None of the political parties would have let the Act cover 67 per cent of population if the elections were not around that time...The opposition would have got a point against us. We knew our government was coming and we would correct it."

In effect, Shanta Kumar has suggested that BJP's postures and positions during elections are set to be different than its intent once it's in saddle at the Centre. But the Union government itself has not said so or made any comment on how it views the report. What it has done is delay the implementation of the food security law through questionable executive orders even as the Socio-Economic Caste Census runs behind schedule by several years now. The survey was to be the new basis for identifying the poor beneficiaries. Without it, the existing lists of beneficiaries dating back more than a decade remain the base on which the new beneficiaries are added.

The Right to Food campaign, the Left parties and the Congress see the Shanta Kumar report as a Trojan Horse set up to attack the food security law rather than bring about mere reforms in FCI. The imprint of economist Ashok Gulati, member on the Shanta Kumar panel, is hard to miss in the report. In the UPA regime as the head of the Commission for Agricultural Costs and Prices, which recommends the minimum support price for farmers, Gulati had expressed the same views through various official discussion papers. At that time, Gulati had fallen on the side of the divide that lost the battle as the Congress party went ahead with the National Food Security Act.

Whether Shanta Kumar's report and Gulati's vision find traction this time in the government will depend on how differently Modi acts as prime minister compared to the ideas he professed on food security as the chief minister of Gujarat.

Three other foreign secretaries who quit or were sacked

Sujatha Singh's isn't the first head to roll; Jagat Mehta, A P Venkateswaran and S K Singh were three others who had to demit office before their time

Sujatha Singh is the fourth instance of a foreign secretary of India to have either been asked to quit or sacked. Singh was removed six months before her two year tenure was to end. The Appointments Committee of the Cabinet, that took the decision to cut short her tenure, used the word “curtail” advisedly. For Singh, born in July 1954, was past her retirement age.

The other three instances of foreign secretaries to have been sacked or signaled to resign took place when they were yet to retire, or so claim former diplomats. Jagat Mehta in 1980, A P Venkateswaran in 1987 and S K Singh in 1990 are the three other examples of serving foreign secretaries being sacked or asked to quit before the end of their terms/reaching superannuation.



Sujatha Singh is also the third top official to be sacked by the Narendra Modi government. In the other two instances, the officials were on extended tenures.

The government removed Special Protection Group chief K Durga Prasad in end November. Prasad was on extension, his tenure having ended earlier that month. Prasad had dismissed speculation that his ouster had anything to do with Prime Minister Modi’s estranged wife Jashodaben having filed a Right to Information application about the security cover being provided to her.

In mid-January, Defence Minister Manohar Parrikar removed the chief of Defence Research and Development Organisation (DRDO) Avinash Chander. Parrikar said the organisation needed a younger man as its head. The Appointments Committee of the Cabinet ended Chander’s contract 16 months before it was to conclude. Chander was on a two year extension given to him by the Modi government.

Three foreign secretaries who quit/ were sacked

Jagat Mehta, 1979: Mehta, one of the most respected officers to serve in the Indian Foreign Service, was sacked months before he was to retire. Prime Minister Charan Singh, with Atal Bihari Vajpayee as his Foreign Minister, felt Mehta had brought in changes in India’s policies towards Pakistan, US and China that had hurt India’s interests. It was also felt that he damaged India’s standing at the Lusaka Commonwealth Heads of Government Meeting, CHOGM in 1979, by promoting his own candidature for the post of the secretary general of the Commonwealth. According to former diplomat T P Sreenivasan, Mehta took the moral responsibility for the fiasco that had more to do with “inept” handling of the issue at the political level. Mehta resigned, but was asked to stay on and later dismissed when his replacement arrived.

