Tag Archive: Economics


 Target 3 Billion: Innovative Solutions Towards Sustainable Development by A.P.J. Abdul Kalam, Srijan Pal Singh

The book talks about PURA : Providing Urban amenities in Rural Area. It talks about various social entrepreneurs who took a challenge or a task to transform their respective villages and societies. Dr Kalam along with Mr Srijan Pal Singh provides the readers with various steps which could be taken to eradicate poverty in the world by using PURA as a tool for development.

The book starts with mentioning about the other human kind which has no access to good life and lack basic amenities like portable drinking water and basic medical supplies.

Then Dr kalam talks about the vision of 2020 that he had set out when he was the president of India. A target he set that needs to met, in which all the indians would strive to make our country a developed nation by 2020.He talks about a form of socio-economic revolution that needs to take place.He rightly focuses upon the cause of rural to urban area migration.

He focuses on youth of India who could play a major role in this aspect in eradicating poverty. He talks that rural India is an opportunity and challenge at the same time for young entrepreneurs who could bring a socio-economic change.

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Dr Kalam provides a list of sustainable features which needs to be undertaken to offer solution to the problem:

  1. Economic sustainability
  2. Technological sustainability
  3. Social Sustainability
  4. Environmental Sustainability
  5. Value Sustainability
  6. Learning and adaptability

He talks how technology could become a major driving force to meet the goal.He also states that environmental conditions should not be harmed in the due process.

Agriculture and PURA:

In another part of the book Dr Kalam and Mr Singh give a detailed viewpoint as to how PURA could be used in agricultural sector.Since rural economies are largely dependent upon agriculture the world over, the work could begin from there to eradicate poverty buy unleashing the potential of agriculture.Both talk about the second green revolution and how India needs another green revolution in which these agro-businessmen of India could play a major role.They then provide information about the many case studies in this field. eg Chitrakoot PURA and WARNA cooperative sugar factory.

They also talk about the Milk revolution which needs to come again. India being that largest producer of the milk in the world and Indian dairy providing 13% employment and 5% to national GDP. The figures are provided to show the potential of Indian milk industry.India has 283 million cattles in the world more than any. Cattle breeding,cattle health care, cattle food and nutrition,processing and marketing of of milk is talked in detail.

Social Transformation and PURA:

Mr Kalam talks about the gap in the Rural and Urban amenities in detail. He provides a bunch of stats in this regard. Here he talks that how technology,management, entrepreneurship and investments need to be used optimally to create a revolutionary change in this decade.Society based on knowledge and skill could be used to utmost advantage in India.There are case studies of social entrepreneurs who made a huge change to society. They also talk how there needs to be building of value based society.

Eco-Friendly sustainable development:

They devote an entire chapter on how the development must be made on Eco-friendly terms. Any development which is done by harming the environment is not right and should be avoided. Climate change and reforestation is talked in detail. The use of renewable energy could be employed for power generation and they talk about the vision 2030 for global energy.

Community driven sustainable development:

In this part Public private community partnership model is talked. The role of community action is been talked in length.

The four fold participation by the community is talked:

  1. Planning
  2. Execution
  3. Sustenance
  4. Growth

Then there are case studies about the barefoot doctors of China which were part of Chinese rural health care movement (started in 1950s). It’s success is talked and how it could be used. Child journalist who create a voice for the community are also in another case study where “Bachhon ki pahel” news bulletin is mentioned. They talk about other organization too such as Magarpatta community, samaj shilpi dampati and female health volunteers of Loni.Emphasis is made on youth to meet the target.

Enterprise creation leading to empowerment:

This was the chapter which interested me the most where social entrepreneurship is talked. This focuses on how enterprises could help eradicate poverty and PURA could be useful tool in it. Micro, small and medium enterprise’s role is looked in depth. A constructive environment which is beneficial for all is talked about which could be built using an enterprise network. Technology’s role is again mentioned and given a prime importance.

Certain PURAs are talked in detail to give a perspective into the way working could be, namely:
1.    Chitrakoot PURA
2.    Periyar PURA

Working culture of Toyota and Fabio Rosa’s work towards bringing sustainable energy to Brazilian villages is also mentioned.

Realization of PURA:

In this part the steps towards implementation and realization of PURA are talked about. The many organizations or people who could setup PURA and worked are talked. It talks more about policy.

