जैसे-जैसे 2013 का बजट नजदीक आ रहा है, मैं यह बात रोज सुनता हूं कि गरीबों को दी जा रही सब्सिडी खत्म होनी चाहिए। एक ओर जहां बहुसंख्यक आबादी की सामाजिक सुरक्षा को 'फ्री लंच' के तौर पर देखा जा रहा है, वहीं शायद ही कोई पैनेलिस्ट या अखबार के लेखक इंडस्ट्री को साल-दर-साल दिए जा रहे 'फ्री मंथली राशन' की कभी बात करते हों। फर्क सिर्फ इतना-सा है कि अमीरों को दी जा रही रियायत सब्सिडी नहीं कहलाती। इन्हें विकास के लिए इंसेंटिव्ज कहा जाता है। सब्सिडी एक बुरा शब्द बन गया है, जबकि इंसेंटिव सम्मान के साथ बोला जाता है।
शायद ही ऎसा कोई दिन गुजरता हो, जब अखबारों के पहले पन्ने पर, टीवी कार्यक्रमों में गरीबों को दी जाने वाली सब्सिडी कम करने के तर्क और स्टोरी सुनने-देखने को न मिलती हों। मुझे मिट रोमनी के उस दावे की याद आती है, जिसमें उन्होंने कहा था कि 47 फीसद अमरीकी कर नहीं देते, इसलिए उन्होंने समझा कि रिपब्लिकन को उनके बारे में चिंता करने की जरूरत नहीं है। वर्ष 2012-13 में जहां कुल बजट खर्च 14.9 लाख करोड़ था, सब्सिडी के लिए 1.78 लाख करोड़ रूपये रखे गए थे और दुहाई यह दी जा रही है कि राजकोषीय घाटे को कम करने के लिए सब्सिडी में कटौती की जाए।
गौरतलब है कि इन सब्सिडीज का एक बड़ा हिस्सा भोजन, फर्टिलाइजर और पेट्रोलियम को जाता है। पिछले कुछ महीनों से केंद्र सरकार ने पेट्रोलियम सब्सिडी से लगातार हाथ पीछे खींचे हैं। पहले पेट्रोल को नियंत्रण मुक्त किया गया और अब हाल ही में डीजल को आंशिक तौर पर नियंत्रण मुक्त किया गया है। रियायती एलपीजी सिलेंडरों पर दी जाने वाली सब्सिडी भी कम कर दी गई है। केरोसीन पर सब्सिडी अभी बची हुई है। फूड और फर्टिलाइजर की बात करें, तो डायरेक्ट कैश ट्रांसफर समेत सभी तरह की तिकड़म प्रस्तावित हैं। रेल किराये में बढ़ोतरी की जा चुकी है। सरकार को किराया बढ़ाने के बाद सालाना 66 सौ करोड़ रूपये आने की उम्मीद है। इसलिए सभी प्रकार के 'फ्री लंचेज', जैसा कि प्रमुख अर्थशास्त्री और कंसल्टेंसी फर्म एग्जीक्युटिव टेलीविजन पर लगातार कहते हैं, धीरे-धीरे कम किए जा रहे हंै।
लेकिन जब बात इंडस्ट्री की हो, तो न सिर्फ 'ब्रेड एंड बटर', बल्कि पूरे महीने भर का राशन मुफ्त मुहैया कराया जा रहा है।
फर्क सिर्फ इतना-सा है, जैसा कि मैंने पहले भी दोहराया कि इन्हें मिलने वाली रियायत को सब्सिडी नहीं, बल्कि 'इंसेंटिव्ज फॉर ग्रोथ' का नाम दिया जाता है। यानी अमीरों को बहुत चतुराई के साथ ग्रोथ की आड़ में सब्सिडी परोसी जा रही है। मैं एक हालिया उदाहरण देना चाहूंगा। प्रधानमंत्री के मुख्य आर्थिक सलाहकार सी. रंगराजन ने यह प्रस्ताव दिया कि भारत में 'सुपर-रिच' लोगों पर मौकाूदा 30 फीसद की दर की बजाय 40 फीसद की उच्च दर से कर वसूलना चाहिए। उनके यह कहने के बाद बवाल-सा मच गया। इंडिया इंक और बिजनेस टीवी चैनल व अखबारों के लेखकों ने एक लय में 'सुपर-रिच' तबके को उच्च कर स्लैब में न लाने के लिए अभियान छेड़ दिया। इसके बाद एनआरआई अर्थशाçस्त्रयों ने भी भारतीय अखबारों में भागीदारी दिखाते हुए अपने कॉलमों के जरिये कॉरपोरेट मंत्र का राग अलापा।
अगर आयकर की सीमा को 'सुपर-रिच' तबके पर बढ़ा दिया जाए, तो सरकार को सालाना 22 हजार करोड़ का राजस्व प्राप्त होगा। अभी कुछ दिनों पहले स्टॉक मार्केट 20 हजार के आंकड़े को पार कर गया, क्योंकि सरकार ने 'गार' को 2016 तक के लिए टाल दिया। अकेले इस कदम से मॉरीशस जैसे टैक्स स्वर्ग जैसे देशों से आने वाले काले धन पर लगाम लग जाती। फिक्की और सीआईआई के अध्यक्ष समेत बड़े बिजनेस घरानों के मुखिया साफ तौर पर खुश दिखाई दिए कि गार को टाल दिया गया है।
दूसरे लफ्जों में कहें, तो विदेशी संस्थागत निवेशकों द्वारा आ रहे निवेश पर कर छूट जारी रहने से वे बड़े खुश हुए। मेरा मानना है कि अगर इसका क्रियान्वयन हो जाता, तो और कुछ नहीं तो यह 50 हजार करोड़ से ज्यादा का सफाया कर देता। लेकिन अमीरों को मुफ्त मासिक राशन मिलने तक तो यथास्थिति कायम ही रहेगी। वैसे, यह अमीर जमात ही है, जो कर कानूनों में से गलियां निकालकर जायज कर चुकाने से बचती है। केंद्रीय वित्त मंत्री पी. चिदम्बरम ने गुस्सा जाहिर किया था कि कर अदा करने वाले 3.5 करोड़ लोगों में से महज 14.6 लाख लोगों ने ही अपनी आय सालाना 10 लाख से ज्यादा दिखाई थी। यानी जाहिर है कि कर कानूनों को लेकर एक बड़ी अनियमितता है और कर कानूनों की पालना के लिए सभी प्रयास किए जाने बेहद जरूरी हैं। पर बड़ा सवाल है कि क्या अमीरों से पूरा कर वसूलने को लेकर गंभीर प्रयास हुए हैं? आपका अनुमान भी मेरे जैसा ही होगा।
नहीं, कभी नहीं... आखिरकार अमीरों को उनका मुफ्त राशन मिलते रहना जरूरी है। गौर करने लायक बात है कि 2012 के बजट में इंडिया इंक को 5.29 लाख करोड़ रूपये की कर छूट- जिसे 'इंसेंटिव फॉर ग्रोथ' कहा जाता है- मिली। यह राशि उस राजकोषीय घाटे को खत्म करने के लिए काफी है, जिसका रोना चिदम्बरम रोते रहे हैं। कर छूट के अलावा इनके द्वारा प्राकृतिक संसाधनों की लूट में भी सरकार सहायक रही है।
