Vinod Anand

THE budgets in India only address the short-run marginal issues relating to income and expenditure accounts, and the expansion and liberalization of the private sector in the context of globalization. They do not focus on basic long-run issues with seriousness. In fact, it is not only a question of fiscal and monetary matters, but also a question of the whole gamut of economic issues facing the country.

The Budget shows no link between the past and the future in the sense that it has not focused on the long-run objectives and issues of economic and social importance for the country as a whole. Long-run ‘demand-side’ issues like high inflation or unsustainable current account or fiscal deficits, and imbalances in the balance of payments work against macro economic stability, which, in fact, is a highly serious matter for the whole economy and works against the whole ethos of growth and development in a serious way. Likewise, long-run ‘supply-side’ issues linked with trade and capital flows, financial sectors, industrial deregulation, and disinvestments of public sector enterprises are also important in various ways. In fact, the long-run focus of the budget has to be both on domestic and external liberalization, because the former consists of relaxing restrictions on production, investment, prices, and, thereby, it attempts in assigning a bigger role to the market system for performing the various functions of the economic system, including resource allocation; and the latter consists of relaxing restrictions on international trade flows of goods and services, technology, and capital. In fact, these two kinds of liberalization are inter-linked with each other.

Let us make some specific observations on the Budget:

• The issue of Deficits in all its connotations: The most serious problem is that of Fiscal Deficit (Budget Deficit + borrowings + other liabilities), which as per the Economic Survey for the Financial Year 2009-2010 has touched the 6.5% mark. According to the announced Budget the Fiscal Deficit is predicted to be 5.5%. The Budget has indicated no ways to control this high fiscal deficit. In fact, it should not be more than 3% or so. Fiscal deficit is a concealed ailment and, if not controlled, it is highly dangerous for the economy in the sense that it is anti-growth and it eventually get converted into a crucial vicious circle. I wonder how exactly the Finance Minister has predicted a rate of economic growth at the 10 % level? Apart from many other reasons, the basic reason behind the high Fiscal Deficit is the enormous amount of non-plan development.
• The Budget has surely shown its concern about the rising prices, essentially of food items, but it has not indicated any specific measures to control it. The basic reasons of this rise are higher liquidity and hence higher demand, and lesser supply. The Budget should have indicated a trade-off between the two reasons to reduce the on-going the price rise.
• Good governance is another important area. It has five basic components: political accountability, free market, the rule of law, social justice, and education. The governance that rules/ controls the nation, therefore, has to be properly streamlined. We should, in fact, learn from the experience of the East Asian countries, and try to be honestly ‘hard’ rather than being dishonestly ‘soft’. It is a happy news that the Budget has dwelt on this issue, and has promised to see that the Government will improve governance, and the role of the Government will be turned into that of an enabler.
• The 13th Finance Commission has recently recommended that “tweaking tax and duty rates annually” should be stopped and they should switch to a “three-year rolling budget”. Even if this recommendation is accepted it would take two to three years to introduce the new system. A rolling budget means that tax and duty rates would remain unchanged for a longer period. This would help the companies and individual to plan their financial strategies better. It would also improve the quality of government expenditure. Many developed countries follow a similar practice. It is time that India moves on to such a system which will amount to stable tax regime for a reasonable period of time and help entrepreneurs to estimate their returns on investment in a much better way. In essence, such a rolling budget will make eminent sense for stability and planning. The Budget is absolutely quiet on this issue;
• The Budget has focused on the infrastructural development of rural development. It has proposed about 46% of total plan on rural development; 13% on road allocations;
• The Budget has also focused on urban development, especially of the poorer people and slum dwellers in terms of poverty alleviation and housing; good amount of money would be allocated to the railways too;
• According to the Budget the Food Security Bill would soon be placed in the parliament;
• The Budget has also announced creating new assets for social sector reforms in including provision of health facilities to the poor, and also support to micro, small, and medium units including those of Khadi Udyog. It has also focused on the delivery of social justice;
• It has announced credit support to the farmers; there will be a four-part strategy in agriculture; for eastern region it would initiate green revolution in various ways;
• The Budget will also give priority to pollution management by initiating the clean energy plan fund;
• The FDI regime would be simplified to attract more foreign investors;
• The Budget has also announced to help the private banks in various ways;
• In terms of tax reforms, the tax regime would be simplified;
• The stimulus package will be withdrawn gradually.

