The Government of India has set in motion reforms which will lead to the eventual development of a very large number of private markets near the agricultural produce growing regions. The village level agri-marketing infrastructure is the last remaining piece in this giant jigsaw puzzle which has remained unfixed in India for the last 70 years. This missing link at the bottom of the pyramid, which would be in the form of storage and transportation and other agriculture-related infrastructure at the panchayat level, has to be plugged in.
The Government of India needs to move away from schemes which dole out subsidies to individual rich farmers. It is time to make the intellectual and philosophical shift to building infrastructure on the post-production storage, logistics and marketing fronts and leave individual economic agents, including farmers, to function on the basis of the demand and supply of various commodities. A production mindset creates perverse incentives for the production of certain commodities including what is happening in the case of wheat, paddy, sugarcane and some other commodities which suffer the overhang of this mindset. Having said that, risk mitigation mechanisms like MSP procurement and PDS distribution systems would need to continue for a long time to accord protection to growers as well as consumers from a food and nutrition security perspective.
The Standing Committee on Agriculture (Chair: Hukumdev Narayan Yadav) submitted its report on ‘Agriculture Marketing and Role of Weekly Gramin Haats’ on January 3, 2019, and recommended that the Central Government (i) increase the number of haats being targeted under the scheme and ensure presence of a haat in each panchayat of the country, and (ii) make the scheme a fully funded central scheme. As against the 22,000 haats mentioned in the Committee report, other sources quote there being 47,000 haats across India with no or very rudimentary infrastructure with produce lying on the ground for sale, etc. The presence of such vast numbers of unregulated village cluster level markets establishes the need for panchayat-level infrastructure as also recommended by the Committee.
According to a National Centre for Cold-Chain Development (NCCD), GoI report, there is a very large gap in the case of pre-cooling/pack-houses (99% gap in demand – 70,080 vs supply – 249), reefer transport (85%) and ripening units (91%) at the level of villages/village clusters. Currently, the post-harvest losses in fruits and vegetables are huge, with a substantial chunk being contributed by potatoes, onions, tomatoes and mangoes which contribute to more than 60% of the overall losses. The lack of cold chain facilities in India is a major reason for losses besides a host of other factors. The percentage movement of fruits and vegetables through cold chain infrastructure in India is near zero, while in the US it is around 80-85% with countries like Thailand being of the order of 30-40%. The orientation of farmers in all states is geared towards production. Not enough attention and steps have been taken to mitigate post-harvest losses. Because of the low number of reefer transportation vehicles in India and the lack of backhaul loads, the cost of cold chain transportation is very high (about 2/3 times) than the normal transportation trucking infrastructure. We have negligible pre-cooling of fruits and vegetables at the village level since infrastructure is non-existent.
WHAT IS THE SOLUTION?
Given both the recommendations and the ground level needs, the Government of India may consider a gigantic infrastructure project to ensure that there would be adequate infrastructure for storage and basic value addition. In larger villages, there would also be a need for auctioning platforms, weighing systems, quality assaying machines, training centres and transportation vehicles in the form of reefer vans as well as normal trucks for movement of agriculture produce. The core of this infrastructure which will also provide it with a self-sustainability revenue stream would be the pre-cooling, ripening, micro cold storage, dry storage and transportation infrastructure. This would be like an advanced version of a haat and more like a full-fledged mandi at the level of every Gram Panchayat in the country with infrastructure as required by fruits/vegetables (@315 million tons) which today exceed the production of grain/pulses/oilseeds (@280 million tons) in India. This requires an integrated pan-India cold chain infrastructure starting from the villages of India without which it makes no sense to have a cold chain infrastructure in just the towns and cities with no such facilities at the growing centres where most of the value destruction and wastage happens in case of fruits and vegetables. Starting a basic cold chain from the Gram Panchayats needs an analysis of the type of cold chain infrastructure that is viable and needed in the villages. There have been incentives and a bias in favour of larger cold storages in India with the trade and industry, which needs to be corrected in favour of micro cold storages at village or village cluster levels.
WHY ARE SMALL OR MICRO COLD STORAGES NEEDED?
It is not viable to store common fruits and vegetables in large cold storages, so small or micro cold storages are required at the farm level. There is a dire need for micro cold storages (MCS) despite the fact that they have a higher capital cost per ton of storage and have a higher running cost per ton of storage. This is because their usage is very different compared to a large cold storage.
The MCS can be used to aggregate and store fruits and vegetables for a few days until a financially viable transport quantity is available. Buyers typically need a truck load every few days. Demand keeps fluctuating according to which harvest of produce from given geographies in season is huge. There is a need for storage so that there are short time windows in which they can be stored during times of crashes in prices. The MCS also allows for longer term storage of two to three months, wherein prices can increase by five to ten times in cases of items like lemons and many other commodities.
MCS can also be used as ripening centres, whenever required. MCS can also become a spoke for large cold storages to ensure value preservation at the time of harvest. Since storage in MCS is normally in 20 kg crates which allow farmers to sell the produce at a higher rate in semi retail using his own or hired transportation. The MCS can also double up as village level pack house, which is nonexistent in Indian villages today, for sorting, cleaning, grading, packing and some basic value addition for vegetables and fruits.
SUGGESTED COMPONENTS OF GRAM MANDI/HAAT
The built area of each GMH unit may be a maximum of 5000 ft² which would make it one of the most imposing structures in each panchayat. There may be another thousand square feet which may be added in the form of training centres and rooms for other community activities. Part of the facility may also serve as a banquet hall for weddings and such functions at the village level. The concept of lawn marriages with the entire integrated package of services being provided by a third-party service provider has also taken root in the villages of India.
The GMH will serve as a one-stop shop for the farmers that cater to a range of relevant services and activities. They would be designed in a way so as to be equipped to locally deliver the immediate needs of the farmers. The promotion of best cultivation practices to enhance production and productivity of major field crops, vegetables, fruits and fodder crops of the region, including the introduction of new and useful plant species, can also be accessed at the GMH.
In addition to agri business units, the project can also initiate social development units including a Primary Health Centre, Women’s Skill Development Centre, Computer Education Centre and Children’s Recreation Centre.
