One by one (china population)

Only very recently in its long civilisational run did humankind begin to wonder what to do with more and more of itself — more and more not of “enemy peoples” or “inferior races” but “one’s own”. The advent of modern medicine and medical care, easier mitigation of natural disasters and the significantly lowered frequency of war and civilian casualties contributed to lowered infant mortality and higher life expectancy. But the population boom became a problem “overpopulated” countries like China and India had to deal with.


In response, China became the land of the one-child policy. Implemented in 1979 and aimed at urban married couples, the policy is claimed by authorities to have prevented 400 million births till 2011, thus alleviating socio-economic and environmental problems. The law was never as absolute as many supposed in their ignorance. It allows many exceptions — couples without siblings, ethnic minorities, and rural couples with a disabled child or a girl child as their first, can have a second child. For additional children, families pay monetary fines and may be denied state benefits.
Controversial all along, the policy came to be criticised for forced abortions, skewing the gender ratio through female foeticide and causing the under-reporting of female births. Gender imbalance is a serious concern in China, as is the generational imbalance in the population which is expected to adversely affect the work force. Significantly, it is China’s most populous province, Guangdong, that has embarked on publicly criticising the one-child policy and asking for its relaxation, raising the above issues that are further complicated by a falling fertility ratio. Although any big reform is not yet expected, it would be interesting to see the policy response, if any, to the criticism of this long-held rule.

Targeted welfare, universal attacks

More than five years after the government rolled out a mega social welfare provisioning programme in the form of the National Rural Employment Guarantee Act, it is set to enact another — the National Food Security Law.


The debate around the proposed food guarantee law is centred around two major themes: the extent of coverage, and the subsidy delivery mechanism.The coverage question centres on whether there should be uniform universal legal coverage, or only targeted legal coverage for the poor. The delivery question hinges on whether we choose the existing public distribution system (PDS) or introduce cash transfers or food coupons. The debate has been so intense that advocates of the PDS want the proposed law to exclude other options altogether.

Interestingly, economists on both sides of the delivery debate are united on the coverage aspect — both advocate almost-universal legal coverage. Their argument is that it is practically impossible to clearly identify different groups (BPL vs APL, or priority vs general) in a framework of differentiated entitlements. Experience suggests that a substantial section of the genuine poor (BPL or priority) gets excluded (exclusion error) while many non-eligible elements infiltrate (inclusion error) the group entitled for most subsidised items. Universal coverage would eliminate both errors, and is, therefore, the new consensus, despite the arguments over PDS or cash transfer/food coupons.


Apart from the exclusion/inclusion error issue, universal coverage has been a fixture of recent rights-based social welfare programmes. Right to work, under the rural job guarantee scheme, has universal provisions applying uniformly to all rural residents. Right to food should follow the same logic, rather than the differentiated foodgrain entitlements in the proposed law.

The NREGA experience is valuable in this context. While it appears to be a universal welfare regime for rural areas, it is actually a means-tested selective welfare programme for those ready to undertake unskilled manual work. A poor skilled artisan from a rural area is less likely to participate, since it is meant for unskilled manual work. However, in situations of desperation and livelihood insecurity, the same skilled artisan may participate. The NREGA, therefore, works through this self-selection of the poor, and ends up catering to the relatively worse-off within rural areas.

That prompts the question: should the NREGA not be used to identify the poor better? Despite the fact that, as many reports suggest, NREGA implementation has been plagued with corruption and mismanagement, it can be used to identify the poor provided this theoretical self-selection works real-time during its implementation.

