Interview: ‘We have underestimated the extent of India’s jobs crisis. It is far more serious’

and gosh. one more frikking q&a.

On Thursday, a political storm boiled over after Business Standard reported that, between 2017-’18, unemployment numbers in India reached a 45-year high. The newspaper based its report on a survey, conducted by the National Sample Survey Organisation, called the Periodic Labour Force Survey that the government had not made public. 

According to the report, the country’s unemployment rate climbed from 2.2% in 2011-’12 to 6.1% in 2018-’18. Once disaggregated, these numbers look even worse. Joblessness is higher in urban areas than rural areas – 7.8% versus 5.3%. For instance, unemployment among rural men in the age group of 15-29 years rose from 5% in 2011-’12 to 17.4%. 

The report corroborated what the government’s critics have been saying – that demonetisation and the ham-handed rollout of the Goods and Services Tax have resulted in large job losses. In a press conference called on Thursday evening, the government hit back. It claimed other datasets – like that of Employees’ Provident Fund Organisation – show employment in the economy is rising. At the event, Amitabh Kant, the chief executive officer of Niti Aayog, also suggested results of the Periodic Labour Force Survey, based on a new methodology which conducts quarterly surveys, is not comparable with older NSSO surveys.

Do these various reasons offered as defence hold up to scrutiny? Scroll.in asked Himanshu, an associate professor at Jawaharlal Nehru University.

Excerpts from an interview.

P Chidambaram interview: Minimum income plan aims to wipe out poverty, MGNREGA had limited objective

On January 28, Congress president Rahul Gandhi announced the party is “committed to a Minimum Income Guarantee for every poor person”.

His brief announcement raised more questions than answers. The financial scale of a scheme that gives a monthly income to the poor in India will be huge. Therefore, how will it be funded? If the programme is funded by, as the Economic Survey had suggested, axing existing welfare programmes, the State’s developmental role will suffer. There is also the risk of competitive populism as other political parties and states follow suit, with a progressive hollowing of the State if they redirect funds to their income support programmes.

Trying to understand what the Congress is planning, Scroll.in contacted former Finance Minister P Chidambaram, who is said to be leading the party’s thinking on income support schemes.

And so, as a followup to my Abhijit Sen interview, my colleague Rohan and I have this email interview with P Chidambaram.

Reviving the Ganga #3. Three ways in which the Modi government is adding fresh stresses to the river

A century ago, the gharial could be found all the way from the Indus to the Irrawady. The thin-snouted, fish-eating member of the crocodile family was spread out over 20,000 sq km at the time, studies estimate, and numbered between 5,000 and 10,000. Now, no more than 200 breeding adults survive in the wild.

The gharial is not the only Gangetic species at risk of extinction. The Gangetic dolphin is endangered as well. Catches of fish from rivers of the Ganga basin have declined 90% in the last 40 years, while otter numbers have dropped by a third over the last 30 years.

The well-being of these species, as also the lives of 400 million people inhabiting the Indo-Gangetic plain, depends on the revival of the polluted, erratically flowing Ganga and its tributaries. That’s what the Bharatiya Janata Party government promised to do when it announced the Rs 20,000-crore Namami Gange shortly after coming to power in 2014. The programme aimed to ensure nirmalta (purity) and aviralta (continuous flow) of the river.

Yet, four-and-a-half years later, the Ganga’s future appears more dire than ever. As the first two parts of this series reported, the efforts to control pollution in the river hinge on a public private partnership model that is untested. At the same time, rampant construction of environmentally suspect hydroelectric power projects in Uttarakhand’s Ganga basin is hampering the flow of the river.

Adding to the problems are three infrastructure projects being rolled out by the government. The Char Dham Pariyojana, a 10-metre wide all-weather road, will connect the four pilgrimage centres of Yamunotri, Gangotri, Kedarnath and Badrinath. The Inland Waterways project intends to use 106 rivers and creeks for moving cargo, while the Ken-Betwa river linking project in the Ganga basin will divert water from the Ken, a tributary of the Yamuna that feeds the Ganga, to the Betwa for irrigation and drinking water. All three projects come with heavy environmental costs.

Two of these projects – the Char Dham road and the Inland Waterways – have escaped any environmental scrutiny. The Ken-Betwa link is coming up despite warnings about environmental damage. Between these projects, falling river flows due to climate change and, as the first two reports in this series described, Namami Gange focusing much more on nirmalta than aviralta, the river’s future looks more uncertain than before.

Out today, the third — and concluding — part of our series on how the Ganga is faring. Some parts of this reporting was relatively easy — like seeing the river as an integrated whole and mulling about the cumulative impacts of all these projects on it. What is harder is this: how does one understand the curious paradox of a hindu majoritarian government which comes to power promising to revive the river but leaves it worse off than before?

