Vijay Kumar Gaba: July 2018

Tuesday, July 31, 2018

Who will consume this poison

"Gray hairs are signs of wisdom if you hold your tongue, speak and they are but hairs, as in the young."

—Rabindranath Tagore (Indian, 1861-1941)

Word for the day

Contextomy (n)

The practice of misquoting someone by shortening the quotation or by leaving out surrounding words or sentences that would place the quotation in context.

Malice towards none

What Imran Khan might have meant is "you take one step toward PoK, we'll take two steps towards Kashmir".

First random thought this morning

Recently Mr. rakesh Kaoor, Global CEO of Reckitt Benckiser was quoted having said that his company has been aggressively leveraging the government’s Swachh Bharat programme to push its brands, including rolling out low-priced smaller packs of Harpic cleaners and Dettol soap to penetrate rural markets and accelerate change in consumption habits of consumers. Does that mean Swach Bharat program has been designed to benefit "corporate friends" of PM Modi?

If Congress truly wants to be a serious contestant in 2019 election, it should come out of its Modiphobia and try to present a constructive agenda for the sustainable inclusive growth. Modi can't be defeated with just frivolities.

Who will consume this poison

In Hindu mythology, once the forces of good (Sura) and evil (Asura) had a protracted battle. The battle lasted so long that both the groups exhausted all their resources and valor. Completely tired, wounded, frustrated and exhausted, they approached the savior Lord Vishnu. The Savior advised them to go and explore the great ocean to find new resources and vigor to make a fresh beginning.

Following the advice, both the groups went to the great ocean and explored it extensively. During their exploration mission, they discovered huge amount of wealth and resources that included the nectar and venom.

The venom was discovered in the lunar month of Shravan, two months before the nectar, which was discovered in the lunar month of Ashwin.

When the venom was extracted from the ocean, the whole universe was threatened by its radiation. Sensing the apocalypse, Lord Vishnu requested the almighty Lord Shiva to absorb the venom so that it does not harm anyone and the balance of the universe is maintained. Obliging, Lord Shiva drank the entire venom and preserved it in his throat.

The legend goes, after consuming venom, the body of Lord Shiva started emitting radiation and he was in great pain due to the negative energies. In Treta Yug, seeing his Lord in pain, his staunch devotee Ravan, the Asur King of Lanka, brought the holy water of Ganga and poured over his Lord's body. It released all the negative energies of poison Lord Shiva had consumed from his body and relieved him of all pain.

The Hindu month of Shravan (or Savan as in film songs) has started last week. This month is traditionally known as month of Shiva, the Lord of Asceticism. During this month, the devotees are advised to abstain from all material pursuits and pleasures, observe fast & abstinence, and pray to the Lord for the welfare of the entire mankind, rising above the self.

Following the legend, people walk of hundreds of miles to bring sacred Ganga Jal to the constituent of Shiva, resident in their locality. The purpose behind undertaking this arduous journey is to commit oneself to the ideas of universality of the human being, selflessness, devotion and surrender.

A journey on the highways from Haridwar & Rishikesh, used by millions of devotees to bring Gangajal for offering to their respective local Shiva temples, during this fortnight, does not evoke much positive feelings amongst people. To some extent, it even raises a sense of disgust and derision towards traditions and cultures. The holy annual event has largely been reduced to frivolous celebrations and hooliganism. The devotees of Lord Shiva, who consumed venom to save the humanity, leave a long trail of venomous pollution behind them. A deeper study is needed urgently to identify the causes of this cultural degeneration and to suggest remedial course. Else we risk losing our culture and traditions; and trust me nothing will be left of India if so were to happen.

Friday, July 27, 2018

Farm sector: social reforms

Thought for the day

"Don't limit a child to your own learning, for he was born in another time."

—Rabindranath Tagore (Indian, 1861-1941)

Word for the day

Blinkered (adj)

Narrow-minded and subjective; unwilling to understand another viewpoint.

Malice towards none

Would we be scared off Imran Khan in the second innings also or the times have changed?

First random thought this morning

ataH kutarkairdhIrastatra na muhyati|

Therefore, by perverted arguments, "the intelligent one is not deluded."

The door is half open means the door is half closed. Therefore, the door is fully open means the door is fully closed! Or: God is Love. Love is blind. Therefore, God is blind!!!

Do you find this kind of sophistry acceptable? Because, the employment generation logic of the Prime Minister in his recent speech in the Lok Sabha, was nothing but Sophistry of most blatant kind.

