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Public-pvt partnership to boost research in 12th five-year plan
The 12th five-year plan, whose period is just about four months away, will see a significant focus on promotion of science and technology and public-private partnership in research areas.
“The science and technology sector will occupy the centrestage in the 12th five-year plan. We are aiming to propel India from poor economy to middle economy status. By the end of the plan period, we aim to achieve remarkable growth in per capita income,” member of the Planning Commission Dr K Kasturirangan said.
He was speaking at a panel discussion on ‘science policy making’ at the ongoing 99th Science Congress here.
The draft policy would suggest a significant increase in the state spending on S&T, from the current 0.9 per cent of GDP to 2 per cent, the noted space scientist said. This is in tune with PM Manmohan Singh’s call for a significant increase in R&D spending and catching up with competitors like China.
He said special programmes would be started to nurture students for science and private industries would be asked to increase funding for research and development.
There would be more public funding in research, Dr Kasturirangan said.
The science policy is expected to increase employment through manufacturing sector, harness young talent pool, encourage participation in research and increase industry-academia interaction, he said.
Dr VM Katoch, Director General (DG) of Indian Council of Medical Research, said the 12th five-year plan must focus on health for all.
Dr S Ayyappan, Director General of Indian Council of Agriculture Research (ICAR), said there was a need for de-bureaucratisation of procedures.
Dr Samir K Brahmachari, Director General of Council of Scientific and Industrial Research (CSIR), said the education system should be more flexible and the youth should be given bigger responsibility to guide scientific projects.
Retail FDI can perk up farm growth
After growing at a fast rate, the farm sector today faces stagnation. The possibility of a second Green Revolution rests with the marketing and development of crops other than rice and wheat. Farmers, cooperatives and governments have proved their inability in doing so. Hence, the need for foreign investment in retail.....
THE decision of the Union Government to allow foreign direct investment (FDI) in multi-brand retail is being debated by touching various dimensions of livelihood of small farmers, trade, middlemen, price rise, malpractices, scope of value addition, consumers’ welfare etc. Such an economic transformation ought to be thrashed out at this juncture. For this, we have to first analyse our present situation and have a glance of the valley we have already stepped in. Till now 51% FDI in single-brand retail is allowed.
An average farmer of Punjab or Haryana has got expertise on food-grain production system, which he has nicely demonstrated on the ground. Now he is at the crossroads and faces economic stagnation and looks for new avenues. Taking into account the aspect of opening up of the economy, we need to view the things in a diametrically opposite perspective.
The current production system is quite rigid and has to be geared up to cater to consumers’ requirements. To capture the need of various sections of society in terms of consumer’s taste, product quality, safety, nutrition etc, the essential services are required to be provided and the existing ones to be upgraded, necessitating the opening of retail chain stores in the state. Therefore, to demonstrate the technical and pricing efficiency, through horizontal and vertical market linkages, harnessing the scale economies appears to be a feasible solution.
There is need to highlight possibilities and assess market requirements for boosting the farm sector’s performance. On this pretext, the following specific questions arise: whether the existing structure of agricultural production and marketing is conducive for a second Green Revolution? If not, how and who should come forward to handle this situation? What are the possibilities and directions for vertical integration in terms of value addition in alternative enterprises?
Marketing pattern
As a food security measure, almost the entire rice and wheat production is procured by the national government at a pre-agreed price from farmers. The market infrastructure was developed to cater to the requirements of foodgrains. A slight increase in production of perishable goods can depress the prices even to the zero level, leaving farmers helpless, which we have been practically witnessing.
Thus farmers hesitate to undertake market risks. The system so far has also not felt the need for handling perishable products from the state. Now, with growing consumerism due to the rising disposable income, level of education and urbanisation, and the changing attitude of the younger generation, a consumer-oriented rather than production-based market system is becoming better workable. In view of this, we have already experimented with various alternatives that can come forward and shoulder the responsibility.
An average farmer has a small farm and is handicapped by constrains of inadequate resources. Incurring heavy investment with business aptitude is not within his reach. Farmers’ cooperatives have been tried for long but have not been successful due to various reasons, including typical Punjabi psyche and political interference and thus lack initiatives to take up such activities.
