FOOD SECURITY IN INDIA; ARE WE UNDERNOURISHED?

SWAMINATHAN;HARBINGER OF GREEN REVOLUTION

One UN report on food security in India has said that about 40% of the children below age of years are undernourished. This report has been prepared after a comprehensive survey by World food programme and

M.S.Swaminathan research foundation.

Swaminathan, a noted Agricultural scientist and harbinger of green revolution is considered as an authority in agriculture and food programme, therefore this report has been taken very seriously in all quarters including the government. This report further reveals that about one third of the entire population i.e. about 40 billion men and women suffer from energy deficiency due to mal or under nutrition. Presenting a state wise data, the report says that Jhakhand is the worst state and has lagged Orissa behind in this field. Previously Orissa was at the last position vis-a-vis food security. States like Punjab, Haryana, Himachal, Tamil Nadu etc have performed well and improved the situation.

The report suggests certain measures like expansion of PDS system and recommends that in place of a Targeted PDS, it should be made universal PDS so that the vailablity of food to the rural areas is made universal and made much more convenient and institutionalised.

The report has praised the schemes like NREGS and other rural developmental wage oriented programmes and emphasised the need of their better and efficient implementation so that the fruits of these programmes are reached to the rural population which constitutes about 56-60% of the total population. The report further recommends to the governments that since the food production is expected to touch record 230 Million tons in this fiscal, it should be ensured that the public distribution system be made much more wide and universal. Malnutrition and undernourishment are the stigma on our society especially when we boasts of high growth rate and a robust economy. The report urges the government that the abhorrible malnutrition is erased from the society.

SWISS BANK TO DISCLOSE HIDDEN TREASURE

UBS, CITADEL OF PROSPERITY BUILT ON BRICKS OF POVERTY

The world economy is in deep crisis. It requires huge amount of liquidity to tide it over. It is amply clear now that the market has plummeted due to excessive financial leverage. According to one estimate, in 1980, the leverage was up to 108% of the global GDP. In fact the trend of twisting and extracting excessively from the economy even beyond its limit had started after 1990s itself. Initially, this trend paid handsomely to the money makers and finance mangers and they thought that it is the secrets of economic success. The so called boom in sectors like housing, IT, service, capital markets etc was perhaps due to this leverage also. The bottomless greed of money makers, MNCs and TNCs brought the leverage percentage up to sky soaring level of 600% of the global GDP in 2007. It is estimated that in 2007 global GDP was about 54 trillion USD, but the financial and banking sectors stretched this amount to six hundred times. Thus the growth of entire global economy was brought to stand on the foundation of sands, which was bound to sink and implode. 

Therefore, the World desperately needs huge liquidity and wealth in order to restructure, revamp and rebuilt its global financial architecture. The American GDP is about 13-15 trillion dollar. According to economic experts, the USA is in desperate need of liquidity in order to ensure that the TARP and second stimulus package get going and help US economy recover from recession. 

It is in this background the US administration is tightening its screws on the tax evaders. In a daring move, the US administration sought information from the United Bank of Switzerland (UBS) regarding the American clients who have evaded tax from the Internal Revenue Service (IRS) and deposited their money in this clandestine off shore Bank. Initially, the UBS vehemently opposed this move and declined to disclose the names of clients and their amounts in the bank account on the pretext of its age old policy of secrecy and confidentiality conferred on it under Swiss Banking Act,1934 

The US administration toughened its stand and made UBS bow down. Now the Bank’s Chairman Peter Kurer says that “We accept full responsibility for these improper activities, he added, suggesting that client confidentiality, to which UBS remains committed, was never designed to protect ‘fraudulent acts’. Now the Bank is ready to disclose the names and the turnover of 250 clients immediately and assured the US administration to divulge some more names in near future. The Bank is also ready to pay 780 million dollar as penalty to avoid possible launching of prosecution against it. 

