Tuesday, November 22, 2016

The GST Issue


The passage of the Goods and Services Tax (GST) Bill, officially called the Constitution (One Hundred and Twenty Second Amendment) Bill, 2014  recently passed in the Rajya Sabha is seen as one of the biggest reforms undertaken by the government since the opening up of the economy in 1990. While there is some road still left to be travelled towards implementation, yet its passage in the Parliament ensures that it will be a reality soon. The GST seeks to replace Central Excise Duty, Service Tax and at the same time will subsume State VAT, Central Sales Tax, and Purchase Tax, among other taxes. In effect, this bill seeks to end the cascading effect of indirect taxation in India.

Before understanding GST, we must understand the present system of indirect taxation prevalent in India. The constitution divides taxation powers between centre and states. Both levels of government have some exclusive areas where they can levy tax. Income tax, which includes tax on company profits, is in the exclusive domain of central government. These taxes are referred to as direct taxes. Indirect taxes are taxes levied on manufacture of goods, provision of services and consumption, which are again in exclusive domain of central government. Taxes on consumption, on the other hand, are under the exclusive domain of state governments.

This system of indirect taxation had some problems. First, there was the issue of multiplicity of taxes. From the moment a product was manufactured, it was treated to a bevy of taxes from central excise to VAT.  This added to the total cost of the product which was borne by the final customer. Another problem was that, different states had different taxation rates. Some states had lower VAT rates compared to others. This created a chance of tax evasion and states lost out on revenue that it had to earn.

GST seeks to correct these anomalies in the system. It seeks to replace the indirect tax regime in India which is replete with multiplicity of laws and barriers in interstate movement of goods. At the fundamental, GST is a value added tax. This will be levied at all points in the supply chain where credits will be allowed for any tax paid on inputs acquired for use in making the output. Since the GST will be tax added on each stage of value addition, the final consumer will bear the GST charged by the last dealer in the supply chain, with set off benefits for all previous stages. It would be applicable for both goods and services wherein the exemptions given are minimum. A minimalistic system that has less discretion will function as a much more transparent and robust system. The GST regime seeks to correct those faults that were present in the indirect taxation regime. GST will make India one unified market.
GST will seek to help the consumer in the following ways. First, all taxes will be collected at the point of consumption. This means that if any product is taxed at 18% (which is the GST rate fixed for now), it will include both central government’s taxes and state government’s taxes. This will decrease the cost of goods in long run and can create an environment of lower inflation rates in the country. Seen in this light, GST can also play an important role towards achieving the recently announced inflation policy where the government will attempt to keep inflation at 4% with tolerance level pegged upto 2%. Second, once barriers between states are removed, we as consumers will not end up paying “tax on tax” which is what happens when goods move across state borders. It will also widen the tax base which is necessary for lowering tax rates and eliminating classifications. GST will result in harmonisation of Central and State tax systems which would reduce duplication and compliance costs. The automation of compliance costs will also result in reduction of errors, thereby increasing efficiency.
In keeping with the federal structure of the country, GST will have two components: Centre GST (CGST) and States GST (SGST). This is keeping in mind the fact that base and essential design features would be same. Both the system will be based on tax on the destination model. Thus, exports would be zero-rated, and imports would attract the tax in the same manner as domestic goods and services. Inter-State supplies within India would attract an Integrated GST (aggregate of CGST and the SGST of the destination State). The GST will be accompanied by the GSTN which will work towards capacity building among others. Officers are already being trained towards administering the new GST.
However the GST will face stiff challenges in its road to implementation in the coming years. The first challenge percolates to the rate at which GST will be launched. The prevailing sentiments seems to be at 18%, which will finally be decided and yet to be notified by GST council, in the long run. While different studies have pointed to different rates, it would undoubtedly help the consumers when the present rate would be fixed at a level which would negate the cascading effects of indirect taxation.
Another challenge that has to be encountered is administering the GST with minimum exemptions. New Zealand had the best GST model when it started out with the taxation rate fixed at 10% with almost zero exemption rates. However as most taxation analysts would like to point, tax policies can never be fixated in one particular realm, as with changing circumstances and economic behaviour, taxation policies need to change as well. Today, New Zealand has increased its taxation rate from 10% to 15% .Countries have fared better in administering the GST regime when they have reduced the exemption while widening the base. This is the challenge India will hope to encounter and successfully resolve.
The third challenge would be the implementation itself. India since its independence has achieved its political unity while the economic unity remains a distant dream. India is composed of various states with different financial standings .While states like Maharashtra and Gujarat are capable of generating their own revenues, the north eastern states, for example, are not on a strong financial footing. Yet the GST will seek to treat every state equally. While this would be challenging, yet it would also harmonise the country as an economic entity in the end. In the long run, GST seeks to benefit all and can truly act as a harbinger of the next round of economic reforms. The road to the same is tricky but the goal is worth it.
- Ibu Sanjeeb Garg ( Views expressed by the author are personal)