These GMH would serve farmers through a range of services and facilities:
• Micro cold storage and dry storage for non-perishables
• Sorting, cleaning, grading, packing, and some basic value addition for fruits, vegetables and also non-perishable goods.
• Business/processing unit like seed processing units, a honey processing unit, daal mills, spice grinding units, etc.
• Provision of farm machinery on custom hiring (pay and use) basis
• Technical and expert support for cultivation of different crops
• Strengthening product value and its market integration through pulses milling facility, apiary processing and seed procurement
• Social development units such as Skill Development Centre, Computer Training Centre and Children’s play area, Primary Health Centre, etc.
• Every module within the GMH must be available on demand to the respective Gram Panchayat except for the core modules like cold storage, the dry storage, sorting/packaging/grading stations, processing unit and the training centre which should be compulsory with every GMH.
• One acre of land near the GMH should be dedicated to a technology demonstration unit which should have the latest technologies as well as the ICAR system demonstrating their technologies directly to the village. Start-ups as well as ICAR are struggling with the challenge of taking technologies from POC or subscale to mass scale implementation in the villages. The GMH could be a mechanism to facilitate this lab to land transfer system which has broken down today.
The micro cold storages could also function as bulk milk chillers at the village level which would add value to 180 odd million tons of milk which is produced all across India and whose supply chain also suffers from a lack of BMC infrastructure at the village level.
Assuming a production of 2500 tons per panchayat, storage may need to be built around 250 tons which would require a warehousing space of around 3000 sq ft.² for dry storage. Micro cold storage unit of the capacity of 30 tons rotated 12 times a year would provide storage for almost 360 tons of fruits and vegetables.
In order to fill this gap, market storage and logistic infrastructure should be built at every Gram Panchayat level in India which is at 250,000 odd locations with slightly bigger infrastructure at the block level which number around 6,600 in India.
The GMH should also provide physical space for village level workers in extension, livestock, healthcare (ANM), CSC, digital/physical training centre to ensure footfall and ensure that the facilities become a hub for all community activities in the village and the surrounding feeder villages.
Infrastructure under the SWAN Initiative of the GoI and the Common Service Centre Initiative of the GoI could also be converged for physical location within the same facilities.
FOLLOWING MODALITIES COULD BE FOLLOWED FOR ROLLING OUT GMH
Every Gram Panchayat would need to submit a proper DPR to the GoI for grant funding to set up a GMH in the respective village. The various criteria and the guidelines of the scheme would ensure the automatic self-selection of capable Gram Panchayats and would be the first off the blocks in rolling out the infrastructure first in the villages which would be capable of monetising the assets built under the project. This process would take time just like what has been envisaged for the Agriculture Infrastructure Fund scheme of Rs 100,000 crore from the GoI. GMH implementation would follow the same trajectory and may take three years to roll out to all the Gram Panchayats of India.
Gram Panchayats may need to give a written commitment to contribute two acres of land to this project and offer labour time to the project as a contribution of the villagers. This facility should include both dry storage and micro cold storage.
Gram Panchayats would also necessarily have to house the management (including the revenues and expenses) of these entities into a pre-existing village level primary agricultural cooperative society or create a new one with broad representation from the local communities for the purpose of the administration and management of these units. Some revenue rich Gram Panchayats may also opt for setting up a Farmer Producer Company with members drawn from the Gram Panchayat village as well as the feeder villages (two to every Gram Panchayat) which are in proximity to every Gram Panchayat. The entities (PACS or other COOPs) which would be engaged in management of the GMH infrastructure should be given the status of FPOs as being set up under a large programme by the GoI.
The Gram Sabha in each village would need to pass a resolution handing over a minimum of two acres of land for the GMH project. The Gram Sabha could upload all the details required directly onto a GoI portal along with the request for construction of the GMH complex in their village. These requests should be made by them directly to the Prime Minister of India.
This entire project needs to be tendered out all over India so good infrastructure companies take up the execution of creating great on-ground infrastructure. The nature and design may be customised depending on the geography. For example, the GMH in Ladakh and the GMH in Kerala would not be the same.
FUNDING FOR GMH
Presence in 250,000 Gram Panchayats and 6600 blocks would require funds to the order of 2.5 lakh crores (Rs1 crore per Gram Panchayat) for the GMH infrastructure at the panchayat level and @ 33,000 crores at the block level (@ Rs 5 crore per block). There could be direct financial support of INR 75 lakhs from the GoI coffers to every eligible Gram Panchayat in India with labour and land being contributed by the local communities under each Gram Panchayat. The GoI would raise another Rs 25 lakhs for each Gram Panchayat from CSR/grants/individual donations from domestic and international sources, making this a USD 40 billion project with the GoI funding it to the tune of USD 30 billion. The project could be implemented over three financial years from FY 21-22, 22-23 and 23-24.
The money for the scheme can be pulled in from schemes like MPLADS, Rashtriya Krishi Vikas Yojana, National Mission on Horticulture, NFSM, Krishi Bhandaran Yojana and other such major/minor schemes under MoRD and MoFPI. MGNREGA may be used to partly fund the labour cost component of the project which will be rolled out in all Gram Panchayats of India.
The GoI could also appeal to PSUs and private companies with CSR budgets to help in building this infrastructure between 1 to 100 villages depending on the CSR budgets of each corporate. There are also large international donor organisations which could be approached to provide very substantial funds to a project of this scale. Non-resident Indians as well as persons of Indian origin can also contribute towards building this infrastructure in the villages of their ancestors. The GMH will provide a structured platform to ensure that any PIO/NRI with emotional connections to their villages would be able to donate for changing the lives of their brethren in the villages in a tangible way.
ECONOMIC OUTCOMES OF BUILDING VILLAGE LEVEL INFRASTRUCTURE
All the village level infrastructure needs to be connected institutionally with the new private markets coming up all over India which may be in the form of physical private markets or even electronic markets functioning on a regional or national basis.
The infrastructure on the ground could feed into these private markets where buyers from all over India could be attracted. Private markets could be run by the FPO or cooperative societies in partnership with organisations like NAFED, GCMMF or any such successful federation or public body with large-scale interfaces with farmers. This will revive the thousands of defunct or dormant Primary Agriculture Societies across India. It would give a fillip to the FPO movement if they have the status of being FPOs with the attendant benefits as available to FPOs through various State Government and GoI schemes and facilities.
