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Fiscal deficit overshoots budget target

Centre may take tough steps in the remaining part of current fiscal.
India’s fiscal deficit overshot the budget estimate of Rs.5.31 lakh crore by December-end, and may prompt the government to take tough steps in the remaining part of 2014-15 to restrict it to 4.1 per cent of GDP.
As per the data released by the Controller General of Accounts (CGA) on Friday, the fiscal deficit during the April-December period was Rs.5.32 lakh crore or 100.2 per cent of the 2014-15 estimate, mainly because of subdued revenue realisation.

Base year change pushes 2013-14 GDP growth to 6.9%

The base year was last revised in January, 2010
The Modi Government, on Friday, sharply revised India’s 2013-14 GDP growth estimate to 6.9 per cent from 4.7 per cent. The 2012-13 growth estimate was revised to 5.1 per cent from 4.5 per cent.

Former Finance Minister and Congress leader P. Chidambaram said that the data released showed that the 10 years of the UPA government recorded the highest decadal growth since Independence. “The data released today and the other economic indicators conclusively establish that the UPA government succeeded in substantial measure on fiscal consolidation, containing the current account deficit, moderating inflation and putting the economy back on the growth path… It should put an end, once and for all time, to the misconceived charge that the UPA government had mismanaged the economy.”

GDP data for a fiscal undergoes three rounds of revisions; the process takes three years. The Central Statistics Office (CSO) releases the second Revised Estimate for a financial year ending in March on the subsequent January 30.

The estimates released on Friday also follow a change in the base year for calculating national accounts to 2011-12 from 2004-05 in addition to the routine annual revision — where changes are made only on the basis of updated data becoming available.

In case of base year revisions, apart from a shift in the reference year for measuring the real growth, conceptual changes, as recommended by the international guidelines, are incorporated, the official release said.

The changes have reduced the gap between the way India calculates GDP and the methodology used by the International Monetary Fund.

“The direction and quantum of revisions show two things—growth delivered by the Manmohan Singh Government was stronger than estimated earlier and the fiscal consolidation was tighter,” Saumitra Chaudhuri, Member of the Economic Advisory Council to former Prime Minister Dr. Manmohan Singh, told The Hindu.

Manufacturing sector
The jobs-creating manufacturing sector’s growth estimate for 2013-14 was revised to 6.2 per cent from minus 0.7 per cent and for 2012-13 was revised to 5.3 per cent from 1.1 per cent.

Source - The Hindu

New China-Myanmar oil pipeline bypasses Malacca trap

China has taken a firm step to beef up its energy security by inaugurating a pipeline that will bring crude oil from a deepwater port in Myanmar, along a transit route that will bypass the strategic Malacca Straits.

The first tanker that will offload 300,000 tons of oil is expected to arrive on Friday at Maday Island – a deep water port developed by China in the Bay of Bengal. From there, oil, mostly brought from West Asia and Africa, will be pumped into a 2402-kilometre long pipeline that will stretch for 771 kilometres in Myanmar and another 1631 kilometres in China. A gas pipeline, next to the Maday Island terminal, already runs from Myanmar’s port of Kyaukpyu. China also finalised plans to establish a rail corridor from Kyaukpyu to its Yunnan province.

The strategic oil pipeline will service China’s two major growth centres — Kunming and Chongqing, an industrial hub along the Yangtze River delta. Both cities are pivotal in the development of China’s Silk Road Economic Belt the 21st century Maritime Silk Road.

Kunming is one of the starting points of the Maritime Silk Road, because it connects with three ASEAN countries — Myanmar, Vietnam and Laos. Landlocked Laos in turn becomes the gateway to ports in Thailand, and a wider transportation network covering Malaysia and Singapore as well.

Chongqing is already a well-established junction along the Silk Road rail corridor, which begins at the coastal city of Yiwu, and heads to Duisburg - a major destination in Germany’s Ruhr industrial belt.

Significantly, the new oil pipeline bypasses the Malacca Straits — a narrow channel that connects the Indian Ocean with the Pacific. The Chinese are concerned that their access to the Malacca Straits — the main channel of their trade and energy supplies — can become compromised on account of Beijing’s growing rivalry with the United States, and maritime disputes with neighbours in the South China Sea.

China Daily quoted Li Li, strategy director at the energy consultancy firm, ICIS-C1, as saying that the “safety level of pipelines is much higher than for sea shipments, which will ensure a stable energy supply to China". "The economic benefits will grow as deliveries increase," she observed.

As oil begins to flow, the Chinese are also building a refinery in Kunming that can process 10 million tons of crude annually.

Part of the shipments received will also be delivered to Myanmar, said the country’s Vice-President U. Nyan Tun. China and Myanmar have jointly funded the project, including the construction of the Maday oil unloading terminal.

Analysts say that apart from enhancing energy security, the construction of an oil and gas pipeline from Myanmar is driven by environmental considerations, as China works to limit carbon emissions resulting from its over-dependence on coal. Consequently, China has signed a long-term $400 billion gas deal with Russia, which will deliver energy supplies, which will be routed for consumption towards the Beijing-Tianjin-Hebei metropolitan area in the north, and the Yangtze River delta in the east. Russia and China have also signed an agreement for gas supplies along the western Altai route, which China hopes will also help reduce its carbon footprint.

Source - The Hindu

FDI inflows beat global trends, surge 26%

U.S. fell to the third slot, with inflows plummeting to almost a third of the 2013 level
Foreign direct investment (FDI) inflows to India increased by about 26 per cent to $35 billion in 2014, despite macroeconomic uncertainties and financial risks, according to a United Nations report on global investments, released on Thursday.

China, however, received inflows worth $128 billion and with a modest increase of 3 per cent, went on to become the world's largest recipient of FDI. Brazil, another BRICS country and an emerging market like India, received $62 billion of FDI inflows.

