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Government replaces RFD Model to measure performance with eSamiksha and PRAGATI
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Government replaces RFD Model to measure performance with eSamiksha and PRAGATIBy Aman Sharma NEW DELHI: With Prime Minister Narendra Modi and Cabinet Secretariat directly monitoring progress of schemes and projects of all ministries through PM's pet eSamiksha and PRAGATI projects, the government has scrapped a major scheme close to the heart of former Prime Minister Manmohan Singh through which performance of ministries was monitored since 2011. Minister of State for PMO, Jitendra Singh has told Parliament that the government "has not pursued the mechanism of Performance Monitoring and Evaluation System (PMES) for 2014-15 and thereafter". Under PMES, every ministry made a Result Framework Document (RFD) every year against which its performance was measured at the end of the year. A senior government official told ET that the Modi government saw the RFD concept as a "completely unviable concept" since it was not possible to quantify performance of any ministry. "Most ministries are dependent on execution of schemes by states and are only monitoring schemes. How will you measure performance of say, DoPT?" the senior official said. The official added that PM and Cabinet Secretariat were now directly monitoring projects and schemes of ministries through eSamiksha project launched by Modi. "When PM and Cabinet Secretary — such senior persons — are intensely monitoring the performance, what is the need for a PMES mechanism? The main objective is only that projects should complete on time," he said. The official added that PMES mechanism was going on "mechanically" and the feedback that the PMO got from many bureaucrats was was that the scheme was not suited for the purpose. "Giving marks to a ministry at the end of the year based on performance which cannot be quantified is useless. Many ministries were setting lower targets to get more marks," the senior official said. The official hence said that the RFDs prepared by ministries for 2014-15 under the UPA were not approved by the new government and no RFDs were made in 2015-16. "Instead, there are now frequent reviews by the PM and Cabinet Secretariat through eSamiksha," the official said. Under the Cabinet Secretariat, the Performance Management Division was handling the PMES. The eSamiksha is a real time, online system for monitoring of projects by the PM and follow-up action is to be updated by the concerned ministry as and when the status changes or at least every month — PM monitors this on his iPad. PRAGATI is another platform through which PM once every month monitors and reviews important programmes and projects of Centre and states. In 2011, then PM Manmohan Singh had unveiled the PMES system for monitoring performance of government departments. Renowned economist, Prajapati Trivedi, was brought in as Secretary of the Performance Management Division of Cabinet Secretariat to steer the PMES through which every ministry made its RFD every year since 2011 spelling out its key targets. At the end of the year, all ministries reviewed their performance against the targets and were given marks. Trivedi left the post earlier this this year and was replaced by Ramesh Abhishek, chairman of Forward Markets Commission, as chairman of Performance Management Division this October. POSTAL SERVICES BUSINESS LINE, DEC 8, 2015 Banks, insurers keen on tying up with India Post S RONENDRA SINGH / KR SRIVATS The e-mail may have replaced the snail-mail but India Post has survived the numerous obituaries written for it and become much sought-after once again on the strength of its unmatched network. After being pursued by e-commerce firms for logistics and other support, the country’s oldest postal service provider is now being wooed by banks and insurance companies as it gears up for a debut in the payment banking business. The list of those keen to tie up with India Post includes marquee names like SBI, Bajaj Alliance, IDBI, YES Bank, HDFC and Axis Bank. There are 17 such banking and insurance companies who have shown interest to use the postal network for delivering their services such as EMI collection and insurance. According to government sources, these companies want to use the postal network by partnering with the India Post Payment Bank, which got licence from the RBI recently. Sources close to the development toldBusinessLine that SBI could be the first bank to join hands with the Postal Department. “SBI chief (Arundhati Bhattacharya) and Kavery Banerjee, Secretary, Department of Posts, had a meeting recently and they discussed to work hand-in-hand for providing services to customers,” an official said. Both the heads — of the largest bank and postal networks — discussed how they can leverage each other’s strengths and help extend financial services to the disadvantaged, the official added. “There was a discussion also on how a postman can work as a bank agent in far-flung rural areas where neither a bank branch nor a bank agent can go for verification of loans. But with the Postal Department’s help, farmers and students can get loans (for agriculture/education) without much hassle,” the official said.