The people whom they mention could set up PURA and help realize the dream of poverty-less nation are:

  1.  Government
  2. Individual/NRIs
  3. Entrepreneurs
  4. Industry
  5. Village cooperatives
  6. Academic institutions
  7. International organizations and NGOs

It is mentioned that ministry of rural development in may 2010 launched national PURA program under private public partnership with an active role for panchayati raj institutions. The funding plans of the projects are also provided in detail.Rest of the book talks about that PURA cooperation could bring changes in development and result in the development of 21st century.It is a good book in understanding a solution that Dr Kalam brings about for solving the issue of poverty in the world and particularly in India.

9780143029106

The book is a combination of various articles written by the author over the years. Possibly from mid 1990s to 2002. The author essentially is of capitalist mind and offers solutions based on that model. The author also tries to convince people that capitalism must be sold to people like “Fabian socialism” of Nehru was sold to masses in 1950s. Even though acknowledging the short comings of the capitalist ideology, the author debates that it is the best system forward.

Being the ex-CEO of Procter and Gamble(India) , the author does provides an insight into various issues from the side of a capitalist. I however believe that the author missed out a concept called “social entrepreneurship” or “responsible capitalism“, which one believes should have been talked more in his book. I must say that I was horrified by couple of his suggestions and at the same time sympathetic to some, particularly about export industry .

Author is educated in Harvard University (in 1950s if I am not wrong) , he does bring along a certain mindset. I however believe that his understanding of certain issues were elitist per say ( both social and economical ) even though the author tries to pinpoint to the reader that he is NOT elitist, on this part I would beg to differ with him.

Author also focuses a lot on philosophers and their view points, I presume that is an educational hazard that the author has to live with (since the author did Philosophy honors from Harvard university) and so he uses the names of many western philosophers in putting his view point across. I would have liked if he would have quoted more of Indian philosophers.

The author also makes a point that he is a liberal in every sense ( I presume it is fashion these days to say so), I for one evoke author’s concern towards the reform of the rules and allowing entrepreneurship to be encouraged. It is an average book if any body wishes to read it. I was drawn to it after reading India Unbound by the author. I however doubt that I would be reading any other of his books soon. None the less , some books recommended by him will certainly be on my list for the book TO-READ.

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Now I would have not known about this issue being developed in India and the world, If I had not given some exams recently. The question itself was the first one in terms of lending money to farmers and corporate houses to “reform” the agricultural system in India. WTO and international hedge fun organizations are forcing in this regard. As after the “real estate” bubble burst, they feel this is the next avenue for investment.

The whole interest of the corporates for land in production of crop raises doubts and cynical thinking in my mind. One can certainly not forget how “East India company” practically ate India. The Indigo farming which destroyed most of India’s land, which eventually led to Mahatma Gandhi’s champaran march in Bihar. There are some serious issues that need to be seen first. There would be little doubt that one considers private sector as India’s savior in job market and in terms of upliftment of the life-style. Land however is completely a different story, land is the most important resource for mankind after drinking water.

Providing land to others is like a potential suicide for farmers, not just for small scale farmers. The trend which is more worry-some is about different countries buying land to do farming. China and Saudi Arabia have already purchased so much land in Africa. The target being India, gives jitters to me. Will we be living the horrors of our past. ? Already the article of land purchasing by govt which dates back to 1894 is causing so much headlines.

This new policy of giving corporates to grow food is a big scary situation. This would mean that one institution being given absolute right, that institution on top of it having no accountability whatsoever. Private sector is driven by profits and for that it is well known that they might shift towards bio-fuel. Then what would happen to food securities, naturally the rates would go up, adding to chaos where rates are already sky high. As the food production will be low. At least in form of a government people have an entity who they can question or vote out (talking about democracy of-course). When the companies will buy land and to farming there, that accountability would be lost.

The small farmers or  the middle range farmers will have hard time. Rather than allotting the complete land to the corporates why doesn’t the corporates talk to farmers, with government as the watchful eyes. In order to make sure that issue of less food doesn’t turns out to be a huge one. More importantly a country like India needs to first feed its own rather than allot land to those who might send the food outside. The govt, if and when does this could be pressurized to stop export but corporates have no such limitations.  One feels the corporates should be involved in retail and distribution, rather than food production. (which I believe should be their foray as it would lead to organization of an unorganized sector.). Plus there are other sectors where they could do more, rather than food production. No body wants a James Bond movies type situation like we had in Quantum of solace.

