News & Events
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1. Can India Grow With Unreformed Power?
There are limits to the viability of financial engineering solutions to what is essentially a political problem. This is what is clear from the legal tussle over an attempt by an Andhra Pradesh power distribution company (discom) to buy power from the spot market, overriding objections by the central government.
The Andhra Pradesh High Court has ruled that the discom can make the purchase and the Union power ministry has decided to contest the ruling in the Supreme Court. The case really points to the fact that there can be no shortcuts to the essential political solution of levying reasonable users’ charges and overseeing a functional market for power nationally.
The Centre issued an order in July 2019, asking discoms to maintain letters of credit in favour of power producers or face curtailment in electricity supply by regional load despatch centres. This is to persuade state utilities to pay for the power they consume.
The fact also is that there seems a sorry lack of political will to walk the talk on distribution reforms. Instead, there seems perverse incentive on the part of the powers that be to curry favour with the electorate, and routinely overlook widespread revenue leakage, sheer non-payment and plain theft of electricity. It has meant rising dues of discoms to power producers, now put at over Rs 1.25 lakh crore.
The constant under-recoveries in power distribution has, unsurprisingly, led to moribund finances of discoms, and a lack of resources to even provide bank guarantees for power purchase.
The way forward is for politicians to muster the courage to say that those who consume power must pay for it. Without that, power would be scarce, electricity would be a major source of financial slippage and growth would be undermined.
2. Trishul Against Covid: Jab, Open Shop, Mask
To stop eating to avoid being poisoned is a path to suicide. Lockdowns have the same effect, not just on the economy but on its very ingredients: livelihoods and lives. With vaccination underway, there are three major impediments to keeping lives and livelihoods safe — one, shutting down, or severely restricting, means of earning; two, creating a lag between those vaccinated and those yet to be jabbed, the latter running a higher risk of spreading the virus; and three, non-implementation of the two safety measures of mask-wearing and physical distancing.
The direct effects of lockdowns are devastating — income losses, businesses grinding to a stop or slowing down calamitously. Lockdown is throttling by policy. On the vaccination count, India simply has to crank up production and delivery. As Narayana Health chairman Dr Devi Shetty insists in a ToI article, vaccinations must include 20-45-year-olds too — not because they are at high risk, but because they pose the highest risk as ‘super-spreaders’.
For this, vaccine production has to be super-scaled up. As argued in this column before, GoI should buy out Covaxin’s intellectual property rights (IPR) from Bharat Biotech and allow companies with manufacturing prowess to produce the licensed product in large quantities. But it is public disregard for precautions that undermines all precautions.
Whether it’s political rallies, protest gatherings, celebrations or the health ministry’s worry, the upcoming Kumbh Mela, mask and distancing are being thrown to the wind. Penalties for non-implementation must be strict — not wearing masks or congregating in big gatherings must ‘hurt’ far more than fretting over mask-wearing or staying away from crowds.
Measures like night or weekend curfews are not just an eyewash but literally ‘crowd in’ earlier hours and weekdays. Keeping workplaces open with precautions, ramping up vaccinations, and stepping out with masks and keeping ‘do gaz doori’ feed off each other. If one goes for a toss, the risk of everything crumbling is very real.
3.Mixed messaging: Politically sanctioned events threaten to set off a second Covid peak
Despite the sharpest weekly Covid surge – last week’s fresh infection count of 2.6 lakh was 1.05 lakh cases more than the week before – contradictions galore mark the Indian response. Blunt instruments like lockdowns and night curfews have been imposed on Maharashtra, Gujarat, Punjab, Madhya Pradesh and Rajasthan. Lakhs of livelihoods are again threatened, but potentially superspreader events like the multi-state election campaigns and the Kumbh Mela in Haridwar are being glossed over even as they violate all Covid safety norms. Massive human congregations are spared social distance policing while individual livelihoods get axed. Such are India’s cruel paradoxes.
Since last September when the first Covid wave peaked, India’s economy has raised itself several notches. Encouraging GST collections are just one manifestation of revival. Carelessness at this point, which has all the markings of a second wave, could drag us down again. Governments are in a mood to blame citizens instead of getting their messaging right. This sarkari attitude defends peremptory imposition of lockdowns by blaming social distancing violations for forcing their hand. Such doublespeak that practises political expediency but punishes citizens when infections go out of hand must stop forthwith.