Farm sector: social reforms

As I highlighted in one of my earlier post (see here) the notion of "farm loan" is materially different from "farmers' debt" in today's context.

The disproportionate rise in aspirational consumption; distortion of social customs (especially marriage, death, birth) for the sake of vanity, ignorance, and misguidance; rise in crime and litigation expenses; rise in cases of chronic diseases and hence prohibitive healthcare expenses form an overwhelming part of "farmers' debt". This debt usually has nothing to do with farming activity.

This is in fact true for a large majority of urban poor and lower middle class people also.

To cure this problem on sustainable basis, it is important that economic reforms are implemented with social reforms.

The social initiatives like focus on cleanliness, cooking gas connection to BPL families are commendable. But what we need is a social renaissance. Small correction and incremental improvement might not be enough given the serious nature of the problem, in my view.

I am not a social scientist. I may therefore not be an appropriate person to suggest the steps that could be taken within the Indian sociological framework. But this does leaves me at freedom to throw some thoughts that may not belong to the box. For example, consider the following:

(a) The government should take strong affirmative steps to eradicate social distortions that have crept in over a period time in our social, religious and cultural events.

To begin with the government should totally nationalize the religious part of the birth, death and marriage ceremonies.

The government should appoint qualified religious persons (QRP) who can perform these ceremonies at the designated venues established by government in every Block of the country . All the expenses like salary of QRP, cost of performing the rituals, food offered to QRP, cost of feeding upto 25 close relatives of the person performing for whom the rituals being done, etc. should be borne by the government.

Special officers may be appointed to supervise all such ceremonies and issue certificate (Birth, Death, Marriage) on the spot.

The government should actively discourage profligate spending on the social part of these events. All expenses on marriage & birth related parties and social functions relating to death, shall be taxed @100%. Meaning, if anyone wanting to spend Rs10,00,000 on marriage party of his/her child, shall be required to pay an equivalent amount as tax. This money may be used exclusively for performing the religious ceremonies stated above.

(b) A dignified birth and death shall be made fundamental right of every citizen.

In case of birth, the government should assume responsibility of the child from the conception stage, for upto two children for each parent. This includes good diet for mother, medical tests, medicine, delivery expenses and immunization of the child. This should be done on a global standard basis not the way typical government medical facility is run by the government.

In case of death, the final rights of the deceased should be performed in a dignified manner, as per his/her religious traditions.

This should apply to all unclaimed and unidentified bodies also.

The insurance companies may be directed to make the claim payments on the spot when the final rituals are done on 13th, 17th or 40th day as the case may be, in cases where the deceased's life was insured, either individually or under some government group scheme.

The corporates may be required to fund this initiative under their CSR obligation.

(c) All regular visitors to the holy shrine of Mata Vaishno Devi in Jammu, who are more than 50years of age, would vouch that the assigning the administration of the shrine to an independent Board in 1986 has led to dramatic improvement in the management and infrastructure in and around the Shrine. No one's religious feelings have been hurt and the number of pilgrims visiting the holy cave has multiplied exponentially.

The government may consider constituting an autonomous constitutional body like Election Commission to take over the management and administration of all places of worship in the country This may put an end to rampant cases of exploitation, mismanagement, money laundering and other disputes, encroachment of public land, environment degradation, and promote secularism, brotherhood, tolerance etc.

A separate assembly of religious leaders, holy men for each religion may be formed. This assembly may be given the task to reevaluate all Holy Scripture, and find if there is any need to reinterpret the scriptures in the light of modern day circumstances and realities. The religious leaders should be requested to weed out the redundancies and misinterpretations, so that no one manipulates the religious sentiments of the people in the name of scriptures and divine mandate.

The assembly should also frame a code of conduct for all people responsible for helping people with their religious ceremonies and duties.

For example, the Hindu assembly may want to ban flowing the last remains of dead people in holy rivers to save them from dying. The ashes may be used for making bricks that can be used to build places of worships and houses for the poor.

It may also encourage people to use electronic or gas based cremation, instead of wood pyres. Alternatively, each family member of the deceased may be required to plant two trees each and take care of it till it grows to become self-sufficient.

(d) Distinguish between "education" and "learning". Nationalize and standardize all education. Learning may be imparted by private citizens volunteering in nation building. (See here for a detailed presentation of this thought)

These steps, if taken, may make the life of poor (both rural and urban) materially comfortable and substantially increase the happiness quotient of the country, in my view.