This whole success story on part of US administration has set a good example for countries like India, the citizens of which have reportedly deposited 1456 billion dollar in UBS. According to the data of Swiss Banking Association (SBA), in 2006, Indian nationals reportedly held the largest quantity of illegally stashed money in Swiss Bank, if this data is to be believed, and there is no reason of disbelief, Russians have deposited 460 billion dollar followed by British 390 billion dollar, Ukrainians 100 billion dollar and Chinese 96 billion dollars. These figures speak much than what it appears to be. This is why it is said that India is rich country where poor citizens live. 

Ours is developing economy and we are proud of it. Even in this period of global meltdown, we have been making impressive growth, second to China only. But in terms of GDP, we are far behind than that of US, China, Japan etc. It is yet to cross 01 tn dollar at the current rate of convertibility. If the deposited huge amount of Indian Nationals is taken true, it is 1.8 times the GDP of our country. What a massive drain of wealth! Alas we could have brought it back. In fact this drain of wealth is much bigger than those of the British colonial period. Economic Historians have estimated that till Independence the Britishers had been able to drain our wealth from India equal to 5% of GDP, whereas; in post independence India it is 108% of the GDP. What a tragedy! 

Like Americans, we too desperately require huge liquidity. We have injected massive stimulus package into the economy for a ‘jerk start’, for which we require more and more money. The Indian Infrastructural Finance Company Limited (IIFCL), which provides fund to carry out infrastructural projects require money. The ambitious programne of National Rural Employement Guarantee Schemes (NREGS, which has helped our rural economy become stronger and helped increase the purchasing power of billions of people in India requires more and more money so that it can yeild much more better results. Thus, to see economy moving and rural developmental schemes get going, we require money. The million dollar question is, from where will the money come? We cannot increase the tax rate, because it is counterproductive. We have already planned to launch GST from April, the next fiscal which is expected to add 1.4% additional increase to the GDP. We have to have tax regime which provide relief to the honest tax payers.

We have, therefore, to take recourse to similar measures as Americans have taken. If we can notch hefty amounts from the UBS, it can be of immense help for our ailing economy; after all 1456 billion is an amount which can change the fate our nation. Some economists are of the opinion that the liberalisation has increased the pace of flight of capital and the size of drain of wealth kept growing with growth of economy. Time and again this issue has been raised but every time the power brokers have succeeded in thwarting the move. No serious effort has so far been made to see that the drained wealth of nation is brought back. There must be a political audacity to raise this issue and make meaningful effort in this regard. India must stand tall and extract information from UBS and other such offshore Banks with regard to clandestine bank deposits by Indian Nationals. We must talk to them in a peremptory tone and demand back the illegally drained wealth of the Nation. It is high time; India must stand firm with a determined body language so that UBS behaves with us at par with US. 

This issue can be raised on world forums including G-20 or G-7 summits. How can a Nation or a financial institution like UBS be allowed to eat up the vitals of ours in the name of century old obsolete and colonial legislation? Time has come for the international community also to exert pressure on Switzerland and see that the policy of secrecy and confidentiality of UBS and other such offshore Banks be scrapped. It does not go against the Laissez-Fairre or free market economy, after all unethical financial practises and bottom less greed have already done tremendous damage to the world financial order beyond repair. Economies are made for the welfare of citizens in particular and human kind in general. How can unethical trade and financial practises be allowed to swallow the destiny and right to live a descent life of billions of poor people who still starve, while the Banks are spilling over with money and gold?

ASSETS OF UBS AND OTHER SWISS BANKS- It is astonishing to know that the total assets of UBS, the largest of the Swiss Banks, is roughly 2 trillion dollar which four times the GDP of Switzerland and 9 times that of Iceland. If assets of all Banks in this country are taken into account, it is 6-7 times the GDP of Switzerland. Comparing with countries like America and Britain, the assets of all the Commercial Banks in these countries are hardly 70% the GDP of these countries.

THE EDIFICE IS CRUMBLING- The sources in the Banks reveal that the outflow of money from these Banks are increasing. The UBS has made certain changes in the top management also. Peter Kurer is reported not to contest the forth coming election for the top job, the Chairman, this year. It seems that the old edifice is crumbling and days are not far when the entire principle of 'privacy'or ' secrecy' on which these Banks are standing would be put to question.