The official said the government is also working towards banks installing ATMs at post offices; the Department of Posts has a network of 1.55 lakh branches across the country and more than 85 per cent are in rural areas. But it is evident that the banks are gung-ho about tying up with the Postal Department as they will only stand to benefit. “This initiative will play a pivotal role in bringing a large number of uninsured segments of the country under the safety net and improving the penetration of insurance in the country,” said TA Ramalingam, Chief Distribution Officer, Bajaj Allianz General Insurance. A tie-up with payment banks like The India Post will provide insurers an opportunity to distribute retail insurance solutions such as personal accident and health insurance policies to their huge customer base, he said. “This will also enable insurers leverage on the payment bank’s strong distribution network to take insurance solutions to the unrepresented segments in the country, especially in tier-III cities and villages,” he added. (This article was published in the Business Line print edition dated December 8, 2015) RAILWAYS DECCAN HERALD, DEC 15, 2015 Railway ticket cancellation, refund rules amended Railway ticket cancellation and refund rules have been amended, parliament was told on Monday. Granting refund of confirmed railway ticket up to four hours before departure, 50 percent cancellation charge for a confirmed ticket submitted between 12 and four hours before departure and 25 percent cancellation charge if submitted between 48 and 12 hours before departure are some of the amended rules since December 12, Minister of State for Railways Manoj Sinha told the Rajya Sabha in a written reply. The minister said refund of fare after deducting clerkage charge for Reservation Against Cancellation (RAC), wait listed ticket and partially confirmed tickets have been introduced if the tickets were submitted for refund up to 30 minutes before the train's scheduled departure. "Rules have been amended to check bogus claims, to facilitate provision of mobile ticketing as well as paperless ticketing, discourage last minute cancellation resulting in seats/berths going vacant etc. The amendment in refund rules became necessary to adapt to changes/developments in the ticketing systems," Sinha said.
"No cancellation charge or clerkage charges are levied and full fare is refunded to all passengers holding confirmed, RAC and wait-listed tickets if the journey is not undertaken due to late running of the train by more than three hours of scheduled departure." The minister added that Railways are preparing reservation charts at least four hours in advance to facilitate ticket reservation till 30 minutes before a train departs. RELIGION STATESMAN, DEC 10, 2015 Religion & State policy - I Vikram Sen The beloved of the Gods, the King Priyadarshi (Asoka’s style of referring to himself in all his edicts) honours all sects and religions both ascetics and layman, with gifts and various forms of recognition. But he does not consider gifts or honours to be as important as advancement of essential doctrine of all religions or sects. The progress of essential doctrine of religions can be achieved in many ways, but its basis is the control of one’s speech, so as not to extol one’s own religion or disparage another’s. Therefore, amity between various religions is to be commended, so that men may hear one another’s principles and obey them. -Emperor Asoka, 12th. Major Rock Edict, circa 256 BCE. Bereft of royal salutations and simplicity of a long bygone era, the quote expresses in a nutshell the essence of religious tolerance expected of a very mature modern statesman. Coming from a man who ruled about two and a quarter millennium back in history over an area more in size than India of present speaks volumes about the depth of understanding and sagacity of the third Emperor of the Mauryan dynasty. Though the advent of Christianity was still about two hundred and fifty years into the future and that of Islam about eight hundred years to come, there was no dearth of religious heterogeneity in India of the third century BCE. The Vedic Hinduism had by that time crystallized into strong mores of behavior and caste system, but Buddhism and Jainism had begun to spread their roots along with the atheism of the Ajivika sect. Religious intolerance and bigotry was not uncommon particularly if fuelled by the ruling dispensation. Asoka belonged to a family that was known for its religious liberalism. Chandragupta Maurya, the founder of the Mauryan dynasty and Asoka’s grandfather, is stated to have abdicated his throne in his later years and had become a Jain ascetic while Asoka’s father Bindusara, the second Mauryan emperor, is stated to have embraced Ajivika sect along with his queen consort in later part of his reign. Asoka strenuously tried to establish a tolerant, rational and humanistic social order among his subjects in a visionary spirit unthinkable in that era or rarely seen ever since. Frowning upon meaningless religious rituals he tried to explain what he believed to be the essence of all religious teachings in a very lucid manner -“People practise various ceremonies during illness, at marriages of sons and daughters, at birth of children, on going on a journey and on other occasions,” Asoka had observed in the 9th. Major Rock Edict. “Women particularly perform a variety of ceremonies which are trivial and useless and have but small results. The true value of religion or Dharma lies in regard for slaves and servants, respect for teachers and restrained behaviour towards living beings and donations to shramanas (monks) and Brahmans.” In other edicts, Asoka had further appealed to his subjects to observe Dharma or religious morality through good behaviour towards each other. In his reckoning, religion is not about rigid modes of behaviour and rituals