Besides the above points, a few other points are mentioned below:

The Budget has allocated enormous amount to defence without providing much external security to the country.

Talking of the Tax Reforms no one would refute the fact that one of the most serious problems of central finances has been the declining Tax-GDP ratio.

It is really surprising that, apart from focusing on children’s education between the age of 6 to 14 without any discrimination, and development of the infrastructure for elementary education, the Budget is absolutely quiet on many other issues that are mentioned above which are quite crucial for improving the educational scenario in the country The Budget has also not looked at the mushroom growth of coaching institutes all over. It is akin to the concept of a ‘parallel economy’, as variously defined by Feige, Schneider and Enste, Bhattacharaya, Smith, Tanzi, Mofelsky, and Gunttman. As nothing much is imparted in the various institutions, students have to go for tuitions at these coaching institutes.

In fact, it should have focused on the following initiatives:
a) massive expansion of educational facilities including setting-up of educational institutions in rural and remote areas with emphasis on regional language/mother tongue as the medium of instruction to eradicate rural-urban disparity in the access of education;
b) hostels for poor students belonging especially to scheduled castes, scheduled tribes and backward classes, and residential schools for the poor-tribals;
c) Mid-day meals, merit-cum-means scholarships, and book-loan programme for the poor school children so that they do not have to earn their livelihood at the cost of education;
d) Vocationalisation of education at all levels to provide skills to the poorer sections for earning their livelihood; e) Non-formal methodology of education (including schemes like ‘Earn While you Learn’, ‘Action Research Project’ on universal primary education, and UNICEF assisted projects) permitting students to learn a course of their interest through a method most suited to them, at their place and over a period which is convenient to them; and f)distant education and use of mass media; and e)adult education;

The Budget has been quiet on this tax-GDP ratio. In fact, it should have proposed to mobilize higher tax revenues like (a) Imposing a highly progressive consumption tax on the so called ‘undeserving’ rich/super rich, who amass a lot of wealth because of an economic system of subsidies, protectionism, privileges, and ‘undesirable’ government support and laxity. Such rich people believe in status and highly conspicuous consumption (b) Extending the tax net to the agricultural sector, where most of the urban income gets invested by the richer people with a view to avoid taxation. In fact, the Government should strike a trade off between the Tax Reforms and their short-run fall-outs on the common man. This will best be achieved by assuring that the benefits of growth reach the masses through percolation in terms of say, low prices of things of daily use, low taxes for the common man, and reasonably attractive interest rates (within the present day policy of low interest-rates-regime), and also in non-monetary terms like, basic social provisions, day-to-day security, effective law and order situation, public discipline and responsibility, and elimination of ‘rent-seeking’ nefarious activities. In case such a trade off is not worked out, the forthcoming Budget would be really hard for the people in various ways.

The budget is not Pareto- Optimal in the sense that it would surely distort the household budgets of the majority of Indians in the country. It should is also not transparent in the sense that it is absolutely quiet on the issue of rent-seeking activities, corruption, and black money. The basic reason for this is that the so-called political entrepreneurs and their supporters are involved in these, and they amass huge wealth through these nefarious activities. The reason is quite clear. The Budget is framed by the same political entrepreneurs, who just aim at their selfish motives. It is also not transparent in terms of a number of non-friendly barriers that inhibit the functioning of the percolation effect.

Although we are out of recession but its dark shadows are still there. The Budget has been quiet on this issue.

