SHOULD PUBLIC SECTORS BE ALLOWED TO INVEST IN MUTUAL FUNDS?

NAVARATNA; YOU HAVE STILL A VITAL ROLE TO PLAY

The Cabinet committee on economic affairs (CCEA) discussed and gave its nod for giving extension till further order on the scheme in which Navratana PSUs had been allowed to invest 30% of their profit in Mutual Funds. The decision to this effect had been taken in 2007 subject to annul review; the period had expired on 1st August, 2008 therefore required review.

This decision is said to have been taken in order to revive the MF field, which is in recession due to the global economic slowdown. Figure available with the ministry of finance suggests that the assets under management of MF has dwindled from Rs/ 5.50 lakh crore in 2007 to 4 lakh crore only in 2008.

IS THIS DECISION WISE?

The decision needs to be analysed in the present context of worldwide recession. If we look at the causes which led to failure of Banks in America and many parts of Europe, we can have an idea that why these banks failed and went bankrupt. American Banking as an institution is said to have started in 1865, when National Banking Act was passed in this year. It was initially based on British model, which prohibits banks from making investments in stock markets. There was another model, called German model which allowed Banks for making investment in the stock markets. 

As far as the present global economic crisis in American banking industries in concerned, its genesis was laid in 1999, when one Graham Leech Blibley Act was passed by Bill Clinton and allowed the banks to make investment in the stock markets. This marked the end of British model of banking and gave these financial institutions unfettered and excessive financial leverage. The infamous ‘housing bubble’ was created thereafter due to subprime lending, which ultimately culminated into burst of housing bubble and subsequently depression.

HOW ARE NAVARATNAS DIFFERENT FROM OTHER COMMERCIAL ESTABLISHMENTS-

The govt is going to commit the same kind of mistake by allowing the Navaratna to go for investment in MFs; which is not a safe business,as American did in allowing the banks to go for investments in stock markets after Graham leech blibley Act of 1999. Public Sector Undertakings (PSUs) are the ‘commanding heights’ of our economy, which Nehru used to boasts off. These PSUs are not typical business and industrial houses because they have been transfused with the bloods of billions of Indians. The value of their assets of lands, plants and machineries, govt budgetary supports etc cannot be calculated in terms of money. These assets are the repository of billions of Indians. The assets obviously are not of the board of directors or the management of these companies; but of the billions of the Indians. One can disagree on this on pretext of being too emotional, but it is not an emotional argument against this proposal; rather it is base on ‘pure economics’ also. The govt is committing the same set of mistakes which the Americans and a host of European countries did and are thereby facing the wrath of millions of their citizens.

How can a set of people sitting in board rooms, decide the fate of the assets of billions of tax payer Indians by allowing them to invest the profits in the MFs. The capital market, we know, are played into the hands of profiteers and speculators despite regulatory regime of SEBI and ministries. We have had experiences like this in the past and hence cannot deny the fowl game if played in future. If it happens, it would be disastrous and catastrophic both in terms of financially and sentimentally.

WHAT SHOULD BE DONE FOR THE PROFITS OF PSUs-

It is true that the profits earned by these PSUs have swelled over years. In fact some sort of insulated affects of global recession on Indian economy are also due the spectacular performances by these Navaratanas. If we look at the fiscal performances by these units in the fiscal year 2007-08, they are magnificent. For example following are the net profits of some of the navaratans in crores during the said financial years are as:

NTPC- 7,12,930 for 2006-07

ONGC- 167016 for 2006-07

BHEL- 2,859 for 2006-07

IOC- 6963 for 2007-08

SAIL - 7,536.78 for 2007-08

MTNL - 110 for 2007-08

GAIL - 2601 for 2007-08

BPCL - 121O.20 for 2007-08

HPCL - 13460 for 2007-08

The million dollar questions are that have the capital of govt of India been repaid? Have these PSUs paid back the values of govt lands which had been given to them free of cost when they were being constructed? Are we not exposing these PSUs to unhygienic financial speculative markets? These questions need answers before we go into this venture of investing into MFs.

Is it wise to invest 30% of these hard earned profits into MFs, which is a risk oriented investment? Can we not use these profits in a more safe and developmental areas?

The govt must use this profit in a wider perspective. The govt can create a separate fund called ‘public sector creation fund’ and use money from this fund for creating and construction new Public sector units. With the opening up of the economy in 1990s, the construction of new public sector units was almost stopped. Now when it has been proved beyond doubt that the PSUs have helped our nation achieve ‘growth with justice’ over a period of time, we can seriously think in terms of creating more PSUs on lines of navaratana. After all govt is not an organisation which is based on making profits only, rather it has to do business blended with social justice and economic equalities. These public sector had have helped a lot in achieving this goal. 

With the passage of time we are faced with a lot of new challenges. We need to have more energy based on non-conventional source. We can create National Solar Power Corporation like company and tap unlimited solar energy. There are other areas also where we can construct new companies. These huge profits can also be used in modernisation and diversification of these PSUs. After all every crisis led us to innovation; innovation led to betterment and subsequently prosperity.

TRAFFICKING IN WOMEN AND CHILD

  

   Historical Perspective –

Trafficking as such is not a modern day development. It existed during ancient and medieval period across the earth. We have heard the name of Amrapali, a famous dancer in the Lichhavi republic in the erstwhile republics in ancient India. During Budha and Jain period, we came across the word Ganika. It refers to prostitute. Thus, there is sufficient evidence during this period, that the trafficking in one form or the other did exist. In Mauryan period also, we came across the word Ganika. In Ashokan edicts and inscriptions, we find references which suggest that the institution of prostitution existed. The sale and purchase of woman during medieval period was very common. With the advent of Mongols, Afghans, Turks and Moguls, the conditions of woman in many part of India further deteriorated. Women were looted and distributed like Booty after the war. Thus, this was a common phenomenon during the ancient and medieval times. In many parts of the world also, the trafficking in women was present in form and the other. We have many references of slave trade in many parts of the world.

• IN THE MODERN PERIOD-

In this period, the nature, magnitude, intensity and character of trafficking underwent radical change. According to one estimate, about 7 Laks women and children are trafficked across the world. Trafficking is now considered as the third largest sources of profit for organized crime, behind only drugs and weapons. According to one estimate, the trafficking business’s annual turnover is about 5 to 7 billion dollars. Former Soviet Union is now believed to the largest source of trafficking for prostitution in the world. In nutshell, we can say that there is no country in the world, where trafficking is not found. This is a problem that affects virtually every country in the world. Generally, the flow of trafficking is from less developed country to an industrialized country.

DEFINITION-

Conventionally speaking, the meaning of trafficking is the trading into something which should not be traded in. For example, human trafficking, drug trafficking and human trafficking etc. So far as the definition of Trafficking is concerned, it is set out in article 1 and 2 of the 1949 convention for the suppression on the traffic in persons and of exploitation of the prostitution. It refers to all acts involved in the transport, harboring, or sale of persons within nation or across International borders through coercion, force, kidnapping, deception or fraud for purpose of placing persons in situation of forced labor of services such as forces prostitution domestic servitude, debt bondage or other slavery like practices. In case of minor, the term trafficking connotes a different meaning. Here the children even taken voluntarily and putting in aforesaid servitude comes under the purview of trafficking. 

VICTIMS OF TRAFFICKING-

1. Women and children in general, because they are comparatively more marginalized.

2. Women and Child living in slums in urban areas or working in farm, pretty trading etc. low income is the most important cause for this.According to report of an NGO, Naujawan Bharat Sabha and Bigul Mazdoor Dasta, which is based on the information retrieved from the competent authority under RTI, 7912 children went missing between January, 2007 to June 2008, but police registered only 765 cases. The report further suggests that about 80% of the missing children belong to poor families.

3. Ethnic minorities, illegal migrants, hill tribes and refugees.

4. Women working away from home as domestic servant or otherwise.

5. Children working in hotels, dhabas, restaurants, and homes are easy prey to this trafficking.

6. In hope getting a better life and salary, women and especially young girls fall prey to touts and pimps. 

7. Liberalization, Privatization and Globalization also in away has aggravated this problem.

REASONS FOR TRAFFICING-

1. Poverty is the root cause of this problem. With the advent of globalization, the population tend to move more freely across the border both legally and illegally and falling prey to the greedy criminals of organized crime across the world. With the erosion of the concept of a welfare state, the subjects are now left at the mercy of the market forces.

2. Subordination of women in the society.

3. Other social evils like dowry which sometimes force the fathers to sell off their daughters.

4. Social recognition in which son is preferred to girl.

5. The high demand, worldwide, for trafficked women and children for sex tourism, sex workers, cheap sweatshop, labor and domestic workers.

6. Sex Tourism is a newer concept and is becoming one of the major causes of trafficking. Countries like Australia, Thailand, Hong Kong, Singapore, Malaysia etc. have become heaven of sex tourism. This is attracting hundreds of thousands of women sex workers. The international criminal gangs are operating and earning billions of dollars in this industry.

