Preparing for Paris

India’s commitment to adopt low-carbon pathways for development is welcome reaffirmation that it fully recognises its role in averting dangerous climate change. In the statement of climate goals and plans — formally called the Intended Nationally Determined Contributions, or INDCs — which has been submitted to the UN Framework Convention on Climate Change, the Narendra Modi government has emphasised the expansion of clean technologies to generate power, greater energy efficiency in infrastructure, and a significant widening of forestry as key measures. There are several other actions that it will take in the areas of transport, buildings, agriculture and waste management in order to balance economic growth with carbon emissions. With all this, India promises to reduce the emissions intensity of its GDP by 33 to 35 per cent by 2030, from 2005 levels, while not committing itself to any absolute reduction in greenhouse gas emissions. What is significant is that the national plans given in the INDC, ahead of the Paris Climate Conference in December 2015, depends on the “unencumbered availability of clean technologies and financial resource from around the world”. Such a position is consistent with the principle of ‘common but differentiated responsibilities’ that guides climate negotiations. Yet, India cannot avoid addressing the internal contradiction — affluent citizens have access to cheap, abundant energy and mobility while the poor and the vulnerable are forced to fend for themselves — in facing the negative effects of climate change.

On the positive side, since much of India’s infrastructure is yet to be built, the Central and State governments can adopt the greenest technologies to ensure that the long-term impact on emissions is positive. This is particularly important in the design and construction of built structures, including housing and offices, mass transport systems and lighting, to name a few. New coal-based power generation facilities have a prolonged lock-in effect of high emissions, and it is vital to opt for the cleanest systems. Financing such a major effort requires massive funding; the INDC data estimate that between now and 2030, at least $2.5 trillion would be required for the country to meet climate change action requirements. Some of the funding could come from the taxing of fuels. As with the coal cess, there could be a climate tax on transport fuels — this would result in a tax-and-share arrangement where high-volume users would pay a tax to fund common facilities. Another area that needs support is in helping citizens scale up their contribution to renewable energy. Incentivising citizen-investment in roof-top solar installations would unlock private funds and help the country exceed the 100 GW it aims to generate from this source. That will be a world-leading achievement.

India matches Brazil’s record in university rankings

Seventeen Indian higher education institutions have featured in a list of the world’s best universities topped by California Institute of Technology.

While no Indian institution was among the world’s top 200 universities, the 12th edition of the annual rankings released by ‘Times Higher Education’ here today has the Indian Institute of Science in the un-ranked 251-300 category and the Indian Institute of Technology Bombay in the 351-400 category.

With 17 institutions on the list, India is now at par with its BRIC counterpart Brazil.

“It is good news for India that 17 of its institutions feature in this year’s list of the world’s best universities, but it will have to work harder to compete with other emerging economies such as China, which has 37 institutions featured in this year’s rankings, and Russia, which has fewer institutions overall but a higher proportion in the upper echelons of the table,” said Phil Baty, the editor of the ‘Times Higher Education’ World University Rankings.

“With the population of young people in the country continuing to expand resulting in further pressure on resources, it is now more crucial than ever that India invests in research and strengthens its links with other nations. The government has spoken about improving its universities but is yet to implement an initiative in this area. It will need to act, and fast, if it wants to match up against its fellow BRIC nations and the rising stars in Asia,” he said.

Other Indian institutions featured in the list are: Indian Institute of Technology Delhi, Indian Institute of Technology Kharagpur and Indian Institute of Technology Madras in the 401-500 category.

The 501-600 category has Indian Institute of Technology Guwahati, Indian Institute of Technology Kanpur, Indian Institute of Technology Roorkee, Jadavpur University and Panjab University.

Aligarh Muslim University, Amrita University, Andhra University, Birla Institute of Technology and Science, Pilani, University of Calcutta, University of Delhi and Savitribai Phule Pune University have been placed in the 601-800 category.

The rankings have doubled the number of institutions covered around the world for this year’s list, which was topped by California Institute of Technology, followed by Oxford and Stanford in second and third place.

University of Cambridge and Massachusetts Institute of Technology (MIT) complete the top five, with Harvard University a close sixth.

In Asia, the National University of Singapore holds Asia’s number one spot (in 26th place) while China’s two leading universities (Peking and Tsinghua) are firmly established in the world’s elite top 50 group at 42nd and joint 47th respectively.