The U.S. fell to the third position, with inflows plummeting to almost a third of the 2013 level. Global FDI flows declined 8 per cent to an estimated $1.26 trillion, down from a revised $1.36 trillion in 2013.

Among the top five FDI recipients in the world, four are developing economies — Hong Kong ($111 billion), Singapore ($81 billion) and Brazil ($62 billion).

Fragile economy
Global FDI inflows fell due to the fragility of the global economy, policy uncertainty and geopolitical risks, the latest ‘Global Investment Monitor’ report released by the United Nations Conference on Trade and Development said.

Source - The Hindu

Agni-V's maiden canister trial a roaring success

The missile is expected to be inducted into service in a year after a few more canister trials. 

Marking another technological milestone in the country’s missile programme, the maiden canister-based trial of India’s most potent strategic missile, Agni-V was successfully carried out for its full range of more than 5,000 km from the Wheeler Island, off the Odisha coast on Saturday.

A DRDO missile technologist who was associated with the launch described it as a grand success and said it was a perfect launch. Another missile technologist said it would be the footprint for future configuration of Agni-V.

The missile sealed in a canister and mounted on a TATRA track was launched in its final deliverable configuration at 8.10 am. As soon as the auto-launch command was given, the 17-metre-long Agni-V lifted off majestically leaving a trail of orange flames and leapt into a sunny sky after the gas generator at the bottom of the canister gave it a forceful thrust.

Within moments after its ejection and upon reaching a height of around 30 metres, the first stage got ignited and separated. As it reached a height of more than 500 km and began descending rapidly, the subsequent two stages also got decoupled with clockwork precision and the missile’s nose cone carrying the dummy payload withstood searing temperatures of more than 3,000 degrees Celsius and impacted near the pre-designated point in the Indian Ocean after a flight of about 20 minutes.

The 17-metre-long, thee-stage solid-fuelled missile, developed indigenously by the Defence Research and Development Organisation (DRDO), is expected to boost India’s nuclear deterrence capability along with other strategic missiles in Agni series. Agni-V is capable of delivering a 1.1 nuclear warhead over a distance of 5,000 km and the range of missile can cover most parts of China and Europe.

A network of radars, electro-optical tracking systems and telemetry stations, besides two ships stationed near the impact point monitored the health of the missile during its flight and recorded the terminal event.
This was the third successful flight test of the Inter- Continental Ballistic Missile and the first canister trial.
The missile is expected to be inducted into service in a year after a few more canister trials.

Scientific Advisor to Defence Minister Avinash Chander, the architect of Agni-V, who will be relinquishing office on Saturday, was present along with other top DRDO missile technologists, including Director-General of Missiles and Strategic Systems, Dr.V.G.Sekaran and Research Centre Imarat Director, G. Satheesh Reddy.

Source - The Hindu

Human rights group slams India’s record

A top global human rights group has criticised the Indian government for its treatment of minorities, lack of protection for women’s and children’s rights, restrictions on free speech and insufficient support extended for human rights via New Delhi’s foreign policy engagements.
In its 25th annual World Report on human rights, New York-headquartered Human Rights Watch noted that there was a “spike” in incidents of violence against religious minorities in 2013 in the run-up to the national elections where 133 people were killed and 2,269 injured in 823 incidents.
Further, the report underscored, even one year after the communal violence in Muzaffarnagar and Shamli districts of Uttar Pradesh where over 60 people, mostly Muslims, killed and tens of thousands displaced, “both the central and the state governments had not provided proper relief or justice.”
Additionally the BJP had chosen Sanjeev Balyan, charged with inciting violence during the riots, as their candidate in parliamentary elections and appointed him as a minister, “intensifying Muslim insecurities,” HRW noted, and the state government forcibly closed down relief camps and failed to act on allegations that lack of adequate relief services caused the death of over 30 children in the camps.
Citing numerous other incidents of violence against minorities, including recent cases of discrimination against Dalits in Andhra Pradesh and Bihar, the HRW report focused attention on the plight of those involved in “manual scavenging,” the cleaning by hand of human waste by members of.
“Those who try to leave such work face retribution, including threats of violence or displacement. In March 2014, the Supreme Court held that India’s constitution requires state intervention to end the practice,” the report said.
In terms of women’s rights, In early 2014, the government introduced guidelines for the medical treatment and examination of women and children who report rape, but failed to allocate resources necessary for their implementation. At time of writing only two states had adopted the guidelines.
Although children’s rights in India received a shot in the arm from the Right to Education Act and the Nobel Peace Prize awarded to Kailash Satyarthi, which drew attention to the “continuing employment of children in the worst of labour,” the report said, millions of children from vulnerable communities still faced “discrimination, inadequate support in government schools, and pressures to earn money, soon drop out and start working.”
The report also emphasised that the United Nations Committee on the Rights of the Child in June 2014 identified several areas in which the Indian government had “failed to ensure protection of children from discrimination, harmful practices, sexual abuse, and child labour.”
Finally while speaking out on global and bilateral platforms in the execution of its foreign policy the Modi administration has been “reticent on many regional and global human rights issues where their voice could make a difference,” including India’s March 2014 abstained on a resolution requesting the Office of the High Commissioner for Human Rights to investigate serious violations during the conflict in Sri Lanka.
Human rights also did not feature strongly in public statements when Indian leaders met with counterparts from the U.S., Australia, China, and Japan, HRW said.

Source - The Hindu

Bandipur night travel ban stays

Forests belong to animals and tribes, says Supreme Court

The Supreme Court on Friday refused to lift the night ban on vehicles plying through Bandipur Tiger Reserve, which links Mysuru to parts of Kerala.
A three-judge Bench, led by Chief Justice of India H.L. Dattu, orally observed that forests primarily belonged to animals and tribes who reside there and not to men who carve roads through them.
Evoking its 2013 ban on tourists taking the Andaman Nicobar Trunk Road that passes through Jarawa tribe habitats, the apex court said it could not be seen to be taking a contradictory stand now.
The hearing came on an application by the Kerala government seeking a direction from the court to allow vehicles to move in a convoy through the reserve forest thrice during night-time.
The State had pleaded that the ban, operative from 9 p.m. to 6 a.m., caused great suffering for passengers.

