Edit, Governance Now, Sept 16-30
Central vigilance commissioner’s appointment betrays government’s lack of interest in fighting corruption
This is a stain on the dignity of the CVC’s office which should be occupied by an officer with an unblemished record,” remarked Sushma Swaraj, leader of opposition in Lok Sabha, after registering her protest with president Pratibha Patil against the appointment of PJ Thomas as the central vigilance commissioner (CVC). It was too late by then as hours earlier Thomas had been sworn in to the office. But this aptly sums up the mood.
It was a historic moment in 1997 when the Supreme Court directed the government to involve the leader of opposition in selecting the CVC. The objective was to insulate the organisation (and hence the CBI over which it was given supervisory powers) at a time when the hawala scam rocked the nation. In the Vineet Narain case, the court had laid down the procedure: “Selection for the post of Central Vigilance Commissioner shall be made by a Committee comprising the Prime Minister, Home Minister and the Leader of the Opposition from a panel of outstanding civil servants and others with impeccable integrity to be furnished by the cabinet secretary. The appointment shall be made by the President on the basis of the recommendations made by the Committee.” This then found its way to the CVC Act of 2003.
The spirit of this judgment was undermined when the prime minister and the home minister shot down Swaraj’s objections to Thomas’ candidature. They also ignored her plea that she was agreeable to any of the other two in the panel of candidates. This raises an interesting debate over whether the three-member selection committee’s “recommendation” has to be taken to mean “consensus” or a “majority decision”. Vineet Narain, the man behind the landmark 1997 judgment, is right in pointing out that if the “recommendation” were to mean “majority decision”, there is no relevance of the leader of opposition in the committee. After all, the prime minister and the home minister can decide for themselves and save the leader of opposition from an embarrassing situation.
Swaraj’s objection was about suitability of Thomas’ candidature. The apex court was specific that the CVC be selected from among “outstanding civil servants and others with impeccable integrity”. He may have been honourably exonerated but there is no denying that Thomas was investigated for his role in the palm oil scam of Kerala some years back. More damagingly, it has now come to notice that as the telecom secretary he had sought the law ministry’s opinion on whether the Comptroller and Auditor General of India (CAG) can audit 2G spectrum scam, in which his minister A Raja is the prime suspect, on the ground that it was a policy formulation. The law ministry responded saying that 2G spectrum scam was not only beyond the jurisdiction of the CAG but also that of the CVC as it was indeed a policy matter. In such a situation it is natural to suspect that Thomas, who took charge as telecom secretary after the scam surfaced, was doing a cover-up job for his minister. Since Thomas’ predecessor Pratyush Sinha had referred the case to the CBI last year, it is no surprise that Swaraj’s party has raised a red flag saying he would, as the CVC, scuttle the CBI investigation.
Propriety and norms of good governance would suggest that the prime minister should have addressed these concerns before appointing Thomas. He didn’t.
This development is all the more worrisome because the CVC’s reputation as the apex body to fight corruption in the country is at an all-time low. Barring the expose on the Commonwealth Games contracts, it has done precious little in the past few years to inspire confidence. Hence the inevitable conclusions that it is time to revisit not only the selection mechanism of the CVC but also the relevance of CVC, given its status as an “advisory” body which can’t even register an FIR by itself.
But more important than that is the sincerity of the government to fight corruption. The way the Manmohan Singh government has tried to bulldoze corruption charges in the 2G spectrum scam, and now brazen its way through in the appointment of Thomas, probably a fresh round of public upraor against this traditional trait of the Congress governments is what can make a difference. But are we ready for that? That is a million dollar question we need to ask.
Monday, September 20, 2010
For god's sake Mr PM, Mamata has just accused your govt of murder
governancenow.com, aug 10
We don't expect Manmohan to sack Mamata, but will he at least reprimand her. Or just show disaproval?
Union railway minister Mamata Banerjee has raised a storm that the union government will find hard to ignore. "I believe Azad had been murdered. It was unjust,” she declared at a public rally in West Bengal’s Lalgarh yesterday referring to the death of Maoist leader Cherukuri Rajkumar alias Azad in a police encounter in Andhra Pradesh last month.
The implications are grave since she also referred to and relied on the information provided by Swami Agnivesh, the centre’s interlocutor trying to arrange peace talks with the Maoists. Agnivesh had earlier alleged that the union home ministry shadowed his movement to reach Azad who was carrying his message to the Maoist leadership holed up in Bastar when he was killed.
What Banerjee said clearly implies that the union home ministry was directly involved in the extra-judicial killing of Azad. If indeed that is so, the prime minister should act quickly and take appropriate measures. Given the fact that the Central Bureau of Investigation has arrested and put Gujarat home minister Amit Shah behind bars for his alleged role in a similar killing of Shorabuddin, the natural course is to order an inquiry and book whoever is responsible.
But since the finger this time is pointing towards his own government, it is unlikely that the prime minister will be quick on the draw in the use of his toy gun, the Central Bureau of Investigation. Of course, there is no reason to take Mamata's word on face value because to get to Writers' Building, she can say just about anything.
In that case, though, it is incumbent upon the prime minister to at least reprimand her openly for her calculated indiscretion that has put his government in a very embarrassing situation of human rights violation. Banerjee is not only directly implicating the union government in the murder, she is violating the principle of collective responsibility of the council of ministers.
Home minister P Chidambaram has threatened to jail civil society activists just for their ideological backing of the Maoists and questioning of the State. Who will read the riot act to Mamata? For god's sake, prime minister, she has just accused your government of cold blooded murder!
We don't expect Manmohan to sack Mamata, but will he at least reprimand her. Or just show disaproval?
Union railway minister Mamata Banerjee has raised a storm that the union government will find hard to ignore. "I believe Azad had been murdered. It was unjust,” she declared at a public rally in West Bengal’s Lalgarh yesterday referring to the death of Maoist leader Cherukuri Rajkumar alias Azad in a police encounter in Andhra Pradesh last month.
The implications are grave since she also referred to and relied on the information provided by Swami Agnivesh, the centre’s interlocutor trying to arrange peace talks with the Maoists. Agnivesh had earlier alleged that the union home ministry shadowed his movement to reach Azad who was carrying his message to the Maoist leadership holed up in Bastar when he was killed.
What Banerjee said clearly implies that the union home ministry was directly involved in the extra-judicial killing of Azad. If indeed that is so, the prime minister should act quickly and take appropriate measures. Given the fact that the Central Bureau of Investigation has arrested and put Gujarat home minister Amit Shah behind bars for his alleged role in a similar killing of Shorabuddin, the natural course is to order an inquiry and book whoever is responsible.
But since the finger this time is pointing towards his own government, it is unlikely that the prime minister will be quick on the draw in the use of his toy gun, the Central Bureau of Investigation. Of course, there is no reason to take Mamata's word on face value because to get to Writers' Building, she can say just about anything.
In that case, though, it is incumbent upon the prime minister to at least reprimand her openly for her calculated indiscretion that has put his government in a very embarrassing situation of human rights violation. Banerjee is not only directly implicating the union government in the murder, she is violating the principle of collective responsibility of the council of ministers.
Home minister P Chidambaram has threatened to jail civil society activists just for their ideological backing of the Maoists and questioning of the State. Who will read the riot act to Mamata? For god's sake, prime minister, she has just accused your government of cold blooded murder!
Another kill bill clause for nuke non-liability
governancenow.com, aug 20
Provision to take over “full liability” of nuclear installation defeats its very purpose
For the fourth time, the government has played mischief with the nuclear liability bill.
The BJP completely missed it and the Left realize the mischief only partly when the Civil Liability for Nuclear Damage Bill 2010 was passed in Lok Sabha on Wednesday.
Surreptitiously, the government added a new line to clause 7 that talks about government’s liability in case of nuclear disaster. This says, “Provided that the Central Government may, by notification, assume full liability for a nuclear installation not operated by it if it is of the opinion that it is necessary in public interest”.
This one line defeats the whole purpose of the bill, which is to fix liability of the operators of nuclear installations and the suppliers of nuclear equipments. In fact, it kills the bill.
This is how:
By taking over “full liability” of the installation, the government is completely absolving the operator of any liability. This much is clear. By not defining “public interest” nor specifying conditions under which a nuclear installation can be take over, the government provides sufficient leeway to absolve the supplier of liability too.
Besides, once a nuclear accident happens (only then the question of taking over full liability comes to play), how is one going to define “public interest”? A nuclear accident, or any accident for that matter which has an wider ramification, becomes a matter of public interest!
The government’s intentions may be different, as some may argue, but here is a law that says very unambiguously that the liability can be taken over by the government. This means, liability will be paid by the tax payers – the victims of nuclear disaster and the rest of us.
In effect, this makes the nuclear operator to operate on the premise that profits are its own, liability is that of Indian people.
The Left got it and even moved an amendment to withdraw it but it didn’t realize the full implication of the provision. Blinkered as its vision is, Basudev Acharya of the CPM said his party is opposed to this new addition to the bill on two grounds. One, this makes way for private operators and second, it means subsidizing liability of private operator.
The Left is off the mark because the entire bill is meant for private operators since all existing nuclear installations run by the central government bodies don’t and haven’t needed a bill to fix liability or award compensation. In case of an accident, the central government has “unlimited” liability.
Moreover, “subsidy” is partial liability while the bill says very specifically of “full liability”.
The BJP, of course, seemingly missed it. Rajiv Pratap Rudy, a member of the parliamentary standing committee that examined the nuclear bill, couldn’t explain, when asked, why his party didn’t protest against the latest mischief. May be his party leadership knew it and put up a charade of opposing “willful”, “intent” etc added to link liability to the suppliers while working out a deal with the government in private for other spin offs.
Prabir Purkayastha, founding member and secretary of the Delhi Science Forum, who was consulted by the parliamentary panel that went through the bill, rings an alarm bell.
“It is a very dangerous provision as it gives a complete free hand to the government to take over the operator’s liability and thereby, defeats the larger purpose of the bill”, he says. He says by not defining “public interest” and not providing the conditions under which the government can take over the liability, this can be done through an executive fiat which is a “dangerous” situation to have.
It would be interesting to watch how Rajya Sabha reacts to it when the bill is take up for passage on Monday.