A P Venkateswaran, 1987: Prime Minister Rajiv Gandhi literally sacked Venkateswaran during his annual press conference. Venkateswaran had publicly termed the sending of the Indian Peace Keeping Force (IPKF) to Sri Lanka a mistake. When asked to respond to this by a Pakistani journalist, Gandhi famously said: Soon, you will be talking to a new foreign secretary. Venkateswaran returned to his office and resigned.

S K Singh, 1990: Singh was appointed the foreign secretary in the last months of the Rajiv Gandhi government. But life became difficult when V P Singh government took over after the Lok Sabha elections in end-1989. External Affairs Minister Inder Kumar Gujral and S K Singh hadn’t been on the best of terms when Gujral was the ambassador to Moscow in late 1970s, while S K Singh dealt with administration in Delhi. He was asked to quit months before his retirement, with Muchkund Dubey appointed the new foreign secretary.

Govt to release revised estimates of GDP with new base year

The new measurement will set the base year as 2011-12 as opposed to the earlier 2004-05

Revised estimates of the gross domestic product (GDP), which are expected to be released later on Friday, is likely to show an increase size of the Indian economy by around 6 per cent to an estimated $1.8 trillion in 2013-14, says India Rating and Research (Ind-Ra), a Fitch group company.

Since the new base year is 2011-12, the revision would be made for 2012-13 and 2013-14 GDP numbers.

Every five years, the Ministry of Statistics and Programme Implementation (MOSPI) updates the base year of its GDP calculations. The current GDP estimates use 2004-05 as the base year which the government is changing to 2011-12.

In two of the last three base year changes, when the base year was changed to FY94 from FY81 and to FY05 from FY00, the size of economy changed significantly, while in the third case it did not change much. This time with the change in base year, Ind-Ra expects the size of the Indian economy to increase to Rs 111.7 trillion or $1.8 trillion in FY14.

It should be noted that any revision in the base, theoretically, should not lead to change in size of the economy. It is so because change in base does not alter GDP in nominal terms. However, the increase in the GDP size comes mainly due to the use of more up-to-date information in the compilation and estimation of national accounts. This is because new goods and services keep entering the system.

For example the 2004-05 base would not have captured the production of LED TVs which did not exist at that time. The change in base year will incorporate information from latest data sources such as the Census 2011, National Sample Survey Organisation’s (NSSO) employment-unemployment and Consumer Expenditure Surveys for 2011-2012, the debt and Investment Survey of 2013, the Annual Survey of Industries (ASI) 2012-2013 and the all India Livestock Census 2012.

With an increase in the size of the GDP, indicators such as the fiscal deficit and current account deficit which are expressed as a percentage of GDP are likely to decline to 4.3 per cent from 4.6 per cent of GDP in FY14 and from 1.7 per cent to 1.6 per cent of GDP respectively. While this does ease the fiscal deficit constraint, Aditi Nayar, chief economist at ICRA cautions, saying that compliance with fiscal targets should be assessed in absolute terms, for instance, comparing the Central Government's fiscal deficit for 2014-15 to the budget estimate of Rs.5.3 lakh crore.

However, fiscal deficit or current account deficit is expressed as percentage of GDP since it becomes difficult to compare absolute numbers with previous year figures and hence setting the target becomes difficult.

The Ind-Ra estimates however do not take into account changes due to the Annual survey of industries for 2012-13. For initial estimates of industrial growth, the government relies on the Index of Industrial Production (IIP) data which is largely collected from the a organised sector. But the ASI data is a more comprehensive set than the index of industrial production (IIP), as it encompasses small and medium industries as well, covering all units that employ at least 10 workers and use power or 20 workers but do not use power. But as these results come out with a considerable lag, IIP estimates are used in the interim. These estimates undergo changes when the results of annual survey of industries are available.

The latest ASI data shows that gross value added in the manufacturing sector grew at 3.9 per cent in 2012-13. This is lower than the growth of manufacturing used for computing GDP in 2012-13 which was 6.85 per cent. This would suggest that GDP growth could be revised downwards. But Madan Sabnavis at Care says that there is not a one on one correspondence between ASI and GDP data. This is because ASI data does not include net indirect taxes and subsidies and other adjustments are often made.