Source - The Hindu

[PIB] New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation (Base Year 2011-12)

1. The Ministry of Statistics & Programme Implementation has released the new series of national accounts, revising the base year from 2004-05 to 2011-12. The base year of national accounts was last revised in January 2010.

2.  Base year revisions differ from annual revisions in National Accounts primarily because of nature of changes. In annual revisions, changes are made only on the basis of updated data becoming available without making any changes in the conceptual framework or using any new data source, to ensure strict comparison over years. In case of base year revisions, apart from a shift in the reference year for measuring the real growth, conceptual changes, as recommended by the international guidelines, are incorporated. Further, statistical changes like revisions in the methodology of compilation, adoption of latest classification systems, and, inclusion of new and recent data sources are also made. Changes are also made in the presentation of estimates to improve ease of understanding for analysis and facilitate international comparability.

3. Improvements as noted above, especially incorporation of new datasets, have resulted in a correction in the level of GDP, which is likely to affect a wide range of indicators where it is used as a reference point: for instance, trends in public expenditure, taxes and public sector debt that are conventionally analysed in terms of their ratios to nominal GDP. It may be noted that the level of revision in the present base revision is not large enough to affect any of these ratios significantly.

4. Users are requested to note that Gross Domestic Product (GDP) at factor cost will no longer be discussed in the press releases. As is the practice internationally, industry-wise estimates will be presented as Gross Value Added (GVA) at basic prices, while ‘GDP at market prices’ will henceforth be referred to as GDP. Estimates of GVA at factor cost (earlier called GDP at factor cost) can be compiled by using the estimates of GVA at basic prices and production taxes less subsidies as given in Statement 3.1 of this note. For the years 2011-12, 2012-13 and 2013-14, GVA at factor cost have been compiled and are presented in Statements 10.1 & 10.2.

5. A brief note on the conceptual and statistical changes made in the new series, and its effect on the key estimates are given in Annex. A short publication giving more details of the revision shall be made available in public domain by the last week of February 2015.

6. The salient features of the key macro-economic aggregates are indicated in the following paragraphs.

Gross Domestic Product
7. GDP for the base year 2011-12 is estimated as Rs. 88.3 lakh crore. Nominal GDP or GDP at current prices for the year 2012-13 is estimated as Rs. 99.9 lakh crore while that for the year 2013-14 is estimated as Rs. 113.5 lakh crore, exhibiting a growth of 13.1 percent and 13.6 percent during the years 2012-13 and 2013-14 respectively.

8. Real GDP or GDP at constant (2011-12) prices stands at Rs.92.8 lakh crore and Rs.99.2 lakh crore, respectively for the years 2012-13 and 2013-14, showing growth of 5.1 percent during 2012-13, and 6.9 percent during 2013-14.

Industry-wise Analysis
9. The percentage changes in the Gross Value Added (GVA) at basic prices in different sectors of the economy are presented in Statements 4.1 and 4.2. At the aggregate level, nominal GVA at basic prices increased by 13.2 percent during 2013-14, as against 12.9 percent during 2012-13 (Statement 1.1). In terms of real GVA, i.e., GVA at constant (2011-12) basic prices, there has been a growth of 6.6 percent in 2013-14, as against growth of 4.9 percent in 2012-13.

10. The growth in GVA during 2013-14 has been higher than that in 2012-13 due to higher growth in ‘trade & repair services’ (14.3%), ‘communication and services related to broadcasting’ (13.4%), ‘other services’ (10.7%), ‘agriculture, forestry and fishing’ (3.7%), ‘construction’ (2.5%) and ‘public administration & defence’ (4.9%).

Net National Income
11. Nominal Net National Income (NNI) for the year 2011-12 stands at Rs. 78.5 lakh crore, while the estimates for the years 2012-13 and 2013-14 are Rs. 88.4 lakh crore and Rs. 100.6 lakh crore, showing an increase of 12.7 percent and 13.7 percent during 2012-13 and 2013-14 rsepectively.

Gross National Disposable Income
12. Gross National Disposable Income (GNDI) at current prices is estimated as Rs.90.6 lakh crore for the year 2011-12, while the estimates for the years 2012-13 and 2013-14 stand at 102.2 lakh crore and Rs.116.0 lakh crore, respectively.

Saving
13. Gross Saving during 2011-12 is estimated as Rs.29.9 lakh crore, and the estimates for the years 2012-13 and 2013-14 are Rs. 31.8 lakh crore and Rs. 34.8 lakh crore respectively. Rate of Saving to GNDI for the years 2011-12, 2012-13 and 2013-14 is estimated as 33.0 percent, 31.1 percent and 30.0 percent respectively.

14. The highest contributor to the Gross Saving is the household sector, with a share of 59.4 percent in the year 2013-14. However, the share has declined from 67.3 percent in 2011-12 and 63.4 percent in 2012-13. This decline can be attributed to the decline in household savings in physical assets, which has declined from Rs.13.4 lakh crore in 2011-12 to Rs. 12.1 lakh crore in 2013-14. On the other hand, the share of Non-Financial Corporations has increased from 29.3 percent in 2011-12 to 34.5 percent in 2013-14. The share of Financial Corporations has been around 9 percent in all these years, while the dis-saving of General Government has decreased from 5.4 percent in 2011-12 to 3.2 percent in 2013-14.