Provision to take over “full liability” of nuclear installation defeats its very purpose
For the fourth time, the government has played mischief with the nuclear liability bill.
The BJP completely missed it and the Left realize the mischief only partly when the Civil Liability for Nuclear Damage Bill 2010 was passed in Lok Sabha on Wednesday.
Surreptitiously, the government added a new line to clause 7 that talks about government’s liability in case of nuclear disaster. This says, “Provided that the Central Government may, by notification, assume full liability for a nuclear installation not operated by it if it is of the opinion that it is necessary in public interest”.
This one line defeats the whole purpose of the bill, which is to fix liability of the operators of nuclear installations and the suppliers of nuclear equipments. In fact, it kills the bill.
This is how:
By taking over “full liability” of the installation, the government is completely absolving the operator of any liability. This much is clear. By not defining “public interest” nor specifying conditions under which a nuclear installation can be take over, the government provides sufficient leeway to absolve the supplier of liability too.
Besides, once a nuclear accident happens (only then the question of taking over full liability comes to play), how is one going to define “public interest”? A nuclear accident, or any accident for that matter which has an wider ramification, becomes a matter of public interest!
The government’s intentions may be different, as some may argue, but here is a law that says very unambiguously that the liability can be taken over by the government. This means, liability will be paid by the tax payers – the victims of nuclear disaster and the rest of us.
In effect, this makes the nuclear operator to operate on the premise that profits are its own, liability is that of Indian people.
The Left got it and even moved an amendment to withdraw it but it didn’t realize the full implication of the provision. Blinkered as its vision is, Basudev Acharya of the CPM said his party is opposed to this new addition to the bill on two grounds. One, this makes way for private operators and second, it means subsidizing liability of private operator.
The Left is off the mark because the entire bill is meant for private operators since all existing nuclear installations run by the central government bodies don’t and haven’t needed a bill to fix liability or award compensation. In case of an accident, the central government has “unlimited” liability.
Moreover, “subsidy” is partial liability while the bill says very specifically of “full liability”.
The BJP, of course, seemingly missed it. Rajiv Pratap Rudy, a member of the parliamentary standing committee that examined the nuclear bill, couldn’t explain, when asked, why his party didn’t protest against the latest mischief. May be his party leadership knew it and put up a charade of opposing “willful”, “intent” etc added to link liability to the suppliers while working out a deal with the government in private for other spin offs.
Prabir Purkayastha, founding member and secretary of the Delhi Science Forum, who was consulted by the parliamentary panel that went through the bill, rings an alarm bell.
“It is a very dangerous provision as it gives a complete free hand to the government to take over the operator’s liability and thereby, defeats the larger purpose of the bill”, he says. He says by not defining “public interest” and not providing the conditions under which the government can take over the liability, this can be done through an executive fiat which is a “dangerous” situation to have.
It would be interesting to watch how Rajya Sabha reacts to it when the bill is take up for passage on Monday.
Judiciary and Corruption
governancenow.com, Sept 20
The story so far
Eminent lawyer and former law minister Shanti Bhushan submitted a list of 16 former chief justices of India (CJIs) in a sealed cover in the supreme court today claiming that “eight (of them) were definitely corrupt, six were definitely honest and about the remaining two, a definite opinion cannot be expressed whether they were honest or corrupt”.
This was in connection with a contempt proceedings initiated against his son and senior advocate Prashant Bushan for levelling charges of corruption against apex court judges in an interview with Tehelka magazine.
The list includes those who became CJI between 25 September 1990 and 14 January 2007. While daring the court to send him to jail for contempt, Shanti Bhushan, who was law minister in the Morarji Desai government, explained his motive by saying, “That unless the level of corruption in the judiciary is exposed and brought in the public domain, the institutions of governance cannot be activated to take effective measures to eliminate this evil”.
* * * *
Prashant Bhushan provides evidence
Senior advocate Prashant Bhushan, who is facing the contempt of court for leveling corruption charges against former CJIs, has reiterated his allegations in a fresh affidavit to the supreme court, saying that half of the last 16 to 17 chief justices have been corrupt. He says his charges are based on his “perception based on some documentary, some oral and some circumstantial evidence, material and information”.
He takes ‘corruption’ in a wider sense as defined by the apex court in the Dr S Dutt vs State of UP case of 1966: “The word ‘corrupt’ does not necessarily include the element of bribe taking. It is used in a much larger sense as denoting conduct which is morally unsound or debased.”
Here are those former CJIs he names in the affidavit and provides evidence against. He refrains from mentioning some others on the plea that he only has oral evidence against them.
Justice Ranganath Mishra: The affidavit says Justice Mishra conducted his probe into the anti-Sikh riots of 2984 “in a highly biased manner and went on to give a clean chit to the Congress party despite there being considerable evidence implicating senior leaders of the Congress party”. He went on to become a Rajya Sabha member after retirement. “Such actions to my mind clearly smack of corruption”, Prashant Bhushan says.
Justice KN Singh: The affidavit points to a series of orders passed to favour Jain Exports and its sister concern Jain Shudh Vanaspati during his 18-day tenure, which became “much talked about scandal in the court even while he was chief justice”. These orders were later overturned by other benches of the apex court.
Justice AM Ahmadi: He diluted the charges against the Union Carbide in the Bhopal gas leak case, from culpable homicide to a mere accident. “This judgment of quashing the charges of culpable homicide before the trial not only delayed the trial but led to such miscarriage of justice that the supreme court has thought it fit to issue notice on a curative petition filed by the CBI”.
The affidavit further says Justice Ahmadi as CJI purchased a plot of land and built a palatial house in Kant Enclave in Faridabad which was “completely illegal and in violation of the supreme court’s judgments as well as the Forest Conservation Act (which) has now been emphatically stated by the supreme court itself in its order dated 14/5/08”. Ahmadi went on to dilute the restrictions placed by the apex court bench headed by Justice Kuldip Singh on construction activities around Badkal and Surajkund lakes. The CEC went on to recommend demolition of the houses of Kant Enclave, including that of Justice Ahmadi, in its report in January 2009.
Justice MM Punchhi: A move to impeach him had been made but it failed due to lack of requisite number of signatories (50 Rajya Sabha members or 100 Lok Sabha members). Several charges had been made against him, including allotment of land in Gurgaon from the discretionary quota of Haryana chief minister Bhajan Lal to his two daughters the day he threw out a writ, as a judge of Punjab and Haryana HC, making serious allegations of malafides against the Bisnoi leader.
Justice AS Anand: He has been accused of passing favourable order to a person “after he had accepted gratification” from the same person in the form of a land in Ganderbal. He “abused his office and influence as a judge and chief justice of the J&K high court to hold on to the ownership of agricultural land which should have been vested in the government under the J&K Agrarian Reforms Act of 1976”. He also got land in Jammu at a throw away price from the state government.
Justice YK Sabharwal: He provoked a series of events that led to this contempt proceedings against Prashant Bhushan. The affidavit says how his sons profited from his orders regarding sealing of commercial properties in residential areas of Delhi and how the sons ran their business from the official residence of the CJI.
The affidavit says Justice Sabharwal’s sons got commercial plots in Noida at highly concessional rates from the Mulayam Singh government at a time when he was hearing the case of Amar Singh’s tapes, the publication of which he had stayed. Also how his sons, who “till he started dealing with the sealing case, were small traders having a turnover of less than Rs 2 crore” went on to buy a property of Rs 15.43 crore in Maharani Bagh in 2007 and, bought a property at 7, Sikandara Road fro Rs 122 crore in April this year.
The affidavit explains why it is difficult to come by direct evidence of corruption against the higher judiciary –i) no investigation is allowed into charges of corruption against the higher judiciary; ii) no disciplinary authority to inquire into or take action against higher judiciary; iii) even registration of FIR and regular criminal proceedings are prohibited without written permission of the CJI which “has hardly ever been given” and iv) “the fear of contempt of court”.
The story so far
Eminent lawyer and former law minister Shanti Bhushan submitted a list of 16 former chief justices of India (CJIs) in a sealed cover in the supreme court today claiming that “eight (of them) were definitely corrupt, six were definitely honest and about the remaining two, a definite opinion cannot be expressed whether they were honest or corrupt”.
This was in connection with a contempt proceedings initiated against his son and senior advocate Prashant Bushan for levelling charges of corruption against apex court judges in an interview with Tehelka magazine.
The list includes those who became CJI between 25 September 1990 and 14 January 2007. While daring the court to send him to jail for contempt, Shanti Bhushan, who was law minister in the Morarji Desai government, explained his motive by saying, “That unless the level of corruption in the judiciary is exposed and brought in the public domain, the institutions of governance cannot be activated to take effective measures to eliminate this evil”.
* * * *
Prashant Bhushan provides evidence
Senior advocate Prashant Bhushan, who is facing the contempt of court for leveling corruption charges against former CJIs, has reiterated his allegations in a fresh affidavit to the supreme court, saying that half of the last 16 to 17 chief justices have been corrupt. He says his charges are based on his “perception based on some documentary, some oral and some circumstantial evidence, material and information”.
He takes ‘corruption’ in a wider sense as defined by the apex court in the Dr S Dutt vs State of UP case of 1966: “The word ‘corrupt’ does not necessarily include the element of bribe taking. It is used in a much larger sense as denoting conduct which is morally unsound or debased.”
Here are those former CJIs he names in the affidavit and provides evidence against. He refrains from mentioning some others on the plea that he only has oral evidence against them.
Justice Ranganath Mishra: The affidavit says Justice Mishra conducted his probe into the anti-Sikh riots of 2984 “in a highly biased manner and went on to give a clean chit to the Congress party despite there being considerable evidence implicating senior leaders of the Congress party”. He went on to become a Rajya Sabha member after retirement. “Such actions to my mind clearly smack of corruption”, Prashant Bhushan says.
Justice KN Singh: The affidavit points to a series of orders passed to favour Jain Exports and its sister concern Jain Shudh Vanaspati during his 18-day tenure, which became “much talked about scandal in the court even while he was chief justice”. These orders were later overturned by other benches of the apex court.