These thoughts and suggestions are nothing new. I have been presenting this to the concerned authorities and to the readers (through this post) frequently. I promise to keep pressing with this in future also, till I see some progress on this.

Readers' comments and views are welcome.

Also read:

Doubling farmers' income

Farm level reforms

Farm Sector: Policy level reforms

Thursday, July 26, 2018

Farm sector: Policy level refoms

Thought for the day

"A mind all logic is like a knife all blade. It makes the hand bleed that uses it."

—Rabindranath Tagore (Indian, 1861-1941)

Word for the day

Epigone (n)

An undistinguished imitator, follower, or successor of an important writer, painter, etc.

Malice towards none

By agreeing to possibility of a non-congress PM, has INC accepted RaGa is a weak candidate?

First random thought this morning

In past one year, the Supreme Court has considered many matters relating to civic administration, exams, environment, religion, faith, movies, personal conduct of people, etc.

Isn't it failure of our democratic system that the things that should have been governed by the local administration, community leaders, religious leaders, and the government are being frequently referred to the Supreme Court?

The worst part is that all parties to the issue involved are treating the Supreme Court's interpretation of the issue and directions in the matter as per their convenience. Most court decisions have therefore become excuse for inaction.

Farm sector: Policy level refoms

There was this feudal lord, who had enslaved a number of peasants on different pretexts. He would make them toil hard the whole day and give two inadequate meals to survive.

Occasionally, on festivals, birthdays of his children, his marriage anniversary, and death anniversary of his parents, he would treat them with a good meal and sweets. Once in 3-4yrs, during winters, he would give them new blankets so that they do not die of cold. In return, the bonded peasants were expected to hail him as protector and great benefactor of the poor.

No one ever dare ask for freedom from bondage. No one ever considered freeing these poor enslaved peasants.

The condition of Indian farmers is no better than those bonded labors in the story stated above. Various governments have been exploiting them, giving occasional doles and expecting favors in the form of votes.

No one has considered making these farmers self-dependent and economically viable. Unfortunately, the farmers have also been quite satisfied with occasional doles and have not been seeking redemption from slavery.

The recent episode of loan waiver is nothing but the new blanket given to farmers so that they survive the chilly winter and vote for the incumbent governments. Anyone assuming it to be anything more than that is seriously mistaken, in my view.

I believe that this is the primary reason for Indian economy not being able to grow faster on sustainable basis. Unless, two third of the population earns enough so that it can adequately consume, save and invest - it may be actually foolish to believe that a inwardly oriented economy like India can consistently grow faster.

For sustainable improvement in the conditions of the rural populace, especially farmers, an integrated reform package that deals with farm level reforms, policy level reforms and social reforms is needed. Yesterday, I presented some ideas for farm level reforms.

The following are some of my ideas for the policy level reforms. These ideas are based on the insights gained through numerous interactions with the farmers, organizations and individuals working in rural areas for welfare of the farmers, local administrators etc.

Policy level reforms

Since independence the government has focused on development of industrial infrastructure in the country. It has actively participated in the endeavor through a large number of public sector enterprise; besides offering a myriad tax and other concessions to the private entrepreneurs.

Now, the country has a reasonably strong industrial base. Many of our industries are globally competitive. We have a strong set of entrepreneurs and risk takers.

It is therefore high time when the government should reset its priorities and turn its primary focus on agriculture. To meet this end, the government may consider, as a matter of policy, the following:

1. Exit all industrial and banking activities.

2. Actively undertake agricultural activities - develop barren lands; develop water bodies and irrigation facilities; develop and use technology for enhancing productivity; give employment to landless farmers; take risk with new technologies & crops; partner with marginal farmers in consolidating their land and do farming on that land - just the way it undertook industrial activities immediately after independence.

3. Undertake, on mission basis, the task to re-skill the underemployed farmers and farm labor. The farmers and their family members may be trained as dairy workers, domestic help, nurses, tourist guides, artisans, etc. Expecting construction sector to absorb all surplus farm labor is a bad idea.

4. Develop at least 5 very large special agri export zones in rocky and desert areas of central and western India and undertake export of farm produce as a commercial activity. These zones may be developed in public, private or joint sector.

5. Acquire farm assets, especially rice farms, overseas to reduce water intensity of Indian agriculture.

6. Encourage various states to make bilateral or multilateral agreements for procurement, processing and trading of farm produce and movement of labor within states.