Capital Formation
15. Gross Capital Formation (GCF) at current and constant prices is estimated by two approaches – (i) through flow of funds, derived as Gross Saving plus net capital inflow from abroad; and (ii) by the commodity flow approach, derived by the type of assets. The estimates of GCF through the flow of funds approach are treated as the firmer estimates, and the difference between the two approaches is taken as “errors and omissions”. However, GCF by industry of use and by institutional sectors does not include “valuables”, and therefore, these estimates are lower than the estimates available from commodity flow.

16. Gross Capital Formation (GCF) at current prices is estimated as Rs. 33.7 lakh crore for the year 2011-12, while the estimates for both the years 2012-13 and 2013-14 stand at Rs. 36.6 lakh crore. Since GCF did not increase during 2013-14, the rate to GDP declined during the year to 32.3 percent as against 36.6 during 2012-13. The rate of GCF to GDP excluding valuables stands at 33.9 percent and 31 percent during 2012-13 and 2013-14 respectively. The rate of capital formation in the years 2011-12 to 2013-14 has been higher than the rate of saving because of net capital inflow from Rest of the World (ROW).

17. In terms of the share to the total GCF (at current prices), the highest contributor is Non-Financial Corporations, with the share rising steadily from 46.6 percent in 2011-12 to 51.5 percent in 2013-14. Share of household sector in GCF is also significant, which has declined from 42 percent in 2011-12 to 34.2 percent in 2013-14. The share of General Government in GCF has increased from 10 percent in 2011-12 to 13.2 percent in 2013-14.

18. The rate of Gross Capital Formation at constant (2011-12) prices has decreased from 37.2 in 2012-13 to 33.4 in 2013-14.

19. Within the Gross Capital Formation at current prices, the Gross Fixed Capital Formation (GFCF) amounted to Rs. 33.7 lakh crore in 2013-14 as against Rs. 31.4 lakh crore and Rs. 29.7 lakh crore in 2012-13 and 2011-12 respectively. The change in stocks of inventories, at current prices, decreased from Rs. 2.2 lakh crore in 2011-12 to Rs. 1.8 lakh crore in 2013-14, while the valuables decreased from Rs. 2.5 lakh crore in 2011-12 to Rs. 1.5 lakh crore in 2013-14.

Consumption Expenditure
20. Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs. 50.9 lakh crore for the base year 2011-12, increasing to Rs. 58.8 lakh crore in 2012-13 and further to Rs. 67.7 lakh crore in 2013-14. In terms of GDP, the rates of PFCE at current prices during 2011-12, 2012-13 and 2013-14 are estimated at 57.6 percent, 58.8 percent and 59.7 percent respectively.

21. At constant (2011-12) prices, the PFCE is estimated at Rs. 53.7 lakh crore and Rs. 57.0 lakh crore for the years 2012-13 and 2013-14 respectively. The corresponding rates of PFCE for the years 2012-13 and 2013-14 are 57.9 percent and 57.5 percent respectively.

22. Government Final Consumption Expenditure (GFCE) is estimated at Rs. 9.9 lakh crore for the year 2011-12. The estimates of GFCE at current prices for the years 2012-13 and 2013-14 stand at Rs. 10.9 lakh crore and Rs. 12.8 lakh crore, respectively. At constant (2011-12) prices, the estimates of GFCE for the years 2012-13 and 2013-14 stand at Rs. 10.0 lakh crore and Rs. 10.9 lakh crore respectively.

Estimates at per capita level
23. For the purpose of estimation of Per Capita Income and Per Capita PFCE, Population Projections compiled on the basis ofCensus 2011 have been used. Per Capita Income at current prices, estimated as Per Capita Net National Income at current prices, is estimated at Rs. 64316, Rs. 71593 and Rs. 80388 for the years 2011-12, 2012-13 and 2013-14 respectively. Correspondingly, Per Capita PFCE at current prices, for the years 2011-12, 2012-13 and 2013-14 is estimated as Rs. 41728, Rs. 47572 and Rs. 54133, respectively.
24. Details of these estimates are available in Statements 1-10 appended with this Press Note.

25. The upcoming releases on GDP are indicated below:

           i. Advance Estimates for the year 2014-15 alongwith quarterly estimates for Q1, Q2 and Q3 of 2014-15 on February 9, 2015; and

          ii. Provisional Estimates for the year 2014-15 alongwith estimates for all the four quarters of the year on May 29, 2015.

Source - PIB

[PIB] Chief Minister of Gujarat inaugurates 18th National Conference on e-Governance

The 18th National Conference on e-Governance was inaugurated by Chief Minister of Gujarat, Smt. Anandiben Patel in Gandhinagar, Gujarat today. The two-day Conference held on January 30th & 31st, 2015 is being organized by the Department of Administrative Reforms & Public Grievances (DARPG), and Department of Electronics & Information Technology (DeitY), Government of India in collaboration with the Department of Science & Technology, Government of Gujarat. 

During the occasion, the Prime Minister of India, Shri Narendra Modi gave his message on Twitter. While expressing his confidence that this conference will become a focal point of several innovational ideas that will help our Nation in the year to come, the Prime Minister urged the participants to explore ways to provide as many services as possible through mobile phones to bring the world into our mobile. He reiterated his commitment to realize the dream of a Digital India - with a vision to make India a digitally empowered society and knowledge economy. 

While inaugurating the Conference, Smt. Anandiben Patel, Chief Minister Gujarat thanked Government of India for selecting Gujarat to host the Conference and observed that the theme of the Conference – ‘Digital Governance-New Frontier’ is very relevant. She mentioned that Gujarat has been pioneering several innovative e-Governance Applications like SWAGAT, Public Distribution System, Mutation linked with Registration, e-Nagar, e-Mamta, etc. This has not only helped Government to improve the service delivery but also facilitated the citizens to access services in their own taluka or village. 

Welcoming the delegates, Shri D. J. Pandian, Chief Secretary of Gujarat informed the gathering about the e-Governance policy of Gujarat towards institutionalizing the State e-Governance Model of ‘Digital Gujarat’ to extend the reach and scope of transparent, affordable and efficient Public Services on the principle of ‘Minimum Government, Maximum Governance’. 