Sunday, August 7, 2016

THE FAT TAX DEBATE

The recent announcement of imposition of a “Fat Tax” in the Kerala budget has generated a lot of discussions around the country. The proposed tax seeks to tax burgers, pizzas and other processed foods at 14.5%. It also seeks to tax food served by major fast food brands.

Obesity has emerged as a global problem in the world today. According to a study published by acclaimed medical journal Lancet in 2014 India has the third largest number of obese people in the world. According to the study India is home to 30 million obese people. If the current trends continue, this number will skyrocket to 75 million by 2025. Childhood obesity tracks into adulthood, and is an important risk factor for the development later in life of type 2 diabetes mellitus, metabolic syndrome, among others. This has to do with unhealthy food, sedentary lifestyles and loss of traditional knowledge. In such a situation it is indeed laudable that Kerala has taken an initiative to tackle the problem.

The concept of Fat Tax is not new. A fat tax is an example of a Pigovian tax which seeks to impose a restriction on the unhealthy food regime that has emerged in the world. Japan was the first country in the world to impose the “metabo law”. This law which included measurement of waist sizes was sought as a tool to fight rising obesity numbers in Japan. Similarly in 2011 Denmark introduced a fat tax on certain products as a tool against rising obesity and lifestyle diseases. However after a fifteen month stint it was taken off because the law had failed to take off and the government admitted to people buying food from across the border.

Understandably the introduction of such a tax has lead to discussions whether the tax would serve any purpose. One of the first points of discussion has been with regard the financial rationale behind this taxation. This tax would add almost ten crores into the coffers of the Kerala government. Those who do not favour the tax argue that ten crores hardly make a difference into a budget that runs into thousands of crores. Industry insiders argue that such a tax will not signal a shift in consumption pattern but will only add to the burden of the customers. Moreover Kerala does not have large number of fast food chains compared to the other major southern states for this tax to make any major impact. In summation critics argue that this will only mean rising cost for the consumer.

Another major argument relates to the fact that fat tax on pizzas and burgers is essentially a non starter because such “Western” food constitutes a small part of the larger Indian dietary pattern. Indians have long been a haven of spices and oil with samosas , pakodas and other fried items almost inevitable in Indian menu. Kerala has its own share of fried items in form of the famous banana chips and beef fry. Each of this item carry huge threat potential to the health of the population .And thus imposition of tax on pizzas and burgers do not make sense.

Others argue that the Denmark failed experiment must be a lesson for those who seek to tax fast food. The failure of the government of Denmark to wind down the schemes within 15 months citing administrative burdens is a sign that such schemes are marked to fail.

However each of these myths must be addressed logically. The rationale behind this taxation is not so much as to earn taxes as to create awareness about the existence of health hazard. It is true that the Indian dietary menu consists of large share of unhealthy items however what can’t be denied is that products like pizzas and burgers have made rapid inroads into Indian markets and are soon poised to take over from traditional Indian foods. A recent judgment of the Delhi High Court in 2015 is noteworthy in this regard. The judgment delivered in 2015 sought to ban sale of junk food in school vicinity. It also sought to control and regulate the advertisements of such products in schools. This undoubtedly shows that policymakers recognise the obesity issue and awareness is the first step towards combating it. This tax would not so much as fill the government coffers as it would create awareness about healthy food items. In the long run such awareness will also spread over to traditional Indian unhealthy snacks. Hence such a tax should not be opposed merely because it targets only a particular category of items.