7. Nationalize all rivers, set up a national water regulator, who shall work out water sharing formula for all states and union territories every three year and maintain adequate provisions for managing droughts. The idea should be to ensure that not a drop of river water flows into sea from India.

It has taken seven decades for Indian industries to reach a stage where the government may consider fully exiting the industrial activities. It may take 2-3 decades for Indian agriculture to reach a stage where the government will be able to exit farming activities completely.

Please note that at this point in time, I am not interested in engaging in debate whether the government's industrial policy was appropriate in the first place. I am also not suggesting nationalization of agriculture sector. I am just saying that the government should undertake the activity on commercial basis to provide the sector with much needed escape velocity in terms of capital, technology, and risk taking capability.

Also read:

Doubling farmers' income

Farm level reforms

Wednesday, July 25, 2018

Farm level reforms

First random thought this morning

The Congress party, and its president in particular, are persistently alleging that there is some impropriety in the Rafael jet deal signed by the government with French jet maker. The government has forcefully denied all allegations and held that the deal is beyond any suspicion.

One fails to understand why can't the government share details of the deal with the president of the largest opposition party in Lok Sabha, who is bound by the constitutional oath of secrecy, or with the Standing Committee on Defense, that has at least three members from INC, who are considered close to the Congress President, and shut their mouth.

Clearly, both parties lack sincerity in their stance and maligning the reputation of the country to promote their vested political interests.

Thought for the day

"The butterfly counts not months but moments, and has time enough."

—Rabindranath Tagore (Indian, 1861-1941)

Word for the day

Leonine (adj)

Resembling or suggestive of a lion.

Malice towards none

As per the official data, during FY17 a total of 45,444 patent applications were filed in India. Out of which only 29% were filed by Indians. Premier institutions - IITs, NITs, IIsc, ISRO, DRDO and CSIR all together accounted for a measly 781 or 1.7% of all patent applications!

Whereas one US company, Qualcomm, alone filed 1840 patent applications!!

Farm level reforms

As I mentioned yesterday, the problems of the farmers need to be tackled at three levels, viz., (1) Farm Level; (2) Policy Level and (3) Social Level. To have any meaningful impact, the initiatives at all three levels need to be pursued urgently, vigorously, simultaneously and in a fully integrated fashion.

My suggestions on these initiatives are as follows:

Farm level reforms

At farm level farmers are struggling with a multitude of problems. The most prominent being:

(a) Uneconomical land holdings (fragmented holdings, unclear land titles)

(b) Low productivity

(d) Poor price realization

(e) Poor market access

The measures initiated so far, e.g., higher support prices, cheaper credit, crop insurance, improved irrigation, cash fertilizer subsidy, better market access (eNAM, roads etc.) have positive impact on the state of agriculture in the country. But this may not be sufficient, as it will have only some incremental impact on the sector. What we need is a set of radical reforms that would break the linearity and provide much greater impetus to growth.

For example, the following steps may be taken at the farm level:

Enforce land consolidation by linking subsidies and facilities to a minimum holding size to encourage collective and cooperative farming.
Digitize all land titles within 2years. Enforce time bound Panchayat level resolution of all title disputes.
Change government procurement system. Government should provide all farm inputs (seeds, fertilizer, insecticide, water, electricity etc) and technical guidance to the participating cooperatives, and take 50% of the crop in lieu of this. The balance crop should pay for the labor cost and profit. This shall ensure: (1) Guaranteed timely supply of quality inputs; (2) No debt burden on farmer in case of crop failure. The government can take adequate insurance for recovery of its costs; and (3) Adequate profit to the farmers.
The landowners who have never engaged in farming activity in past two decades should be forced to give away their landholdings to cooperatives at 50% discount. Anyways these landowners let out their land on crop sharing basis or nominal lease rental.
Make sure not a single drop of river water flows into the ocean from India. Develop river linking and water distribution on the models of roads.
Allow corporates to develop waste and barren land for farming purposes. For example, many corporates from India and Arab world may be interested in developing Rajasthan and Gujarat desert and barren lands for growing dates, palm, aloe etc.
Set up a price equalization mechanism through participation of private corporate sector. Encourage building large scale modern storage capacities for farm produce. Assure a regulated annuity return to warehouses, that may be equivalent to say 110% of the bench-mark 10yr G Sec yields, and allow bonds issued by warehouses as SLR securities and PSL assets.
Take factories to farms. Encourage industry to partner with farm cooperatives to set up food processing units at the farms. The farmers' cooperative allots land and provides farm produce, whereas the entrepreneurs contribute capital and undertake marketing and sales responsibilities. Both share the profit in pre-agreed ratio. This could maximize profit of both the industrial enterprise as well farmers, in my view.

