The HINDU Notes – 30th June 2020 - VISION

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Wednesday, July 01, 2020

The HINDU Notes – 30th June 2020

📰 India, Bhutan sign pact for first joint hydel project

600 MW Kholongchhu venture termed a ‘milestone’ in ties

•India and Bhutan took a major step forward for the construction of the 600 MW Kholongchhu project, their first hydropower joint venture project in Bhutan’s less developed eastern region of Trashiyangtse.

•The project’s “Concession agreement,” which was signed in the presence via video-conference of External Affairs Minister S. Jaishankar in Delhi, and Bhutan’s Foreign Minister Tandi Dorji and Economic Affairs Minister Loknath Sharma in Thimphu, marks a shift as it is the first time an India-Bhutan hydropower project will be constructed as a 50:50 joint venture, not as a government-to-government agreement.

•Speaking at the ceremony, both Foreign Ministers called the agreement a “milestone” in the India-Bhutan partnership, under which four hydropower projects have been built in the last 30 years totalling a capacity of 2,100 MW, and another two are under construction. The Kholongchhu project is one of four additional projects agreed to in 2008, as a part of India’s commitment to help Bhutan create a total 10,000 MW of installed capacity by 2020.

‘Mutually beneficial’

•“[The] hydro power sector has been the most visible symbol of the mutually beneficial bilateral cooperation between our two countries,” said Mr. Jaishankar at the signing ceremony between the JV Partners Sutlej Jal Vidyut Nigam (SJVN), a Himachal Pradesh PSU, and the Bhutanese Druk Green Power Corporation (DGPC).

•“I congratulate both the JV partners for this remarkable feat and hope that they will leave no stone unturned in expeditiously completing the project,” he said.

Signed in 2014

•The inter-governmental agreement for the Kholongchhu project was signed after prolonged negotiations on the structure of the joint venture, in April 2014, and the foundation stone was laid when Prime Minister Narendra Modi travelled to Thimphu a few months later.

•However, progress on preparing the site ground to a halt in December 2016 over India’s new power tariff guidelines (on Cross Border Trade of Electricity - CBTE), until the government amended its guidelines after negotiations with the Bhutan government. During Monday’s ceremony, the Bhutanese Foreign Minister said the delay had “some benefits” as many issues on the ground were ironed out during the period.

•According to the agreement finalised, the construction for the Kholongchhu Hydro Electric Power (HEP) project will begin soon, and be completed in the second half of 2025.

📰 Cautious, but firm

India must weigh its options against Chinaand engage in wider domestic consultations

•After weeks of more diplomatic wording, the statement by the Ministry of External Affairs (MEA) on June 26 appears to signal that patience in dealing with Beijing is reaching a dead end. The statement said publicly, for the first time since reports of the stand-off, that the Chinese build-up and clashes with Indian troops, including the Galwan Valley incident on June 15 in which 20 Indian soldiers were brutally killed, had a “larger context”. Moving away from previous statements that alluded to the clashes in May as quite routine, and borne from “differences in perception” of the LAC, the MEA said that PLA behaviour “this year” was a shift from the past. It also admitted that the Chinese side had built up a large armed presence since early May, making it clear that India’s strategic establishment has had much to worry about. There are other shifts of note. While each of the MEA’s several references to the situation at LAC in May and June had mentioned dialogue as the way forward, its latest statement makes it clear that it is China’s responsibility to restore peace and tranquillity along the LAC, without citing further dialogue. It warned that a continuation of the current situation “would only vitiate the atmosphere” for the relationship, indicating that the current status quo is unacceptable. In detailing the number of clashes, the use of unauthorised violence on June 15, and the sheer numbers of troops and weaponry “amassed”, the government is pointing out that China has violated every agreement on border peace that the two sides have committed to since the 1993 Agreement. In short, the message is this — not only is the situation at the LAC of concern, but China’s actions have also probably undone decades of careful negotiations on the boundary.

•Given all that the MEA statement now acknowledges, it is only inevitable that the government will face probing questions on its silence when such a large troop mobilisation by China threatened Indian frontiers weeks ago, and whether it missed signals out of Beijing that this build-up was intended. Other questions remain about Prime Minister Modi’s insistence and the MEA’s consistent stand that Chinese troops have not come across the LAC, and that there have only been “attempted transgressions” by the PLA. Satellite pictures and media accounts point to the contrary. The government must now ensure some clarity. The nation must be apprised on the challenges and the steps planned beyond ongoing military and diplomatic exchanges, to ensure that the status quo ante, prior to May, is restored by China. Each step, whether it involves military action, international support, or sanctions by banning Chinese products or the participation of Chinese telecom and other companies, will come with serious consequences, and the government must ensure wide consultations, simultaneously preparing the people for what may follow.

📰 The STARS project needs an overhaul

Instead of building state capability, the World Bank education project gives a larger role to non-state actors

•Atmanirbhar Bharat calls for an India that is able to produce and deliver local goods and services to its citizens. This applies equally to education for all children. Delivering a service, like education, requires a capable state, especially given the scale and complexity of its large and diverse population. Building state capability involves a process of learning to do things on one’s own. This is precisely the idea behind an Atmanirbhar Bharat. Fundamentally, therefore, it cannot be outsourced.