[The writer is a well known professor of economic]

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Liquor flows in Punjab as youth takes to drug

Gobind Thukral

IT was written in bold letters on the back of a truck: “tere bache jeen, sharab peen”. Another truck had yet another slogan: “Tere bache jeen, sharab peen, tera khoon peen”. Some Punjabi humour indeed! We have immense capacity to laugh at ourselves. We have also immense capability to take to liquor and drugs. Name a brand of liquor from the high-end Blue Label to any brand of India Made Foreign Liquor and popularly called whisky to roori brand that homemade brew, Punjab is comfortable with all. In fact, some of the old hands at brewing boast of best variety of homemade and one can have the taste of these desi daru even posh houses of powerful politicians. These concoctions have endless ingredients. From simple jaggery mixed with oranges to almonds and other costly dry or fresh fruits, all possible combinations are used.

These liquor consumers may harm their health, both physical and social, but they make immense contrition to the development of Punjab. Nay any other state in India. They provide funds for roads, education and health besides greasing the palms of the officials and ministers. Last year liquor vends in Punjab sold over 29 crore bottles. Haryana consumed another seventeen crore bottles. In spite of the economic hard times due to recession, liquor consumption in Punjab has touched an all time high, with its denizens guzzling roughly 29 crore bottles of Punjab Made Liquor (PML), Indian Made Foreign Liquor (IMFL) and beer in 2009-2010. Perhaps better prices for wheat and paddy cotton have helped. Anyone in Punjab knows that a joyous ceremony like marriage or birthday is not possible without plenty of booze.

This is a whopping increase of 10 crore bottle over the consumption of 19 crore bottles in the preceding year, suggesting that the tipplers have given a major boost to the revenue earnings of the financially starved state of Punjab. Harassed Akali BJP government is happy and thankful to the drinkers, though it would not say so. In other words, Punjab with a population of 2.5 crore has one of the highest per capita consumption in the country -- roughly 10 bottles (750 ml each) per head in a year. This is bedsides liquor procured from other sources. We get plenty of scotch and wine brought by a constant flow of foreign travellers. Every Punjabi has relatives and friends aboard. Then there are defence department canteens [CSD] spread all across the state for defence personnel and their friends, liquor smuggled from neighbouring states and, of course, the illicit brew. According to senior excise department officials, this should be more than legal sale- roughly 35 crore bottles. The total could be anywhere around 50 crore bottles in a year.

And, the happiest man could be the Finance Minister, Mr Manpreet Singh Badal as he has collected record revenue of Rs 2,150 crore in 2009-2010 -- Rs 200 crore more than the preceding year. Ten per cent of more honesty would mean another ten percent rise in revenue. As the consumption of liquor shows an upward trend, the draft excise policy for the next year has proposed no hike in rates. it will help people buy more and consume more. But this should not be taken as a sign of buoyant economy. Farmers’ indebtedness tells its tale. Industrial production is down as is the service sector. Only farmers despite their conditions are helping the state economy to move up to 6.9 per cent this year.

The state Excise and Taxation Department hopes to mop up an additional Rs 200 crore over the outgoing year from the sale of PML, IMFL as well as beer. For this, the department plans to increase the licence fee and also the quota of liquor the vendors can sell.

The main reason for such an unprecedented spurt in liquor consumption is a major increase of PML, IMFL and beer quota by the state in order to counter the inflow of smuggled liquor from neighbouring states, particularly from Chandigarh and Himachal Pradesh. A raise in liquor quota means decrease in liquor prices, spurring greater consumption. The new draft excise policy will come up for the Cabinet's approval on February 23. Officials who drafted the new policy have proposed no significant change in the allotment of liquor vends through draw of lots. There are 6,000 liquor vends across the state. They all make a hell of money and many of these are owned by powerful people including politicians.

As per the Excise Department data, alcohol addicts in Punjab guzzled 1.5 crore cases of country liquor, 50 lakh of IMFL and 40 lakh of beer in 2009-10. A case contains 12 bottles. Add the drugs that our youth is getting addicted to and we a Punjab that may be starving intellectually and aesthetically, but not from liquor and drugs.