Is it ecological ignorance, which leaves them unable to see the river as an integrated whole? In which case, how did they arrive at this view of nature which is so shorn of any ecological understanding? Is it cynical politics where they just rode on the issue (as they seem to have done on the Ram mandir)? In which case, what are the compulsions contributing to that cynicism? This is a question we try to answer, especially in the Uttarakhand report, where we look at why the party is pushing dams despite knowing they are harmful for the river.

But there is something else here — and you see my thoughts turning more and more inchoate with each passing word — about a politics which seems to be so unmindful of the gap between promises and actions. I find it hard to understand that too. This gap makes me think of a book I just finished reading — and need to re-read. This is Lewis Lapham’s ‘Age Of Folly‘, where he talks about how democracy in America lost its vitality.

In his analysis, a large part of the answer lies in a society which turns cynical and stops discussing these matters.

For the better part of 200 years it was the particular genius of the American democracy to compromise its differences within the context of an open debate. For the most part (i.e., with the tragic exception of the Civil War), the society managed to assimilate and smooth out the edges of its antagonisms and by so doing to check the violence bent on its destruction. The success of the enterprise derived from the rancor of the nation’s loudmouthed politics — on the willingness of its citizens and their elected representatives to defend their interests, argue their case, and say what they meant. But if the politicians keep silent, and if the citizenry no longer cares to engage in what it regards as the distasteful business of debate, then the American dialectic cannot attain a synthesis or resolution. The democratic initiative passes to the demogogues in the streets, and society falls prey to the ravening minorities in league with the extremists of all denominations who claim alliance with the higher consciousness and the absolute truth.

Easier, he writes later in the book, for politicians to sway masses by claiming virtue than by engaging on a range of questions to which they often won’t have all the answers.

But that is an impulse which is always around. Bigotry, for instance, is always around and so too the impulse to ride on it. And so perhaps the question is: how do democracies come to this sorry pass?

Reviving the Ganga #2 Modi said he would revive Ganga but his government is doing the opposite by reviving dams

The focus of their anger lay 400 kilometres to the north. Since 2002, Uttarakhand, where the Ganga originates, has been on a drive to build hydel power projects. The state, which currently produces 4,000 MW of hydel power from 98-odd projects, has since 2009 signed agreements to build another 350 dams.

Most of these are diversion dams, which block the river and divert its water through tunnels to turbines that generate electricity. The river rejoins its original course only after passing over the turbines, leaving riverbeds dry between the dam wall and the tunnel’s outlet. For instance, the Bhagirathi, one of the sources of the Ganga, runs through tunnels for half its 220-km length.

One result has been a spike in anti-dam movements in Uttarakhand, including the one by the sadhus. Maintaining that the Ganga is holy, they want it to flow without interruptions. In 2014, the BJP’s election manifesto took note of this and promised to ensure “the cleanliness, purity and uninterrupted flow of the Ganga on priority”.

Shortly after the party won the 2014 election, it announced a Rs 20,000-crore project to revive the river. Namami Gange was intended to ensure nirmalta (purity) and aviralta (continuous flow) of the river.

In Uttarakhand, ensuring aviralta was the priority. As the state’s rivers, which feed the Ganga, ran through tunnels for hydel power projects, both the rivers and the aquifers they recharged had dried up. Blasting to build dams and tunnels created new fissures into which mountain aquifers disappeared. Communities living by the river found local water sources drying up and had to walk longer distances to fetch their supplies. As dams fragmented rivers, fish such as the golden mahseer began dying out.

In addition, the new hydroelectric power projects run the risk of cataclysm. The Himalayas see both earthquakes and cloudbursts, like the one in 2013 at Kedarnath which killed over 5,000 people and damaged 4,500 villages. After the cloudburst, several hydel projects failed to hold their surging reservoirs. As they gave way, downstream valleys saw walls of water bearing down on them.

On November 1, 2010, heeding some of these concerns, the Congress-led United Progressive Alliance cancelled three hydel projects in Uttarakhand. It also declared a 100-km stretch of the Bhagirathi – from Gaumukh to Uttarkashi – an eco-sensitive zone. Two years later, environmental studies ordered by the Uttarakhand High Court proposed a minimum distance between hydel projects and suggested that each dam be required to release enough water for a river to perform its ecological functions. This is called “environmental flow”, or e-flow. One of these studies, by the Wildlife Institute of India, recommended that 24 proposed projects on the Alaknanda and the Bhagirathi be scrapped….

Oddly, after coming to power in 2014, the BJP-led NDA government rolled back all these protections. The second part of our series looks at the reasons why.

Reviving the Ganga #1. Modi’s clean Ganga plan hinges on private companies tackling sewage. Will it work?