7. Inadequate and non-stringent laws. Generally laws are such in which prostitutes are punished and the perpetrators got escape free. Although trafficking in children is an offence i.e. sale of child is an offence but abduction of children for begging is still not an offence. For instance if at all it is established that children who are on the traffic signal are being forced by some gang, we can book them in beggary Act, but the traffickers go unscathed. In India the figures of lost children is increasing at an alarming rate, but unfortunately the laws are not being given more incisors in order to see that the trafficker are punished more stringently.For instance, Delhi do not have a law of its own regarding beggars.The National capital still invoke Bombay Prevention of Begging Act, 1959, which lacks teeth to deter the trffickers.

8. Inter-personal, intra and inter regional economic disparities have also added new dimension into it. Large-scale immigration in search of better life and bread, the illegal immigrants are easily made prey to the trafficking.

9. The Child trafficking in India has increased alarmingly due a number of reasons some unrelated to poverty. Luring towards a better life force the children to run from their homes and therefore this should be tackled in a social perspective. No law can prevent it. The breaking of family relations, alcohlism in parents, frequent querreling among them are major causes of this problem. It has been seen in recent times that children of economically better families have also left their homes under above mentioned circumstances. The ultra-nuclear family concept in which the grand parents have lost their space has left the children dependent either on electronic entertainments or on web friendship. Unfortunately both means lack ethos and morality. Both are market oriented and centered on profiteering. The scences of violence, sex, high profile page-3 life styles lure the children of immature and growing minds of the children who sometimes fled from their homes in a hope of getting these things and are trafficked.

ACCORDING TO SURVEY CONDUCTED BY AN NGO ON THE DIRECTION OF SUPREME COURT FOLLOWING MECHANISMS HAVE COME TO LIGHT-

MECHANISMS AND TECHNIQUES OF TRAFFICKING-

REASONS AND PERCENTAGE

BEFRIENDING 16.4

PROMISE OF JOB AND MONEY 52.4

PROMISE OF MARRIAGE 4.5

ADOPTION 0.2

BLACKMAIL 2.8

USE OF FORCE 11.6

PERSUADING HUSBAND FOR 

UNDERGOING TRAFFICKING 0.2

FAMILY TRADITION 2.1

MISC 9.8

1. Women and Children are generally recruited from rural areas and transported to the destinations. In this process, they are handed over and taken over by a number of brokers and intermediaries. 

2. Local contacts.

3. Relatives and friends.

4. Direct sale.

5. Deceit.

6. Debt bondage.

7. Kidnapping.

8. Falsification of documents.

9. Bribes.

10. Transportations

11. Aspiration of better life and better career opportunities caused them to be allured by touts. 

12. Drug addiction.

13. Hotel industry.

STRATEGIES TO COMBAT TRAFFICKING:

1. Through legal and criminal justice system. Law enforcing agencies are required to be sensitized and made sensible by way of training and motivation.

2. Stringent penal provisions for the traffickers. Amendment to the IPSA is on anvil, it should be therefore passed by the parliament at the earliest. It provides for, among other things, non-re-victimisation of the victims. In the existing laws, the victims are placed at par with the offenders in terms of investigation and punishment.

3. Rescue and Rehabilitation system is to be strengthened.

4. Creating awareness among target groups.

5. Making economically self reliant to women.

6. Demand and Supply reduction through public awareness and creating job opportunities at village itself like NAREGA etc.

7. Promoting girl education and women empowerment.

8. Increase in the number of girl and women in security forces.

CONVENTIONS RELATED TO TRAFFICKING

1. INTERNATIONAL AGREEMENT OF 18 MAY 1904 FOR THE SUPPRESSION OF THE WHITE SLAVE TRAFFIC, AS AMENDED BY THE PROTOCOL APPROVED BY THE GENERAL ASSEMBLY OF THE UNITED NATIONS ON 3 DECEMBER 1948.

2. INTERNATIONAL CONVENTION OF 4 MAY 1910 FOR THE SUPPRESSION OF THE WHITE SLAVE TRAFFIC, AS AMENDED BY THE ABOVE-MENTIONED PROTOCOL,

3. INTERNATIONAL CONVENTION OF 30 SEPTEMBER 1921 FOR THE SUPPRESSION OF THE TRAFFIC IN WOMEN AND CHILDREN, AS AMENDED BY THE PROTOCOAL APPROVED BY THE GENERAL ASSEMBLY OF THE UNITED NATIONS ON 20 OCTOBER 1947,

4. SLAVERY CONVENTION,1926

5. FORCED LABOUR CONVENTION, ADOPTED IN 1930.

6. ABOLITION OF FORCED LABOUR CONVENTION ADOPTED IN 1957

7. INTERNATIONAL CONVENTION OF 11 OCTOBER 1933 FOR THE SUPPRESSION OF THE TRAFFIC IN WOMEN OF FULL AGE, AS AMENDED BY THE AFORESAID PROTOCOL. 

8. LEAGUE OF NATIONS DRAFT CONVENTION IN 1937 

9. UNIVERSAL DECLARATION ON HUMAN RIGHTS,1948. IT HAS BEEN TRANSLATED INTO 350 LANGUAGES ACROSS THE WORLD.

10. CONVENTION FOR THE SUPPRESSION OF THE TRAFFIC IN PERSONS AND OF THE EXPLOITATION OF THE PROTITUTION OF OTHERS APPROVED BY GENERAL ASSEMBLY RESOLUTION 317 (IV) OF 2 DECEMBER 1949 AND COME IN TO FORCE IN 1951

11. WORST FORM OF CHILD LABOUR CONVENTION, 1999.

12. PROTOCOL TO PREVENT, SUPRESS AND PUNISH TRAFFICKING IN PERSONS, ESPECIALLY WOMEN AND CHILDREN, SUPPLEMENTING THE UN CONVENTION AGAINST TRANSNATIONAL ORGANISED CRIME, 2000. 

13. SAARC CONVENTION ON PREVENTING AND COMBATING TRAFFICKING IN WOMEN AND CHILDREN FOR PROSTITUTION,2001

14. COUNCIL OF EUROPE CONVENTION ON ACTION AGAINST TRAFFICKING IN HUMAN BEINGS 2005

LAWS RELATED TO PREVENT TRAFFICKING IN INDIA:

Following are some of the legislations which provide protection against trafficking and also provide for punishment to those found involved in it.

1. The Constitution of India. The constitution itself guarantees the protection of women and child against any crime.

2. Immoral Traffic Prevention Act, 1956 popularly known as SITA or IPSA. It provides for stringent punishments to the convicts. It is being amended very soon to make it more stringent for the offenders.

3. Indian Penal Code, 1860.

4. Indian Evidence Act,1872

5. Code of Criminal Procedure, 1973.

6. Bombay police Act, 1951.

7. Delhi Police Act, 1978.

8. Juvenile Justice (Care and Protection of Children) Act, 2000.

9. Probation of Offender Act, 1958.

10. Indecent Representation of Women (prohibition) Act, 1986.

11. Goa Children Act, 2003. This law is considered to be a pioneer in the field of prevention of child trafficking. Law on national level is being mooted out so that it could be made applicable throughout the country.

12.Bombay Prevention of Begging Act, 1959

INITIATIVES TAKEN BY MINISTRY OF WOMEN AND CHILD IN ORDER TO COMBAT TRAFFICKING OF WOMEN AND CHILD:

1. NATIONAL PLAN OF ACTION PREPARED IN 1998.

2. ISSUED GUIDELINES TO ALL STATES TO IMPLEMENT IT.

3. CENTRAL ADVISORY COMMITTEE IN DWAC( DEPT OF WOMEN AND CHILD) SECRETARY OF THIS DEPT IS EX.OFFICIO CHAIRPERSON AND MEMBERS FROM ALL CONCERNED MINISTRIES AND OTHER LAW ENFORCING AGENCIES ARE MEMERS. MEETINGS ARE HELD TRI MONTHLY.

4. PROTOCOL FOR PRE RESCUE, RESCUE AND POST RESCUE HAS BEEN FORMULATED.

5. MWCD (MINISTRY OF WOMEN AND CHILD DEVELOPMENT) HAS FORMULATED THREE MANUALS FOR JUDICIAL OFFICERS, MEDICAL OFFICERS AND COUNSELLORS RESPECTIVELY.

6. MWCD IS PREPARING MANUAL FOR POLICE AND PROSECUTORS ALSO. ANTI HUMAN-TRAFFICKING UNITS TO BE SET UP IN POLICE DEPTT.

7. MWCD HAS SUGGESTED MINISTRY OF HOME AFFAIRS (MHA) TO ENSURE THAT ATLEAT 30% SEATS ARE FILLED BY WOMEN IN POLICE FORCE.