With the revision in base, Ind-Ra further expects the Indian economy to become a three trillion dollar economy by the end of this decade. On the previous base, this milestone would have been achieved a year later.

The Muslim population

Among the three countries that once constituted undivided India, Pakistan in 2001-11 had a decadal population growth rate of about 20 per cent, India's Muslims (it has now been revealed) 24 per cent, and Bangladesh slightly more than 14 per cent. If India's Muslims had witnessed Pakistan's population growth rate of 20 per cent, the country would have had about five-six million fewer Muslims in 2011. And if Bangladesh had experienced the same 20 per cent population growth rate, it would have had seven million more Muslims. So does the explanation for the higher growth rate in Indiaand the lower rate in Bangladesh lie primarily in the migration of Bangladeshis to India? It might seem so, given that the growth of the Muslim population in the border districts ofWest Bengal and Assam has been the highest (which is not to say that illegal immigrants don't settle in more distant parts of India, including Delhi).

Even at 20 per cent, the growth rate of the domestic Muslim population would be higher than for all non-Muslims (17 per cent). The difference though would be smaller than the census numbers have recorded, and would be explained by two factors: the lower socio-economic status of Muslims in India (the poor tend to have more children), and the greater resistance of Muslims to family planning. This latter is evidenced by the higher growth rates in the population of both Pakistan and Bangladesh in the period since Partition. But there is no cause for the paranoia in some circles that "Hindus will be reduced to a minority" in India. More reasonable projections suggest that the Muslim population at its peak may be 18-19 per cent of the population.

That would be a significant change from the 10 per cent of 1951, and it is just as well that the government has released the religion-wise census numbers (the previous government had no business hiding them, as though they contained a dirty secret). But one must understand the numbers in order to be able to deal rationally with the issues they raise.

There are three specific issues. First, if the higher growth rate in the population of Muslims is because of their inferior socio-economic census, then that underlying problem should be addressed. However, the report of a commission that went into this a few years ago and recommended solutions was widely criticised. Its recommendations have no chance of getting any purchase with the present government. Second, ways should be explored to encourage more Muslims to adopt family planning.

The third issue would be to explore whether illegal immigration can be reduced. Since this would seem to be the primary problem, every effort should, of course, be made in this direction. But if one is to judge by the experience on the US-Mexican border, there is little chance of success, even if fences are set up and the Border Security Force made less corrupt (anecdotal evidence is strong that they facilitate immigration in return for pay-offs). It is worth bearing in mind that if India continues to do better economically than Bangladesh (whose per capita income is now barely two-thirds of India's), there will be even more illegal immigration.

Does that mean there is no escape from a steady increase in the Muslim population? Whether one likes it or not, that is the likely prospect for the foreseeable future. Asking Hindus to have more children or attacking Muslims politically will not deliver solutions. What Hindus can usefully do is stop killing girl children, as Mr Modi exhorted the other day. That way there will be more Hindu women reaching child-bearing age.