उद्योगों द्वारा जमीन हथियाने को लेकर सरकारें जिस तरीके से नियम-कानूनों को मोड़ती हैं, वह भी एक तरह की सब्सिडी ही है। यह सब कुछ उद्यमशीलता को बढ़ावा देने के नाम पर किया जाता है। अगर उद्योगपति उद्यमी हैं, तो क्या एक किसान, शिल्पकार, एक दुकानदार और संघर्षरत आम आदमी उद्यमी नहीं है? ऎसा कैसे हो सकता है कि उसे किसी सहारे की जरूरत नहीं है और सिर्फ एक अमीर ही सरकारी खजाने पर जीने का हकदार है?
Poor get 'Free Lunches", Rich get "Free Monthly Ration"
In the run up to Budget 2013, I hear it every day. Subsidies are doles to the poor, must be curbed. There are no 'free lunches'. While social security for a majority of India's population is being considered as 'free lunches', none of the TV panelists (and newspaper writers) ever talk of 'free monthly ration' that the industry is being given year after year. The only difference is that the doles to rich are not called subsidies, these are 'incentives for growth'. Subsidies have become the bad word, and incentive is lapped up.
"Boost Tax Mopup, Prune subsidies" screams a front page headline in The Economic Times (Jan 14, 2013). There is hardly a day when you don't see similar stories and arguments splashed all over the front page and the comments page. TV shows are repeatedly and nauseatingly holding discussions which invariably run down subsidies to the poor. This reminds me of Mitt Romney's claim that 47 per cent American don't pay taxes, and therefore he implied that the Republican's don't need to worry about them. No wonder, he lost to Obama.
While the total budget expenditure in 2012-13 was Rs 14.9 lakh crore, the subsidies have risen to Rs 1.78 lakh crore, and the clamour is for pruning the subsidies to reduce the fiscal deficit. Bulk of these subsidies go to food, fertiliser and petroleum. In the past few months, the govt has steadily withdrawn from providing petroleum subsidies by decontrolling petrol and lately by partially decontrolling diesel. Subsidised LPG supplies have also been curtailed. Kerosene subsidies remain. In case of food and fertiliser, all kinds of permutations and combinations are being proposed, including direct cash transfer.
Rail fares have been hiked. The Govt is expecting to realise Rs 6,600-cr every year from increased rail fares. So in a way, all "free lunches", as most economists and consultancy firm executives who appear on TV regularly say, are being gradually withdrawn.
But when it comes to industry, it is not only bread and butter but the entire monthly ration that is being provided free. The only difference, as I said earlier, is that these doles are not through the subsidies head, but 'incentive for growth,' which is a very clever way of camouflaging the dirty subsidies the rich get. Let me begin by citing the latest exemption. Mr C Rangarajan, the chief economic advisor to Prime Minister has recently proposed that the super-rich in India should be taxed at a higher rate -- 40 per cent, against the present norm of 30 per cent. All hell broke loose the moment he said this. India Inc and Business TV channels plus the newspaper writers have launched an orchestrated campaign to see that the super-rich are not brought under a high tax slab. And then, you of course have the NRI economists joining the chorus, most of them write columns in Indian papers, and chant the Corporate mantra unabashedly.
Raising the income tax limit for the super-rich will bring in Rs 22,000-cr revenue every year.
A few days back, the stock market went up because the Govt deferred the introduction of GAAR to 2016. This move alone would have curbed the inflow of dirty money (and often bloody money) coming from the tax haven of Mauritius. The FICCI chairman, the CII chairman, and everyone else was elated that GAAR has been deferred. In other words, they rejoice over continuing tax exemption to the FII investments flowing in. I am sure, if implemented, this move alone would have mopped up anything exceeding Rs 50,000-cr. But since it is a part of the monthly free ration to the rich, the Govt had to bend.