For the first time, London has four universities — Imperial College London, University College London, London School of Economics and King’s College London — in the top 30 of the rankings.

“I’m incredibly proud that four of London’s universities are in the top 30 worldwide according to this survey. The capital continues to be the global leader in education, innovating and inspiring top talent from both across the country and overseas,” said London mayor Boris Johnson.

The 2015 ranking features universities in 70 countries, with 29 new countries included this year including Indonesia, Malaysia, Ghana, Nigeria, Bangladesh, Latvia, Oman, Qatar and the Ukraine.

“This year’s expanded list is testament to just how competitive global higher education has become — our top 800 universities come from 70 different countries, and the traditional dominance of the US is eroding,” said Mr. Baty.

The rankings are partly based on publication and citation data from Elsevier’s Scopus, the world’s largest abstract and citation database of peer-reviewed literature, and include analytics from SciVal, Elsevier’s tool to calculate comparative research metrics.

It examines 13 performance indicators to examine all the core missions of the modern global university — research, teaching, knowledge transfer and international activity.

India to reduce the Emissions Intensity of its GDP by 33 to 35 Per Cent by 2030 from 2005 Level India to create additional Carbon Sink of 2.5 to 3 Billion Tonnes of Co2 Equivalent through Additional Forest and Tree Cover by 2030

India’s Intended Nationally Determined Contribution is Balanced and Comprehensive: Environment Minister

India to reduce the Emissions Intensity of its GDP by 33 to 35 Per Cent by 2030 from 2005 Level

India to create additional Carbon Sink of 2.5 to 3 Billion Tonnes of Co2 Equivalent through Additional Forest and Tree Cover by 2030

India to Anchor a Global Solar Alliance

The Government has said that India’s Intended Nationally Determined Contribution (INDC) is balanced and comprehensive.  Addressing a press conference here today, Union Minister of Environment, Forest and Climate Change, Shri Prakash Javadekar, said that India is keen to attempt to work towards a low carbon emission pathway, while simultaneously endeavoring to meet all the developmental challenges that the country faces today. Shri Javadekar said that INDC include reduction in the emissions intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level and to create an additional carbon sink of 2.5 to 3 billion tonnes of CO₂ equivalent through additional forest and tree cover by 2030.  India has also decided to anchor a global solar alliance, INSPA (International Agency for Solar Policy & Application), of all countries located in between Tropic of Cancer and Tropic of Capricorn.   

The Minister said, ‘recent decisions of the Government represent a quantum jump in its aspirations and demonstrate unparalleled vision’.  He also said that India’s contribution represent utmost ambitious action in the current state of development. 

The INDC centre around India’s policies and programmes on promotion of clean energy, especially renewable energy, enhancement of energy efficiency, development of less carbon intensive and resilient urban centres, promotion of waste to wealth, safe, smart and sustainable green transportation network, abatement of pollution and India’s efforts to enhance carbon sink through creation of forest and tree cover.  It also captures citizens and private sector contribution to combating climate change.  The INDC proposals are on the following:

a.             Sustainable Lifestyles

b.                        Cleaner Economic Development

c.             Reduce Emission intensity of Gross Domestic Product (GDP)

d.                        Increase the Share of Non Fossil Fuel Based Electricity

e.             Enhancing Carbon Sink (Forests)

f.              Adaptation

g. Mobilizing Finance

h. Technology Transfer and Capacity Building

INDC outlines the post-2020 climate actions they intend to take under a new international agreement.  The INDC document is prepared with a view to taking forward the Prime Minister’s vision of a sustainable lifestyle and climate justice to protect the poor and vulnerable from adverse impacts of climate change. Ministry of Environment, Forest and Climate Change adopted an inclusive process for preparation of India’s INDC. It held stakeholder consultations with the specific involvement of the key Ministries and State Governments.  Interactions were also held with civil society organisations, thinktanks and technical & academic institutions of eminence. The Ministry had commissioned Greenhouse Gas (GHG) modeling studies for projections of GHG emissions till 2050 with a decadal gap. The gist of all these consultations & studies were taken on board before submitting India’s INDC. For India’s INDC, Government  zeroed-in-on a set of contributions which are comprehensive, balanced, equitable and pragmatic and addresses all the elements including Adaptation, Mitigation, Finance, Technology Transfer, Capacity Building and Transparency in Action and Support.