In this context one event which brought the truth out is quoted this week by Governor of Manipur, Mr. Gurbachan Jagat who went to address the convocation of ho his old Government College Hoshiarpur. Mr. Jagat a former police chief Jammu and Kashmir and Border Security Force is an honest intelligent officer who found most of the students in his old college who received degrees were young girls. He asked the principal where the boys had gone. They are either moving to foreign lands or busy consuming drugs and alcohol. The educationists over there asserted that these days over 70 per cent students in colleges and universities in Punjab are girls. They also take merit positions beating boys hollow. Good in one way, but for society in many other ways.

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South rejects Biotechnology Regulatory Authority Bill

EVEN while some of the most important legislations such as the Women’s Reservation Bill and the Food Security Bill are crying for an early passage in the Parliament, the Government has shown a surprising hurry, almost bordering on obscenity, to introduce a new Bill called the Biotechnology Regulatory Authority of India in the current session of Parliament. It does not need a detective’s skill to understand the reason for this urgency. The national debate around Bt Brinjal steered by the Environment Minister Jairam Ramesh and the direction in which it moved the national consensus has put the cat among the genetically engineered pigeons. They are now ready to fight for their life; hence this coordinated aggression with their political agents.

According to p v satheesh, National Convenor, South Against Genetic Engineering, “The BRAI, still shrouded in secrecy, has a number of most disconcerting provisions that cause profound concerns among all of us who are demanding a democratic debate on the need to bring in genetic engineering technology into the arena of food and farming in India. The Bt Brinjal debate was the first of its kind and offered a glimmer of hope that we, as citizens of this country, can participate in making the decisions on what we grow and eat. But even before this glimmer can grow into a beacon, efforts are afoot to extinguish it by introducing the draconian BRAI Bill.

There is a need to look at the introduction of this Bill in the context of the developments that have taken place in the past week. The most significant is the letter shot off by the Agricutural Minister Mr Pawar, who has complained that “significant investment had already been made by private and public organisations in developing BT crops and all that would go waste if GM cultivation was banned.” Similar is the argument of the Science and Technology Minister Shri Prithviraj Chauhan, who is reported to have argued that “the moratorium was sending out wrong signals and was stopping investments in Indian agro-technology.”

The other important development is the intervention of the PM’s economic advisory group led by one of our coldest economic thinkers, Dr Rangarajan. This Group has come up with the advise that “After the success of Bt cotton and the benefits it has brought to farmers in Gujarat and Maharashtra, it is imperative that the government must have a clear policy on genetically modified crops,” The council has also urged the government to “……bring the results into the public domain at the shortest possible time”,

The insistence on shortest possible time is significant for the reason that it is symptomatic of a stock market approach and not that of a sound science. Sound science in food, medicine and agriculture always looks at long term impacts of any organism introduced into environment, food and health systems. Short cutting this process can only result in unprecedented harm our environment, health and food systems.

All the above are not isolated, stray remarks or developments. They are very coherent, organized, and orchestrated attempts to push the GE agricultural policy to mutate and morph as an economic argument with scant regard to the issues of citizens’ health and what we grow and eat; nor has there been any concern shown for the natural environment of the country’s farming landscape. The overriding and dominant concern, sadly, is for the economic investment, whatever the cost!

This is a dangerous argument by itself. But the fact that this is being obviously forced by the biotechnology industry and their masters in the USA is scary. The way the Bill is being fashioned is an indication to this distance learning of its framers.

How does BRAI want to treat the environmental citizens of this country who would like to voice their concerns against genetic engineering? Read the following clause in the Bill:

63. Whoever, without any evidence or scientific record misleads the public about the safety of the organisms and products specified in Part I or. Part II or Part III of the Schedule I, shall be punished with imprisonment for a term which shall not be less than six months but which may extend to one year and with fine, which may extend to two lakh rupees or with both.

