Inflation in India : Fuelled by Demand?

Recent spurt in prices came as a rude shock to the government which was preparing to take on the
serious economic challenges like tumbling of the stock exchanges in the country and global slowdown. In
a democratic system like ours, nothing can be more worrying to the party in power than the soaring prices
in an election year. Surprisingly, the inflationary pressure is coupled with the reduction in economic
growth of the country, and defying the principles of monetary theory, the Indian economy is behaving like
a typical developing economy. By the end of March, the inflation rate had reached an alarming 7.41 per
cent level and has been hovering above 7 per cent thereafter.

No one need to scratch one’s head to find out the reasons for the price rise in the recent weeks, despite
several desperate measures taken by the government to control it. First and foremost is the global
environment. Globally, the prices of food articles have risen by about 75 per cent during the last about six
months. The situation is so precarious in the African continent that groups of people suffering from hunger
in several African countries have tried to loot the foodgrain stores of the government and the other
organisations.
 
The world community became even more concerned after the recent report that the world has been left
with food stocks only for three to four weeks. Sharad Pawar, the Agriculture Minister of India was quick to
respond to the above report and announced that the situation was under control in the country, as the
buffer stocks of food were more than the prescribed limit. But notwithstanding the said assertion by the
Agriculture Minister, the prices of foodgrains, edible oils, pulses, fruits, vegetables etc. continue to head
northwards.
 
In India, agriculture sector is growing at the rate of around two per cent while the growth rate of population
is also around two per cent. In other words, more people in the world are chasing lesser food articles,
resulting in pressure on the prices. In addition, the world economy is also trying to pay attention to the
sectors having high growth potential and the primary sector is getting ignored. India has not been an
exception in this regard.
 
Global prices of crude oil have been on the rise during the past about two years now. Towards the
end of April, the crude oil prices in the international market had crossed $ 120 per gallon, putting pressure
on the government to increase the retail prices of petrol and diesel in the country. Increase in the prices of
these products has cascading effect on the prices of other commodities due to increase in the
transportation cost. This has been one major factors responsible for higher inflation rate in the country.
 
Another factor responsible for the constant increase in prices has been the rising prices of cement and
steel. This is perhaps due to increased demand for steel and cement due to increased construction
activity, infrastructure development through various flagship programmes of the government and
increased demand for these commodities for such programmes and the activities of the National Highway
Authority of India. Increased steel prices put pressure on the prices of many products that use steel as
raw material, including the automobiles, construction industry and other such industries. 
 
Defying Monetary Policy? 

As per the monetary theory, inflation is largely a monetary phenomenon and it is the monetary policy
measures that come to the rescue of the government to control inflation. In developed countries, it is the
increased money supply that generally causes inflation and the government takes monetary measures
like increasing the bank rate, Credit Reserve Ratio (CRR), increasing the deposit rates to mop up the
surplus flow of money in the economy. Traditionally, inflation in India has generally defied the monetary
theory and has refused to be curbed by the monetary measures.
 

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 The economy has been growing at around 8 per cent per annum during the past five years and the
forecast for the current financial year is also around eight per cent. But, on the other hand, the prices of
food articles, cement, steel and oil are on the rise. Though the agricultural sector has been growing at
slower rate of around 2 per cent per annum, other sectors like the manufacturing and the services sector
are booming with a growth rate in double digits. All these factors contradict the teachings of the monetary
policy.
 
Another principle of the monetary policy is that the price rise due to increased money supply of one
commodity is offset by the price fall of another. In a poor and agrarian country like ours, where majority of
the people spend major chunk of their earnings on food articles, this cannon seems ridiculous. With food
scarcities galore and the food prices soaring, it is immoral to say that the increase in the prices of food
articles is offset by reduction in the prices of other goods, say cosmetics. People need food at every cost
and not the cheaper cosmetics!
 
The above phenomenon has forced the policy makers to control inflation by moving away from the
monetary policy measures to other measures. One of the most frequently used measures  has been the
changes in the import-export policy. To tackle inflation, India has often resorted to the policy of reducing
the import duties on the food articles, on the one hand, and banning the exports of the select food items,
on the other.
 
Recently, Raghuram Rajan Committee had suggested that the Reserve Bank of India should not resort to
routine multi-tasking covering the exchange rate, growth and inflation, but should focus primarily on
control of inflation. It is believed by many that in the Indian conditions, non-core inflation is often the
dominant part of inflation, and under such a scenario, the monetary policy measures are week tools for
curbing inflation. The policies which are successful in the European countries may not work in the country
like ours and there is no point in blindly following the monetary policy measures as prescribed in the
economic (monetary) theory book.
 
Corrective Actions

The Wholesale Price Index (WPI) is an index of a few commodities and if one looks at the composition
of such goods, the prices of several articles have not undergone any change, indicating the inflation rate
at 7.41 per cent as on 29th March 2008.
 
For example, fertilizers and pesticides have about 10 per cent weight in the index, but the prices of these
commodities have not undergone any major change in the last one year. But even if these two
commodities are excluded, a significant percentage of index representing a host of commodities has
remained unchanged over the last several months. Electrical goods, for example represent about 2 per
cent weight in the WPI and their prices have remained static during the last about eight months.
 
The above facts indicate that the WPI takes into account the weighted average of the commodities
included by the government in it and ignores the prices of the commodities that are excluded from the
index. Hence, in the modern day of consumerism, where there are several segments in a particular
commodity, the WPI needs to be made broad based to include more commodities. As on today, it does
not represent the true picture about the price rise in the country.
 
For rural and agricultural workers the impact of the inflation has been even higher. Ironically, these
categories have very low income levels when compared to the national average. Consumer Price Index
(CPI) for the agricultural labourers and rural labourers during the month of March has been close to 8 per
cent. Since the calendar year 2007, the CPI for the agricultural labourers (CPI-AL) has been increasing at
a much faster rate than the WPI.  During April-March 2007-08, CPI-AL has remained higher than the WPI,
with the gap between the two being around 3.5 per cent at an average. The reason is that the CPI has
higher weightage for the food and consumer items than the WPI. This also explains why the impact of
price rise for the consumer is higher than the announced inflation rate by the government. CPI is more
relevant to the consumers and not the WPI.
 

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 House rents and miscellaneous services have also become dearer than before, adding to the worries of
the consumers.  As per the latest data released by the NSSO, the most consumed items in the Indian
households are rice, wheat, onion, potato, milk, arhar and edible oils. During April-March 2007-08, the
WPI of rice increased by 6.35 per cent, arhar by 14.52 per cent, milk by 8.68 per cent, wheat by 5.57 per
cent, mustard oil by 28.91 per cent and coconut oil by 10.8 per cent.
 
Increased prices of the food articles are attributed to the supply side constraints and the developments in
the international markets. Exports have become expensive due to the global price rise. Hence, the
government was left with no alternative but to take measures to control inflation directly. The zero import
duty facility has been extended to the import of several food commodities and export of pulses has been
completely banned. Further, several State governments like Delhi and Maharashtra initiated several de-
hoarding drives by raiding the foodgrain godowns.
 
Being in the election year, the UPA government at the Centre can ill-afford to let the situation of price rise
prevail and perpetuate. The measures have begun to show some results when the inflation rate eased to
7.14 per cent during the week ending April 5, 2008. It is felt that a spell of good monsoons would further
improve the position, while the failure of the monsoons may spell doom not only for the farmers, but also
for the consumers.

ROLE OF BANKS AND FINANCIAL

INSTITUTIONS IN ECONOMY
Money lending in one form or the other has evolved along with the history of the mankind. Even in the
ancient times there are references to the moneylenders. Shakespeare also referred to ‘Shylocks’ who
made unreasonable demands in case the loans were not repaid in time along with interest. Indian history
is also replete with the instances referring to indigenous money lenders, Sahukars and Zamindars
involved in the business of money lending by mortgaging the landed property of the borrowers.
 
Towards the beginning of the twentieth century, with the onset of modern industry in the country, the need
for government regulated banking system was felt.  The British government began to pay attention
towards the need for an organised banking sector in the country and Reserve Bank of India was set up to
regulate the formal banking sector in the country. But the growth of modern banking remained slow
mainly due to lack of surplus capital in the Indian economic system at that point of time. Modern banking
institutions came up only in big cities and industrial centres. The rural areas, representing vast majority of
Indian society, remained dependent on the indigenous money lenders for their credit needs.
 
Independence of the country heralded a new era in the growth of modern banking. Many new commercial
banks came up in various parts of the country. As the modern banking network grew, the government
began to realise that the banking sector was catering only to the needs of the well-to-do and the
capitalists. The interests of the poorer sections as well as those of the common man were being ignored.
 
In 1969, Indian government took a historic decision to nationalise 14 biggest private commercial banks. A
few more were nationalised after a couple of years. This resulted in transferring the ownership of these
banks to the State and the Reserve Bank of India could then issue directions to these banks to fund the
national programmes, the rural sector, the plan priorities and the priority sector at differential rate of
interest.  This resulted in providing fillip the banking facilities to the rural areas, to the under-privileged and
the downtrodden. It also resulted in financial inclusion of all categories of people in almost all the regions
of the country.
 
However, after almost two decades of bank nationalisation some new issues became contextual. The

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 service standards of the public sector banks began to decline. Their profitability came down and the
efficiency of the staff became suspect. Non-performing assets of these banks began to rise. The wheel of
time had turned a full circle by early nineties and the government after the introduction of structural and
economic reforms in the financial sector, allowed the setting up of new banks in the private sector.
 
The new generation private banks have now established themselves in the system and have set new
standards of service and efficiency. These banks have also given tough but healthy competition to the
public sector banks.
 
Modern Day Role

Banking system and the Financial Institutions play very significant role in the economy. First and
foremost is in the form of catering to the need of credit for all the sections of society. The modern
economies in the world have developed primarily by making best use of the credit availability in their
systems. An efficient banking system must cater to the needs of high end investors by making available
high amounts of capital for big projects in the industrial, infrastructure and service sectors. At the same
time, the medium and small ventures must also have credit available to them for new investment and
expansion of the existing units. Rural sector in a country like India can grow only if cheaper credit is
available to the farmers for their short and medium term needs.
 
Credit availability for infrastructure sector is also extremely important. The success of any financial
system can be fathomed by finding out the availability of reliable and adequate credit for infrastructure
projects. Fortunately, during the past about one decade there has been increased participation of the
private sector in infrastructure projects.
 
The banks and the financial institutions also cater to another important need of the society i.e. mopping
up small savings at reasonable rates with several options. The common man has the option to park his
savings under a few alternatives, including the small savings schemes introduced by the government from
time to time and in bank deposits in the form of savings accounts, recurring deposits and time deposits.
Another option is to invest in the stocks or mutual funds.
 
In addition to the above traditional role, the banks and the financial institutions also perform certain new-
age functions which could not be thought of a couple of decades ago. The facility of internet banking
enables a consumer to access and operate his bank account without actually visiting the bank premises.
The facility of ATMs and the credit/debit cards has revolutionised the choices available with the
customers. The banks also serve as alternative gateways for making payments on account of income tax
and online payment of various bills like the telephone, electricity and tax. The bank customers can also
invest their funds in various stocks or mutual funds straight from their bank accounts. In the modern day
economy, where people have no time to make these payments by standing in queue, the service provided
by the banks is commendable.
 
While the commercial banks cater to the banking needs of the people in the cities and towns, there is
another category of banks that looks after the credit and banking needs of the people living in the rural
areas, particularly the farmers. Regional Rural Banks (RRBs) have been sponsored by many commercial
banks in several States. These banks, along with the cooperative banks, take care of the farmer-specific
needs of credit and other banking facilities.
 
Future

Till a few years ago, the government largely patro-nized the small savings schemes in which not only
the interest rates were higher, but the income tax rebates and incentives were also in plenty. The bank
deposits, on the other hand, did not entail such benefits. As a result, the small savings were the first
choice of the investors. But for the last few years the trend has been reversed. The small savings, the
bank deposits and the mutual funds have been brought at par for the purpose of incentives under the
income tax. Moreover, the interest rates in the small savings schemes are no longer higher than those

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 offered by the banks.
 
Banks today are free to determine their interest rates within the given limits prescribed by the RBI. It is
now easier for the banks to open new branches. But the banking sector reforms are still not complete. A
lot more is required to be done to revamp the public sector banks. Mergers and amalgamation is the next
measure on the agenda of the government. The government is also preparing to disinvest some of its
equity from the PSU banks. The option of allowing foreign direct investment beyond 50 per cent in the
Indian banking sector has also been under consideration.
 
Banks and financial intuitions have played major role in the economic development of the country and
most of the credit- related schemes of the government to uplift the poorer and the under-privileged
sections have been implemented through the banking sector. The role of the banks has been important,
but it is going to be even more important in the future.   

Education for All

The gains achieved since the Education for All and Millennium Development
Goals were adopted in 2000 are undeniable: great strides have been made
towards universal primary education, increased participation in secondary and
tertiary education and, in many countries, gender equality. More widely, there
have been improvements in overcoming hunger, poverty, and child and
maternal mortality.

The global financial crisis could radically change all this. Reaching the
marginalized demonstrates that declining government revenue and rising
unemployment now pose a serious threat to progress in all areas of human
development. Government budgets are under even greater pressure and
funding for education is especially vulnerable. So are poor households.
Rising poverty levels mean that the challenge of meeting basic human needs
is a daily struggle. Lessons from the past teach us that children are often the
first to suffer—as is their chance to go to school.

Global Monitoring Report, 2010, underscores that there is a long way to

travel. There are still at least 72 million children worldwide who are missing
out on their right to education because of the simple fact of where they are
born or who their family is. Millions of youths leave school without the skills
they need to succeed in the workforce and one in six adults is denied the right
to literacy.

The 2010 Report is a call to action. We must reach the marginalized. Only
inclusive education systems have the potential to harness the skills needed to
build the knowledge societies of the twenty-first century.

The international community needs to identify the threat to education posed

by the economic crisis and the rise in global food prices. Human development
indicators are deteriorating. An estimated 125 million additional people could

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 be pushed into malnutrition and 90 million into poverty in 2010.

With poverty rising, unemployment growing and remittances diminishing,

many poor and vulnerable households are being forced to cut back on
education spending or withdraw their children from school. National budgets
in poor countries are under pressure. Sub-Saharan Africa faces a potential
loss of around US$4.6 billion annually in financing for education in 2009 and
2010, equivalent to a 10% reduction in spending per primary-school pupil.

As part of an effective response, it is need of the hour to provide sustained

and predictable aid to counteract revenue losses, protect priority social
spending and support progress in education.

The situation is not hopeless everywhere, though. Some countries have

achieved extraordinary advances. Benin started out in 1999 with one of the
world’s lowest net enrolment ratios but may now be on track for universal
primary education by 2015. The share of girls out of school has declined from
58% to 54%, and the gender gap in primary education is narrowing in many
countries. Between 1985–1994 and 2000–2007, the adult literacy rate
increased by 10%, to its current level of 84%. The number of adult female
literates has increased at a faster pace than that of males.

However, much need to be done. Malnutrition affects around 175 million

young children each year and is a health and an education emergency. There
were 72 million children out of school in 2007. Business as usual would leave
56 million children out of school in 2015.

Around 54% of children out of school are girls. In sub-Saharan Africa, almost
12 million girls may never enrol. In Yemen, nearly 80% of girls out of school
are unlikely ever to enrol, compared with 36% of boys. Literacy remains
among the most neglected of all education goals, with about 759 million
adults lacking literacy skills today. Two-thirds are women.

Millions of children are leaving school without having acquired basic skills.
In some countries in sub-Saharan Africa, young adults with five years of
education had a 40% probability of being illiterate. In the Dominican
Republic, Ecuador and Guatemala, fewer than half of grade 3 students had
more than very basic reading skills. Some 1.9 million new teacher posts will
be required to meet universal primary education by 2015.

The urgent international measures required include: increased concessional

financial support through bilateral aid and the World Bank’s International
Development Association (IDA), with a commitment to increase IDA
replenishment from US$42 billion to US$60 billion; a review of the
implications of the global economic downturn for the financing of
development targets in advance of the 2010 Millennium Development Goals

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 summit; an emergency pledging conference during 2010 to mobilize
additional aid for education; budget monitoring to pick up early warning
signs of fiscal adjustments that threaten education financing, with UNESCO
coordinating an international programme to these ends; revision of the IMF’s
loan conditions to ensure consistency with national poverty reduction and
Education for All priorities.

Education Quality
The ultimate measure of any education system is not how many children are
in school, but what – and how well – they learn. There is growing evidence
that the world is moving more quickly to get children into school than to
improve the quality of the education offered.

Learning achievement deficits are evident at many levels. International

assessment exercises point consistently towards severe global disparities. The
2007 Trends in International Mathematics and Science Study (TIMSS) found
that average students in several developing countries, including Ghana,
Indonesia and Morocco, performed below the poorest-performing students in
countries such as Japan and the Republic of Korea. Inequalities within
countries, linked to household disadvantage and the learning environment, are
also marked. The problem is not just one of relative achievement. Absolute
levels of learning are desperately low in many countries.

Evidence from South and West Asia and from sub-Saharan Africa suggests
that many children are failing to master basic literacy and numeracy skills,
even when they complete a full cycle of primary education. Low learning
achievement stems from many factors. Schools in many developing countries
are in a poor state and teachers are in short supply. By 2015, the poorest
countries will need to recruit some 1.9 million additional primary school
teachers, including 1.2 million in sub-Saharan Africa, to create a good
learning environment for all children. More equitable teacher deployment is
also vital: all too often, the poorest regions and most disadvantaged schools
have the fewest and least-qualified teachers. Several countries, including
Brazil and Mexico, have introduced programmes targeting schools serving
disadvantaged communities. Governments can also raise standards by
spotting problems early, using constant monitoring and early-grade reading
assessments.

Education for all Development Index (EDI)

While each of the six Education for All goals adopted in 2000 matters in its
own right, the commitment undertaken by governments at the World
Education Forum in Dakar was to sustain advances on all fronts. The
Education for All Development Index (EDI) provides a composite measure of
progress, encompassing access, equity and quality. Because of data
availability constraints, it includes only the four most easily quantifiable
goals, attaching an equal weight to each: (1) universal primary education,

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 measured by the primary adjusted net enrolment ratio (ANER); (2) adult
literacy, measured by the literacy rate for those aged 15 and above; (3) gender
parity and equality, measured by the gender-specific EFA index (GEI), an
average of the gender parity indexes of the primary and secondary gross
enrolment ratios and of the adult literacy rate; (4) quality of education,
measured by the survival rate to grade 5.

The EDI value for a given country is the arithmetic mean of the four proxy
indicators. It falls between 0 and 1, with 1 representing full EFA
achievement.

India is ranked 105 on the EDI index. On top of the list is Norway, followed
by Japan and Germany.

Education Scenario of India

Literacy in India has made remarkable strides since Independence. This has
been further confirmed by the results of the Census 2001. The literacy
rate has increased from 18.33% in 1951 to 64.84% in 2001. This is despite
the fact that during the major part of the last five decades there has been
exponential growth of the population at nearly 2% per annum.

The Indian Constitution resolves to provide quality education to all and, in an

effort to fulfil the educational needs of the country, specifically for the
diverse societies and cultures of the country, the government has chalked out
different educational categories: elementary education, secondary education,
higher education, adult education, technical and vocational education. Free
and compulsory education to all children up to the age of fourteen years is
now a constitutional commitment in India. Despite serious handicaps of
means and resources, the country has built up during the last 50 years a very
large system of education, and has created a vast body of men and women
equipped with a high order of scientific and technological capabilities, robust
humanist and philosophical thought and creativity.

The government of India has initiated a number of programmes to achieve the

goal of Universalisation of Elementary Education (UEE), from among which
the Sarva Shiksha Abhiyan (SSA), launched in 2001, is the most recent one. It
aimed at achieving universal elementary education of satisfactory quality by
2010. The SSA is expected to generate demand for secondary education in
view of which the government of India has recently launched the Rashtriya
Madhyamik Shiksha Abhiyan (RMSA) to improve universal access and
quality at the Secondary and Higher Secondary stages of education.

For successful implementation of any educational programme, effective

monitoring and an efficient information system are essential. While the
monitoring framework for the SSA is developed separately, concerted efforts
have been made towards strengthening the Educational Management

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 Information System (EMIS) for the elementary level of education. The
District Elementary Education Plans (DEEP) across the country are being
developed primarily based on the data generated though the information
system developed for the SSA, i.e. the District Information System for
Education (DISE).

The elementary education system of India has expanded into one of the
largest in the world. Number of primary schools increased from 2.15 lakhs in
1950-51 to 6.1 lakhs in 1997-98; the corresponding increase in upper primary
schools was from 0.14 lakhs to 1.85 lakhs. These 8.17 lakh schools together
enrolled 1,110 lakh children as compared to 192 lakh in 1951.

Universal provision of education has been substantially achieved at the

primary stage (classes I-V). An estimated 95 percent of the rural population
living in 8,26,000 habitations has a primary school within a walking distance
of one km and about 85 percent of the rural population has an upper primary
school within a walking distance of three km. More than 150 million children
are currently enrolled covering around 90 percent of the children in the age
group of 6-14 years. Recent surveys on literacy rates indicate a phenomenal
progress in the nineties and indicate a significant rise in the literacy level.

Despite such significant achievements in the recent years, it is realized that

there are serious problems of gender, regional, sectional and caste disparities
in UEE. A significant proportion of children continue to drop out due to
socioeconomic and cultural factors as also due to lack of adequate
infrastructure, shortage of teachers and unsatisfactory quality of education
provided.

The country has the dubious distinction of having the largest number of
illiterates and out of school children in the world—30% of the world’s adult
illiterates (300 million) and 21.87 percent of out-of-school children. At least
24 million children in the age group 6-14 are out of school of whom about
60% are girls; about 121.3 million are adult illiterates in the age group 15.35
of whom about 62 percent are women. Given the demographic pressures the
numbers are likely to increase further. Universalisation of elementary
education thus, poses a formidable challenge to India: the numbers of
children dropping out, not attending school regularly and never enrolled are
immense. Quality of education is poor; teachers are inadequately trained and
have lack of motivation.