IS LAISSEZ-FAIRE IN REVESE GEAR?

( BROWN AND SARKOZY,IS HONEYMOON OVER?)

THE world economic down turn has started showing its ugly and horrendous faces in social spectra also. The impact of this recession is gradually percolating down vertically and spreading horizontally across the global village. The economic depression, the product of U.S.A., is being exported throughout the length and breadth of globe and letting its jitters felt in all sections of the society.

In Europe , France is witnessing the worst ever street-protests against the alleged failure of the government in tackling the economic slowdown and mitigating the woes of its citizens. President Sarkozy is facing a grave challenge and the sweet memories of his honeymoon with Bruni are fading. This unrest has strained his relation with Gordon Brown also. Britain on the other hand, is also witnessing protests and anti-government demonstrations. “British company only for British employees” is being advocated for, very staunchly. In fact British companies have been hiring cheap paid employees from other European countries, are permissible in European Union Law, and are becoming bone of contention.

Similar social and political unrests are being witnessed in Russia and in many other erstwhile members of Warsaw Pact countries. Prime Minister Putin and President Dmitry Medevedev have been facing rough weathers in Russia. Putin, once hero of Russian people, whose popularity was said to be at a soaring level, when he quitted the presidency, is also under tremendous pressure.

Even in America, people are taking to streets and demanding tough, decisive and result oriented steps so that their lives are brought back to normalcy. In spite of Bush’s 700 billion dollar TARP (bailout package) more than 18000 jobs are being lost every month. According to America’s own labour department statistics, the un-employment rate is about to touch a double digit figure, a all time high in the post depression economic history of the country. Obama’s historic coronation to the Whitehouse seat has instilled a huge amount of hopes, which is both an asset as well as liability for this first African-American non-white president. His 836 billion dollar US Stimulus package will take few more months to make its impact felt in the socio-economic arena. Till then the American society’s patience will be put to test.

The Asian dragon, the republic of China, hitherto unscathed from the scratches of the down turn is also undergoing socio-economic as well as political upheavals. The massive 900 PLUS billion dollar stimulus package has been put on top gear of the economic vehicle. The thirst, the government says, will be on ways and employment oriented infrastructural developmental activities like Rail and roadways constructions. In spite of this the growth of this Asian Giant has shrinked to 7.5 percent. The toys industries, one of the biggest exporters of the world, have suffered very badly. It has butchered the employment to such an extent that the stimulus package’s after effects are also being neutralised.

India, one of the fastest growing economies of the world, too could not remain insulated from the viral infection of the global economic ailment. The massive pumping of liquidity into the financial systems through frequent rate cuts in CRR, SLR, REPO and REVERSE REPO RATES have applied some ointments on the bleeding wounds of economy but still a lot is required to be done. The stimulus package of Montek has a long way to go before it reaches to the tattered masses. The brunt of the slowdown has taken millions of jobs head here in India also but the social and political unrest at a magnitude similar to those in other parts of globe is not imminent here. Thanks to the accustomed Indian psyche and its endless power of tolerance. The institutionalised and bureaucratised network of social security system has done a commendable job here in this country. NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEMES (NREGS), the brain child UPA government, has come as a huge relief for the people living below the poverty lines in the countryside. The massive allocation of more than 60 thousand crore rupees over a period of 3 years has done miracles in the rural economy of this country in the sense that it has provided pennies in the pockets of billions of people. It worked on KEYENESIAN theory which is based on the principle of government expenditure vis-a-vis the purchasing power of people.