Reading this, one doesn’t believe that one is living in a democratic country! Are the pressure, clout and power of the multinational agrochemical corporations and their government in the USA so powerful that our government is turning this country into a banana republic? We knew and had heard that in the Latin American countries which were completely dependent upon the USA for their economic survival, such USA-compliant laws were enacted to enforce a complete ban on dissent. But imagine similar laws in India, an emerging Economic Tiger! Just Unbelievable!.

What is the purport of this clause? What kind of evidences are admissible before an environment activist like me or a media person like you are put behind bars for pointing to the dangers of GE foods? The very core of the BRAI mandates the Authority to make a science-based evidence to clear any biotechnology product. The term science based itself is contentious, especially in the context of “modern biotechnology” the cause of which the Bill espouses.

Increasingly, the world over, the problems and limitations of Genetic Engineering are being seen clearly by all reputed world bodies. In the International Assessment on Agricultural Science and Technology for Development [IAASTD], in which over 400 world class scientists participated under the banner of the World Bank, FAO, WHO, UNESCO etc., there was clearly a refusal to endorse genetic engineering as a solution to food security. Last week, the Head of UNDP Ms Helen Clark, who was formerly the Prime Minister of New Zealand, clearly said, “I don’t think GE is the solution to the food security problem. Instead, I recommend more funding for agriculture that emphasizes solutions to the problems faced by poor farmers”.

While this rethiniking and soul searching is going on in the civilized sectors of the world, one of the hotheads of the GE industry who is on the payrolls of a major agrochemical company, recently termed the revered scientist Dr P M Bhargava “senile’ for opposing Bt Brinjal. Far more ominous is the fate encountered by the evidences brought by the Centre for Science and Environment [CSE] against the soft drinks Coca Cola and Pepsi. All the diligent research done by the CSE was demolished by the soft drink giants saying that India had no capacity to test their drinks. Similar arguments will be presented by the GE industry by creating a plethora of protocols and procedures if someone challenges them. For them science is what is defined by their market mechanisms. Science is not necessarily truth if it is opposed to them. This is the environment that will confront us tomorrow once the BRAI becomes an Act.

In the BRAI, the people who will decide what organisms can be permitted, imported and field-trialed will be a group of three who will all be composed of scientists in the area of biotechnology or medicine or industrial science. It has no place for environmentalists, farmers or food consumers. Thus, all our rights to decide for ourselves what we farm and what we eat will be snatched away from us. And we cannot go to normal courts to challenge them. The BRAI will set up its own Appellate Tribunal which will have the jurisdiction to hear arguments on the issues concerning biotechnology. If one wants to appeal against the decisions of this Tribunal, the only court we can go to is the Supreme Court of India. Who will have the time, money and energy to go into such lengthy and expensive legal processes? This is the surest way of disempowering citizen activists of the country.

The list of booby traps embedded in BRAI is long and dark. The only way it can be countered is to say a clear no to it. We don’t want a BRAI for this country. As Minister Jairam Ramesh said, giving the power to determine what we should grow and eat to a body of three persons is anti democracy and anti human rights. Therefore South Against Genetic Engineering calls on the government to quash the Bill even before it is tabled in the Parliament and earn the respect of its citizens while restoring faith that this government respects democracy and the well-being of its citizens.

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“Obtaining information under RTI wouldn’t be possible under BRAI”

ACCORDING to KHETI VRASAT MISSION, The proposed Biotechnology Regulatory Authority (BRAI) as introduced in this session of parliament will take away the right to protest and speak against bullying activities and illegalities by corporates, corporations and government on genetically modified food.” Eminent lawyers, Medical professionals, Social activists, agriculture scientists and representatives of several public interest groups came together under the umbrella of Alliance for GM Free & Safe Food, met at Lajpat Rai Bhawan here today and expressed their fears about the control over freedom of speech of the media and common man by using the draconic powers of Section 63 of the proposed biotechnology Act. Terming the proposed Biotech Regulator Bill (Biotechnology Regulatory Authority of India Bill) as a wrong bill by the wrong people for the wrong reasons, Alliance members called for the setting up of a National Biosafety Protection Authority Act in India, under the Ministry of Environment & Forests or Ministry of Health & Family Welfare, keeping in mind the sustainable development interests of all Indians.