The first panel survey on the NREGA, undertaken by the NSSO, which covered 82,108 people from 17,853 households drawn from 900 villages from three better performing states — Andhra Pradesh, Madhya Pradesh and Rajasthan — indicates that this self-selection is working. It was conducted between July 2009 and December 2009, during the 66th round of the NSS survey. Three findings of the survey support the self-selection theory. First, the monthly per capita expenditure of NREGA participants is “substantially less than” that of non-participants. Secondly, among those who have participated in the NREGA, the proportion of upper castes is less than 10 per cent, compared to those from scheduled castes, scheduled tribes and other backward classes. The social determinants of deprivation in Indian society have always indicated that upper castes are relatively better off, and the NSSO findings re-affirm the self-selection-under-NREGA theory along these lines as well. Third, the NSSO survey finds that household size for those participating in the NREGA is far greater than those of non-participants, in line with the idea that poor households tend to have larger families than those relatively better off. While the NSSO survey does not deal with the extent of irregularities in the scheme’s implementation, it certainly indicates that poor households are self-selecting themselves to participate in this means-tested welfare programme.

These findings leave little reason for planners to not consider the NREGA database to identify the poor. In fact, the Rashtriya Swasthya Bima Yojana (RSBY), the health insurance scheme for the poor, has already started using the NREGA database to identify a section of its beneficiaries. Any NREGA worker who has worked 15 or more days the previous year is eligible for health insurance under the programme. This may further be fine-tuned using state-specific cut-off days, given that poorly performing states like Bihar are likely to have fewer workers who have put in more than 15 days, because the programme has been relatively slow despite a large poor population. One can even consider district-wise cut-offs — say for the Kalahandi-Balangir-Koraput districts in Orissa or the left-wing extremism-affected districts.

Coming back to the debate over the extent of coverage under the food security law, the attack against the targeted approach is a disservice to needy sections, unless we are contemplating universal legal rights to decent clothing, housing, drinking water, electricity, higher education and health, etc, along with the universal legal right of foodgrains. Otherwise, targeted financial assistance (subsidy) from government needs to be supported and preserved as a mechanism. The targeted approach can also bring about a convergence of various welfare programmes for the identified group.

This means that identification of the poor will remain the most critical component. Rather than advocating that this targeted mechanism be entirely replaced by an “almost-universal” system, one should consider finding ways to improve identification of poor. For instance, as the government carries on the BPL survey, which is still to gather momentum, it could consider seeking information about NREGA participation in the household survey. This information would be a useful supplement for the seven other criteria being used by the government to identify the poor for various welfare programmes.

National Interest: Jan Lok Sabha

What a pleasant feeling it is writing a curtain-raiser of sorts to a new Parliament session. A resumption of old-fashioned politics will give the political class a chance to recover from recent reverses. It will also be its opportunity to redeem itself by showing this country how it is actually governed, and how the opinion of its people is reflected by the government of the day, as also its opposition.


Unless somebody conjures up a clever face-saver quickly, Anna Hazare and his team will be back at Jantar Mantar a day after Independence Day, and exactly in the middle of this one-month session. There is no chance in hell Parliament would even consider his deadline of passing any Lokpal Bill by August 15. In fact, chances are this bill may first have to go to a parliamentary committee for the usual fine-tuning. It is too important a law to be passed in a hurry with a gun pressed to your temple. To that extent, the political class finally got its focus back. It is one thing for a motley “civil society” group fuelled by news TV and middle-class rage to hold an already embarrassed government to ransom. Taking on the institution of Parliament is a different story altogether.




First evidence that sanity had begun to be restored somewhat came last month as Anna Hazare started leading his delegation to the leaders of the various political parties (the opposition as well as the Congress) pleading the case of his version of the Lokpal legislation. That is how it should be done in a parliamentary democracy. The idea of writing a law from outside and forcing it down Parliament’s throat was both arrogant and obscene. As if you believed that your Parliament was illegitimate, full of dummies and would not be able to resist the gale-force of your presumed intellect or moral authority.