Planned actions and economic reforms have contributed positively to the rapidly declining growth rate of energy intensity in India. The Government of India, through its various institutions and resources, has taken steps to de-couple the Indian energy system from carbon in the long run. Despite facing enormous development challenges like poverty eradication, ensuring housing, electricity and food security for all, India declared a voluntary goal of reducing the emissions intensity of its GDP by 20–25%, over 2005 levels by 2020, despite having no binding mitigation obligations as per the Convention.  A slew of policy measures to promote low carbon strategies and Renewable Energy have resulted in the decline of emission intensity of our GDP by 12% between 2005 and 2010. It is a matter of satisfaction that United Nations Environment Programme (UNEP) in its Emission Gap Report 2014 has recognized India as one of the countries on course to achieving its voluntary goal.

India has adopted several ambitious measures for clean and renewable energy, energy efficiency in various sectors of industries, achieving lower emission intensity in the automobile and transport sector, non-fossil based electricity generation and building sector based on energy conservation. Thrust on renewable energy, promotion of clean energy, enhancing energy efficiency, developing climate resilient urban centres and sustainable green transportation network are some of the measures for achieving this goal.

Solar power in India is poised to grow significantly with Solar Mission as a major initiative of the Government of India. A scheme for development of 25 Solar Parks, Ultra Mega Solar Power Projects, canal top solar projects and one hundred thousand solar pumps for farmers is at different stages of implementation.  The Government’s goal of ‘Electricity for All’ is sought to be achieved by the above programs that would require huge investments, infusion of new technology, availability of nuclear fuel and international support.

The energy efficiency of thermal power plants will be systematically and mandatorily improved. Over one million medium and small enterprises will be involved in the Zero Defect Zero Effect Scheme to improve their quality, energy efficiency, enhance resource efficiency, pollution control, waste management and use of renewable energy.

Urban transport policy will encourage moving people rather than vehicles with a major focus on Mass Rapid Transit Systems. In addition to 236 km of metro rail in place, about 1150 km metro projects for cities including Pune, Ahmedabad and Lucknow are being planned. Delhi Metro, which has become India’s first MRTS project to earn carbon credits, has the potential to reduce about 0.57 million tonnes of CO₂ e annually.

The switch from Bharat Stage IV (BS IV) to Bharat Stage V (BS V) and Bharat Stage VI (BS VI) to improve fuel standards across the country is also planned for the near future.

Renewable energy sources are a strategic national resource. Harnessing these sources will put India on the path to a cleaner environment, energy independence and, a stronger economy. The renewable energy technologies contribute to better air quality, reduce reliance on fossil fuels, curb global warming, add jobs to the economy and, protect environmental values such as habitat and water quality.  Over the years India has successfully created a positive outlook necessary to promote investment in, demand for, and supply of, renewable energy. India’s strategy on renewable energy is driven by the objectives of energy security, energy access and also reducing the carbon footprints of the national energy systems. It has evolved over the years through increasingly stronger commitment at federal level.

The institutional arrangement for offtake of renewable energy power will be further strengthened by Renewable Purchase Obligations and Renewable Generation Obligations.

   India’s share of non-fossil fuel in the total installed capacity is projected to change from 30% in 2015 to about 40 % by 2030.  India is running one of the largest renewable capacity expansion programmes in the world. Between 2002 and 2015, the share of renewable grid capacity has increased over 6 times, from 2% (3.9 GW) to around 13% (36 GW) from a mix of sources including Wind Power, Small Hydro Power, Biomass Power / Cogeneration, Waste to Power and Solar Power. On normative terms the CO₂ emission abatement achieved from the renewable power installed capacity was 84.92 million tons CO₂ eq. /year as of 30 June 2015.

To accelerate development and deployment of renewable energy in the country, the Government is taking a number of initiatives like up-scaling of targets for renewable energy capacity addition from 30GW by 2016-17 to 175 GW by 2021-22.The renewable power target of 175 GW by 2022 will result in abatement of 326.22 million tons of CO₂ eq. /year.  The ambitious solar expansion programme seeks to enhance the capacity to 100 GW by 2022, which is expected to be scaled up further thereafter. Efforts will include scaling up efforts to increase the share of non-fossil fuel based energy resources in total electricity mix including wind power, solar, hydropower, biomass, waste to energy and nuclear power.