A major concern is to improve the skills and motivation of teachers,

promoting the participation of communities in the running of schools and
enrolling/retaining girls/working children of urban poor and children with
special needs in schools. Also, in India, a large universe of working children
exists such as the street children, neglected and destitute children, children of
sex workers and children practising as sex workers. Many of these have been

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 targeted through non-formal initiatives but never main-streamed. Besides,
along with access and retention, the quality of education provided to them is
questionable.

India has significant requirements and goals set for it, which will enable it to
possess self-equipped citizens holding a key to the progress and development
in all spheres. This implies that all the provisions stated in the NPE must be
realized by 2025. To begin with, it is important to understand the quantitative
requirements of the sector concerning issues of enrolment, school
infrastructure, and teacher availability etc. Thereafter, it will be logical to
analyse the scenario that will exist in the year 2025, with respect to the
attainment of the requirements.

Given the requirements in purely quantitative terms it is important to

understand the non-negotiables for their achievement by 2025. It will be
critical to have at least a growth rate of 9-10 per cent per year in the
economic sphere, necessitating the requirement for human skills, especially
the research skills. There will have to be no compromise with respect to
enrolment and retention of children in schools. For this there has to be 100
per cent literacy and 100 per cent enrolment at primary, secondary and
technical levels. The problem of drop-outs will need to be main-streamed
together with the quality of education at the primary, secondary and technical
levels and for this the rural sector will have to be mobilized and encouraged
in the cause of education.

Economic development of our country is built around educational

development. There is considerable data which shows that education is based
on economic development and vice versa. This aspect has also been realised
by the community at large and education is now being considered important.
This is even highlighted by the analysis of household income versus
expenditure, which shows that investment in education in even the poorest
households is high. People have understood the economic value of education
and are now ready to invest. This is also seen in the fact that many youths are
opting out of labour force and are spending larger period on education.

However, the government’s capacity to pay for education is limited. Thus,

there is a need to explore private and other investments. It has been
established beyond doubt that besides its social and cultural dimensions,
education is also an economic and political investment yielding long-term
benefits. It is not only justifiable but also desirable to focus on this
investment in order to gain maximum benefit.

In terms of allocation for education, it needs to be underlined that the present

3.6 percent of GNP is less than: (a) the requirement of the education system
to provide reasonable levels of quality education to all the students enrolled
presently; (b) the requirements of the system to provide universal elementary

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 education of eight years for every child of the age-group 6-14, and
consequent growth in secondary and higher education, as universalisation of
elementary education in a comprehensive sense, includes universal provision
of resources. This implies that it will be important to raise money from
private sources in order to ease pressure on public spending. This, of course,
is not meant to release the State from its financial commitments, which have
been substantial in India.

Along with the issue of investment, the quality issue also demands attention
at all levels of education. In this context, the Research and Development area,
which is extremely weak, has to be focused. This area is critical as it provides
base to the planning process, links it up to the implementation and
subsequently highlights areas for reform. A weak system endangers the life of
the intervention, its sustainability and impact.

Linked to the overall issue of education is the sub-issue of value education. It

is feared that the more we industrialize, greater will be the need for value
education at all levels. Although, we have been led to believe that India’s
values are the best, the western values are associated with progress,
development, quick achievement, and hence are being readily imbibed by the
students. It has to be understood that there is no particular set of values which
guarantees success and that the societal values must match with the
organizational values and hence, values such as wisdom, humility, rationality,
intellectualism etc. will have to be inculcated in education at all levels. In this
context, India’s cultural values will need to be integrated with education.

PUBLIC FINANCE AND FISCAL

DEVELOPMENTS
The fiscal space generated in the 2004-05 to 2007-08 period, following the
Fiscal Responsibility Budget Management Act (FRBMA) mandate, mitigated
on effects of global financial and economic crisis in 2008-09 through an
expansionary fiscal stance to boost aggregate demand. Traditionally,
assessment of public finances was confined to analysis of fiscal indicators,
but the macro-economy-wide impact of the crisis underscored the importance
of accounts data in tandem in such assessments.

In advanced economies, the operation of automatic stabilizers and

discretionary fiscal policies pursued to obviate the adverse impact of the
global financial and economic crisis was made possible by the space available
and the largely cyclical nature of the fiscal deficit. In India, the rapid and
significant fiscal consolidation achieved in the post-FRBMA period up to
2007-08 was indeed an important achievement that enabled greater fiscal
space for a macro-economic policy stance to counteract the impact of the

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 global economic crisis. As a proportion of the GDP, the reductions in fiscal
deficit in the period 2003-04 to 2007-08 were made possible in equal measure
by higher tax revenues and expenditure compression. This facilitated use of
both tax and expenditure measures in the expansionary fiscal policies to boost
demand. As such, the progress in fiscal consolidation in India is different
from the typical models elsewhere, which are driven purely by expenditure
compression.

As the impact of the crisis continued through 2009-10, the expansionary

fiscal stance was continued in the Budget for 2009-10. Given the relative
levels of shares of private final consumption expenditure and government
consumption expenditure, such expansion could only be a short-term measure
and the Medium Term Fiscal Policy Statement presented along with the
Budget for 2009-10 favoured a resumption of the fiscal consolidation process,
albeit a gradual one, with fiscal deficit declining to 5.5 per cent of the gross
domestic product (GDP) and 4.0 per cent of the GDP in 2010-11 and 2011-
12, respectively. In its report, the thirteenth Finance Commission has traced
the path of fiscal consolidation for the Centre and States. The resumption of
the path of fiscal prudence would complement the recovery process in the
near term and lay the foundation for reviving the growth momentum in the
long term.

A low and stagnant tax-GDP ratio characterized Central government revenues

for a considerable period since 1990-91. This reflected in part the reform of
the tax structure through lower rates in indirect taxes and the levels of the tax
base. The rapid growth momentum in the post-FRBMA period helped change
the composition of taxes, deepen the process of rationalization of taxes and
widen the base. As a proportion of gross tax revenue, direct taxes rose from a
level of 19.1 per cent in 1990-91 to reach 49.9 per cent in 2007-08; in 2008-
09, they were at 55.5 per cent.

As a proportion of GDP, total expenditure fell from a level of 17.1 per cent in
2003-04 to 14.4 per cent in 2007-08, largely driven by the steep fall in capital
expenditure. Total expenditure was placed at Rs 8,81,469 crore in 2008-09,
which implied a growth of 23.7 per cent over 2007-08 levels and 17.4 per
cent over that assumed in 2008-09. The front loading of Plan expenditure was
evident in the rise in its proportion to the GDP from a level of 4.1 per cent in
2007-08 to 4.9 per cent in 2008-09. Thus, the reversal in major fiscal deficit
indicators in 2008-09 and 2009-10 was a policy-driven stimulus to counter
the demand slowdown.

In the post-FRBMA period (2004-05 to 2007-08), average annual/compound

growth in total expenditure was 11.2 per cent, which compared favourably
with the 12.2 per cent in the previous four years. Within total expenditure,
growth in capital expenditure was again lower than that in revenue
expenditure. Adjusting for one-off distortions in capital expenditure, like

41
 redemption of securities of the National Small Savings Fund in 2004-05 and
the expenditure on acquisition of State Bank of India (SBI) shares from the
Reserve Bank of India (RBI), growth in capital expenditure was more stable.
While traditionally assessment of the trends in expenditure, particularly in the
context of the fiscal consolidation process, had focused on the compression in
terms of proportions of GDP, in view of the policy-driven expansion process
it would be useful to understand the magnitude and direction of the
expansion. In 2008-09 and 2009-10, the increase in total expenditure was of
the order of 23.7 per cent and 43.2 per cent, respectively, over the levels in
2007-08. In 2008-09, the main components of expenditure significantly
higher than their 2007-08 levels were major subsidies, social services, Plan
expenditure and economic services. In 2009-10, the major components of the
expansion were interest payments, defence, social services and economic
services.

To an extent, rising interest payments reflect past consumption and do not

contribute to current productive uses and are primarily tax financed. They are
a drag on the present generation. Inter-generational equity concerns were one
of the key objectives of institutionalizing the fiscal consolidation process in
the form of the FRBMA. Interest payments appropriated substantial
proportions of revenue receipts and the efforts in the FRBMA period were to
reduce the level of deficits and incremental assumption of debt to contain the
interest burden. Interest payments as a proportion of revenue receipts
declined from a level of 52.1 per cent in 1998-99 to a level of 31.6 per cent in
2007-08. They were at the 35 per cent level in 2008-09 and were budgeted at
36.7 per cent in 2009-10. The rise in the levels of gross market borrowings in
2008-09 and 2009-10 has resulted in a reversal of the trend towards fall in
average cost of borrowings.

The global commodity price shock (particularly in crude petroleum) that

preceded the global financial crisis in 2008-09 led to a burgeoning of the
subsidy bill and a sharp rise in the below-the line issuance of bonds to oil and
fertilizer companies. As a proportion of GDP, major budgetary subsidies rose
from 1.6 per cent in 2003-04 to 2.2 per cent in 2008-09 and were budgeted at
1.7 per cent in 2009-10. Besides, the above below-the-line issuance of oil and
fertilizer bonds was of the order of 1.7 per cent of GDP in 2008-09. The
Budget for 2009-10, recognizing the importance of institutional reforms,
announced the intention to move towards a nutrient-based subsidy regime in
respect of fertilizers and ultimately towards direct cash transfers and the
setting up of an expert to advise on a viable and sustainable system of pricing
for petroleum products.

Finances of State governments

Following the adoption of Fiscal Responsibility Legislations (FRLs), the
combined finances of the States exhibited a faster than anticipated turnaround
in 2005-06, with the level of fiscal deficit at 2.4 per cent of the GDP. There

41
 were, however, large variations amongst States, with Assam having a fiscal
surplus of 0.6 per cent of the Gross State Domestic Product (GSDP) and
Mizoram having a high fiscal deficit of 14.7 per cent of the GSDP in 2005-
06. States combined posted a revenue surplus in 2006-07. The record of fiscal
consolidation of the States combined was indeed remarkable and was
facilitated by the growth in their own revenues following the successful
adoption of State-level Value-Added Tax (VAT), the buoyancy in Central
taxes, the higher levels of transfers and the scheme of Debt Consolidation and
Waiver linked to fiscal consolidation.

In 2008-09, there was a growth of 15.3 per cent in States’ own tax revenues
and 26.6 per cent in non-tax receipts. However, with higher levels of
disbursements, which grew by 26 per cent, fiscal deficit went up to a level of
2.6 per cent of the GDP but was still well below the 3.0 per cent level
mandated by the FRLs. With the relaxation in State-level fiscal targets to
obviate the adverse impact of the global crisis, revenue deficit of 0.6 per cent
of the GDP and fiscal deficit of 3.2 per cent of the GDP was budgeted in
2009-10.

The Debt Consolidation and Relief Facility (DCRF) has two components: (i)
consolidation of Central loans (from the Ministry of Finance) contracted till
March 31, 2004 and outstanding as on March 31, 2005 and (ii) provision of
interest relief and grant of debt waiver to States based on their fiscal
performance. Consolidation of Central loans has given interest relief to
States. Debt waiver is granted to States based on their fiscal performance, for
which an assessment is made annually. Benefits under the DCRF helped
States by easing debt and interest pressures and also incentivized States to
follow the path of fiscal correction.

So far, Central loans to 26 out of 28 States have been consolidated to the

extent of Rs 1,13,601.1 crore.  From 2005 to 2009, States have been granted
debt waivers for an aggregate amount of Rs 22,039.4 crore and interest relief
of Rs 18,688.5 crore.

Conclusion
Typically, the fiscal responsibility rules world over are anchored in balanced
budget and debt targets with clear differences in framework across advanced
economies and developing countries. In India, under the FRBMA, the rule
focused on incremental assumption of liabilities. By and large this rule was
adhered to in the post-FRBMA period; since 2008-09, there has been a rise in
the assumption of net incremental liabilities as a result of the expansionary
fiscal policy stance. As a result, with the revised GDP series (2004-05)
released by the CSO, the ratio of outstanding liabilities to the GDP after
falling from a level of 61.6 per cent in 2004-05 to 56.3 per cent in 2008-09,
has risen marginally to 56.7 per cent in 2009-10. Internal debt, mainly market
borrowings, continues to be the main component of outstanding liabilities.

41
 The full picture of public finances and their impact on the macro-economy is
best analysed through the levels of deficits in the consolidated General
Government. As a proportion of the GDP, revenue receipts of the
consolidated General Government rose from a level of 19.0 per cent in 2004-
05 to reach a level of 21.2 per cent in 2007-08. They were budgeted at 20.5
per cent in 2009-10. With total disbursements remaining at more or less the
same levels in four years ending 2007-08, the combined revenue and fiscal
deficit came down. In fact, the combined levels of deficit were much lower
than the levels (sum of Centre and States) mandated by the FRBMA and
State-level FRLs. Reflecting the overall expansion to stimulate demand, fiscal
and revenue deficit for 2009-10 is placed at 9.7 and 5.2 per cent of the GDP.

State of India’s Economy

Readers will find this feature useful in their preparations for Civil Services
Exam and other similar UPSC and SSC exams. The information provided is
also useful for Bank P.O. and Bank Clerk Recruitment exam preparations as
also any competitive exam [MBA, NDA, CDS, IFS, IES etc] in which
questions on General Awareness or General Knowledge and Current Affairs
are asked.

In the second half of 2008-09 there was a significant slowdown in the growth
rate, following the financial crisis that hit the world in 2007. The fiscal year
2009-10, thus, began on a difficult note. There was apprehension that the
slow-down will continue to affect the economy thus making 2009-10 a
difficult year.

However, 2009-10 turned out to be a year of reckoning for the policy makers,
who took a calculated risk by providing substantial fiscal expansion to
counter the negative fallout of the global slowdown.

The downside of the fiscal stimulus was that India’s fiscal deficit increased,
reaching 6.8 per cent of GDP in 2009-10. A sub-normal monsoon added to
the overall uncertainty.

Despite all odds the economy, at the end of the financial year, posted a
remarkable recovery, not only in terms of overall growth figures but, more
importantly, in terms of certain fundamentals, which justify optimism for the
Indian economy in the medium to long term.

The real turnaround came in the second quarter of 2009-10 when the
economy grew by 7.9 per cent. As per the advance estimates of GDP for
2009-10, released by the Central Statistical Organisation (CSO), the economy

41
 is expected to grow at 7.2 per cent in 2009-10, with the industrial and the
service sectors growing at 8.2 and 8.7 per cent respectively.

This recovery is impressive for at least three reasons. First, it has come
about despite a decline of 0.2 per cent in agricultural output, which was the
consequence of sub-normal monsoons. Second, it fore-shadows renewed
momentum in the manufacturing sector, which had seen continuous decline in
the growth rate for almost eight quarters since 2007-08. Indeed,
manufacturing growth has more than doubled from 3.2 per cent in 2008-09 to
8.9 per cent in 2009-10. Third, there has been a recovery in the growth rate
of gross fixed capital formation, which had declined significantly in 2008-09
as per the revised National Accounts Statistics (NAS). While the growth rates
of private and government final consumption expenditure have dipped in
private consumption demand, there has been a pick-up in the growth of
private investment demand.

There has also been a turnaround in merchandise export growth in November

2009, which has been sustained in December 2009, after a decline nearly
twelve continuous months.

The broad- based nature of the recovery created scope for a gradual rollback,
in due course, of some of the measures undertaken to overcome global
slowdown effects on Indian economy, so as to put the economy back on to
the growth path of 9 per cent per annum.

The emergence of high double-digit food inflation during the second half of
the financial year 2009-10 was a major cause of concern. On a year-on-year
basis, wholesale price index (WPI) headline inflation in December 2009 was
7.3 per cent, but for food items (primary and manufactured), with a combined
weight of 25.4 per cent in the WPI basket, it was 19.8 per cent. A significant
part of this inflation was due to supply-side bottle-necks in some of the
essential commodities, precipitated by the delayed and sub-normal southwest
monsoons.

Overall GDP growth

The CSO has effected a revision in the base year from 1999-2000 to 2004-
05. It includes changes on account of certain refinements in definitions of
some aggregates, widening of coverage, inclusion of long-term survey results
and the normal revision in certain data in respect of 2008-09. While there are
no major changes in the overall growth rate of GDP at constant 2004-05
prices, except for 2007-08 where it has been revised upward from 9.0 to 9.2
per cent, there are some changes in growth rates at sectoral level and in the
level estimates of GDP.

The contribution of the agriculture sector to the GDP at factor cost in

2004-05 has declined from 17.4 per cent in the old series to 15.9 per cent in

41
 the new series. Similarly, while the contribution of registered manufacturing
has declined from 10.9 per cent in the old series to 9.9 per cent in the new
series, that of unregistered manufacturing has increased from 4.9 to 5.4 per
cent.

There is also an increase in the contribution of real estate, ownership of

dwellings and business services from 8.2 per cent to 8.9 per cent.

In the case of level estimates of GDP at current prices, the difference ranges
from 3.1 per cent in 2004-05 to 6 per cent in 2008-09. As a result, there are
also changes in the expenditure estimates of the GDP.

The advance estimate of GDP growth at 7.2 per cent for 2009-10, falls
within the range of 7 +/- 0.75 projected nearly a year ago in the Economic
Survey 2008-09. With the downside risk to growth due to the delayed and
sub-normal monsoons having been contained to a large extent, through the
likelihood of a better-than-average rabi agricultural season, the economy
responded well to the policy measures undertaken in the wake of the global
financial crisis. While the GDP at factor costs at constant 2004-05 prices, is
placed at Rs 44,53,064 crore, the GDP at market prices, at constant prices, is
estimated at Rs 47, 67,142 crore. The corresponding figures at current prices
are Rs 57,91,268 crore and Rs 61, 64,178 crore, respectively.

The recovery in GDP growth for 2009-10 is broad based. Seven out of eight
sectors/sub-sectors show a growth rate of 6.5 per cent or higher. The
exception is agriculture and allied sectors where the growth rate is estimated
to be minus 0.2 per cent over 2008-09. Sectors, including mining and
quarrying, manufacturing; and electricity, gas and water supply have
significantly improved their growth rates at over 8 per cent in comparison
with 2008-09.

The construction sector and trade, hotels, transport and communication have
also improved their growth rates over the preceding year, though to a lesser
extent. However, the growth rate of community, social and personal services
has declined significantly, though it continues to be around its pre-global
crisis medium-term trend growth rate.

Financing, insurance, real estate and business services have retained their
growth momentum at around 10 per cent in 2009-10.

In terms of sectoral shares, the share of agriculture and allied sectors in

GDP at factor cost has declined gradually from 18.9 per cent in 2004-05 to
14.6 per cent in 2009-10. During the same period, the share of industry has
remained the same at about 28 per cent, while that of services has gone up
from 53.2 per cent in 2004-05 to 57.2 per cent in 2009-10.

41
 Per capita growth
The growth rates in per capita income and consumption, which are gross
measures of welfare in general, have declined since 2008. This is a reflection
of the slowdown in the overall GDP growth. While the growth in per capita
income, measured in terms of GDP at constant market prices, has declined
from a high of 8.1 per cent in 2007-08 to 3.7 per cent in 2008-09 and then
recovered to 5.3 per cent in 2009-10, per capita consumption growth as
captured in the private final consumption expenditure (PFCE) shows a
declining trend since 2007-08 with its growth rate in 2009-10 falling to one-
third of that in 2007-08. The average growth in per capita consumption over
the period 2005-06 to 2009-10 was slower at 6.08 per cent than that in per
capita income at 6.52 per cent. These year to year differences in growth rates
can be explained by the rising savings rate and also the rise in tax collections
that have been observed in some of these years.

Aggregate demand and its composition

The change in the base year, from 1999-2000 to the new base of 2004-05, has
brought about significant revision in the expenditure estimates of the GDP for
2008-09. While growth of the PFCE in 2008-09 was revised upward from
2.9 per cent to 6.8 per cent, growth in government final consumption
expenditure was revised downwards from over 20 per cent in 2008-09 on the
old base to 16.7 per cent on the new base. In 2009-10 a growth of 4.1 per cent
is expected in private final expenditure and 8.2 per cent in government final
expenditure.

There is a significant decline in the growth of consumption expenditure in

2009-10. However, the overall share of consumption expenditure, both
private as well as government in GDP at market prices, at constant 2004-05
prices, has declined only marginally from 70.9 per cent in 2008-09 to 69.6
per cent in 2009-10.

At the same time, the growth rate of gross fixed capital formation in 2008-
09 has also undergone a revision. It was revised downward from 8.2 per cent
in the earlier base to 4 per cent in the revised base for 2008-09. It is, however,
estimated to grow by 5.2 per cent in 2009-10.

With growth in private expenditure on food, beverages and tobacco falling

behind the overall growth in private consumption expenditure, the share of
expenditure on food items has gradually been declining over the years. As per
the CSO data, it was 35.3 per cent in 2008-09 as against 39.6 per cent in
2004-05. At the same time, the growth in expenditure on transport and
communication and miscellaneous goods and services has been increasing,
though with occasional aberrations, with the result that together they account
for nearly the same share in total private consumption as the expenditure on
food items.

41
 Agriculture
Total foodgrains production in 2008-09 was estimated at 233.88 million
tonnes as against 230.78 million tonnes in 2007-08 and 217.28 million tonnes
in 2006-07. In the agricultural season 2009-10, the impact of the delayed and
sub-normal monsoon is reflected in the production and acreage data for kharif
crops. As per the first advance estimates, covering only the kharif crop,
production of foodgrains is estimated at 98.83 million tonnes in 2009-10, as
against the fourth advance estimates of 117.70 million tonnes for the kharif
crop in 2008-09 and a target of 125.15 million tonnes for 2009-10.