As this session begins on Monday, the important thing would be to analyse what exactly happened in those bizarre weeks when it looked like the entire political (democratic) system was going to collapse. There were the many unresolved scandals, cover-ups and popular anger. But the main reason it was able to acquire the dimensions it did was the fact that the winter session of Parliament had been such a total washout. The BJP stalled Parliament, demanding a JPC into the telecom scam. The Congress resisted, even at the cost of writing off an entire session. This will remain a slur on its record, considering that it conceded a JPC in the end anyway. But even for the BJP, in the end, it was a totally pointless exercise in point-scoring. Because the loss was not just the UPA’s, but that the entire political class was undermined. People said, here are the two coalitions, together accounting for around 430 Lok Sabha members, only interested in either stalling investigations into a great scandal or exploiting it for petty political mileage. It is convenient now to complain that the judiciary is indulging in over-reach, or that civil society is attempting a coup or that the media has become an accuser-judge-executioner. But it happened only because a totally short-sighted political class so cynically wrote off an entire session and undermined the institution it draws all its power and authority from, the national Parliament.



This short monsoon session is an opportunity now to reverse that slide. Many of the issues that destroyed the winter session are still there. The Congress-BJP relationship is no better than before. So the choice of ruining this session again is still there. But you can take encouragement from the fact that, chastened by the anti-politician mood, the two parties have been talking behind the scenes, even negotiating successfully to resolve issues with some pending legislation, particularly where bills have been sitting with committees headed by MPs of the BJP. On the Lokpal Bill, many of the finer changes suggested by Arun Jaitley on the BJP’s behalf have already been made. Of course, the BJP may take a position on putting the prime minister under the Lokpal’s jurisdiction in some qualified way, but that won’t be sufficient reason to stall Parliament. You can also sniff a secular sense of unease in the political class over the loss of face it has suffered vis-a-vis the activists, and also with what is seen as an increasing tendency on the part of the courts to encroach upon the political-executive turf. You can see that convergence quite clearly in the way the BJP tacitly supports the Centre’s challenge to the black money order and, similarly, the Centre quietly hopes that the Chhattisgarh government’s appeal against the SPO judgment succeeds to some extent. It also helps that the BJP starts this session firmly on the defensive, having lost one of its most popular chief ministers to the indictment of a Lokayukta who also happens to be among the most important members of Hazare’s team.

It is still possible that the Congress and the BJP will return to their basic instincts and resume hostilities over one thing or another. But you see indications that they might be a bit more circumspect now, and respectful of the institution through which India speaks, and is heard and governed. Of course, the prime minister himself could initiate that positive new outlook by attending this session more often than usual, and speaking, intervening, answering questions. He has nothing to lose but his utterly uncalled for reticence.

Pride and prejudice

Madhya Pradesh’s minister for cooperatives, Gaurishanker Bisen, delivered a few truly astonishing and unpleasant rants recently on a trip to Chhindwara and Seoni. He let loose at revenue officials (patwaris), at one point asserting that every single patwari was corrupt. When faced with one particular patwari in Seoni district who was said to be slacking on the job and allegedly did nothing without a bribe, a furious Bisen made him do several squats, as public humiliation and expiation.


But that’s not all — he also informed the patwari, in full public view, that he was being let off easy because he was a Gond, and that he would have killed him if he had been a Pawar. In other words, he voiced and validated the idea that a public official’s caste should determine what sort of treatment he would get from higher authorities. This was an interaction between citizens, local revenue officials and Bisen, a BJP minister and five-time MLA. Not only was this sober event reduced to a feudal farce, where an enraged minister could order “uthak-baithaks”of a supposedly errant official, the message of differential treatment to different caste groups couldn’t be more damaging.



Whatever Bisen might say in his defence, these cannot be dismissed as stray, thoughtless comments that came out of a frustrating field visit. He clearly believes his own dangerous rants — for instance, on the same day, discussing with a few Congress legislators the topic of tribal land that might have been wrongfully acquired, he also made the observation that tribals can be taught to read and write at best, they cannot learn good sense and wisdom. Remarks and acts like these, in fact, only reinforce suspicions about a deeply internalised prejudice. They display the distilled bigotry of centuries, and they convey an entire world of casteist contempt and group stereotyping. How can a person with these thoughts be allowed to report at work as a minister? The chief minister must take complaints against Bisen seriously, and meet them with exemplary action.