Anything monetisable by the hands of the local communities through the mechanism of the bodies owned and controlled by them creates business models and economic opportunities for millions who would be engaged with the facilities built all over India. Many Indian companies including startups would be major beneficiaries of the GMH which would mean thousands of crores of rupees as revenue for these Indian-owned organizations.
Since the cold chain and sorting/packing/grading/cleaning would start from the villages, there would be huge savings in supply chain losses which may amount to billions of dollars on an annual basis. Since there would be a sudden boost in the number of reefer transportation assets all over India, the country would reach a tipping point in terms of their usage and also freight costs moving the country from zero to approaching the levels of Thailand at 40% percent of the output being transported in these types of vehicles. Since there would be a massive jump in the number of micro cold storages in India, their unit costs would go down from the current levels of Rs 10-15 lakhs for every 15-30 tons of storage to 1/3rd of that cost, furthering triggering their adoption by even large farmers.
The GMH can also be integrated with the ‘One District, One Product’ initiative of the Government of India with there being some level of value addition at the village level to the specialty produce from the village, which may be the processing of seed spices like cumin, coriander, fennel or other such items which are grown in Rajasthan, Gujarat and Madhya Pradesh. There could be value addition to milk in the form of paneer, ghee and other products.
The project could also change the mindsets of the GoI and state governments from the current production focus to a market-driven approach. As a natural corollary of the One District One Product programme, the GoI could guide the country towards ‘One Village One Product’. There could be village wise commodity specialisation which could become the reason of renown for the village.
This will become a huge pump priming project for the economy which is suffering the effects of Covid and the turmoil in the global environment. The solution for the varied problems of the farm sector and the peasant community lies not in subsidies but in building a robust post-harvest infrastructure. It will help facilitate the journey to the doubling of farmers’ income in India.
The writer is founder and chairman, Indian Society of Agribusiness Professionals and Indigram Labs Foundation. The views expressed are personal.
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PUNJAB CABINET FORMATION APPEARS TO BE INCLUSIVE AND BALANCED
The new Punjab Cabinet appears to be inclusive and aimed at reaping political dividends in next year’s Assembly elections. However, it is too early to predict whether the Congress would be able to keep its flock together, given Captain Amarinder Singh’s dissatisfaction with the party and the omission of his close associates in the ministry. There is no one in the Cabinet who has ready access to the former Chief Minister and it is evident that bridges between him and the new leadership have been burnt forever. Therefore, it would not come as a surprise if the Captain asks the new government to take a floor test within one month or so. His camp has been watching the developments very closely and it is virtually certain that he would be severing his links with the Congress shortly. He is keeping his options open and is likely to take advantage of a possible tussle between Charanjit Singh Channi, his successor and Pradesh Congress president, Navjot Singh Sidhu. Differences between the two have already started over the choice of officers and Sidhu presumes that he shall be the CM after the polls next year while Channi is no green horn, who would allow his advantage to fritter away. The Congress High Command has to assess the unfolding drama very objectively and pragmatically in order to keep the MLS from deserting the party. The Captain is a very astute and perceptive politician who shall make his moves swiftly once the appropriate time arrives. In this context, it would have been better to include someone close to him in the ministry in order to ascertain what all was going on in his mind or camp. In 2016 when he had threatened to form his own party, Rana Gurmeet Singh Sodhi had persuaded him to rethink. This time Sodhi who acted as an interlocutor for the Congress between the Captain and Sidhu at one stage, is out and none of the others who are in the ministry can claim to enjoy proximity which would provide them access to understand Amarinder’s mind. Region wise the new ministry has 9 from the Malwa belt, four from Doaba and the remaining five from Majha. There are nine Jat Sikhs in the new government besides three Dalits, one OBC, four Hindus and one Muslim. The ministry gives an impression that it has been constituted to counter possible threat from the Akalis and the Captain without taking into consideration that the Aam Aadmi Party (AAP) which could emerge as the `X’ factor, closer to the polls. This political change may occur when the Congress decides to announce its list of nominees and those who would be left out may gravitate towards the Captain or AAP. There are indications that the Captain could form his own party which may have an electoral understanding with the BJP. He enjoys immense support amongst the Hindus of Punjab who view him as a nationalist figure. Therefore, to offset that perception, the Congress has included four influential Hindu faces in Om Prakash Soni, one of the deputy CMs, Brahm Mohindra, Vijay Inder Singla and Bharat Bhushan Ashu. The Captain has sounded the bugle and this war with the Congress could alter the political scenario in the State. Thus there is a huge responsibility that has been placed on the shoulders of the new government and the Congress High Command.
Taliban takeover and Russia’s strategic miscalculation
Russia will commit a strategic blunder by supporting the Taliban regime as the latter is not the legitimate voice of the Afghan people. This move will further isolate Moscow globally.
The rapid changes which occurred in Afghanistan after the violent takeover by the Taliban, ousting the civilian government headed by Ashraf Ghani are generating a lot of questions having larger geopolitical implications for both global and regional geopolitics. At the same time, the unending human sufferings like (flow of refugees, suppression of women and minority communities and denial of basic human rights to the common people) are also evident in Afghanistan following the forced takeover of power by the radical Taliban. Though these consequences are expected before, if the Taliban capture power. It is a well-known fact that the Taliban is created and patronized by Pakistan since the 1990s to achieve its diabolical strategic goals. Thus, what one witnesses is a new kind of geopolitical cauldron. Similarly, Afghanistan which has made tremendous progress in the socio-political spheres at the domestic level for the last 20 years (in the post-Taliban 1.0 era) including in the direction of deepening the democratisation process is reverting to the era of the 1990s. These two intricating developments are raising a lot of fundamental questions in the context of future of post-Nato Afghanistan.