•In other words, state capability is about getting things done in the government, and by the government, by ensuring effective implementation that is responsive to local needs, but also about being able to design and conduct reforms. However, the World Bank’s STARS project, a $3 billion project to improve education in six Indian States, has the mistaken understanding that state capability should be built by giving a larger role to non-state actors and by increasing the use of technology. Both these premises are misguided as they do not contribute to the capability of the state to deliver better education. The reason is that there are some preconditions for effective governance within the public sector that must be met before either technology or non-state actors can be useful.

For effective governance

•First, the administration must be equipped with adequate physical, financial and human resources. An overburdened bureaucracy with vacancies and without basic equipment cannot be expected to be effective. Often one hears that increasing inputs is a waste of resources as they are used inefficiently. This criticism neglects the fact that for efficiency, a critical minimum level of resources is a precondition. Unfortunately, in the education sector we are short of that level in all areas.

•Second, administrative or governance reforms must give greater discretion to the front-line bureaucracy to address local issues and innovate if required. This is as much a function of better resources at the local level as of greater decentralisation of decision-making or political authorisation. The movement against corruption and towards accountability has had an unfortunate fallout on innovation for fear of misuse of an increased room for manoeuvre. Yet, for reforms to be successful, public sector entities need to be able to try new things, and at times, to fail. Outsourcing to non-state partners not just takes away discretion from state actors but also a sense of accountability and ownership towards their job.

•Third, there needs to be trust within the administration among peers and across different levels within the administration. If suspicion is the guiding principle, institutional arrangements will be geared to monitoring and surveillance, not support and improvement. The goal must be to improve, not to judge and punish.

A flawed approach

•Why is the STARS approach to build state capacity flawed? First, it fails to address the basic capacity issues: major vacancies across the education system from District Institutes of Education and Training (DIETs), district and block education offices, to teachers in schools, remain unaddressed. Without capable and motivated faculty, teacher education and training cannot be expected to improve. Similarly, at the block level, an already overburdened bureaucracy cannot be expected to perform miracles without a substantial increase in trained manpower, support staff and other forms of institutional support.

•Second, the Bank ignores that decentralising decision-making requires the devolution of funds and real decision-making power. Greater decentralisation can allow accountability to flow to the people rather than to supervising officers. It requires not just investment in the capacity of the front-line bureaucracy but also in increasing their discretionary powers while fostering social accountability.

•The issue of discretion hinges crucially on trust – the third, important element requiring attention if state capability is to be enhanced. Trust, which implies listening and collaborating across different levels within the administration, is entirely ignored in the World Bank project. Instead, the Bank displays yet again an over-reliance on Information and Communications Technology (ICT) as a panacea that lacks any backing in evidence. It is based instead on the idea that a flawed system can be fixed merely through the injection of more and better technology. In fact, technology does not address most of the systemic or governance challenges; it simply bypasses them. This is not to deny that technology has its uses, but its usefulness depends on whether preconditions for an effective use of ICT systems have been put in place. Otherwise the likelihood of exacerbating, rather than solving, problems increases. Technology as a short-cut to creating a capable state has not worked in the past.

•Fourth, measurement is seen as a way to improve performance. Yet, just like fever does not go away by checking the temperature more frequently, service delivery does not improve by measurement alone. It is important to know that temperature is high, but more important to understand why it is so. Schools in India need improvement. The question is: should money be invested in improving the capability of the system to improve learning or in testing infrastructure, that too for standardised assessments alone?

•Lastly, outsourcing basic governance functions by “expanding private initiatives” and “reducing government tasks” will not make education “more relevant to local needs” or “democratically promote people’s participation by empowering local authorities” as stated in the project document. Institutions of the state, from State-level officials who design policy changes, to district, block, cluster and school-level officials who adapt those policies for solving local problems rely on past experience (institutional memory) to meet new challenges and build additional memories with every new reform they undertake. New private initiatives do not have these institutional memories, nor do they have a grasp of socio-cultural realities that play an important part in the delivery process. While state structures need to develop more skills to enable them to solve both local and structural problems more effectively, it is not clear how they can be imparted by agencies that are extraneous to both the context and the system.

•If we want DIETs, block and community resource centres, and schools to be atma nirbhar , we need to enable them to develop their own capability to reform themselves. Outsourcing, an over-reliance on measurement by standardised assessments, and an excessive use of ICT will not get us closer to an Atmanirbhar Bharat. The World Bank would do well to learn from its past mistakes and use evidence, often times generated by its own research arms, to formulate projects. In its current form, STARS is bound to fail to deliver its core objective: to reform the governance architecture in order to improve the quality of education.