Autonomous investment is also a remote possibility as the state governments have already washed their hands off with the excuse that they are starved of financial resources, obviously due to various populist measures adopted on different fronts. The initiation of contract farming by roping in private trade was an interesting positive step taken by state governments a few years back. This experiment too is fumbling due to a number of reasons, especially basic structural flaws in the system and over-interference of the government.
There has not been even an iota of success whenever a high-level consumers’ organisation had tried to operate in the country.
Thus the only ray of hope is investment by big business houses which have already initiated the process of horizontal and vertical market integration in farm products. Let the potential farmers’ organisations and individual farmers also coordinate and compete within the system. Going a step further, the market view should not be limited only to the domestic consumers but also to potential global markets to even out market fluctuations.
Public perception
By population, India is a big country. There are about 12 million retail outlets in the country which means that for every 90 persons there is one retail shop. The need for a single window to meet the domestic requirements is increasingly felt. A vast majority of the population has small means with low purchasing power. Market requirements of the domestic consumers are diverse as the population has varying income levels, cultures and tastes etc. Most of the production units are also small, scattered and unorganised.
Therefore, market channels are generally long and marketing costs and margins are quite high and account for a sizable part of consumers’ cost. The varieties of consumer goods are also not so wide to meet the pocket and taste of consumers. As compared to 80% in the USA, 40% in Thailand and 17% in China, only 4% of the consumption needs are realised through organised retailing in India. Across the commodities traded through such markets, most of these products are directly or indirectly the outcome of the farm sector.
A number of chain stores such as Bharti Wallmart, PepsiCo, Reliance, Tata Khet Se etc are coming up in the area as well. An opinion survey of various sections of society about such development has revealed certain issues which may be considered in the light of allowing foreign investment.
Investment only in retail trade should be kept confined. Some liberty was taken by MNCs in the past when they entered agro-processing but shifted to soft drinks. Similarly, investment in real estate made by retail stores has resulted in significant gains. As the land prices are booming, the gain from this proposition is sometimes even higher than the trading of goods.
Employment of human factor is feared to be getting adversely affected. This was argued by others and countered with the fact that only 8% of the population of India is in retail business as against 20% in the US. Evidently, the supply chain gets shortened but the spread of utilities and services is widened.
Disparity in the economy may also widen because small would not be able to compete with big business houses. Experience of other countries indicates that small and ancillary trades coexist and continue to flourish. Establishment of retail store becomes a mini focal point giving birth to a number of small units around.
Economic efficiency improves due to large-scale operations, division of labour and mechanical handling. Thus it lowers the cost of operations such as storage, transportation, handling, processing and packing. High selling cost such as advertising, staff salaries, maintaining showrooms could be exploitative for consumers and increase undue costs. However, competition among big business houses themselves and with small traders in terms of price, quality, variety and services is an auto check to improve efficiency, maintain quality and minimise wastage.
There is a serious concern of the nations to minimise wastage and spoilage which appears to be better addressed through the development of chain stores. It is an accepted fact that the wastage of perishable goods by public agencies and petty traders is enormous due to poor handling of the produce and lack of suitable infrastructure. Various studies have confirmed 30-40 per cent transit losses in case of fruits and vegetables, which we cannot afford.
Having better information about domestic and global market signals and Sanitary & phyto-sanitary (SPS) measures and technical barriers of trade (TBT) standards, quality of goods may improve, make crop diversification possible, farm incomes may increase and export of farm goods is likely to go up.
The claim of ‘targeting small farmers’ is just not practicable in such a situation. First, almost all farmers are small and further limited by the ceiling on land holdings. Secondly, buyers and sellers both feel convenient by contractual agreements with bigger ones. Moreover, there cannot be any effective check for depriving larger farmers from entering the field. Therefore, growing population, urbanisation, consumerism and changing lifestyle demand no going back from increasing chain stores to the traditional system of petty shop trading. Better services, lower prices, more variety and quality products are expected due to such development. Farmers’ organisations and competitors may come up to balance the ill-effects.