Shri Alok Rawat, Secretary DARPG, Government of India in his address stated that IT is only a tool and re-engineering the system and processes with the use of this tool is significant. He informed about various e-governance initiatives which have won the National e-Governance Awards for 2014-15 and stated that the Department is disseminating the best practices in the form of publications, case studies, documentary films etc. for adaptation, replication & further innovation of these practices. He stated that the ensuing Conference will provide a unique opportunity for all States to ponder as to what we have so far achieved in the field of e-Governance and what further can be achieved in future. He mentioned that the Central Govt. has introduced “Jeevan Pramaan” for pensioners, under which the Central pensioners can use biometric verification and Aadhaar number avoiding physical presence for annual verification. Another Software called as Bhavishya online has also been introduced for submitting pension forms online through which Central pensioners can track the progress of their pension sanction process, incorporation of additional DA installment etc. 

Shri R. S. Sharma, Secretary, DeitY, Government of India in his address mentioned that India has been at the forefront of ICT in terms of writing software for the world; however, we have not been able to implement the same software and systems in our governance. He mentioned that three numbers are going to represent Indian citizen in future; they are Aadhar for identity, Mobile No. for public service delivery and bank account No. for financial inclusion. These numbers are for empowerment through which every citizen should participate in digital world. 

Shri R.Chandrashekhar, Chairman NASSCOM stated that there is a need for Government and industry to work in integrated manner for improving the service delivery mechanism. 

During the inaugural Session, the National Awards on e-Governance for the year 2014-15 were presented by the Chief Minister of Gujarat, Smt. Anandiben Patel. These awards were given in twelve different categories concerning various aspects of e-Governance. These Awards distinguish some of the best Government to Government (G2G), Government to Citizen (G2C), Government to Business (G2B) initiatives by various government departments and public sector units. Exhibition of various initiatives of Central and State Government, and Industry was also organised. 

The objective of conferring these awards is to recognize and promote excellence in implementation of e-Governance initiatives. These awards recognize achievements in the area of e-Governance; disseminate knowledge on effective methods of designing and implementing sustainable e-Governance initiatives; encourage horizontal transfer of successful e-Governance solutions; promote and exchange experiences in solving problems, mitigating risks, resolving issues and planning for success. 

The inaugural session was followed by a session on “Digital India” and plenary session on “Digital Governance-New Frontier”. During the two day Conference other interactive sessions would be held on several relevant issues such as “e-Governance Leaders as Change Agents”; “Accountable Governance through Social Media and Citizen Engagement”; and “Integrated Service Delivery-Standards and Interoperability”; “Use of Mobile Platform for rapidly expanding access”; “Skill Development and Employability”; Partnership with Industry – New Business Model and Service Delivery”; and “Citizen Services in a Smart City – New Paradigm”. The Conference with the theme “Digital Governance-New Frontier” also aims to explore the benefits of the use of ICT, how e-Governance leaders can act as the agents of change, integrated service delivery and use of mobile platform for expanding access rapidly. Focus sector of this year is “Skill Development and Employability”. 

Source - PIB

More Autonomy to be Given in Decision Making to DPSUs and OFBs for Better Performance: Parrikar

The Defence Minister Shri Manohar Parrikar today said MoD would be bringing about major changes in the Defence Procurement Procedure and the Defence Production Policy to provide greater autonomy to the Defence Public Sector Undertakings (DPSUs) and Ordnance Factory Board (OFB) units for their expansion and diversification.

Addressing the Consultative Committee attached to his Ministry, here, he said, we need to delegate powers to DPSUs to enable them to take decisions so that they improve the serviceability of the platforms available to the Armed Forces. “Every machine in operation is like adding an additional equipment. DPSUs will be provided support but they must think like a commercial organisation”, he said.

Referring to the Make in India Procedure in Defence, Shri Parrikar said it needs further improvement. Defence industry in India is a unique industry where the only customer is the Services.
The Meeting discussed in detail the performance of the 41 Ordnance factories and 9 DPSUs.

Taking part in the discussions, Members of Parliament wanted to know whether the Government has drawn up a clear roadmap to reduce Defence imports. Some members felt that there was a concerted campaign to denigrate the public sector and to promote the private sector. They felt that unlike consumer products, the design and development of defence product has a long gestation and the contribution of DPSUs has to be appreciated in that light.

They expressed the view that the private sector must be promoted in a big way, but not at the cost of the public sector.
Members of Parliament who attended the meeting included Shri Mallikarjun Kharge, Shri Raj Kumar Singh, Shri Anil Shirole, Prof. Saugata Roy, Shri P Nagarajan, Shri Kirti Vardhan Singh, Shri Rajeev Chandrasekhar, Shri VP Singh Badnore, Dr. Mahendra Prasad, Shri Veer Singh, Shri TK Rangarajan, Shri Bhupender Yadav, Shri HK Dua and Ms Ambika Soni.

The Defence Secretary Shri RK Mathur, Secretary Defence Production Shri G Mohan Kumar, Secretary, ESW, Shri PD Meena also attended the meeting.

Source - PIB

[Ed] Weak backbone

The government needs to create an enabling environment for creating the infrastructure for a digital India

It is disappointing that the National Optical Fibre Network, envisaged to bring broadband services to 2.5 lakh gram panchayats across the country, will miss yet another deadline. Four years after the Centre approved the Rs. 20,000-crore project, only 6 per cent of the work has been completed. Though the UPA government had initially set a target of rolling out the network by 2013, lack of coordination between the various agencies involved and delays in procuring equipment have set back the project by several years. The blame for the slow progress lies squarely with the Department of Telecom, which failed to speed up the roll out, despite repeated prodding by the TRAI and the Prime Minister’s Office. A project of such national importance could have been better executed by involving private players. By entrusting it to public sector undertakings such as Bharat Sanchar Nigam Ltd, which do not have a great track record of completing projects on time, the DoT paved the way for the project to get entangled in time-consuming tendering processes and bureaucratic hurdles. As a result, BSNL, which is supposed to lay 1.64 lakh route kilometre of optical fibre cable by March, has so far done only 11,680 km. Powergrid and Railtel, the other two PSUs involved in the project, have fared worse.