📰 Grain aplenty and the crisis of hunger

The focus on One Nation One Ration Card is misplaced when what is needed is a universal Public Distribution System

•With the economic crisis continuing on the one hand and the health system crumbling under the burden of rising COVID-19 cases on the other, it is clear that it will take a long time for things to get back to “normal”. Unemployment is high and it will take a while for lost livelihoods to be rebuilt, especially given the fact that India was already facing an economic slowdown along with high levels of inequality. Among other interventions to revive demand in the economy and create employment, it is absolutely essential that food support in the form of free/subsidised grains is made available to all without any disruptions.

An inadequate response

•As a measure to address hunger, the central government announced as part of the Rs. 1.70-lakh crore relief package under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) in the last week of March that it would provide 5kg of foodgrains and 1 kg of pulses for free to all those who are beneficiaries under the National Food Security Act (NFSA) for three months.

•As it became obvious that many were not part of the NFSA, the government, in May, almost two months after the lockdown was initiated, announced its expansion to cover an additional eight crore individuals for two months to ensure that migrants are included under the Atmanirbhar Bharat Abhiyan package. This basically meant each State being given foodgrain to the tune of 10% more than what they normally get under the NFSA. Many States were already covering more beneficiaries than was allotted to them by the NFSA, and some States made additional temporary provisions for these two months.

What needs to be done

•As many have argued, this is an inadequate response. What is required is a universal Public Distribution System (PDS) to ensure that nobody is excluded. What is also an urgent need now is for the food support announced as part of the PMGKAY and Atmanirbhar package to be extended for a longer period, as both end in June. The president of the Indian National Congress party, Sonia Gandhi, wrote to the Prime Minister last week seeking an extension in the distribution of free foodgrains until September (another three months). It has also been reported that the Union Minister for Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, in a video conference with State food ministers/secretaries on June 18, said that “around 10 States have written to the Ministry to extend the distribution of free food grains under the PMGKAY for three more months”. However, the government has not yet announced any such extension.

•Rather, the government seems to be indicating that all problems of exclusion will be resolved once the One Nation One Ration Card scheme is expanded across the country, which is supposed to be achieved by March 2021. Under ONOC, a beneficiary can receive ration entitlements as under the NFSA from any fair price shop in the country using her/his Aadhaar number and biometric authentication. This will apparently be possible once the Aadhaar numbers of all members enlisted in ration cards are seeded, which will enable transactions under the Public Distribution System across the country to be brought on to one digital platform. It has been announced that ONOC is operational in 20 States.

Biometric authentication

•Portability across States is an important and valid concern that needs to be ensured so that migrant workers can access their entitlements. ONOC, however, has a number of problems in the way it has been conceived, being Aadhaar-based. The experience of biometric authentication using electronic point of sale (ePoS) machines so far suggests that it results in exclusion of some of the most marginalised because of multiple reasons including network issues, authentication failure and so on. Keeping these concerns aside for now, it must be noted that ONOC is definitely not a solution to the immediate crisis of hunger that continues in the aftermath of the lockdown.

•The integrated management of PDS (IM-PDS) portal, which gives real time data on transactions under ONOC, shows that for the month of May, there were a total of 378 transactions (3,077 beneficiaries) under ONOC and 479 transactions (3,856 beneficiaries) in June (as on June 29, 2020). The figures for April are even lower. Ironically, Mr. Paswan is reported to have said in the same videoconference that, “in the time of Covid-19 pandemic, the scheme proved immensely beneficial for migrant labourers, stranded and needy persons to access their quota of food grains through ONOC portability”. It must not be forgotten that lakhs of migrants were stranded in different places without access to food.

Overflowing granaries

•This emphasis on ONOC is an obfuscation, while the real issue is of burgeoning food stocks along with widespread hunger. If we include unmilled paddy, foodgrain stock in the Food Corporation of India has now risen to almost 100 million MTs while the buffer stock norms is 41 million MTs. This will increase even more as there is another week of procurement open in the rabi marketing season; there will be another round of procurement of kharif crop in a few months (49.9 million MTs of rice was the procurement during the kharif marketing season in 2019-20). A universalised PDS giving 10kg of foodgrains per person per month for another four months requires about 47 million tonnes in total, assuming that nearly 85% of the population actually lifts their rations. It can be safely assumed that the rich will automatically self-select themselves out of the system. This is indicative and the actual requirements would most likely be lower.

•It is unfathomable why the PDS is not being universalised immediately especially when food stocks are at such a historic high. The government seems to be hoping to get rid of grain through the Open Market Sale Scheme (OMSS) where it sells the grains at prices lower than the procurement cost but much higher than the issue prices under PDS, so that the fiscal consequences can be contained. Earlier experiences with the OMSS do not spell much hope that this plan of the government will be successful. In the period 2017-18 to 2020-21 (up to first week of June), only 16.6 million tonnes of rice and wheat have been sold under the OMSS. The quantity sold each year was less than the quantity offered. Moreover, one-third of all sales was to State governments (almost all the rice) thereby shifting the subsidy burden to State governments. If not OMSS to private buyers, the only other options left are to either export them or let the grain go waste. Needless to say, choosing any of these options while people go hungry is nothing less than criminal.