Now many would see the statement as anti-corporation. It is not, it is just pro-people like me who have no control over price rise and who do-not grow any food. One does-not wishes to be arm twisted in paying more money. There are already so many problems in India regarding the present situation of land grab, such policies would just aggravate the situation. The farmers are already suffering from different quarters.

For acquiring any land in India, one needs to go through the land act of 1894. The Land Acquisition Act of 1894 is a legal Act in India which allows the Government of India to acquire any land in the country.

Generally, every parcel of land belongs to some individual or group of individuals and they have legal rights to own the land. These individuals are free to use their land according to their will or to sale their land for monetary or other advantages.

However, at times land is needed for some community purpose i.e. it serves needs of the society as a whole like roads, canals, government offices, military camps etc.

“Land Acquisition” literally means acquiring of land for some public purpose by government or government agency as authorised by the law from the individual landowner(s) after paying some compensation in lieu of losses occurred to land owner(s) due to surrendering of his/their land to the concerned government agency.

Acquisition of land by the government for public purpose or for the companies is governed by the Land Acquisition Act, 1894.

The word “Public Purpose”, as defined in the Act mentioned above refers to the acquisition of land for putting up educational institutions or schemes such as housing, health or slum clearance, apart from the projects for rural planning or formation of sites.

“Appropriate Government” would mean the Central Government if the purpose for acquisition is for the Union and for other purpose it is the State Government. It is not necessary that all the acquisition has to be initiated by the government alone. Local authorities, societies registered under the Societies Registration Act, 1860 and Co-Operative Societies established under the Co-operative Societies Act can also acquire the land for developmental activities through the government.

Certain procedure has been envisaged under the statute, which has to be mandatory followed before acquiring the land for public purpose, as discussed below:

 History of Land Acquisition Act

In India in 1824 British government for the first time enacted regulation I of 1824(for land acquisition).its application was throughout the whole of the Bengal provinces immediately subject to the presidency of fort William.

The rules empowered the government to acquire immovable property at a fair and reasonable price for construction of roads, canals or other public purpose. In 1850 some of the provisions of regulation I of 1824 were extended to Calcutta through Act I of 1850, with a view to confirm the title to lands in Calcutta taken for public purpose. At that time railways were being developed and it was felt that legislation was needed for acquiring land for them also.

Building act XXVII of 1839 and act XX of 1852 were introduced to obviate the difficulties to particular cities of Bombay and madras.

Act VI of 1857 was the first full enactment, which had application to the whole of British India. It repealed all previous enactments relating to acquisition and its object.

Subsequently act x of 1870 came in to effect which was further replaced by land acquisition act 1894 in order to purge the flaws of act x of 1870.

“LAND ACQUISITION ACT-1894” is a well defined, self contained efficient act for facilitating land acquisition process.

After independence in 1947 Indian government adopted “land acquisition act-1894” as a tool for land acquisition.

Since then various amendments have been made to the 1894 act from time to time. Despite these amendments the administrative procedures have remained same.

Special powers of section 17

Section 17 of the Act confers special powers with the concerned authority wherein passing of award may be dispensed with and yet permits to take possession of the land notified for acquisition. Further holding of enquiry can also be waived, as envisaged under section 5 A of the Act. However, such powers can be exercised only in case of urgency. After passing of the award, the person whose land has been proposed to be acquired can give his consent for such acquisition and agree to receive the compensation.

Objections can also be raised against the measurement of the land, enhancement of compensation or apportionment of the compensation by filing a written application before the Deputy Commissioner, as provided under section 18 of the Act, requesting the authority to refer the matter to the court for determination of the grounds raised in the application. An application to that effect has to be filed by the person who was personally present when the award was passed, within six weeks from the date of the award passed by the Collector. In other cases, the application will have to be made within six weeks from the date of receipt of the notice issued under section 12(2) or within six months from the date of the award passed by Deputy Commissioner, whichever is earlier.

