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Monthly Archives: June 2011

the importance of hedging despite the alleged incorruptibility of the lokpal

 What is the best institutional architecture for fighting corruption? Should India have one, all-powerful anti-corruption watchdog or should it have several smaller ones? What if the Lokpal gets corrupted the way other institutions have? Are we better off with a strong Lokpal? Or are we better off making the CBI more independent of the government, strengthening the ‘Judicial Accountability and Standards Bill, and so on? All this, of course, coupled with a Lokpal to keep an eagle eye on politicians and bureaucrats.

a small story on the contentious issues albatrossing the lokpal bill, and possible solutions to dem.

Cash Trance

In his speech this year, the Indian finance minister announced that India would deliver the fertiliser subsidy directly to farmers from next year onwards. Shortly after the budget, the government’s National Informatics Centre insisted that it be allowed to develop the necessary software. A small update from the trenches here.

This software, sources in the fertiliser ministry told the Economic Times, will now be tested in selected districts of Rajasthan, Orissa, Tamil Nadu, Assam, Haryana and either Karnataka or Andhra Pradesh. In Rajasthan and Orissa, the pilots will be conducted in Ajmer and Sambhalpur, respectively.

For context, see this story re larger changes in fertiliser policy. And see this story re the cash transfers themselves. India really seems to be rushing to implement cash transfers without sufficiently understanding how retailers and farmers will respond to them, or what cash transfers might mean for food security and rural livelihoods.

Will be very important to track these (and subsequent) pilots, methinks.

On the crisis in India’s dryland areas…

 The green revolution came in the sixties. Tasked with ensuring food security, it pushed high-yielding varieties (HYVs) of wheat and rice over jowar, bajra et al. It began in the floodplains of the north. Where, as canals came up, farmers, realising rainfall risk was a thing of the past, switched to HYVs. In the drylands, the story evolved differently. The green revolution came here in bits and pieces. The seeds and fertilisers reached. So did the exhortations to farmers to adopt ‘modern’ farming. What did not reach was water. Predictable water supply is something the farmers created for themselves. When electricity came, they invested in groundwater pumps.

What followed was transformative . In Malwa (MP), for instance , till the early-1970 s, farmers grew jowar during the rains and Malwi Ghehu , a local wheat variety, after that. Once the pumps came in, farming became a yearlong activity. Cash crops like soya displaced jowar. HYVs of wheat displaced Malwi Ghehu. Below the Malwa plateau, the same set of changes played out more recently, as groundwater pumps came just eight years ago. This is the story across India. Groundwater (tube wells) has been the mainstay of addition to irrigation resources.

It’s a fairytale that is winding down now. India’s dryland areas are seeing soils weaken, groundwater levels collapse and rainfall get increasingly erratic. Worse, farmers cannot go back to the old modes of farming that hedged risk far better than monocropping ever can. An ET story on the crisis, why the farmers are trapped in a vise and what this portends for India’s food security future.

MFI regulation: Part Three

With SKS Microfinance challenging Andhra Pradesh’s controversial microfinance law in the Supreme Court, India might soon have an answer to the question: who should regulate microfinance institutions (MFIs), the Centre or the states? This is a question that needs an immediate answer. As non-banking finance companies (NBFCs), MFIs are regulated by the RBI. Being financial corporations – as per the Seventh Schedule of the Constitution – they come under the Centre. See them as moneylenders and the same Seventh Schedule makes them a state subject. This ambiguity in law is one reason why, despite MFIs getting desperate, neither the RBI nor the finance ministry can get the Andhra Pradesh government to abandon the Act.

Slowly, the regulatory regime for the MFIs takes shape. The thing I am marvelling about, though, is this. The new regulatory regime looks like it will be the amalgam of the steps taken by assorted institutions trying to fix the problems they see — the AP Ordinance plus the Malegam committee recommendations plus the Microfinance Bill plus the Supreme Court verdict. As opposed to, say, a unified policy response to the crisis in/by the sector.

Which is roughly what I had also seen while studying the drafting of the Forest Rights Act in 2009. Law making, unlike what Akhileshwar Pathak writes in Laws, Strategies and Ideologies,  can actually be the sum of disparate parts being strung together. (I should upload that paper soon. Soon, once I, sigh, finish its damn conclusion)

Also, this is my third story on how the regulatory regime has been evolving. The first one, written last June, looked at why complexity was nobbling the government’s attempts to fathom how to regulate the sector. The second, written a month later, looked at other regulatory alternatives before the government.

Prakash Bakshi’s To-do list at Nabard

After much speculation, Nabard has finally appointed Prakash Bakshi as its chairman.

He is assuming charge at a difficult time. Nabard was set up to ensure credit flows for agriculture and rural development, a vitally important role in this country. But, over the years, agricultural production has come to lag behind agricultural credit, raising questions about how the credit flows are being used. There are other challenges. Some of which are well known — like the Microfinance Bill that Nabard is drafting. And some others that are less known.

For more on what these challenges are, um, click hither.

Baba Ramdev sets out to cure corruption

On Thursday, more out of curiosity than anything else, I tagged along with a friend who was heading to Delhi’s Ram Lila Maidan. Baba Ramdev who was, till now, trying to clean the body through yoga, is now out to cleanse the body politic (thanks for the line, rama). And has consequently announced that he will begin a fast, from saturday onwards, till the government agrees to to his suggestions on how to crack down on corruption.

The whole thing is fascinating. Like Anna Hazare, Baba Ramdev is fasting not to get his grievances registered. But to have his recommendations accepted as policy. You, dear gentle reader, can read about his demands, in this quick and dirty story I filed after that little traipse through Ram Lila Maidan.

I am still processing what I saw there. Talk to the people there and you hear one uncomplicated narrative repeatedly: India was once a ‘Soney Ki Chidiya’ — the golden sparrow, the need to restore that state of affluence, the allusions to an ancient, akhand bharat that also comprised Lanka, Bangladesh, Bhutan, Pakistan and Nepal, etc, etc, etc. My friend Rama calls this Vedic Nationalism. I need to understand this way of thinking. Hmmm.

Also, I switch on the TV and I hear talking heads banging about the illegitimacy of Ramdev as a leader. Or mocking the views of these people. To me, Ramdev seems to be as legitimate a leader as any — a large bunch of people have voluntarily agreed to follow him. As for the views, the fact that they think differently from us English speaking elite doesn’t mean they are wrong. Right and wrong, as my academic friends would say, are premodern concepts.

Am heading back there later today. More for my own understanding than anything else.