Not till winter?? (land acquisition bill)

For the past year, land issues have been a spark for anger and political confrontation all over the country, and the Supreme Court’s recent intervention in Greater Noida land acquisition has underlined the urgency of discovering a political solution. Meanwhile, the Reserve Bank of India said at the beginning of this year that investment would slide unless land issues were sorted out. And, sure enough, FDI numbers have shown an alarming slide while Indian companies, able and willing to invest abroad, are also postponing or cancelling investment in the country till comprehensive, transparent and fair land acquisition mechanisms are in place. Every project that goes abroad, every opportunity foregone, has a cost in terms of growth, jobs and poverty reduction. The delay in getting a new land acquisition bill done has, perhaps more importantly, impacted crucial development work, and the creation of rural and urban infrastructure that has massive spillover effects on growth and investment.


So why is it that the rural development ministry has decided to further postpone the introduction of the Centre’s land acquisition bill? On Thursday, Rural Development Minister Jairam Ramesh announced the ministry would organise month-long “pre-legislative consultations” with various NGOs, states and political parties before it submitted the already prepared draft to the cabinet for approval. The last day of the monsoon session of Parliament is September 8; setting aside a month for consultation means the bill’s introduction will likely miss this session altogether. This is despite the fact that the UPA government, through the statements of several senior ministers, had already committed itself to introducing the bill in the monsoon session. The government cannot afford to be this cavalier with legislation of such importance.



Congress general secretary Rahul Gandhi, while touring several flashpoints in Uttar Pradesh where land acquisition disputes had broken into open violence, accepted that the Centre had been tardy with essential land legislation. “We will bring a good law, we are trying our best to pass it in the next session of Lok Sabha,” he had said then, blaming the Congress’s coalition partners for the delay. The coalition (read Mamata Banerjee) is no longer the problem; but it is worrying that it appears politics still is. All this while, state governments have been left to their own devices, compensating for the antiquated, colonial-era legislation with their individual packages. To have Parliament go yet another session without even starting the process of bringing legislative clarity to the issue indicates a strange order of priorities.

Stressed-out banks

The financial performance in the first quarter, of the few top public sector banks give room for concern. At least three top banks have seen their profits dip by around 25 to 30 per cent in the first quarter when compared to the previous year. A closer look at their results would also show that this is the outcome of a fall in the ‘net interest margin' (the difference between the average income earned on a rupee of loans and of deposits) for banks have been under pressure. Barring one or two exceptions, for most banks, NIMs have been falling and, in a few cases, quite steeply.

What is clear is that while interest rates have been on the upswing generally over the past year, pricing power is still not decisively in the hands of banks, thanks to competition. Banks have been forced to hike their deposit rates also in a bid to keep their customers from going elsewhere. And for the same reason, they have had to delay their lending rate hikes. That explains why NIMs have dropped. Despite the compression, however, for most banks, NIMs are still in the region of 2.7 per cent even now. Last year, the RBI Governor had asked banks to learn to live with a lesser NIM and offer better returns to depositors and more competitive rates for borrowers. That's perhaps happening now with some delay. It must be said here that Indian banks enjoy higher margins than those in other emerging markets, and can improve their efficiency without denting their profitability. A rise in the gross value of non-performing assets of many banks is the other area of concern. For some, if not all, they have grown by as much as 35 per cent over the past one year. Of course, in terms of causes, there are the usual suspects — the small and medium enterprises (SME) sector as well as agricultural defaults. But the restructuring of loans in the infrastructure sector is a pointer to the potential for further trouble in the days to come.