While the Denmark experiment has been a failure in some measure there are experiments around the world in different forms which have shown such schemes are successful. For example a “soft drink” tax imposed by Mexico in 2014 of one peso per litre resulted in the dropping of soft drink sales by 2%. It also added about 2 billion dollars in the government coffers, almost a third more than what the government had anticipated. While sales have picked up again since then, yet the rate of sales are nowhere near the pre taxation levels. On the other hand there have been successful experiments in Hungary, Finland and France of taxing one junk food item or another. In summation it can be concluded that governments worldwide are waking up to the reality of obesity and unhealthy lifestyle.

The most important component to this debate however is the threat to the poor. As any poor economist would tell us the poor are vulnerable to false impressions of a better lifestyle, because it signals aspiration. Burgers, pizzas and cold drinks are seen as symbols of a beter lifestyle. This is why perhaps there are stories of McDonalds employees mistreating street children who are later fed by benevolent customers. The fact that such street children hang around fast food chains is a testimony to the vivid imagery that these chains project. And it is this image to which the poor are most vulnerable. In a country like India which is confronting the poverty challenge boldly, providing a better food basket is an important part of that challenge. And it is towards this that the projection of fast food has to change from being a symbol of growth to one that is fraught with its dangers.


As we move into a global order, food habits and dietary charts will undoubtedly change. For example the consumption of pulses have rapidly fallen in India .Yet it is important to keep reinventing the basket so that at any point it offers a healthy modicum of choices for the consumer. And it is towards this change of perception that the fat tax should be seen. It is not a tool to earn revenue or rapidly shift the consumer consumption pattern. It must be seen as a indicator that seeks to check and balance our dietary behaviour should it reach dangerous levels.


(http://thediplomat.com/2016/08/indias-fat-tax-debate/)

Tuesday, July 19, 2016

NADI 2016-connecting the people with rivers

In 1981, Joseph Montville, while discussing foreign policy in the magazine ‘Foreign Policy” through the course of his article “Foreign Policy According to Freud” coined the phrases ‘Track 1’ and ‘Track 2’ diplomacies. Track 1 referred to the normal discussions that diplomats indulged in, while Track 2 took place through professional experts, industry leaders, among others. A Track 2 discussion was seen as a way of understanding each other’s apprehensions and identifying common threads that would help establish a partnership. Since then, globally Track 2 discussions have become an important part of diffusing tensions and creating conducive atmosphere towards building a more meaningful partnership.

In this context the two day Asian Confluence NADI festival-2016 organised by the Asian Confluence, India, East Asia Centre, Shillong, in collaboration with the Meghalaya government and the Maulana Abul Kamal Azad Institute of Asian Studies assumes significance. It was a two day conference organised between 15 and 16 July 2016. Noted speakers and experts from Bangaldesh, Bhutan, Nepal, Myanmar and north eastern states of India sat together to discuss issues of connectivity and people. Rivers was the central theme of discussions, as besides serving as a means of transport, rivers stood as a connective narrative among people for centuries now.

A number of interesting ideas were presented during the course of the two day conference, which sought increased connectivity among India’s Asian neighbours. This would indeed help India in its own quest as an emerging global power, and at the same time, giving the North East a firm footing in evolving diplomatic relations. It was Punjab and Tripura which first started power diplomacy with neighbouring countries and redefined how foreign relations evolved in India. Through initiatives such as the NADI festival, the north eastern states would further diplomacy from a state perspective as well. All this, while staying on course of the firm ethos on which the Indian diplomatic values and direction lie on.

Representatives from Bangladesh sought to increase the number of flights between Bangladesh and Northeastern region to further people-to-people connectivity. Basin management should also form a part of the joint initiative, the speakers opined. Speakers from India stressed on strengthening dialogue process and that including all stakeholders would pave the way for effective convergence and “actionable” points in using rivers for mutual benefit and prosperity in the region. Border haats (Border markets) as an important form of cross border trade was emphasised and stress was laid on increasing the number of border haats.
                                             
At the bedrock of the NADI confluence which seeks to capitalise river, both as a conduit of transportation as well as a people-to-people connector, it is important to understand why inland waterway is important to India. According to a World Bank study, when one compares Inland Water Transport (IWT) with Road and Rail connectivity, one sees a clear pattern. While energy efficiency (in terms of how much weight cargo one HP of energy can carry) for rail and road are 500 kg and 150 kg respectively; for IWT it is 4000 kgs! Similarly fuel efficiency of IWT is much more than traditional rail and road connectivity. While considering other factors such as land needed, capital invested and air pollution induced, IWT scores favourably over other traditional forms of transport.