8. CERTAIN AMMENDMENTS ARE PROPOSED IN IMMORAL TRAFFIC (PREVENTION) ACT, 1956. SECTION 8 AND 20 ARE BEING DELETED. THESE SECTIONS REVICTIMISE THE COMMERCIAL SEX WORKERS (CSW).WHO ARE THEMSELVES VICTIM OF TRAFFICKING. THE ‘ TRAFFICKING IN PERSONS’ ON THE LINES OF DEFINITION OF TRAFFICKING OF UN IS BEING INSERTED IN THE PROPOSED BILL SO THAT IT CAN PROVIDE PUNISHMENT TO THE PERSON WHO VISITS A BROTHEL FOR PURPOSE OF SEXUAL EXPLOITATION. THE BILL TITLED ‘IMMORAL TRAFFIC (PREVENTION) BILL, 2006 IS UNDER CONSIDERATION OF THE PARLIAMENT.

9. SWADHAR HOMES SCHEMES FOR VICTIMS. AND SHORT STAY HOMES ARE BEING CONSTRUCTED IN MANY STATES.

10. ONE COMPEHENSIVE SCHEME IS UNDER FORMULATION. ONE IS FOR PREVENTIVE AND OTHER IS RESCUE AND REHABILITATION OF THE VICTIMS. VARIOUS STATE GOVT AND NGO ARE DELIBERATING UPON IT.

SOME STEPS TO CHECK CROSS BORDER TRAFFICKING-

• To set up internal task force to check and combat this menace

• UNICEF has under taken a task on behalf of MWCD to solve problems in identifying Bangladeshi victims and evolve mechanism to repatriate them easily.

• Sensitize the security personnel responsible for border patrolling.

• Create data base for pre rescue, rescue and post rescue operations.

• Participation of stakeholders in policy making formulations. 

INTERNATIONAL EFFORTS TO POPULARISE HUMAN RIGHTS.

1. EU SPENDS 140 MILLION POUND ON ‘EURPEAN INSTRUMENTS ON DEMOCRACY AND HR

2. THE DECLARATION HAS BEEN TRANSLATED INTO MORE THAN 350 NATIONAL AND LOCAL LANGUAGES.

3. TREATY OF ROME.

4. EU FOUNDING TREAY. WHICH ENSHRINES HUMAN RIGHTS AS PREREQUISITE FOR JOINING THIS UNION.

RECESSION IN INDIA; HAS IT REACHED?

THE SIGNS OF DISPAIR;WILL IT DISAPPEAR?

The global economic crisis has slowly been spreading its bloody tentacles over Indian Economy. There may be difference of opinion with respect to the magnitude of its effects in terms of percentage or odd figures, but there is no denying the fact that the contagion has started spreading gradually into the financial and economic health of the Nation.

TRENDS AND FIGURES-

Figures released by Index for Industrial Production (IIP) a week ago stated that the Industrial production has shown negative growth of 0.4%. The data suggested that in the same month of previous year, the growth in Industrial production had been 12.2%. The figures also suggested that except the coal, all other key infrastructure industries like cement, electricity, finished steel, crude oil and petroleum refinery products etc. showed growth in decline mode.

These data sounded alarm in the North Block and the then FM hurriedly reviewed the situation. Soon after this, one set of disagreement appeared in the some of the Newspapers refuting the figures on the basis of method of calculations in finding out the figures of Industrial growth. IIP also made some correction and clarified that the slowdown is not of that magnitude and the figures are a little bit miscalculated and thereby inflated.

Nonetheless, there is no denying the harsh reality that the slump has started making its jittery felt in many sectors of the economy. Kamal Nath, the Commerce Minister states that there is decline of 26% in FDI, which means less funds coming into the economy from outside. According to one estimate, the FDI had swelled over a period of time and has risen from a dismal 95,639 Crore in 2003-04 to rocketing 16,54,949 Crore in 2007-08. The external commercial borrowings (ECB) which had registered 30% increase during 2006 to 2007, suddenly showed nosedive in October, 2008, when it declined from 283.49 Crore in September 2008 to 112.52 Crore in October, 2008 showing a reversal trend of 30%.

If fact, the total FDI from US itself during 2000- 2008 is about 5.4 billion USD. The worst hit by this reverse cash flow is the software industries, which witnessed decline of 5.8% in FDI. This sector has been the fastest growing among all sectors registering 70-80% growth rate per annum over a period of time, contributing 8.4 billion USD in 2007-08 to the FOREX on the country. 

The swelled FOREX and spilling FDI have also been witnessed in increase of the share of Import-export to GDP, which has increased from 21.2% in 1997-98 to 42% in 2008-09. Undoubtedly, since the contraction in global trade, volume of export-import would now decrease resulting in cascading effect on the overall growth of the economy. In fact it has experienced 12% down fall in the month of October, 2008. 

COMPARATIVE EFFECTS ACCROSS THE GLOBE-

The US, UK, France, Germany, Italy, Canada, Japan and a host of other developed Nations have officially entered into Recession. Most of them have announced so-called bailout packages also for taking the ship out of the economic tsunami or at least to mitigate the effects of this contagion on their people. For instance USA, Russia, UK, Germany, Belgium, Ireland, Iceland, and France injected 990, 200, 876, 50, 16, 864,300, billion US dollars respectively in form of bailout packages. Indian and China however acted slightly differently. Instead of injecting money directly into market, China launched massive infrastructure construction by making available 586 billion USD and undertook massive construction in roadways and railways, whereas; India reduced CRR, SLR, Repo and reverse Repo rates and increased the diameter of pipes flowing money into the market through Banks. It is due to this paradigm shift in strategies of mitigating the crisis, India and China stand at slightly different stage. 

But in West and America, these monetary injections also could not act as anti-pyretic and the fever continues to run high except for transient respite in the economy. The growth rate of Japan has shrunk to less than one percent and rate of un-employment is rising unprecedentedly. Only few days ago, Sony, the electronic giant, has decided to cut the job by 80,000 and to shut 10% of its factories across the world. 

The US economy is worst hit leaving 5, 73,000 Americans jobless, in Britain it has dangerously reached 1 million, 75,000 increase from last month. Thousands of European and American citizens are left homeless now due to debt-fuelled housing bubble. 

The US labour department’s figure suggests that the rate of unemployment has increase to 6.7% in November, 2008. The GDP of USA in Q3 is dismally –0.5%. Federal Reserve estimation is that the US economy is expected to contract at an annual rate of 5% or so.

The commerce department is not letting loose hope and unenthusiastically suggests that the economy will grow up to 4%. Even if this figure is accepted, it is hopelessly poor in view of the past performance. Financial market is in shambles. The Federal Reserve has been continuously decreasing the rate of interest but in vain. The magnitude of fiscal leverage and financial deregulation are such that the treasury department has not yet been able to know that how much money actually is involved in ‘Toxic assets’ of the Banks in America facing closure, so that healing measures might be taken accordingly.

The other indicators in US are also not encouraging. For instance, the consumer spending has come down by 3.4% and consumer durable asset spending has fallen drastically by more than 14%, which would led to further cut in supply resulting in contraction in the economy. The Keynesian spending has so far not been able to bring the economy on tract. 

Russia could also not remain insulated and an ‘island of stability’ as referred by its Finance Minister Alexei Kudrin. Russian FOREX of 600 Billion USD is fast depleting and causing concern in top echelon including Putin. The manufacturing industries witnessed 15.3% plummet, whereas; production in core infrastructure like coke, cement, fertiliser and rolled metal fell by more than 30%.

Similar is the case in other parts of Europe also. The growth fell to -0.5% in Germany, to -0.3% in France and Italy and not surprisingly zero % in Netherland and Spain. It is said that friendship is tested in distress; the non-consensus among the 27 members of European Union (EU) has once again proved Shakespeare’s saying true that when sorrows come, they do not come in single species but in battalion. 

The ‘European Rescue Plan’ of EU has failed to take off owing to lack of consensus among member countries. Germany is reluctant to support Britain and France on most of the issues. There are several issues where disagreement is putting hurdles in progress. The confluence of disputes may be no coincidence. The disagreement is such that Ms Markel was not even invited to a ‘mini- European summit’ in Downing Street. Such disagreement at this crucial juncture will make European predicament more difficult and worsen the situation much more exponentially. The scramble for leadership in new global financial order has begun.

The much talked Washington Summit held previous month, has also failed to yield positive and healing results because elusive consensus could not be arrived at. The West’s frowning on capital control and their staunch penchant for laissez-faire have been allowing the situation going from bad to worse. 

World Bank has perceived the above situation and has recently forecasted that the Great Depression of 1930 is looming large and situation which followed thereafter is likely to be repeated again globally. 

INDIAN CONTEXT-

MONETARY AND FISCAL STEPS-

Indian economy, though in stress, has been doing fairly good, especially in view of prevailing economic malady all around. The growth rate is expected to be 6.5 to 7.5%, if not more. The rate of inflation has been witnessing downward trend in successive weeks and has come down to single digit number, it is expected to come down further, thanks to the bold and effective fiscal and monetary measures taken by RBI and Ministry of Finance.

The major contributors to the GDP like service and agriculture sectors have not hitherto affected as badly as other sectors. The flow of FDI in service sector which roughly contributes 45-50% to GDP has risen from 13,903 Crores in 2003 to 1, 43,776 Crores in 2007. In terms of percentage also, FDI in this sector has registered increase of 23.2% in 2008, which is 1.2% more than the previous year. 