In any case, it is the rich who circumvent tax laws to escape paying the legitimate taxes. Out of the 3.5 crore people who pay taxes, only 14.6 lakh have shown an income exceeding Rs 10 lakh/year (Unrealistic tax realisation.. Economic Times, Dec 19, 2012. http://bit.ly/XuM9wF) Now this is certainly a gross understatement. But has there been any serious effort in recovering the taxes that are due from the rich? Well, your guess is as good as mine. There never would be any serious attempt to mop up tax revenue from where it is due. After all, the rich must continue to get their free ration.
On top of it, In 2012 Budget, under the 'revenue foregone' category, India Inc got a tax exemption, call it 'incentive for growth' of Rs 5.29 lakh crore, good enough to wipe out the entire fiscal deficit that Chidambaram keeps on crying about. This is in addition to all that is doled out to industries in the Budget itself. Since 2004-05, the 'revenue foregone' adds to more than Rs 27-lakh crore. And yet, the exports have not risen, the manufacturing sector is down, and the industry continues to slog. But despite the industrial stagnation and downturn that is visible all these years, the Corporates are sitting over a huge cash pile. By March 2012, Indian Inc had hoarded a cash surplus of Rs 9-lakh crore. So, it is quite obvious, that the free monthly ration is adding on to the bottom line of the companies.
Add to the tax exemptions, usurping of natural resources, including forests, mineral resources, water and land, aided and abetted by the Govt. The land grab that is taking place, and the manner in which laws are being formulated to benefit the industry, is also a covert subsidy. I have been saying for long that the industry actually thrives on subsidies. It is only that we don't want to see these subsidies or we are paid not to demystify these subsidies. Most of us are beneficiaries of the same system that subsidises the rich, and obviously we wouldn't like to cut the hand that feeds us.
All this is in the name of encouraging entrepreneurship. If the industrialists are entrepreneurs, isn't the farmer, the artisan, the petty shopkeeper and for that the struggling aaa aadmi also an entrepreneur? How come that he doesn't need any support, and it is only the rich would deserve to live on State exchequer?
Even the Armed Forces have discontinued the system of providing subsidised monthly ration to the families of the serving soldiers. When will this business of giving "Free Monthly Ration" to the rich, stop?
"Boost Tax Mopup, Prune subsidies" screams a front page headline in The Economic Times (Jan 14, 2013). There is hardly a day when you don't see similar stories and arguments splashed all over the front page and the comments page. TV shows are repeatedly and nauseatingly holding discussions which invariably run down subsidies to the poor. This reminds me of Mitt Romney's claim that 47 per cent American don't pay taxes, and therefore he implied that the Republican's don't need to worry about them. No wonder, he lost to Obama.
While the total budget expenditure in 2012-13 was Rs 14.9 lakh crore, the subsidies have risen to Rs 1.78 lakh crore, and the clamour is for pruning the subsidies to reduce the fiscal deficit. Bulk of these subsidies go to food, fertiliser and petroleum. In the past few months, the govt has steadily withdrawn from providing petroleum subsidies by decontrolling petrol and lately by partially decontrolling diesel. Subsidised LPG supplies have also been curtailed. Kerosene subsidies remain. In case of food and fertiliser, all kinds of permutations and combinations are being proposed, including direct cash transfer.
Rail fares have been hiked. The Govt is expecting to realise Rs 6,600-cr every year from increased rail fares. So in a way, all "free lunches", as most economists and consultancy firm executives who appear on TV regularly say, are being gradually withdrawn.
But when it comes to industry, it is not only bread and butter but the entire monthly ration that is being provided free. The only difference, as I said earlier, is that these doles are not through the subsidies head, but 'incentive for growth,' which is a very clever way of camouflaging the dirty subsidies the rich get. Let me begin by citing the latest exemption. Mr C Rangarajan, the chief economic advisor to Prime Minister has recently proposed that the super-rich in India should be taxed at a higher rate -- 40 per cent, against the present norm of 30 per cent. All hell broke loose the moment he said this. India Inc and Business TV channels plus the newspaper writers have launched an orchestrated campaign to see that the super-rich are not brought under a high tax slab. And then, you of course have the NRI economists joining the chorus, most of them write columns in Indian papers, and chant the Corporate mantra unabashedly.
Raising the income tax limit for the super-rich will bring in Rs 22,000-cr revenue every year.
A few days back, the stock market went up because the Govt deferred the introduction of GAAR to 2016. This move alone would have curbed the inflow of dirty money (and often bloody money) coming from the tax haven of Mauritius. The FICCI chairman, the CII chairman, and everyone else was elated that GAAR has been deferred. In other words, they rejoice over continuing tax exemption to the FII investments flowing in. I am sure, if implemented, this move alone would have mopped up anything exceeding Rs 50,000-cr. But since it is a part of the monthly free ration to the rich, the Govt had to bend.
In any case, it is the rich who circumvent tax laws to escape paying the legitimate taxes. Out of the 3.5 crore people who pay taxes, only 14.6 lakh have shown an income exceeding Rs 10 lakh/year (Unrealistic tax realisation.. Economic Times, Dec 19, 2012. http://bit.ly/XuM9wF) Now this is certainly a gross understatement. But has there been any serious effort in recovering the taxes that are due from the rich? Well, your guess is as good as mine. There never would be any serious attempt to mop up tax revenue from where it is due. After all, the rich must continue to get their free ration.