Case for Delhi meet on Kabul : Role of regional stakeholders is crucial
DURING the last two months in 2011, there were two major international conferences in Istanbul (Turkey) and Bonn (Germany). With the 2014 deadline for the US-led foreign troop withdrawal fast approaching, the international community is frantic about achieving its interests before getting out of Afghanistan. What can India do in this situation?
Despite Islamabad’s negative contribution to peace in Afghanistan, there has been an international recognition that Pakistan is a part of the solution. It appears that Pakistan has succeeded in positioning itself as a central piece in the Afghan chessboard. Where has India positioned itself? What roles does it want to play to protect its own interests? What strategies could New Delhi pursue to improve its position in deciding the future of Afghanistan?
First, an analysis of where India stands among the international community in deciding the future of Afghanistan. While the US and the rest of the international community appreciate New Delhi’s economic investment in Afghanistan, not many of India’s “strategic partners” in the American and European continents would give a blank cheque. While India has already invested billions of dollars in Afghanistan, and is willing to expand further its political and economic footprints, there is an apprehension.
The international hesitation in allowing India to do what it is willing is based on two counts. First, there is an apprehension that India is expanding its intelligence network within Afghanistan to prevent Pakistan from having strategic depth vis-a-vis India. Some even suspect that India is building a coalition within Afghanistan to counter Pakistan’s presence. In short, there is strong suspicion among the international community, and some even openly accuse India of using Afghanistan as a proxy against Pakistan.
Second, a substantial section of the international community, including the US, does not want to offend the sentiments of Islamabad and its military by allowing India to have a larger footprint in Afghanistan. The general belief among this section is that Pakistan’s inputs and involvement are much more important to build a stable Afghanistan. This section acknowledges, at times even publicly, that Pakistan has played a negative role in Afghanistan, yet it would want to work with Islamabad.
With President Hamid Karzai failing to have a stable government in Afghanistan, the above section considers Pakistan much more important for the future of Afghanistan than any other country. This is why, despite regularly accusing the ISI of using the Taliban and the Haqqani network against the international troops and the Karzai government, they still want to work with Pakistan and are willing to exclude India in this process.
Given the importance that Islamabad has succeeded in getting in the estimation of the international community at the cost of reducing the Indian footprint, what can New Delhi do? How can India protect its own interests in Afghanistan and help it to stabilise?
A Delhi conference with substantial inputs from regional countries around Afghanistan will help India achieve its objectives and stabilise the Kabul regime for the following reasons. First, in recent months there have been two international conferences — one in Istanbul and the other in Bonn — during the second week of December. Both conferences had been organised by the international community, which would like to protect its own investments in Afghanistan and help Mr Karzai. The primary purpose behind this analysis is not to criticise India for what it has achieved as a result of these two conferences. The analysis is aimed at finding ways and means so that India can achieve its own objectives.
Second, a Delhi conference is essential to reach out to the regions and countries surrounding Afghanistan. Most countries of Central Asia, Russia and Iran also have substantial interests in Afghanistan, besides Pakistan and China. New Delhi will not be able to protect its interests or investments in Afghanistan on its own. Besides, India, on its own, could only devise strategies to adapt itself to the changing game rather than ambitiously change the game in Afghanistan. Should India play according to the changing game or plan towards changing the game in Afghanistan? A Delhi conference may help India decide its primary objectives and then achieve them.
Iran, Russia and Central Asia, in particular, have substantial interests in what happens in Afghanistan. All these actors have serious reservations about the efforts made by the US and its NATO partners, though they have been taking part in international efforts. Iran is extremely apprehensive of the American interests and presence in Afghanistan. Tehran by now should be convinced that the US troops are not going to leave Afghanistan completely by the end of 2014. There will be a substantial American military presence in Afghanistan, which is not likely to be targeting only the Taliban and Al-Qaeda. Tehran has every reason to suspect that the American presence in Afghanistan will be detrimental to its own future. The possibility of Tehran even tactically supporting the Taliban to achieve its short-term objectives cannot be ruled out. Iran may see the Taliban in Kabul as a lesser threat than Mr Karzai collaborating with the US troops.