Agriculture- it continues to play a vital role in growth of India contributing 20-24% to the GDP. As the financial market has very little to do with the agrarian economy, the financial crisis has not affected this sector to the extent it has affected other sectors of the economy. The ‘LOAN WAIVER’ of the Union govt announced in the budget this year has provided stimulus to this sector and is working as bailout package. Although it has failed to check the farmer’s suicide completely and according to National Crime Record Bureau (NCRB) 16,632 farmers have committed suicide in 2007 in which 4238 have lost their lives in Maharashtra only. This situation must change; let feeders of nation do not die for want of food. They actually constitute what we call ‘fundamentals of economy’.

RECIPE TO KEEP ECONOMY VACCINATED AGAINST EFFECT OF PANDEMIC OF ECONOMIC SLOW DOWN IN INDIA -

The economic policy of any country is not governed by the kind of people who govern the country; rather by the kind of people governed. Here lies the crux of the problem as well as solution. Instead of mimicking the west and US, we should think in terms of evolving strategies to mitigate the after effects of global contraction by increasing the domestic saving and domestic market demand. There are some steps which are urgently required to mitigate the effects of global recession-

1. MAKING AVAILABLE MONEY FOR PUBLIC SPENDING-

With the flight of foreign capital, the market is likely to contract leading to fall in production and demand. The consequential effect would be as expected, be discernible in rise in unemployment. This would create a vicious circle and if India gets trapped into it, would enter into recession. It is said that every cloud has a silver lining. The best way to get insulated from it is unearth capital and money from within, instead of begging from others. We need to have voluntary disclosure scheme (VDS) like measures to take the black money out of the shelves of millions of people in India. The volume of domestic saving in Banks and post-offices can further be increased by taking some specific monetary policies. This would ensure increase in availability of liquid in the market and help taking fiscal steps to tide over the crisis more effectively. Help from external source at this juncture when every nation, rich or poor are facing acute fiscal pain, is a futile and unwise venture.

2. NEED OF PARADIGM SHIFT IN LENDING PATTERN OF MAJORITY OF BANKS-

The fiscal and monetary steps taken so far by the RBI and Finance ministry have been not as unsuccessful, as many economists had thought. Unfortunately, all focus is converging on big industries and banks. The media hype have been diverting the govt’s attention from a very crucial sector, which is comprised of tiny and non-farm small units, which are about 5,80,0000 in number. This vast sector has been providing employment to about 105 million people in this country contributing about 30% of GDP. What a massive contribution. Ironically, these units get hardly only 4% of net Bank credit. What a neglect and what an unwise fiscal decision on part of Banks! The attitude of the Banks needs to be changed. The experiences suggest that a Bank Manger is more interested in disbursing loans to bigger entrepreneurs rather than small investors. It is perhaps due to the fact that they are interested in achieving financial targets and not physical. They feel it convenient to deal with less number of entrepreneurs for obvious reasons.

It the credit given to these units is increased only by 1%, it would bring about unbelievable change in the growth pattern of the economy. It would increase about 1, 00, 000, 00 employment and add further about 0.5% to the GDP. Merely injecting liquid into the market either directly or indirectly through cut in interest rates is not going to solve the situation for ever. The bailout packages across the world have failed to mitigate the throes of this economic ailment for many reasons, one being siphoning off the money by big banking and business tycoons. The FBI has already taken up investigation into ‘housing mortgage fraud’ and the role of Fannie Mae and Freddie Mac, the housing mortgage giants’ in the present crisis. In Russia also, about 160 billion USD has been pumped by the central Bank, but it failed to stop downslide of rouble. Many prominent citizens have written an open letter to Putin and Medvedev stating therein that the major chunk of the bailout package has been eaten up by large corporations and banks. We cannot rule out in totality, the possibility of such siphoning off incidents.

3. UNORGANISED SECTOR NEEDS STIMULUS-

The unorganised sector in this country has been hitherto one neglected area. Parliament has passed the ‘unorganised workers’ social security Bill, 2008’ only a couple of days ago. It is milestone in the economic history of this nation. At present, according to one estimate, there are as many as 30-34 Crores unorganised workers in this country. National Commission for Enterprises in the Unorganised Sector (NCEUS) has recommended for setting up of a NABARD like financial institution so that loans etc can be made available to them at comparatively lesser interest rates and more conveniently. We need to have a more generous policy towards them not because they are at the fence; rather they are contributing magnificently to the overall growth of the nation. Unfortunately even after successive robust growth, only 20-25% of the population have been dinning the slice of development and rest 75-80% are still longing for a loaf of dividend. This is not philanthropy; this is pure economics, the Keynesian theory, of which the West boasts off so frequently. Let the purchasing power be increased of majority of the population; or else the citadel of prosperity would crumble down like playing cards. This is what is happing globally. Shopaholic culture of west and unfettered financial institutions are not suitable for country like India.

4. FOOD, SOCIAL SECURITY AND RURAL DEVELOPMENT SCHEMES -

Many Western countries including America are now a little bit surprised to the see India get going with relatively more pace and throttle in this period also. The west’s frowning on laissez-faire now faces extremely rough weather. The American and European newspapers which usually used to be flooded with editorials and columns deploring and criticising slow pace of reform in India; now preach their own governance and financial system about the capitalism blended with social responsibilities. India has a well institutionalised chain of Public Distribution System (PDS) shops is roughly 4.78 lakh in number and which is catering to needs of 652.03 lakh BPL families i.e. about 30% of the population. There may be pilferage here and there in this chain of distribution of food grains, but one cannot deny the importance of these shops in terms of maintaining supply line strong enough to cater to the needs of billions of people in rural areas. It ensures actually at least enough food grains in the local market; otherwise the situation in the countryside would have been much more precarious. The availability of food grain helps stabilising the price of commodities also to an affordable level.

The social security schemes like old age pensions, family pension, widow pensions, poor students’ stipends and a host of other such schemes are like blood capillaries of the economy. Such measures are taken being taken by the west as crisis management steps; whereas here in our countries these are institutionalised but non-philanthropic schemes. These are the inherent and inalienable rights of our poor citizens, we believe. These are the measures which are proving very helpful in this hour of distress. It is not merely a chance that we are not hit as hard as the west and other Nations are; rather it is due to our socialistic and humane approach which is paying dividends. 

The National Rural Employment Guarantee Act, 2005 (NREGA) was a land mark in country. In 2008-09 budget 16,000 Crore rupees has been allocated and later on additional 10,500 Crore was made available to this innovative scheme. If all wage oriented rural developmental schemes are added, it comes roughly more than 60,000 Crore rupees. Many people may not be optimistic about the performance of these schemes on the pretext of reports of corruption and otherwise, but it is acting as a bailout package in this period of economic crisis. It has magnificently increased the purchasing power of millions of poor Indians, which according to Keynesian also mitigating the after-effects of economic slowdown.

We need to do much more because much is left to do. The figures of NSSO regarding poverty and spending pattern are not encouraging. We need to bridge the gap between ‘haves and ‘have nots’. 

5. REFORMS IN FINACIAL SECTOR AND MONETARY POLICIES- 

This crisis has all set to unleash forces of resurrection and drastic reform. When Asian crisis hit majority of countries like Malaysia, Indonesia, Hong Kong etc, America prescribed menu for their revival; which included three things. Firstly not to cut interest rates. Secondly let the Banks go bankrupt and thirdly encourage saving and cut public spending. Ironically, when America is hit this time, it is doing exactly the reverse. The toxic assets have been bought, interest rates have been drastically cut and finally the public spending is enhanced and public is being advised to spend more. How can be two prescriptions for same ailment? Hindsight is always better than foresight. We must ponder on the financial sector reforms, a reform not be benefit corporate sectors only, but for the poor people also. The CD ratio of many states has to be improved in order to bring parity in the development. The blind imitation of west in this sector is disastrous; it has been proved beyond doubt. Even the Americans have now started discussing the legitimacy of blind race of development based on excessive financial leverage. Cutting of CRR, SLR, REPO, REVERSE REPO rates etc are good to some extent, but it should also be ensured that money is used to ease out the effects, and not being siphoned off by unscrupulous speculators and corporate managers as was done in USA and Russia. This might have been done in many countries also, which only time would unravel the truth. How can the govt finance and buy the toxins of some rich people with the help of the money of billions of tax payers? The financial sector should be reformed in such a way which cares for all and not for those only who could go the FMs meeting to extend their so-called valuable advices at the eve of each budget. In fact Nobel Laureate Joseph Stiglitz while delivering the 10th D.T.Lakdawala Memorial Lecture on ‘ crises Today and the Future of Capitalism’ said that this US exported recession is caused due to crisis which is US in origin due to the policies based on ‘ privatising profits and socialising losses’. This is not the capitalism, he said. 