This specific section 17 been used and abused by many in govt and judiciary for own purposes, thereby subduing the rights of the rightful owner, the farmer.

http://laudyms.wordpress.com/2010/04/28/%E2%80%98land-rush%E2%80%99-as-threats-to-food-security-intensify/

http://www.twnside.org.sg/title2/susagri/susagri087.htm

http://farmlandgrab.org/15537

This new approach of land grabbing is going at a fast rate as 40 million hectare of lands and being garbed. The more important aspect is the adequate compensation is not being provided nor is the ecological issue understood. The govt in world especially ASIA and Africa are selling in $100 billion worth deals. The UN agriculture safeguard organization is proposing a code of conduct for land acquisition. The problem is also that no doubt that India needs flashy new homes to show case it to the world as the emerging economic superpower,but the cost should not be food. The fertile land being brought at cheap price is an alarming sign, not only for poor farmers but middle class and upper middle class who will be hit by high food prices. As multiple crop harvesting lands are being brought.  The golf courses which would be made on these lands would help create many international golfers but these golfers would also need food. Excess of everything is harmful.

The land grab for agriculture for corporates have another drawback. Suppose that they buy the land today for farming but later turn it into a real estate project, could they be challenged. The contract would say that they brought the land and are landowners and could do anything with it.  Forgive me if the words come out strong but that would be an exact replica of colonial time (which we as nation tried to forgo in our independence struggle), by using terms like modernizing and upliftment as proxy to get the job done. One feels the approach is not right. There needs to be a policy which needs to be planned where the local population which is living there does not feel thrown out, by being arm twisted on the bases of using various exploitative laws.

Land is usually an emotional subject for most people as it provides them livelihood. It is a source of existence for many communities. Native Americans suffered due to this land grab in US, where many hollywood bigshots had to come forward to raise voice for their right. One such was Marlon Brando. He showed how land of American Indians was being grabbed for selfish purposes.

Now the objective is not to target any group or corporate houses (both are important entities for growth of country), but surely both the parties should benefit along with those whose food needs should be addressed by the govt. I know there is lot at stake, but from the pictures emerging is that the farmer, poor and middle class  are the ones who have more at stake. One’s issue is identity, another’s existence and the latter one’s is food.

Microfinance: The way to end poverty ?

The west and most of the developing countries are looking towards micro-finance as one of the tool to eradicate poverty. Though many critics do point out that poverty is a complex problem which needs equally complex answers but none the less, MicroFinance offers hope. The Indian banks for one are toying with the idea first initiated by Mohd Younus of Bangladesh. His Grameen Bank’s main objective was to give loans to those poor people to whom banks do not wish to give loans owing to risk involved in return of the money. The idea has been a revolutionary one and like all revolutionary ideas it has made world leaders sit up and take notice.

The banks in particular in lending loans look into the credit history of an individual on whose name the loan is being taken. Bank looks into potential recovery options in terms of mortgages. In the case of the poor however there is a huge risk as returns are not guaranteed. Many like the former Governor General of RBI Dr Reddy have said that “microfinance” is the “subprime loan” of India. That is the risk driven loan something which crashed US economy. None the less Microfinance has showed its potential to scholars, the loans given are not of higher amount and are given collectively. It is this collective duty that results in the recovery and namely that it is mostly given to rural women. Grameen Bank in particular claims a recovery of about 97%. In India SKS is the biggest Micro Financing institution for lending. Grameen Bank also boasts of 97% of its borrowers are women, thereby being an instrumental tool in emancipation and economic independence of womenfolk.

According to CGAP, “Comprehensive impact studies have demonstrated that:

  • Microfinance helps very poor households meet basic needs and protect against risks
  • The use of financial services by low-income households is associated with improvements in household economic welfare and enterprise stability or growth.
  • By supporting women’s economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being.
  • For almost all significant impacts, the magnitude of impact is positively related to the length of time that clients have been in the program. (UNCDF Microfinance)

Micro Finance is an advantage as access to money allows the poor the purchasing power and with an opportunity to fulfill their dream and be self employed. There by boosting small scale entrepreneurship which in long run reduces that massive load of the government to provide jobs and source of living to its citizens. It provides an opportunity to the poor to be partners in the growth of the nation rather being burden. The various Indian banks especially government owned banks are trying to create separate wings for dealing which micro finance issues where loans could be provided for the poor and they could be helped to get out of poverty.

  • In Bangladesh, Bangladesh Rural Advancement Committee (BRAC) clients increased household expenditures by 28% and assets by 112%. The incomes of Grameen members were 43% higher than incomes in non-program villages.
  • In El Salvador, the weekly income of FINCA clients increased on average by 145%.
  • In India, half of SHARE clients graduated out of poverty.
  • In Ghana, 80% of clients of Freedom from Hunger had secondary income sources, compared to 50% for non-clients.
  • In Lombok, Indonesia, the average income of Bank Rakyat Indonesia (BRI) borrowers increased by 112%, and 90% of households graduated out of poverty.
  • In Vietnam, Save the Children clients reduced food deficits from three months to one month.