or unnecessary debates about comparative benefits among competitive sects but about observation of basic human values and fraternity and kindness among all individuals irrespective of caste, creed or religion. Asoka’s concern for congenial family life is touching and heartwarming. In most of his edicts he has repeatedly urged his subjects to be obedient to their mother and father and elders, show respect to them as well as the teachers and to be kind to the servants and helpers. While Asoka had urged that all members of the family must be shown equal respect to each other he also suggested that the senior members of the family should be given due honour. It is significant that Asoka gives no prominence to the male members of the family and urges equal respect for all in the family, male and female. He also instructs his civil servants to ensure that Brahmanas, teachers, trainers, story tellers and all who are in charge of training the young should impress upon their students and apprentices to observe these norms for congenial family and social life. Of particular significance are Asoka’s instructions to his civil servants as well as the new group of officials he appointed to encourage the people to observe the essential good of all religions. “You are in charge of many thousand living beings’, Asoka instructed his civil servants in a particularly moving piece of administrative direction. “You must strive to gain the affection of men. All men are my children and just as I desire happiness and welfare for my children both in this world and the next so do I desire for all men. Often a man suffers imprisonment or torture and then is released, both without reason, and many others suffer still further. You should strive to practise impartiality which requires that you must avoid jealousy, shortness of temper, harshness, rashness, obstinacy, idleness or slackness in your public dealings. The basic lesson is to be even tempered and not rash in your official actions. At the same time, one who is slack will not act. In your official capacity you must strive, act and work so that you may be satisfied in your mind that you have discharged your debt to the King who approves and instructs thus”. But Asoka is not satisfied only by appealing to the conscience of the civil servants. He instructs the superior magistrates to strictly ensure that no one is imprisoned or tortured without good reason. As a further check to ensure such impartial behaviour he also proposed to send superior and balanced officials on tour both from the Central as well provincial levels to investigate and ensure that the King’s orders are carried out in full. Not a very happy commentary on the Indian bureaucracy then and, perhaps, equally applicable today. Asoka also knew that it was easier to ensure such administration of justice in cities or urban areas through strict instructions and constant monitoring but very difficult to achieve in the vast rural areas of his empire. Through his various edicts Asoka had repeatedly stressed his concern for the welfare of his rural subjects. In the 7th. Pillar Edict, Asoka had mentioned that he had undertaken various welfare measures in the rural areas like digging of wells for drinking water, plantations on the roadside, building of rest houses, plantation of fruit bearing trees, preservation of forest areas etc. But he reflected that similar welfare measures were also undertaken by kings in the past but those did not really touch the lives of rural people and did not uplift their understanding and acceptance of Dharma. Which essentially meant ethical social and humane behaviour by men towards each other, and welfare and development for all irrespective of personal or religious beliefs. In order to achieve happiness and welfare of the rural people Asoka had created a new post of rural officials called Rajukas and had appointed many thousands of such rural officials and took personal care to train them. He had given them independent authority to promote happiness and welfare of the country people. “As one entrusts his child to an experienced nurse and is confident that the nurse is able to take care of the child satisfactorily,” Asoka had declared in the 4th. Pillar Edict, “so my Rajukas have been appointed for the welfare and happiness of the country people. In order that they may fulfill their functions fearlessly, confidently and cheerfully, I have given them independent authority in judgment and punishment”. But at the same time Asoka was aware of the possibilities of excesses on the part of the newly appointed officials and cautioned that they must adopt uniformity in judicial procedure and punishment and should be guided by envoys that Asoka sent periodically. (To be concluded) The writer is retired Principal Secretary, Government of West Bengal. STATESMAN, DEC 11, 2015 Religion & State policy - II Vikram Sen Asoka’s care and concern for the protection of the environment is also amazing for that age. Apart from plantation of shady and fruit-bearing trees, medicinal plants and herbs, he had repeatedly called for the protection of living beings and mercy towards them. In the 5th. Pillar Edict, Asoka had given a long list of weak and endangered species of birds, animals, fish and turtles which are not to be killed throughout his empire and forbade burning of forests for killing living beings. In order to preserve and sustain domestic animals and fish in the rivers he had specified certain calendar days when these animals are not to be caught, killed or castrated. Frowning upon religious practices of slaughter or sacrifice of