6. ENHANCE PUBLIC SPENDING-.

According to one estimate about 80% of the infrastructure is created by the public spending. It helps create infrastructure at the same time generate enormous employment opportunities. The SEZ policy, which has been borrowed from China, should be re-defined. This cannot be allowed to be used for real-estate developers. In fact present outcry by a section of farmers in different areas are said to be due to these reasons. It ought to be oriented for industrial ventures and creating infrastructures.

7. INDIA SHOULD STAKE CLAIM IN THE EMERGING NEW GLOBAL FINANCIAL ORDER-

The American dominance on global financial order is all set to come to an end. Zakaria has predicted Post-American global economy. The wheel has turned around and American economy is in desperate need of money from developing nations like China and India. Undoubtedly, China has emerged as the biggest player and largest bargainers in this present crisis. It’s huge FOREX of 600 Billion dollar and huge domestic saving has started paying dividends. Both India and China can use G-20 forum to press for change in the global financial architecture and also speak on behalf of 152 Nations which had not been invited in Washington Summit. Globalisation, after all means maximum good for maximum numbers and not for a few, who reaped the profits and distributing the losses to the poors. 

IMF Chief has set 2% growth rate for major countries and suggested that govt spending should increase and interest rates be further cut. The question is that from where the money would come? How can govt enhance public spending? India has still a huge potential of domestic borrowing. The govt will have to instil confidence in masses to encourage bank deposits. India has to come forward with renewed vigour and stake claim to be a major player in the new world order, because it is said no one gets anything if begged, one has to claim for this.

BIHAR TO HAVE RULE FOR KHAS MAHAL LAND AT LAST

GOLGHAR;THE VESTIGE OF LOST GLORY

The state govt has finally decided to frame Khas Mahal bylaws for managing about 7,000 Hectares of Khas Mahal land which spread over 38 districts of the state. Draft of this bylaw is already in its final stage and is likely to get cabinet’s nod within a couple of days from now.

Till date there is no law or rule with respect to Khas Mahal land in this state and it is being regulated by collection of circulars and adhoc procedures called Bihar Government Estates(Khas Mahal) manual.

Khas Mahal are those lands which were vested into the State after enactment of Bihar Land Reforms Act, 1950 and came directly under the management of the state govt.

All such lands are situated in towns and are very costly. The present manual is slanted towards lease holders and most of the land are held by the lease holders at a throw away price. The renewal process is so simple that even if the lease not renewed, the govt cannot claim the land. At present most of such lands are located in districts like Munger, west champaran, Patna, Bihar sharif, Sasaram and Arrah and are either encroached or have been transferred to different persons for which govt did not get any revenue whatsoever.

If the said Bylaw is approved by the cabinet, the govt will be in a position to reclaim majority of such land and lease out to other persons at market value. This would enable govt to use such land for commercial and other govt purposes also.

On the other hand some people are apprehensive about the real motive of the government. It is pertinent to mention here that most of the Khas Mahal lands are either under illegal possession of influential persons of political or bureaucratic circle.

If the provisions are not implemented in letter and spirit, the Khas Mahal land may discriminately leased out to the people who are close to the political establishement.

Another Singur in Making in Jharkhand

Is Aamgachi village of Kantikund P.S. under Dumka district of Jharkhand going to be the Singur of Jharkhand? Is the ground being prepared for another Nandi gram in making? These are million dollars questions, which every one aspires to enquire into.

The Police Firing on tribal people who were protesting against the proposed construction of a power plant by one Calcutta Electric Supply Corporation Ltd (CESC) of RPG (Goenka) group in Aamganchi revenue village of kantikund police station under Dumka district of Jharkhand on 6th of December which left six people dead and few injured, has once again raised the issue of displacement versus development in this tribal dominated newly created state of Jharkhand.

With the creation of this state on 14th November 2000, the hopes of paradigm shift in developmental strategies ran high across the millions of people in this State. The State got first tribal CM and wheels of change were set in. 

Several MOUs were signed and it seemed, at least apparently, that the fate of this poverty stricken state would catapult into prosperity, but the swelled hopes quickly deflated owing to nasty political games resulting in frequent changing of guards one by one causing political instability and rampant corruption on highest level.

As far as this crisis is concerned, the crux of the matter is that CESC limited proposed to set up a thermal power plant of installed capacity of 1000 MW in Aamgachi village in Katikund block. This region happened to be the Sibu soren’s home constituency.

The company required 700 acres of land, but it initially requested the govt for 328 acres of land only because this much land was required for plants and machinery in this village. The process of land acquisition started and notification to this effect were issued. Initially all went right at least apparently, but subsequently one lady named Munni Hansda came into picture and floated an ‘ulgulan manch’ to what she calls, ‘protect the tribal people from eviction and alienation’.

The thermal power plant requires two basic facilities, coal and water. The company was allotted captive coal mines near the proposed site at Aamgachi by Ministry of Coal govt of India on 9th January, 2008. The company sources say that the proposed plant would require 3.33 MCM of water per month which would be made available by Brahmni river during rainy season, but for the remaining season the plant would require storage facility for which they would require additional land. The locals were knowing the future plans of the company. 

In this backdrop, the agitation against eviction and land acquisition was progressing side by side. In the first week of December, the ‘Ulgulan Manch’ started ‘jail bharo agitation’ and accelerated pace of movement. The district authority seeing the mood of agitators promulgated prohibitory orders under section 144 of Criminal Procedure Code (CrPC) in the area.

On 6th December, 2008, the mob turned violent because the police wanted to stop them from violating the prohibitory orders. The mob suddenly went amok and there was heavy exchange of stone pelting resulting into injuries from both sides. The police later opened fire, to what they call; quell the unruly and violent mob resulting into six causalities and several injuries. The entire area turned into a battle field and it seemed that the situation which was witnessed in Singur is being replayed. 

Medha Patker, as usual, appeared on the scene thereafter; and it seems now that the grounds are being prepared for making it another Singur. She led a ‘pratirodh march’ to the Governor House in Ranchi and sought to nationalise the issue. Naturally, when personalities like Medha or Arundhati come to the scene, the media attention gets focussed and the real issue gets somewhat blurred.

Undoubtedly, such incidents of violence would adversely affect the investment prospect in the region and make situation unfriendly for investment and industrial ventures. In this case, the fate of construction naturally hanged in uncertainty. Few months back, in Khunti district of the state, officers of Arcelor-Mittal Steel giant were brutally beaten up and their faces were blackened when they had gone to inspect the proposed site for construction of 12 million ton steel plant. This company requires 11,000 acres of land for this. One Adivasi Mulvasi Astitva Raksha Manch(AMARM) led a agitation thereafter and the project is all set to be scrapped. Similarly Bhusan Steel faced vehement opposition in Patmada in Jamshedpur district of this state. Such vehement opposition has been experienced by a host of other companies also here. There is one more interesting thing about these companies that most of them are interested in mining lease rather than Green field projects. This may be one hidden reason why the tribal people cast doubt on their motives.

Any way these developments have raised questions that why are such incidents of violence happening and how to fix these problems?

We will have to see the entire gamut of problem in an anthropologic- constitutional perspective. States like Jharkhand (south Bihar of erstwhile united Bihar) had been brought in Scheduled Area Regulation Act of 1956 under Article 244 of Indian constitution in order to provide extra safeguards to the tribal inhabiting these areas vis-a-vis their alienation from land. The threat to their unwilful eviction from their ancestral land was sought to be further protected by enactment of Panchayats (extension to the scheduled areas) Act (PESA) in 1996. This law makes it mandatory on part of the govt as well as the companies to obtain the consent of the Gram Sabha before starting any land acquisition process or signing MOUs. But unfortunately most of the MOUs have been signed without obtaining the consent of Gram Sabha as enshrined in the law. 

The previous experience of tribal people with respect to benefits given to them in lieu of their land that have been taken or industries those have been set up, have never been happy. For instance, in a place called Kiriburu in Chaibasa district of Jharkhand, which is believed to be the largest deposit of iron ore in India, mining operation has been underway for the last ten decades. Today these mines are owned by Steel Authority of India Ltd (SAIL). The company has erected huge infrastructure including plants, machineries, guest houses and quarters but the surrounding area is poorly developed. In fact this area is one of the most neglected areas with dismal literacy rate and poor per capita income.

Nowamundi, another area in Chaibasa is a typical example of utter neglect. In this area, some iron ore mines are owned by TATA group. Mining operation is going on for years but the demography has not yet been benefitted to the extent it should have been. We have a number of examples in this mineral rich state in which poor people has not tasted the fruits of dividends of mineral excavation. The govt’s new mining policy attracted private companies in the state and several mining lease have been granted to them. But these lease and MOUs could not bring about any qualitative change in the life of common tribal.

In this backdrop, the perception of the common tribal people has become hostile to the investment in general resulting sometimes in unjustified opposition. The apathy of the govt towards the legal rights bestowed on the tribal is revealed in the MOUs which are signed by the govt with a host of companies without Gram Sabha’s consent.

On the other hand, there is no denying the fact that investment in sectors like power is a prerequisite for development of any state. If industrialisation as well as agriculture have to make progress, energy is required. This area has been opened for private sector and it is in this background this company decided to setup power plant in kantikund.