In September 2014, shortly after coming to power, Prime Minister Narendra Modi held his first meeting on the Ganga. The river had featured prominently in the Bharatiya Janata Party’s election manifesto. The Ganga was both jeevan dayini, the giver of life, and mukti dayini, which sets the soul free, the document said.

But all was not well. “Even after decades of independence, the Ganga continues to be polluted and is drying,” said the manifesto. It went on to assert that the BJP was committed to ensuring “the cleanliness, purity and uninterrupted flow of the Ganga on priority”.

The Indo-Gangetic plain is home to a little over 5% of the world’s population. The Ganga and its tributaries bring in fresh water, recharge groundwater aquifers and drain wastewater. The survival of an estimated 400 million people – and the biodiversity amidst them – hinges on the health of the Ganga.

Modi’s meeting in September 2014 was one of the first signs the BJP intended to make good its election promise… Four-and-a-half years later, however, contradictory decisions by the government have pushed the Ganga into deeper trouble than before. On one hand, the government has moved to reduce river pollution, mainly by privatising sewage collection and treatment in 97 cities and towns along the river…

At the same time, the government has launched a set of other projects that further erode the river’s ecological foundations. Environmentalists have already expressed doubts about the Char Dham Pariyojana, a 10-metre-wide road between the temple towns of Badrinath, Kedarnath, Yamunotri and Gangotri, which is being built in the landslide-prone Garhwal Himalayas.

They have also criticised the large-scale dredging for the Inland Waterways project to ferry cargo on the river. Besides, environmentalists say, flows in the river will be hurt by the Ken Betwa river-linking initiative and the 450 hydel power projects being built on the river in Uttarakhand.

Last November, I reported on this three-part series on how our Hindu majoritarian government’s promise to revive the Ganga are coming along. Part one looked at the government’s work on pollution abatement.

Insolvency process: Competition Commission should see if monopolies are forming, says Yashwant Sinha

Over the last four-and-a-half years, the Bharatiya Janata Party-led National Democratic Alliance government has done much to constrict India’s economy.

Demonetisation hurt the smallest businesses: those of the self-employed. Their incomes are yet to return to pre-demonetisation levels. Many slightly bigger businesses, like small and medium enterprises in industrial clusters like Surat in Gujarat and Tirupur in Tamil Nadu, closed down after the introduction of the Goods and Services Tax in July 2017.

What has received less attention is the government’s ham-handed treatment of the country’s bad loans problem. The government’s insolvency proceedings have created a situation where a handful of companies are buying most of the distressed firms put up for sale by banks. The implications, as Scroll.in reported in October and November, run deep. They include both the possibility of cartelisation in the country’s core sectors and a freeze in fresh investments.

Adding to this, India’s financial institutions have taken a pounding. With the government preferring fealty over capability, institutional autonomy has come under a cloud. At the Reserve Bank of India, for instance, the government first replaced Raghuram Rajan, who opposed demonetisation, with Urjit Patel, who mutely allowed it, and then with Shaktikanta Das, who loudly defended it.

In April, Yashwant Sinha, finance minister from 1998-2002, during the Atal Bihari Vajpayee government, resigned from the Bharatiya Janata Party. He has emerged as one of the most prominent critics of the Narendra Modi government. His book India Unmade: How the Modi Government Broke The Economy, released in December, details his thoughts on what the administration has done wrong. Scroll.in spoke to him about how the economy could be revived.

Interview: Income support schemes for farmers are a cop-out, says economist Abhijit Sen

On January 1, when Indian news agency ANI asked Prime Minister Narendra Modi about the government’s plans to reduce agrarian distress, he said loan waivers do not work as a very small segment of farmers take loans from banks. “A majority of them take loans from money lenders,” said Modi. “When governments make such announcements, those farmers do not become beneficiaries of the waivers.”

Calling loan waivers a political stunt, the prime minister told ANI the government would empower farmers in other ways. In that context, an idea from the South Indian state of Telangana has been getting some attention. The state government gives its farmers Rs 4,000 per acre per year as income support. States like Jharkhand and Odisha have followed suit. The first has announced a Rs 5,000 per acre payment from next year. The second plans to transfer Rs 10,000. There is speculation that the Union government might follow suit.

It is easy to understand why politicians find these ideas attractive. As capital becomes global even as labour stays local, governments are increasingly unable to provide jobs for all their people. One outcome, according to economist Abhijit Sen, a former member of the erstwhile Planning Commission, is that politicians, increasingly unable to find answers, turn to interventions like regular cash payments to the citizenry.

The country needs to tread carefully on this idea. Income transfer schemes come with large questions. Where does the money come from? Given competitive politics, can these burgeon out of control? If so, what happens to developmental expenditure? What happens to a society where states collect revenues from a small handful of businesses and keep a large chunk of the population on the dole? Whom are they more answerable to?

Excerpts from an interview.