The range of ecosystem goods and services provided by forests include carbon sequestration and storage. Despite the significant opportunity costs, India is one of the few countries where forest and tree cover has increased in recent years and the total forest and tree cover amounts to 24% percent of the geographical area of the country. Over the past two decades progressive national forestry legislations and policies of India have transformed India’s forests into a net sink of CO2. With its focus on sustainable forest management, afforestation and regulating diversion of forest land for non-forest purpose, India plans to increase its carbon stock. Government of India’s long term goal is to increase its forest cover through a planned afforestation drive which includes number of programmes and initiatives like Green India Mission, green highways policy, financial incentive for forests, plantation along rivers, REDD-Plus & Other Policies and Compensatory Afforestation Fund Management and Planning Authority 

For the first time devolution of funds to states from the federal pool will be based on a formula that attaches 7.5 % weight to the area under forest. It takes into account the changing realities in order to rebalance the fiscal system of the country in a way that will incentivize greener distribution of resources. This initiative will give afforestation a massive boost by conditioning about USD 6.9 billion of transfers to the states based on their forest cover, which is projected to increase up to USD 12 billion by 2019-20.

For India, adaptation is inevitable and an imperative for the development process. India is facing climate change as a real issue, which is impacting some of its key sectors like agriculture and water. The adverse impacts of climate change on the developmental prospects of the country are further amplified enormously by the existence of widespread poverty and dependence of a large proportion of the population on climate sensitive sectors for livelihood. It is of immediate importance and requires action now.  In the INDC,  the country has focused on adaptation efforts, including: a) developing sustainable habitats; b) optimizing water use efficiency; c) creating ecologically sustainable climate resilient agricultural production systems; d) safeguarding the Himalayan glaciers and mountain ecosystem; and, e) enhancing carbon sinks in sustainably managed forests and implementing adaptation measures for vulnerable species, forest-dependent communities and ecosystems. India has also set up a National Adaptation Fund with an initial allocation of INR 3,500 million (USD 55.6 million) to combat the adaptation needs in key sectors.  This fund will assist national and state level activities to meet the cost of adaptation measures in areas that are particularly vulnerable to the adverse effects of climate change. 

India's climate actions have so far been largely financed from domestic resources. India already has ambitious climate action plans in place.  Preliminary domestic requirements to implement national climate plans add upto more than USD 2.5 trillion between 2015 and 2030.Substantial scaling up these plans would require greater resources. Developing countries like India are resource constrained and are already spending enormous amounts on climate change, . Implementing climate change mitigation and adaptation actions would require domestic and new & additional funds from developed countries in view of the resource required and the resource gap.

Urgent efforts to reduce GHG emissions need to take place against the backdrop of a growing energy demand and urbanisation in India. With the responsibility of lifting around 360 million people out of poverty and raising the standard of living of an even greater number of people, technology is the only powerful solution for countries like India that can simultaneously address climate change and development needs. Technology development and transfer and capacity-building are key to ensuring adequate development and deployment of clean-technologies. The technology gap between rich and poor countries remains enormous and the capacity of developing economies to adopt new technology needs to be enhanced.  Enhanced action on technology development and transfer will be central in enabling the full and effective implementation of India’s INDC. Developed countries should be supportive and help in transfer of technology, remove barriers, create facilitative IPR regime, provide finance, capacity building support and create a global framework for Research & Development on clean coal and other technologies.

India has submitted it’s Intended Nationally Determined Contribution on Gandhi Jayanti, The approach of India’s INDC has been anchored in the vision of equity inspired by the Father of our Nation Mahatma Gandhi's famous exhortation;“Earth has enough resources to meet people’s needs, but will never have enough to satisfy people's greed” and formulated under the leadership and guidance of the Prime Minister, Shri Narendra Modi, who has called for ‘convenient action’ in order to deal with the ‘inconvenient truth’ of climate change.

Conference of Parties (COP) of United Nations Framework Convention on Climate Change (UNFCCC) at 19th Session held in Warsaw in November 2013 invited all Parties to initiate domestic preparations for their INDC towards achieving the objective of the Convention and to communicate them, well in advance of the 21^stsession of the Conference of Parties. The concept of ‘Nationally Determined Contributions’, taking into account the outcomes of both Warsaw COP 19 and Lima COP 20 has to (i) reflect the principles of equity and  Common But Differentiated Responsibilities (CBDR) and (ii) the Country’s contributions must be seen in a balanced and comprehensive context.