Justice AM Ahmadi: He diluted the charges against the Union Carbide in the Bhopal gas leak case, from culpable homicide to a mere accident. “This judgment of quashing the charges of culpable homicide before the trial not only delayed the trial but led to such miscarriage of justice that the supreme court has thought it fit to issue notice on a curative petition filed by the CBI”.
The affidavit further says Justice Ahmadi as CJI purchased a plot of land and built a palatial house in Kant Enclave in Faridabad which was “completely illegal and in violation of the supreme court’s judgments as well as the Forest Conservation Act (which) has now been emphatically stated by the supreme court itself in its order dated 14/5/08”. Ahmadi went on to dilute the restrictions placed by the apex court bench headed by Justice Kuldip Singh on construction activities around Badkal and Surajkund lakes. The CEC went on to recommend demolition of the houses of Kant Enclave, including that of Justice Ahmadi, in its report in January 2009.
Justice MM Punchhi: A move to impeach him had been made but it failed due to lack of requisite number of signatories (50 Rajya Sabha members or 100 Lok Sabha members). Several charges had been made against him, including allotment of land in Gurgaon from the discretionary quota of Haryana chief minister Bhajan Lal to his two daughters the day he threw out a writ, as a judge of Punjab and Haryana HC, making serious allegations of malafides against the Bisnoi leader.
Justice AS Anand: He has been accused of passing favourable order to a person “after he had accepted gratification” from the same person in the form of a land in Ganderbal. He “abused his office and influence as a judge and chief justice of the J&K high court to hold on to the ownership of agricultural land which should have been vested in the government under the J&K Agrarian Reforms Act of 1976”. He also got land in Jammu at a throw away price from the state government.
Justice YK Sabharwal: He provoked a series of events that led to this contempt proceedings against Prashant Bhushan. The affidavit says how his sons profited from his orders regarding sealing of commercial properties in residential areas of Delhi and how the sons ran their business from the official residence of the CJI.
The affidavit says Justice Sabharwal’s sons got commercial plots in Noida at highly concessional rates from the Mulayam Singh government at a time when he was hearing the case of Amar Singh’s tapes, the publication of which he had stayed. Also how his sons, who “till he started dealing with the sealing case, were small traders having a turnover of less than Rs 2 crore” went on to buy a property of Rs 15.43 crore in Maharani Bagh in 2007 and, bought a property at 7, Sikandara Road fro Rs 122 crore in April this year.
The affidavit explains why it is difficult to come by direct evidence of corruption against the higher judiciary –i) no investigation is allowed into charges of corruption against the higher judiciary; ii) no disciplinary authority to inquire into or take action against higher judiciary; iii) even registration of FIR and regular criminal proceedings are prohibited without written permission of the CJI which “has hardly ever been given” and iv) “the fear of contempt of court”.
Green crusader, did you say?
Governance Now, Sept 16-30
Jairam Ramesh is the toast of the green lobby for throwing Vedanta out of Niyamgiri Hills and protecting the rights of the tribals. The history of MoEF’s actions suggests otherwise.
Jairam Ramesh has become a national hero by upholding the rights of the Niyamgiri tribals and that of the ‘other traditional forest dwellers’ (OTFDs) in the POSCO project area, both in Orissa. In the case of the Niyamgiri, he withheld ‘forest’ clearance and in the case of POSCO, he withdrew it citing violations of the Forest Rights Act.
Undoubtedly, the Orissa government is guilty on both counts. But what has escaped notice is that much before these forest rights violations, Ramesh’s own ministry of environment and forests (MoEF) had granted a series of clearances, including those that he calls ‘in-principle’ clearance, to both the projects in violation of the rule of law. Had he or his ministry acted as the law required, there wouldn’t have been any need to withhold or withdraw anything. The Vedanta group’s project is now a fait accompli and the POSCO project an agonising experience for everyone involved.
To understand how Ramesh and his ministry have unleashed a regime of ‘un-principled’ governance, let’s revisit these and other well-known projects.
Niyamgiri saga
The Vedanta group came up with a project to make metallurgical grade alumina and aluminium products in Orissa. The project included setting up a smelting plant in Jharsuguda (to make liquid aluminium from alumina powder); a refinery in Koraput’s Lanjigarh (to make alumina powder from bauxite) nearly 400 km away and mining of the Niyamgiri hills (to mine bauxite), about five km of aerial distance from the refinery. Obviously, all three operations are inter-linked and inter-dependent and work started on all three simultaneously.
You would expect the MoEF to consider and give (or deny) clearance to the project in its entirety and at one go. What actually happened is quite bizarre.
The smelting plant of Jharsuguda got environment clearance on March 7, 2007. The Lanjigarh refinery got environment clearance on September 22, 2004. The mining (by the Orissa Mining Corporation, which would then pass bauxite to Vedanta) got environment clearance on April 28, 2009.
Meanwhile, Vedanta sought environment clearance to expand its refinery capacity from one million tonne to six million tonne and received what is called the terms of conditions (TOR) on March 12, 2008.
What about ‘forest’ clearance? It came separately.
The smelting plant required no forest clearance because it was on revenue land, though within the Sambalpur elephant reserve. The refinery neither sought nor got this clearance because no forest land was involved (this claim turned out to be false as MoEF admits that the refinery has occupied 26.123 hectares of forest land). Since the refinery didn’t need forest clearance, the expansion plan also didn’t need forest clearance. The mining operation got ‘in-principle’ forest clearance on December 11, 2008 (delayed by more than a year because of litigation; MoEF’s forest advisory committee had given its approval in October 2007).
What MoEF has done now is to deny ‘final’ forest clearance to the mining (Niyamgiri hills) on the ground that the forest rights of the Dongaria and Kutia Kondhs have been violated by the state government.
But read Ramesh’s 20-page order. Page 17 carries a shocking confession. It says: “It is brought to my attention that this is the first time that the Dongaria Kondhs have directly challenged the project in any court of law. The appeals highlighted (the) several violations in the environmental clearance process. Some of the key charges raised were that the full environment impact assessment report was not made available to the public before the public hearing, different EIA reports made available to the public and submitted to the MoEF, the EIA conducted was a rapid EIA undertaken during the monsoon months. The matter is reserved for judgment before the NEAA (National Environment Appellate Authority).” (Ramesh’s own emphasis)
These facts were enough to deny ‘environment’ clearance, which came in September 2004. Or withdraw it in all these years for violating the Forest (Conservation) Act of 1984 and its guidelines. MoEF did neither.
Ramesh’s excuse that he came to know the facts only now is not borne out by facts. These facts were made known to the Supreme Court-appointed Central Empowered Committee way back in November 2004, when the project was challenged. Besides, national and international media and human rights bodies have published these facts and national and international celebrities have held demonstrations in India and abroad since 2004.
Several other facts are worth noting.
* The legal battle challenging the clearance to the smelting plant started in 2007 (before the NEAA and then the Delhi High Court), on the ground of improper EIA and improper public hearing and continued till mid-2009. By that time, construction of the plant was over; it went into production in 2008. MoEF should have intervened but it didn’t. The smelting plant became a fait accompli.
* The legal battle against the refinery began in November 2004, which objected to non-disclosure of 26.123 hectares of forest land it had occupied, before the Supreme Court-appointed Central Empowered Committee. CEC recommended withdrawal of the environment clearance but by the time the apex court took it up, it was 2007 and the refinery had started its operations. MoEF should have withdrawn clearance as “concealment” of information violates the EIA Notification of 1994. It didn’t and the refinery became a fait accompli.
* MoEF gave ‘in-principle’ forest clearance to Niyamgiri’s mining in December 2008. Immediately, Vedanta began constructing a conveyor belt in violation of Forest Conservation Act and its guidelines. It was stopped by the locals. The whole world knew it. But MoEF granted ‘final’ forest clearance in April 2009. Its own inquiry established these violations in February 2010. But the clearance wasn’t withdrawn.
* Work on expansion of refinery is 60 percent complete without environment clearance. Ramesh admits it, but hasn’t done anything beyond promising to issue a show-cause notice. If history is any indication, this will soon become a fait accompli too.
* The N C Saxena report says the Niyamgiri mining lease has “limited relevance” as it can support the expanded refinery only for four years. Where from will Vedanta get the bauxite? Vedanta Alumina COO Mukesh Kumar says “all required bauxite deposits are available within a 40 km radius of the refinery.” What is to expect? Many more Niyamgiris, soon.
Ritwick Dutta, an environment lawyer who has been fighting for Niyamgiri tribals, makes an apt point: “Failure of governance on part of MoEF and continued support to the project through a series of approvals right up to 2009 led to the present situation. Had the MoEF done justice with its environment clearances, things would have been sorted out much earlier.”
POSCO pitfalls
South Korean steel major POSCO proposed to set up a steel plant in Orissa’s Jagatsinghpur with an investment of Rs 54,000 crore. MoEF granted it environment clearance on July 19, 2007. The ‘in-principle’ forest clearance was given on September 19, 2008. The ‘final’ forest clearance came on December 29, 2009.
On August 5, 2010, Ramesh issued a “stop order” to the Orissa government for denying rights of the other traditional forest dwellers and overlooking resolutions of palli (gram) sabhas refusing transfer of forest land.
The obvious question is how did MoEF give its final forest clearance in December 2009?
More than four months before the forest clearance, MoEF had, on August 3, 2009, issued a ‘binding guideline’ to all state governments which said “application for diversion under the Forest Conservation Act would be considered only after all due process contained in the Scheduled Tribe and Other Forest Dwellers (Recognition of Rights) Act, 2006 have been fully and satisfactorily completed”. (Ramesh’s emphasis)
Why this “binding guideline” was violated by Ramesh? A sub-committee’s report on the basis of which Ramesh issued the “stop order” points this out and says: “The MoEF ‘final approval’ of December 29, 2009 is itself a violation of its circular No. F. No. 11-9/1998-FC (pt), of 30 July 2009 (and therefore of the FRA), requiring FRA completion and gram sabha consent for forest diversion.”
This sub-committee made two recommendations: One, to ask the Orissa government to stop all work and second, “withdraw the forest clearance provided in December 2009.” Ramesh accepted the first but ignored the second.