Overall production of kharif cereals in 2009-10 has shown a decline of 18.51

million tonnes over 2008-09.

In terms of acreage, the kharif 2009-10 season saw a decline of nearly 6.5
per cent or 46.18 lakh ha in the area covered under foodgrains. Almost the
entire decline in this acreage was confined to the kharif rice crop. Some of
this decline in acreage may have been made up by the increased acreage in
the rabi season.

Industry and Infrastructure

The cyclical slowdown in the industrial sector, which began in 2007-08 and
got compounded by the global commodity price shock and the impact of the
global slowdown during the course of 2008, was arrested at the beginning of
2009-10. After the first two months of 2009-10, there were clear signs of
recovery. While the CSO’s advance estimates place industrial-sector growth
at 8.2 per cent, as against 3.9 per cent in 2008-09, the IIP industrial growth is
estimated at 7.7 per cent for the period April-November 2009-10,
significantly up from 0.6 per cent during the second half of 2008-09. The
manufacturing sector, in particular, has grown at the rate of 8.9 per cent in
2009-10.

Core industries and infrastructure services, led by the robust growth

momentum of telecom services and spread across power, coal and other
infrastructure like ports, civil aviation and roads, have also shown signs of
recovery in 2009-10. In the current fiscal, electricity generation emerged
from the lacklustre growth witnessed in the previous year and equalled its
performance in 2007-08. That this was achieved despite constraints imposed
by the inadequate availability of coal and the dismal hydel generation
scenario due to the sub-normal monsoon, attests well to its potential.

The domestic supply of crude oil remained around 34 million metric tonnes
(mmt) and natural gas at about 32 billion cubic metric tonnes during the past
five years. With 15 new oil and gas discoveries during 2009-10, the domestic
availability is expected to improve. During 2009-10, the projected production
for crude oil is 36.7 mmt, which is about 11 per cent higher than the actual
crude oil production of 33.5 mmt in 2008-09.

41
 In 2009-10, as against the stipulated target of developing about a 3,165 km of
national highways under various phases of the National Highway
Development Project (NHDP), the achievement up to end November 2009
has been about 1,490 km. Similarly, as against the 2009-10 target of about
9,800 km for awarding projects under various phases of the NHDP, projects
totalling a length of about 1,285 km have been awarded up to end November
2009.

The service sector which has been India’s workhorse for well over a decade
has continued to grow rapidly. Following the NAS classification, it comprises
the sub-sectors trade, hotels, transport and communications; financing,
insurance, real estate and business services; and community, social and
personal services. As against a growth of 9.8 per cent in 2008-09 it grew at
8.7 per cent in 2009-10.

Savings and investments

Gross domestic savings (GDS) at current prices in 2008-09 were estimated
at Rs 18,11,585 crore, amounting to 32.5 per cent of GDP at market prices as
against 36.4 per cent in the previous year. The fall in the rate of GDS has
mainly been due to the fall in the rates of savings of the public sector (from
5.0 per cent in 2007-08 to 1.4 per cent in 2008-09) and private corporate
sector (from 8.7 per cent in 2007-08 to 8.4 per cent in 2008-09).

In respect of the household sector, the rate of saving has remained at the
same level of 22.6 per cent in 2007-08 and 2008-09. The rate of GDS on the
new series increased from 32.2 per cent in 2004-05 to 36.4 per cent in 2007-
08 before declining to 32.5 per cent in 2009-10, as against the old series
where it rose from 31.7 per cent in 2004-05 to 37.7 per cent in 2007-08.

Gross domestic capital formation (GDCF) at current prices (adjusted for

errors and omissions) increased from Rs18,65,899 crore in 2007-08 to
Rs19,44,328 crore in 2008-09 and at constant (2004-05) prices, it decreased
from Rs16,22,226 crore in 2007- 08 to Rs15,57,757 crore in 2008-09. The
rate of gross capital formation at current prices rose from 32.7 per cent in
2004-05 to 37.7 per cent in 2007-08 before declining to 34.9 per cent in
2008-09.

The sectoral investment rate is a useful indicator of the direction of new

investments. While the overall growth of investment in India was in the range
of 15 to 16 per cent per annum during the last few years, it plunged to -2.4
per cent in 2008-09 as a result of the external shock-led slowdown. At
sectoral level, there has been a welcome rebound in the growth rate of
investment in the agricultural sector, which grew at 16.5 per cent and 26.0 per
cent in 2007-08 and 2008-09 respectively. This is in contrast to the growth
rate of 1.4 per cent recorded in

41
 2006-07.

Prices and Inflation

The year-on-year WPI inflation rate was fairly volatile in 2009-10. It was
1.2 per cent in March 2009 and then declined continuously to become
negative during June-August 2009, assisted in part by the large statistical
base effect from the previous year. It turned positive in September 2009 and
accelerated to 4.8 per cent in November 2009 and further to 7.3 per cent in
December 2009. For March to December 2009 period WPI inflation was
estimated at 8 per cent.

Year-on-year inflation in the composite food index (with a weight of 25.4

per cent) at 19.8 per cent in December 2009 was significantly higher than 8.6
per cent in previous year. In respect of food articles, inflation on year-on-year
basis in December was 19.2 per cent and on fiscal-year basis (i.e. over March
2009) it was 18.3 per cent. At the same time, the composite non-food
inflation within the manufactured group of the WPI (with a weight of 53.7
per cent) at 2.4 per cent in December 2009, was lower than the 6.7 per cent
recorded in previous year.

A significant part of this inflation can be explained by supply-side

bottlenecks in some of the essential commodities, precipitated by the delayed
and sub-normal south-west monsoons as well as drought-like conditions in
some parts of the country. The delayed and erratic monsoons may also have
prevented the seasonal decline in prices, normally seen during the period
from October to March for most food articles other than wheat, from setting
in. At the same time, it could be argued that excessive hype about kharif crop
failure, not taking into account the comfortable situation in respect of food
stocks and the possibility of an improved rabi crop, may have exacerbated
inflationary expectations encouraging hoarding and resulting in a higher
inflation in food items. This is supported by the estimates on shortfall in
production/availability of major food items in 2009-10 for rice and wheat, as
also for some other items, except pulses. In the case of sugar, delay in the
market release of imported raw sugar may have contributed to the overall
uncertainty, thereby allowing prices to rise to unacceptably high levels in
recent months.

The implicit deflator for GDP at market prices defined as the ratio of GDP
at current prices to GDP at constant prices is the most comprehensive
measure of inflation on annual basis, Unlike the WPI, the GDP deflator also
covers prices in the services sector which now accounts for well over 55 per
cent of the GDP. Overall inflation, as measured by the aggregate deflator for
GDPMP, increased from 4.7 per cent in 2005-06 to 5.6 per cent in 2006-07
and then declined to 5.3 per cent in 2007-08, before rising again to 7.2 per
cent in 2008-09. It has been estimated at 3.6 per cent in 2009-10 as per the
advance estimates.

41
 External-sector Developments
The global economy, led by the Asian economies especially China and India,
has shown signs of recovery in fiscal 2009-10. While global trade is gradually
picking up, the other indicators of economic activity such as capital flows,
assets and commodity prices are more buoyant.

As per the latest data for fiscal 2009-10, exports and imports showed
substantial decline during April-September (H1) of 2009-10 vis-à-vis the
corresponding period in 2008-09. However, there has been improvement in
the balance of payments (BoP) situation during H1 of 2009-10 over H1 of
2008-09, reflected in higher net capital inflows and lower trade deficit. The
trade deficit was lower at US$ 58.2 billion during H1 (April-September) of
2009 as compared to US$ 64.4 billion in April-September 2008 mainly on
account of decline in oil import.

The net invisibles surplus (invisibles receipts minus invisibles payments)

stood lower at US$ 39.6 billion during April-September of 2009 as compared
to US$ 48.5 billion during April-September 2008. The current account
deficit increased to US $ 18.6 billion in April-September 2009, despite a
lower trade deficit, as compared to US $ 15.8 billion in April-September
2008, mainly due to the lower net invisibles surplus.

Net capital flows to India at US $ 29.6 billion in April-September 2009

remained higher as compared to US $ 12.0 billion in April-September 2008.
All the components, except loans and banking capital that comprise net
capital flows, showed improvement during April-September 2009 from the
level in the corresponding period of the previous year.

Net inward FDI into India remained buoyant at US$ 21.0 billion during
April-September 2009 (US $ 20.7 billion in April-September 2008) reflecting
better growth performance of the Indian economy. Due to large inward FDI,
the net FDI (inward FDI minus outward FDI) was marginally higher at US$
14.1 billion in April-September 2009, reflecting better growth performance of
the Indian economy.

Portfolio investment mainly comprising foreign institutional investors’

(FIIs) investments and American depository receipts (ADRs)/global
depository receipts (GDRs) witnessed large net inflows (US $ 17.9 billion) in
April-September 2009 (net outflows of US $ 5.5 billion in April-September
2008) due to large purchases by FIIs in the Indian capital market reflecting
revival in growth prospects of the economy and improvement in global
investors’ sentiment.

Given the uncertain global context, the government did not fix an export
target for 2009-10. Instead, the Foreign Trade Policy (FTP) 2009-14 set the

41
 objective of an annual export growth of 15 per cent with an export target of
US$ 200 billion by March 2011. With the deepening of the global recession,
the beginning of 2009-10 saw acceleration in the fall of export growth rate.
The upwardly revised export figures for the first half of 2008-09 also
contributed to the faster decline in the growth rate. While the export growth
rate was a negative 22.3 per cent in April-November 2008-09, in November
2009, it became a positive 18.2 per cent after a 13-month period of negative
growth. This significant turnaround is due to the low base figures in
November 2008 (at $11.2 billion compared to $14.1 billion in October 2008
and $13.4 billion in December 2008). The export growth rate in November
2009 over October 2009 was marginally positive at 0.04 per cent. In
December 2009 the recovery in export growth has continued with a positive
year-on-year growth of 9.3 per cent and a growth of 10.7 per cent over the
previous month.

During 2009-10 (April-December) import growth was a negative 23.6 per

cent accompanied by a decline in both POL and non-POL imports of 29.8 per
cent and 20.7 per cent respectively. Gold and silver imports registered
negative growth of 7.3 per cent primarily on account of the volatility in gold
prices. The continuous rise in prices of gold also dampened the demand. Non-
POL non-bullion imports declined by 22.4 per cent reflecting slowdown in
industrial activity and lower demand for exports. Import growth was at a
positive 27.2 per cent in December 2009 due partly to the base effect and
partly the 42.8 per cent increase in the growth of POL products with the pick-
up in oil prices and industrial demand. Non-POL items also registered a
significant growth in imports at 22.4 per cent, despite a high negative growth
of gold and silver imports.

Trade deficit fell by 28.2 per cent to US$ 76.2 billion (as per customs data)
in 2009-10 (April– December) from US$ 106 billion in the corresponding
period of the previous year. There have been significant changes in the
composition and direction of both exports and imports in this period.

During fiscal 2009-10, foreign exchange reserves increased by US$ 31.5

billion from US$ 252.0 billion in end March 2009 to US$ 283.5 billion in end
December 2009. Out of the total accretion of US$ 31.5 billion, US$ 11.2
billion (35.6 per cent) was on BoP basis (i.e excluding valuation effect),
because of higher inflows under FDI and portfolio investments, while
accretion of US$ 20.3 billion (64.4 per cent) was on account of valuation gain
due to weakness of the US dollar against major currencies.

Besides, the Reserve Bank of India (RBI) concluded the purchase of 200
metric tonnes of gold from the IMF, under the IMF’s limited gold sales
programme at the cost of US$ 6.7 billion in the month of November 2009.
Further, a general allocation of SDR 3,082 million (equivalent to US$ 4,821
million) and a special allocation of SDR 214.6 million (equivalent to US$

41
 340 million) were made to India by the IMF on August 28, 2009 and
September 9, 2009, respectively.

Monetary Policy
Since the outbreak of the global financial crisis in September 2008, the RBI
followed an accommodative monetary policy. In the course of 2009-10, this
stance was principally geared towards supporting early recovery of the
growth momentum, while facilitating the unprecedented borrowing
requirement of the government to fund its fiscal deficit. The fact that the
latter was managed well with nearly two-thirds of the borrowing being
completed in the first half of the fiscal year not only helped in checking
undue pressure on interest rates, but also created the space for the revival of
private investment demand in the second half of the year.

The transmission of monetary policy measures continues to be sluggish and

differential in its impact across various segments of the financial markets.
The downward revisions in policy rates announced by the RBI post-
September 2008 got transmitted into the money and G-Sec markets; however,
the transmission was slow and lagged the in the case of the credit market.
Though lending rates of all categories of banks (public, private and foreign)
declined marginally from March 2009 (with benchmark prime lending rates
[BPLR] of scheduled commercial banks [SCBs] having declined by 25 to 100
basis points), the decline was not sufficient to accelerate the demand for bank
credit. Consequently, while borrowers turned to alternate sources of possibly
cheaper finance to meet their funding needs, banks flush with liquidity parked
their surplus funds under the reverse repo window.

Demand for bank credit/non-food credit remained muted during 2009-10. It

was only from November 2009 that some signs of pick-up became evident.
On financial-year basis (over end March), growth in non-food credit
remained negative till June 2009. It picked up thereafter, only to hover
between 0.0 to 1.8 per cent till mid-September 2009. Consistent growth in
non-food credit was recorded only after November 2009.

Growth in sectoral deployment of gross bank credit on a year-on-year basis

(as on November 20, 2010) shows that retail credit has not picked up during
2009-10. While growth in credit to agriculture remained more or less the
same as on the corresponding date of the preceding year, for the other broad
sectors–industry, personal loans and services—growth in credit decelerated as
compared to the corresponding period of the preceding year.

Fiscal Policy Developments

The fiscal expansion undertaken by the Central government as a part of the
policy response to counter the impact of the global economic slowdown in
2008-09 was continued in fiscal 2009-10. The expansion took the form of tax
relief to boost demand and increased expenditure on public projects to create

41
 employment and public assets. The net result was an increase in fiscal deficit
from 2.6 per cent in 2007-08 to 5.9 per cent of the revised GDP (new series)
in 2008-09 (provisional) and 6.5 per cent in the budget estimates for 2009-10
(as against 6.8 per cent of the GDP on the old series, reported earlier). Thus
the fiscal stimulus amounted to 3.3 per cent of the GDP in 2008-09 and 3.9
per cent in 2009-10 from the level of the fiscal deficit in 2007-08.

As part of the fiscal stimulus, the government also enhanced the borrowing
limits of the State governments by relaxing the targets by 100 basis points. As
a result, the gross fiscal deficit of the States combined rose from 1.4 per cent
of the GDP in 2007-08 to 2.6 per cent in 2008-09 (revised estimates [RE])
and was estimated at 3.2 per cent of the GDP in 2009-10 (BE).

The relative success of the fiscal stimulus in supporting effective demand,

particularly the consumption demand, in 2008-09 and 2009-10 could be
traced to its composition. The approach of the government was to increase the
disposable income in the hands of the people, for instance by effecting
reductions in indirect taxes (excise and service tax) and by expanding public
expenditure on programmes like the National Rural Employment Guarantee
Act (NREGA) and on rural infrastructure.

The implementation of the Sixth Pay Commission recommendations and the

debt relief to farmers also contributed to this end. The fact that the approach
worked is attested to by the GDP growth rate and more specifically by the
growth in private consumption demand in 2008-09 and also in 2009-10 as
reflected in the relevant data on the NAS new series. Consumption
expenditure, by its very nature, has short lags, and affects demand quickly,
with little or no effect on productivity, while productive infrastructure
expenditure takes much longer to translate into effective demand. The
recovery having taken root now necessitates a review of public spending. It
has to be geared towards building medium-term productivity of the economy
and making up for the decline in investment growth in certain sectors of the
economy.

Social-sector Development
Fiscal 2009-10 saw the strengthening of several public initiatives and
programmes with a view to cushioning the impact of the global slowdown on
the more vulnerable segments of the population in the country. While some of
these programmes were a part of the ongoing interventions to give effect to a
more inclusive development strategy, there were some measures that were
undertaken as a direct response to the slowdown of growth, especially in the
tradable sectors of the economy. Thus emphasis in favour of higher allocation
to social-sector development given in recent years continued to be reflected in
the allocations under the Union Budget 2009-10. The share of Central
government expenditure on social services, including rural development in
total expenditure (Plan and non-Plan), increased to 19.46 per cent in 2009-10

41
 (BE) from about 10.46 per cent in 2003-04. Similarly, expenditure on social
services by general government (Centre and States combined) as a proportion
of total expenditure increased from 19.9 per cent in 2004-05 to 23.8 per cent
in 2009-10 (BE).

A major concern was regarding the possibility of a rise in unemployment

due to the slowdown of the economy. While comprehensive employment data
for the current financial year are not available, some sample surveys
conducted by the Labour Bureau, Ministry of Labour and Employment,
government of India, indicated job losses in the wake of the global financial
crisis, which seemed to reverse in later part of 2009-10. Employment is
estimated to have declined by 4.91 lakh during the third quarter (October-
December) of 2008; it increased by 2.76 lakh during January-March 2009,
followed by a decline of 1.31 lakh during April-June 2009, and then an
increase of 4.97 lakh during the second quarter (July-September) 2009.

Under the NREGA, which is a major rural employment initiative, during the
year 2009-10, 4.34 crore households were provided employment till
December 2009.

Road Ahead
There are some deep changes that have taken place in India, which suggest
that the economy’s fundamentals are strong. First, the rates of savings and
investment have reached levels that even ten years ago would have been
dismissed as a pipedream for India. On this important dimension, India is
now completely a part of the world’s fast growing economies.

In 2008-09 gross domestic savings as a percentage of GDP were 32.5 per cent
and gross domestic capital formation 34.9 per cent. These figures, which are a
little lower than what had been achieved before the fiscal stimulus was put
into place, fall comfortably within the range of figures one traditionally
associated with the East Asian economies. Since these indicators are some of
the strongest correlates of growth and do not fluctuate wildly, they speak very
well for India’s medium-term growth prospects. It also has to be kept in mind
that as the demographic dividend begins to pay off in India, with the working
age-group population rising disproportionately over the next two decades, the
savings rate is likely to rise further.

Second, the arrival of India’s corporations in the global market place, and
informal indicators of the sophisticated corporate culture that many of these
companies exhibit, lends to the optimistic prognosis for the economy in the
medium to long run.

In the medium term it is reasonable to expect that the economy will go back
to the robust growth path of around 9 per cent that it was on before the global
crisis slowed it down in 2008. To begin with, there has been a revival in

41
 investment and private consumption demand, though the recovery is yet to
attain the pre-2008 momentum. Second, Indian exports have recorded
impressive growth in November and December 2009 and early indications of
the January 2010 data on exports are also encouraging. Further, infrastructure
services, including railway transport, power, telecommunications and, more
recently but to a lesser extent, civil aviation, have shown a remarkable
turnaround since the second quarter of 2009-10. The favourable capital
market conditions with improvement in capital flows and business
sentiments, as per the RBI’s business expectations survey, are also
encouraging. Finally, the manufacturing sector has been showing a buoyancy
in recent months that was rarely seen before. The growth rate of the index of
industrial production for December 2009 was a remarkable 16.8 per cent.
There is also a substantial pick-up in corporate earnings and profit margins.

Hence, going by simple calculations based on the above-mentioned variables,

coupled with the fact that agriculture did have a set-back in 2009 and is only
gradually getting back to the projected path, a reasonable forecast for the year
2010-11 is that the economy will improve its GDP growth by around 1
percentage point from that witnessed in 2009-10. Thus, allowing for factors
beyond the reach of domestic policy-makers, such as the performance of the
monsoon and rate of recovery of the global economy, the Indian GDP can be
expected to grow around 8.5, with a full recovery breaching the 9 per cent
mark in 2011-12.

Global Tobacco Epidemic

100 million dead in the 20th century. Currently 5.4 million deaths every year.
Unless urgent action is taken: By 2030, there will be more than 8 million
deaths every year. By 2030, more than 80% of tobacco deaths will be in
developing countries. One billion estimated deaths predicted during the 21st
century.

The above statistics are scary, indeed. "Reversing this entirely preventable
epidemic must now rank as a top priority for public health and for political
leaders in every country of the world," according to Dr Margaret Chan, WHO
Director-General.

Tobacco is the only legal consumer product that can harm everyone exposed
to it–and it kills up to half of those who use it as intended. Yet, tobacco use is
common throughout the world due to low prices, aggressive and widespread
marketing, lack of awareness about its dangers, and inconsistent public
policies against its use. Most of tobacco’s damage to health does not become
evident until years or even decades after the onset of use. So, while tobacco
use is rising globally, the epidemic of tobacco-related disease and death has

41
 just begun.

The global consensus that we must fight the tobacco epidemic has already
been established by more than 150 Parties to the WHO Framework
Convention on Tobacco Control. Now, the WHO Report on the Global
Tobacco Epidemic gives countries a roadmap that builds on the WHO
Framework Convention to turn this global consensus into a global reality
through MPOWER, a package of six effective tobacco control policies.

To support MPOWER, WHO and its global partners are providing new
resources to help countries stop the disease, death and economic damage
caused by tobacco use. When implemented and enforced as a package, the six
policies will prevent young people from beginning to smoke, help current
smokers quit, protect non-smokers from exposure to second-hand smoke and
free countries and their people from tobacco’s harm.

The MPOWER package entails:

Monitor tobacco use and prevention policies. Assessment of tobacco use

and its impact must be strengthened. Currently, half of countries – and two in
three in the developing world – do not have even minimal information about
youth and adult tobacco use. Data on other aspects of the epidemic, such as
tobacco-related disease and death, are also inadequate. Good monitoring
provides information about the extent of the epidemic in a country, as well as
how to tailor policies to specific country needs. Both global and country-by-
country monitoring are critical to understanding and reversing the tobacco
epidemic.