While there’s still time, leading politicians from the PM and CMs down to Union/ state ministers and top opposition leaders must insist on masking at their rallies. Unfortunately, digital rallies find no favour. Given the enormous expenditure running into crores that political parties incur on the campaign trail, distributing free masks at rallies will hardly tax their purses (wholesale prices of surgical masks have dropped below Re 1 and of N95 masks to Rs 10). No less worrisome is the Kumbh Mela where an estimated 30 million pilgrims are expected, despite the once in 12 years congregation being shortened to one month.
A number of people are testing positive daily in Haridwar questioning the wisdom of Uttarakhand CM Tirath Singh Rawat overturning his predecessor’s decision to mandate Covid negative certificates. With lakhs of devotees fanning out across the country after the pilgrimage, the second wave could go fast out of hand. Vaccination, the other countermeasure, has progressed far too slowly to make a perceptible difference. One option is to initiate mass vaccination in the 50 districts with surging case count. Another is to further relax priority restrictions nationwide. Scrap all movement restrictions, mandate masking and vaccinate faster. Don’t mess with the economy again.
4.Vote banks everywhere: But election manifestos targeting fiscal benefits to earmarked social groups, have downsides
Election manifestos of political parties competing for seats in the forthcoming elections of five assemblies display a common thread. In keeping with tradition, there’re fiscal promises that’ll severely test FMs in future. However, it’s another trend gaining traction that’s more worrisome. Some of the fiscal concessions are designed to cater to group identities. This is an extension of community specific development boards in some states. The fallout of this phenomenon will be the balkanisation of society as the message sent is that hardening of narrow group identities can translate into economic benefits.
BJP’s election manifesto for Bengal has some of these features. There’s the promise of a standalone development board for Poundra Kshatriyas. Also, Matua Dalpatis have been handpicked for a monthly pension of Rs 3,000. Andhra Pradesh and Karnataka are two other states which have favoured community specific development boards. The outcome will be wider social fissures. In addition to this, electoral pitches include the promise of bringing reservation benefits to some groups. An egregious case is the decision of Tamil Nadu’s AIADMK government to subcategorise the state’s MBC reserved category just hours before election dates were announced.
Specifics of election manifestos are inherently contradictory. Along with measures such as conditional cash transfers unrelated to group identities, political parties are simultaneously slicing and dicing the electorates into ever more vote banks. Consolidation of narrow group identities will create new challenges. Moreover, it’s antithetical to the view that a job is the best form of inclusion. The environment for job creation is weakened by another kind of promise. Even now, political parties resort to promising in-kind subsidies which lead to economic distortions. DBT, easily done today, is superior to promises such as free electricity. Eventually, India benefits when political parties avoid catering to narrow interests.
5.A dark nexus in Mumbai | HT Editorial
It may have started with 20 loose gelatin sticks found in an abandoned SUV outside industrialist Mukesh Ambani’s residence, but the case has blown up, and now, the fate of state home minister Anil Deshmukh hangs in the balance. Former Mumbai police commissioner, Param Vir Singh, has accused Mr Deshmukh of running an extortion racket by reportedly setting monthly targets of ₹100 crore for certain policemen (including Sachin Vaze, arrested for his role in the SUV case). A suspended Mumbai police inspector has now written to the home department making corruption allegations against Mr Singh.
All sides are in the dock, for key questions remain unanswered. Why did Mr Singh only raise his voice against the home minister’s reported corruption after being shunted out of his post? Why was Mr Vaze, who had been suspended from the force for his role in an alleged custodial death, reinstated in 2020 and given an important post? Why is chief minister Uddhav Thackeray not ordering an immediate probe into the serious charges against Mr Deshmukh and seeking his resignation? And why is Sharad Pawar not acting against the home minister, who is his party’s representative in the state’s beleaguered coalition government?
But the issue goes beyond the immediate. No major party in the state has focused on police reforms, a possible reflection of the complicity of all actors in systemic corruption. Until the police are kept insulated from political interference, whether in terms of postings or transfers, or in terms of their investigations, the two will forever remain in an unhealthy co-dependent relationship. As political scientist Milan Vaishnav has explained in the context of politics and crime, there is a supply-side issue, where individuals (and this can extend to mean corrupt cops) seek political protection to preserve and expand wealth, and a demand side issue, where parties depend on illegal finance (and this takes the form of extracting resources from state institutions such as the police and citizens). What is needed is a charter of wide-ranging reforms in the criminal justice system that could lead to quick judicial decisions (such as on Vaze’s role in the alleged custodial killing; instead, the matter is still in court, 18 years later); in the political finance regime; and in watchdog institutions, which should strongly enforce the law and expose wrongdoings. Maharashtra must address the nexus of politics, police and crime.