What about the mining part of the project? MoEF is blissfully ignorant while the state is struggling to find a mine for POSCO. The Orissa High Court stayed the state’s last attempt to recommend a mine saying that proper procedure had not been followed.
Polavaram patchwork
Given the two glaring examples of violations of the Forest Rights Act, the least you would expect is that Ramesh wouldn’t commit the same mistakes again. Right? Wrong.
On July 28, 2010, he quietly handed over the ‘final’ forest clearance to the Indira Sagar (Polavaram) Multipurpose Project on river Godavari in Andhra Pradesh. (‘In-principle’ forest clearance had come on December 26, 2008 and the environment clearance on October 25, 2005.)
The order said the ‘final’ forest clearance was being given on three grounds: (i) “assurance” of the Andhra government that no forest rights need to be settled; (ii) a “clear understanding” that the Andhra government will ensure “no submergence of forest land” in Orissa and Chhattisgarh and (iii) that the rehabilitation and resettlement package will be implemented.
Firstly, this violates “binding guideline” of 2009 and other notifications about implementation of forest rights as a pre-condition to forest clearance.
Second, how will Andhra Pradesh ensure no submergence? MoEF had itself acknowledged in its environment clearance order of 2005 that the project will submerge 11 villages, over 1,000 hectare of land, that included forest land, affecting 6,316 people in Orissa’s Malkangiri and 16 villages, 2,398 hectare of land affecting 11,766 people in Chhattisgarh’s Dantewada.
Andhra’s “assurance” came only in January 2009. It said submergence could be avoided by constructing embankments along two rivers in these states. This is an absurd proposition and will cost Rs 600 crore, as against Rs 60 crore to rehabilitate those to be saved! It involves constructing 10 m high, 30-km-long embankments on each of Sileru and Sabri rivers on either side! Imagine the amount of land needed to dig up earth and to build the embankments!
Third, this alters the project substantially and hence, calls for cancellation of the nod given earlier. Fourth, it violates the pre-condition of “no submergence and displacement” set in 2008 for final forest clearance.
Fifth, both Malkangiri and Dantewada are Fifth Schedule Areas and so, the Panchayats (Extension to the Schedule Area) Act of 1996 is applicable. No forest clearance can be given without a “mandatory” approval of the gram sabhas. That is so because even if embankments were to be made, it would require a huge chunk of land and the nods from gram sabhas. No such approval has been taken.
Sixth, on December 19, 2007, NEAA quashed environment clearance to the project saying the affected people of Malkangiri and Dantewada had not been consulted. It said the clearance “is quashed on the ground that the impugned order was passed taking into consideration the Public Hearing which by itself was incomplete as it was not conducted in affected areas of Orissa and Chhattishgarh resulting in denial of access to information and opportunities to the affected people to express their views/opinions etc. on the Environmental Impact of the Project and consequential violation of Principles of Natural Justice.”
The Andhra High Court stayed the order and the case is now pending before the apex court.
So, when, on July 28, 2010, Ramesh gave ‘final’ forest clearance to the project, he actually had six reasons to withdraw the previous clearances and deny the ‘final’ one - all for violating various laws, guidelines and notifications. He did the opposite.
Incidentally, Indira Sagar will be one of the biggest hydropower projects -- bigger than the Narmada projects as it would displace about 277 villages and 1.8 lakh people.
Where does all this leave us? That our Green Crusader is not, after all, a hero to be looked upto but someone who has been violating all the forest, environment and tribal laws, his own “binding guidelines” and various notifications.
* * *
Regime of 'fait accompli'
Lafarge’s mining in Meghalaya
French company Lafarge set up its cement plant in Bangladesh for which limestone was to be mined from Meghalaya’s Khasi hills. The project got MoEF’s environment clearance in 2001 on the basis of an Environment Impact Assessment report which said the proposed mining area was “wasteland and non-forest area”. So, no forest clearance was sought. Mining began and the plant went into production in 2006.
Later, in the same year, MoEF admitted that the mining area was actually a “natural/virgin forest” but allowed the operation by telling the Supreme Court in 2008 that a stay will adversely impact “credibility of India as an investment destination”! After four years of operations, the Supreme Court stayed mining in February 2010. MoEF and the government of India went and pleaded that the stay was harming Bangladesh’s economy and would spoil our relations with Dhaka!
The court has not vacated the stay. But it is a ‘fait accompli’. MoEF has already submitted a proposal for compensatory afforestation and local development plan for which Lafarge will pay the money.
Jindal’s Rantagiri thermal plant
Jindal’s 1,200 MW thermal power plant in Maharashtra’s Alphanso mango and cashew belt, Jaigad in Ratnagiri district, got environment clearance on May 17, 2007 on the basis of an EIA report which didn’t mention that Alphanso or cashew orchards abounded in the area. Litigations followed and fresh assessments were ordered. One of such studies by MoEF’s Expert Appraisal Committee (under vice chairman Prof CR Babu) admitted Alphanso and cashew orchards existed but said pollution is actually good for them!
It said: “All these observations amply suggest that both Alphanso mango and cashew were as healthy or even healthier in vehicular polluted environments as compared to those found in environments away from vehicular pollution.” MoEF continues to send expert teams, supervisory committees (the last one set up on June 28, 2010) to study the impact of thermal power plants on “sensitive” environment.
On September 1, 2010, one 300 MW unit of the JSW Energy went into commercial production. Rest three will do so by end of March 2011, said an official. Fait accompli!
Jairam Ramesh is the toast of the green lobby for throwing Vedanta out of Niyamgiri Hills and protecting the rights of the tribals. The history of MoEF’s actions suggests otherwise.
Jairam Ramesh has become a national hero by upholding the rights of the Niyamgiri tribals and that of the ‘other traditional forest dwellers’ (OTFDs) in the POSCO project area, both in Orissa. In the case of the Niyamgiri, he withheld ‘forest’ clearance and in the case of POSCO, he withdrew it citing violations of the Forest Rights Act.
Undoubtedly, the Orissa government is guilty on both counts. But what has escaped notice is that much before these forest rights violations, Ramesh’s own ministry of environment and forests (MoEF) had granted a series of clearances, including those that he calls ‘in-principle’ clearance, to both the projects in violation of the rule of law. Had he or his ministry acted as the law required, there wouldn’t have been any need to withhold or withdraw anything. The Vedanta group’s project is now a fait accompli and the POSCO project an agonising experience for everyone involved.
To understand how Ramesh and his ministry have unleashed a regime of ‘un-principled’ governance, let’s revisit these and other well-known projects.
Niyamgiri saga
The Vedanta group came up with a project to make metallurgical grade alumina and aluminium products in Orissa. The project included setting up a smelting plant in Jharsuguda (to make liquid aluminium from alumina powder); a refinery in Koraput’s Lanjigarh (to make alumina powder from bauxite) nearly 400 km away and mining of the Niyamgiri hills (to mine bauxite), about five km of aerial distance from the refinery. Obviously, all three operations are inter-linked and inter-dependent and work started on all three simultaneously.
You would expect the MoEF to consider and give (or deny) clearance to the project in its entirety and at one go. What actually happened is quite bizarre.
The smelting plant of Jharsuguda got environment clearance on March 7, 2007. The Lanjigarh refinery got environment clearance on September 22, 2004. The mining (by the Orissa Mining Corporation, which would then pass bauxite to Vedanta) got environment clearance on April 28, 2009.
Meanwhile, Vedanta sought environment clearance to expand its refinery capacity from one million tonne to six million tonne and received what is called the terms of conditions (TOR) on March 12, 2008.
What about ‘forest’ clearance? It came separately.
The smelting plant required no forest clearance because it was on revenue land, though within the Sambalpur elephant reserve. The refinery neither sought nor got this clearance because no forest land was involved (this claim turned out to be false as MoEF admits that the refinery has occupied 26.123 hectares of forest land). Since the refinery didn’t need forest clearance, the expansion plan also didn’t need forest clearance. The mining operation got ‘in-principle’ forest clearance on December 11, 2008 (delayed by more than a year because of litigation; MoEF’s forest advisory committee had given its approval in October 2007).
What MoEF has done now is to deny ‘final’ forest clearance to the mining (Niyamgiri hills) on the ground that the forest rights of the Dongaria and Kutia Kondhs have been violated by the state government.
But read Ramesh’s 20-page order. Page 17 carries a shocking confession. It says: “It is brought to my attention that this is the first time that the Dongaria Kondhs have directly challenged the project in any court of law. The appeals highlighted (the) several violations in the environmental clearance process. Some of the key charges raised were that the full environment impact assessment report was not made available to the public before the public hearing, different EIA reports made available to the public and submitted to the MoEF, the EIA conducted was a rapid EIA undertaken during the monsoon months. The matter is reserved for judgment before the NEAA (National Environment Appellate Authority).” (Ramesh’s own emphasis)
These facts were enough to deny ‘environment’ clearance, which came in September 2004. Or withdraw it in all these years for violating the Forest (Conservation) Act of 1984 and its guidelines. MoEF did neither.
Ramesh’s excuse that he came to know the facts only now is not borne out by facts. These facts were made known to the Supreme Court-appointed Central Empowered Committee way back in November 2004, when the project was challenged. Besides, national and international media and human rights bodies have published these facts and national and international celebrities have held demonstrations in India and abroad since 2004.
Several other facts are worth noting.
* The legal battle challenging the clearance to the smelting plant started in 2007 (before the NEAA and then the Delhi High Court), on the ground of improper EIA and improper public hearing and continued till mid-2009. By that time, construction of the plant was over; it went into production in 2008. MoEF should have intervened but it didn’t. The smelting plant became a fait accompli.
* The legal battle against the refinery began in November 2004, which objected to non-disclosure of 26.123 hectares of forest land it had occupied, before the Supreme Court-appointed Central Empowered Committee. CEC recommended withdrawal of the environment clearance but by the time the apex court took it up, it was 2007 and the refinery had started its operations. MoEF should have withdrawn clearance as “concealment” of information violates the EIA Notification of 1994. It didn’t and the refinery became a fait accompli.
* MoEF gave ‘in-principle’ forest clearance to Niyamgiri’s mining in December 2008. Immediately, Vedanta began constructing a conveyor belt in violation of Forest Conservation Act and its guidelines. It was stopped by the locals. The whole world knew it. But MoEF granted ‘final’ forest clearance in April 2009. Its own inquiry established these violations in February 2010. But the clearance wasn’t withdrawn.