On top of it, In 2012 Budget, under the 'revenue foregone' category, India Inc got a tax exemption, call it 'incentive for growth' of Rs 5.29 lakh crore, good enough to wipe out the entire fiscal deficit that Chidambaram keeps on crying about. This is in addition to all that is doled out to industries in the Budget itself. Since 2004-05, the 'revenue foregone' adds to more than Rs 27-lakh crore. And yet, the exports have not risen, the manufacturing sector is down, and the industry continues to slog. But despite the industrial stagnation and downturn that is visible all these years, the Corporates are sitting over a huge cash pile. By March 2012, Indian Inc had hoarded a cash surplus of Rs 9-lakh crore. So, it is quite obvious, that the free monthly ration is adding on to the bottom line of the companies.
Add to the tax exemptions, usurping of natural resources, including forests, mineral resources, water and land, aided and abetted by the Govt. The land grab that is taking place, and the manner in which laws are being formulated to benefit the industry, is also a covert subsidy. I have been saying for long that the industry actually thrives on subsidies. It is only that we don't want to see these subsidies or we are paid not to demystify these subsidies. Most of us are beneficiaries of the same system that subsidises the rich, and obviously we wouldn't like to cut the hand that feeds us.
All this is in the name of encouraging entrepreneurship. If the industrialists are entrepreneurs, isn't the farmer, the artisan, the petty shopkeeper and for that the struggling aaa aadmi also an entrepreneur? How come that he doesn't need any support, and it is only the rich would deserve to live on State exchequer?
Even the Armed Forces have discontinued the system of providing subsidised monthly ration to the families of the serving soldiers. When will this business of giving "Free Monthly Ration" to the rich, stop?
Not crop diversification, Punjab needs to diversify from existing intensive farming system.
Several decades back, soon after economist Dr S S Johl had submitted his report on crop diversification in 1986, I asked late Dr Norman Borlaug, the Nobel laureate, during one of his visits to Punjab, as to what he thought about the debate on crop diversification. I remember vividly his reply: “This is a wrong move. Punjab is doing exceedingly well in wheat and rice, and this equilibrium should not be disturbed.”
“It is like in athletics,” He tried to explain. “If you have a sprinter who is a record–holder in let us say 100-metres dash, you don’t ask him to slow down and diversify into steeple chase and high jump. You expect him to better his record in race. ” His suggestion therefore was that instead of Punjab shifting to other crops, it will be much better if Madhya Pradesh, Bihar, Orissa and eastern Uttar Pradesh are encouraged to cultivate other crops.
That was some three decades ago. Meanwhile, reeling under over-exploitation of ground water, Punjab has enacted a ‘Contract Farming Act’ and announced a 5-year programme to diversify the cropping pattern. Chief Minister Prakash Singh Badal has urged the Centre to allocate Rs 5,000-crore for crop diversification in Punjab on the lines of the financial package doled out to eastern states for ushering in Green Revolution. But take a closer look at the strategy being proposed, and you will find that for the reasons that crop diversification is being desperately promoted, the new array of proposed crops suffer from the same problem but in a still bigger magnitude. In fact, most of the alternative crops that are being launched, except for pulses, are environmentally more damaging than rice.
In the backdrop of the shocking revelations tumbling out about the rise in cancer deaths all across the state, and the steadily rising graph of farmer suicides, I had expected a much greener programme that could restore soil health, help raise groundwater and turn farming into a profitable proposition. Unfortunately, the crop diversification programme fails to imbibe any enthusiasm. In my understanding, it will surely help the agri-business companies but leave behind dying fields and crying farmers. Therefore, before we exacerbate the existing farm crisis and taken it an unmanageable level, it is time to step back and rethink.
First, let us look at groundwater. A very interesting study by a Nawanshehar-based researcher Kuldip Singh Herian has shown the water requirement, based on the same parameters as quoted in several crop diversification reports, for paddy at 60,20,000 litres per hectare. Now let us look at the crops being suggested as alternatives. Sugarcane requires 1,60,00,000 litres, cotton 78,50,000 litres, sunflower 65,00,000 litres and winter maize 61,00,000 litres. In addition, kharifmaize requires 46,00,000 litres per hectare. It is therefore quite obvious that the alternative crops do not provide any saving on groundwater usage. Interestingly, his research shows that water requirement for producing 1 kg of rice comes to about 1,131 litres against 1,691 litres for kharif maize, 6,217 litres for cotton and 5,612 for sunflower.
Considering that rice gets an assured price every year, farmers are wise enough not to shift to any other alternative. Even though Chief Minister has appointed the Punjab State Warehousing Corporation to act as a nodal agency in procuring maize, undertaking scientific storage and set up mechanised drying units, I don’t see much possibility of an area shift. In any case, maize cultivation offers no incentive when it comes to water efficiency. It will however provide a huge market for sale of hybrid seeds for the private sector, which appears to be primary reason for the clamour for maize as replacement.
In case of chemical pesticides, I see no reason why Punjab cannot drastically cut down on pesticides usage on rice. Studies by International Rice Research Institute in the Philippines have conclusively shown that ‘pesticides use on rice in Asia was a waste of time and effort.’ Farmers in several parts of the Philippines, Vietnam, Bangladesh and India produce better rice crop without the application of pesticides. Wonder, why Punjab has never taken this advice seriously? In the case of bananas, olives and roses, the pesticide requirement is several times higher.
Similarly, there are several known methods of restoring soil health, inter-cropping and mixed cropping with leguminous crops being the common crop rotations to be followed. Crop rotation is the best way to get out of the monoculture that Punjab has lived with and thereby limit the damage to soil health and environment. All it needs is to redesign the package of practices. In other words, Punjab needs an urgent diversification of the existing farming systems – from highly intensive to more ecological -- to make it more viable and sustainable.
Is Palm Oil the Answer to India's Edible Oil Crisis?