animals he issued stern instructions not to sacrifice animals during religious festivals and urged his subjects to reduce slaughter of animals for food. Giving his own example he said that in the past many hundred animals were slaughtered for meat in the royal kitchen but now only two peacocks and a deer are killed, the deer not regularly. He was even trying to reduce these killings. It is significant that Asoka did not call for the prevention of killing or slaughter of animals or particular animals under any religious considerations, but under a genuine feeling of kindness and pity for all living beings. But at the same time he did not intend to impose the royal will over eating habits of his subjects and did not issue blanket orders preventing slaughter of animals even in his own kitchen. He only appealed to the people to show compassion and kindness to all living beings. Here he made a clear distinction between royal decrees to be implemented by force and the power of gentle persuasion. Asoka had clearly understood that mere issuance of royal orders or decrees can by no means guarantee their observance. It is much more important to persuade people by meeting them, explaining the need for decent social and personal behaviour and win their hearts for the cause of Dharma. Thus in his 7th. and last Pillar Edict Asoka had concluded, ‘The advancement of Dharma among the people has been achieved by two means, legislation ( issuance of decrees or regulations) and persuasion. But of these two, persuasion has been much more effective. For instance I have proclaimed through legislation that certain species of animals are not to be killed and many other such regulations. But men have increased their adherence to Dharma by being persuaded not to injure living beings and not to take life”. Asoka had thus constantly encouraged his officials to meet ordinary people, listen to their problems and explain the value of truthfulness, honesty, kindness to living beings and amity and fellow-feeling among all. The Emperor himself was constantly on tour and met people and explained the conduct of Dharma to all. He also instructed that wherever there are stone pillars and stone slabs the Dharma messages are to be engraved so that they may last long and guide and inspire people. It is true that Asoka by his own declaration was a lay Buddhist believer but later became more ardent and close to the order. He had also given specific advice to the Buddhist monks on proper learning of the teachings of Buddha and to maintain unity and purpose of the order. But what is significant is that all such edicts were inscribed at or near Buddhist shrines or places for congregation of the Buddhist order in what archaeologists classify as minor or separate rock or pillar edicts. But in his main or major 14 Rock or seven Pillar-edicts spread across the length and breadth of the country presumably for reading and understanding by the general population and also for guidance of his officials, Asoka had never mentioned Buddha or his teachings and had always equated Brahmanas, Shramanas, Jains and leaders of other religious sects for respect, charity and care. It is unfortunate that in Indian traditions he had largely been portrayed as a monarch who became a Buddhist convert after the Kalinga war and adopted pacifist policies which ultimately led to the downfall of the Mauryan empire. Little attention has been paid to his deep commitment to secular and humane administrative policies and his untiring efforts and concern for welfare of his people. Almost all subsequent rulers of India or their courtiers had invoked gods and goddesses in their public engravings, scriptures or coinage and eulogized themselves or their patrons as chosen and protected by the divine powers and went on to describe their military exploits with little or no mention of the lives of their subjects. Apart from his title of “Beloved of gods King Priyadarshi” Asoka rarely made reference to gods in his edicts. Instead of the listing of his conquests, he had sincerely expressed his remorse for the Kalinga conquest which had brought death and loss of near and dear ones and untold suffering to ordinary people. Again it is rarely seen in history that a monarch expresses his remorse and repentance in public for the sorrows and sufferings caused to ordinary men as a result of his wars and promising to abjure unnecessary violence. But at the same time he warned that his remorse or softness should not be taken as his weakness and he has enough powers even in his remorse to punish those who challenge his authority or foment trouble in the border areas of the empire. It is also significant that Asoka chose to write his entire set of edicts in Magdhi Prakrit, the pan-Indian language of the common man at that age and easier for them to follow and comprehend rather than in classical Sanskrit, the language of the court and that of the educated. Engravings and writings of subsequent rulers including those of the Gupta Emperors are mostly recorded in Sanskrit. The script was of course in Brahmi which is the precursor of Devanagri and most of the modern Indian scripts. While Independent India adopted the Asokan symbol as the State emblem and gave constitutional guarantee to his secular policy, it seems that that the framers of the Constitution were not bold enough to implement Asoka’s repeated calls for the progress of essential good of all religions based on universally accepted liberal humanist values which he regarded as higher than the teachings of any individual religion. Our Constitution has guaranteed freedom