The markets expect at least one more hike before the end of this year. What this will do to borrowers who are already under stress can well be imagined. Banks have already seen some extra slippage in their non- performing assets after they migrated to system-based recognition of NPAs. As the process gets underway at various banks this year, there could be a little more deterioration. It's time for them to bring management focus to this problem and concentrate on recovery and upgradation/restructuring of viable accounts. The next quarter is likely to be a difficult one given the signs of an economic slowdown.

Lokpal bill and the Prime Minister

Anil Divan

The Indian citizenry is up in arms against corruption at the highest levels of government. Anna Hazare's movement has caught the people's imagination. The former President, A.P.J. Abdul Kalam, has pitched in and called upon the youth to start a mass movement against corruption under the banner “What can I give?” (The Hindu, June 27, 2011).

According to a CRISIL report (The Hindu, June 29, 2011), inflation has caused the Indian public to be squeezed to the extent of Rs. 2.3 lakh crores. According to the Comptroller and Auditor General of India (CAG), the estimate of loss to the exchequer owing to the 2G spectrum scam is Rs. 1.22 lakh crores.

That corruption is a disease consuming the body politic is a fear expressed by dignitaries in India over many years. As far back as 1979, Justice V.R. Krishna Iyer observed in a judgment in his inimitable style: “Fearless investigation is a ‘sine qua non' of exposure of delinquent ‘greats' and if the investigative agencies tremble to probe or make public the felonies of high office, white-collar offenders in the peaks may be unruffled by the law. An independent investigative agency to be set in motion by any responsible citizen is a desideratum.”

Mark the words: fearless investigation by an independent investigative agency against delinquent ‘greats'. A good Lokpal bill has to be nothing less.

It is in this context that this article addresses the issue of whether the Prime Minister should be brought under the ambit of an Ombudsman (Lokpal) and be subject to its scrutiny. It is important to observe that in most of the Lokpal bills, including the 2010 government draft (except the 1985 version), the Prime Minister is within the ambit of the Lokpal.

The Constitution

Under the Indian Constitution there is no provision to give immunity to the Prime Minister, Chief Ministers or Ministers. Under Article 361, immunity from criminal proceedings is conferred on the President and the Governor (formerly the Rajpramukh) only “during his term of office.”

So what is the principle behind such immunity being given? The line is clearly drawn. Constitutional heads who do not directly exercise executive powers are given immunity as heads of state. Active politicians such as Ministers, who cannot remain aloof from the hurly-burly of electoral and party politics, ethical or unethical, honest or corrupt, are not given any immunity. They are subject to penal laws and criminal liability.

The basic structure of the Constitution clearly denies immunity to the Prime Minister.

Internal Emergency

During the period of the Internal Emergency (1975-77), Indira Gandhi enjoyed dictatorial powers. She detained without trial prominent Opposition leaders and was supported by a captive and rump Parliament.

The Constitution (Fortieth Amendment) Bill was moved in, and passed by, the Rajya Sabha in August 1975 and later it was to go before the Lok Sabha. The Bill was blacked out from the media and hence very few people knew about it. It never became law because it was not moved in the Lok Sabha.

The Bill sought to amend Article 361 by substituting sub-clause (2) thus: “(2) No criminal proceedings whatsoever, against or concerning a person who is or has been the President or the Prime Minister or the Governor of a State, shall lie in any court, or shall be instituted or continued in any court in respect of any act done by him, whether before he entered upon his office or during his term of office as President or Prime Minister or Governor of a State, as the case may be, and no process whatsoever including process for arrest or imprisonment shall issue from any court against such person in respect of any such act.”

The attempt to give life-time immunity from criminal proceedings for acts done during and even prior to assuming office, of the President, the Governor and additionally the Prime Minister, did not materialise.

Foreign jurisdictions

In Japan, Prime Minister Kakuei Tanaka (July 1972 to December 1974) was found guilty of bribery and sentenced. In Israel, Prime Minister Ehud Olmert was indicted in corruption scandals in August 2009. In Italy, Prime Minister Silvio Berlusconi enacted, through a pliant legislature, a law by which he shielded himself from prosecution. The Italian Constitutional Court recently invalidated crucial parts of that law, which may result in his trial being revived.