Just after the ouster of the Ghani government, the Taliban sent a delegation to Pakistan which confirms the fact that Islamabad is the mastermind of this radical and terrorist organisation. Pakistan as reported has also deputed its high officials including the chief of ISI who supervised the illegitimate government formations by Taliban in Afghanistan. At the same time, China’s Ambassador in Afghanistan Wang Wu has already held talks with Taliban and assured support including financial assistance. This is a well-known fact that both China and Pakistan are hand in gloves with Taliban. But the most interesting thing that needs to be highlighted here is that Russia is also mending fences with Taliban despite knowing the fact that it is a terrorist group and a “banned organisation” in Russia. Just after the coup in Afghanistan, on 17 August 2021 Russian Ambassador Dmitry Zhirnov met Taliban leaders and gave an appalling statement as reported in Reuters. Zhirnov stated that “There is no alternative to the Taliban in Afghanistan”. He mentioned further that “The mood in Kabul can be described as one of cautious hope.”
By overlooking the ground situation, the Russian Ambassador to Afghanistan certainly misled the global community. The recent bombing at the Kabul Airport carried out by terrorist group ISKP (another terrorist group operating in Afghanistan under the patronage of Pakistan) also proves the fact that the Russian Ambassador’s statement is far from the existing reality in post-Nato Afghanistan.
It may be recalled here that it is not only the Russian Ambassador to Afghanistan who gave a statement on supporting Taliban, even the Spokeswoman of Russia Foreign Ministry Maria Zakharova in her response to the Press on 19 August echoes the statement given by Zhirnov. Zakharova stated, “ The positive signals transmitted to us from the Taliban leaders regarding their plans for the country’s future.” The Statement of Zakharova is quite strange because the whole world is criticising the Taliban’s illegal and hostile move but Russia is keeping its option open while dealing with Taliban. This implies Russia is giving patronage to the radical terror group Taliban along with China and Pakistan. The subsequent telephonic conversation between Russian President Vladimir Putin and Chinese President Xi Jinping also gave a signal that Russia is interested to work closely with Taliban in Afghanistan.
While evaluating Russia’s stand towards Taliban, it appears that Moscow does not follow a consistent policy. It is a common fact that Russia is the worst victim of terrorism over the years. A number of studies suggest that many of the Northern Caucasian militants had taken training from Taliban in the post-1995 phase. Reports suggest, along with Taliban, Pakistan is supporting some of these militants and terrorist groups that are currently operating illegally in Russia. Moreover, Russian policymakers and analysts have also accused Pakistan of harbouring Chechen terrorists.
In the post 9/11 phase, Russia formed Collective Security Treaty Organisation (CSTO) by including post-Soviet countries like Tajikistan, Kyrgyzstan, Kazakhstan, Armenia and Belarus just to checkmate the flow of drugs and narcotic substances and radical extremism from Afghanistan. Russia is still operating its military base in Tajikistan under the aegis of CSTO to thwart the above-mentioned threats originating from Afghanistan. It is in this context the sudden soft-corner towards Taliban by Russia is raising many questions?
It is pertinent to mention here that what are the factors that might have propelled Russia to change its stance towards Taliban? In this regard there are three major reasons that need to be underlined. These are:
a) Over the years Russia is playing a supporting role to China in the international arena. This can be evident from the growing alignment between Russia and China on several issues and in this process, Moscow is also losing its “strategic autonomy”, in the decision-making process. The dependence of Russia on China has increased significantly after the Western sanctions in the aftermath of the Crimea crisis in the post-2014 phase.
b) Russia is also losing its “strategic preponderance” in Central Asia in recent years. This is largely because of the emergence of new political elites in Central Asia (except in Tajikistan) and they are pursuing a multi-vector foreign policy as studies suggest. These new leaderships in the Central Asian landscape are quite apprehensive of China’s move in Central Asia. They think Russia is also not in a position to protect them in case of any aggression from China. Thus, Russia to regain its lost position in Central Asia may be using Taliban rule in Afghanistan as a ploy to warn Central Asian countries to fall prey to the Russian dictum.
c) Russia as part of its policy of “Greater Eurasia” is pursuing vigorous geoeconomics diplomacy. In this process, it is also interested at getting access to the new energy market. Moscow’s involvement in the construction of the Pakistan Stream Gas Pipeline and its desire to control the Afghan natural resources are few of the instances.
Some of the above reasons are propelling Russia to mend fences with the radical Taliban. However, Russia is not understanding the long-term consequences of engaging with the Taliban. This will only encourage the radicals of the North Caucasus which Russia is confronting over the years.
A question that will arise is whether Russia will continue its policy of supporting Taliban? This is in the context of growing criticism by the global community of radical Taliban and its patrons- Pakistan and China. The United Nation’s Security Council (UNSC) which met on 30 August 2021, under the chairmanship of India , “Calls for the Taliban to facilitate safe passage for people wanting to leave Afghanistan, allow humanitarians to access the country, and uphold human rights, including for women and children.” Though there was a consensus about the resolution adopted by the Council, however, Russia “abstained” from the resolution.. Similarly, China has also followed Russia’s line. This confirms that Russia is having a sympathy for Taliban in Afghanistan.
Similarly, President Vladimir Putin though in his speech at 15th BRICS Summit which took place on 9 September 2021 in virtual mode under India’s Chairmanship raised the issue of Afghanistan. Though he stated that “ we are not interested in Afghanistan remaining a threat to neighbouring countries or having terrorism” however, what is expected is a concrete plan of actions from Russia including reprimanding China and Pakistan for their nefarious role in accentuating the present crisis situation in Afghanistan . At the same time Moscow should stop support to radical Taliban.
Already resistance is mounting against Taliban from the Northern Alliance and reports suggest former Afghan National Army members are regrouping under Amarullah Saleh and Ahmad Massoud. Russia should understand that Taliban is not the legitimate voice of the Afghan people. Hopefully, Russia will rethink its Afghan strategy.
The writer teaches at the School of International Studies, Jawaharlal Nehru University, New Delhi. He can be reached at firstname.lastname@example.org. Views expressed are writer’s personal
While evaluating Russia’s stand towards Taliban, it appears that Moscow does not follow a consistent policy. It is a common fact that Russia is the worst victim of terrorism over the years. A number of studies suggest that many of the Northern Caucasian militants had taken training from Taliban in the post-1995 phase. Reports suggest, along with Taliban, Pakistan is supporting some of these militants and terrorist groups that are currently operating illegally in Russia.