of religion but does not inspire its citizens to rise above narrow religious boundaries. Thus more than six decades after the adoption of our Constitution we still find people being killed for allegedly eating beef, religious instructional institutions harbouring terrorists and imposition of a blanket ban on eating habits of people -all in the name of religion. The liberal, rational and secular ideals that were the hallmark of our struggle for Independence have all but disappeared in the vortex of electoral politics. Asoka’s fervent appeals to adopt moderation in praising or practising one’s religion have now been replaced by religio-political leaders promising to supply guns to whoever comes to kill people in the name of religion. Asoka’s instructions to ensure that humane social, family and personal values are taught in schools and training institutions have now evolved to religious hymns and rituals practised in schools again in the name of freedom of religion. Asoka’s fight against meaningless religious rituals and appeals for the establishment of a civil society based on tolerance, kindness and sympathy for fellow individuals have now been reduced to the dominance of religious rituals and practices in our public life and killings of scholars and rationalists for exposing unscientific religious restrictions and superstitions. As we witness the sorry spectacle of a lethargic police force rendered even more impotent to uphold individual freedom in the face of a cynical political leadership we perhaps understand Asoka’s logic behind appointing the Rajukas for dispensation of instant justice in rural areas. It is true that the highly centralized Mauryan Empire did not last more than 78 years after Asoka’s death, but his messages of tolerance, compassion and paternal care for his subjects irrespective of religious or social barriers as an expression of philanthropic statecraft still survive. Our present political leadership will do well to study his state policy if only to comprehend the vision and concern of a man sitting on an imperial pedestal and governing more areas than they can ever do, about the lives of the humblest of his citizens and his constant desire that they live a violence-free happy and honest life. RURAL DEVELOPMENT STATESMAN, DEC 13, 2015 Smart Villages-I Shantanu Basu In his landmark book, Making Globalisation Work, Joseph E Stiglitz observed that “Development is about transforming the lives of people, not just transforming economies.” To the contrary, globally declining commodity prices, food inflation, natural calamities and much more have created a hitherto unparalleled agrarian crisis in India. This has led to deaths and impoverishment of three-quarters of the people who live in rural areas. This crisis, in turn, has engendered massive agricultural indebtedness, alienation of land to money-lenders, resultant suicides and all-round impoverishment of small and medium farmers. In many states land reforms have shrunk individual land-holdings that are not acceptable to banks as collateral security for loans. Farmers’ savings are utilised by bigger farmers, mainly in southern and western India while the credit-to-deposit ratio for states like Assam declines. Although giant loan waivers resorted to by preceding governments have been granted, almost bankrupting the banking system and budget, these have hardly benefited small and medium farmers. Arrogant politics of keeping body and soul together, enshrined in programmes such as MNREGA have rendered farmers, mainly small and medium, unskilled, untrained and economically dependent on declining state and central budgets for subsistence. Six and a half decades of deprivation, notably in NE, Northern and Central India, has also contributed, in part, to the rise of left-wing extremism. Basic amenities of life such as health and education have not permeated to the desired extent in rural India. Nor has much new skill development taken place that would have afforded a billion people to earn an honourable supplemental living. While catchy slogans like Digital India and Smart Cities are the order of the day, little is being spared for 72 per cent of India’s population. With health and education budgets on the decline in real terms and the absence of a social security system, life in rural India is worsening by the day. Census 2011 shows that 72 per cent of Indians, or about 950 million, live in nearly 6.50 lakh villages. Assuming no more than a 3-5 per cent decline in such numbers till 2026, nearly 1.10 billion Indians will populate close to 7 lakh villages. The country’s population is projected to grow to 1.40 billion in 2026. The rural population is presently spread over villages with 59 per cent concentrated in habitations of a thousand heads or less. In other words, about 300 million people live in small rural clusters of 1000 heads and below. Thus a cost-effective mix of permanently resident and mobile solutions would have to be contemplated for these two broad categories of rural agglomerations. Since three-quarters of India’s people live in villages, that too mostly in economically-sized villages (in terms of services and coverage) there is the strongest case for reincarnating them as smart villages at a fraction of the cost of smart cities. For instance, in the health sector, mobile clinics, operation theatres, telemedicine, VSAT connectivity with major state and private hospitals to rural family wellness centres should be planned. Likewise, in the education sector, mobile e-libraries, Internet Access Vans, Adult Literacy Classroom Vans, technical trade