* Work on expansion of refinery is 60 percent complete without environment clearance. Ramesh admits it, but hasn’t done anything beyond promising to issue a show-cause notice. If history is any indication, this will soon become a fait accompli too.
* The N C Saxena report says the Niyamgiri mining lease has “limited relevance” as it can support the expanded refinery only for four years. Where from will Vedanta get the bauxite? Vedanta Alumina COO Mukesh Kumar says “all required bauxite deposits are available within a 40 km radius of the refinery.” What is to expect? Many more Niyamgiris, soon.
Ritwick Dutta, an environment lawyer who has been fighting for Niyamgiri tribals, makes an apt point: “Failure of governance on part of MoEF and continued support to the project through a series of approvals right up to 2009 led to the present situation. Had the MoEF done justice with its environment clearances, things would have been sorted out much earlier.”
POSCO pitfalls
South Korean steel major POSCO proposed to set up a steel plant in Orissa’s Jagatsinghpur with an investment of Rs 54,000 crore. MoEF granted it environment clearance on July 19, 2007. The ‘in-principle’ forest clearance was given on September 19, 2008. The ‘final’ forest clearance came on December 29, 2009.
On August 5, 2010, Ramesh issued a “stop order” to the Orissa government for denying rights of the other traditional forest dwellers and overlooking resolutions of palli (gram) sabhas refusing transfer of forest land.
The obvious question is how did MoEF give its final forest clearance in December 2009?
More than four months before the forest clearance, MoEF had, on August 3, 2009, issued a ‘binding guideline’ to all state governments which said “application for diversion under the Forest Conservation Act would be considered only after all due process contained in the Scheduled Tribe and Other Forest Dwellers (Recognition of Rights) Act, 2006 have been fully and satisfactorily completed”. (Ramesh’s emphasis)
Why this “binding guideline” was violated by Ramesh? A sub-committee’s report on the basis of which Ramesh issued the “stop order” points this out and says: “The MoEF ‘final approval’ of December 29, 2009 is itself a violation of its circular No. F. No. 11-9/1998-FC (pt), of 30 July 2009 (and therefore of the FRA), requiring FRA completion and gram sabha consent for forest diversion.”
This sub-committee made two recommendations: One, to ask the Orissa government to stop all work and second, “withdraw the forest clearance provided in December 2009.” Ramesh accepted the first but ignored the second.
What about the mining part of the project? MoEF is blissfully ignorant while the state is struggling to find a mine for POSCO. The Orissa High Court stayed the state’s last attempt to recommend a mine saying that proper procedure had not been followed.
Polavaram patchwork
Given the two glaring examples of violations of the Forest Rights Act, the least you would expect is that Ramesh wouldn’t commit the same mistakes again. Right? Wrong.
On July 28, 2010, he quietly handed over the ‘final’ forest clearance to the Indira Sagar (Polavaram) Multipurpose Project on river Godavari in Andhra Pradesh. (‘In-principle’ forest clearance had come on December 26, 2008 and the environment clearance on October 25, 2005.)
The order said the ‘final’ forest clearance was being given on three grounds: (i) “assurance” of the Andhra government that no forest rights need to be settled; (ii) a “clear understanding” that the Andhra government will ensure “no submergence of forest land” in Orissa and Chhattisgarh and (iii) that the rehabilitation and resettlement package will be implemented.
Firstly, this violates “binding guideline” of 2009 and other notifications about implementation of forest rights as a pre-condition to forest clearance.
Second, how will Andhra Pradesh ensure no submergence? MoEF had itself acknowledged in its environment clearance order of 2005 that the project will submerge 11 villages, over 1,000 hectare of land, that included forest land, affecting 6,316 people in Orissa’s Malkangiri and 16 villages, 2,398 hectare of land affecting 11,766 people in Chhattisgarh’s Dantewada.
Andhra’s “assurance” came only in January 2009. It said submergence could be avoided by constructing embankments along two rivers in these states. This is an absurd proposition and will cost Rs 600 crore, as against Rs 60 crore to rehabilitate those to be saved! It involves constructing 10 m high, 30-km-long embankments on each of Sileru and Sabri rivers on either side! Imagine the amount of land needed to dig up earth and to build the embankments!
Third, this alters the project substantially and hence, calls for cancellation of the nod given earlier. Fourth, it violates the pre-condition of “no submergence and displacement” set in 2008 for final forest clearance.
Fifth, both Malkangiri and Dantewada are Fifth Schedule Areas and so, the Panchayats (Extension to the Schedule Area) Act of 1996 is applicable. No forest clearance can be given without a “mandatory” approval of the gram sabhas. That is so because even if embankments were to be made, it would require a huge chunk of land and the nods from gram sabhas. No such approval has been taken.
Sixth, on December 19, 2007, NEAA quashed environment clearance to the project saying the affected people of Malkangiri and Dantewada had not been consulted. It said the clearance “is quashed on the ground that the impugned order was passed taking into consideration the Public Hearing which by itself was incomplete as it was not conducted in affected areas of Orissa and Chhattishgarh resulting in denial of access to information and opportunities to the affected people to express their views/opinions etc. on the Environmental Impact of the Project and consequential violation of Principles of Natural Justice.”
The Andhra High Court stayed the order and the case is now pending before the apex court.
So, when, on July 28, 2010, Ramesh gave ‘final’ forest clearance to the project, he actually had six reasons to withdraw the previous clearances and deny the ‘final’ one - all for violating various laws, guidelines and notifications. He did the opposite.
Incidentally, Indira Sagar will be one of the biggest hydropower projects -- bigger than the Narmada projects as it would displace about 277 villages and 1.8 lakh people.
Where does all this leave us? That our Green Crusader is not, after all, a hero to be looked upto but someone who has been violating all the forest, environment and tribal laws, his own “binding guidelines” and various notifications.
* * *
Regime of 'fait accompli'
Lafarge’s mining in Meghalaya
French company Lafarge set up its cement plant in Bangladesh for which limestone was to be mined from Meghalaya’s Khasi hills. The project got MoEF’s environment clearance in 2001 on the basis of an Environment Impact Assessment report which said the proposed mining area was “wasteland and non-forest area”. So, no forest clearance was sought. Mining began and the plant went into production in 2006.
Later, in the same year, MoEF admitted that the mining area was actually a “natural/virgin forest” but allowed the operation by telling the Supreme Court in 2008 that a stay will adversely impact “credibility of India as an investment destination”! After four years of operations, the Supreme Court stayed mining in February 2010. MoEF and the government of India went and pleaded that the stay was harming Bangladesh’s economy and would spoil our relations with Dhaka!
The court has not vacated the stay. But it is a ‘fait accompli’. MoEF has already submitted a proposal for compensatory afforestation and local development plan for which Lafarge will pay the money.
Jindal’s Rantagiri thermal plant
Jindal’s 1,200 MW thermal power plant in Maharashtra’s Alphanso mango and cashew belt, Jaigad in Ratnagiri district, got environment clearance on May 17, 2007 on the basis of an EIA report which didn’t mention that Alphanso or cashew orchards abounded in the area. Litigations followed and fresh assessments were ordered. One of such studies by MoEF’s Expert Appraisal Committee (under vice chairman Prof CR Babu) admitted Alphanso and cashew orchards existed but said pollution is actually good for them!
It said: “All these observations amply suggest that both Alphanso mango and cashew were as healthy or even healthier in vehicular polluted environments as compared to those found in environments away from vehicular pollution.” MoEF continues to send expert teams, supervisory committees (the last one set up on June 28, 2010) to study the impact of thermal power plants on “sensitive” environment.
On September 1, 2010, one 300 MW unit of the JSW Energy went into commercial production. Rest three will do so by end of March 2011, said an official. Fait accompli!
Friday, September 3, 2010
Ramesh shows the way...if only he stays the course!
Governance Now, Sept 1-15
No point in having a ministry and sundry laws to protect environment, forest, forest rights and tribal self-rule in the Scheduled Areas if these were to be sacrificed in the name of development
By rejecting the proposal to mine the Niyamgiri hills in Orissa for bauxite, environment and forests minister Jairam Ramesh has upheld the rule of law, which is what good governance is all about. Logically, after two panels of his ministry and several independent studies incontrovertibly established that all relevant laws of the land have been flouted in allowing Vedanta Alumina Ltd to set up its refinery in Lanjigarh and then seek, through the Orissa Mining Corporation, mining rights to the Niyamgiri hills, that was the only recourse left. But as we are well aware, logic or rule of law has hardly inconvenienced the private corporate bodies in our country.
Take a fresh look at Vedanta Alumina Ltd’s Lanjigarh project. Ramesh’s own ministry was playing footsie until now. Not once did it consider the project in its entirety. First it gave “environment” clearance only to the one million tonne refinery in 2004, but slept over the “forest” clearance. Now it transpires that the refinery has occupied 26.123 hectare of village forest land “illegally”. The mining part of the project came into picture in 2005. The ministry granted “forest” clearance to this in 2007, but called it “in-principle” clearance subject to certain conditions (it is violation of these conditions that the ministry has cited to deny “final” forest clearance. The “environment” clearance for mining came two years later, in 2009. In the meanwhile, Vedanta sought expansion of its refinery to six million tonne capcity in 2008. The same year, the ministry granted “in-principle” “environment” clearance, but slept over the “forest” clearance. What do you make out of all these anomalies?
Now, let us look at the state government’s role. It has granted all the necessary clearances and duly submitted all compliance reports in connection with Vedanta’s project. But as the MoEF panels, particularly the N C Saxena Committee, has pointed out, the state government not only flouted every law of the land but also misrepresented facts. It said, wrongly, that the primitive tribes of the area, Dongaria and Kutia Kondhs, didn’t stake claim to the proposed mining area as is their right under the Forest Rights Act. It said, wrongly again, that the tribals’ “informed consent” had been taken as per the Panchayats (Extension to the Scheduled Areas) Act to acquire their land. It said, wrongly yet again, that proper Environment Impact Assessment (EIA) of the project had been done, when it was only a “rapid” EIA. And after, the Saxena Committee said mining Niyamgiri will be “illegal” because it had been “established beyond doubt that the area proposed for mining and the surrounding thick forests are the cultural, religious and economic habitat of the Kondhs”, the state said, again wrongly, that the Supreme Court had given “forest clearance” to the project in 2008. In fact, the apex court’s next and concluding line was: “The next step would be for the MoEF to grant its approval in accordance with law.”