THE TREND OF PROTECTIONISM -The WTO has released a report that says that about 16 countries have take protectionis measures since September the last. Many experts believe that these anti-free trade measures will provoke retaliation from other countries also and may led to reveral of the entire process of free trade capitalism across the globe.The trend of protectionism is set in USA also, ‘Buy American’clausein America’s 819 billion dollars stimulus package smack of protectionism. US administration's decision regarding H-1B visa restrictions are not in congruent with the policy of ‘lazes- fairre’, a policy which America do not get tired of boasting. One 'Patriot employer Act' is on anvil, which will give incentives to the employers taking some protectionists and social security measures with respect to providing employement in USA. Many Europeans are tightening their immigration regulations with a sole motive of saving their economy and providing employment to their own citizens. America has imposed an undeclared ban on Chinese goods. The Japanese economy has shrunk to almost negative growth due to shrink in exports, the main growth factor coming in Japanese economy, to almost Zero level. This is suggestive of the fact that the importing countries have stopped Japanese goods into their countries. 

Many Europeans nations have resorted to such similar moves which go against the basic tenets of capitalism. Germany for example have provided huge subsidies to its industries and sought to protect its economy from the onslaught of the recession. Chinese have restricted imports and is providing unprecedented protection. President Sarkozy has hinted that some protectionist steps would be taken to save the ‘French Detroit’, move opposed by many European nations themselves.

Canada, Mexico, Brazil, Argentina, Russia, Ukraine, Japan, South Korea, etc all are on similar move. The sentiment is running high across the world in favour of protectionism and the ideals of free economy are being abhorred now.

The excessive financial leverage and excessive greed have ruined the financial fabric beyond repair. According to an estimate, the financial leverage in 1980 was 108% which rose to 600% in 2007 and lending was done of worth 600 trillion dollar whereas; the total Global GDP was only about 55 trillion dollar. What an excessive leverage and what as mad race it was.

The champions of ‘European Unification’ ‘Under One Europe’, one currency and one parliament under ‘European Union Umbrella’ are sitting quiet now. The global economic forums like WTO and World Economic Forum at Davos seem to have postponed their ‘Unified world market and non-subsidised’ world economy plans. All the motions, it seems have been kept in abeyance, thanks to Xenophobia everywhere.

IMPACT ON INDIA DUE TO ‘BUY AMERICAN’ CLAUSE- the Indo-US trade has witnessed spectacular rise over a decade. According to the Ministry of Commerce, the export from India to USA has been of 160 Billion dollar in 2007-08 which rose to 200 billion dollar in 2008-09. The chart below gives the picture of more than a decade-

1993 1994 1995 1996 1997 1998 1999 2000 

India’s Exports 4,551 5,302 5,736 6,169 7,322 8,237 9,071 10,686 

India’s Imports 2,761 2,296 3,296 3,318 3,608 3,564 3,688 3,663 

Turnover 7,312 7,598 9,032 9,487 10,931 11,801 12,759 14,349 

Balance (+) 1,790 3,005 2,440 2,851 3,715 4,673 5,383 7,023 

(* Source: US Department of Commerce, Bureau of Census) ,

The above figures suggest the increasing trend of the bilateral trade over the years which have reached more than 200 billion dollars. As far as the composition of the trade is concerned, India's exports to the US have been rising mainly on account of significant increases in the exports of diamonds, textiles and ready-made garments, machinery, carpets, footwear and leather products, dyes, iron and steel products, chemicals, edible fruit and nuts and spices, coffee and tea. Items such as, cut and polished non-industrial diamonds, jewellery, textiles and clothing, carpets, shrimp and other marine products, footwear and leather goods, iron and steel, and cashew nuts constitute over 70% of total Indian exports to the USA. 

The volume of these exports is expected to witness a downward trend owing to the restrictions imposed in the stimulus package. 

As far as import of India from USA is concerned, there has been a change in the composition of India’s imports from the USA also. Due to increase in our food grains production especially wheat and edible oils, the imports of these items from the USA on a regular basis have stopped. Crude oil, which remained one of the highest imported items from USA in 1980s has been gradually phased out.

At present, we import from America, items like machinery including project items, fertilizers, aircraft and aeronautical equipment, medical equipment, and organic chemicals etc. undoubtedly, if our exports experiences contraction, we would resort to contraction of imports from USA also in order to see that the balance of trades in not slated excessively in favour of USA 

USA is the largest trading partner of India. Share of USA in India’s export is 17%, and its monetary value as we have seen is more than 200 billion USD. This economic meltdown had already adversely affected India’s export in general and export to USA in particular. According to Federation of Exporters Association (FOE), the exports from India are already showing signs of decline due to this slowdown syndrome. Figures suggest that it is experiencing a decline of more than 15%.