YUDHBIR SINGH DADWAL, THE HANDSOME FACE OF DELHI POLICE
Yudhbir Singh Dadwal, a 1974 batch IPS officer was the 16th Police Commissioner of Delhi who served in this position for over three years. His passing away a few days ago brought back several memories, the earliest being my first meeting with him in 1980 when he was the additional DCP of New Delhi district. This was the period when Pritam Singh Bhindar was the CP and Gurcharan Singh, the DCP of the district. Dadwal was always well turned out and preferred to wear a beret instead of the usual peak cap, which most IPS officers preferred. He would invariably be present at the Boat Club which used to be the designated venue of all demonstrations and protests.
Reporters covering the crime beat would also look after the major demonstrations and thus it was very frequently that one would inter-act with this handsome police officer, whom some of us would refer as the “Boat Club Specialist’’. Of course, SI Sharma who served at the Boat Club police post for over 23 years as well as Pandit Hari Dev, the Parliament Street ACP, would also be always present. Dadwal would crack jokes with the reporters as we waited for the demonstrators to turn up and thus his association with some of us in the media started. His other batchmates—Amod Kanth, Umesh Katna and Shujauddin Sajid— were all making a mark in the police and Dadwal too was embarking on his onward journey. His first independent district posting took him to the East District where a major riot broke out in the Chauhan Bangar area near Seelampur one night.
Unfortunately, Dadwal had to proceed on leave due to some very personal reasons and the riot was quelled by his boss, Surjeet Singh and his colleague, J.P.Singh. Thereafter, one would continue to run into Dadwal at the Police Headquarters and he would always have some interesting anecdote to narrate.
Subsequently, he joined the R&AW and was posted at Rome. Perhaps it was the nature of his job that brought about a change and he inter-acted with very people, I being one of them. When Dr K.K. Paul was about to complete his distinguished career with Delhi Police, there was speculation on who would succeed him. Kiran Bedi was the next in line in terms of seniority (1972 batch) but the Home Ministry seemed interested in someone else other than her. It was at this time, Dadwal would sometimes call up to find out what the developments were since he had emerged as the front-runner. Finally, he was selected. He was extremely helpful and When Hindustan Times, where I was working at that time, organized an AR Rehman event in Rajouri Garden, the permission was held back since clearances had not been obtained. It was Dadwal who helped in resolving the situation and provided vital inputs to get the permissions before instructing his DCP to go out of the way and allow the event. After Delhi Police, he went to the SSB and thereafter met a very few people.
I had not seen him in many years and the news of his sudden demise shocked me as it did everyone else. He would have been 70 next month. However, his friends, well-wishers, colleagues and associates would always remember him as an outstanding person and an able police officer.
Modi masterstrokes: Telecom reforms and ‘bad bank’
Setting up a ‘bad bank’ and undertaking the telecom reforms are only the added dimensions to the long trajectory of structural and process-driven reforms by the Narendra Modi government, and yes, there is more to come.
The Union Cabinet last week cleared big-bang telecom reforms that include, among other things,100% foreign investment through the automatic route. These reforms will usher the telecom industry into a new era, boost investment and reduce the debt burden and ease cash flows. The Cabinet also allowed a four-year moratorium on all dues that telecom operators have to pay to the government, including annual payments of dues arising out of the adjusted gross revenue (AGR) judgement and spectrum purchased in past auctions, excluding the March 2021 auction. The moratorium will start from October 1, 2021. These reforms are deep, broad and structural. They will bring in change today and in the future as well and are revenue-neutral for the government. Moratorium or deferment on due payments of spectrum purchased in past auctions (excluding the auction of 2021) for upto four years, with net present value (NPV) protected at the interest rate stipulated in the respective auctions is a landmark step.
Option to the telecom players to pay the interest amount arising due to the said deferment of dues by way of equity is a huge step too that will drastically bring down the unsustainable debt levels of some players. This will also help various banks having substantial exposure to the telecom sector.
The definition of AGR which had been a major reason for the stress in the sector, has been rationalised by excluding non-telecom revenue of telecom companies from the ambit of AGR, with prospective effect. AGR refers to revenues that are considered for payment of statutory dues. Telecom companies had been asking for a change in definition of AGR since 2005 and it finally happened in 2021, thanks to sweeping, bold reforms by Prime Minister Narendra Modi. A four-year moratorium to pay government dues (but with interest) is a welcome step too.
The Modi government has also allowed permission to share scarce airwaves. The scrapping of spectrum usage charge (SUC) for airwaves acquired in future spectrum auctions is again a decisive measure. And though this is with prospective effect, it will lead to massive savings for telecom players, as currently anywhere between 3-5% of AGR is paid as SUC and about 8% of AGR, as license fee. Allocation of spectrum through an auction for a period of 30 years, compared with the 20-year period prevalent at present, is another out-of-the-box move. Also, telecom operators will be allowed to surrender the spectrum that will be acquired in future auctions, after 10 years of the lock-in period. In effect, the recent telecom sector reforms by the Modi government will restore back to health a sector that was repeatedly impaired by successive Congress regimes that squeezed the sector by forcing companies to bid for auctions at ridiculously expensive prices. Thereafter, license fees, SUC, penal taxes, only made the going more difficult for telcos, making even the banks who loaned large sums of money to these telcos saddled with NPAs and bad debts under incompetent Congress dispensations. However, all that will now be a thing of the past as the recent measures will put the sector back on track.
Easing of customer acquisition norms for telecom operators by replacing the need to fill physical forms with digital forms, for instance, shows the minute detailing that went into the relief package announced for telecom players.
In effect, the structural and process reforms in the telecom sector will protect and generate employment opportunities, promote healthy competition, protect interests of consumers, infuse liquidity, encourage investment and reduce regulatory burden on telecom service providers (TSPs). In the backdrop of the outstanding performance of the telecom sector in meeting Covid-19 challenges, with huge surge in data consumption, online education, work from home, interpersonal connect through social media, virtual meetings etc., the reform measures will further boost the proliferation and penetration of broadband and telecom connectivity. The reforms reinforce Prime Minister Modi’s vision of a robust telecom sector, with emphasis on competition, customer choice, antyodaya for inclusive development, bringing the marginalised areas into the mainstream and universal broadband access to connect, the unconnected. The package is also expected to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks.