Now this is getting too much. The chairman of the Commission for Costs & Prices (CACP) Dr Ashok Gulati has come out with another analysis which, if implemented, will take India from the frying pan into fire. That's what I feel. All through he has been shrieking at the top of his voice for cutting down on import duties on agricultural commodities. His argument has been that cheaper imports will make Indian farmers efficient, which in turn will improve crop productivity thereby increasing exports.
Nothing like that happened.
Writing in The Economic Times, he says in an oped article entitled: Oil palm: Answer to India's edible oil problem (ET. Jan 17, 2013. bit.ly/S5qtKS ) that India's edible oil import bill has crossed Rs 56,295-crore in the oil year, Nov 2011 to October 2012. "The projections of demand and supply of agri-products also shows that the biggest challenge of Indian agriculture will be in producing enough edible oils at globally competitive rates to meet its rising demand." Fair enough.
And then he very conveniently hides the fact that India had achieved near self-sufficiency in oilseeds production in 1993-94, many called it yellow revolution, after which the down slide began. From a near self-sufficiency status to becoming world's second biggest importer of edible oils is because it was after 1993-94 India had began to gradually reduce the import duties. As per WTO obligations, India is allowed to bound its import tariffs on edible oils at 300 per cent (except for soy oil where it has been pegged at 40 per cent, thanks to US pressure). But it was autonomous liberalisation that did the damage. At present, there is zero duty on crude edible oil and 7.5 per cent on refined edible oil. Now with import duties brought down to almost zero, what do you expect to happen?
Imports have been on an upswing. From Rs 14,709-crore in 2006-07, the import bill jumped to Rs 34,677-crore in 2009-10, and has further soared to Rs 56,295-crore in 2011-12.
You will agree that it is because of India's faulty policies that edible oils have turned into a big strain on the state exchequer. Obviously, the current account deficit will grow when imports increase and exports do not match. In fact, still worse, because we allowed cheaper edible oil to be imported, farmers abandoned cultivation of oilseed crops and shifted to other unremunerative crops (oilseeds are mainly grown in the harsh environs of drylands). At the same time, the domestic edible oil processing industry collapsed, in turn implying that it was a lost opportunity to create employment.
Just between 2006 and 2012, a period of six years, India has incurred Rs 2.02 lakh crore on edible oil imports. If India had continued with the oilseed self-sufficiency programme, as initiated by former Prime Minister Rajiv Gandhi, this entire amount would have remained within the country thereby helping farmers and the industry. Here also, people like Ashok Gulati were advising the successive governments on the dire need to open up imports. So first you the damage the country by encouraging imports, and then you try to inflict another bigger damage by campaigning for a crop which is known to be environmentally destructive.
While the Ministry of Agriculture is now contemplating a re-look at the import duties on edible oils (Govt to review import duty structure of edible oils. Business Line. Jan 15, 2013. bit.ly/SCVmrB ), Ashok Gulati is suggesting a shift to palm oil cultivation to meet the domestic demand. His suggestion is that India should bring 2 million hectares under palm cultivation in the next four to five years, for which he even advocates a compensation of Rs 4,000-crore to farmers as opportunity costs. CACP chairman doesn't want the wheat and paddy prices to be raised by even Rs 10/quintal but has no problem if the government was to shell out Rs 4,000-crore to farmers as compensation for palm oil cultivation!
Palm oil cultivation has a terrible socio-economic and environmental fallout (See this WWF report: Palm oil: Environmental impacts. http://wwf.panda.org/what_we_
Meanwhile, the Government today has raised the import duty on crude edible oil from existing zero to 2.5 per cent. Ministry of Agriculture had proposed a hike of 7.5 per cent, which also is very low. To make any appreciable dent in the sense that India returns back to the path of self-sufficiency, the import duties should have been raised by 150 per cent. But then, that's not the intention of this government.
Nothing like that happened.
Writing in The Economic Times, he says in an oped article entitled: Oil palm: Answer to India's edible oil problem (ET. Jan 17, 2013. bit.ly/S5qtKS ) that India's edible oil import bill has crossed Rs 56,295-crore in the oil year, Nov 2011 to October 2012. "The projections of demand and supply of agri-products also shows that the biggest challenge of Indian agriculture will be in producing enough edible oils at globally competitive rates to meet its rising demand." Fair enough.
And then he very conveniently hides the fact that India had achieved near self-sufficiency in oilseeds production in 1993-94, many called it yellow revolution, after which the down slide began. From a near self-sufficiency status to becoming world's second biggest importer of edible oils is because it was after 1993-94 India had began to gradually reduce the import duties. As per WTO obligations, India is allowed to bound its import tariffs on edible oils at 300 per cent (except for soy oil where it has been pegged at 40 per cent, thanks to US pressure). But it was autonomous liberalisation that did the damage. At present, there is zero duty on crude edible oil and 7.5 per cent on refined edible oil. Now with import duties brought down to almost zero, what do you expect to happen?
Imports have been on an upswing. From Rs 14,709-crore in 2006-07, the import bill jumped to Rs 34,677-crore in 2009-10, and has further soared to Rs 56,295-crore in 2011-12.
You will agree that it is because of India's faulty policies that edible oils have turned into a big strain on the state exchequer. Obviously, the current account deficit will grow when imports increase and exports do not match. In fact, still worse, because we allowed cheaper edible oil to be imported, farmers abandoned cultivation of oilseed crops and shifted to other unremunerative crops (oilseeds are mainly grown in the harsh environs of drylands). At the same time, the domestic edible oil processing industry collapsed, in turn implying that it was a lost opportunity to create employment.