Northeastern India is a completely land locked region connected to the rest of the country by a thin chicken neck! As such, alternate connectivity to the rest of the country as well as reverse connectivity between India and its Asian neighbours via North East assumes significance and it is here that rivers have a major role to play. While China has almost 43% of its internal trade via waterways, in India it stands at 7% only. Today experts estimate about 640 rivers criss-cross the region and 54 rivers flow from the NorthEast to Bangladesh. There is immense potential of developing these rivers as inter country as well as intra country means of transport. The Indo Bangladesh Protocol on Inland Water and Trade (PIWTT) has been operational since 1972.   PIWTT was later amended and Ashugonj was declared a port of call and transhipment port and is now used to transport goods to Tripura. This has cut down the transportation costs of good to Tripura dramatically. A renewed PIWTT would not only enhance intra regional trade but also open new opportunities of connectivity.  The Kaladan Multimodal Transit Transport Project which seeks to connect Kolkata with Sittwe port in Myanmar by sea can be seen as a natural extension to the ideas envisaged in the NADI confluence.

Yet an initiative of connectivity via rivers should not be seen in terms of transport connectivity alone. There has to be greater people-to-people interaction, more linkages between the upstream and downstream inhabitants. A theme of connectivity, centred around such connections is bound to boost relationship among nations. In the sidelines of the conference, a Buddhist circuit jointly developed between India and Bangladesh was mooted. Such a proposal would indeed bring the nations closer. India, as the birthplace of the Buddha, has a special place among Buddhists spread across Bangladesh, Myanmar and other Asian nations. A proposed Buddhist circuit incorporating these dynamics would undoubtedly foster closer people-to-people relations. Another initiative that can work wonders is opening a South Asian University centre in the North East, in the lines of one established in New Delhi. North East undoubtedly shares racial, cultural and historical ties with the Asian nations. A common university in North East would doubtless be attractive for students from other South Asian nations and increase people-to-people dynamics.

Today, India and her neighbours jointly face new forms of challenges in form of conventional and non conventional threats. As the deadly attack in Gulshan, Dhaka has proved no country is immune to the threat of global terrorism anymore. In such a crucial juncture, initiatives such as NADI-2016 would provide a great boost to confidence building measures among nations. At the same time threats are not limited to conventional arrays alone. Climate change is a major threat to nations today, especially low lying ones like Bangladesh. Experts predict, by the end of this century, a large part of Bangladesh would be under water. This would undoubtedly create pressure on the North Eastern states as migration is inevitable and the pressure would be on cross border migration as well. The North Eastern states already have a chequered history on the issue of migration from Bangladesh; hence opportunities such as these can also be used to discuss the question of livelihoods, cross border migration and climate change in the future.

In a global order, 21st century diplomacy has certainly moved from drawing rooms of diplomats to the people. This is a positive trend that encourages people participation and makes them stakeholders in their nation’s future. As the world order moves towards greater connectivity initiatives such as NADI-2016, it would indeed foster greater people-to-people ties and at the same time helping India cement its position as a global leader in a new emerging multilateral world order.

- Ibu Sanjeeb Garg (The views expressed by the author are personal)


Monday, July 4, 2016

Feasibility of privatisation of Oilfields in Assam

The government has recently arrived at a decision to privatise 12 small oilfields in Assam. This, as part of the new policy towards privatisation of 67 small oil fields in India, has drawn understandably strong reactions from the vocal civil society of Assam. Assam has had a long chequered history with oil, with its roots in the Assam movement when slogans like “Tez Dim Tel Nidiu” had evoked sentiments of all. Thus naturally any talk about oil in Assam evokes strong reactions.

30 years have passed since the movement have taken place in Assam. The homegrown Oil companies in Assam like Assam Oil have withered away. Refineries like Digboi oil refinery with its falling production limit are now within the gambit of Oil India Limited (OIL). And millions of metric tonnes of oil and oil equivalent gas stand unused. Despite having immense potential, the natural resources in Assam lie unused. Royalties from oil payments are stuck in legal battle since 2008. And a large demographic population stands unemployed.