The questions which remained answer are why is this distrust? Why do the govt machinery and companies fail to make tribal understand that benefits of such investments would also go to them? Why are tribal people not being convinced about rehabilitation and other govt incentives that are likely to be given to them?

In fact, this communication gap between them is the crux of all these problems. The kind of involvement and association which are required at the outset in such projects are conspicuously absent from govt and company side. The tribal people have captured a stereotype image of govt officials, which they feel is of exploitative for them. This gap of communication gets metamorphosed into mistrust by the NGOs most of the times. The namby-pamby govt machinery fails to counter the misinformation campaign unleashed by the NGOs. They provide with very attractive and imaginary data regarding their dislocation and make the land acquisition process intractable. This was exactly what has happened in Singur and is happening in Kantikund also. The govt must come up with more participatory land acquisition policy in tune with the PESA and take the local people in confidence before launching any project. The role of NGOs vis-a-vis anti-acquisition agitation cannot be countered by legislations only. The civil society as well as the govt will have to think that how and why do suddenly the same kind of people appear on the scene and vitiate the prospects of developmental projects. It does not mean however that all such NGOs are putting stumbling blocks in the way of development, but the experiences which we had in Singur is not encouraging. After the exit of TATA from Singur, even the local people feel cheated by the so-called activists who had promised to them of more bargains, but all went in vain. Everything including their dreams is shattered now. Such nefarious design of these elements must be made known to all concerned and thereafter; make sure that unreasonable and unjustified opposition do not come in the way of the progress of the nation. For this the locals must be made active stakeholders in such projects. They should not only feel but should reap also the fruits of development. They should also taste the growth being achieved by the nation in economic field.

This is not philanthropy, but an economics also, because unless we enhance the purchasing power of billions of Indians, the graph of growth cannot move upward uninterrupted. We cannot afford to go on creating oasis in deserts. Let us make every commoners stakeholder in the development process or else we will continue to invite wrath of the common people. Timely intervention of govt in this episode with precision like a heart surgeon can prevent another collapse like what happened in Singur.

IS RECESSION COMING TO SOFTWARE INDUSTRIES?

SOFTWARE IS SOFT ENOUGH TO BE INFECTED

Software industries in India have been on boom owing to opening of up of socialistic pattern of erstwhile economy in 1990s. This sector (IT-BPO) has been experiencing a growth of more than 80% for the last decade except a few exceptions. Today IT giants like WIPRO, TCS, and INFOSYS etc have made a respectable place for themselves on the globe.

The robust growth of Indian economy at the rate of 8-9% per annum has changed ‘Hindu growth rate’ stereotype image of Indian economy in the west including America.

This changed perceptions resulted in massive inflow of Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB) over a period of time. The boom in the Stock Markets pushed the Sensex from unimpressive 8,000 points to spectacular 21,000 points in recent years. Many savviest investors believe that the massive inflow of FDI has triggered the growth rate of many software and service sector industries to a sky soaring level.

But the recent report released by the RBI, has raised eye brows of many economic pundits. The impact of slowdown in world economy is slowly making its throes felt in India also.

The report suggests that the rate of inflow of FDI is fast decelerating in a couple of months. For instance it has reduced from 283 crores in September, 2008 to 112.52 crores in October, 2008 making a 30% decline.

In fact, the total FDI had risen from 95,639 crores in 2003 to a spectacular 6, 54,949 crores in 2007. This massive inflow of FDI has contributed a lot in accelerating the overall growth rate of economy.

But the slump in the bourses, which started in September, 2008 has started slowly but steadily spreading in the world market. Now when the USA, UK, France, Japan and many other G-8 nations have officially entered into recession, this contagion have started engulfing many Nations hitherto unaffected.

In India, two sectors which are likely to be affected most, are Software and service sectors. For instance, whereas; in 2007, the total FDI in software sector was 10,215 crores, it has reduced drastically to 5727 crores only (in seven months of 2008) registering a decline from 15.6% in 2007 to 5.8% in 2008.

The external commercial borrowings (ECB) are also likely to go down in a couple of months. This would manifest in the downward trend of export also which was 8.4 billion USD in 2007-08 in this sector. 

Many software industries have started giving PINK SLIPS to the GUYS ON BENCH. The exact figure of such retrenchment is no known, but this decline in inflow would definitely dwindle the job opportunities in IT sectors which has given direct employment to 5, 60,000 ‘Smart English speaking IT guys.’ 

The services sector however don’t show any sign of RECESSION right now, because the report of RBI suggests that flow of FDI in this sector has risen from 22% in 2007 to 23.2 % in 2008. This sector which contributes about 50% to the GDP has emerged as the saviour of giant economy of India. As a matter of fact, this sector has attracted 13,903 crores FDI in 2003 and has spectacularly swelled to 1, 43,776 crores in 2007 registering about 20-22% annual growth.

But it too would be affected by this down ward trend of FDI and ECB. Timely intervention of RBI and Ministry of Finance has so far been producing encouraging results, but these stop gap arrangements would have to be institutionalised financially. The heavy dependence on FDI and ECB would not help our economy protected from contagion for a long time.

Ugly faces of Terrorists

My new photographs

new photographs

Bihar convenes all party meet to review ARC report : iGovernment

Bihar convenes all party meet to review ARC report : iGovernment

Bihar plans Employment Melas to check mass exodus : iGovernment

Bihar plans Employment Melas to check mass exodus : iGovernment

BIHAR'S FLOOD FURY; END OF KOSI CIVILIZATION

iGovernment » Governance Bihar's flood of fury: End of Kosi civilisation?

The quantum of the severity of this flood of fury is yet to completely seep in. Most of the areas under Kosi's new, course may now never resurface

Published on 8/29/2008 7:52:54 PM

By Om Prakash Yadav

Over one lakh people in 102 relief camps, about 2.5 lakh houses destroyed, crops in 1.06 lakh hectare wiped off, and while the government claims it has so far evacuated nearly three lakh people, the total number of population affected has swelled to 1.2 crore.

This is day thirteen of the catastrophe that hit Bihar on August 18. And while relief measures and funds have started flowing in, it seems the quantum of the severity of this flood of fury is yet to completely seep in, even though the overflowing Kosi—the sorrow of Bihar—has been sinking most of the human habitat that has come on the way of its new, changed course.

A close look at the history of this North Bihar river, and one realises that the worst is yet not over.

According to experts and the data of rainfall and water discharged from the Bhimnagar Kosi barrage every year, an additional 2.1 lakh cusecs of water is likely to flood in from Nepal between September and October.

And what does that mean? Experts suggest that it is just the beginning of the problem, for one, the changed course of the river has swallowed millions of hectares of land and which are hardly going to resurface even after the water recedes. 

Two, these inundated areas are technically in the river bed, thereby completely uprooting those living in these areas—not to talk about the loss of agriculture land, houses, livestock, ponds, wells and above all their dreams.

Three, the devastation of this magnitude is unheard in modern civilisation, with the entire Kosi civilisation on the verge of eclipse.

The genesis of disaster

Like many other rivers of North Bihar, Kosi gathers water from Himalayas in Nepal. However, it is a trans-boundary river and flows between Nepal and India.

Kosi is also one of the largest tributaries of Ganga and after flowing through nearly 70,000 sq kilometres confluences into Ganga near Kursaila in Katihar district of Bihar.

In Nepal, this river lies to the west of Himalayan peak, the Kanchanjangha and has seven major tributaries namely Sun Kosi, Tama Kosi, Dhudh Kosi, Indravati, Likhu, Arun and Tamar. That is why it is known as 'Sapta Kosi' in Nepal.

This river has earned notoriety since time immemorial due to its unruly, turbulent and unpredictable behaviour.

On an average, it carries 70-80 million tons of silt every year and it is perhaps due to this feature, it tends to change its course after a definite period of time. This is also one of the most important differences between Himalayan rivers and rivers of Europe or America.

Many experts are therefore, of the opinion that viability of high dams on any Himalayan river is very bleak, because the heavy siltation makes barrages useless after a period of time.

Kosi has an average discharge of 55,000 cusecs of water that increases by as much as twenty times during the monsoon or flood season, thereby assuming dangerous proportions.

The speed and velocity of the river's flow is also very high, causing devastation that is most often unthinkable. As the river is relatively new, experts suggest that it has not matured enough to settle a definite course.

Mapping the old course

The first attempt to map the meandering of this swift, fast and turbulent river was made by British surveyor C C English way back 1779.

According to district gazetteer of Saharsa, he tracked the course of Kosi since 1731 and the maps prepared by him suggest that the 18th century Kosi that flowed near Purnea moved westwards in the ensuing 300 years—shifting its course from from Purnea to Supaul.

On the basis of this inference, it is being said that the Kosi has come back to its 18th century course. According experts, the river that had shifted 120 kilometres from east to west in over 250 years has suddenly again reversed its course.

Kosi, Floods and Devastation

Kosi and floods in Bihar have inseparable history, with the river being responsible for some of the most devastating floods caused in the state—from the one in 1954 to those in 1963, 1971, 1984, 1987, 1991, 1995 and the present flood in 2008.