Central Asian countries and communities like the Uzbeks and the Tajiks have their own objectives to achieve in Afghanistan because of historical linkages and the presence of their brethren in that country. None of the Central Asian countries is comfortable with an Afghanistan totally under the control of a Pashtun leadership — Taliban or otherwise — with substantial linkages with Islamabad. Russia also has the same interests and apprehensions in Afghanistan.
Third, a Delhi conference, if projected as a complementary process and not in competition with the existing international conferences, would fill the gap in the much-needed regional approach towards stabilising Afghanistan. The international community is keenly looking for alternative approaches. During the recent Istanbul conference there was reluctance towards a regional approach among the Afghan neighbours, primarily because it was seen as an American project. If India has to lead the efforts for an alternative process, which is seen as independent one, the regional countries, including Tajikistan, Uzbekistan and Iran, along with Russia and Afghanistan, may be favoured. Iran and Russia, in particular, will always be apprehensive of any West-led initiative on Afghanistan. While they may not be too anxious to accept the idea of a Delhi dialogue on Afghanistan, they are likely to be less suspicious about an Indian initiative. As mentioned earlier, if it is projected as a complementary process, even the West may be willing to support such an initiative.
For India, a Delhi conference on Afghanistan would provide the much-needed space to work with the neighbours of Afghanistan. From the Turkmenistan-Afghanistan-Pakistan-India gas pipeline to reviving the old Silk Route, there is much that this conference can focus on like economic, cultural and political issues. Perhaps more on economic and cultural issues and less on political issues, for it should be left to the Afghans to decide what form of government they would like to have. This would not only allow India to work with Afghanistan and its neighbours, but also result in creating regional constituencies within Afghanistan.
Pakistan is likely to remain suspicious and may not take part in such an initiative. So would be China. The objective of a Delhi initiative should not be aimed at isolating Pakistan; India needs to play a role if any initiative on Afghanistan has to succeed. So far as the Chinese role and their investments in Afghanistan are concerned, there has been an exaggeration. Will they make use of a regional initiative, or try to scuttle it? The real question is: Will Pakistan be willing to take part in an Indian initiative?
Irrespective of how Pakistan behaves, India needs to pursue multiple strategies to protect its interests in Afghanistan. A Delhi conference on the lines of the Bonn and Istanbul conferences may give the much-needed space to India to enlarge its footprint in Afghanistan.
New high in US-Iran tension : Showdown over N-issue imminent
IT seems Iran is not far away from acquiring the nuclear weapons capability. That is why the US appears to be more worried now than it has ever been. The buzz is that the US wants to paralyse the Iranian economy to force Tehran to abandon its dangerous ambitions. The US has imposed fresh sanctions on the Iranian central bank and financial sector to prevent it from doing oil-related transactions. The sanctions will also be applicable in the case of the countries that refuse to snap their trade relations with Iran. Russia and China, which have close economic relations with Iran, may be among the other affected countries if no corrective measures are taken. This may complicate the situation, leading to unimaginable consequences.
Iran is showing no signs of being scared of the US action. Instead, it has warned the US to keep off the strategically significant Strait of Hormuz through which one-fifth of the world’s oil supply passes. The US navy’s biggest aircraft carrier is about to enter the Strait of Hormuz as a matter of routine. Iran claims that it has the right to block the shipping channel and it will do so as its response to the latest US action to reduce Tehran’s earnings through oil exports considerably. The showdown, which appears imminent, between the US and Iran may lead to an acute oil shortage, resulting in a fresh rise in energy prices. The situation may become more complex with the European Union also threatening to announce an embargo on importing oil from Iran.
All this is happening over six weeks after the International Atomic Energy Agency issued its latest report saying that Iran may be working secretly over a nuclear warhead design despite its denials to the contrary. Since then the US has been under tremendous pressure from its West Asian allies like Saudi Arabia to prevent Iran from acquiring nuclear weapons which will upset the power balance in the region. The Saudis may help the US scheme of things by increasing their oil production to keep its prices at the desired level. The Iranians seem to be ready for a military conflict with the US. Can the US afford it when its economy is finding it difficult to come out of the recessionary quagmire?