Huge reduction in bank guarantee (BG) requirements (80%) against License Fee (LF) and other similar levies, are an important step too. Henceforth there will be no requirement for multiple BGs in different licenced service areas (LSAs) regions in the country. Instead, one BG will be enough. Also, from 1st October, 2021, delayed payments of License fee (LF)/spectrum usage charge (SUC) will attract interest rate of SBI’s marginal cost of lending rate (MCLR) plus 2%, instead of MCLR plus 4%, which will give huge breathing space to telcos. Interest will be compounded annually instead of monthly, with penalty and interest on penalty removed. For auctions held henceforth, no BGs will be required to secure instalment payments, as industry has matured and the past practice of BG is no longer required. Additional SUC of 0.5% for spectrum sharing has been removed.
Ease of doing business is being promoted, with cumbersome requirement of licenses under the 1953 customs notification for wireless equipment, removed. Self-kyc (App based) has been permitted. E-kycrate has been revised to only one rupee. Shifting from prepaid to post-paid and vice-versa will not require fresh kyc. Paper customer acquisition forms (CAF) will be replaced by digital storage of data. Nearly 300-400 crore paper CAFs lying in various warehouses of TSPs, will not be required. Warehouse audit of CAF will not be required. SACFA clearance for telecom towers has been eased. DoT will accept data on a portal based on self declaration basis. Portals of other agencies (such as civil aviation) will be linked with DoT Portal.
The Modi government is also laying down the framework for incorporation of a “Bad Bank” with all the regulatory approvals in place.
The high level of provisioning by public sector banks (PSBs), of their stressed assets calls for measures to clean up the bank books. An asset reconstruction company limited (ARCL) and asset management company (AMC) is being set up to consolidate and take over the existing stressed debt and then manage and dispose the assets to alternate investment funds (AIFs) and other potential investors for eventual value realization. The incorporation of the national asset reconstruction company limited (NARCL) was registered with the registrar of companies (RoC) on 7th July, 2021. Paving the way for a major clean-up of bad loans in the banking system, the Modi government last week cleared a Rs 30,600 crore guarantee programme for securities to be issued by the newly incorporated ‘Bad Bank’ for taking over and resolving non-performing assets (NPAs) amounting to Rs 2 lakh crore.
The Reserve Bank of India is in the process of granting a licence for the National Asset Reconstruction Company Limited (NARCL), following which toxic assets worth Rs 90,000 crore that banks have already fully provided for, will move to the NARCL. The Cabinet’s decision to extend a five-year guarantee for NARCL-issued security receipts to banks completed the entire cycle of cleaning up India’s banking system, that began with the recognition of the extent of bad loans in 2015. The erstwhile Congress led UPA never fully provided for bad loans. Instead,the Congress ran the banking system like a private fiefdom by spending good money, after bad. NPAs were not fully recognised during the UPA era and banks were forced to lend money to fraudulent companies, so that they could simply repay the earlier loans availed from banks, by these companies. In effect, the erstwhile Congress regime ran a huge “ponzi scheme”, with banks being made unwilling and often, willing accomplices. Prime Minister Narendra Modi’s zero tolerance for corruption, rewrote the rules of the game in the last seven years, with banks being restored back to health.
Under the new proposed mechanism, the NARCL will acquire assets by making an offer to the lead bank. Private sector asset reconstruction (ARCs) firms may also be allowed to outbid the NARCL. Separately, public and private lenders will combine forces to set up an India Debt Resolution Company (IDRC) that will manage these assets and try to raise their value for final resolution. The Modi government has completely overhauled the banking system by tightening prudential norms and recognising bad assets. A 15% cash payment would be made to the banks based on objective valuation and the rest 84% will be given as security receipts (SRs). For those to hold on and have their value intact, there is a need for the government to give a back-stop arrangement and that is why Rs 30,600 crore has been cleared by the Modi government.
Once the NARCL and the IDRC have finally resolved the bad assets, preferably as a going concern and not through liquidation proceedings, the balance 85% held as security receipts would be given to the banks. The government back-stop of Rs 30,600 crore will come in only as much as to pay the gap between the realised value and the face value of those receipts and, this will hold good for only five years. While there are 28 ARCs in the private sector, they did not take up big ticket resolutions, so a need was felt for government-backed security receipts and the NARCL. The whole idea is to ensure that value that is locked in the assets is realised and comes back to the banks; Banks then use it as “Growth Capital” and the banking system becomes more robust. The five-year limit on the guarantee, with an increase in the fees charged for the guarantee every year, is an incentive for the resolution process to be completed at the earliest. The Modi government has addressed the issues facing the banking system in totality, that in 2015 was a major challenge for the economy. The twin balance sheet problem which caused a lot of stress has been resolved in a holistic way. The government guarantee for the proposed security receipts is a positive stepping stone for unlocking stressed assets. The upfront cash payment by the NARCL to banks will immediately be accretive for the profitability and capital of the banks. The ability of the NARCL to resolve these assets in a time-bound manner will be critical for future provision writeback by banks and that is precisely what the NARCL will look to do.
Public sector banks will have a 51% ownership in the NARCL, while their shareholding along with that of public sector financial institutions will be capped at 49% for the IDRC, with private lenders bringing in the rest of the equity capital. About 16 banks, including private players, would put up about Rs 6000 crore as equity for the NARCL. These are some pertinent lines spoken by PM Modi,at the CII conference in August 2021: “Our government is ready to take the biggest risk in the interest of the nation. GST was stuck for so many years only because those who earlier in the government could not muster up the courage to take political risks. We not only implemented GST but today we are witnessing record GST collection. Recently, we decided to scrap retrospective tax which was praised by the industry. It will strengthen the bond between the government and industry.” Well, setting up a “Bad Bank” and the telecom reforms, are only an added dimension to the long trajectory of structural and process driven reforms by the Modi government and yes, there is more to come.
The writer is an economist, national spokesperson of the BJP and the bestselling author of ‘Truth & Dare: The Modi Dynamic’. Views expressed are writer’s personal.
WILL PM MODI’S MAGIC WORK ON BIDEN AND HARRIS TOO?