The following are some of the main arguments against bringing the Prime Minister under the Lokpal's scrutiny. The first one runs thus: “The simple answer is, if the Prime Minister is covered under ordinary law (the Prevention of Corruption Act), you don't need him covered under Lokpal.” This is a view that has been attributed to the former Chief Justice of India, J.S. Verma (Hindustan Times, June 27, 2011). Any misconduct by a Prime Minister can be investigated by the Central Bureau of Investigation: this view is that of Chief Minister Jayalalithaa (The Hindu, June 28, 2011). This objection concedes the principle that the Prime Minister is not immune from criminal liability and can be investigated, but argues and assumes that the Prevention of Corruption Act and the CBI present effective existing alternative procedures. Nothing could be farther from the truth and the ground realities.

What is the ground reality? First, the CBI, the premier anti-corruption investigative agency, is under the Department of Personnel and Training, which is controlled by the Prime Minister's Office (PMO). Secondly, the career prospects of CBI officers and other personnel are dependent on the political executive, and all officers are subject to transfer except the Director. Thus, the investigative arm is controlled by the ‘political suspects' themselves. Thirdly, the Single Directive, a secret administrative directive that was invalidated by the Supreme Court in the Jain hawala case in 1997 (Vineet Narain v. Union of India) has been legislatively revived. Consequently, under Section 6A of the Delhi Special Police Establishment Act, the CBI is disabled from starting an inquiry or investigation against Joint Secretary or higher level bureaucrats without the Central government's prior approval. Therefore, the Prevention of Corruption Act is a non-starter against Ministers and high-level bureaucrats who may act in concert. It is imperative that the CBI's anti-corruption wing be brought under the Lokpal and not under the PMO. This alone would meet the test of an independent and fearless investigative agency as enunciated by Justice Krishna Iyer.

Secondly, it is argued that if the Prime Minister is within its ambit, the Lokpal could be used by foreign powers to destabilise the government. Today, the checks on the executive government are the higher judiciary, which has actively intervened in the 2G spectrum scam and other scams; the CAG, whose reports against the functioning of the telecommunications sector triggered investigations into scams; the Election Commission headed by the Chief Election Commissioner, which conducted elections in West Bengal in the most efficient and orderly fashion. All these authorities could be undermined by a foreign power. Why should the Lokpal alone be the target of a foreign power? Why not the intelligence and defence services? Why not leaks from Cabinet Ministers and their offices — bugged or not?

Thirdly, it is argued that bringing the Prime Minister under the Lokpal's scrutiny would mean a parallel government being put in place. This objection is disingenuous. Do the Supreme Court and the higher judiciary constitute a parallel government? Is the CAG a parallel government? Is the CEC a parallel government? Is the CBI a parallel government? The answer is clear. These constitute checks and restraints on the political executive and the administration so that public funds are not misappropriated and constitutional democracy and citizen rights are not subverted. The Lokpal will be under the Constitution and subject to judicial review, and it is imperative that the anti-corruption wing of the CBI be brought under the Lokpal. There is no question of any parallel government. The Lokpal will be only a check on the corrupt activities of the Executive. If all checks and balances are to be regarded as the marks of a parallel government and therefore abolished, it will be a recipe for dictatorship.

William Shakespeare wrote: “There is a tide in the affairs of men, which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life is bound in shallows and in miseries.” There is a tide in the affairs of this country and there is a great opportunity to promote good governance through a powerful and independent Ombudsman. India's economic reforms, for which the Prime Minister deserves approbation, should not be derailed at the altar of scams and corruption. Will his leadership ride on the tide of fortune and take the country forward to greater heights?

(Anil Divan is a Senior Advocate, and president of the Bar Association of India.