Though like all the noble efforts there are some concerns which are genuine such as this industry needs regulation via RBI. This has been a pivotal point which has been highlighted by the industry wise men. They say the micro-finance industry seems not to be a non-profit organization anymore( as many people are trying to get their IPOs etc ) but rather is converting into a profit oriented venture where in regulations are important as it may become an entity taking benefits and profits from the poor.

Like all the situations in the world there are places where Micro finance has restrictions. Microcredit may be not successful and run into losses where conditions pose severe challenges to loan repayment. For example, populations that are geographically dispersed or have a high incidence of disease may not be suitable microfinance clients. It may also be an issue in a war torn scenario where it is tough to keep a track of things therefore there are some debates of getting it into Afghanistan. In these cases, grants, infrastructure improvements or education and training programs are more effective. For microcredit to be appropriate, the clients must have the capacity to repay the loan under the terms by which it is provided.

Though there are many debates going on within the systems where Mohd Younus wishes to retain the Non-Profit philosophy of the Microfinance but there is no debate on the point that it has helped women empower and helped make many people economically sound and sufficient.

Bihar: An enigma

Bihar and bihari image has remained an enigma for many years to most Indians. The moment you think of Bihar there are stereotypical images that flash onto your memory namely Laloo Prasad yadav, poverty sickened Bihari and lawlessness. The movies like Gangajal and Aphaaran made by prakash jha and middle class bihari’s sending child away from bihar to study to an extend gave credibility to it. Though, the thing that confuses the rest of the India most is…

  1. Biharis make most in IAS, yet Bihar suffers.
  2. Biharis migrate and develop other states yet not Bihar.
  3. Biharis are hard working but Bihar is in a bad condition.
  4. People migrate from bihar to rest of India but not visa versa..
  5. Past of Bihar is glorious why not present?
  6. Why was no politician or political party developing Bihar?
  7. Is Bihar a burden on India?
  8. Is Bihar going to slow India’s economic rise?
  9. When will good education come in Bihar ever?
  10. Will industries be setup in Bihar ever?

Thought the question are many and hold true from rest of the India, the thing that mattered the most was the questions in a Bihari’s mind.

This election like last one was more about economics and governing capabilities than politics and one would like to keep it that way. In the growth of India the story of Bihar need not be left out (it is what Bihari want it seems). Though one can’t help it but see it more like a fight for self-respect or of Bihari pride  that has taken a severe beating in the last 3 decades (the political class it seemed was responsible for it).

The empowerment of womenfolk was also an issue, irrespective of the fact whether there is development or not, the respect of a woman needs to be maintained which it seems was fading in Bihar due to bad condition in law and order.

Therefore the election result of Bihar as it comes out has got to do more with Bihari pride and deep rooted desire for development. The development of state will do greater good for not only Bihar but rather for India too, wherein a Bihari need not have to travel so many kilometers away from his home to earn a living. Hopefully there might come a day when there would be reverse migration that is people from rest of the country would come to Bihar to study and work and its cities will be as good as in any other “developed” state ( high tech type with good infrastructure). Since the development of the country is more got to do with economic development of every state and certainly not just few cities, therefore the true integration and correct form of development needs to be a complete one.

The most important message would be for other states in terms of economic parameters, who use to accuse Biharis of taking  their jobs away (much like west do to India). When development of the regions like eastern Uttar Pradesh and Bihar would occur then the more regional fanatics and naxalism will erode(which in recent times have increased). Since we are all Indians and all need to be inclusive in the development of India, therefore no region should be left behind.

Though the setting up of the industries in Bihar is the point which will be “wait and watch” for many Indians. Microfinance has worked in Bihar and nitish government’s giving money instead of food grains for work, this has also improved the purchasing ability of Bihari(thereby boosted growth). The growth rate of 11.44 per cent State Gross Domestic Product (SGDP) during 2008-09 was achieved because Biharis had money in their hands to spend. There was also a record set that of 22 per cent SGDP in 2006-07.

The administrative capabilities and the economic policies of the new government would not only affect a Bihari in Bihar but rather Indians all over India because like the famous saying “you got clean your own mess”. The Biharis need to show their true brand by making their state as an accelerator of growth of India and yes the whole of India is watching with hope and optimism towards Bihar for the first time in two decades.

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