According to the records available with Water Resources Department (WRD), overall 850,000 cusecs of water was discharged from the river during the 1954 flood. It was under these unprecedented circumstances that the Government of India (GoI) decided to look for a long lasting solution to the problem.

The initiative to tame this mighty and uproarious river saw India sign the historic 'Kosi Agreement' with Nepal on April 25, 1954. While Gulzari Lal Nanda signed the agreement on behalf of the GOI, Nepal was represented by Bir Shumeshwar.

The agreement envisaged setting up of a barrage by GOI. The barrage was to be located about eight miles upstream of Hanuman Nagar town; the barrage was built at Bhimnagar and it took over seven years (1956-63) to complete the work.

The terms and conditions of the agreement, however, stipulated that India would be responsible for any the repair and maintenance of the barrage. The Government of Nepal also handed over the project area land was on lease for 193 years.

Other than the barrage, a 39 Kilometre long embankment from barrage site to Chatra in Nepal was also built to 'jacket' and tame the turbulence of this river. The 'jacketing' directed the flow of the river to the barrage and swift and fast Kosi was brought to control to a great extent.

Spurs—a diagonal structure to check the speed of current and protect embankment—were also constructed along the eastward embankment to prevent the erosion or breach in embankment.

The August 18 Breach

While the jacketing of this river upstream barrage did prove successful in guiding and controlling the direction of the flow over the last 45 years, it was also moving towards becoming disastrous because of heavy siltation.

As this river carries heavy silt with it, in due course of time the bed of the river rose above the field itself and this, in fact, has been the typical reason of flood every year in this area.

Unfortunately enough, while all previous floods in Kosi always happened due to breach in embankments downstream the barrage, the present flood has been caused due to breach in the embankment near Kusaha which is located upstream the barrage.

According to reports available with sections of media, the signs of breach in this eastward upstream embankment were perceptible in the very first week of August itself. 

The current started eroding and damaging the embankment between 12.10 and 12.90 kilometres. The officials of WRD say that the law and order situation in Nepal has under gone a change and they were not getting required amount of co-operation from the Nepalese authorities.

They justified their alleged inaction by saying that when the team of engineers visited the site at Kusaha, they were not allowed to work and were forced to flee from the site.

Gradually, the spurs near Kusaha also got damaged and finally breached on August 18, 2008 at 12.80 kilometre point. This site was about 12 kilometres away from the barrage, therefore within few hours waters flowed into the Indian territory.

With the river flowing in full swing, the surging water took no time in widening the breach by up to two kilometres the same day. With the water gushing out through the breach, the situation had worsened and within 24 hours the entire Kosi barrage was almost empty.

Although engineers tried to lessen the damage and control the discharge of water through the breach by opening 54 out of 56 sluice gates of the barrage, the current had by that time adopted a different course, making the attempt to prevent the disaster futile.

The roaring Kosi took eastward course from here and entered into Bihar through Birpur. Within hours, the water inundated Birpur, Belwa Bazar (native village of former Chief Minister Dr Jagarnath Mishra), Chatarpur, Pratapganj, Raghopur and Triveniganj of Supaul district.

The surging water moved further east southwards and engulfed areas like Farbisganj and Narpatganj of Araria district. The direction of the flow was such, that its entry into Purnea district was easily forecasted. This was exactly the route that Kosi had been flowing through in the 18th century.

As the river found no natural course in east-south downward direction, it got divided into many branches and entered into different areas inundating and marooning them.

Within a week, the water inundated Narpatganj, Ghurna, Bela, Basmatia and Bhargama Blocks of Araria District, Pratapganj, Udhampur, Raghopur, Triveniganj and Chatarpur of Supaul district. Some areas of Kisanganj district were also affected.

District like Madhepura also came in the way of this river. Firstly Kumarkhand, Udakisanganj, Bihariganj, Alamnagar, Murliganj, Purni, Gwalpara, Singheshwarsthan and Sankerpur blocks of Madhepura got badly affected and people got trapped in the flood.

On August 27, flood water entered the Madhepura town itself.

Situation in these areas are fast deteriorating and condition is becoming precarious. While official figure indicates nearly 50 causalities so far, unconfirmed sources suggest that the number of deaths would be much more than what anybody would guess.

In Purnea district, blocks like Bikothi, Banmankhi, Rupauli, Dhamdaha and Amaur are either partially or totally affected by this catastrophe.

While moving east west downward direction, areas like Sonbarsha, Sourbazar, Pataghat, Banganwan and Simribakhtiarpur of Saharsha district also witnessed the fury of flood. People have lost lives, properties, homes and perhaps everything.

Kosi confluences into Ganga near Kursaila in Katihar district, therefore red alert have also been sounded to evacuate areas like Kursaila, Barari and Korha. Sources suggest that water can enter these any moment now and cause further destruction.

Magnitude of the problem

With over 20 blocks of six districts in the state badly in the grip of the ferocious flowing Kosi water, the magnitude of problem is not difficult to estimate. About 15 lakh people are trapped in different places, and there is an urgent need to evacuate them, or else the state might lose them forever.

Even if all such persons are rescued, huge numbers of relief camps are required to be set up. A rough calculation of the displaced based on the number of blocks and villages affected suggest that the state government would need to chalk out plans for rehabilitating over 1.2 crore affected population.

Rescuing the marooned population, providing relief and arranging rehabilitation is a herculean job, because almost entire infrastructure has been destroyed. Worse, the state government has neither the manpower nor the resources to meet this unprecedented situation.

The immediate question, however, is to find out enough space to set up relief camps and make arrangements for the basic needs, including adequate food, for supporting over 15 lakh people.

Carrying the entire population and shifting them to distant and safer places has never been an easy task, not to talk about running the relief camps on such a large scale and for a long time; experts in WRD suggest that the situation is likely to remain unaltered till October.

And while Prime Minister Manmohan Singh has declared it as a national calamity and aids have been flowing in—from Rs 1,000-crore package central government assistance to free rail services and relief material being supplied by the Indian Railways and financial assistance announced by the governments of Maharashtra, Delhi, the United State, Britain and Unicef—the distribution of the relief on such large scale is a huge challenge in itself.

The changed course of the river has swallowed millions of hectares of land that are hardly going to resurface even after the water recedes, posing a massive challenge of shifting and rehabilitating a huge population.

It is not hard to guess the cost of this rehabilitation programme, both in terms of money and time. And while experts say that it would be possible to bring back Kosi to its original course, what if they fail to reverse the situation?

While the failure to do so will mean that there would be sand dunes everywhere in the old course, it also means that the state and its people will permanently lose their properties, fertile lands, infrastructure, and all.

This also means that unless the situation is handled with precision care of a surgeon doing an open heart surgery, Bihar will witness a pre-1963 like situation when the Kosi belt was known for drought and famine.

The impact of this catastrophe is also manifold—the pace of development of Bihar is certainly going to come to a grinding halt, or may even get reversed.

Many would agree that history is going to repeat itself. The irony is that the international community is sitting quite and except for few announcements there has been no initiative as such to help the nation and the state tide over the disaster that is fast turning severe than the recent Tsunami.

The magnitude of devastation and destruction is such that no government will be able to tackle it single handedly. The job is enormous and response so far has been cold.

This is the time to fight back; Bihar is looking for help from all corners, all agencies and many nations. And while Chief Minister Nitish Kumar and the entire state machinery are struggling hard, so are the denizens of entire North Bihar.

Let helping hands come out and take Bihar out of this 'national calamity'.

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Post Comments Total Comments: 38 

Posted By P K Jha on 9/1/2008 5:03:50 PM 

Thanks a lot for such clear and to the point description. 

It is unfortunate to see few and lukewarm response to a huge catastrophe. It seems influential only get attention. Had there been industry and influential people with union etc. it would have attracted many fold response. 

Who cares (only few humane) for the poor lot? 

See how Orissa got support or for that matter Bhuj Earthquake. 

Still the large mouthed politicians are trying to gain millage only over the dead bodies and hungry, ill clothed affected. 

Thanks again for the call. 

Regards 

P K Jha 

Posted By Vikas Vaibhav on 9/1/2008 10:45:56 PM 

History always Repeats, and what we have to do is to learn from it and make sure that good things which happened in past happen again and again and at the same take precautions to never let the disasters repeat themselves. But it seems that some people never learn. We knew that if this river has shows its real self then something like this is sure to happen, but still we are not able to take precautions and steps in maintaining the barrage at Bhimnagar. But it seems that we are good only at finding the reasons after the damage is done. 

The ignorance of the government and taking the issue of maintaining the barrage in its condition lightly is finally costing us the life of crores of people. 

Well! what can i say, the damage is done and u say that the worst is still to come.what can be worst than this, is it going to wipe out the entire state. Keeping in mind the past history of the state and how it was moving ahead in the direction of development. This event seems to break the backbone of Bihar. 