In a digital world, connectivity needs to be treated as a fundamental requirement. Infrastructure creation in the telecom space is plagued with difficulties regarding securing Right of Way for cable networks and erection of communication towers. Each State has its own set of rules, requiring multiple approvals and clearances. This not only escalates costs but is also time consuming. As a result, not many telecom companies have ventured beyond the top 100 cities to lay cables, while mobile operators struggle to get site approvals to erect base stations, leading to network congestion. A centralised, single-window clearance system will address many of these problems.

Along with creating the optic fibre, attention needs to be paid to reaching fibre to homes, which will enable users access to stable, high-speed networks at lower costs. Our policy focus has been distorted towards wireless connectivity. Given the lack of availability of radio spectrum, the delays in freeing up additional bandwidth and the rising cost of scarce spectrum, fibre-optic connectivity offers a sustainable alternative. The more robust the telecom network becomes, the more telephone conversations and data traffic it can carry. Telecom users in the US and Japan, for instance, are able to access video and live streaming at over 100 Mbps speeds. In contrast, the 2.5 lakh gram panchayats identified under the optical fibre project do not have access to any data network. If the Modi government is serious about putting India on the world’s digital map, it must quickly put in place a regulatory mechanism that enables and encourages infrastructure creation in this space.

Source - Business Line

[Ed] Year-end sales

The Centre has managed to raise approximately Rs 22,600 crore — about 38 per cent of its full-year disinvestment target of Rs 58,425 crore — by selling 10 per cent of Coal India Limited through the “offer for sale through stock exchange” route. While the offer for sale was just oversubscribed (by 1.04 times), retail investor participation — 20 per cent of the shares were set aside at a 5 per cent discount on the floor price for retail investors — was subdued with only approximately 42 per cent of the quota being subscribed. This may partly have been because the swiftness with which the government announced and executed the plan caught retail investors unawares.

The Centre’s urgency was probably fuelled by the fact that by end-November, the fiscal deficit, which is aimed at 4.1 per cent of the GDP, was already 99 per cent of the full-year target. This, in spite of the headroom created by falling oil prices. The government is said to be ready to follow up the Coal India sale with share sales of Oil and Natural Gas Corporation, Power Finance Corporation and Rural Electrification Corporation this fiscal. While it is good that the Centre is finally moving on the disinvestment agenda, the bunching up of sales towards the end of the fiscal is undesirable and inadvisable as it puts investors and markets under pressure. Indeed, given that the Sensex is up by 25 per cent since last April, it is inexplicable that aside from the 5 per cent Steel Authority of India Limited sale, there was no other disinvestment. Ideally, stake sales should be spread out over the entire year.

Further, the route that the Centre used to offload shares — offer for sale through stock exchange — was originally devised by the Securities and Exchange Board of India as a way for promoters to dilute their holdings in order to comply with regulations. It was not intended to be used as a method to raise capital. The government should rather have floated a follow-on public offer — in 2010, Coal India was listed through an initial public offer that was oversubscribed 15 times. This would have been in the fitness of things.

Source - Indian Express

[Ed] Climate change deniers

The passage of the Keystone XL pipeline bill, the first priority of the new U.S. Senate controlled by Republicans, hit a roadblock on January 27 when the Senate managed to muster just 53 votes in its favour, seven shy of the 60-vote threshold to limit debate. The nearly 1,900-km-long proposed pipeline, which will transport 830,000 barrels of oil a day from Alberta’s (Canada) vast oil sands to Nebraska, is a highly controversial project. Unlike conventional crude, mining and turning tar sands into oil is highly carbon-intensive and hence has far worse consequences for global warming. It is for this reason that President Barack Obama had threatened to veto the bill. But the bill produced some interesting results before it reached the stage when the Senate voted on it. For the first time, the Republicans’ slowly but surely shifting position on climate change became evident. When the first measure — climate change is real and not a hoax — offered as an amendment to the legislation that will pave the way for the Keystone XL pipeline project was put to vote on January 21, except for one Republican the entire Senate agreed that climate change is for real. Interestingly, Republican Jim Inhofe, the veteran climate change denier in the Senate, was one of those who voted for the amendment. For him, the hoax was that “some people think… they can change climate”.

Though a majority of the Senators also agreed that humans are singularly responsible for climate change, two crucial amendments that pointed a finger at humans failed to cross the 60-vote threshold. While an amendment affirming that humans contributed to climate change was just one short of 60, the third amendment, that “human activity ‘significantly’ contributes to climate change”, got only 50 votes; just five Republicans voted for it. Apparently, the emphasis on human contribution turned out to be the sticking point. The Senate has till date refused to widely agree that man-made climate change is real. Despite a body of evidence unequivocally proving that human activity has been the causal factor for climate change, the deniers are in no mood to change their stand. So long as policymakers fail to acknowledge the havoc created by human activity, there is little possibility that anything substantial will be done to address it. The consequences will be terrible and irreversible if ideology continues to stand up to science. With reckless emission of greenhouse gases continuing, the Earth is already on “track to warm by 3.6° Celsius”, as the International Energy Agency estimated last year. This is way beyond the goal of limiting the increase in global average surface temperature to 2°C above the pre-industrial level.