Expectations from Paris

1)                        A balanced agreement with all components -mitigation, adaptation, technology, finance and capacity building- consistent with the principles and provisions of the Convention;

2)                        New, additional and predictable finances from developed and developing countries for mitigation, adaptation, technology transfer and capacity building;

3)                        Provision of technology development, transfer and diffusion;

4)                        Paris Agreement must incorporate loss and damage and make operational Warsaw International Mechanism.

India’s Intended Nationally Determined Contribution: At a Glance

India’s Intended Nationally Determined Contribution: At a Glance

India has submitted its Intended Nationally Determined Contribution (INDC) to the United Nations Framework Convention on Climate Change. Some of the salient points of the INDC are:

• To put forward and further propagate a healthy and sustainable way of living based on traditions and values of conservation and moderation.

• To adopt a climate-friendly and a cleaner path than the one followed hitherto by others at corresponding level of economic development.

• To reduce the emissions intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.

• To achieve about 40 per cent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030, with the help of transfer of technology and low cost international finance, including from Green Climate Fund.

• To create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.

• To better adapt to climate change by enhancing investments in development programmes in sectors vulnerable to climate change, particularly agriculture, water resources, Himalayan region, coastal regions, health and disaster management.

• To mobilize domestic and new and additional funds from developed countries to implement the above mitigation and adaptation actions in view of the resource required and the resource gap.

• To build capacities, create domestic framework and international architecture for quick diffusion of cutting edge climate technology in India and for joint collaborative R&D for such future technologies.

Grow Safe Food” Campaign Initiated to Create Awareness

Measures Undertaken by Government for Judicious and Proper Use of Pesticides

“Grow Safe Food” Campaign Initiated to Create Awareness

Government of India has taken several measures for proper use of pesticides by the farmers in the country. The pesticide residue data generated under the “Monitoring of Pesticide Residues at National Level” are shared with State Governments and concerned Ministries/Organizations to initiate the corrective action for judicious and proper use of pesticides on crops with an Integrated Pest Management approach and to generate awareness amongst farmers.

Department of Agriculture, Co-Operation & Farmers Welfare (DAC&FW) emphasizes Integrated Pest Management (IPM) which promotes biological, cultural and mechanical methods of pest and advocates need based, judicious use of pesticides. DAC&FW implement a scheme “Strengthening and Modernization of Pest Management Approach in India” to promote Integrated Pest Management (IPM) which is an environment friendly broad ecological approach for managing pest problems. It encompasses pest control techniques such as cultural, mechanical and biological with minimum dependence on chemical pesticides. Human Resource Development in IPM is done by imparting training to Agriculture / Horticulture Extension Officers and farmers at Grass Root Level by organizing Farmers Fields Schools (FFSs) and Seasonal Long Training Programmes (SLTPs). The DAC & FW has established 35 Central IPM centers in different states to promote IPM Strategies. Grant-in-aid is also provided to the States for establishment /strengthening of State Biocontrol Laboratories. A total of 313 SBCLs have been established across India.

“Grow Safe food” Campaign has been initiated to create awareness about the safe and judicious use of pesticides among the various stakeholders. In addition to the above, DAC&FW has revised 68 Integrated Pest Management (IPM) Packages of Practices for major crops giving impetus to ecological and cultural techniques of pest management. Under the Insecticide Act 1968, insecticides are registered after evaluating the safety of the product with respect to human health. The terms of registration also include instructions for farmers and users of pesticides on label and leaflets of containers on safe use of pesticides. If the pesticide is used as per the instructions on labels and leaflets, they are unlikely to leave behind unwanted residues in the agri-produce.

BACKGROUND

The Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture is regularly monitoring the pesticide residues in food commodities and environmental samples under the central sector scheme, “Monitoring of Pesticide Residues at National Level”. The scheme was initiated during 2005-06 and has 25 participating laboratories representing Ministry of Agriculture, Indian Council of Agriculture Research, Ministry of Health and Family Welfare, Ministry of Environment and Forest, Council of Scientific and Industrial Research, Ministry of Chemical and Fertilizer, Ministry of Commerce and State Agricultural Universities across the country. The participating laboratories collect food commodities samples from various Agriculture Produce Marketing Committee (APMC) markets, Public Distribution Systems (PDS), Farm Gates and irrigated water and soil samples from agricultural fields across various parts of the country. The samples are analyzed for the presence of possible pesticide residues in various food commodities such as vegetables, fruits, cereals, spices, pulses, milk, butter, irrigated water, fish, meat, tea etc.