Energy and security
Which should prevail, concerns of energy security or of national security? The row the Prime Minister's Office (PMO) is now confronted with is between the Petroleum and Defence Ministries over security clearance for oil and gas exploration in eight blocks off the east coast and in the Andamans. These blocks are among the 34 that the Petroleum Ministry awarded under the New Exploration Licensing Policy (NELP) last year to Indian and foreign companies. The blocks were auctioned only after securing clearance from the Naval headquarters, according to the Petroleum Ministry. Yet, after the blocks were awarded in early 2011, the Defence Ministry refused permission for exploration activity in three specific blocks as the Navy was using these seas for submarine manoeuvres and training. Though a truce was reached, with the Navy promising to review its stand and the Petroleum Ministry agreeing to demarcate no-go zones for exploration, the stand-off continued forcing the PMO to intervene. The Petroleum Ministry has complained that its credibility in the eyes of prospective investors in oil exploration is at stake.
Energy security is important but national security is paramount, and in any clash between the two, the latter has to prevail. If oil exploration activity encroaches into the Navy's training and operational theatres, there is absolutely no way that it can be permitted. That said, there was evidently a lack of application of mind by the Navy and the Defence Ministry in the first instance — that is, when the Petroleum Ministry referred the blocks to them before the auction. Having given permission, to retract it later and that too after the blocks were auctioned, is clearly not the right thing to do. The PMO has to question the Defence Ministry on this if only to ensure that such instances do not recur. As for the Petroleum Ministry, a lot of embarrassment could have been avoided if it had decided not to auction blocks that fall in defence-sensitive areas, such as the ones the Navy is now objecting to. The problem arises because after nine rounds of NELP, all the easy-to-tackle blocks have been contracted out and what remain are the difficult ones from a technological or security standpoint. Maybe, it is time for the Petroleum Ministry to go slow on the auctions, which have not attracted much foreign investment anyway, and to focus on regulating the blocks that have been already contracted. Auctioning newer blocks is, after all, not the only way to increase oil and gas output.
Security-driven ties with Israel : India needs to review its policy
ON November 29, 1947, the UN General Assembly passed a Partition Plan, with a two-thirds majority, dividing the British Mandate of Palestine into two states — Jewish and Muslim. The resolution was accepted by the Jewish leadership and rejected by the Arabs. A newly independent India, torn apart by the massacres that followed its communal partition, predictably voted against the partition of Palestine on communal lines. Just over two years later, responding to international realities, India recognised Israel. But the seeds of partition of Palestine were sown half a century earlier, when the First Zionist Congress held in Switzerland in 1897, called for the establishment of Jewish sovereignty in the “Land of the Pure”, or Palestine.
Arab intellectuals responded two decades later, demanding the independence from the Ottoman Empire of all Arab provinces, including Palestine. Refusing to recognise the State of Israel, invading Arab forces were humiliatingly defeated in wars with the Jewish state in 1948, 1967 and 1973. The Egyptians made peace with Israel in 1979 and have since maintained a normal, but sometimes uneasy relationship with it. Jordan soon followed suit.
Ever since then a number of Arab countries commenced overt or covert ties with the Jewish state. Some, like Kuwait and Oman, shut their doors to the free entry of Palestinians. Moreover, Arab-Israeli differences now lie largely subsumed in Shia-Sunni tensions within countries like Iraq and Bahrain. Historical Arab-Persian rivalries between Shia-dominated Iran on the one hand and its Sunni Gulf Arab neighbours led by Saudi Arabia on the other also tend to dominate Arab attention today, even more than the Palestinian issue.
An Israeli delegation led by Yitzhak Rabin and Palestinians led by Yasser Arafat strove in 1993 to find a peaceful solution to their differences through what became known as the Oslo peace process. A crucial milestone in this process was Arafat’s letter of recognition of Israel’s right to exist. Since then the “Mid-East Quartet” comprising the US, the EU, Russia and the UN has taken centrestage in promoting direct talks between Israel and the Palestinians. Neither India nor China nor any other Asian country has a role in this effort.