The bilateral trade has been galloping with unprecedented pace due to variety of reasons, thanks to the cementing of bilateral ties over a number of issues including strategic and nuclear matters.

Although, this protectionist clause will help improve the situation in the domestic demand in America on short term basis, but in the long term, this would affect adversely the American trade also. If exports from this country plummets, similar retaliatory measures are taken by host of countries. 

1. EFFECT ON IT-BPO AND SERVICE SECTORS- the service sector constitutes 50% in our GDP, meaning thereby that this sector has witnessed boom over a decade or so.

Over a period of time, the export of this sector increased by 33.5% amounting to 8.4 b USD in 2007-07, it is expected to reach 10-11 b USD by the end of 2007-08. According to National Association of Software and services Companies (NASSCOM), the number of employees working in BPO-IT sector in India is under-

Year Number of employees

2003-04

2,16,000

2004-05 3,16,000

2005-06 4,15,000

2006-07 5,53,000

The current figure is certainly much more and is increasing day by day. According to one estimate it has touched a figure of 1 million. They were getting salaries worth 1 b USD during the year before last year and naturally it has increase substantially in 2008-09. According to one estimate, about 82% of US software companies prefer Indian software professionals for obvious reasons. 

The buy American clause would be adversely affecting this outsourcing industry also and Obama has made it clear that the American companies which outsource would not get tax reliefs. Message is clear, they would be discouraged from outsourcing the job to the Indian software sector in particular and service sector in general.

GOVERNMENT GOES TOUGH ON CORRUPTION

HARBINGER OF HOPES IN THE TATTERED STATE

Government of Bihar is coming out with a comprehensive legislation to confiscate assets of the public servants against whom case (s) of ‘Disproportionate Assets’ have been filed and charge-sheets have been submitted in the court of law. A bill in this regard is likely to be tabled in the forthcoming budget session of the State Legislative assembly itself.

While speaking on a seminar organised by DFID, the CM reiterated his commitment to weed out corruption from governance and hinted at this move. He has geared up the vigilance sleuths in the state and the number of trap cases by the state vigilance bureau has increased many folds. As many as 60 trap case with 68 arrests in 2006, 29 trap cases with 37 arrests in 2007, more than 60 trap case with 70 arrests in 2008 and 7 trap cases with equal number of arrests have been made in 2009. Subsequently cases of Disproportionate Assets are launched but thanks to the slow pace of trial a very few could actually be convicted. Apart from this bureau, one Special Vigilance Unit (SVU) has been set up to take anti- corruption measures against high officials. This Unit has also made some headway with respect to recover huge amount of wealth from the possession of officials including several IAS and IPS officers. Their assets could not be confiscate due to non-availability of any specific law in this regard. To sort out this problem, special courts are to be set up and speedy trial would be started, hinted the sources at the state secretariat.

On the other hand, rules are also likely to be amended and the power of making appointments of Teachers would be snatched from the Panchayats and ULBs representatives very soon. The CM received innumerable complaints of corruption and nepotism during his Vikas Yatras against the Local representatives especially Mukhiyas of the Panchayats. Two years back, the CM had formulated the policy of appointment of Teachers (Bihar Panchayat and Nagar Nikaya shikshak niukti niyamabali’) by Panchayati Raj and ULBs representatives with a utopian idea of devolution of powers to lower level of functionaries as enshrined in the constitution. But this effort has failed miserably due to rampant corruption in the panchayati raj and ULBs institutions. Many academicians are of the opinion that the qualities of the ‘appointed teachers under this scheme’ are hopelessly poor because it is based on ‘counselling’ and not on ‘tests’, which has given ample opportunities to the representatives to play foul in this game. This has adversely affected the qualities of primary education, many people lament.

MY IMAGE WHILE WRITING ARTICLES

Om Prakash Yadav