Time to relook RESERVATION

Leaders of different communities had so much confidence in the fairness of the country when it won freedom, that none of them wanted caste-based reservation system. The Muslim leaders rejected then home minister Sardar Patel's offer of a 15 per cent quota in government jobs and education institutions. Their argument was that reservation fostered a parochial thinking. The country had paid an enormous price in the shape of partition for the communal electorate introduced by the British.

Then law minister B R Ambedkar, himself a Dalit, said that his community did not want to walk with the help of crutches all their lives. After a lot of pressure, Ambedkar was persuaded to accept reservation for the scheduled castes and scheduled tribes for 10 years. Little did he know then that reservation would become a permanent feature because of the vote bank it provided?

It is unfortunate that the caste system, even after hundreds of years, remains an integral part of the Hindu society. The Dalits are still at the lowest rung of the ladder. It is an open secret that rural areas have separate habitations for the Dalits, at a considerable distance from where the upper castes live. Now, a debate has begun on whether reservation needed a relook, but not on the discrimination which is still practiced against the Dalits, openly and unashamedly.

RSS chief Mohan Bhagwat's suggestion has jolted the status quo so much that the BJP has distanced itself from the proposal of another look at reservations. The vested interests continue to be decisive. Many Dalits have embraced Islam to escape discrimination. But some have found, to their horror, that the tag of discrimination stays with them even in the casteless Islam once classification is acquired.

True, many pronouncements, some by the law courts, have pointed out that the "creamy layer" should, at least, be barred from reservation. But they are the most vocal and most influential. This explains why the RSS chief remains a lonely figure in the entire Sangh parivar.

His disappointment must have increased after Rajasthan, a BJP-run state, gave quota to the poor in the upper castes. This humanistic gesture reads well but it is against what the constitution makers had in mind. They gave reservations only to the Dalits because the Hindu society, for centuries, had denied them the basic dues. It was a sort of repentance translated into concessions.

There were poor among the upper castes even at that time. But both Jawaharlal Nehru and Sardar Patel were able to persuade the Constituent Assembly that the upper caste must do the penance for the excesses committed. The state is violating the Supreme Court's directive that reservation should not exceed the limit of 50 per cent. Unfortunately, this malady is spreading. It is comical to see today that the Patels, a well-off, upper caste business community, is demanding reservation. The government in Gujarat, again run by the BJP, is dealing severely with the 22-year-old maverick leader Hardik Patel who is agitating for reservations for the Patels.

Other states are keenly watching whether Rajasthan and Gujarat will get away with the quota because they have the same thing in mind. The Narendra Modi government should have taken the BJP-run states, particularly Rajasthan, to task because the entire federal structure faces danger of a collapse. The Modi government has a strange kind of confidence that when the chips are down, all states, with a predominant Hindu majority population, will not go to the brink.

Probably, Modi will use the whip of discipline after the Assembly election in Bihar. Any kind of action at this time, when the state is only a few weeks away from polling, can boomerang and harm the BJP's fortunes. However, time has come when all political parties should sit together to ponder over reservation on the basis of caste and creed. A constitutional position for only 10 years has become permanent. All parties support the continuation whenever such a constitutional amendment comes before parliament.

Demolish caste barriers

A country which has the word 'secularism' in the preamble of its constitution should break the shackles of caste. Socialism requires the demolition of caste barriers. The ruling BJP should initiate a legislation to lay down the criteria on the basis of economic status. A poor Brahmin is no less deserving than a Dalit. What about the Muslims? The Sachar Committee pointed out that their condition has been worse than that of the Dalits. With the soft-Hindutva embracing the country, the future of minorities is becoming more and more questionable.

If there was a survey, it would underline the fact that unemployment among the Muslims is rising. Since they cannot afford good schools, they figure less in jobs through competitive examinations. They are not even a fraction of some 18 per cent of population in the country. Their backwardness should be a matter of concern. Idle hands take to desperate methods. What is more important than anything else is to foster social relations between Hindus and Muslims. The togetherness witnessed during Diwali or Eid is missing. Mixed localities have become fewer.