Driven by its domestic political compulsions, the dynamics of Cold War politics and its role in the nonaligned movement, India hesitated in moving towards establishing diplomatic ties with Israel, even though ties at covert levels continued, with Israel providing India with urgently needed military supplies, during and after the 1965 India-Pakistan conflict. But with the end of the Cold war and the Arabs and Israelis themselves talking directly to each other, India moved, albeit belatedly, to establish diplomatic ties with Israel, in 1992. What has emerged since then has been a burgeoning security relationship between the two countries.
For Israel, this relationship has attained greater importance after Turkey turned hostile to it, in recent years. Israel, however, has normal and friendly relations with China, Japan and a number of East Asian countries. It also has friendly ties with India’s neighbours like Sri Lanka, Nepal and Myanmar.
The India-Israeli relationship has quietly been security driven. While many aspects of the relationship, particularly in the spheres of defence, aerospace and counter-insurgency, have been kept under wraps, they are now coming into public focus in studies by Indian and Israeli scholars. Over the past decade, Israel has emerged as the second largest supplier of sophisticated weapon systems to India. Former President A.P.J. Abdul Kalam played a crucial role in promoting this effort, after his visit to Israel in 1996, as Scientific Adviser to the Defence Minister. This has now led to a vastly expanding collaboration in areas like crucial air defence systems and missiles, upgrading of the aging Soviet-era equipment, including tanks and fighter aircraft, and cooperation in areas of research and development, in highly advanced night vision devices, sensors and unmanned aerial vehicles, which have a crucial role in dealing with cross-border terrorism. Sadly, our former Ambassador to Israel Raminder Singh Jassal, who played a key role in shaping the strategic directions of relations with Israel, died recently in Turkey.
As India seeks industrial development in areas of high technology and the involvement of its private sector in fields like defence and aerospace, Israel has emerged as an important partner. The Tatas have become the first Indian company to seek manufacturing and R&D facilities through collaboration with Israel in areas like radars, electronic warfare and homeland security systems. Cooperation in aerospace with Israel commenced with an agreement reached in 2003 that India would launch a satellite developed by Tel Aviv University.
The Israeli satellite “Polaris” was launched by ISRO in 2008. Shortly thereafter India launched an Israeli-made imaging satellite RISAT 2. India has also leveraged its ties with Israel to secure Congressional understanding in the US on several critical issues. While American concerns about the rise of China have secured India exclusive access in Asia to advanced early warning systems like the Israeli PHALCON, there are areas of concern where Israeli transfers to China are finding their way to Pakistan, for fighter aircraft like the Chinese J 10, which was designed and developed by Israel.
Under pressure from is communist allies, Dr Manmohan Singh’s UPA-I government avoided visits by Cabinet ministers to Israel. The CPM’s objections were strange, given the fact that two of its top leaders, Mr Jyoti Basu and Mr Somnath Chatterjee, had paid an extended visit to Israel in 2000 and sought Israeli cooperation in agriculture and industry. It has been fairly common for chief ministers of Indian states, ranging from Maharashtra and Himachal Pradesh to Haryana and Punjab, to visit Israel for collaboration projects in agriculture, horticulture, water management and sprinkler systems.
Reflecting a welcome change in what was a strange policy, driven by the “compulsions of coalition politics”, the External Affairs Minister, Mr S.M. Krishna, is now scheduled to visit Israel shortly. This does not signal a change in India’s principled position that Israel should avoid building settlements in territories occupied by it and work for a solution that leads to the emergence of a viable Palestinian state, while guaranteeing the security of all states in the region. Arab states tend to take India for granted by routinely supporting gratuitous anti-India resolutions on Jammu and Kashmir in the Organisation of Islamic Conference. They should be made to realise that friendship is a two-way street. India has taken an overly benign view of gross human rights violations and sectarian tensions in some Arab countries. The possibility of reviewing this policy should always be kept open.
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