Protect people from tobacco smoke. All people have a fundamental right to
breathe clean air. Smoke-free places are essential to protect non-smokers and
also to encourage smokers to quit. Any country, regardless of income level,
can implement smoke-free laws effectively. However, only 5% of the global
population is protected by comprehensive smoke-free legislation. In most
countries, smoke-free laws cover only some indoor spaces, are weakly
written or are poorly enforced. Once enacted and enforced, smoke-free laws
are widely popular, even among smokers, and do not harm businesses. Only a
total ban on smoking in public places and workplaces protects people from
second-hand smoke and helps smokers quit.

Offer help to quit tobacco use. Most of the world’s more than one billion
smokers – about a quarter of all adults – are addicted. Many want to quit, but
few get the help they need. Services to treat tobacco dependence are fully
available in only nine countries, with 5% of the world’s population. Countries
must establish programmes providing low-cost, effective interventions for
tobacco users who want to escape their addiction.

41
 Warn about the dangers of tobacco. Despite conclusive evidence, relatively
few tobacco users understand the full extent of their health risk.
Comprehensive warnings about the dangers of tobacco can change tobacco’s
image, especially among adolescents and young adults. Graphic warnings on
tobacco packaging deter tobacco use, yet only 15 countries, representing 6%
of the world’s population, mandate pictorial warnings (covering at least 30%
of the principal surface area) and just five countries, with a little over 4% of
the world’s people, meet the highest standards for pack warnings. More than
40% of the world’s population lives in countries that do not prevent use of
misleading and deceptive terms such as “light” and “low-tar”, even though
conclusive scientific evidence – which has been known to the tobacco
industry for several decades – shows that such products do not reduce health
risks. This first report has not assessed public education campaigns, which, if
hard-hitting, sophisticated and sustained, are highly effective.

Enforce bans on tobacco advertising, promotion and sponsorship. The

tobacco industry spends tens of billions of dollars world-wide each year on
advertising, promotion and sponsorship. Partial bans on tobacco advertising,
promotion and sponsorship do not work because the industry merely re-
directs its resources to other non-regulated marketing channels. Only a total
ban can reduce tobacco consumption and protect people, particularly youth,
from industry marketing tactics. Only 5% of the world’s population currently
lives in countries with comprehensive bans on tobacco advertising, promotion
and sponsorship. About half the children of the world live in countries that do
not ban free distribution of tobacco products.

Raise taxes on tobacco. Raising taxes, and therefore prices, is the most
effective way to reduce tobacco use, and especially to discourage young
people from using tobacco. It also helps convince tobacco users to quit. Only
four countries, representing 2% of the world’s population, have tax rates
greater than 75% of retail price. And although more than four out of five
high-income countries tax tobacco at 51–75% of retail price, less than a
quarter of low- and middle-income countries tax tobacco at this rate. A 70%
increase in the price of tobacco could prevent up to a quarter of all tobacco-
related deaths world-wide. A 10% price increase may cause a 4% drop in
tobacco consumption in high-income countries and an 8% drop in low- and
middle-income countries, with tobacco tax revenue increasing despite
reduced consumption. Higher taxes can provide countries with funding to
implement and enforce tobacco control policies and can pay for other public
health and social programmes.

For 3.8 billion people living in the low- and middle-income countries for
which information is available, total national tobacco control expenditure was
only US$ 14 million per year. In contrast, tobacco tax revenue for these same
countries was US$ 66.5 billion. In other words, for every US$ 5,000 in
tobacco tax revenue, these countries spent about US$ 1 for tobacco control.

41
 Per capita expenditure on tobacco control in low- and middle-income
countries with available information was less than one tenth of one cent and
about a half a cent, respectively.

The MPOWER package provides tools to take action. What is needed now is
the resolve by political leadership, governments and civil society in every
country to adopt and enact these six policies that have been proven to reduce
tobacco use and its resulting burden of disease and death. Citizens strongly
support tobacco control measures, even in countries with high levels of
tobacco use. In China, for example, the world’s largest producer and
consumer of tobacco, a recent survey found that most urban residents support
establishing smoke-free public places, banning tobacco advertising,
promotion and sponsorship, and raising tobacco taxes.

Tobacco control is not expensive. Tobacco taxes increase government

revenues. Enforcement of smoke-free laws and advertising, promotion and
sponsorship bans do not require large expenditure. Cessation services can be
integrated into the general health-care system.

To counteract the tobacco epidemic, countries must have the political will to
adopt and enforce MPOWER. Despite strong evidence of effectiveness of and
public support for tobacco control measures, only about one in five countries
has fully implemented any of the key five policies – smoke-free
environments, treatment of tobacco dependence, health warnings on
packages, bans on advertising, promotion and sponsorship, and tobacco
taxation – at a level that provides full protection for their populations, and not
a single country has implemented all six at the highest level. If countries
implement and enforce MPOWER, they can prevent millions of people from
being disabled or killed by tobacco.

Economics of Tobacco

Although the tobacco industry claims it creates jobs and generates revenues
that enhance local and national economies, the industry’s overriding
contribution to any country is suffering, disease, death – and economic losses.
Tobacco use currently costs the world hundreds of billions of dollars each
year.

Tobacco-related deaths result in lost economic opportunities. In the United

States, these losses are estimated at US$ 92 billion a year. Lost economic
opportunities in highly populated, developing countries – many of which are
manufacturing centres of the global economy – will be severe as the tobacco
epidemic worsens, because half of all tobacco-related deaths occur during the
prime productive years. The economic cost of tobacco-related deaths imposes
a particular burden on the developing world, where four out of five tobacco
deaths will occur by 2030.1 Data on tobacco’s impact on global health-care

41
 costs are incomplete, but it is known to be high. In the United States, annual
tobacco-related health-care costs are US$ 81 billion, in Germany nearly US$
7 billion and in Australia US$ 1 billion.

The net economic effect of tobacco is to deepen poverty. The industry’s

business objective – to get more customers addicted – disproportionately
hurts the poor. Tobacco use is higher among the poor than the rich in most
countries, and the difference in tobacco use between poor and rich is greatest
in regions where average income is among the lowest.

For the poor, money spent on tobacco means money not spent on basic
necessities such as food, shelter, education and health care. The poorest
households in Bangladesh spend almost 10 times as much on tobacco as on
education. In Indonesia, where smoking is most common among the poor, the
lowest income group spends 15% of its total expenditure on tobacco. In
Egypt, more than 10% of household expenditure in low-income homes is on
tobacco. The poorest 20% of households in Mexico spend nearly 11% of their
household income on tobacco. Medical costs from smoking impoverish more
than 50 million people in China.

The poor are much more likely than the rich to become ill and die
prematurely from tobacco-related illnesses. This creates greater economic
hardship and perpetuates the circle of poverty and illness. Early deaths of
primary wage earners are especially catastrophic for poor families and
communities. When, for example, a 45-year-old Bangladeshi man who heads
a low-income household dies of cancer from a 35-year bidi habit, the survival
of his entire family is at stake. His lost economic capacity is magnified as his
spouse, children and other dependants sink deeper into poverty and
government or extended family members must take on their support.

Helping the addicts

People who are addicted to nicotine are victims of the tobacco epidemic.
Among smokers who are aware of the dangers of tobacco, three out of four
want to quit. Like people dependent on any addictive drug, it is difficult for
most tobacco users to quit on their own and they benefit from help and
support to overcome their dependence.

Countries’ health-care systems hold the primary responsibility for treating

tobacco dependence. Treatment includes various methods, from simple
medical advice to pharmaco-therapy, along with telephone help lines known
as quit lines, and counselling. These treatment methods have differing cost
efficiencies, and do not have a uniform impact on individual tobacco users.
Treatment should be adapted to local conditions and cultures, and tailored to
individual preferences and needs.

41
 In most cases, a few basic treatment interventions can help tobacco users who
want to quit. Three types of treatment should be included in any tobacco
prevention effort: (i) tobacco cessation advice incorporated into primary
health-care services; (ii) easily accessible and free quit lines; and (iii) access
to low-cost pharmacological therapy.

Integrating tobacco cessation into primary health care and other routine
medical visits provides the health-care system with opportunities to remind
users that tobacco harms their health and that of others around them.
Repeated advice at every medical visit reinforces the need to stop using
tobacco.

Well-staffed quit lines should be accessible to a country’s entire population

through toll-free phone numbers and waivers of access charges for mobile
phone users. Quit lines are inexpensive to operate, easily accessible,
confidential and can be staffed for long hours; many tobacco users may be
unable or unwilling to call during business hours. Quit lines also can help
introduce users to other tobacco dependence treatment, such as counselling
and nicotine replacement therapy. Additionally, quit lines can reach
individuals in remote places and can be tailored to specific population groups.
For example, the United Kingdom’s Asian Quit Line receives 20 000 calls a
year and reaches 10% of all South Asian tobacco users in that country.

In addition to medical advice and quit lines, effective treatment can also
include pharmacological treatment such as nicotine replacement therapy in
the form of patches, lozenges, gum and nasal sprays, and prescription
medications such as bupropion and varenicline. Nicotine replacement therapy
is usually available over-the-counter, whereas other drugs require a doctor’s
prescription for them to be dispensed.

Nicotine replacement therapy reduces withdrawal symptoms by substituting

for some of the nicotine absorbed from tobacco. Bupropion, an anti-
depressant, can reduce craving and other negative sensations when tobacco
users cut back or stop their nicotine intake. Varenicline attaches to nicotine
receptors in the brain to prevent the release of dopamine, thus blocking the
sensations of pleasure that people can experience when they smoke.

Pharmacological therapy is generally more expensive and considered to be

less cost effective than physician advice and quit lines, but it has been shown
to double or triple quit rates.

Cessation programmes provide a significant political advantage by enabling

governments to help those most directly affected by the epidemic at the same
time that they are enacting new restrictions on tobacco. They generally
encounter few political obstacles and help foster a national policy of
opposition to tobacco use, an important step in creating a tobacco-free

41
 society. Governments can use some tobacco tax revenues to help users free
themselves from addiction.

New Zealand provides a good example for government action. Following a

lobbying campaign by the tobacco control community, the country went from
offering virtually no tobacco cessation treatment to one of the world’s most
advanced initiatives in only five years, with government spending on
smoking cessation rising from almost zero to US$ 10 million per year. The
initiatives include a national quit line that is now one of the busiest in the
world, subsidized nicotine replacement therapy and quit services focusing on
the minority Maori population.

Implementation status

Only 86 of 193 Member States have recent, nationally representative data for
both adults and youths. More than half of the world’s population lives in
areas that lack even minimally adequate recent information on tobacco use.
Monitoring systems are particularly weak in low- and middle-income
countries; high-income countries are more likely to collect at least minimally
adequate monitoring information (73% of countries) than are middle- (43%)
or low-income (24%) countries. However, basic monitoring need not be
expensive, and is within reach of virtually all countries.

In 44 of the 127 countries with recent and representative adult surveys, data
were collected through international survey tools such as the World Health
Survey or WHO’s STEPwise approach to Surveillance (STEPS). Out of these
127 countries, 25 have sub-national Global Youth Tobacco Survey data and
68 have national Global Youth Tobacco Survey data.

Smoke-free environments are crucial for protecting the health of smokers and
non-smokers alike, as well as for sending a clear message that smoking in
public places is not socially accepted. Smoke-free laws protect workers from
chemicals that cause cancer and change the way blood clots and flows to the
heart, and they provide a strong incentive for smokers to quit. Only
completely smoke-free places, without any indoor smoking areas and with
effective enforcement, can protect workers and the public and also encourage
smokers to quit. Exceptions make enforcement difficult and negate the
effectiveness of smoke-free laws.

Although an increasing number of countries have passed legislation

mandating smoke-free environments, the overwhelming majority of countries
have no smoke-free laws, very limited laws or ineffective enforcement.

More than half of countries, accounting for nearly two thirds of the
population of the world, allow smoking in government offices, workplaces
and other indoor places. Consequently, most office workers worldwide are

41
 forced to breathe other people’s tobacco smoke. Only 24 (13%) of the 179
countries and 1 territory protect restaurant workers from tobacco smoke;
although any country can implement smoke-free laws, the proportion of high-
income countries with smoke-free restaurants (12 of 41, 29%) is more than
three times higher than the proportion of low- and middle-income countries
(and one territory) with similar measures (12 of 139, 9%).

Of the countries reporting smoke-free laws that are moderate or complete,

only one third have even moderate levels of enforcement documented (scores
of 3 or higher out of 10). Only four countries achieved a score of 8 or higher
(out of 10 possible points) and only two countries – Uruguay and New
Zealand – had both comprehensive smoke-free laws and an enforcement
score of 8 or higher. Many countries with completely smoke-free
environments are in Europe.

Some countries have made great strides protecting citizens from second-hand
smoke. In March 2004, Ireland became the first country in the world to create
and enjoy smoke-free indoor work-places and public places, including
restaurants, bars and pubs. Within three months, Norway’s smoke-free
legislation entered into force. Since then, these examples have been followed
by many countries including Italy and Uruguay, along with many cities
across the globe. Most people in Canada, Australia and the United States are
protected by State or local smoke-free legislation.

Conclusion

In summary, only around 5% of the world’s population is covered by any one

of the key interventions of effective advertising, promotion and sponsorship
bans, smoke-free spaces, prominent pack warnings, protection from deceptive
and misleading advertising, promotion and sponsorship, and cessation
support. Governments collect more than US$ 200 billion in tobacco tax
revenues and have the financial resources to expand and strengthen tobacco
control programmes. Further tobacco tax increases can provide additional
funding for these initiatives.

The number of people killed each year by tobacco will double over the next
few decades unless urgent action is taken. But just as the epidemic of
tobacco-caused disease is man-made, people – acting through their
governments and civil society – can reverse the epidemic.

Tobacco is unique among today’s leading public health problems in that the
means to curb the epidemic are clear and within our reach. If countries have
the political commitment and technical and logistic support to implement the
MPOWER policy package, they can save millions of lives.

Because the tobacco industry is far better funded and more politically

41
 powerful than those who advocate to protect children and non-smokers from
tobacco and to help tobacco users quit, much more needs to be done by every
country to reverse the tobacco epidemic. Unless urgent action is taken, more
than one billion people could be killed by tobacco during this century.

Human Development Report, 2009

Challenges Migration Misconceptions
The Human Development Index (HDI) is a summary measure of a country’s
human development. It measures the average achievements in a country in
three basic dimensions:

 a long and healthy life, as measured by life expectancy at birth;

 access to knowledge, as measured by the adult literacy rate and the
combined gross enrolment ratio in education; and
 a decent standard of living, as measured by GDP per capita in
purchasing power parity (PPP) US dollars.

2009 HDI—which uses data for 2007—has been calculated for 182 countries.
Three new countries have been included: Andorra and Liechtenstein, both for
the first time ever, and Afghanistan, for the first time since 1996. The results
presented in the report take account of both new data and revisions to past
series. It is important to note that these HDI results, based on 2007 data, do
not reflect the effects of the global economic crisis, which is expected to have
massive impacts on human development achievements in many countries
around the world.

Norway tops the list, followed by Australia in second position and

Iceland in third—the same positions as 2008. There are few changes in rank
in the top ten and only one newcomer—France—which has displaced
Luxembourg. At the other end of the index, Niger, Afghanistan and Sierra
Leone are respectively in the last three places and have also not changed
ranks between 2006 and 2007.

India continues to be ranked 134. There has been no change in its rank this
year.

The theme of 2009 report was: Overcoming barriers—Human mobility

and development.

The huge differences in human development across and within countries have
been a recurring theme of the Human Development Report (HDR) since it
was first published in 1990. In 2009 report, it explores for the first time the

41
 topic of migration.

According to HDR 2009, for many people in developing countries, moving

away from their home town or village can be the best—sometimes the only—
option open to improve their life chances. Human mobility can be hugely
effective in raising a person’s income, health and education prospects. But its
value is more than that: being able to decide where to live is a key element of
human freedom.

When people move, they embark on a journey of hope and uncertainty,

whether within or across international borders. Most people move in search
of better opportunities, hoping to combine their own talents with resources in
the destination country so as to benefit themselves and their immediate
family, who often accompany or follow them. If they succeed, their initiative
and efforts can also benefit those left behind and the society in which they
make their new home.

But not all do succeed, says the report. Migrants who leave friends and family
may face loneliness, may feel unwelcome among people who fear or resent
newcomers, may lose their jobs or fall ill and thus be unable to access the
support services they need in order to prosper.

The 2009 HDR explores how better policies towards human mobility can
enhance human development. It lays out the case for governments to reduce
restrictions on movement within and across their borders, so as to expand
human choices and freedoms. It argues for practical measures that can
improve prospects on arrival, which in turn will have large benefits both for
destination communities and for places of origin.

According to HDR 2009, most movement in the world does not take place
between developing and developed countries; it does not even take place
between countries. The overwhelming majority of people who move do so
inside their own country. Using a conservative definition, the report estimates
that approximately 740 million people are internal migrants—almost four
times as many as those who have moved internationally. Among people who
have moved across national borders, just over a third moved from a
developing to a developed country—fewer than 70 million people. Most of
the world’s 200 million international migrants moved from one developing
country to another or between developed countries.

People displaced by insecurity and conflict face special challenges, the report
says. There are an estimated 14 million refugees living outside their country
of citizenship, representing about 7 percent of the world’s migrants. Most
remain near the country they fled, typically living in camps until conditions at
home allow their return, but around half a million per year travel to
developed countries and seek asylum there. A much larger number, some 26

41
 million, have been internally displaced. They have crossed no frontiers, but
may face special difficulties away from home in a country riven by conflict or
racked by natural disasters. Another vulnerable group consists of people—
mainly young women—who have been trafficked.

In general, however, people move of their own volition, to better-off places.

More than three quarters of international migrants go to a country with a
higher level of human development than their country of origin, the report
adds. Yet, they are significantly constrained, both by policies that impose
barriers to entry and by the resources they have available to enable their
move.

People in poor countries are the least mobile: for example, fewer than 1
percent of Africans have moved to Europe. Indeed, history and contemporary
evidence suggest that development and migration go hand in hand: the
median emigration rate in a country with low human development is below 4
percent, compared to more than 8 percent from countries with high levels of
human development.

According to HDR 2009, demographic trends—an aging population in

developed countries and young, still-rising populations in developing
countries—and growing employment opportunities, combined with cheaper
communications and transport, have increased the ‘demand’ for migration.
However, those wishing to migrate have increasingly come up against
government-imposed barriers to movement.

Another interesting fact brought out by the report is that an estimated 50

million people today are living and working abroad with irregular status.
Some countries, such as Thailand and the United States, tolerate large
numbers of unauthorized workers. This may allow those individuals to access
better paying jobs than at home, but although they often do the same work
and pay the same taxes as local residents, they may lack access to basic
services and face the risk of being deported. Some governments, such as
those of Italy and Spain, have recognized that unskilled migrants contribute
to their societies and have regularized the status of those in work, while other
countries, such as Canada and New Zealand, have well designed seasonal
migrant programmes for sectors such as agriculture.

HDR 2009 argues that migrants boost economic output, at little or no cost to
locals. Indeed, there may be broader positive effects, for instance when the
availability of migrants for childcare allows resident mothers to work outside
the home. As migrants acquire the language and other skills needed to move
up the income ladder, many integrate quite naturally, making fears about
inassimilable foreigners seem unwarranted. Yet it is also true that many
migrants face systemic disadvantages, making it difficult or impossible for
them to access local services on equal terms with local people. And these

41
 problems are especially severe for temporary and irregular workers.

In migrants’ countries of origin, the impacts of movement are felt in higher

incomes and consumption, better education and improved health, as well as at
a broader cultural and social level. Moving generally brings benefits, most
directly in the form of remittances sent to immediate family members.
However, the benefits are also spread more broadly as remittances are spent
—thereby generating jobs for local workers—and as behaviour changes in
response to ideas from abroad.

HDR 2009 believes that large gains to human development can be achieved
by lowering the barriers to movement and improving the treatment of movers.
A bold vision is needed to realize these gains.

Overcoming Barriers lays out a core package of reforms, which comprises six
‘pillars’. Each pillar is beneficial on its own, but together these offer the best
chance of maximizing the human development impacts of migration:

1. Liberalizing and simplifying regular channels that allow people with

low skills to seek work abroad;
2. Ensuring basic rights for migrants;
3. Reducing transaction costs associated with migration;
4. Improving outcomes for migrants and destination communities;
5. Enabling benefits from internal mobility; and
6. Making mobility an integral part of national development strategies.

While the report agrees that migration is not a substitute for broader
development efforts, it can be a vital strategy for households and families
seeking to diversify and improve their livelihoods, especially in developing
countries. Governments need to recognize this potential and should integrate
migration with other aspects of national development policy.

The Road Ahead

The report says, for origin countries, more systematic consideration of the
profile of migration and its benefits, costs and risks would provide a better
basis for integrating movement into national development strategies.
Emigration is not an alternative to accelerated development efforts at home,
but mobility can facilitate access to ideas, knowledge and resources that can
complement and in some cases enhance progress.

For destination countries, the ‘how and when’ of reforms will depend on a
realistic look at economic and social conditions, taking into account public
opinion and political constraints at local and national levels.

International cooperation, especially through bilateral or regional agreements,

can lead to better migration management, improved protection of migrants’

41
 rights and enhanced contributions of migrants to both origin and destination
countries.

In terms of international migration, the Report does not advocate wholesale

liberalization, since people at destination places have a right to shape their
societies; but it argues that there is a strong case for increased access for
sectors with a high demand for labour, including for the low-skilled. This is
particularly important for developed countries because their populations are
ageing—and this may increase the demand for migrant workers.