...to continue tomorrow

Also read:

Doubling farmers' income

Tuesday, July 24, 2018

Doubling farmers' income

Thought for the day

"Emancipation from the bondage of the soil is no freedom for the tree."

—Rabindranath Tagore (Indian, 1861-1941)

Word for the day

Carte blanch (n)

Unconditional authority; full discretionary power:

Malice towards none

Legalizing the widespread overloading practice by truckers has not helped much. They still went on strike.

Do you read a conspiracy here?

First random thought this morning

GST council has announced another round of rate rationalization. With this round, now only 35 items are left in the 28% slab. Most of these items are for use by upper middle class and rich like air conditioners, cars etc. This is significant, as just one year ago, we started with over 220 items in 28% slab.

At this rate, we may move to 18% maximum slab in 2-3years.

Is it natural progression or Rahul Gandhi is setting the agenda and government is just complying?

Doubling farmers' income

Doubling farmers' income by 2022 and ensuring a minimum of 50% profit to farmers are two of the most prominent electoral promises made by the incumbent government.

The government has apparently taken many steps to fulfill its promises, viz., farm loan waivers, better availability of Urea, soil health check to optimize the use of fertilizers and enhance productivity, better crop insurance coverage, sharp increase in government support prices for various major crops, higher budget for irrigation etc.

A recent visit to the rural areas of UP, MP, and Rajasthan however suggested that farmers find the steps taken by the government inadequate. Many social organizations working for the welfare of farmers have also highlighted numerous lacunae in the government endeavor. The former prime minister Dr. Manmohan Singh recently echoed this sentiments and highlighted that the aim of doubling farm income by 2022 may not be attained.

I believe that a part of the criticism of the government efforts (both quantum and direction) may be purely political and undue. However, it is important to note that farmer distress is a genuine problem and they are finding government's effort lacking both in quantum and direction.

I have been repeatedly highlighting the problems faced by Indian farmers and some solutions for making structural changes in the Indian agri sector.

I would like to reiterate some of the earlier discussions. But before that it would be useful to note the following:

(a) As per NSSO 2013 data 85% of Indian cultivators own less than one hectare land. Another 15% own land measuring between one and four hectares. Only 0.24% farmers owned more than ten hectares of land. The average land holding for all farmers is 0.9 hectares.

(b) There is huge variation in land holding pattern amongst states. For example, AP and TN have largest proportion of landless farmers (more than 50%): Bihar and West Bengal have largest number of marginal farmers (close to 60%), where Rajasthan has the largest share of large farmers. Same agri policy for all these states is bound to fail. About two third of all rural households have farming as their principle source of income.

(c) As per last NSSO survey data, the average monthly rural household income in India is about Rs6426 and average Monthly rural household expenses are about Rs6223. About 85% of households earn less than their expenses. About half of this income comes from cultivation and rest from other activities like labour and animal husbandry.

(e) Rural household spend about half their income to buy food.

(f) As per the last available NSSO data, the average per student annual expense for education in rural areas was Rs6788 in 2014. It had risen more than 2.5x since 2008 when it was recorded at Rs2461.

(g) The average hospitalization expense in rural areas is close to Rs17000 per case of hospitalization as per the last available NSSO data

(h) Doubling the farmers' income by 2x in 8years (2014-2022) means a nominal growth rate of 9% CAGR. There is little change in real rural wages over past four years, and last year the real wage growth was negative. Considering that rural wages are an important component of rural income and a key determinant of minimum support price for farm produce, the government might need to review its strategy.

To bring any meaningful improvement in the dismal condition of India's farming community, a comprehensive rural development effort is needed. Any piecemeal solution like occasional loan waiver shall have almost no sustainable impact. The traditional farmer welfare measures like periodic hikes in support prices for certain crops, farm input subsidies, interest rate subvention have not yielded the desired results.

In my view, a sustainable improvement in Indian farmers' conditions is possible only under a comprehensive rural development mission. The mission should address the problem with structural reforms at three levels, viz., 1. Farm Level; 2. Policy Level and 3. Social Level. All reforms need to be pursued urgently, vigorously, simultaneously and in a fully integrated fashion, for having a meaningfully sustainable impact.

...to continue tomorrow