Take, for instance, the debate over Netaji Subhas Chandra Bose files. It unnecessarily became an emotional issue. For days, the entire nation was engrossed in discussing whether the files should be made public or not. The nation suddenly became oblivious to the basic issue of development. It must keep uppermost in its mind that one-third of Indians go to bed with just one meal in 24 hours.

The Modi government has ruled the country for more than one and a half years. Its promise to give livelihood to all remains as distant as it was on the day Modi took the oath to assume power. Except for the usual rhetoric, there is nothing on the ground to indicate that his promise of "sab ka saath, sab ka vikas" is near implementation. The nation is still waiting.

What is the Indian Financial Code

The revised draft of Indian Financial Code, released on 23 July 2015, has already made to the headlines, as it proposes to dilute the RBI Governor's power; he may no longer have the power to veto policy rates.

The major change as of now is that there will be four members appointed by the central government and three from RBI, earlier the ratio was other way around.

The IFC bill is expected to table in the Winter session of the parliament. The Parliament will finalise the code, which will eventually find its way to the Union Cabinet for approval.  

What is the Indian Financial Code? How does it work? 

The Financial Sector Legislative Reforms Commission (FSLRC) was set up on March 24, 2011, for re-writing the Code to regulate the financial sector and introduce principles for financial regulation and the constitution, objectives, powers and interaction of financial agencies. Its aim was also to bring about coherence and efficacy in the financial regulatory framework.

In 2013, the commission, headed by Justice BN Srikrishna, submitted its report in two volumes, which included 'Analysis and Recommedation' and 'Draft Law'. The revised draft in twenty parts will strive to regulate financial agencies.

Under this Act, the Financial Sector Appellate Tribunal was established to exercise the jurisdiction, powers and authority conferred upon it.

According to the Act, the general direction and management of the financial agencies will be vested in the respective boards -- the Financial Authority Board for the Financial Authority, the Reserve Bank Board for the Reserve Bank, the Redress Agency Board, with respect to the Redress Agency, the Corporation Board for the Corporation; the Council Board for the Council and the Debt Agency Board, with respect to the Debt Agency.

The Code deals with the establishment of financial agencies, establishment and structure of the tribunal, allocation and regulation of financial services.

A part of it discusses the functioning of financial agencies, such as boards of financial agencies, strength and composition of boards; decision making, advisory councils, accountability mechanisms and funding for financial agencies.

It also mentions the disposal of applications, information and inspections, investigations and offences as executive functions of financial agencies. These financial agencies also have quasi-judicial functions -- administrative law, show cause notices and orders, enforcement actions, procedure for enforcement actions and penalties. 

Moreover, the Code also clarifies financial consumer protection, prudential regulation, contracts, trading and market abuse, capital controls, resolution of financial service providers, financial stability and development council,  development (provisions for review), public debt management  agency, offences, functions, powers and duties of tribunal, miscellaneous, and schedules. 

Analysis

The finance ministry has put out a revised draft in public domain and invited comments from stakeholders.

The commission proposes a financial regulatory architecture featuring six agencies:
(a) Financial Authority;
(b) Reserve Bank of India;
(c) Financial Redress Agency;
(d) Resolution Corporation;
(e) Financial Stability and Development Council; and
(f) Public Debt Management Agency

The 10 big changes the revised draft of the Indian Financial Code proposes could change the functioning of the Indian financial sector

1. MONETARY POLICY

Now: The Reserve Bank of India (RBI), and within the central bank it is the governor who enjoys absolute power in deciding interest rate

Proposed: The committee approach to decide interest rate where government will appoint four members, while three will be from RBI

Impact: RBI loses its power to decide interest rate. If autonomy of RBI is compromised in the eye of investors, it could have serious implications

2. MANAGING GOVERNMENT'S DEBT

Now: The central bank - investment banker for the government - manages its debt

Proposed: An independent debt management agency to manage government's borrowing

Impact: Conflict of interest issues are overblown on either side. There will be some conflict whether RBI or government manages it. But an independent debt management agency, with external professionals from the beginning could turn out to be risky, as they will not have experience of managing government debt

3. STABILITY AND SYSTEMIC RISK

Now: The Financial Stability & Development Council (FSDC), was set up in December 2010 to strengthen and institutionalise the mechanism for maintaining financial stability, and enhancing inter-regulatory coordination and promoting financial sector development. The chairman of FSDC is the finance minister, with all the sectoral regulators as members. FSDC also focuses on financial literacy and financial inclusion