Urbanisation: A Daunting Challenge

Urbanisation has been a problem in India for quite sometime and the city
governments in the country have always struggled to solve the problems like
growth of slums,  management of solid waste, water supply, street lighting,
locating the street vendors etc. With the cities contributing more than 65 per
cent of the GDP in the recent years, the government has now begun to look at
the urban areas as engines of growth. With rapidly increasing population in
the urban areas and insurmountable problems, urbanisation has emerged as
one of the most serious challenges before the planners.

Migration to cities is considered to be a serious problem and most of the

political parties as well as the municipal bodies are generally interested in
reversing this trend of rapid urbanization. But migration is not the only reason
for growth of the cities. Internal growth of cities and inclusion of the
periphery areas are two other reasons for growth of the urban areas. It is
expected that in the coming two decades, the urban population share in the
total population of the country would increase to 50 per cent.

Rural poor come to the cities and towns to look for productive work with a
view to get two square meals for their families and secure better education for
their children. They also migrate to the cities to ensure that they are able to
lead a better life than their forefathers and the cities act as the dream
destinations for the poor for a better tomorrow. But more often than not, their
dreams get shattered as they arrive in the cities. They are hassled by the
problems like lack of affordable housing, lack of availability of clean
drinking water, lack of cleanliness, sanitation and other civic amenities.

The question is—can we envisage the transformation of the modern day cities
in the country without appreciating the contribution of the poorer sections in
the overall growth of cities? They render required and important services like
household assistance, street sweeping, solid waste disposal, delivery of
newspapers, delivery of milk and other food articles and vegetables etc.  But
this important segment of urban population cannot get land security for their

41
 dwellings and are generally bereft of even bare minimum urban services in
the vicinity of localities where they live.
There is thus a dire need for having the provision of housing for the urban
poor. While the cities and towns keep coming out with various housing
projects for the upper and middle classes, housing schemes for the urban poor
and the low income groups generally do not exist. More often than not, the
poor are required to be uprooted from their slums whenever a new scheme of
infrastructure or housing is planned in any city. This trend needs to be
reversed.

Lack of civic amenities is yet another problem. As per a slum census only
65.4 per cent of the households in the cities and towns had access to drinking
water within their premises. Remaining households either had the water
supply source outside their premises or away from their houses.
Source of lighting is another important area which was surveyed during the
census. Though the percentage of households having an electric source of
energy was much higher than in the rural areas, yet more than 12 per cent of
the households in the urban areas did not have an electric source of lighting
and have to depend on other sources like kerosene.  About 0.4 per cent of the
households in cities and towns have no source of lighting at all.

Availability of education facilities in the urban areas is also a key area,

particularly for the poor. While the affluent and upper middle classes
normally have best of educational facilities available to them in the cities, the
poorer sections find it hard to have access even to basic educational facilities.
The level of male and female literacy rates in the slum areas is distinctly
lower than non-slum population of cities, with Patna recording highest
difference of almost 30 per cent between the level of literacy rates in slum
and non-slum areas of the city.

Lack of good healthcare facilities is also an area of serious concern. The Task
Force appointed by the government of India to advise on health scenario in
the urban slums has pointed out that 6 out of 10 children in slum areas are
delivered at home in Indian slums. Further, more than half of India’s urban
poor children are underweight and the state of under-nutrition in urban areas
is worse than in the rural areas. Reach and utilisation of essential preventive
health services by the urban poor is generally found to be very low and about
60 per cent of the children below one year of age are not fully immunized.
Only 4 per cent couples use birth spacing methods.
In addition to the above mentioned problems pertaining to urban and social
services, there are serious gaps in the availability of infrastructure facilities in
urban areas. Roads are getting congested with more and more new vehicles
getting registered every day and parking has become a serious problem in
most urban areas. Solid waste management is also a serious problem in the
country, particularly in the cities. Safe disposal of the solid waste in a
scientific manner is a major issue in Indian cities and towns. With over 400

41
 million people living in urban areas and generating millions of tonnes of
garbage every day, without proper arrangements for safe disposal of the
garbage serious problem of water contamination and environment pollution is
on the anvil. The problem is worst in the areas inhabited by the poor and in
the slums.
 
The Road Ahead
For the last about six decades, the government has focused on rural
development and rural poverty alleviation. Billions of rupees have been spent
but even after 60 years of concentration on this sector, the absolute number of
rural poor in the country has actually increased. The government is now
viewing the urbanisation process as an alternative strategy to eradicate rural
poverty. Growth rate of population in the cities in the country is much higher
than the general growth rate of population in the country and there is a need
to strengthen the cities and towns to be able to brace up to the challenges
ahead.

The government of India, in December, 2005, launched an ambitious

programme called Jawaharlal Nehru National Urban Renewal Mission
(JNNURM), for renewal of Indian cities on sustainable basis. 63 cities have
been chosen under the Mission. There are also two sub-missions. First sub-
mission aims at strengthening the urban infrastructure like water supply,
sewerage, traffic flow, de-congestion, scientific solid waste management,
proper storm water drainage, preservation of heritage etc. Second sub-mission
is aimed at providing basic services to the urban poor, including proper
housing at affordable rates and up-gradation of slums to ensure that all the
slum areas in the mission cities are provided with the same level of facilities
as are available to the better areas in the Mission cities.

Funding pattern under the JNNURM is that for the States of the north east 90
per cent of the cost of projects approved under the mission is to be provided
by the Union government as grant in aid and the remaining amount has to be
pooled in by the Urban Local Body (ULB) concerned and the State
government. For other hill States and the cities with less than one million
population, the percentage of ACA is 80 per cent. For cities with population
between one million and four million, the ACA is 50 per cent of the project
cost, while the same for the cities with over four million population is 35 per
cent. It is expected that after including the State and ULB share, during the
mission period (upto 2012-13), more than Rs 1,50,000 crore would be spent
for up-gradation of urban infrastructure and for providing basic services for
urban poor in the Mission cities. In addition to the JNNURM funding and
projects, the city administration has to make special efforts to make sure that
the challenges of urbanization are met and the cities and towns are able to
cope up with the urban problems in the years to come.

41
 Agriculture and Food Management in India
The performance of the agricultural sector influences the growth of the Indian
economy. Agriculture (including allied activities) accounted for 17.8 per cent
of the Gross Domestic Product (GDP-at constant prices) in 2007-08, as
compared to 21.7 per cent in 2003-04.

Notwithstanding the fact that the share of this sector in GDP has been
declining over the years, its role remains critical as it accounts for about 52
per cent of the employment in the country. Apart from being the provider of
food and fodder, its importance also stems from the raw materials that it
provides to industry. The prosperity of the rural economy is also closely
linked to agriculture and allied activities. The rural sector (including
agriculture) is being increasingly seen as a potential source of domestic
demand; a recognition, that is shaping the marketing strategies of
entrepreneurs wishing to widen the demand for goods and services.

In terms of composition, out of the total share of 17.8 per cent in GDP in
2007-08 for the agriculture and allied activities sector, agriculture alone
accounted for 16.3 per cent of GDP, followed by fishing at 0.8 per cent
and forestry and logging at 0.7 per cent of GDP.

Area, Production and Yield

Growth in the production of agricultural crops depends on acreage and yield.
Limitations in the expansion of agricultural land suggest that increase in gross
cropped area can come from multiple cropping. In view of this, the main
source of long-term output growth is improvement in yield.

Compound growth rates of index of area under rice showed a negative growth
of (-) 0.1 per cent per annum during 2001-08, compared to the 1990s. Area
under rice cultivation has remained more or less stagnant in the recent years
while growth in yield has shown an increase.

Area under wheat, that was around 25 million hectares in 2002-03, increased
to 26.4 million hectares in 2005-06 and further to 28 million hectares in
2007-08. The coverage under irrigation has been about 87 to 89 per cent of
area for wheat. The compound growth rates of indices of area, production and
yield of wheat during 1991-2000 and 2001-08 show a perceptible decline.

Cotton occupies an important place among the cash crops in India. Cotton is
grown in nine major States namely, Punjab, Haryana, North Rajasthan,
Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and
Tamil Nadu. Area under cotton increased from 7.60 million hectares in 2003-
04 to 9.43 million hectares in 2007-08. The yield of cotton went up from 307
kgs per hectare in 2003-04 to 466 kgs per hectare in 2007-08. The compound

41
 growth in index of yield has shown an increase from (-) 0.4 per cent during
the 1990s to 15.8 per cent during 2001-08. However, the growth in index of
area moderated, but remained positive. The combined effect on index of
production was an increase in growth from 2.3 per cent during the 1990s to
17.5 per cent during 2001-08.

During 2008-09 the area sown at all-India level under kharif was 2.3 per cent
less than the area sown in 2007-08 of 1,039.23 lakh hectares. As on March
27, 2009, area sown under all rabi crops taken together has been reported to
be higher at 638.33 lakh hectares, as compared to 619.68 lakh hectares in the
corresponding period of 2007-08.

Agricultural Inputs
Improvement in yield, which is a key to long-term growth, depends on a host
of factors that include technology, use of quality seeds, fertilizers and
pesticides and micro-nutrients, and, not the least, irrigation. Each of these
plays a role in determining the yield level and in turn the augmentation in the
level of production.

The first decisive step that a farmer takes relates to sowing. The availability
of quality seeds (among other factors) makes a critical difference to output
growth. In India, more than four-fifths of the farmers rely on farm-saved
seeds, leading to a low seed replacement rate.

The Indian Seed Programme includes the participation of Central and State
governments, the Indian Council of Agricultural Research (ICAR), State
agricultural universities and the cooperatives and private players. There are
15 State seed corporations besides two national level corporations, viz. the
National Seeds Corporation and the State Farms Corporation of India. Indian
seeds programme recognizes three kinds of seed generation, viz. breeder,
foundation and certified seeds. Production of breeder and foundation seeds
during 2008-09 is anticipated at 1.00 lakh quintals and 9.69 lakh quintals,
respectively, and the distribution of certified/quality seeds at about 190.0 lakh
quintals.

The Ministry of Agriculture is implementing a Central sector scheme,

“Development and Strengthening of Infrastructure Facilities for Production
and Distribution of Quality Seeds”, on all-India basis since 2005-06. The
scheme is aimed at making available quality seeds of various crops to the
farmers at affordable price, and in time, so as to enhance seed replacement
rate, boost seed production in private sector and help the public sector seed
companies to contribute in enhancing seed production.

A major thrust under the scheme is on improving quality of farm-saved seeds

through “Seed Village Programme,” under which more than 25,000 seed
villages have been organized during 2008-09 across the country.

41
 Certified/quality seed production has increased from 194.31 lakh quintals
during 200607 to 250.35 lakh quintals during 2008-09.

The seed component of the Prime Minister’s Relief Package for distressed
farmers is being implemented in 31 suicide-affected districts in four States of
Maharashtra, Andhra Pradesh, Karnataka and Kerala. Under the scheme,
certified seeds are supplied at 50 per cent of the seed cost to the farmers in
such affected districts. During the year 2008-09, an amount of Rs. 445.81
crore was released under the PM’s Relief Package.

The Protection of Plant Varieties and Farmers’ Rights (PPV&FR)

Authority was established in November 2005. The Authority has the
mandate to implement provisions of the PPV&FR Act, 2001. Fourteen crops,
namely, rice, bread wheat, maize, sorghum, pearl millet, chickpea, pigeon
pea, green gram, black gram, lentil, field pea, kidney bean, cotton and jute
were notified for the purpose of registration under the Act. The Authority has
plans to extend its coverage to forestry, aromatic agriculture and food
management and medicinal plants.

In response to the changes that have taken place in the seed sector, the
existing Seeds Act, 1966 is proposed to be replaced by a suitable legislation
to, inter alia, (i) create a facilitative climate for growth of the seed industry so
as to enhance seed replacement rates, boost the export of seeds and encourage
import of useful germplasm, create a conducive atmosphere for application of
frontier sciences in varietal development and for enhanced investment in
related R&D.

Irrigation
The government of India has taken up irrigation potential creation through
public funding and assisting farmers to create potential on their own farms.
Substantial irrigation potential has been created through major and medium
irrigation schemes. The total irrigation potential in the country has
increased from 81.1 million hectares in 1991-92 to 102.08 million
hectares up to the end of the Tenth Five Year Plan (2006-07). Of the total
potential created, however, only 87.2 million hectares is actually utilized. The
Working Group on Water Resources for the Eleventh Five Year Plan (2007-
12) has proposed creation of irrigation potential of 16 million hectares (9
million hectares from MMI sector and 7 million hectares from MI sector)
during the Eleventh Five Year Plan period.

The Central government has also initiated the Accelerated Irrigation

Benefit Programme (AIBP) from 1996-97 for extending assistance for the
completion of irrigation schemes remaining incomplete. Under the
programme the project approved by the Planning Commission are eligible for
assistance. In 2008-09, Rs. 2,791 crore was released to AIBP for major and
medium irrigation schemes up to December 2008.

41
 Fertilizers
Chemical fertilizers have played a significant role in the development of the
agricultural sector. The per hectare consumption of fertilizers in nutrient
terms stood at 117.07 kg in 2007-08. However, recent trends in agricultural
productivity show a decline in marginal productivity of soil in relation to the
application of fertilizers and in some cases has also become negative. Some
of the evident factors contributing to the decline in marginal productivity are:
skewed NPK application ratio in the country, comparatively higher
application of straight fertilizers like urea, DAP and MOP as against the
complex fertilizers (NPKs) which are considered to be ergonomically better
and more balanced fertilizer products. Lack of application of proper nutrients
based on soil analysis has also contributed to slowdown in growth of
productivity.

The domestic production of urea in the year 2008-09 was 199.22 lakh
tonnes, as compared to 187.27 lakh tonnes in 2002-03, whereas that of DAP
declined in 2008-09 to 29.33 lakh tonnes, after reaching a peak of 52.36 lakh
tonnes in 2002-03, mainly because of shift from DAP production to complex
fertilizer production.

Availability of raw material/intermediates has also been a major bottleneck

towards increase in production. There is no domestic production of MOP and
its requirement is met fully by import.

The government has taken various policy initiatives for the fertilizer sector.
These cover pricing policy for indigenous urea, new investments in urea
sector, nutrient-based pricing, production and availability of fortified and
coated fertilizers, uniform freight subsidy on all fertilizers under the fertilizer
subsidy regime, concession scheme for decontrolled phosphatic and potassic
fertilizers, inclusion of Mono Ammonium Phosphate (MAP), Tri Super
Phosphate (TSP) and Ammonium Sulphate (AS) in the concession scheme,
revised scheme for concession for Single Super Phosphate (SSP) based on
inputs cost and a uniform all-India maximum retail price of Rs. 3,400 per
tonne for SSP, policy for conversion of FO/LSHS urea units to natural gas.

National Food Security Mission

The National Food Security Mission (NFSM) is being implemented in 312
identified districts of 17 States of the country. The NFSM-Rice is being
implemented in 136 districts of 14 States i.e. Andhra Pradesh, Assam, Bihar,
Chhattisgarh, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh,
Maharashtra, Orissa, Tamil Nadu, Uttar Pradesh and West Bengal. The
interventions covered under NFSM-Rice include demonstrations on improved
practices; system of rice intensification; promotion of hybrid rice-production
and distribution; distribution of HYV seeds; seed mini-kits; micro-nutrients;
liming; conoweeders; zero till seed drills; multi-crop planters; seed drills;

41
 rotavators, diesel pump sets, power weeders, knap sack sprayers; plant
protection chemicals and bio-pesticides; farmers’ field schools; local
initiatives; award for best performing districts; mass media campaign;
international exposures for technical knowledge enrichment and project
management team. NFSM-Wheat is being implemented in 141 districts of 9
State—Bihar, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Punjab,
Rajasthan, Uttar Pradesh and West Bengal.

The Rashtriya Krishi Vikas Yojana

Under the Scheme of RKVY, the following indicative broad activities have
been identified for focused attention–Integrated Development of Food Crops,
including coarse cereals, minor millets and pulses; agriculture mechanization;
soil health and productivity; development of rain-fed farming systems;
integrated pest management; market infrastructure; horticulture; animal
husbandry, dairying and fisheries; Concept to completion projects that have
definite timelines; support to institutions that promote agriculture and
horticulture, etc.; organic and bio-fertilizers; and innovative schemes. During
2007-08, an outlay of Rs. 1,500 crore was approved of which an amount of
Rs. 1,246.89 crore, including Rs. 48 crore at Rs. 10 lakh per district for
preparation of District Agriculture Plan (DAP), was released to the States.
For the year 2008-09, an outlay of Rs. 2,891.70 crore has been provided at
revised estimate (RE) stage and an amount of Rs. 2,886.80 crore has been
released to the eligible States as on March 31, 2009.

Information Availability
Timely availability of reliable information on agricultural output is of great
significance for planning and policy making. The existing system of
agricultural statistics, in spite of established procedures and wide coverage,
has inherent limitations in the matter of providing an objective assessment of
crops at the pre-harvesting stages, with the desired spatial details which are
essential to identify problem areas and the nature of required interventions in
terms of spatial, temporal and qualitative inferences. Capabilities of the
existing system of crop forecasts and crop estimation can be enhanced with
the introduction of technological advancements and the adoption of emerging
methodologies. In turn, an efficient and sound information mechanism can
assist considerably in the management of concerns in areas such as food
security, price stability, international trade, etc. Remote Sensing (RS),
Information and Communication Technology (ICT) and Geographic
Information System (GIS) can be used towards this end. Schemes/projects
like Forecasting Agricultural Output using Space, Agro-meteorology and
Land-based Observations (FASAL) and Extended Range Forecasting System
(ERFS) have been initiated to establish a more scientific and reliable basis for
forecasting.

In 1987, the Department of Agriculture and Cooperation (DAC) sponsored a

project called “Crop Acreage and Production Estimates (CAPE)” with the

41
 objective of developing methodologies using the RS techniques for crop area
and production forecasting. The project was implemented through the Space
Applications Centre (SAC), Ahmedabad and provided a platform for
development and standardization of basic procedures, models and software
packages for crop area and production forecasting, using remote sensing and
weather data. The concept of FASAL seeks to strengthen the current
capabilities of early and in-season crop estimation capabilities from
econometric and weather-based techniques with remote sensing applications.

Keeping in view the expertise needed, some of the functions under the
scheme have been outsourced. For example, forecasting of area and
production of major crops using Remote Sensing technology is being handled
by SAC, and forecast of production based on econometric modelling is being
done by the Institute of Economic Growth (IEG), New Delhi. The activities
relating to forecast of production based on crop growth and yield modelling
by making use of the agro-met data has been assigned to the India
Meteorological Department (IMD). All other functions, including
coordination with various groups are being performed by the National Crop
Forecasting Centre (NCFC) in the Ministry of Agriculture. Experimental
forecasts based on econometric models and forecast based on RS technology
for specific crops have commenced.

Agriculture Insurance
The frequency and severity of droughts, floods and cyclones and rising
temperatures, agro-climatic variations and erratic rainfall accentuates
uncertainty and risk in the agricultural sector leading to huge losses in
agricultural production and the livestock population in India.

The National Insurance Scheme (NAIS) for crops has been implemented
from rabi 1999-2000 season. Under the scheme and until rabi 2007-08, an
area of 184 million hectares of about 1,155 lakh farmers have been covered
and a sum of Rs. 1,21,606 crore insured. Claims to the tune of about Rs.
11,607 crore have been reported against premium income of about Rs. 3,626
crore, benefitting 302 lakh families.

Under the Weather Based Crop Insurance Scheme (WBCIS) being

implemented by the Agriculture Insurance Company of India Ltd. (AIC), 10
States have been covered on pilot basis during the kharif 2008 season. About
1.4 lakh farmers with 1.87 lakh hectares of cropped area were insured for a
sum of Rs. 309 crore generating a premium of Rs. 31.5 crore (including
subsidy, farmers’ share of premium is Rs. 11.82 crore). This pilot is being
continued in rabi 2008-09. In addition to AIC, private insurers like ICICI-
LOMBARD General Insurance Company and IFFCO-TOKIO General
Insurance Company have also been included for implementation of the
scheme in selected areas.

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 National Policy for Farmers, 2007
Major policy provisions of the National Policy for Farmers, 2007, include
provisions for asset reforms, water use efficiency, use of technology, inputs
and services like soil health: good quality seeds, disease free planting
material, support services for women, credit, insurance etc. Provisions have
also been made for National Agricultural Bio-security System, setting up of
farm schools in the fields of outstanding farmers to promote farmer to farmer
learning and to strengthen extension services and expanding food security
basket to include nutritious crops like bajra, jowar, ragi and millets, which
are mostly grown in dry land areas. A comprehensive National Social
Security Scheme for the farmers for ensuring livelihood security, by taking
care of insurance needs on account of illness, old age, is included.

Food Management
Food management in India has three basic objectives viz. procurement of
food-grains from farmers at remunerative prices, distribution of food-grains
to the consumers particularly the vulnerable sections of the society at
affordable prices and maintenance of food buffers for food security and price
stability. The instruments for food management are the Minimum Support
Price (MSP) and Central Issue Price (CIP). The focus is on incentivizing
farmers by ensuring fair value for their produce through the Minimum
Support Price mechanism, distribution of food-grains at subsidized rates to
6.52 crore BPL families, covering all households at the risk of hunger under
Antyodaya Anna Yojana (AAY), establishing grain banks in chronically
food-scarce areas and strengthening the Public Distribution System (PDS).
The nodal agency which undertakes procurement, distribution and storage of
food-grains is the Food Corporation of India (FCI). Procurement at MSP is
open-ended, while distribution is governed by the scale of allocation and its
off-take by the beneficiaries.

Challenges and Outlook

The agriculture sector faces challenges on various fronts. On the supply side,
the yield of most crops has not improved significantly and in some cases
fluctuated downwards. The scope for increase in the net sown area is limited
and farm size has been shrinking. In the case of certain crops like sugarcane,
extreme variability in the acreage and production over the years has been a
matter of concern. On the other hand, in the case of pulses, production has
just not kept pace with the requirement leading to a rise in prices given that
its availability in the international markets is limited.