The Act also attacks the Constitution by undermining the Federal Structure of the Indian polity. “Agriculture and pest control is an exclusive State subject as per Article 246 and VIIth Schedule of the Constitution. By inserting Section 2 and 81 in the Biotechnology Act, the Union Government unfairly and illegally wants to take control of all agricultural activities and encroaches on the authority of the States. This is undemocratic and unconstitutional.” Umendra Dutt of Kheti Virasat Mission mentioned. Several parts of India, particularly the Green Revolution states are already witnessing severe agro-ecological and environmental health crisis due to wrong agriculture technologies of the past. Now GM seeds / Crops will further jeopardize our ecology, biodiversity and food safety. GM Seeds will also enslave our agriculture and food sovereignty. GM crops are bound to bring food colonialism and this bill will only legalizing this colonialism and destruction, Umendra Dutt further added.

Social activist Hemant Goswami said that “The proposed ‘Biotechnology Regulatory Authority of India Bill, 2009’ does not have any provision to punish corporates and people who conceal adverse effects of genetically modified organisms and food. Even unauthorized field trials of genetically modified crops have not been made a punishable offence. Only unauthorized clinical trials in humans have been made a punishable offence which would be rare. Wide scope has been left for companies to illegally and unethically deal in all other forms of trials. Field-trials have not been dealt in the said act.” According to the definition of “confidential commercial information” in Section 3 of the Act, no person would be able to obtain information from the authority under the RTI too. The way field trial, clinical trial, commercial information, etc are defined in the bill only ensures that the Biotechnology Authority remains a useless and cosmetic body which serves the commercial interest of big multinationals only. Unless and until there are strict penal provisions against concealment of adverse effects on humans or environment and severe class action and penal consequences for any genetically modified product which causes harm/damage, the regulatory authority will serve no purpose. Also, the Act must specify, that if the GM products are proven harmful then the penal action against government agencies, corporations on whose recommendations any GM food item has been cleared.

Quoting from the text of the bill, as placed in the parliament, eminent lawyer Reeta Kohli said that the Section 63 is a direct assault on the media’s freedom of speech, which reads, “Whoever, without any evidence or scientific record misleads the public about the safety of the organisms and products shall be punished with imprisonment for a term which shall not be less than six months but which may extend to one year and with fine which may extend to two lakh rupees or with both.” This is more draconic than acts like TADA, POTA, etc. and is a clear violation of fundamental rights guaranteed under Part III of the Constitution.

social worker Onkar Chand mentioned the casual manner in which the Government is dealing with the BRAI bill is a cause of concern. The advent of MNC’s in genetically modified food and products will have the effect of controlling not only the entire food chain by a few people but can also bring in unheard miseries on human beings by ill-researched or greedy actions by these commercial companies. He demanded that the BRAI bill should not even be considered or deliberated upon unless and until the opinion of all the State Governments and the general public is also taken on it. It should be withdrawn from the parliament immediately.

Prof Vinod Chander Nanda said that the composition of committee in chapter II of the bill is also ludicrous and it gives little autonomy to the regulatory authority. “Members in the Bioregulatory authority should be appointed from all the State Governments too and ideally should be much larger body and not just a three member dummy body.”

Various lawyers’ bodies and legal experts mentioned that the bill carries several discrepancies and clearly indicates that it has been drafted by those persons who have substantial interests in biotechnology areas. It was also pointed out that the BRAI Bill will bring the GM issue in the domain of the Ministry of Science and Technology, which has a substantial conflict of interest as it is already partnering with many MNC’s and having joint programs. Most of the scientists in Department of Bio-Technology have cross funding from these big companies. Legal experts were of the opinion that such a regulatory authority should be under the Ministry of Health and not Biotechnology.

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