Irrespective of what his diehard detractors might say, PM Narendra Modi has devised his own distinct, characteristic and inimitable charm toolkit which helps him trigger positive vibes in his foreign counterparts and generate personal rapport and chemistry. What can be a more convincing than the fact that he was able to develop strong personal chemistry with two US Presidents, Barak Obama and Donald Trump, who were individuals of such contrasting personalities and different from each other like chalk and cheese. With this background, there shouldn’t be any doubt that Narendra Damodardas Modi and Josheph Robenette Biden Jr will hit off well; though there will be no raucous Rock star like reception in Madison Square Garden as happened before Modi met Obama, nor a carnival like Howdy Modi in Houston where the Indian PM literally owned the stadium and introduced the US President Donald Trump to 50,000 strong Indian Americans.
Biden and Modi have talked on phone and met virtually thrice at the QUAD summit (March 21), Climate Change Summit (April 21) and G-7 Summit in June this year. The US Defence Secretary Lloyd Austin and the Secretary of State Antony Blinken have visited India respectively in March and July this year. And keeping pressure on India to announce her Net Zero commitment by 2050, the US Presidential Envoy on Climate Change, John Kerry has visited India in April and September. During his last visit, Kerry launched the Climate Action and Finance Mobilization (CAFM) with India which will focus on: finance mobilization, clean energy and climate adaptation measures.
The US defence exports to India remain on a high .Both have signed three foundation Communication agreements: LEMOA, COMCASA, and BECCA. India has been accorded the major defence partner status bringing her on par with USA’s NATO allies and given SAT-1 status that will facilitate transfer of sensitive American technologies for civilian and defence use. Obviously, India and USA have overcome the hesitation of history and come closer than ever militarily.
There has been extensive sharing of information and satellite images and intelligence inputs to fight international terrorism, cybercrimes and money laundering.
In spite of disruptions caused Covid-19, in 2019-2020 bilateral trade between India & the US was estimated at US$88.75 billion; India’s trade surplus with the US in 2020-21 was US$ 23 billion. The US has replaced Saudi Arabia as the second largest supplier of oil. Nonetheless, the Trade and Industry Minister Piyush Goel was quoted to have said recently that a trade agreement with the US wasn’t likely in near future, not even a mini trade deal. The US, focused on addressing its trade issues with China, isn’t interested in signing any trade agreement. The US is believed to be demanding market access for its agri products, a sensitive area for India, and substantial amendments to IPR and laws related to data protection. On its part, India also seeks market access for its automobile parts, engineering and agro product and a relook at the GSP which stands withdrawn, and the long pending demand for a toatalisation agreement. H1B visas issue and certain regulations have impacted Indian tech companies adversely.
After some initial hiccup, the US extended assistance to India on a mission mode in the face of devastation caused by the second wave of Covid-19 pandemic. The total US Covid-19 related assistance including contributions from the Indian Americans was worth over US$ 500 million.
Both the Trump and Biden administration have been supportive of India on the issue of Chinese aggression across the LAC. As a matter of fact, increasing Chinese assertiveness and aggressiveness brings India-US nearer though our threat perception of China, which remains in occupation of Indian territory and with which we have an unresolved boundary dispute aren’t identical.
It’s largely the China factor which has led the US to acknowledge India’s salience in the QUAD and Indo-Pacific. It was Donald Trump who introduced a virtual blood transfusion in the QUAD which was lying in limbo since 2007 and redefined its role. He also rechristened the Asian–Pacific into Indo-Pacific underlining India’s relevance. Leaders of QUAD, at their summits, have been stressing that they stand for a free, open and inclusive Indo-Pacific with freedom of navigation and over flights and peaceful resolution of territorial disputes as per the International laws including the UNCLOS. This will be reiterated at the forthcoming QUAD summit as well. Modi might emphasize his concept of SAGAR: Security and Growth for all in the Region.
Notwithstanding the claims of the concerned States to the contrary, China considers both the QUAD and Indo Pacific as primarily anti-China groupings. Interestingly, Russia shares this perception.
To dilute this perceived anti-China slant, at the virtual summit of QUAD in March 21, the leaders identified new areas of cooperation: new technologies, developing alternative supply chains and getting 2 billion doses of Covid-19 vaccine produced mostly in India with financial and logistic support from Japan and Australia. Fighting terrorism, cybercrime, and cooperation in maritime piracy are also likely to be discussed at the forthcoming QUAD summit that might be organized on a hybrid format—that is Biden and Modi attending in person while the Japanese and Australian PMs joining virtually.
The announcement of the formation of a trilateral Security partnership between the US, the UK and Australia (AUKUS) ostensibly to confront China and USA’s decision to help Australia develop nuclear Powered submarines has not only enraged China and provoked France to recall it’s ambassadors from Washington and Canberra but also cast a spell on the future of QUAD.
On the first visit to US in Sept 2014,PM Modi publicly advised Obama in his speech at the Council of Foreign Affairs not to withdraw from Afghanistan in hurry. The same sage advice was conveyed to Trump. India went on repeating that there is nothing called good Taliban or bad Taliban, they are the same and essentially bad. But the war weary US, desperate to get out, assiduously courted the Taliban with Pakistani and Qatari help and signed an agreement in Doha in March 21 which was a total surrender to Taliban. American withdrawal was humiliating; it left Afghan people, especially women at the mercy of an undemocratic regime. Regrettably, the US showed utter disregard to possible spike in security challenges of India posed by the Taliban Government comprising of 14 internationally wanted terrorists.
With Vice President Kamla Harris and Democrat Congresswoman Pramila Jayapal in the background, Joe Biden might flag reports of increase in alleged violations of freedom of expression and religious tolerance in India. His soaring speech in the UN might cover fight against the unprecedented pandemic, Climate change, international terrorism, and underline the need of strengthening the UN, WTO, and WHO and might allude to the negative role being played by some countries like China and Pakistan.
PM Modi’s dynamic leadership and the global re-ordering
In the global re-ordering that is now in the offing and in the unmistakable shift eastward, the compass also points India-ward. As PM Modi embarks on his US tour, the first since the re-ordering began, these dimensions are emerging with certainty.