classrooms and work benches are entirely feasible. Mobile agri-labs, demo vans, fertilizer sale vans, post offices and banks, mobile entertainment, Community TV/Radio Broadcast Centres, telephone exchanges would greatly help the village economy in its integration with the urban economy. Being mobile, all these amenities could plug into off-grid solar/biomass-based energy systems and not require more than 2-3 months to erect. Once large-scale employment is generated in villages, their painful migration to cities may well become history while prosperity spreads to villages. Modular add-ons relating to waste and water management could be considered, subject to availability of investible funds. That too would vastly improve the Quality of Life Index (QLI) by providing amenities comparable to an urban area while stoking low-overheads and medium-technology but huge manufacturing rural economy with concomitant employment opportunities in addition to agriculture. I created an example of how rural waste management could help improve QLIs in rural India. Waste management may have three major components - mobile waste collection and incineration for energy and human/animal remains incineration. Waste collection would cover community and individual water closets and generate biogas while waste water could be recycled for irrigation. From mobile incineration, energy could be generated with saleable by-products like fly ash. Commercial animal remains disposal could create a village industry in animal hide. Likewise, portable all-weather prefabricated structures could provide multi-use solutions, in tandem with mobile ones. These could be used to house primary schools, multipurpose halls, homes, local manufacturing centres, stadia/amphitheatre and family wellness centres. Information technology enabled services (ITES) connected to the State OFC backbone (with Reliance Jio in the pipeline) could offer multiple services. For energy and water management, web-based meter reading, pre-paid tariff coupons could be contemplated. I-T enabled services would coordinate movement of mobile waste collection; manage local energy generation and much more. A single pre-fabricated hut could accommodate the panchayat office, post office, rail and bus booking counters, real time e-kiosk information access to weather, water and energy supply, market prices of produce, etc. The use of alternative fuels would open Greenfield areas of employment and foods/vaccine preservation. Solar/biomass powered cold storage containers would fetch much better prices for produce when one considers that 22 per cent of India’s vegetable and fruit production worth an estimated Rs 330 billion in 2014-15, rots or never reaches remunerative markets. Such containers could store medicines, vaccines, meat, and marine products as well. Technologies like biomass gasifiers would not only help in managing rural waste (presently being burnt in Punjab, UP and Haryana and causing lung-searing smog in New Delhi) but has substantial energy potential too to supplement state energy utilities. Rural India may well be the single biggest GDP-booster in the next decade or so if its energy requirement is met. Then should Public-Private Partnership (PPP) be the preferred option? A UNODC survey in 2011 showed that 6.45 per cent of private PPP partners embezzled property, 6.45 per cent of private senior managers colluded; there was corruption in 9.68 per cent of PPP procurement, 19.35 per cent fabricated false financial statements, another 19.35 per cent colluded with governments to select a pre-determined bidder while 22.58 per cent resorted to bribery to government PPP-related partners. On the government’s side. 10.11 per cent of officials surveyed felt that government tender evaluators colluded with the private partner, 13.48 per cent accused politicians of colluding with politicians, 20.22 per cent believed that independent consultants hired by the government colluded with the concessionaire, 25.84 per cent believed that there was misrepresentation of facts by bidders and 30.34 per cent thought that concessionaires misrepresented facts. Private PPP partners also blamed their government partners for poor services to be rendered by these ventures. In fact, both government and PPP partners agreed that confidentiality of bids was shared by both partners and that corruption also had its genesis in the definition of the pre-qualification criteria. Likewise, government and their PPP partners agreed that there was pressure from senior members of the government. In fact, PPP ventures have become the biggest contemporary racket in India with the difference between politicians, civil servants and contractors having been obliterated. The logical corollary therefore is private sector takeover with the establishment of an effective regulation regime by states. India’s Prime Minister realised, early in his tenure, the futility of finding state funding for smart rural India when there was precious little available with his government. Yet, the Government of India’s high pitch for FDI is yet to show appreciable results. FDI alone is not the panacea for the severe shortage of development funds and must necessarily be teamed with systemic out-of-the-box thinking for meaningful accretion to GDP and prosperity as at least Mr Narendra Modi has realized. The virtual exclusion of rural India and the traditional preservation of poverty for votes is an issue that bodes ill for our national integrity. It is also not as if India is not endowed with large investible resources but the owners of such resources, public and private, await