Proposed: FSDC to identify and monitor systemic risk. To take all required action to eliminate or mitigate systemic risk

Impact: In the US and UK, macro prudential regulation and supervision are a mandate of the central bank. Limiting the universe of systemic risk tools to three could be an area of concern, as more such risks could be evolving. The central bank, being the monetary policy authority and the only lender of last resort, is the natural choice for being the systemic regulator

4. REGULATION OF BANKS/NBFCS

Now: RBI is the regulator for the banking system, as well as non-banking finance companies and primary dealers

Proposed: RBI continues to be the banking regulator and for systematically important payment systems but non-bank credit institutions will be regulated by the Financial Authority. The Financial Authority will also regulate all financial products

Impact: Could lead to fragmentation of regulation and give rise to regulatory arbitrage. There is a view that RBI should oversee non-bank financial entities like insurance and mutual fund companies due to their interconnectedness with the banking system

5. REGULATION OF ENTITIES IN THE PAYMENT SYSTEM

Now: RBI is the regulator of prepaid payment instruments and has laid regulatory norms for payments banks

Proposed: Only systematically important payments systems will be regulated by RBI

Impact: Many new players are emerging with rapid product innovations. The full impact of all these on financial stability and monetary policy are not clear. RBI, which is the regulator of the payment and settlement systems of the country, could lose some power to oversee this function

6. CONSUMER PROTECTION

Now: While RBI has an ombudsman and insists on banks treating their customers fairly, banks routinely flout norms and mis-sell products. The penalties levied by RBI on banks for violating norms related to mis-selling of financial products to consumers are the bare minimum

Proposed: A separate consumer agency is proposed to protect and promote the interests of consumers and promote public awareness of matters relating to financial products and services

Impact: A welcome step to protect consumer interest, as the regulator is unable to both regulate and solve disputes in a time-bound manner

7. CAPITAL CONTROL

Now: The present law under FEMA vests the power of capital account regulation with RBI. In practice, the government and RBI consult before initiating a policy measure. While the government takes decisions on various issues, like foreign direct investment, the notification is issued by the central bank

Proposed: The government will "consult" RBI to make rules on capital controls (section 241). This consultation will cover the problem to be addressed, the goal sought to be achieved and the alternatives available to address problems and achieve goals. RBI will work as an administrator to implement rules. The draft code empowers the government to prescribe rules to seek its nod for capital account transactions which affect national security

Impact: The present practice of both the government and RBI being involved in deciding capital control has served the country well, particularly during the global financial crisis and the Asian crisis. The conduct of monetary policy will be weakened if capital control regulation is taken out from the central bank. Interestingly, the code is silent on the issue of financial stability

8. REGULATION OF MONEY MARKETS

Now: RBI regulates all these markets

Proposed: Separating regulation of such markets from RBI

Impact: In India, the exchange rate and interest rate are not fully market-determined. Due to the high fiscal deficit of the government, statutory liquidity ratio of banks are not going to come down in the near future. Since volatile capital flows impact such markets, the central bank should have a role in regulating these markets

9. ADDRESSING OPACITY IN DECISION MAKING

Now: Current regulatory decision-making process lacks transparency

Proposed: The annual reports of RBI and the central government must give a complete disclosure and analysis of the performance of functions by the central government and RBI. They must include the total number of approvals granted, the applications rejected and the time taken for disposal of each application. The FSDC must also publish in its annual report all significant trends identified in the financial system and an assessment of the stability and resilience of the financial system

Impact: These disclosures will bring about much-needed transparency and will reduce information asymmetry that currently plagues the system

10. ESTABLISHMENT OF A RESOLUTION CORPORATION

Now: There is no Resolution Corporation. The regulator has complete power over resolution of institutions

Proposed: The new code proposes to establish a Resolution Corporation to carry out resolution of certain types of financial institutions in distress. The corporation can take over the entity if it is classified in the category of critical risk. It can also inspect an entity independently, if it opines that the regulator's assessment of risk to viability of a covered service is incorrect

Impact: This is likely to speed up the process of resolution. Currently, this process is time-consuming, as was seen in the case of the Madhavpura Merchantile Cooperative Bank. This proposal is in line with similar institutions in other countries