Just between 2006 and 2012, a period of six years, India has incurred Rs 2.02 lakh crore on edible oil imports. If India had continued with the oilseed self-sufficiency programme, as initiated by former Prime Minister Rajiv Gandhi, this entire amount would have remained within the country thereby helping farmers and the industry. Here also, people like Ashok Gulati were advising the successive governments on the dire need to open up imports. So first you the damage the country by encouraging imports, and then you try to inflict another bigger damage by campaigning for a crop which is known to be environmentally destructive.
While the Ministry of Agriculture is now contemplating a re-look at the import duties on edible oils (Govt to review import duty structure of edible oils. Business Line. Jan 15, 2013. bit.ly/SCVmrB ), Ashok Gulati is suggesting a shift to palm oil cultivation to meet the domestic demand. His suggestion is that India should bring 2 million hectares under palm cultivation in the next four to five years, for which he even advocates a compensation of Rs 4,000-crore to farmers as opportunity costs. CACP chairman doesn't want the wheat and paddy prices to be raised by even Rs 10/quintal but has no problem if the government was to shell out Rs 4,000-crore to farmers as compensation for palm oil cultivation!
Palm oil cultivation has a terrible socio-economic and environmental fallout (See this WWF report: Palm oil: Environmental impacts. http://wwf.panda.org/what_we_
Meanwhile, the Government today has raised the import duty on crude edible oil from existing zero to 2.5 per cent. Ministry of Agriculture had proposed a hike of 7.5 per cent, which also is very low. To make any appreciable dent in the sense that India returns back to the path of self-sufficiency, the import duties should have been raised by 150 per cent. But then, that's not the intention of this government.
GAAR Deferred. Investors, stock markets, industry and media celebrate the induction of black money. Is India really against corruption?
Some years back, I was sitting with some family friends. For some reason, the topic of discussion shifted to henpecked husbands. The ladies were telling how bad they feel when they see a henpecked husband. While it was interesting to hear what each one had to say I was particularly amused to hear when one of them said: "I certainly don't like to see henpecked husbands, but I wouldn't mind if my own husband is henpecked." Everyone laughed.
When I see the nation's anger over corruption, I am reminded of that evening. Swami Ramdev and Anna Hazare have led from the front. The movement against corruption, the way it has mobilised the masses, certainly remains unprecedented in India's history. Everyone points a finger at other's corruption, the favourite whipping boy of course being the politicians. Commonwealth Games, 2G scam, Coalgate and everything else points to the politicians. But sometimes I wonder whether we are willing to look inwards, to see and evaluate how corrupt we are as individuals?
The same holds true for the business and industry, the foundation of India's growth story. Have India Inc every turned the mirror inwards to see how corrupt it is? Or like the lady the other evening, India Inc can't tolerate political corruption, but doesn't mind its own corruption?
Now, hold on. Before you think this is a subject that doesn't concern you, it is time to do a reality check. The Hindustan Times says: "The GAAR provisions, put forward in the budget for 2012-13, triggers howls of protest from global and domestic business leaders as it can potentially affect almost anybody, and everybody (Tax-Avoidance rules delayed by 2 years, Jan 15, 2013)." It then goes on to tell you how you can be impacted. "For instance, many companies, experts had said, would have been forced to restructure salaries of employees if taxmen concluded that these were structured only to avoid taxes."
In simple words, the market experts have created a fear psychosis. They have warned you to keep quiet since your job too is at stake. So that you too can become a willing party to corruption.
Only a few months back, and it wasn't long, when India had witnessed what many called as people's rising over mammoth corruption. Some even likened it to Arab Spring. Anna Hazare became the torch-bearer of the fight against rampant corruption. Everyone joined to point an accusing finger at the political system, holding it primarily responsible for prevailing corruption. If this was really true, I don't understand how could everyone now turn a blind eye to the Finance Ministry's controversial decision to provide a legal route for dirty money to flow in through the Mauritius route.
GAAR, introduced in Budget 2012-13 by the then Finance Minister Pranab Mukherjee with the aim of checking tax avoidance, was to come into effect from April 1, 2014.
Since nearly 40 per cent of the FII investments come through the tax haven route of Mauritius (as part of a treaty signed earlier), it clearly shows how the flow of black money has been formally allowed in the name of economic reforms. The next obvious question therefore: Is India's growth story based on black money? Is India's economic reforms actually driven by corrupt practices? If not, then how come the chairperson of the Federation of Indian Chambers of Commerce and Industry (FICCI) Naina Kidawi be very proudly welcoming the decision saying that the industry needs this investment at this critical juncture. Does it therefore mean that India Inc is growing on tainted money? Not only the FICCI chief, I am shocked that every other economic writer and (of course the newspapers/TV channels) and industry leader are visibly excited. There is a sense of relief over the continuation of corrupt practices. Sensex and Nifty have have already cheered the induction of more black money in the economy.
At a time when globally the sentiment is for improving governance and transparency, how can India Inc justify the continuation of corrupt practices in the name of economic reforms? Isn't GAAR a set of rules to check how FIIs are evading taxes? Will it not help to weed out black money that some FIIs bring? How can any sensible economist or a market analyst support the postponing of GAAR rules? Does it not mean that corruption runs deep in this country, afflicting the rich and the powerful more than anyone else? And business as usual, (which means continuing with corrupt business activities) is what the rich and the super-rich want?
So the next time you rally against corruption, don't only blame the politicians and the government. Be bold to point an accusing finger at Indian business and industry, market analysts, and also the media.
That brings me to the moot question. Is India really against corruption? #
Additional reading: Tainted money, Deccan Herald.
To save on global warming, why food is allowed to travel across continents? Why not popularise local products and local markets?