coherent long-term policy to be enunciated. CNBC’s Money Control database shows 16 major private banks had over Rs.1.70 lakh crore cash and deposits that was an average of only 7.41 per cent of their liabilities. PSBs likewise, have over Rs.7.36 lakh crore that was an average of 7.58 per cent of their liabilities. Four major CPSUs in the power generation sector, viz. NTPC, NHPC, NLC, SJVN and PGCIL had a combined total cash and deposit availability of Rs.26500 crore with an average of 12.50 per cent of their liabilities. In fact, the fifty largest Indian firms had combined cash and deposit base in excess of Rs.10 lakh crore as on March 31, 2015. PSBs would also have extra funds to loan Rs.40000-50000 crore if they are able to recover even 10 per cent of their current NPAs. (To be concluded) STATESMAN, DEC 14, 2015 Smart villages -II Shantanu Basu To begin with, the governments must give up direct delivery of high-cost state-run and difficult-to-staff rural energy, sanitation, healthcare and education sectors. Instead it should confine themselves to the role of refinancing agencies for providing interest subsidy on loans to financial institutions that lend capital for rural development. Tax-free Rural Development Bonds with amnesty for non-disclosure of source of investment by subscribers may be contemplated. Loaning financial institutions must be permitted on the boards of SPVs that the private sector may create for this purpose and to freely determine collateral securities, etc. It follows that government patronage by mainly absent nominee Directors must be eliminated. Further, states must be mandated to allow pre-paid tariffs for all public services (duly regulated by SERCs, etc.) and 25-30 year lease of panchayat land (with lease rent going to panchayats) for such services. This would reduce pilferage and unpaid bills. Since governments would save hugely by involving the private sector in rural India, it must be willing to shell out such savings in the form of a social security scheme by bunching all subsidies and other financial assistance plus their savings. Such a scheme would partly underwrite public services and could involve an affordable monthly or annual consolidated premium by rural Indians to make such private projects financially viable in the long run. This would also ensure accountability of private operators. Rampant rent-seeking from O&M on state buildings may be minimized with leasing out O&M of state hospitals, schools, primary health centres, etc. to the private sector. There is a huge shortage of human resources in all states, paradoxically with high unemployment, irrespective of educational attainment. Therefore, overstretched and expensive government human resources, with some re-training, could staff regulatory and onsite inspection agencies, instead of directly delivering mostly unsatisfactory and erratic public services. Yet, the crux of success of such huge projects is the transparent and fair award of these operating leases to applicant firms. If cronyism and capture of leases remain constant, these projects will become a millstone around governments’ neck, much the same way as state financial corporations and electricity utilities in most states. A financially viable geographical jurisdiction that harmonises resident and peripatetic service and off-grid and on-grid solutions is essential for this new business model to emerge from the shadow. State regulators must ensure that private operators do not speculate on rural land instead of putting up their equipment, solar farms, etc. For skill development for supplementary income for agriculturists, states would have to lay down the broad parameters for adding value to unskilled labour by training them in identified specialized modules such as solar and basic equipment maintenance, welding, FMCG assembly, etc. Special training ought to be provided to women who, by and large, remain far more conscientious and honest workers than men. Obviously, the private sector would demand matching incentives for their large investments in rural India. If interest subsidy of about 4-5 per cent per annum were budgeted in FY 2016-17, this would be a great start. Single-window clearance to participating firms would be an asset and minimize rent-seeking. Accelerated depreciation percentages for such investment could be revised upwards so that investments plus interest and a 15-20 per cent annual return may be achieved for operators. Incomes arising from such projects could be declared 50 per cent tax-free for the first 10 years and 25 per cent exempt in the following ten. The rampant milking of anything new by Finance Ministers to cover the inefficiency and waste of state spending ought not to cloud such mega projects. Instead, government buildings could derive income by permitting railway station, post office and bank building roofs to place communication equipment and solar panels by private operators. Fair weather roads constructed under PMGSY could be macadamised using a mix of waste plastic and fly ash, etc. in tandem with the usual bitumen, gravel and gravel dust. Private firms engaging in such projects could be considered for 5-7 per cent interest subsidy and an annual toll paid by government of another 1-2 per cent of the cost of construction for the entire lease period, subject to renewal at negotiated rates. Supplementing the private sector and tax breaks, etc. are many other sources of financing that may come forward with offers to invest were this business model to take off with a modicum of success. The examples are bilateral and multilateral aid