Therefore, there is clearly a need for a renewed focus on improving

productivity, and at the same time, to step up the growth of allied activities
and non-farm activities that can help improve value addition. The current
focus on developing rural infrastructure, particularly rural roads, needs to be
maintained as it would go a long way in providing connectivity that is
essential for movement of agricultural produce. The irrigation sector requires

41
 a renewed thrust, both in terms of investment as also modern management.
There is considerable scope for development of micro-irrigation systems and
watersheds and in the use of a participatory approach for achieving the same.

There is also a need to narrow the gap between producer prices and consumer
prices through proper marketing support. The development of marketing
infrastructure and storage and warehousing and cold chains and spot markets
that are driven by modern technology will go a long way in addressing this
need.

As per the Report of the Committee on Financial Inclusion (January 2008),

more than 73 per cent of farmer households have no access to formal sources
of credit. Innovative institutional mechanisms that provide credit and
financial products (including insurance products) specifically designed to
meet the needs of the farm sector, keeping their risk-bearing ability in view,
is the need of the hour.

The rural economy needs to be viewed as comprising of a continuum of

interrelated economic activities. Farming needs to be dovetailed with viable
off-farm and non-farm activities. Farmers need to be facilitated to take up
value addition such as processing of agricultural produce, horticulture,
pisciculture, poultry, and development of non-farm rural enterprises.

On the distribution side, there is need to ensure that benefits accrue to the
targeted population. A mission approach for promotion of smart cards and its
cross reference with ration cards and voter ID cards would help better
targeting, lesser leakages and easier administration.

An area that requires focused attention is the issue of sustainability of

agriculture with due emphasis on environmental concerns. Soil erosion, water
logging, reduction in ground-water table and the decline in the surface
irrigation are the problems faced by agriculture. The consequences of climate
change on Indian agriculture also need to be factored in the strategy for the
development of this sector.

Secularism in India
“I do not expect India of my dreams to develop one religion, i.e., to be wholly Hindu or wholly
Christian or wholly Mussalman, but I want it to be wholly tolerant, with its religions working
side by side with one another.’’
             —Mahatma Gandhi

On paper, India is unquestionably a secular State with secure constitutional guarantees for all
citizens. Yet, at a social and political level secularism seems an abstraction. There is a serious

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 contradiction between the secular goal of the Indian Constitution and the growing
communalisation of its polity.

Secularism cannot be defined without relating it to the socio-political context. What is true in the
western context, may not be necessarily valid in Indian context and vice versa. Secularism, in
philosophy and politics, is rejection of religious and sacred forms and practices in favour of
rational assessment and decision-making. In Europe and North America, secularism can be
traced to the 18th-century Age of Enlightenment or Age of Reason. Enlightenment thinkers
attacked classical traditions and religious authority. In particular, they argued that the separation
of Church and State would enable the free exercise of human intellectual capacities and
imagination, and would bring about government by reason, rather than by tradition and dogma. 
The State, which was subservient to Church, till then, was able to free itself from domination of
papal authority, after a long struggle.

Western dictionaries define “secularism” as the absence of religion, but Indian secularism means
a profusion of religions, none of which is privileged by the State. Secularism in India does not
mean irreligiousness, rather it means multi-religiousness.

However, the Indian society was very different from the European society in its socio-religious
structure and could not, therefore, imitate the western model of secularism. It had to evolve its
own model of secularism from its own experimental context. Since there was not any struggle
against any established religious authority, there was no question of any resentment against
religion. Also, India was rich in pluralistic traditions, and mainly relied on them for developing
its concept of secularism.

Indian pluralism is best summed up in two maxims: ekam sad vipra bahula vadanti (i.e. That
which exists is one; sages call it by various names) and sarva dharma sambhava (All religions
should be equally respected).

Thus, right from the beginning, Indian secularism drew its strength from pluralism. It was the
religious community, rather than the religious authority, which mattered in the Indian context of
secularism. The saner leaders of both the communities emphasized justice in power-sharing,
without questioning the religious authority of either community.

In fact, the leaders of minority communities feared domination by the majority community and
interference in their religious affairs. The leaders of the majority community, on the other hand,
sought to assuage the feelings of minority communities by assuring them they would be free to
follow their own religions. Such leaders were called secular, while those of the majority
community who resented unrestricted religious freedom for minorities were called communal. (a
loose definition) Thus, in Indian secularism an anti-religious attitude did not play a part.

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 When the concept of secularism came to be accepted in Indian politics, beginning with later part
of 19th century, Indian society was deeply religious and people jealously guarded their religious
rites as well as religious identities. Even the modern reform movements launched by Raja
Rammohan Roy and Sir Syed, both in the Hindu and Muslim societies, were launched within the
framework of respective religions. The leaders of freedom movement, like Tilak, Mahatma
Gandhi, Maulana Azad and others were all believers themselves and adopted the religious idiom
to mobilize the Indian masses for the freedom struggle.

For Gandhiji, the basis of Hindu-Muslim unity was also religion. The political unity, in his view,
should also be based on one’s religious duty to unite with other human beings. He wrote in the
Harijan of July 6, 1947 that “....by trying to befriend Muslims I have only proved myself a true
Hindu and have rightly served the Hindus and Hinduism. The essence of true religious teachings
is that one should serve and befriend all”. To strengthen his point then he goes on to quote a
couplet—from Iqbal’s famous poem Naya Shivala: "Mazhab nahin sikhata aapas mein bayr
rakhna", meaning, religion does not teach us to bear ill-will towards one another.

Constitutional concept
Differing views of national leaders meant that the form of secularism that found expression in
the Constitution after independence was ambiguous. The result was that the Constitution sought
to do several things. It made some allowance for the role played by religion, especially
Hinduism, in Indian life. It also gave statutory recognition to minorities, thereby implicitly
accepting the existence of a majority. It aimed to foster a common civic identity, but then
compromised this by the provision of reserved seats in legislatures to Scheduled Castes and
Scheduled Tribes (initially meant to last 10 years, no Parliament has contempla-ted doing away
with this and its regular extension has become a formality).

Though our Constitution is secular, originally the word ‘secular’ found only a single casual
mention in the document of 1950. The reference was to “economic, financial, political or other
secular activity” in Article 25(2a) and the usage followed the standard dictionary meaning. It was
only during the emergency in mid-seventies, during Congress party rule, that the words “secular
and socialist” were added.  The secular objective of the State was specifically expressed by
inserting the word ‘secular’ in the Preamble of the Constitution (42nd Amendment) Act, 1976.
But the word ‘secular’ was not defined, although it was given official (not Constitutional but
operational) expression in the State practice of maintaining equidistance from all religions, or
paying equal respect to all religions, not favouring one at the cost of another. Thus, the unity and
fraternity of the people of India, professing numerous faiths, was sought to be achieved by
enshrining the ideal of a ‘secular State’, which means that the State protects all religions equally
and does not itself uphold any religion as the State religion.

Thus, the spirit of Indian secularism is not denial of any religion or religious practice, but religio-
cultural pluralism. It is certainly better than atheistic secularism as the latter does not admit the

41
 right of citizens to believe.

Critique
Uneven benefits of modernization and industrialization, on one hand, and marginalization of
religious traditions, on the other, have led to strong reaction, lending legitimation to the
reassertion of religious and ethnic identities, and putting more and more pressure on the secular
State.

During eighties, right-wing politicians mooted the concept of positive secularism, putting a
question mark on the Nehruvian concept of secularism. The advocates of ‘positive secularism’
argue that all those who follow Nehruvian secularism are following a ‘pseudo secularism’ or
‘false secularism’, as they are indulging in ‘minorityism’ by unduly favouring the minorities.

Religion in India, whether pre- or post-Independence, has never been dissociated or delinked
from State institutions at any level: legal, institutional or cognitive. Rather, the modern Indian
State has been involved in regulating the religious affairs of society, more to secure political
goals than to “modernize” the social structure of Indian society. As a matter of fact, its various
policies have promoted and strengthened the religious identity of people and provided State
patronage to religious institutions and leaders.

Secularism became not a creed of radical separation between religion and politics, but of
spiritualising politics itself, which often took the form of mutual accommodation of orthodoxies.
The crucial question would be what should be the relationship between the State and religion?
Should the State play a part in religious affairs?

Many argue that it is not possible to do away with religion from politics in India. It must be
noted that though the Constitution provides for citizenship on individual basis, irrespective of
one’s religion or caste, one can hardly forget that our existential reality is communitarian, rather
than individual-oriented.

The Constitution had to take note of this existential reality. Thus, our Constitution tries to imbibe
elements of both as an honourable compromise. Strictly speaking, the ruling elites do not rule in
the name of religion, or for a particular religion. However, politics of the ruling elites has always
found it convenient to negotiate with various communities, rather than individuals. Religion has
firm presence within the communities, and it is a reference point for the communities to define
themselves. The Indian State, therefore, continues to interact and deal with communities, and in
the process, constantly legitimizes and reinforces the communities through its acts.

The meaning of religion varies from one person to another. All religious people are not
dogmatic, narrow-minded, ignorant, superstitious and intolerant. Dogmatism and narrow-
mindedness or fanaticism are psychological rather than religious categories. In that way, even an

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 atheist or agnostic can be dogmatic or intolerant and even fanatic.

The role of religion has often varied, from being an instrument in the hands for enforcing abject
subjugation of the toiling masses, to that of inspiring the revolt against tyranny or racial
oppression. Religion for toilers generally steps in to cement the strong bonds desired. It provides
values and meaning to their lives. It is their hope. Religion acts not only as a substitute to science
in explaining the universe and its laws, it also acts as a popular philosophy for even the most
ordinary person to be able to appreciate.

The ordinary or powerless need stronger, collective existence to give meaning and purpose to
their existence. The collective social existence through which the individual seeks to compensate
his or her powerlessness is to have common social values, culture, and a world-view.

Some social scientists in India have argued that the serious threats to social tolerance and
diversity in India today come either from an anti-democratic, majoritarian, ethnic nationalism or
from a homogenising and modernising nation State, and the imposition of alien values on Indian
society. Such theorists prefer a State which does not claim procedural neutrality and separation
of State from religion but is, instead, guided by an encompassing indigenous culture, although
they oppose the interpretations of Indian culture which are being marketed by right-wing forces
today. Minorities could be protected, they argue, by the tolerance and modes of coexistence
which have evolved in the society over time, rather than by a modernising nation State with alien
values. The State should be prepared to devolve some of its powers and functions on to
communities.

Petroleum Pricing Policy in India: Need for

Change
India is one of the fastest growing economies of the world. At the same time, the country is also home to
almost one fifth of the total world population. With such a huge chunk of the world population and growth
rate of the economy hovering around 8 to 9 per cent per annum for last five years, the demand for the
petroleum products is expectedly high. Keeping the social and economic
ramifications in mind the government has always remained involved with the pricing and supply of these
products.
 
The reasons for the direct involvement of the government are not difficult to seek. While the demand for
the petroleum products is rising by almost 15 per cent per annum, the domestic production of the crude oil
has virtually remained stagnant over the last two decades, making the country heavily dependent on the
import of crude.
 

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 Further, the rapidly developing economy requires petroleum products like diesel and petrol in huge
quantities for carrying goods across this vast country. Diesel is also used by many industries as a critical
input for production. The booming automobile sector of the country also needs a lot of petrol and diesel at
reasonable prices. Thus, any steep increase in the prices of oil adversely affects the Indian economy.
 
More than 250 million people in the country live below poverty line and there is a vast majority of
population classified as the middle class. It is the responsibility of the government to provide the cooking
fuel to the poorer sections at affordable rate and the government has been continuing with its policy of
subsidising kerosene heavily. At the same time, the middle class, constituting majority of the population of
the country, cannot afford the LPG at the market rate and hence the government has to subsidise the
LPG as well.
 
Immediately after independence the cost realization to the oil companies in the country was linked to the
‘import parity’ type of pricing, known as the ‘Value Stock Pricing’ (VSA). This mechanism was basically a
cost-plus formula to the import price, which included added elements of all the costs such as shipping
charges upto the Indian ports, insurance, transit losses, import duties and other levies and charges.
 
The VSA was followed by the Administered Price Mechanism (APM) which actually involved artificial price
fixing by the government from time to time and hike or reduction in the prices become a political decision,
rather than being a rational economic decision. The decision to dismantle the APM was aimed at
gradually shifting from artificial pricing of petroleum products towards a situation where the price is
determined by the market forces of demand and supply. Hence, as a conscious policy decision, the
government brought into the force a new pricing mechanism with effect from April 1, 2002.
 
The new mechanism was designed to partially insulate the prices of petroleum products in the country
from volatile international crude oil prices. At the same time it was to ensure that the prices of certain
products like kerosene and LPG remained subsidised as per the government policy.
 
It was expected that the new pricing mechanism would be the first step to move forward towards a 
pricing mechanism based on the interaction of the market forces.
 
While the weaknesses of the new system had come to the fore during the past six years of its
enforcement, the recent spurt in the global crude prices has completely exposed the flip side of it. While
devising the new mechanism six years ago, no one had thought that the global crude prices would be
close to $150 per barrel.
 
One of the most prominent arguments advanced by the Central government in favour of the recent steep
hike in the prices of the petroleum products was that the oil companies were suffering heavy losses and
had to be bailed out. This logic, however, exposes the illogic of system of pricing these products. If the
aim was to effect the import price recovery, the same badly lost focus in the previous years and the price
determination for this sector has again turned out to be a purely political decision.
 
While the country is undoubtedly dependent heavily on imports, almost one fourth of the total crude
requirement is met by domestic production. When price per barrel of crude oil is discussed, the fact that
one fourth of the total supply of the crude is met domestically is over-looked. Domestically produced
crude oil costs the nation something around $55 per barrel and if the global price is taken to be around
$150 per barrel, the average weighted domestic price comes to be around
$122 per barrel. When converted to per litre, it costs the country about Rs 31 per litre. The refining and
distribution costs included, the average cost of petroleum products like diesel and petrol should not be
more than Rs 35 per litre, while the average rate of these commodities has been fixed higher.
 
At the same time it should not be forgotten that the petroleum products are the most taxed commodities in
the country. If the government is so much concerned about the prices of the petroleum products, it must
reduce the excise duty and the VAT rates across the country. But such a decision would result in loss of
revenue. It looks like the loss to the oil companies is a myth created by the government to protect its own
revenues.

41
  
The performance of the public sector oil companies does not suggest that these companies are under any
threat of loosing out their profits after the global crude price increase. Their profits have actually
increased.
 
The Alternative 

The logic behind the extent of increase in prices is neither understood by the general public and nor is
transparent. Under the current scenario, where the crude oil prices are fluctuating with upward trend, the
pricing mechanism has become even more suspect.
 
But the government does not have many options. One option is to go back to the previous APM regime,
having zero transparency. But such a step would be retrograde in nature.  Even if re-introduced with
certain modifications, the APM may fail to come up to the expectations of the consumers.
 
Second option is to switch over the market driven system under which the government would have little
role in determination of petroleum prices. Should the government decide to go in for this regime, several
prior actions are required to be taken. The government shall have to dismantle the regime of subsidies in
respect of diesel, LPG and kerosene altogether. If the subsidies are not to be scrapped altogether and are
to be provided to the targeted group of people (viz. those living below poverty line), then a separate
distribution network needs to be identified to cater to their needs.
 
Such a system, however, may be politically unacceptable to most of the political parties. More particularly
in the present day scenario, when the inflationary pressures are at their peak.
 
The solution lies in suitably modifying the existing system to a large extent. The changes must aim at
reducing the discretion in the process of determining the prices of the petroleum products. Deter-mination
of prices should be more transparent, with sufficient and well defined role of the market forces.
Subsidisation of the products like kerosene and LPG should only be targeted to the people living below
the poverty line by devising a suitable mechanism. Remaining subsidies must be withdrawn by adhering
to a prescribed timeline.
 
A suggestion has been made that different types of diesels should be used for trucks and luxury cars. It
makes no sense to supply diesel at subsidised rate for the owner of a luxury diesel car. It is high time that
the railways also switched over to the use of 100% electricity for running the trains. For transport vehicles
CNG should be used, which is less polluting, on the one hand, and would result in liberating the goods
transport sector from the use of diesel, on the other. 

Do Elections make a difference?

Mr A The present elections in India have been accompanied by a huge media campaign that
one must vote and participate in the political process. An urgency of sorts was generated because
of the terrorist attacks in Mumbai. Citizens turned out to hold candle light marches amidst total
disgust with our leaders. A feeling was generated, at least in the media, that people should vote
and elect the leaders whom they liked. The question that was asked was: if people don’t vote, do
they have the right to protest against their leaders? Yet, voter turnout has not been too inspiring.
It would seem that people have gone back to their lives and do not care about voting. From the
point of view of majority of voters, they don’t care two hoots for their leaders, perhaps because
they know that things will not change, whether or not they vote. That is the background of this

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 debate: do elections make a difference to people? Has the political process left out the aspirations
of the people?

Mr B I would say this is not the case. Elections do generate a lot of excitement in the country.
People are interested in the political process. Otherwise how do you explain the great reversals in
elections: the loss of Indira Gandhi despite her huge popularity? Closer in time, who could have
thought that the BJP would be wiped out in the last elections despite being led by a stalwart like
Vajpayee? So it is wrong to say that elections do not make a difference. People do see and
analyse the policies of their government and are able to vote and seal the fate of leaders who
have let them down. This time also it will not be any different. I would say that most people keep
watching silently, at least the majority. These people do not speak on television debates but have
a strong opinion of their own. If elections do not make a difference, how would you explain the
great electoral reversals that we have seen in the past?

Mr C I agree with your point of view, but if you go beyond electoral reversals, you will see
why there is voter apathy. Actually there is no choice before the voter. Whether it is BJP,
Congress or the Third Front, they all are the same. Whether we choose one or the other, we know
that there is no party in India that can tackle the issues confronting the people of India:
corruption, caste-based reservations or affordable education and healthcare. Rather than talk
about these issues, every party is spewing forth poison against one community or the other. Even
the young leaders are no better, as was shown by the Varun Gandhi episode. Parties are talking
about the Kandahar episode or the demolition at Ayodhya—unfortunately these are not issues
that affect the people. The electoral process in the country has fragmented the population in a
way that even the British could not. Can you blame the voter that he is apathetic? Vote or not, he
knows that he will have to pay a bribe to get things done from a government office. So I would
say that elections in India is a wasteful exercise, because nothing changes for people.

Mr B The problem also is with the fact that we do not know whom to vote for. Since no party
is able to get the majority, the scramble for MPs starts after the election. It is usually an ugly
spectacle, with small parties offering themselves to the highest bidder. The party that emerges
with the majority does not have voter mandate, so actually the vote of the people goes waste. For
example, in one of the earlier elections Mr Hegde was able to emerge as the Prime Minister of
the country, even though none of us knew his name before the elections. In the last elections, the
Congress was able to patch up a majority and pulled out Manmohan Singh as the country’s
leader, as if from a magician’s hat, because he was seen as a humble and obsequious to the party
president. He was the non-controversial candidate who would not rock the boat by taking
decisions on his own, and the arrangement served the party well. The BJP had done the same—it
installed Vajpayee because he was the non-controversial, liberal face of the party, but it did not
change its colours and was defeated. So I would say that the electoral system is flawed. We don’t

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 know our leaders, we don’t know who will be chosen by the parties when the voting is done, we
don’t know the policies that the government will make. So what’s the point of the elections?

Mr D Elections are the backbone of our democracy. Even if the system is flawed, can we say
that elections do not make a difference? Look at the countries that do not have elections: they are
dictatorships or ruled by armies. Whatever the flaws, I am glad that we are not in that category.
We may not have a part to play in selecting the Prime Minister, but we certainly have the power
to throw out leaders whom we do not like. That is quite a big thing. We are counted today with
great countries like USA, UK and France, because we are all democracies. We have citizen and
human rights, unlike people in China and Russia. There is accountability of the elected leaders
towards the electorate. We cannot and should not wish it away. Despite all the flaws, elections
do serve a very important function.

Mr E I think none of us have any problems with the democratic system in our country. A
democratic system is definitely better than any other political system. However, the problem is
that the system has become so corrupted that voters are turning away from it. You cannot
subscribe to the argument that we deserve the government that we get because we don’t vote.
The point is that even if we vote, we cannot remove criminals from politics, we cannot make the
government act when we are attacked, we cannot remove the policeman who demands a bribe
from us, we cannot even meet our Prime Minister and express our concerns because of his heavy
security. What kind of democracy is this?

Mr A I agree with you. Our leaders preach development but encourage people who beat up
girls wearing jeans or going to pubs. They play the caste and religion card. So where is the
choice? Whether we vote or not, these things are going to stay. That is why we say that elections
do not make a difference. Perhaps the answer to this riddle is that the political system should be
reformed. No big reforms are needed, just implementation of existing laws. Parties fielding
criminals should be banned, parties asking for votes on caste or religion propaganda should also
likewise face penalties. Parties should also declare their leaders before the elections and make
their position clear in terms of patching up with regional powers before the elections. Without
such considerations, you cannot blame the people of India from turning away from the electoral
process.

Mr B The voter is quite helpless. All he can do is to hold candle-light marches. The system
remains exploitative. Instead of electing leaders who can represent us in Parliament, we are
forced to elect leaders who treat their term as an opportunity to enjoy the privileges of power and
to amass wealth. You can say that we have the power to throw them out—and we do—but is that
the purpose of voting? Somewhere along the line we have forgotten that the purpose of
democracy is to elect leaders who can represent our concerns, instead we are forced to vote for

41
 regressive people who come out with strange policies like banning English, beating up people for
wearing a dress they disapprove of, or declaring that a particular city is for people of a certain
State.