Source - The Hindu

[Ed[ Nuclear deal no cause for celebration

Any understanding between Narendra Modi and Barack Obama on circumventing the Indian nuclear liability law to protect American reactor suppliers should be a matter of concern

At their recent meeting, Prime Minister Narendra Modi and President Barack Obama discussed methods of circumventing the Indian nuclear liability law to protect American reactor suppliers from the consequences of accidents caused by design defects. Although public details are scarce, if they have indeed reached an understanding on the issue, then this is not a cause for celebration; it should be a matter of deep concern.

The importance of supplier liability is illustrated by the Fukushima nuclear disaster in 2011. When the reactors were hit by the tsunami that year, the weakness of the General Electric (GE) Mark I design was cruelly exposed. The reactors’ inadequate containment was unable to prevent the spread of radioactivity when the cooling systems failed and pressure built up inside the reactors. Although this design defect was first noted about 40 years ago, just as the Fukushima reactors were commissioned, the industry resisted regulatory changes that could have ameliorated the disaster.

Framework of impunity

The Japan Center for Economic Research estimated that the cost of cleanup at Fukushima may reach $200 billion. A 2013 expert study “Accounting for long-term doses in worldwide health effects of the Fukushima Daiichi nuclear accident” published in the journal Energy and Environmental Science estimated that the disaster may lead to about a thousand excess deaths due to cancer. However, it is unlikely that GE will ever be held accountable for its poor design choice. Under Japanese law, the supplier is indemnified from liability for an accident. This is the framework of impunity under which nuclear suppliers like to operate.

Legal indemnity for suppliers creates a “moral hazard”— encouraging suppliers to take excessive risks since they don’t have to pay for the consequences. The case of GE not strengthening the Mark I containment is not an exception. The Presidential commission appointed to study the 1979 Three Mile Island disaster, which saw a partial nuclear meltdown, pointed out that the supplier, Babcock and Wilcox, was already aware of design defects that contributed to the accident, but never bothered to resolve them.

Nevertheless, suppliers have ferociously defended their privilege of being free of liability, and they exerted tremendous pressure on the Indian government when the Civil Liability for Nuclear Damage Act was framed in 2010. Contrary to the industry’s propaganda, this is not a “tough” law. Indeed, several clauses in the law were directly lifted from an annex to the “Convention on Supplementary Compensation,” created by the U.S. government to benefit its nuclear industry.

The law channels primary liability for an accident to the operator — the public sector Nuclear Power Corporation of India — and caps it at Rs. 1,500 crore. This overrides the absolute liability judgment of the Supreme Court, passed after the Bhopal gas leak disaster, which had no such limit. The cap is about a thousand times smaller than estimates of the damage that a serious nuclear accident could cause. Therefore, the law is designed to protect the financial interests of the operators and the supplier; victims or the taxpayers will simply have to bear costs beyond this cap.

Multinational suppliers are unhappy because a relatively minor clause allows the operator to recoup this compensation. By the scales of nuclear commerce, the amount of money involved is minuscule. A single reactor may cost up to an estimated Rs. 60,000 crore — 40 times the maximum amount the supplier could be liable for. The figures of each unit have been arrived at from studying plants under construction in Finland and France. If imposing liability on suppliers leads to cost increases, it can only mean that they are using the law as an excuse to escalate prices.

A close reading of the statements made by advocates of their interests reveals what suppliers are really concerned about: the Indian law could set a precedent that could undermine the iniquitous international system of impunity that they enjoy. “If litigants were able to file suit against suppliers, essentially it could destroy the whole industry,” declared Ashley Tellis, an American negotiator for the nuclear deal.

The United Progressive Alliance government repeatedly tried to subvert the law, earning a sharp rebuke from Arun Jaitley who wrote in 2013 that “a leopard never changes its spots. The government’s intention to dilute the right of recourse … [has] continued.” He should explain why his own government is pursuing a similar policy. The current proposal of using a “legal memorandum” to reinterpret the law is similar to the UPA’s attempt to sign away its “right of recourse” on various pretexts.

No tangible benefits

The most baffling feature of the current agreement is that it holds no tangible benefits for India. The United States has offered to sell two reactor designs — both of which are expensive and untested. The Westinghouse AP1000, which has been chosen for Mithi Virdi (Gujarat) is not in commercial operation anywhere and has encountered difficulties wherever it is being built. At Plant Vogtle, in the U.S. state of Georgia, Westinghouse and its partner Georgia Power have sued each other for a billion dollars over cost increases and delays. Even in China, the AP1000 has been delayed by about two years because of problems with reactor coolant pumps.

Even less can be said for GE’s Economic Simplified Boiling Water Reactor (ESBWR), selected for Kovvada (Andhra Pradesh). After years of questions about ESBWR’s steam dryer, the design obtained regulatory approval from the U.S. Nuclear Regulatory Commission — the first step before construction can commence — only in September 2014. There are no firm orders for the ESBWR.

The Vogtle plants were initially estimated to cost about $7 billion apiece. Even accounting for lower construction costs in India we showed — in a detailed study “Cost of Electricity from the Jaitapur Nuclear Power Plant” published in the Economic and Political Weekly — could translate into electricity tariffs that are as high as Rs. 15 per unit. If the government is looking for cheap electricity to promote development, importing American reactors hardly seems like a smart choice.

Last week, the residents of Mithi Virdi wrote an open letter to Mr. Obama and Mr. Modi reminding them that the “gram panchayats of four most-affected villages … [have] passed a resolution declaring the entire … region as [a] nuclear free zone.” The leaders of the “world’s largest democracies” face a clear choice. They can channel billions of dollars into nuclear corporations by sacrificing safety and economic prudence. Or they can heed the democratic voices from Mithi Virdi and cancel these unnecessary deals.

(Suvrat Raju and M.V. Ramana are physicists with the Coalition for Nuclear Disarmament and Peace)

Source - The Hindu

[Ed] Food insecurity acts

The Shanta Kumar Committee’s recommendations to unbundle the Food Corporation of India are in tune with U.S.-led demands raised in the World Trade Organization

The Shanta Kumar Committee report, released last week, on a range of issues relating to procurement, storage and distribution of food grains is not only deeply flawed in its reading of the situation on food security, but also short on facts. It was prepared under the guidance of the Prime Minister’s Office.