As for Vedanta Alumina, it violated several laws - by encroaching 26.123 hectare forest land without MoEF clerance, expanding refinery without MoEF clearance, building mine access road without MoEF clearance, wrongly concluding from public hearings that its project had wide support of the tribals, falsifying EIA report to say that the proposed mining area is “unproductive and tree deficient area not useful for wildlife and forest” and sourcing bauxite from 14 mines outside Orissa, 11 of which, it is now realised, don’t have environment clearance!
The issue here is not of development, as the Orissa government and Vedanta Alumina would like everyone to believe. It is nobody’s case that mining shouldn’t be allowed. A poor state like Orissa does need to mine its natural resources to propel economic growth and a corporate body like Vedanta Alumina to bring investment from outside.
The issue is really of good governance. All environment, forest and tribal related laws are to make development sustainable, humane, equitable and just. And that is what Jairam needs to prove. He needs to prove that his environment laws apply to all equally and Vedanta has not been made an example of for political purpose.
No point in having a ministry and sundry laws to protect environment, forest, forest rights and tribal self-rule in the Scheduled Areas if these were to be sacrificed in the name of development
By rejecting the proposal to mine the Niyamgiri hills in Orissa for bauxite, environment and forests minister Jairam Ramesh has upheld the rule of law, which is what good governance is all about. Logically, after two panels of his ministry and several independent studies incontrovertibly established that all relevant laws of the land have been flouted in allowing Vedanta Alumina Ltd to set up its refinery in Lanjigarh and then seek, through the Orissa Mining Corporation, mining rights to the Niyamgiri hills, that was the only recourse left. But as we are well aware, logic or rule of law has hardly inconvenienced the private corporate bodies in our country.
Take a fresh look at Vedanta Alumina Ltd’s Lanjigarh project. Ramesh’s own ministry was playing footsie until now. Not once did it consider the project in its entirety. First it gave “environment” clearance only to the one million tonne refinery in 2004, but slept over the “forest” clearance. Now it transpires that the refinery has occupied 26.123 hectare of village forest land “illegally”. The mining part of the project came into picture in 2005. The ministry granted “forest” clearance to this in 2007, but called it “in-principle” clearance subject to certain conditions (it is violation of these conditions that the ministry has cited to deny “final” forest clearance. The “environment” clearance for mining came two years later, in 2009. In the meanwhile, Vedanta sought expansion of its refinery to six million tonne capcity in 2008. The same year, the ministry granted “in-principle” “environment” clearance, but slept over the “forest” clearance. What do you make out of all these anomalies?
Now, let us look at the state government’s role. It has granted all the necessary clearances and duly submitted all compliance reports in connection with Vedanta’s project. But as the MoEF panels, particularly the N C Saxena Committee, has pointed out, the state government not only flouted every law of the land but also misrepresented facts. It said, wrongly, that the primitive tribes of the area, Dongaria and Kutia Kondhs, didn’t stake claim to the proposed mining area as is their right under the Forest Rights Act. It said, wrongly again, that the tribals’ “informed consent” had been taken as per the Panchayats (Extension to the Scheduled Areas) Act to acquire their land. It said, wrongly yet again, that proper Environment Impact Assessment (EIA) of the project had been done, when it was only a “rapid” EIA. And after, the Saxena Committee said mining Niyamgiri will be “illegal” because it had been “established beyond doubt that the area proposed for mining and the surrounding thick forests are the cultural, religious and economic habitat of the Kondhs”, the state said, again wrongly, that the Supreme Court had given “forest clearance” to the project in 2008. In fact, the apex court’s next and concluding line was: “The next step would be for the MoEF to grant its approval in accordance with law.”
As for Vedanta Alumina, it violated several laws - by encroaching 26.123 hectare forest land without MoEF clerance, expanding refinery without MoEF clearance, building mine access road without MoEF clearance, wrongly concluding from public hearings that its project had wide support of the tribals, falsifying EIA report to say that the proposed mining area is “unproductive and tree deficient area not useful for wildlife and forest” and sourcing bauxite from 14 mines outside Orissa, 11 of which, it is now realised, don’t have environment clearance!
The issue here is not of development, as the Orissa government and Vedanta Alumina would like everyone to believe. It is nobody’s case that mining shouldn’t be allowed. A poor state like Orissa does need to mine its natural resources to propel economic growth and a corporate body like Vedanta Alumina to bring investment from outside.
The issue is really of good governance. All environment, forest and tribal related laws are to make development sustainable, humane, equitable and just. And that is what Jairam needs to prove. He needs to prove that his environment laws apply to all equally and Vedanta has not been made an example of for political purpose.
Subterfuge, rather than sincerity, marks the nuclear law
Governance Now, Sept 1-15
Government will forever remain a suspect for the way it sought to compromise polluter-pays principle
By the time you read this both houses of parliament would have passed the Civil Liability for Nuclear Damage Bill 2010, hopefully without any more mischief. But few would be assured by prime minister Manmohan Singh’s solemn declaration in parliament that he was not working for the US interests or that he shared the opposition’s concerns for nuclear safeguards. In fact, the opposition had charged his government with using “a sleight of hand” in drafting the law and trying to “hustle” it through parliament. This was not without reason and the doubts over the government’s sincerity will linger on until US president Barack Obama’s goes back after his visit in November.
To begin with, the government wanted to get the nuclear bill passed in the last budget session without anybody having a clue about it. A parliamentary panel, that went through the bill subsequently, strongly objected to the fact that even the ministries which would play crucial roles in the event of a nuclear disaster weren’t consulted. It pointed out that “when the Committee inquired from the Secretaries of Ministries/Departments of Government of India who appeared before the Committee as to whether the draft nuclear liability Bill was referred to them for their views/comments, some of them viz. Ministries of Health & Family Welfare, Agriculture, Labour & Employment, Food & Public Distribution, etc. replied in the negative”. It did ask the government to do so in future but that is of no consequence.
The problem began right at the beginning when it was learnt that the government had compromised on the “polluter-pays” principle by letting off both the nuclear operator and the supplier of nuclear equipments lightly in the event of a nuclear disaster. The opposition blocked the bill’s tabling but the government did so surreptitiously, in the midst of pandemonium on the last day of the session. Then the bill was referred to a parliamentary panel dealing with science and technology, which was headed by loyal Congressman T Subbarami Reddy, and not the one dealing with energy as it should have been. And on the very first day of the panel’s meet, the government slipped in an amendment removing supplier’s liability completely. This was detected and a storm was raised. The panel was forced to retain the provision and also modify the language which required that “willful act” or “gross negligence” needed to be established. When the panel’s report was tabled in parliament, someone played mischief again and inserted a word “and” to link supplier liability to a written contract with the operator. This led to another round of storm until “and” was deleted.
But that was not all. The union cabinet, while revising the bill to be passed, made changes that sought establishing “intent” of the supplier to “cause nuclear damage” for it to be liable. Understandably, another storm was raised until this was dropped too and sanity, in the bill, was restored. All these manoeuvres were linked to the US because it is the turn of the US suppliers to enter the scene. The government has already signed deals with Russia and France, which too protect the supplier from liability but that is another story.
The operator’s liability, which was initially a lowly Rs 500 crore, also provoked protest until it was raised to Rs 1,500 crore. It is still less than about Rs 2,200 crore paid to the Bhopal victims. But doubts remain because the bill passed by Lok Sabha contained a clause that provides for the government to assume “full liability” for a nuclear installation not operated by it if it is of the opinion that this is necessary “in public interest”. Now what is this “public interest” needs to be explained.
Coming as it does after the Bhopal verdict and the subsequent uproar over gross injustice to the victims in terms of compensation it is a pity that the government could do no better than use subterfuge, rather than sincerity, in passing such a crucial law.
Government will forever remain a suspect for the way it sought to compromise polluter-pays principle
By the time you read this both houses of parliament would have passed the Civil Liability for Nuclear Damage Bill 2010, hopefully without any more mischief. But few would be assured by prime minister Manmohan Singh’s solemn declaration in parliament that he was not working for the US interests or that he shared the opposition’s concerns for nuclear safeguards. In fact, the opposition had charged his government with using “a sleight of hand” in drafting the law and trying to “hustle” it through parliament. This was not without reason and the doubts over the government’s sincerity will linger on until US president Barack Obama’s goes back after his visit in November.
To begin with, the government wanted to get the nuclear bill passed in the last budget session without anybody having a clue about it. A parliamentary panel, that went through the bill subsequently, strongly objected to the fact that even the ministries which would play crucial roles in the event of a nuclear disaster weren’t consulted. It pointed out that “when the Committee inquired from the Secretaries of Ministries/Departments of Government of India who appeared before the Committee as to whether the draft nuclear liability Bill was referred to them for their views/comments, some of them viz. Ministries of Health & Family Welfare, Agriculture, Labour & Employment, Food & Public Distribution, etc. replied in the negative”. It did ask the government to do so in future but that is of no consequence.
The problem began right at the beginning when it was learnt that the government had compromised on the “polluter-pays” principle by letting off both the nuclear operator and the supplier of nuclear equipments lightly in the event of a nuclear disaster. The opposition blocked the bill’s tabling but the government did so surreptitiously, in the midst of pandemonium on the last day of the session. Then the bill was referred to a parliamentary panel dealing with science and technology, which was headed by loyal Congressman T Subbarami Reddy, and not the one dealing with energy as it should have been. And on the very first day of the panel’s meet, the government slipped in an amendment removing supplier’s liability completely. This was detected and a storm was raised. The panel was forced to retain the provision and also modify the language which required that “willful act” or “gross negligence” needed to be established. When the panel’s report was tabled in parliament, someone played mischief again and inserted a word “and” to link supplier liability to a written contract with the operator. This led to another round of storm until “and” was deleted.