Mr C A lot of interesting points came up for discussion today. I think we all agreed that there
is apathy among the people and we also know that voting will not change the exploitative
system. So, while we are not against the democratic process, all of us feel that if some basic laws
are implemented, people will be more willing to take part in the political process. The voice of
the people has been lost in the electoral din. It is time it is recovered, to save our democracy. We
want to be a vibrant, modern country, but our leaders are holding us back by talking about caste,
region and religion. If we can eliminate these three non-issues from the political life and are able
to get a leader who can address the real issues of the people, I am sure that people will respond to
him. Unfortunately, for the past many years we have not had even one leader who could rise
above narrow electoral gains to address the issues affecting people. That is why people feel that
elections do not make a difference. I just hope that some leader realizes this in the future and
puts us on the path to growth, as also above all narrow non-issues.

Is Broadening of Societal Values Resulting in

Shrinking Marriage Spans?
What is it that kept couples living happily ever after till the last generation and what is now that
the younger generation is increasingly taking to the ‘trial and error’ process in this aspect? In
the past two decades, the Indian society has seen quite a bit of ‘liberalisation’—this one in terms
of shunning rigidity and letting the winds of newer cultures hold sway. Lifestyles, attitudes,
thought processes, ambitions, aspirations, all have taken a quantum leap. Coupled with
economic changes, this drift has changed the meaning of life in the Indian set-up. Has it, in the
process, also taken the toll of loyalty and the willingness to adjust with the one person, who had
been once chosen as a partner for life? Why are the marriages increasingly becoming short-
lived?

Mr A I do not see any change in the value systems as being the reason behind the shorter
marriage spans. In my opinion, it is simply the lifestyle that has come to be, with the increasingly
demanding work front as the real culprit. The times are no longer such that a nine to five job can
suffice. The private sector has come into play in a big way and if one really wishes to carve out a
place for oneself, then the worth has to be proved. Most jobs demand you to put in long hours,
sacrificing holidays, sometimes travelling for most part too! For a family man, this kind of a
situation might assume difficult proportions. Besides the job, there are several things to be

41
 managed to keep that structure called home from crumbling...there are sundry tasks to be
performed, time given, to family and children. I wonder how the juggling of so many roles is
possible. Also, I guess if the wife is working too, then things might just get out of hand, say for
that matter over a leaking faucet!

Miss B It is all okay my friend, but to break a family requires more than a leaking faucet. The
way I see the picture is that today the youngsters have all the freedom to pick and choose their
mates. When a decision is made in the teenage on solely emotional basis, trouble is in the offing
and possibilities of having to reconsider the decision are rife. Also, there are choices galore. If
after some time of married life one feels that the handsomest man is not exactly Mr Right or that
the most beautiful woman in the world (until yesterday) gave your mother an earful over a non-
issue, one is free to walk out. The freedom given to the youngsters to exercise their choices is
right, but they must be mentally grown-up to use this freedom. With the kind of system taking
shape in the society, the parents are only going to give the youngsters a wider berth. These are
the times of innumerable permutations and combinations and one can go on experimenting till
the right fit is achieved.

Mr C My dear friend we should not forget that the family structure has also undergone a
massive change with the times. Earlier, the prevalent form was that of the joint families, with the
strong kinship leading the family out of any kind of crisis, simply by holding on together. Then
the smaller units increasingly started flourishing and the nuclear families became the order of the
day. The result is that there are more and more responsibilities being shared by the lesser number
of people. Earlier on, the work was divided among numerous family members, making it all very
manageable. Now the tasks are more in number, tempers are shorter and egos are larger. The
counsel that was readily available is no longer there. In the event of a misunderstanding, the
elders would mediate and matters could be sorted. Their past experience in handling similar life
situations would come in handy and defuse any likely tensions, big or small. I feel that it is
largely the unavailability of any guiding hand that is leading to such problems.

Miss D There is no disputing the fact that the society as a whole has opened up to a very
large extent. Especially when it comes to the women, there has been marked change. The
working woman is no longer a novelty. Rather, it has become important that she earns in order to
meet the expenses. Moreover, now we see women in professions which were once looked down
upon. To boot, they go for it with approval from the family. There have been revolutionary
changes in the way women dress up, conduct themselves, etc.  One can also see them frequenting
places like pubs and discos.  Also, professionally the women are increasingly giving the men a
run for their money. There are hardly any arenas left where we do not find a woman calling the
shots. Also, the society is more free and flexible. This paradigm shift has had an unsettling effect
on the males, who have to play along on the surface. If things do not massage with ego, or gel

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 with ideas, then conflicts might arise.Young people today desire spouses who fit into every role,
assuming the traditional and the modern garb as and when required. In the event of discovering
the absence of all attributes, conflicts arise.

Mr A I somehow have a feeling that it is only a very small section of the society that might be
facing such a problem. It so happens that a few cases, if elaborated and displayed in blown out
proportions, may make the issue seem larger than it really is. I still feel that the shorter marriage
spans may be a phenomenon witnessed by a very specific set of people. The Indian society has
largely held on to its values despite the onslaught of different cultures. For example, the Indian
woman professional may be a power dresser, but at heart she still worries about her man’s meals
and her child’s needs. Also, if you take into account the rural and semi-urban India, things are
more or less the same. The family set-ups still do not permit any revolutionary changes. In the
middle class in the urban areas, couples would occasionally bicker and bite, undoubtedly, but it
would take more than the mundane to push them to part ways. I feel it has more to do with the
individual cases than the society at large.

Miss D I don’t necessarily think so. There is always a first step for even the biggest
happenings.  I feel that this trend is an outcome of the great emphasis on the self. This has
increased the stakes for both people in the institution of marriage. The individuals have of late
begun to calculate their gains, not necessarily in material terms. When there are lesser personal
gains by the association then it may not go very far. The emphasis is on concepts like space,
fulfilment and such similar intangibles, that raise many issues that were until some time ago not
even spared a thought. The most common reasons that come forth from people in such situations
are that they were either feeling too cramped or were getting suffocated in the bounds of a
certain relationship. In my opinion, it is this awareness of the self and quest for fulfilment of it,
that is creating the problem.

Mr C Most of you would agree with me when I say that the economic dependence makes one
put up with things that normally one wouldn’t. Until a few years ago, a woman could not show
her dissent or afford to go contrary to her husband. If she did, she would have no one on her side.
The parents would not accept her and the husband would not keep her. Now, as she has stepped
out and earns her bread, she is more confident and can be assertive. Earlier, a working woman
was reason enough for many raised eyebrows. Now it is a common feature. There is also a
greater awareness of rights that has prompted a questioning attitude. If things do not work out
then she can walk out without fear. Let us not assume that the marriages till some time ago have
been ‘bonding’ always. There are a lot of instances when it is a compromise of sorts. There are
numerous cases of women living independently and even bringing up children single handedly.

Miss B Somehow, this marriage of convenience does not gel with me. There is nothing

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 sacrosanct left about it. More and more concepts from the West are finding manifestation here. I
suppose we can even term it a legalised living-in.  People come together for achieving certain
personal goals. In the earlier times the focus was on building the family as a collective force, but
now all that remains is an untamed desire to make material gains. In times of crisis, which are an
invariable part of any life, there is lesser and still lesser inclination to make allowance for
mistakes. In such a scenario, marriage as we know it degenerates into an impermanent
agreement. Not a very encouraging situation! Well, there is certainly some transition that the
society is still witnessing in its value systems. But I guess before the trend takes on the status of
the ‘done thing’, we must check the negative tendencies. The Indian households have been very
tenacious, unbending the times of the worst distress. If the upheaval continues to affect it in the
name of globalisation, it will not be long before we see every thing in the society turning flexible
and ‘disposable’.  The fact that is increasingly getting ingrained in the young minds about marital
life has to be undone. It’s time for them to realise that a temporary or a rocky relationship cannot
give lasting happiness. And as far as the career goes, one can succeed professionally only if the
personal life is sound.

Celebrity Endorsements: Right or Wrong?

While roping in a celebrity may or may not work out for a company there are no two ways about
the charisma of these individuals and their ability to get hold of the audience’s attention.  A
well-formulated strategy could catapult the fortunes of a company or, in another scenario, it
could well prove to be a costly mistake.  However, now that doubts are being raised and studies
proving the harmful effects of certain products, the big question arising here is that whether
celebrities should be endorsing products and services at all?

Miss A In my opinion there is nothing wrong about celebrity endorsements.  It is simply a

marketing strategy to increase sales that cannot be denied to any company.  There are no
regulations against this and it can hardly be perceived as a dangerous activity.  People are free to
make use of endorsements and it is a very easy way for the stars to make more money.  And
that’s not all, featuring in an advertisement today is not just about money.  It is a barometer of
one’s popularity and fame.  A good example in this would be that of Bill Gates who went on to
endorse a brand of golf clubs in the nineties.  Now what possibly could the world’s richest man
desire out of endorsing a certain product.  It could only mean that he has liked the quality and
performance given by that particular brand.  Not allowing endorsements by stars is such an
undemocratic thing to do and it sure is unlikely to go down well with anybody.  Going by the
logic that it can start a wrong trend, there is so much of wrong/unhealthy/inappropriate stuff
already going on, why single out this one issue.

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 Mr B Well, I would like to believe that each and every individual is larger than the single role
played by him/her in the capacity of a celebrity.  Therefore, the responsibility as a concerned
citizen should be greater.  This calls for a more active role and a greater level of awareness too. 
It has been outlined that the persona of a star carries tremendous power and can be harnessed to
send out a message with above average effectiveness.  There is nothing wrong with celebrities
endorsing products and services per se. What really calls attention is the fact that manufactures /
providers of sundry products and services may not be true to their word and could possibly be
indulging in some malpractices or providing a substandard product.  Not only can this sully the
image of the celebrity in question, it is akin the duping the consumers too. 

Miss C To endorse or not would be an extremely discomforting position.  Endorsements

work well when the star is able to infuse confidence into it.  And that can come only after using a
certain product or subscribing to a certain service.  Ethically, endorsements done simply for the
sake of money are as condemnable as dishonesty itself.  One is at great fault, when the attempt is
simply to pass off something to the consumer without ascertaining whether it is right or not.  It
took the government such a long time to put a stop on the advertisements selling gutkhas and
liquor.  And this after knowing fully well what havoc these things can wreck upon users. 
Nonetheless, surrogate advertising continues and brand recall is still maintained for consumers. 
Celebrities continue to feature in pan masala ads too.  The right approach would be to figure out
whether a product has positive value for the public or is rather a bane.  There should be no
problem with endorsements by celebrities; it is the products and services that should be scanned
well enough with regard to their contribution to quality of public life.  If products have the
potential of being nuisance, celebrities should keep away from them.

Mr D The marketing and advertising people in India are well aware of the people’s obsession
with cricket and movies.  The stars of the two are the real heroes of the Indian public.  However,
one must not forget the current trend.  What is going on these days is a short-term romance of the
people with few celebrities whose time has come.  These are individuals who have caught fancy
of the nation temporarily.  When they hit the crest, one can see them endorsing everything—
from toothpaste to engine oils to food products.  What is more, they can clearly portray the whys
and wherefores of these endorsements.  Since the stars are likely to have an extremely short shelf
life, the idea is to make as much money while the sun shines.  If a star exploits his/her charisma,
indiscriminately, it can cause much damage.  It is an act devoid of thoughtfulness and concern
for welfare of people.  If endorsements are done without liking into the finer details of the
products or services, the people will only feel cheated.  I think one should lend one’s name but
only after checking the details carefully.  And if the case is as with the stars of the moments, then
the consumer should be extra careful too.  

Miss A I think it is absolutely all right for stars to endorse products and services.  The people

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 are well aware and cannot be fooled easily into buying something.  Just because Shahrukh Khan
is someone’s favourite actor does not mean that he or she is going to buy the oil or shampoo,
soap, fridge, TV etc. he endorses. These decisions are based on a host of other factors besides the
stars’ recommendations. The person has to take care of issues like how much money he can
spare for that particular item, his requirement, the choice of other people in his family and the
storage or space available in the house. In case of soft drinks the factor that makes them popular
is not the star appeal but the taste.  People like the taste of the aerated drinks, their ability to
soothe quickly during the hot summer months and, lastly, because of their easy availability
across the length and breadth of the country. If, in truth, endorsements could whip up that kind of
magic, people would end up buying almost everything because there are so many celebrities
endorsing all kinds of products. There are many people who have expressed futility of remarks
against celebrity endorsements. After all it is an art—how to use a celebrity power during a few
seconds that the commercial lasts. Most people are simply overawed by the stars’ presence and
do not even remember what the product was unless the connection has been established properly.

Mr B Well, everyone seems to be focusing everywhere but on the segment of audience which
is growing the fastest—children. I think that film stars have the greatest fan following among
children. And it is this category that takes its idols seriously. Therefore, when an actor or an
actress endorses soft drinks that are harmful and seriously can cause depletion of elements like
calcium, it is indeed a deplorable matter. Detractors may argue that next in line would be fast
food like French fries, pizzas, etc… but one has to start somewhere. Children are affected greatly
by such persuasion. They may not be participating in taking major decisions at home, like buying
of durables, but they can certainly cajole their parents into buying food stuff of their choice. Soft
drinks, sugary juices, junk food laden with high fat content haven’t really got much going against
them, at least as of now. Since they are at a greater risk due to such persuasive selling, a line
needs to be drawn here. Also, what needs to be noted is that if stars refuse to endorse products
with a dubious value for public welfare then it is going to act in their favour only. Their positive
image is likely to register up scaling, as socially responsible and mature individuals who are not
driven simply by monetary concerns. The goodwill generated by this effort would be far greater
than the crores made by them through endorsements.

Miss C This angle does make it an issue worth considering since the ramifications for
children are only too clear. However, due to the heightened passions in the argument, it must not
be forgotten that the children do not and cannot act on their own. Parents must assume a more
firm and responsible role when it comes to such matters. They know better what to choose when
it is child’s health versus momentary happiness.  And it is not as if healthy options are not
available. It is the older members of the family who have to teach the children discerning right
from wrong and how they would tend to gain in the longer run. Even by this logic one cannot
actually stop the celebrities from endorsing the products. In fact, sometimes this itself may work

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 as a deterrent. Stars may be liked by some and disliked by others. In case the latter are
greater in number, they might cause the popularity as well as sales of a certain commodity to
plummet down. The reason why companies rope in mega-stars and pay them incredible sums is
because markets are flooded with numerous similar products. Endorsements add an
element of superiority, credibility and exclusivity to them.

Mr D Notwithstanding the several arguments, the truth remains that it is every advertiser’s
dream to have the rising sun vouches for his or her offering to the markets. There is hardly any
doubt about celebrities saying no to endorsements. There’s money in it, there is fame and there is
the reach into every home. It may be true that people do not buy an item because their favourite
star/idol says so. The companies still use their power for their presence. These people are
certainly the show-stoppers and have it in them to get public to stop awhile and pay attention.
In today’s times, with minuscule attention spans, and multiple media hankering for that look, a
mega-star’s voice or glamorous look is sure to get the attention.

DOES COMPETITION ULTIMATELY

PROVE DETRIMENTAL?
The number of prodigies hogging the headlines is quite indicative of a very
unsettling increase in the burden of yoke that is carried by young shoulders from
the day they are able to speak and walk. Some may, however, take a different
view of it, though revelling in the fact that the human brain has come a long way
and is capable of exercising its faculties to produce some amazing results. The
reasons to gloat can be found aplenty, but does it also indicate that better
education and increased awareness is pushing the individuals into a fast lane
from where there is no getting off, for the fear of becoming incompetent and a
‘misfit’? Does it imply the loss of rights to grow in ordinary fashion, enjoying
the simple unadulterated pleasures?

The pressures are undoubtedly tremendous, be it a prodigy or not. The

expectations to excel leave no room for leisure—neither for children nor for the
adults, for whom leisure is almost a dream. With the near equal opportunities
available to quite a large number of individuals, the survival is becoming
increasingly difficult. It depends on how well the individual is equipped to
‘compete’, and competition is all that needs to be battled to ensure one’s own
place. So, is competition all that unhealthy or is it helping one achieve the
greater heights?

Miss A  I suppose there is nothing better than a good degree of competition that
can prove to be a motivator. I suppose that to move ahead in life, and to do better

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 in every aspect, motivation is greatly required and that motivation comes from a
number of quarters, including that of someone who is capable of giving the
individual a run for his money. Very often we find that there is nothing too
remarkable about the achievements made, but the hype generated is enough to
bloat them up. The sum and substance, if analysed, is nothing but mediocrity that
has crept in to stay for there is hardly anyone to challenge that smugness. Let us
just take the example of the Indian athletes. Why is it that India does not even
come close to the other countries in this sphere? I feel that there is hardly any
competition for them within the country to make them gear up for the greater
challenges they have to face in the international arena. I believe very firmly that
if there is any fire that can keep an individual on his toes, it is the fear of losing it
to a better man.

Mr B I agree with my friend, but only in a limited way. For me this only
signifies a rat race, wherein all remain rats even though one may emerge a
winner. I believe that competition, and especially in the contemporary society, is
more detrimental than anything else. The aim to achieve something takes on the
shades of obsession if there is pressure. And what can you expect from such an
individual. He may finally achieve all that he has been gunning for, but the cost
paid for it—both psychologically and physically—may be far too much. Instead
of having a person capable of appreciating and enjoying life’s splendour, we
have a maladjusted individual who can see nothing else. His aim becomes the
sole reason for existence. He lives in a false construct, which is at perpetual
conflict with the outside world, for there are very few similarities. Life beyond
that individual’s cocoon is wholesome and to be a socially fit person one must be
able live and think beyond narrow goals. If these small pleasures also escape him
then, I presume that competition is only making him a dullard.

Miss C I really do not fail to understand how competition can be so negative an

issue! I suppose that competition is vital to achieve anything. Competition can
only bring in the drive to move forward, to do something even better than what
exists or is being striven for. My friend contends that competition only breeds
dull brains and individuals who are obsessed with their aims. But has one
thought that almost all people who have contributed to the society with their
exceptional contributions have been preoccupied with the achievement of their
objective. For all the comforts and luxuries that we enjoy today, we have a lot to
offer to those individuals who were allegedly out of sync with the society. The
greatest of scientists and inventors were devoted to their missions and did the
posterity so much of good. If that is bad, then we can hardly expect any good
from others. Besides, that fire and zeal to surge forward and remain focused has
to come from somewhere and that is fuelled by good competition.

Mr D  That is very true, but we must keep in mind that the times have changed
and so have the concepts. Competition is now not just limited to the higher
rungs, by which I mean the achievements of a larger nature. I find myself at
great discomfort when I read of small school children shuttling from the regular

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 studies to the music and dance classes, tuitions and sports routines, all in a day!
The discomfort would not have been as great if it were the choice of the child.
The strife at the end of the parents, to make their child an  ‘exceptional kid’ is
the factor that is worrisome. There is hardly any attention paid to what the child
would like to do. If Piano and French are the ‘in thing’, then come what may, the
child will be made to go through the routines, with the classes fitted into the
already cramped academic rigmarole. And why not, the parents want to equip
the children with all that is desired to succeed. I suppose that there is a big
difference between the desired and the required. What I say is the story of most
urban homes now. In homes where affording all this is difficult, the children are
driven to compete with the limited resources, often leading to frustration. The
sense of being complete is increasingly being replaced by compete, compete,
compete!

Miss A   I also tend to get worried by this trend, but there is a greater purpose
in furthering the competition. Is it not true that we do not realize the value and
worth of things that we get until we have to earn them for ourselves, having to
sharpen and use our faculties in the process? Similar is the case here. If things
came easy, the value and worth would not be well appreciated. There would be
no pride in displaying the trophies and accolades achieved, and the mantle pieces
would mostly go empty. I feel that there is a great need to make the people take
real pride in their achievement. A reward backed by the feeling of being
legitimately won and got after hard work is doubly pleasurable. I feel that the
honour earned is a real boost to the individual’s morale and can be a great step in
pushing the person forward. Any company issuing the ‘employee of the year’
award will only see the doubled efforts on part of the recipient.  

Mr B  I simply do not agree to it. It is a known fact that all the individuals are
born different. Each has a different level of intelligence and the faculties are not
equally sharpened. It is unjust to pit the individuals of different calibre together.
This I say with a greater conviction because, apart from the human endowments,
the individuals are born to different people whose resources are not equal. I feel
that if competition breeds mostly negative emotions like jealousy and frustration,
it cannot be good. Healthy competition is different, but now a days it has turned
into a war of the resources, which is never equal or healthy. The athletes
compete with shots of steroids, the companies use more of arm-twisting than
brain-work, the parents are more in the arena when it comes to children, at
workplaces there is undercutting and back-biting among colleagues... I do not
suppose that these are the signs that augur well. The worst case is that presented
by the politicians. They compete with each other using the people as their
pawns, the latter realizing it little.   

Miss C  The scenario that my friend puts forward here is not very encouraging,
but there is also no denying the fact that it is only when an individual is given a
shake-up does he or she realize the limits to which the person can push himself
or herself. Nobody comes into the world with pre-determined abilities that have

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 limits of achievement. It is only when one is faced with a certain challenge that
one discovers the hidden sources of energy in oneself. I guess, you would all
agree with me that when faced with tough competition, the efforts applied
increase manifold and even surprise the individual very often. It is this feeling
that inspires self-confidence and charges one with enthusiasm and the zeal to
win. There is no doubt that to a positive and a willing mind, success does not
elude easy. I really feel that competition is the most essential ingredient of
success. Why else do we suppose that a worthy rival is respected a lot—only
because he or she helps bring out the best in oneself.