For example, the report asserts that only six per cent of all farmers have benefited from Minimum Support Price (MSP) through sale of food grains to an official procurement agency, according to data of the National Sample Survey Organisation’s 70th round. But analysts have found discrepancies between the survey’s estimates of the food grains sold to official procurement agencies and the actual amount of grains procured by official agencies for that year.

For kharif, the NSSO survey estimates that 13 million tonnes were sold to a procurement agency while the actual procurement that year by government agencies was 34 million tonnes. For rabi, the gap is even larger: 10 million tonnes estimated in the survey while the actual amount procured by an official agency was 38 million tonnes.

Selling at distress prices

Why did the Shanta Kumar Committee overlook these possible underestimates? Was it just to arrive at the sensational figure of six per cent and then argue that since only six per cent of farmers get the benefit of MSP and procurement, why have the Food Corporation of India (FCI) at all?

But there is another way of looking at it. It is true that large numbers of farmers are deprived of the benefits of MSP. It is not because they do not want to sell to the procurement agencies but because they do not have access to official procurement centre, which are set up only in selective States and regions. The majority of farmers sell at distress prices which push them deeper into debt. For this large section of rural India, reforming the system would mean a substantial increase in the number of procurement centres and easier access, so as to enable it to benefit from MSP.

As soon as the Bharatiya Janata Party (BJP) assumed office, the first thing it did was to bring down the rate of increase of MSP to just about three per cent over the previous year — this when the prices of farm inputs have increased phenomenally.

Some States under pressure from Kisan movements decided to give a bonus over and above the MSP to help farmers. The Modi government stepped in to “punish” such States. It decreed that it would not procure any food grains over and above the requirement for the Public Distribution System (PDS) from such States which gave the farmers a bonus.

Confronted with the Central government’s policy, the Chhattisgarh government, for example, which had given such a bonus, issued a circular that it would procure only 10 quintals of paddy per acre from individual farmers. Andhra Pradesh has also limited its procurement. Thus, open-ended procurement which ensured India’s food security and farmer security is now in the process of being whittled down while the rate of increase of MSP is delinked from the increases in the cost of production and adequate profit margins. This is in contrast to the Swaminathan Commission’s recommendation for MSP to be calculated at the cost of production plus 50 per cent profit, to keep agriculture viable.

The immediate impact in Chhattisgarh has been distress sales by farmers to private traders who can dictate prices, buoyed by the assurance from the government that it would not procure more grains.

The Shanta Kumar Committee report takes these dangerous steps further by advocating limited procurement as the officially declared policy.

This is directly linked to its recommendation to scrap the existing Food Security Act (FSA). The Committee wants to reduce the coverage from 67 per cent to 40 per cent of the population. It also wants to double the prices that these food grains are to be sold at under the present Act by linking the price to the MSP. This means resurrecting the fraudulent and discredited Above Poverty Line and Below Poverty Line estimations and depriving equally poor people of subsidised grains. In fact, as the Left has consistently argued and fought for, it is only a universalised PDS that can meet the requirement to make India hunger-free. The Shanta Kumar Committee wants to eliminate even the inadequate provisions under the existing FSA and push the country back to the worst days of food insecurity.

Ironically, such a recommendation comes at a time when the United Nations agencies monitoring country-wise performances towards meeting the Millennium goals have praised India for its reduction of malnutrition, giving credit for this to food security systems like the “ICDS [Integrated Child Development Services] as well as the public distribution system.” In spite of the reduction, which brings India from the “most alarming category” to the “seriously affected” category, the country is still home to the largest malnourished population in the world; its rank in the Global Hunger Index at 55 out of 76 emerging economies is only slightly ahead of Pakistan and Bangladesh but worse than Sri Lanka and Nepal.

As in the case of procurement, the Modi government has started to subvert the FSA in the case of implementation too. The FSA became law in September 2013. More than a year later, it is being implemented in only 11 States. The Central government has excluded 25 States and Union Territories from the ambit of the Act. According to a release on November 28, 2014, these States and Union Territories “have not completed the preparatory measures required for the implementation of the Act.” It was further stated that “the Central Government extended the deadline for the implementation of the Act by another six months, namely till April 2014.”

The Government of India has no right to make the implementation of the Act conditional to “preparedness” on the basis of parameters it has decided arbitrarily. There is no such legal provision in the Act, nor is there any legal deadline. But the official release reflects clearly the present government’s hostility towards taking any responsibility for food security. This is also reflected in the allocation of food grains. If the FSA is to be implemented, then according to the calculations of the Food Ministry, the allocations will go up to 550 lakh tonnes of food grains compared to the pre-FSA allocations in 2012-2013 of 504 lakh tonnes.

Shift to direct cash transfers

According to the Ministry’s food grains bulletin till December 2014, allocations to the States were just 388 lakh tonnes of food grains. This is roughly the same as it was the previous year, before the Act was passed. In other words, the Modi government has already stayed the implementation of the FSA. It is preparing to shift to direct cash transfers for a more restricted number of families.

The Shanta Kumar Committee’s recommendations to unbundle the FCI, allowing the free play of market forces in procurement and storage of food grains, and restricting the FSA are in tune with the demands raised by the western world led by the U.S. in the World Trade Organisation against India’s systems of procurement, storage and distribution. The India-U.S. agreement to end the stalemate in the WTO process is clearly premised on the changes being suggested by the Committee.

The government can be expected to try and bulldoze the required amendments to the FSA through Parliament using its majority. But undoubtedly it will face the resistance of the people.

(Brinda Karat is a member of the CPI-M Polit Bureau.)

Source - The Hindu