Some decades back I had written on how Pepsi was shipping its used PET bottles, used for packing soft drinks, to Chennai in India for recycling. These bottles would then again be shipped back to the US for use. Why Pepsi took this detour for recycling PET bottles was simply because recycling of plastic waste is not easily allowed in the US (it has very stringent norms) for health and environmental reasons, and that obviously adds on to the cost.
Later, in 1994, I remember reading an excellent report Food Miles produced by Sustain. It told us about the dangers of shipped food across the continents, processed and repacked elsewhere, and then shipped back to the same country from where it all started. There were several glaring examples, which should have woken up the policy makers and of course the economists who talk of everything but little sense. Food on an average travels 3,000 miles before it reaches your plate. This itself was such a startling revelation that should have made consumers to rethink, but somehow it did not. The report is now updated and republished and you can have a copy (click this link to know more about http://www.sustainweb.org/
Yesterday, Zac Goldsmith forwarded a tweet, which reminded me of the hidden cost of the global food transport system. The Sunday Times, London, had several years back reported how British prawns were being shipped to China for hand-shelling, and then shipped back to UK for the consumers. Supermarkets are excelling in globe-trotting for food products, taking advantage of the cheap processing costs (and also taking advantage of the massive fuel subsidies) and remain unmindful of the carbon footprint they generate in the process.
Take this example. The tradecraft coffee that supermarket chain Sainsbury sells in its stores is grown in Bukoba, Tanzania. The coffee beans then travel 656 kms to Dar-es-Salaam from where it is shipped to Vijaywada in Andhra Pradesh. Vijaywada is about 3,250 miles from Dar-es-Salaam. In Vijaywada, the beans are packed. It is again shipped to Southampton in UK, which is about 5,000 miles. From Southampton, it goes to Leeds from where it is redistributed to Sainsbury stores worldwide. I am sure with the approval granted to FDI in retail in India, Sainsbury will find it convenient to ship the packed coffee from Leeds to New Delhi (You can read the news report here: http://www.airportwatch.org.
Isn't it time therefore to do a serious rethink of our international trade policies? I have been saying for long that World Trade Organisation (WTO) and Climate negotiations actually work at cross-purposes. While WTO will push for more of such trade, it doesn't pay any heed to the resulting carbon footprint such trade generates and the impact it has on global warming. Similarly, Climate negotiators are not calling for restricting such unwanted trade as a precursor to climate control standards.
I have never understood the logic of allowing apples to be imported all the way from New Zealand and Chile into India while there are no takers for apples from Himachal Pradesh and Kashmir. Similarly, what is the logic behind allowing Washington apples to be exported to India, while Chinese apples travel all the way to the US, controlling roughly 45 per cent of the US market. The food globe-trotting is happening because the aviation fuel is damn cheap. Many have said that aviation fuel actually works to be cheaper than Coke !
Creating and popularising local markets is perhaps the only viable alternative to the madness of making food travel across the globe. Consumers have a very important role to play here. Try to avoid being lured by products which claim to have brought you the same processed stuff from far away which otherwise is grown in your neighbourhood. Keep a close watch. Why go for processed orange drink from Chile or from US, when you have much fresh and tasty juice available in your local market? Make such sensible choices. And your would have played your small but effective part in limiting global carbon foot print.
Later, in 1994, I remember reading an excellent report Food Miles produced by Sustain. It told us about the dangers of shipped food across the continents, processed and repacked elsewhere, and then shipped back to the same country from where it all started. There were several glaring examples, which should have woken up the policy makers and of course the economists who talk of everything but little sense. Food on an average travels 3,000 miles before it reaches your plate. This itself was such a startling revelation that should have made consumers to rethink, but somehow it did not. The report is now updated and republished and you can have a copy (click this link to know more about http://www.sustainweb.org/
Yesterday, Zac Goldsmith forwarded a tweet, which reminded me of the hidden cost of the global food transport system. The Sunday Times, London, had several years back reported how British prawns were being shipped to China for hand-shelling, and then shipped back to UK for the consumers. Supermarkets are excelling in globe-trotting for food products, taking advantage of the cheap processing costs (and also taking advantage of the massive fuel subsidies) and remain unmindful of the carbon footprint they generate in the process.
Take this example. The tradecraft coffee that supermarket chain Sainsbury sells in its stores is grown in Bukoba, Tanzania. The coffee beans then travel 656 kms to Dar-es-Salaam from where it is shipped to Vijaywada in Andhra Pradesh. Vijaywada is about 3,250 miles from Dar-es-Salaam. In Vijaywada, the beans are packed. It is again shipped to Southampton in UK, which is about 5,000 miles. From Southampton, it goes to Leeds from where it is redistributed to Sainsbury stores worldwide. I am sure with the approval granted to FDI in retail in India, Sainsbury will find it convenient to ship the packed coffee from Leeds to New Delhi (You can read the news report here: http://www.airportwatch.org.
Isn't it time therefore to do a serious rethink of our international trade policies? I have been saying for long that World Trade Organisation (WTO) and Climate negotiations actually work at cross-purposes. While WTO will push for more of such trade, it doesn't pay any heed to the resulting carbon footprint such trade generates and the impact it has on global warming. Similarly, Climate negotiators are not calling for restricting such unwanted trade as a precursor to climate control standards.
I have never understood the logic of allowing apples to be imported all the way from New Zealand and Chile into India while there are no takers for apples from Himachal Pradesh and Kashmir. Similarly, what is the logic behind allowing Washington apples to be exported to India, while Chinese apples travel all the way to the US, controlling roughly 45 per cent of the US market. The food globe-trotting is happening because the aviation fuel is damn cheap. Many have said that aviation fuel actually works to be cheaper than Coke !