Mr D Indeed, there is nothing like a healthy dose of competitive spirit to infuse

life into any activity that is moving at an ordinary pace. It is only because of the
intimidation from able rivals that the best of men have striven for excellence and
have laid down examples for us to learn from. If Arjuna from Mahabharata is
well known, equally well known are Karna and Eklavya. These were men whose
greatness was achieved by vanquishing the opponents who were, maybe, a wee
less in might. I will tend to agree with my other friends too. The form that the
‘competitive spirit’ is acquiring these days is indeed deplorable. The desire to
move ahead is there, but it exists beside marauded ideals. The desire is to make
it by hook or by crook. In other aspects the desire is blinded and does not make
allowance for anything that might come in the way. If only the outlook towards
achievements is coupled with an inclination towards the right, then and only then
can we hope to achieve things we can be proud of.

Can Cap on Salary Engender Greater

Equity?
There is a thinking of some persons that excessive remunerations at senior
levels and increased conspicuous consumption are methods of fostering a
discontent and subsequent social unrest. According to them the benefits of
growth need to be shared with the less privileged and the industry is as much
responsible towards the betterment of society.  Though the sentiments of
concerted efforts towards equitable growth may find favour with many, there
are those who feel that the thinking is anachronistic as well as out of place.

Mr A I am definitely not in agreement with this line of thinking.  How can

it even succeed as an idea?  Capping salaries of CEOs of companies and
senior-level executives cannot in any conceivable way rectify the situation of
inequality that our country faces currently in terms of poverty and prevalent
inequality.  The logic is very clear and simple.  It would make sense when
one compares the percentage of wealth held by the CEOs and top executives
vis-à-vis the percentage of wealth that is dedicated and implemented by the

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 government.  The former is a minuscule figure in front of the immense
portion that government has at its disposal.  Sadly, with all the resources and
brains and infrastructure the government has not been able to accomplish
much.  It’s a shame that in today’s times people die of starvation and lack of
medical help.  And it definitely cannot be blamed on the high emoluments of
senior executives.  They are paid because they perform their defined duties
and achieve targets.  Corporate India is smart enough and is highly unlikely
to be spending such great amounts on the upkeep of white elephants.  The
corporate honchos justify their salaries with their work.

Miss B True that talent and skill will call for a price and get it too.  But is
it not an indecent figure—120 millions as an annual salary, or some top brass
receiving 100 crores only as stock options.  I do feel that there is a need to
curb ostentatious doling out of wealth.  It is quite true the salaries in corporate
sector are a matter of great debate even in the developed countries. 
According to the Global Institutional Survey, executive compensation is
considered to be one of the top three governance issues even in the United
States, UK and Europe.  Not to be left behind, a Bloomberg poll reflected that
more than 80% of the Americans felt that CEOs were given a far greater
share of the pie.  It is quite true that such salaries only create an imbalance. 
The rift between the haves and the have-nots simply widens as this trend sets
the stage for disparities downwards.  It is also not only the gulf between the
common people and these top executives.  Those who occupy even a single
rung lower have a much lesser salary and this trim happens quite mercilessly
till the underdog’s position where a meagre amount is doled out.  I really do
think that the picture requires some semblance and some kind of cap on
salaries is required.

Mr C I cannot see the rationale of restricting salaries of the CEOs or

trimming the existing one’s either. It is true that the top positions today are
commanding salaries unheard of before, but it is for a reason.  These CEOs
are leading the companies to grow by leaps and bounds. It is a reflection of a
company’s faith that these individuals have it in them to lead the company to
newer pinnacles of growth and success. The money paid to these individuals
is taxed by the government. It must be understood clearly that poverty exists
in our country not because of high salaries of corporate top brass.  They have
not grabbed the share of the poor.  It is more because the government has not
been able to deliver much. The emphasis, in my thinking, should be on
promoting a culture of hard-working and empowered citizenry, rather than
prescribing cuts on what is a factor much under control of the market forces
of demand and supply.  The policies should be of a more enabling nature
rather than those that are mere paper tigers.  If deserving individuals get
rewarded for their professionalism and entrepreneurship then what is the
harm?

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 Mr D It is not wholly absurd an idea when the differences between the
haves and the underprivileged class is so stark.  Apparently, the call is to a
greater cooperation towards ameliorating the condition that exists today.  The
government has been trying but has not been able to deliver much.  However,
if the industry aligns itself with the government in bridging the gulf by
engaging in welfare activities it could make a dent too.  The intent is not to
simply maximize profits and plough it all back into business and give off fat
pay cheques.  It would be worthwhile if a part of the tremendous wealth
generated by the companies is assigned towards fulfilling
what is called corporate social responsibility.

Mr A The mantra of fulfilling corporate social responsibility is justified

but it is seriously not done to call out the salaries and perks of the CEOs and
senior level executives into the ambit of legislation.  The government simply
cannot be sitting to decide who gets paid how much?  The business
environment is becoming more and more competitive each day.  And to retain
one’s own in a global scenario, one requires expertise.  The primary aim of
business and private enterprise is profit maximization.  If the government
starts telling companies about the correct salaries that ought to be paid at each
level we will be no better than a communist regime.  India is very much a
democratic set up, where firms must feel free to take their own decisions on
sundry issues within the reasonable regulatory framework.  When the country
opened its doors to winds of change through liberalization, it should have
decided upon a readiness for the changes that would come with it when India
Inc. competes with the rest of the world. Any resistance will only stand as an
obstruction in the country’s way of becoming a force to reckon with on the
world stage.

Miss B Well, what our friend has just stated here carries quite a lot of
substance.  The government cannot be interfering in the matters of private
enterprise.  It would be in complete negation of the democratic principles. 
However, there is one thing that can be done.  The governments or regulators
in developed countries have chosen the path of transparency to engender
egalitarianism and reduce disparity.  They have pushed for more transparent
disclosure requirements for all forms of compensation—stock options, use of
company assets and severance allowances including payments made at the
time of a golden handshake.  The need for the disclosures arises mainly for
shareholders information who ought to know why a senior executive gets to
take home a fat pay cheque.  The disclosure gives the companies an
opportunity to demystify and explain its compensation policies and to
elaborate the procedures and calculations used to arrive at the terms and
forms of compensation for the highly paid executives.  And if the top brass
has really earned its honours, it should not shy away from disclosures.  It
would only make them emerge stronger.

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 Mr C It is all very nice to hear about transparency, accountability,
disclosures but the government should be really thinking about the skeletons
in its own closet.  Everything that should not be finding its way into the
public domain (for the better or worse) is safely stamped as confidential and
stowed away somewhere.  If the government makes efforts and tries to clean
out its own executive machinery, a lot could get achieved.  Once it cranks its
own wheels with some serious sincerity of purpose and political will, a lot
many policies could work wonder where poverty and inequality are
concerned.

Do Women make Better Parents than Men?

Bringing up the children has been the mother’s duty since time immemorial.
However, things are changing fast as there are single persons opting for
adoption and couples unwilling to tide it through together who are opting to
take up the job single handed. There is much to support the mother’s role as
the primary caregiver of the family and the young ones, especially through
reasons embedded in tradition as well as convenience. However, there have
been many examples of single men coming forward, with the nurturing spirit
surfacing strongly. Would they fare equally well as any woman or would they
be at sea, if confronted by the daunting task of caring for a real child 24/7?

The external responsibilities that a male usually carries out in a family—set

up as the breadwinner and the protector—give him a tough aura that comes
in the way of visualising him performing the mother’s role. However, this
cannot be used as a benchmark to determine whether the man is capable of
providing children with equal, if not more, tenderness, love and care. The
perception that precedes any male when it comes to parenting may well have
become redundant now, or is it still the same? Are men likely to fare badly at
parenting, or have they become more sensitive to the needs of children in a
changed environment? In fact some would rather believe that they better
than the mothers as well. So do men actually make better parents than
women?

Mr A This question is quite a poser as there cannot be a perfect answer to

it. All individuals are different from one another and may respond or perform
at different levels as per their individual capabilities. However, if a generalist
idea has to be formed it would be so that women generally make the better
parents as they have the innate maternal instincts that allow them to take the
best care of their children. Women would have subconsciously built a bond
with the child even before it is born. Carrying a child in the womb for nine
month is sufficient for strong emotional ties to be formed that are beyond
understanding of average human relationships. Nature has implanted the

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 nurture and care automatically in women. Bringing up life in its first few
years is extremely important and to ensure safety and survival the women are
attuned intrinsically to this need. For the men this part might be the difficult
bit. They are seen largely making valuable contributions in a child’s
development after he/she has achieved control over bodily functions and has
reached a certain level of comprehension.

Miss B Well, the normal perception would be that a woman definitely

makes for a better parent due to her instincts and her innate capabilities.
However, there are certain ways in which a father or a male can contribute in
the upbringing of children that women cannot do complete justice to. Men are
generally rational and logic driven and decisions/choices and actions are
based on sound reason. The way a father can allow a child to go all out and
grow up would not be possible with mothers, who are more protective and
would be daunted by the slightest crunch in the heart. Of course, the
exceptions are always there but the go getting spirit, courage and fierce
determination can be imparted very well by the male only. It is important as it
makes the child more worldly wise and equipped with a skill that will not be
taught in any school as a part of the curriculum.

Mr C  Indeed this one is a tough call but I must admit that somewhere
there is an initial advantage that lies with the woman. She is the one who is
physically and mentally programmed naturally to do a better job of parenting.
Women generally are more sensitive and attentive to even the smallest needs
exhibited by the children. They are inherently good listeners, blessed with
more patience to deal with hours of bawling. It can be very challenging to
keep comforting little children as they are not able to express or communicate
at times about what bothers, pains or frightens them. Mothers are usually
patient at such time and are willing to put aside hours to calm and reassure
them. The important part worth taking notice of is that the young years are
really crucial in the formation of a self-confident and a secure individual. If
the children are neglected and ignored, they are likely to shape up as insecure
somewhere and no matter how much of inputs and care are given after they
grow up, that deficit cannot be made up for. I personally think that women
are more capable of adding this tremendous value to a child’s life.

Miss D Well, there may be a slight element of risk in generalising totally

about who is actually a better parent. My friends here have argued that
women make better parents as they are innately programmed to be so.
However, in the light of recent developments I would like to differ and cite
the alternative point of view. The equations in today’s world are changing
and the women are actively seeking employment and pursuing very
challenging careers. Though the idea of motherhood is very fascinating, the
actual process of bringing up a child can be very demanding. And here is
where the male’s rational, organised and practical outlook counts. They can

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 make it tick even in such a very demanding situation and hence men are
capable of being better parents.

Mr A I would still say that there is no doubting the fact that mothers make
better parents as they are known to be more balanced, especially in crunch
situations. If we were to take a neutral scenario where the financial pressure
and the emotional mess of a broken household are absent, women are capable
of dealing superbly with the task. Usually, the women are projected as
emotional wrecks, poor decision makers and incapable of providing a secure
future only in situations where they are not educated enough to go out and
earn. Other than that, there are ample examples where independent single
women have done a splendid job of parenting. I feel that the women are
capable of a healthy left brain- right brain activity balance and create and
nurture life adeptly.

Miss B I do agree that there are some very valuable skill sets that may be
the exclusive domain of women, but there is much that men may be capable
of doing. Men are usually not known to be very expressive about their ideas
or their feelings. They are more of the doers. The fact that I really appreciate
about fathers is that they are capable of imparting many critical life lessons to
their children without actually making them look like lessons.  Children
emulate their elders. A practical parent would teach the child to evaluate
situations without really reacting at the drop of a hat. Men are good at
controlling their emotions and by exhibiting more of the controlled reactions
in crisis situations teach them calm, analytical approach. Then, there is the
general conduct adopted toward the various people that instils etiquette,
politeness and fist lessons in people skills. The other issue with the females is
that even when the child has grown up, they may still be clinging on
somewhere. Men will not be so edgy about letting go. I really feel that men
are better parents as they are capable of a more hands off approach.

Miss D Well this has been one really tough call where each one has tried
to shed light by expressing their perspective. It comes across as a logical
conclusion of this debate that the role of both man and woman is equally
significant as parents and it is not necessarily so that women make better
parents. Most women make good parents as they are better listeners and tend
to be more attentive to one’s needs. Being more sensitive than males, women
can forge a closer relationship with their children. Father is commonly seen
as the rationalist, but this is not always true. Some fathers can make better
parents than mothers; and this could be largely attributed to an individual’s
personal upbringing, the childhood he or she experienced and the values that
they believe in. If one has had a loving family unit and an environment that
made him/her feel loved, it inspires a quite confidence and self-assurance
which further gets translated into further parenting. Therefore, it is really
immaterial as to whether men or women make better parents. Anyone, with a

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 more mature and balanced outlook is likely to do a better job of parenting—
being hands off when required and involved when desired. 

DOES INDIA NEED ANOTHER GREEN

REVOLUTION?
This battle is against an enemy that is completely ruthless and spares none.
And what can come to aid if nature abets its rage. With most of the rural
population depending on agriculture for subsistence, it is not amazing that
the maximum number of victims are from this bloc during a drought year. It
is pitiable that though India is generally regarded as a land that abounds in
food grains, there should be a substantial percentage of rural and tribal
population resorting to wild grass for feeding themselves. With the crop
failure comes not only the problem of starvation, but also of the increase in
the number of suicide cases, as well as increased exploitation of the small
and marginal farmers at the hands of money-lenders. All this only causes one
to ponder whether it is time for another green revolution—to boost the crop
production so that the basic provision of food can be achieved.

Mr A I feel that India really needs to initiate the process of going about
another round of ”Green Revolution”. It is a pity that having come so far we
still have people dying of hunger. Moreover, nothing can be more
disappointing than the fact that after having seen success in the sphere of food
production, calamities like drought still bring as unmanageable and unwieldy
situations before us. Ensuring that enough food is provided for the population
is one of the basic duties of any government, and there should be no second
thought about making this possible. Human capital is the most valuable asset
for a country and productivity depends on how healthy and efficient they can
be. What good is all the advancement if more than 70% of the population that
still lives on agro-based occupations in rural areas has to look skywards all
the time. We have to use the knowledge acquired over the years to make
certain that no life is lost to hunger.

Miss B In my view the second green revolution would be nothing but

folly—repeating a mistake all over again. It would amount to ignoring the
long-term effects, and endorsing short-term gains. Why are we a blind eye to
what history has put in clear terms before us. Green revolution did give
bumper crop as yield, but not without strings attached. It used the high
yielding varieties of crops that depleted the soil nutrients to a large extent.
This is a heavy price to pay for one time crop. Let us not forget it is the same
measure of arable land that will depend on for cultivation and that we cannot
afford to ravage it. I feel that in order to face natural calamities like droughts,
and to avoid starvation deaths, the government and its agencies need to put

41
 on  their think caps and step up their efficiency. Why does nobody seek relief
from the much hyped overstocked warehouses, rather than resorting to a
measure that will not only take time to show results but will also be high on
the negative aspects.

Mr C I am afraid to see so much of resistance and pessimism in my friend.

Agreed that in long-term the green revolution showed more of undesired
effects than benefits, but the underlined problems of those times can be
certainly rectified today. We have more than four decades of hindsight to
make use of. It would not make sense if one thought that the mistakes then
would be simply repeated again. What we are meaning to do is to boost
productivity using scientific knowledge that decreases dependence on
weather conditions. Going by my friend’s logic, one would abandon all
experimentation upon meeting with failure once. And
mind you, though the green revolution had many negative effects, it
marked hope for the Indian farmer, nonetheless. I strongly support the efforts
for increase in food production as it is one of the ways to ensure healthy and
prosperous rural population, and a promise of certain help in times of distress.

Miss D I  have a different contention altogether. The issue is not so

simple as my friend puts it across to us. Any high-yielding variety would
demand a lot of input too. That in case of the last green revolution was in
terms of water and fertilizer. Considering the plight of an average Indian
farmer, how far does one think it is feasible? In my opinion, the real problem
lies with the government agencies that are meant to deal with such situations.
The Public Distribution System (PDS) needs to be hauled up. There are tall
claims of food surplus that are made in the Parliament. So why is it that in
times of crisis the surplus is unable to reach where it is needed most. The
assistance from the Centre to the affected States also needs to be questioned
—whether it is adequate or lacking? It is really worth a thought that at a time
when there are reports of people dying due to hunger, the politicians are
spending crores on celebrating their birthdays and distributing cakes and
colour televisions as return gifts to the guests. We have come very far in time
and the politicians claim much more sensibility than Marie Antoinette. It is
high time the governing machinery was shaken up and was made to answer
all the difficult questions. The answer lies not in another green revolution, but
in hauling up the system.

Mr A It is not that I am not in agreement with my friend, but what I fail to

understand is that after having achieved so much of success in scientific
agricultural practices, why is it that we shrink from having a go at it once
again. It is only a large-scale implementation of a practice that will prove to
be of mass benefit. It is not only the question of advanced agricultural
practices, but also of making sure that the multitude that makes India does not
go empty stomach, or worse still, resort to wild shrubbery for food. The

41
 country’s population is our own, and more so is our responsibility to feed
them in times of crisis. My contention is that the Green Revolution would be
nothing but a precautionary measure. The current reserves of food will not
last forever and we need to be prepared even if there is a succession of
calamities. A resistance to fostering such a positive step only surprises me.
More- over, if there are constraints for the small farmer, they can be
overcome with some subsidies from the government.

Miss B It would be worth noting that the agricultural subsidies form quite
a  large portion of the burden on the State exchequer. Why should this be
increased any more? One should also consider that the land holdings in India
have been fragmented to a very large extent over the years and the average
size of a holding is very small. In such a scenario, using a practice that is
capital intensive would neither be economical for the farmer, nor be of any
help in terms of yield. Green revolution and such like procedures spell profits
for the bigger landowners, who have already struck gold and who can afford
to invest the money required initially to have it going successfully. If one
takes a serious look at the agricultural sector, most of the small and marginal
farmers already carry the burden of a debt that seems never ending. Also, it is
only a few who make the prosperous large land owning class. So, if in case a
revolution like it does come through, it would again accrue the benefits to an
already rich section of farmers.

Mr C Solutions can be sought for most problems, and there is one for
what my friend has just described. If serious efforts are made to consolidate
the fragmented land holdings, a lot can be achieved. The groups of farmers
can form cooperative societies, that would help all of them share benefits.
The need is to educate the farmers and spread awareness among them, about
how they can benefit and prosper from such revolutions. One big advantage
of going about this exercise would be that it would reduce the distance
between the farmers and the official machinery. The small farmers can
approach the banks for loans and become a part of the benefit-reaping
category. Besides, one cannot refrain from trying out newer techniques.
While we figure out ways of  boosting food production, we also have to make
sure that this food reaches people who require it in times of crisis.

Miss D I feel that we definitely need to stock up for the future. Being
prepared is better than having to stare a disaster helplessly in the face. I feel
that introducing new techniques and new varieties of crops certainly would
bring about some change for the good. But equally important here is the
reshaping of a few aspects of governance, and the spread of public education
and awareness. The various schemes launched to counter such bad times are
not able to generate good results, and that is all due to corruption pervading at
various levels. Several cases of ration cards being distributed after the setting
up of enquiry commissions have come to light. Also, it is seen that the village

41
 heads (often at the lower-most rung in the implementation of such schemes)
are very corrupt. We have to root out instances of the sarpanches keeping the
ration cards of the villagers with themselves, hoarding a portion of each ones
share of the free grain, only to sell it off later, while the latter starve.
Corruption is one cause that has to be rooted out if a hunger-free society is
desired.

Capital Punishment for Crimes against

Women?

41
 Every so often there is reported a crime, so heinous that it makes one and all
sit up. But, as is expected, the pace of investigation and the action to follow
slackens and it becomes another of those unfortunate incidents that would be
soon forgotten. This is especially true in the case of crime against women,
where, the extent of horror keeps extending the threshold of mental
acceptance and after a while the repeat incidents are reported often for sheer
titillation! Even today, it is not only the repressed and the uneducated woman
or the unsuspecting children that become targets of the sick machinations of
the human mind, but it is also the emancipated women who are not safe.

Surprising but true, according to a WHO study, a woman gets raped in India
every 54 minutes! It is not unusual to find stories of minors, and even
children under the age of ten, falling prey to the wicked intents. There have
been incidents that have escalated in the degree of gruesomeness, but not one
ruling in the cases to set an example. How else can one expect the
offenders/potential offenders to refrain from such acts?

So, where lies the solution? Should there be capital punishment for such
offenders so that one can put a stop to this soaring crime rate?

Mr A I completely agree that this category of crime should be totally

unacceptable to the society and the best way to put a curb on such happenings
is to have capital punishment for the criminals and offenders. What I am
about to say should not be interpreted as a justification of killing, but that of
my contention here. When a murder happens, the person is killed and not let
to live and suffer the anguish. But here, in the cases of rapes and molestation,
the offender should not be let off even with limited punishment. If they are
allowed to get away with it, what is the guarantee that they will not come up
again with another of such acts? There has to be devised a way to simply stop
the incidents. There has been a lot of argument against capital punishment,
but how do you get back the same life for a six year old who has been robbed
of innocence even before life did start meaning something to her, or that of a
young woman who has just started shaping her career? Agreed that the
punishment will not revert their status, but it just might prevent the others
from even indulging in such acts.

Mr B I feel for the victims of such acts, but there is another way the entire
picture can be looked at. It is really not true that an eye for an eye and a tooth
for a tooth can come into play here. We cannot take away a life for a life.
That is exactly why capital punishment of any and every sort was done away
with, in the first place. Things would have been different if a life could be got
back by taking away another, or that meaning could be imparted to a life by
sentencing the other to death. It is very difficult to judge the circumstances
under which a crime has been committed. If it comes to be proven later that
the person, who had been convicted and done away with, was actually
innocent, how would you restore that life and give reprieve to the close ones
of that person. Capital punishment does not leave any room for correction of
mistake in judgement.

Miss C I cannot agree with you. Just consider the scene in totality in the
country. Numerous incidents of sexual assaults and rapes of minors and
women are reported... what happens to them next. We don’t know. We just
41 read about them, shake our heads in despair and then forget the whole issue
as we move on to read the next news item. In this country, the victims would
either die of shock, or commit suicide and those who cannot do anything
would be subjected to further torture—be sold to become a part of the flesh