But that was not all. The union cabinet, while revising the bill to be passed, made changes that sought establishing “intent” of the supplier to “cause nuclear damage” for it to be liable. Understandably, another storm was raised until this was dropped too and sanity, in the bill, was restored. All these manoeuvres were linked to the US because it is the turn of the US suppliers to enter the scene. The government has already signed deals with Russia and France, which too protect the supplier from liability but that is another story.
The operator’s liability, which was initially a lowly Rs 500 crore, also provoked protest until it was raised to Rs 1,500 crore. It is still less than about Rs 2,200 crore paid to the Bhopal victims. But doubts remain because the bill passed by Lok Sabha contained a clause that provides for the government to assume “full liability” for a nuclear installation not operated by it if it is of the opinion that this is necessary “in public interest”. Now what is this “public interest” needs to be explained.
Coming as it does after the Bhopal verdict and the subsequent uproar over gross injustice to the victims in terms of compensation it is a pity that the government could do no better than use subterfuge, rather than sincerity, in passing such a crucial law.
Right way to carry right to food
Governance Now, Sept 1-15
Between the farmer’s field and your kitchen, the government procures, stores and distributes food grains. How it messes up at every stage and what can be done about it.
If you want to know what’s wrong with our food distribution system, step into the godowns of arguably the country’s largest agriculture produce marketing body, Punjab Markfed (an annual turnover of Rs 4,800 crore) in Bhawanigarh block of Sangrur district.
Hundreds of gunny bags containing wheat lie in the open, exposed to the elements. Mercifully, it is a sunny day when I visit it but there are tell-tale signs to show how the monsoon caused a havoc here a few days ago. Several hundred of empty and damaged gunny bags are strewn all over the place for the purpose of drying under the sun while their contents are spread elsewhere for the same purpose. An employee is sifting through the grain and stuffing those he thinks have dried enough into new bags. Wherever you look, the bags carry fungus stains, suggesting that the grain inside is rotting and is probably not fit for consumption. A few stacks have no sign of the tarpaulin cover. Bhim, a caretaker of the godown, says most of the stocks were brought in in 2007 and have already been exposed to three monsoons.
Less than 10 km away, in Akbarpur, another godown of the Punjab Markfed similarly stores paddy in the open. Some stacks have no tarpaulin cover and grains are spilled all over. These were brought in last October and may possibly survive the first rains. But a few yards away in the same compound, a rice mill remains idle with ample covered space but that cannot be used because the miller is yet to get the clearance to de-husk the paddy.
Both these godowns fall in the category of what is called “CAP” (cover and plinth) in the FCI parlance —grain stored in the open on wooden platforms, with tarpaulin sheets for protection. Punjab stores most of the paddy and a significant amount of wheat stocks for the entire country. Punjab Markfed is one of the five state government agencies that procure and store food grains on behalf of the Food Corporation of India (FCI), the national food procurement, storage and distribution agency.
FCI’s problem of plenty
Punjab has a total capacity to store 19.9 million tonne of food grains—9.5 million in godowns and 10.4 million in the open (CAP). All of its rice stock (6.3 million tonne) are in godowns as it can’t be stored in the CAP. This leaves 3.2 million tonne space for wheat and the rest - 9.5 million of total wheat stock of 12.7 million tonne (that is 74 percent!) - rotting in the open in Punjab alone!
But that is not all. A far bigger trouble is waiting round the corner. Fresh procurement will begin in October for paddy (9 million) and in April for wheat (12.7 million). These would require additional storage space. Every month 1.2 million tonne of grains are supposed to move out of Punjab to other states, thus vacating space for fresh procurement. But this year, Punjab has seen little grain movement. The wheat stock hasn’t been touched at all and only 2.7 million tonnes of rice (of 9 million) has moved out. The space constraint has led to delay in de-husking of 2.2 million tonne paddy procured last October.
This problem of plenty pervades FCI’s operations throughout the country. As per official data, it currently stores 57.8 million tonne, against a requirement of 31.9 million tonne of buffer/strategic stocks as on July 1. Of this, 17.8 million tonne are under the CAP—that is, lying in the open.
FCI explains this bizarre situation by saying it “de-hired” godowns at the advice of a private consultant and the Comptroller and Auditor General of India (CAG) so as to utilise space lying unused following the 2002 drought. The scenario has changed but the practice continues and explains why liquor bottles were found stocked in FCI godowns of Jaipur while grains were rotting outside. Worse, it doesn’t have details about the space “de-hired”.
That is not the end of FCI’s trouble. In June, an empowered group of ministers (EGoM) headed by Pranab Mukherjee decided to offload 5 million tonne of wheat in the open market to bring down the soaring prices. But to everyone’s shock, it was found that there was no taker for this because the prevailing wholesale price turned out to be lower than the FCI price! This was true in Delhi (Rs 1,252.15 as against wholesale price of Rs 1,230 a quintal), Lucknow (Rs 1,282 against Rs 1,150), Bhopal (Rs 1,304 against Rs 1,180) and elsewhere. Apparently, something is seriously wrong with the minimum support price (MSP) at which FCI procured wheat last year.
Modern Golghar and other solutions
What all these details show is that the FCI and the food ministry needs to completely overhaul their operations. But how?
* The first obvious step is to set the MSP right, particularly while going for procurment of more than the normal 40 to 45 million tonne of grains - which happened last year when the government bought an extra 10 million tonne fearing drought. The problem of plenty can be addressed by setting the right target for procurement and establishing a system that can avoid panic procurement of the kind witnessed last year.
* Storage of grains has emerged as a major problem. Needless to say, capacity building is required but not in the way it is done now. The right example to follow is the 18th century Golghar of Patna, built by the British to counter famine. The modern-day silos follow the same system, which is scientific as it works on the principle of first-in-first-out. We have half-a-dozen silos in the country. The only thing going against it is its high cost of building. Involving private sector by way of public private partnership (PPP) may be a way out.
* The cheaper option is to go for Grain Banks at village or panchayat level, which are more efficient. A couple of non-government organisations of Andhra Pradesh and Orissa have demonstrated how these banks can work at the village level.
* Excessive dependence on FCI and state agencies that work on its behalf is also a cause of problem. Tamil Nadu has a highly successful public distribution system which is largely run by the cooperative societies and women self-help groups - 93 percent of all fair price shops (FPS). These are also empowered to procure grain and other food items locally.
* Grain movement from the FCI godowns to the intended states needs to be rationalised and made efficient so as to avoid the practice of holding on to grains for three to four years and letting them rot.
Adopting some of these measures may prevent rotting of grains that we witnessed in Punjab. But what about taking the stuff that has not rotten to the people?
Universal PDS
It needs no elaboration that the public distribution system (PDS) too is rotten. What is of greater relevance is the fact that replacing the PDS with the Targeted PDS in 1997 caused even more harm. A Planning Commission report of 2005 said this switch “neither benefited the poor nor reduced subsidy”. On the other hand, it increased diversion of food grains by a greater extent—“58 percent of subsidised food grains didn’t reach the intended beneficiaries.”
Kerala, which used to be a model state in pre-1997 era, is a good example. A 2008 study showed how “Kerala has taken a complete u-turn in utilisation of the PDS from a scenario where the majority of the population was dependent on the PDS to a state where 70 percent are excluded from the system completely.”
On the other hand, Tamil Nadu is a shining example how the pitfalls could have been avoided. When the entire country opted for the Targeted PDS, it retained the universal character and is a great success story. The National Advisory Council, which is presently working on the right to food law, held a special presentation of this model to learn how and why it works there.
The right step, therefore, would be to switch back to the universal PDS. More so since the government is working towards the right to food law, which is, by definition, universal. Universal PDS will also remove three obvious shortcomings in the Targeted PDS: Lesser number of beneficiaries attached to an FPS makes it economically unviable, prone to greater diversion and deprives local community a stake and hence, no incentive to make PDS work.
Universal PDS completely negates the concept of direct cash transfer (DCT) proposed by some experts and the governments of Delhi and Bihar to battle the PDS menace. And rightly so. Even the Planning Commission has opposed it in its recent presentation to the NAC because DCT “threatens to dismantle PDS and leave the intended beneficiaries at the mercy of the private traders” who would get in and take over the operation.
The only stumbling block in switching back to the universal PDS is subsidy, which would go much beyond the current level — Rs 60,000 crore has been earmarked as food subsidy in this year’s budget. The answer, however, can be found in differential pricing, which means a higher price of PDS supply for those who are economically better off.
Operational modifications
But to make PDS work, it would require several radical changes in its operation.
One is to introduce ‘smart cards’ as the Planning Commission has proposed. The plan panel says that “instead of delivering subsidised grain to the poor we should switch to a system where the PDS shops sell grains at the normal above-poverty-line (APL) price, but the poor have a smart card which enables them to pay the subsidised price and have the subsidy amount credited to the shopkeeper’s account”. This would eliminate possibility of diversion of food grains flowing to FPS to the market.
But that leaves the issues of bogus ration cards and exclusion of the poor from the system unaddressed. The plan panel suggests that these problems can be overcome by linking the smart cards to the Unique Identity project. This linkage will have an additional benefit. UID will link food entitlement to the individuals, rather than the families, which is the case now. Since the family size vary the present system does not necessarily address people’s needs correctly. The UID Authority has already begun its spadework this linkage.
The third change required is to make FPS economically viable. As Justice Wadhwa Committee has pointed out in its reports to the Supreme Court, it requires about 1,000 cardholders for each FPS to make it viable at the present rate of commission. Apart from this, the Justice Wadhwa Committee also suggested a few more measures, like involving cooperatives and women self-help groups to run the FPS, door-step delivery of food grains to the FPS, charging actual cost of transportation (a major cause of loss for the PFS) rather than a formula-based approach as at present, timely delivery to the FPS and allowing FPS to sell other commodities.
A few other modifications can be borrowed the Tamil Nadu and Chhattisgarh models. Tamil Nadu’s universal PDS has some features other than allowing cooperatives and women self-help groups to run the FPS and buy food items locally. These include mobile FPS to cater to smaller and isolated groups of people, part-time FPS to take care of emergencies, restricting the distance of FPS from beneficiaries to less than two km and keeping private individuals and firms completely off the PDS network.