Creating and popularising local markets is perhaps the only viable alternative to the madness of making food travel across the globe. Consumers have a very important role to play here. Try to avoid being lured by products which claim to have brought you the same processed stuff from far away which otherwise is grown in your neighbourhood. Keep a close watch. Why go for processed orange drink from Chile or from US, when you have much fresh and tasty juice available in your local market? Make such sensible choices. And your would have played your small but effective part in limiting global carbon foot print.
Rabobank promotes hybrid rice. Aimed at helping Monsanto, Syngenta, Pioneer, Dow Agro Science and Bayer Crop Science sell more seed.
For years, farmers have been complaining. "You tell us to keep domestic breeds. But banks only provide me credit if I purchase a crossbred cow," farmers would tell me at many a places. If you have wondered why farmers did not fancy desi breeds of cows, this is one of the major reasons. I have raised this at various platforms, and am still not sure whether banks have rectified their flawed policy to provide credit only for 'improved' technology.
This malice has gone on and on. In fact, in lot many way I find the banks are primarily responsible for the prevailing agrarian crisis. They have always supported the industrial-driven farming systems and thereby knowingly led agriculture on the path to disaster. One reason perhaps is that the agriculture staff in banks is stuffed with people who have little exposure to the ground realities. They literally go by text books, and have drawn development policies in consultation with firms like Ernst&Young, Tata Consultancy Services, among others. One can cite a number of examples, but then let's keep that to another day.
The situation has worsened after the private banks got foothold in the Indian market. The latest is Rabobank. The bank has done a study wherein it calls for investing in hybrid seeds to increase rice production by some 15-20 per cent (Hybrid seeds will help raise rice productivity: Study. Business Standard, Jan 9, 2013. http://bit.ly/TJbtBH). At present, hybrid rice seed is cultivated in only 3 per cent of the total area, and since seed giants like Bayer Crop Sciences, Dow Agro Sciences, Pioneer, Monsanto and Syngenta's commercial interests are involved, how can Rabobank not make promotional bid?
It is primarily for the same reason that Ministry of Agriculture is also aggressively promoting hybrid rice seeds through the Rashtriya Krishi Vikas Yojna. Subsidies are being provided for hybrid seed purchase. Interestingly, while the RKVY objective is to increase production, the State which produces the largest rice surplus -- Punjab -- is launching a crop diversification programme planning to take out 12 lakh hecatres from rice cultivation and shift to other crops. At the same time, India is saddled with huge rice stocks and is therefore reluctant to procure more rice. It is thinking of capping food procurement to limit the burden on the Food Corporation of India.
Under such conditions, why do we need to raise production by 15-20 per cent? Well, you guessed it right. Because it will help seed multinationals to market more seed. This in turn will raise their stock value. Since hybrid seeds have to be purchased every year, look at the huge market available. Punjab is also worried about depleting groundwater from excess pumping out of water for rice cultivation. Rabobank should have known that hybrid seeds pull out at least 1.5 times more water than the high-yielding varieties (HYV). This in turn will require more fertilisers and pesticides thereby adding on to the send-generation environmental impacts and also fan global warming. But the bigger question is when will the policy makers hold banks accountable if their policies acerbate the agrarian crisis? Isn't it time to hold social and environmental audit of bank policies and approaches?
The answer is: Only when people like you and me raise their voice.
This malice has gone on and on. In fact, in lot many way I find the banks are primarily responsible for the prevailing agrarian crisis. They have always supported the industrial-driven farming systems and thereby knowingly led agriculture on the path to disaster. One reason perhaps is that the agriculture staff in banks is stuffed with people who have little exposure to the ground realities. They literally go by text books, and have drawn development policies in consultation with firms like Ernst&Young, Tata Consultancy Services, among others. One can cite a number of examples, but then let's keep that to another day.
The situation has worsened after the private banks got foothold in the Indian market. The latest is Rabobank. The bank has done a study wherein it calls for investing in hybrid seeds to increase rice production by some 15-20 per cent (Hybrid seeds will help raise rice productivity: Study. Business Standard, Jan 9, 2013. http://bit.ly/TJbtBH). At present, hybrid rice seed is cultivated in only 3 per cent of the total area, and since seed giants like Bayer Crop Sciences, Dow Agro Sciences, Pioneer, Monsanto and Syngenta's commercial interests are involved, how can Rabobank not make promotional bid?
It is primarily for the same reason that Ministry of Agriculture is also aggressively promoting hybrid rice seeds through the Rashtriya Krishi Vikas Yojna. Subsidies are being provided for hybrid seed purchase. Interestingly, while the RKVY objective is to increase production, the State which produces the largest rice surplus -- Punjab -- is launching a crop diversification programme planning to take out 12 lakh hecatres from rice cultivation and shift to other crops. At the same time, India is saddled with huge rice stocks and is therefore reluctant to procure more rice. It is thinking of capping food procurement to limit the burden on the Food Corporation of India.
Under such conditions, why do we need to raise production by 15-20 per cent? Well, you guessed it right. Because it will help seed multinationals to market more seed. This in turn will raise their stock value. Since hybrid seeds have to be purchased every year, look at the huge market available. Punjab is also worried about depleting groundwater from excess pumping out of water for rice cultivation. Rabobank should have known that hybrid seeds pull out at least 1.5 times more water than the high-yielding varieties (HYV). This in turn will require more fertilisers and pesticides thereby adding on to the send-generation environmental impacts and also fan global warming. But the bigger question is when will the policy makers hold banks accountable if their policies acerbate the agrarian crisis? Isn't it time to hold social and environmental audit of bank policies and approaches?
The answer is: Only when people like you and me raise their voice.
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