institutions, infrastructure debt and R&D funds and venture capital, etc. Moreover, there are huge savings on capital account in state budgets every year. In 2012-13 and 2013-14, ten states alone accounted for savings of Rs. 31631 crore while the Government of India saved a whopping Rs. 4.27 lakh crore in 2012-13. Adding to government revenues are mining leases, telecom spectrum auction proceeds (about Rs. 43000 crore in 2014-15), huge saving in POL imports not balanced by reduction in taxes thereon and ad hoc demands raised by the Union Finance Minister in end-2014. A modest 10 per cent cut in spending on revenue account could add several thousand crore more per annum. In 2014-15, state and central governments spent Rs. 18.48 lakh crore for development purposes. Even if 5 per cent of this amount, say a lakh crore rupees, were earmarked for a smart rural India, this would underwrite capital subsidy for annual loans in the range of Rs. 8-10 lakh crore per annum by public and private sectors. This percentage would rise by at least another 20-25 per cent if one were to factor corruption and petty pilferage from nearly all development schemes and lower delivery cost by the private sector and a social security scheme, making possible institutional lending of Rs. 20-30 lakh crore per annum. The gain on employment, housing, health, education and finally, GDP would be immeasurably large and leave governments with adequate resources to undertake larger projects like national highways, rail tracks, communication satellites, etc. India’s villages are no longer as desperately poor and illiterate as many of our reputed economists would have the nation believe... all for votes. Census 2011 clearly shows that even with a depressed 64.64 per cent national literacy rate, there are over an additional 100 million literate women now, almost equal with their male counterparts, who have a substantially higher 80.89 per cent literacy rate. In fact in rural areas, female literacy has expanded from 46.13 per cent in 2001 to 57.93 in 2011, i.e. by about 12 per cent. Against these figures, the male literacy rate stands at 70.70 per cent to 77.15 per cent from 2001 to 2011, i.e. about 7 per cent. Basic education has spread to the majority of rural India while the national electronic media has raised hopes of a better life. About 39 million families, in rural and urban India, still live in homes that have thatched/grass roof while 22.1 per cent of rural households in 2011 have water sources located far away from their homes, up from 19.5 per cent in 2001. Likewise, 51.9 per cent of the rural population depends on unfiltered water in 2011, up from 43.2 per cent in 2001. Similarly, nearly 28 per cent of rural Indians have no kitchen inside their homes and 45 million households, 24 per cent of the overall population, cannot afford less labour-intensive fuels such as LPG and have to make do with crop residue. The Indian villager would therefore not be averse to paying affordable tariffs for efficiently delivered fundamental necessities of life. If pre-paid tariffs with matching meters are charged by private operators and they are permitted to use the revenues wholly for maintaining and extending rural infrastructure for say, 25 years, rural India would bloom. An unparalleled rural-based market economy would come into being, new skills and employment would be generated that would attract migrant villagers in urban areas, our cities would not look like giant slums, industry would prosper and become more competitive. Consumption would steadily rise and thereby attract more investment, indeed the benefits are manifold. The days of free water and energy as vote-catchers, being financially unsustainable, are therefore over -a truth that the nations’ rulers would have to necessarily accept. The only role the State must play is that of facilitator but not a regulator, a planner but not an implementer and a statesman but not a rent-seeker. The key to India’s prosperity lies not only in its slum-like towns and cities but in the giant rural hinterland that is home to three-quarters of the population. Hungry and poor voters may add votes for political parties but are a generational blot on a nation that frequently proclaims its pretensions of becoming the world’s second largest economy by 2025. Why not the world’s largest instead? The renowned American political scientist, EE Schattschneider observed over five decades ago, “In politics the most catastrophic force in the world is the power of irrelevance which transmutes one conflict into another and turns all existing alignments inside out.” In his Riot: A Love Story, Shashi Tharoor aptly observed that “India is not, as people keep calling it, an underdeveloped country, but rather, in the context of its history and cultural heritage, a highly developed one in an advanced state of decay.” A smart rural India could turn existing political and economic alignments inside out for three-quarters of India and raise her from her current advanced state of decay. TERRORISM HINDU, DEC 11, 2015 Directory: www -> iipalibrary -> iipa www -> Integer programming and game theory www -> Dsci 3870: Management Science www -> H1N1 Pandemic 21-393 Fall 2009 www -> Chapter 9 Integer Programming Learning Objectives www -> Mixed-Integer Nonlinear Programming Techniques for Process Systems Engineering www -> Ieor 4600 Mixed-Integer Rounding Inequalities www -> Math 4630/5630 Homework 4 Solutions Problem Solving ip iipa -> Subject index accountability Download 309 Kb. Share with your friends:
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