8th National Conference on e-Governance

8th National Conference on e-Governance Theme: Digital Governance-New Frontier

The Department of Administrative Reforms and Public Grievances (DARPG), Government of India, in association with the Department of Electronics & Information Technology, Government of India and Government of Gujarat, is organising the 18th National Conference on e-Governance on January 30-31, 2015 in Gandhinagar, Gujarat. Senior Officers from the Government, Industry, academicians, technical experts and NGOs will participate in the event. The Chief Minister of Gujarat, Smt. Anandiben Patel, the Minister of State in the Prime Minister’s Office, Personnel, Public Grievances & Pensions, Dr. Jitendra Singh; will be present during the inaugural session on January 30, 2015. The occasion will also be attended by Secretary, DARPG, Government of India, Shri Alok Rawat; Secretary, Department of Electronics and Information Technology, Government of India, Shri R. S. Sharma; Chief Secretary, Gujarat, Shri D. J. Pandian; President NASSCOM, Shri R. Chandrashekhar; Special Secretary, DARPG, Shri Arun Jha; and other Senior Officers from the Government of India and various State/Union Territory Governments. National e-Governance Awards for the year 2014-15 will be presented in 12 different categories concerning various aspects of e-Governance during the inaugural session by the Chief Minister of Gujarat and the Minister of State in the Prime Minister Office and Personnel. The Valedictory session will be graced by the Governor of Gujarat, Shri O.P. Kohli and the Minister of Science & Technology, Government of Gujarat, Shri Govindbhai Patel. The National e-Governance Awards recognise some of the best Government to Government (G2G), Government to Citizen (G2C), Government to Business (G2B) initiatives taken by various government departments and also initiatives of public sector units and Non-Government Institutions. The Conference along with the Exhibition is a forum to showcase best practices, innovative technologies and ICT solutions. The 18th National Conference on e-Governance, with the theme “Digital Governance-New Frontier”, will explore the benefits of the use of ICT, how e-Governance leaders can act as the agents of change, integrated service delivery and use of mobile platform for expanding access rapidly. Focus sector of the year is “Skill Development and Employability”.

lyricist and actor Shekhar Sen appointed as Chairman of Sangeet Natak Akademi

Renowned singer, music composer, lyricist and actor Shekhar Sen appointed as Chairman of Sangeet Natak Akademi

Shri Shekhar Sen has been appointed as the Chairman of the Sangeet Natak Akademi (SNA). Shri Shekhar Sen is an eminent singer, actor, theatre director, composer and lyricist. According to an order issued by the Union Ministry of Culture dated 28th January,2015 Shri Shekhar Sen has been appointed as Chairman of SNA for a term of 5 years with immediate effect. Shri Sen has done many research oriented musical programmes and has rendered many significant Bhajan Albums since 1983 as singer, lyricist and composer. He is famous for his mono act musical plays “Tulsi”,” Kabeer”, “Vivekananda”, “Sanmanti”,”Saahab” and “Soordas” which have been highly acclaimed. Shri Shekhar Sen has received prestigious awards including PadamShri and state level awards. A brief bio-data of Shri Shekhar Sen is enclosed. Bio-data of Shri Shekhar Sen Shri Shekhar Sen is an accomplished singer, music composer, lyricist and actor. He started his career as a music composer and subsequently shifted towards composing Bhajans. He has rendered many Bhajan Albums as singer, lyricist and composer. Over the years as a playwright, actor, singer, director and composer, Shri Shekhar Sen has created many one man musical plays like “Tulsi”, “Kabeer”, “Vivekananda”, “Sanmati”, “Saahab” & “Soordas” and performed many shows of his Mono act Musical Plays. He has also undertaken research oriented musical programs like “Dushyant Ne Kaha Tha”, “Madhya Yugeen Kaavya”, “Pakistan Ka Hindi Kavya”, “Meera Se Mahadevi Tak”. Shri Sen’s performances have been acclaimed in India and in countries such as US, UK, Belgium, Surinam, Singapore, Jakarta, Hong Kong, South Africa, UAE, Mauritius and Trinidad where he has performed. Shri Sen has performed in many singing concerts and also performed his mono act musical play ‘Kabeer’ in the Lok Sabha. His Mono Act Musical Plays have received great acclaim in India as well as abroad. Among the many honours conferred to him, Honble President of India has approved conferment of Padma Shri Award on Shri Shekhar Sen in the field of Arts. He was also awarded with Safdar Hashmi Puraskar in 2001 by the Sangeet Natak Academy of Uttar Pradesh for his contribution in the field of theatre and the V. Shantaram Samman by the Maharashtra Rajya Hindi Sahitya Academy in 2008.