If stopping this plague needs a hand of a surgeon, then i really wish to God to send one. Otherwise i really don't know how Bihar is going to recover from this loss. But still whatever may be the situation, no matter how worst it becomes we can not leave each others hand. 

I only wish to God that soon the authorized people can figure out a solution to stop this demon and stop this social slaughter. 

Posted By Sanjay Kumar on 9/2/2008 12:20:28 PM 

Outstanding article, gives clear picture of the magnitude. The write deserves credit of making this report exclusive and eye opener. The Kosi so far was a myth for me. Thanks I could understand the history and geography of it. 

Sanjay Kr, Hajipur 

Posted By Gajendra Kr Singh on 9/2/2008 12:29:02 PM 

Simply excellent and mind opener. The writer has successfully delineated the picture of the flood. He has given the history, hitherto unrevealed. He has successfully portrayed the picture in the aftermath of the flood 

Gajju 

Posted By A.K.Chandra on 9/2/2008 2:07:23 PM 

The writer has given the picture no newspaper was able to do it. He has rightly said that Bihar's development is going to be badly affected. The top level bureaucracy has be fooled Nitish Kr. IAS officers are unwilling to go to the affected area and they are doing only lip service. The writer has an indepth understanding of the problem. 

A K Chandra 

Posted By Aradhana Dutta on 9/4/2008 10:05:09 AM 

An eye opener for all readers. This article is really outstanding. I couldn't have got a better perspective about the cause for the present flood situation and demography of the problem. 

The havoc caused is immense but more unfortunate thing is the problem could have been avoided, its high time that we don't take Nature for granted. 

Aradhana 

Posted By Dr Birendra, IAS on 9/7/2008 12:54:32 PM 

The writer has given both historical and geographical picture hitherto untouched in media. The picture attached clears the concept very vividly. The web should publish such reports instead of publishing stereotype news and rhetoric. 

Birendra 

Posted By R. Ashok Kumar on 9/20/2008 12:59:10 PM 

It is interesting that the Eastern Embankment breach started on the 6th of August 2008. On the 5th of August 2008 a 6 MM quake occurred near the 12th May Sichuan quake: 

2008,08,05,094917.26, Latitude32.76, Longitude105.49,6.0MM 6km depth. 

And on the 25th of August 2008 a 6.8 MM quake occurred at Western Xizang. This was the last straw. 

See http://damsquakeskosirivershifts.blogspot.com 

This article shows the genesis of the catastrophe lies in quakes caused by dams on the Indian subcontinent. 

Posted By Colonel Mithilesh singh on 9/21/2008 11:04:52 AM 

I hail from Madhepura and I can understand the woes and sufferings of the victims. The writer has rightly described the picture. The real problem will start when the water recedes. The Kosi area is going to witness pre-1963 like situation. It requires massive investment and intense monitoring. 

Mithilesh 

Posted By Colonel Mithilesh Singh on 9/21/2008 3:53:15 PM 

The writer has very intelligently described the woes of the flood. The state govt must learn a lesson and do the needful 

mithilesh 

Posted By Rohit Ranjan on 9/22/2008 11:16:02 AM 

The writer has rightly projected the magnitude of the problem. The govt must act and search long lasting solutions instead of a cosmetic surgery. 

The construction of high dam is not the solution. It is surprising why the de-silting has not been done. 

Posted By Vimal Kr on 9/22/2008 12:10:20 PM 

Let the river be de-silted first before constructing high dams. The politics of flood relief should stop and real work should begin. 

Posted By N. Sinha on 9/22/2008 1:28:53 PM 

The writer has very minutely and geographically described the course of Kosi. It is a balanced and well contained article. The govt should take into account the valuable suggestion extended by the writer. 

N.Sinha 

Posted By R.K Verma on 9/22/2008 6:59:51 PM 

The writer has rightly said that the need has come to reconsider the viability of dams. 

Posted By Mantu on 9/22/2008 7:34:32 PM 

I hail from Madhepura. The writer has rightly said that the entire region will face pre-1963 like situation. The officials responsible should be punished. Nitish Kumar is good man but he should come out of the clutch of IAS coterie. IAS people are ruining this state. They have destroyed RJD and they would destroy NDA also. 

Posted By Murari Pd. Singh on 9/23/2008 11:43:55 AM 

Google is very helpful in searching good articles on various issues. I was trying to understand this flood from geographical and social points of view. Several articles, I read, most of them political. This article has solved my problem. Now I could understand the technicality of the problem. everyone cries dam and dam, no one talks about desilting of the rivers. Thanks google and iGovernment for this beautiful article 

Posted By Ajay on 9/23/2008 12:33:39 PM 

The writer is requested to give a complete write up regarding rehabilitation. what should be done to bring back the areas to track. It seems that the writer has a deep knowledge about it he should share it with all. 

Posted By Riya Alias Swetlana on 9/23/2008 2:51:49 PM 

This is my papa's article and therefore I read it with much interest. Before this I could understand flood only through News channels. Now I understand it in a better way. Thanks to Papa 

Posted By Sapan Roy on 9/23/2008 3:06:50 PM 

Its an excellent article and the writer has described the intricacy of the problem in a lucid way. The magnitude of the problem is such that only govt cannot help it out.

Sapan, Patna 

Posted By Vivek on 9/28/2008 10:58:26 AM 

Such a devastation and so cool response from National media? This is not a flood it is a catastrophe. Bihar should be helped out of this tragedy. Unfortunate for this state. Nitish is doing hard. Politics should stop and rehabilitation and reconstruction should begin. 

Posted By Adarsh Bhardwaj on 10/6/2008 11:51:18 AM 

Finally there is an article that explains the clear story of Kosi's disasters. The immediate question, however, is to find out enough space to set up relief camps and make arrangements for the basic needs, including adequate food, for supporting over 15 lakh people. 

Posted By Amit on 10/6/2008 12:02:22 PM 

Its a really a good article that I have read in recent times on this problem.

Posted By Neeradhi on 10/6/2008 1:55:47 PM 

The article is really informative. Hope the politicians stop trying to gain political mileage out of the saddening situation and really do something for the suffering people. 

I hope we behave like responsible citizens and genuinely help our country mates. 

Posted By Kulkiran Preet on 10/6/2008 2:44:26 PM 

Really touching . Bihar should be helped to recover from such tragedy.Govt shouldn't sit quie. 

Posted By Nitin Bhardwaj on 10/6/2008 2:54:01 PM 

Never did I realise that the problem was so grave till I read this article. Good article to know the exact nature of problem. The Indian government should take this problem on high priority and seriously do something to put the river on right course or at least find some solution to construct a dam which can control the water of the river. 

The eminent and powerful personalities should also come forward to draw the attention to this problem. 

Nevertheless, the financial aid should continue so that the flood-hit people can fulfill their basic necessities. 

And I'll also like to know that how the posting of replies to this article only, is going to help Bihar?

Posted By Vishal Verma on 10/6/2008 3:07:43 PM 

The author has provided an in-depth detail of the Kosi Problem. In reality, it shakes all our claims of being competent with so called Super Powers. I think our government should take some corrective actions so that these kind of disasters do not happen again. Its time to do action action and action. 

Posted By Shekhar Verma on 10/6/2008 3:35:57 PM 

A comprehensive description of the disaster and its reasons.... Unfortunately there is no channel in our so called democratic country where common man can give its opinion and make them work for us ... however, with this posting we can at least make people aware of the things....Thanks to the writer ... 

Posted By Rahul Agarwal on 10/6/2008 4:07:42 PM 

The article gives the real picture of how the drastic catastrophe has ruined the lives of lakh of people in North Bihar. Unfortunately the governance is not paying the required attention. 

This is not just about what has happened, it's a warning for us on what could happen if appropriate measures are not taken in time. 

Such researched articles are required to make people aware of the reality which they don't get to know through media. Worth reading and giving a thought!! 

Posted By Shashank Arun Sinha on 10/6/2008 4:42:10 PM 

Excellent article. It's really first time I got to know the true picture. Till now I was only dependent on the information from TV news channels. It is really a great effort to draw the real picture of the tragedy. The govt should take into account the valuable suggestions given here by the writer. Please don't take the nature for granted. 

Posted By Rahul Deb Mukherji on 10/6/2008 5:42:08 PM 

Real eye opener.Very nice article. 

Posted By Gyanendra Kumar Gupta on 10/6/2008 8:09:30 PM 

Nice article. Shows the depth and knowledge of author. 

Posted By Anil Thatipalli on 10/6/2008 8:21:00 PM 

Nice article. 

Posted By Khushboo on 10/6/2008 9:27:06 PM 

This is a brilliantly written article that gives a full coverage of causes and effects. The writer has precisely pointed out the facts and figures in the article, which is an eye opener for many. 

Posted By Tuhina Dubey on 10/6/2008 10:08:23 PM 

This is truly an eye opener ... The problem needs to be addressed in a much bigger forum. 

Posted By Mitali Lalwani on 10/7/2008 11:38:08 AM 

An eye-opener for the Government ...but seems its still sleeping and innocent people are suffering due to the delay of the permanent cure of this.