Chhattisgarh runs a successful Targeted PDS model. Key elements of this model are: (i) transparency — every aspect of the operation is computerised, from the time grain is procured from a farmer and paid for on the spot, its real time distribution status, availability at every FPS at any given time and details about individual consumer (ii) community participation in monitoring and (iii) stiff punishment for any wrongdoing, which can be reported through a convenient mechanism.
As it would be clear now, at the end of the day it is as much an issue of good governance as the involvement of local community that makes the food distribution system work. n
prasanna@governancenow.com
Between the farmer’s field and your kitchen, the government procures, stores and distributes food grains. How it messes up at every stage and what can be done about it.
If you want to know what’s wrong with our food distribution system, step into the godowns of arguably the country’s largest agriculture produce marketing body, Punjab Markfed (an annual turnover of Rs 4,800 crore) in Bhawanigarh block of Sangrur district.
Hundreds of gunny bags containing wheat lie in the open, exposed to the elements. Mercifully, it is a sunny day when I visit it but there are tell-tale signs to show how the monsoon caused a havoc here a few days ago. Several hundred of empty and damaged gunny bags are strewn all over the place for the purpose of drying under the sun while their contents are spread elsewhere for the same purpose. An employee is sifting through the grain and stuffing those he thinks have dried enough into new bags. Wherever you look, the bags carry fungus stains, suggesting that the grain inside is rotting and is probably not fit for consumption. A few stacks have no sign of the tarpaulin cover. Bhim, a caretaker of the godown, says most of the stocks were brought in in 2007 and have already been exposed to three monsoons.
Less than 10 km away, in Akbarpur, another godown of the Punjab Markfed similarly stores paddy in the open. Some stacks have no tarpaulin cover and grains are spilled all over. These were brought in last October and may possibly survive the first rains. But a few yards away in the same compound, a rice mill remains idle with ample covered space but that cannot be used because the miller is yet to get the clearance to de-husk the paddy.
Both these godowns fall in the category of what is called “CAP” (cover and plinth) in the FCI parlance —grain stored in the open on wooden platforms, with tarpaulin sheets for protection. Punjab stores most of the paddy and a significant amount of wheat stocks for the entire country. Punjab Markfed is one of the five state government agencies that procure and store food grains on behalf of the Food Corporation of India (FCI), the national food procurement, storage and distribution agency.
FCI’s problem of plenty
Punjab has a total capacity to store 19.9 million tonne of food grains—9.5 million in godowns and 10.4 million in the open (CAP). All of its rice stock (6.3 million tonne) are in godowns as it can’t be stored in the CAP. This leaves 3.2 million tonne space for wheat and the rest - 9.5 million of total wheat stock of 12.7 million tonne (that is 74 percent!) - rotting in the open in Punjab alone!
But that is not all. A far bigger trouble is waiting round the corner. Fresh procurement will begin in October for paddy (9 million) and in April for wheat (12.7 million). These would require additional storage space. Every month 1.2 million tonne of grains are supposed to move out of Punjab to other states, thus vacating space for fresh procurement. But this year, Punjab has seen little grain movement. The wheat stock hasn’t been touched at all and only 2.7 million tonnes of rice (of 9 million) has moved out. The space constraint has led to delay in de-husking of 2.2 million tonne paddy procured last October.
This problem of plenty pervades FCI’s operations throughout the country. As per official data, it currently stores 57.8 million tonne, against a requirement of 31.9 million tonne of buffer/strategic stocks as on July 1. Of this, 17.8 million tonne are under the CAP—that is, lying in the open.
FCI explains this bizarre situation by saying it “de-hired” godowns at the advice of a private consultant and the Comptroller and Auditor General of India (CAG) so as to utilise space lying unused following the 2002 drought. The scenario has changed but the practice continues and explains why liquor bottles were found stocked in FCI godowns of Jaipur while grains were rotting outside. Worse, it doesn’t have details about the space “de-hired”.
That is not the end of FCI’s trouble. In June, an empowered group of ministers (EGoM) headed by Pranab Mukherjee decided to offload 5 million tonne of wheat in the open market to bring down the soaring prices. But to everyone’s shock, it was found that there was no taker for this because the prevailing wholesale price turned out to be lower than the FCI price! This was true in Delhi (Rs 1,252.15 as against wholesale price of Rs 1,230 a quintal), Lucknow (Rs 1,282 against Rs 1,150), Bhopal (Rs 1,304 against Rs 1,180) and elsewhere. Apparently, something is seriously wrong with the minimum support price (MSP) at which FCI procured wheat last year.
Modern Golghar and other solutions
What all these details show is that the FCI and the food ministry needs to completely overhaul their operations. But how?
* The first obvious step is to set the MSP right, particularly while going for procurment of more than the normal 40 to 45 million tonne of grains - which happened last year when the government bought an extra 10 million tonne fearing drought. The problem of plenty can be addressed by setting the right target for procurement and establishing a system that can avoid panic procurement of the kind witnessed last year.
* Storage of grains has emerged as a major problem. Needless to say, capacity building is required but not in the way it is done now. The right example to follow is the 18th century Golghar of Patna, built by the British to counter famine. The modern-day silos follow the same system, which is scientific as it works on the principle of first-in-first-out. We have half-a-dozen silos in the country. The only thing going against it is its high cost of building. Involving private sector by way of public private partnership (PPP) may be a way out.
* The cheaper option is to go for Grain Banks at village or panchayat level, which are more efficient. A couple of non-government organisations of Andhra Pradesh and Orissa have demonstrated how these banks can work at the village level.
* Excessive dependence on FCI and state agencies that work on its behalf is also a cause of problem. Tamil Nadu has a highly successful public distribution system which is largely run by the cooperative societies and women self-help groups - 93 percent of all fair price shops (FPS). These are also empowered to procure grain and other food items locally.
* Grain movement from the FCI godowns to the intended states needs to be rationalised and made efficient so as to avoid the practice of holding on to grains for three to four years and letting them rot.
Adopting some of these measures may prevent rotting of grains that we witnessed in Punjab. But what about taking the stuff that has not rotten to the people?
Universal PDS
It needs no elaboration that the public distribution system (PDS) too is rotten. What is of greater relevance is the fact that replacing the PDS with the Targeted PDS in 1997 caused even more harm. A Planning Commission report of 2005 said this switch “neither benefited the poor nor reduced subsidy”. On the other hand, it increased diversion of food grains by a greater extent—“58 percent of subsidised food grains didn’t reach the intended beneficiaries.”
Kerala, which used to be a model state in pre-1997 era, is a good example. A 2008 study showed how “Kerala has taken a complete u-turn in utilisation of the PDS from a scenario where the majority of the population was dependent on the PDS to a state where 70 percent are excluded from the system completely.”
On the other hand, Tamil Nadu is a shining example how the pitfalls could have been avoided. When the entire country opted for the Targeted PDS, it retained the universal character and is a great success story. The National Advisory Council, which is presently working on the right to food law, held a special presentation of this model to learn how and why it works there.
The right step, therefore, would be to switch back to the universal PDS. More so since the government is working towards the right to food law, which is, by definition, universal. Universal PDS will also remove three obvious shortcomings in the Targeted PDS: Lesser number of beneficiaries attached to an FPS makes it economically unviable, prone to greater diversion and deprives local community a stake and hence, no incentive to make PDS work.
Universal PDS completely negates the concept of direct cash transfer (DCT) proposed by some experts and the governments of Delhi and Bihar to battle the PDS menace. And rightly so. Even the Planning Commission has opposed it in its recent presentation to the NAC because DCT “threatens to dismantle PDS and leave the intended beneficiaries at the mercy of the private traders” who would get in and take over the operation.
The only stumbling block in switching back to the universal PDS is subsidy, which would go much beyond the current level — Rs 60,000 crore has been earmarked as food subsidy in this year’s budget. The answer, however, can be found in differential pricing, which means a higher price of PDS supply for those who are economically better off.
Operational modifications
But to make PDS work, it would require several radical changes in its operation.
One is to introduce ‘smart cards’ as the Planning Commission has proposed. The plan panel says that “instead of delivering subsidised grain to the poor we should switch to a system where the PDS shops sell grains at the normal above-poverty-line (APL) price, but the poor have a smart card which enables them to pay the subsidised price and have the subsidy amount credited to the shopkeeper’s account”. This would eliminate possibility of diversion of food grains flowing to FPS to the market.
But that leaves the issues of bogus ration cards and exclusion of the poor from the system unaddressed. The plan panel suggests that these problems can be overcome by linking the smart cards to the Unique Identity project. This linkage will have an additional benefit. UID will link food entitlement to the individuals, rather than the families, which is the case now. Since the family size vary the present system does not necessarily address people’s needs correctly. The UID Authority has already begun its spadework this linkage.
The third change required is to make FPS economically viable. As Justice Wadhwa Committee has pointed out in its reports to the Supreme Court, it requires about 1,000 cardholders for each FPS to make it viable at the present rate of commission. Apart from this, the Justice Wadhwa Committee also suggested a few more measures, like involving cooperatives and women self-help groups to run the FPS, door-step delivery of food grains to the FPS, charging actual cost of transportation (a major cause of loss for the PFS) rather than a formula-based approach as at present, timely delivery to the FPS and allowing FPS to sell other commodities.
A few other modifications can be borrowed the Tamil Nadu and Chhattisgarh models. Tamil Nadu’s universal PDS has some features other than allowing cooperatives and women self-help groups to run the FPS and buy food items locally. These include mobile FPS to cater to smaller and isolated groups of people, part-time FPS to take care of emergencies, restricting the distance of FPS from beneficiaries to less than two km and keeping private individuals and firms completely off the PDS network.
Chhattisgarh runs a successful Targeted PDS model. Key elements of this model are: (i) transparency — every aspect of the operation is computerised, from the time grain is procured from a farmer and paid for on the spot, its real time distribution status, availability at every FPS at any given time and details about individual consumer (ii) community participation in monitoring and (iii) stiff punishment for any wrongdoing, which can be reported through a convenient mechanism.
As it would be clear now, at the end of the day it is as much an issue of good governance as the involvement of local community that makes the food distribution system work. n
prasanna@governancenow.com
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