As Prime Minister Modi embarks on his UN and US visit, it is interesting to see how he has pushed the Indian narrative of crisis management and handling over the last two years. Modi’s politics is not the politics of resentment, he does not speak of the rise of India as being propelled by the narrative of humiliation. When he speaks of India’s rise, he speaks of a benevolent rise, a rise with responsibility. Since March 2020, amidst many a dire prediction of India reaching the nadir in her struggle with the pandemic, Modi’s politics of aspiration, of India’s benevolent rise has triumphed. This has been attracting global recognition.
Public intellectual, S. Gurumurthy has argued that now, ‘India’s stature has altered to its advantage and the global structure and its perception about India too have changed…The investment India has made in its democratic institutions and rule of law is now both a matter of global attention and attraction.’ This rule of law, under Modi, has not been a coercive right denying approach, it has based itself on a sense of duty rather than being only a clamour for rights.
It is interesting to note, that much before some of the leading global minds discussed the effects of the pandemic and its impact on a global re-ordering Modi had already articulated India’s position. At a time when the pandemic had hit, when confusion prevailed globally on how to handle it and when the narrative of isolationism and disconnectedness hit the stands India’s position was perhaps the most nuanced and farseeing. Prime Minister Modi had said, that the pandemic ‘does not see race, religion, colour, caste, creed, language or border before striking’ and that ‘our response and conduct thereafter should attach primacy to unity and brotherhood. We are in this together.’ Modi argued that ‘unlike previous moments in history, when countries or societies faced off against each other, today we are together facing a common challenge. The future will be about togetherness and resilience.’ It is instructive to understand this against the canvas of the ongoing global discourse on re-ordering.
PM Modi’s emphasis on the need to put human beings at the centre of the vision for global prosperity, his insistence that there should be a free and ‘open sharing of the benefits of medical research and development, of the need to develop adaptive, responsive and humane health care systems, evolve new crisis management protocols and procedures for an interconnected global village’ and the need for reforming intergovernmental organisations like WHO, was the first such a clear articulation of the future re-ordering, the world after the pandemic-inflexion point. It was also becoming clear that the East had performed better in terms of handling the pandemic and addressing the multi-dimensional complexities arising from it. After this stand was articulated, one saw thinkers like Henry Kissinger and Joseph Nye take a similar line. While Nye spoke of the need for the United States to ‘launch a massive COVID-19 aid program— a medical version of the Marshall Plan, Kissinger argued that leaders must choose a path of cooperation that ‘leads towards international resilience’ against such global crises in the present and in the future. Nye also spoke of the need for leaders to articulate ‘the importance of power with rather than over others and set up bilateral and multilateral frameworks to enhance cooperation. In Nye’s framework a ‘cooperative and soft-power enhancing policies’ could create a ‘geopolitical path to a better world.’ India’s insistence, since the early days of the pandemic, had already been this— the need for a cooperative, soft-power enhancing, multilateral, synergized and resilient framework.
Modi has also been repeatedly speaking of the Asian century. One had heard of the rise of the East, or narrative of the Asian century, in the past, when vast tracts of Asia were under colonial subjection, material exploitation and cultural subjugation. PM Modi’s reference to the 21st century being the Asian century, in the present context, needs to be read against the backdrop of Asia on the verge of a major shift eastward post pandemic.
Francis Fukuyama, for instance, has spoken of the continuing shift of the ‘global distribution of power’ eastward, since ‘East Asia had done better at managing the situation than Europe and Asia.’ Diplomat scholar Kishore Mahbubani, for instance, argued that the ‘deference to Western societies, which was the norm in the 19th and 20th centuries’ will be replaced by ‘a growing respect and admiration for East Asian ones.’ As Gurumurthy too has argued, ‘Covid 19 has exposed the hollowness of assumptions of the world order based on Western experiences which were experimented on the Rest from 1990s.’ Singapore Prime Minister Lee Hseing Loon has also joined PM Modi in speaking of an ‘Asian century.’ The pandemic, Mahbubani, argues, could ‘mark the start of the Asian century.’ In a post Covid order, Asia will be looked upon as a role model, he observes, ‘not only for how to handle a pandemic but how to govern more generally.’
That governance was carried on with and not just managed, despite gargantuan pressures of a once-in-a-century pandemic, was best seen in an India under its onslaught. Economic recovery, mega infrastructural push, the ushering in of a futuristic and transformative national education policy, the time-bound development of a vaccine and the humongous effort to administer it to a massive and varied population, the handling of the oxygen supply dimension, among other things, perfectly demonstrated Asian resilience and one-pointedness in times of acute crisis. Ultimately the examples that will define and represent the Asian century will be examples that have been successful and transformative in an inherently and unshakably democratic environment, driven by synergy, national cohesion and inspiration, brought forth by the sense of collective duty and shorn of any hectoring and coerciveness. In all of these India is bound to stand out. Among the eastern countries, India’s handling of pandemic, in a most varied and complex setting, her reaching out to countries across the region and developing a web of cooperation, is another dimension that stands out.
American journalist and author, James Traub, for instance, argued that Asian democracies show that ‘citizens can surrender some’ of their ‘freedom without sacrificing fundamental political rights.’ In India’s handling of the pandemic, freedom remained intact, and the sense of civic responsibility and commitment grew, while fundamental political rights remained undiluted and protected. Those who have peddled the ‘dictator’ Modi narrative, directly or indirectly, or had thought that the pandemic would offer an ‘ideal’ opportunity to prove their thesis right, were disappointed. In their unrelenting opposition to Modi, they failed to spot the actual dictators, the failing democracies and the faltering republics.
In the global re-ordering that is now in the offing and in the unmistakable shift eastward, the compass also points India-ward. As PM Modi embarks on his US tour, the first since the re-ordering began, these dimensions are emerging with certainty.
Anirban Ganguly is director, Dr Syama Prasad Mookerjee Research Foundation, New Delhi. The views expressed are personal.
PM Modi has also been repeatedly speaking of the Asian century. One had heard of the rise of the East, or narrative of the Asian century, in the past, when vast tracts of Asia were under colonial subjection, material exploitation and cultural subjugation. PM Modi’s reference to the 21st century being the Asian century, in the present context, needs to be read against the backdrop of Asia on the verge of a major shift eastward post pandemic.
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