It is in the background of these issues that the question of privatisation of oilfields in Assam must be addressed. The first theory, that is often propounded whenever there is talk of foreign investment, is the bogey of foreign investment. The image of foreigners, exploiting resources often make for vivid imagery in the socio political landscape of Assam. Yet the fundamental point is the fact that mere declaration of a policy intending to invite foreign investment will not automatically translate into foreign investment. The global economy is at an all time low, Brexit has hit international markets and oil prices are yet to see a high. This, seen with the domestic market not being robust, the chance of foreign investors flocking in to invest in Assam seems quite remote. To this, when one adds the perception of North East as an investment location, the chances of foreign investments seem even bleaker. Hence the chance of foreign incursion in oilfields is unfounded.

Another aspect of the privatisation debate is the “threat to environment”. It is true that extraction of natural resources always extracts its cost from the environment. However, in a fast developing world where oil is the basic consumption fuel, from machines to transport, to sit on top of oil reserves and do nothing makes no sense. At some point there has to be systematic efforts to harvest natural resources. However this must be coupled with the twin paradigm of sustainable technology and accountability.

Today a number of companies worldwide are investing and implementing technologies that make oil and gas drilling as sustainable as possible. For example Cenovus, a company working in northern Alberta, Canada is trying to minimize their impact on this pristine landscape by using reusable wooden mats to create temporary access roads. The wooden mats provide stable work conditions for equipment and the crew and help protect the ecosystem underneath. When finished, they simply pick up the mats and move them to the next location. Petrobus has been drilling in the Urucu province in the Amazon. In a span of more than two decades, the company has built on less than 0.5 percent of the site; the rest is undisturbed. Petrobras has built 71 kilometers of paved roads, but they are built only when needed. When doing exploratory drilling, for example, Petrobras doesn't build a road to a potential site; it clears a patch of land and brings in equipment by helicopter. If the exploratory work proves disappointing, native plants from an on-site nursery are brought there to restore the forest. The nursery, at last count, had about 200,000 seedlings and more than 85 varieties of orchids. Apart from these, companies can go paperless and give back to the community in form of plantation programmes among others.

 Thus, in the 21st century oil and gas drilling is beginning to evolve as a sustainable face that can’t be ignored. Steps like giving back to marginalised communities in form of building hospitals and schools would further strengthen this process. Though contested, it can’t be completely denied that the poor have less access to sustainable means of development. For example, while the poor use firewood for cooking,  a better option is  use of cooking gas, which is more sustainable. Hence upgradation of livelihood has an indirect spinoff on environmental sustainability as well.

There is however the “perception” of environmental damage that is much harder to confront. In the last thirty years, streams have grown dry, hills have been mowed down and river beds have become thriving business avenue for a large number of people. A Ramsar site of repute, the Deepor Beel, is under continuous threat of encroachment. The hills around Guwahati have become the site of illegal settlement. And yet it is oilfields alone whose exploration is seen as bringing out massive environmental upheaval in Assam!

The threat to environment is real. However the real solution to that lies in accountability and self restraint. Environment will wither away irrespective of whether investments in oil fields are made or not, if there is no accountability. Hence a nuanced approach would be to involve in the oilfield operations and ensure their environmental accountability. Social and Environmental Impact Assessments are the heart and soul of any modern day programme. Accountability must be placed upon those who seek to invest in the oilfields with assurance, not only to give back to the community but also contribute towards innovating sustainable measures for themselves. Steps like construction where only needed, would ensure that balance is maintained between the quest for oil and gas and the environment.

The question arises, as to how the privatisation of oilfields can benefit Assam. The answer to that would lie within the socio political milieu of Assam, if it can assert itself as a responsible actor that is vigilant and cooperative, instead of indulging in uninformed rhetoric. According to the NSS 66th Round Sample Survey, Assam has the third highest unemployed population in the country. While urban unemployment stands at 52% rural unemployment stands at 39%. The numbers for urban unemployment seem dismal already, the lower rate of rural unemployment is no cause for cheer either. The number stands at 39% because primarily rural employment is in agriculture that itself is plagued by large scale underemployment and disguised unemployment. If these numbers were rectified, the number of unemployed in rural areas would rise even higher.

The State GDP of Assam during 2013-14 grew by 14.68%; when states like Bihar grew by 25%  and Goa by 39.84% . While the growth of Assam is slightly above the national average of 14%, yet this growth rate, seen in the context of large number of unemployed people, does not seem enough to fulfil the aspirations of a burgeoning youth population.  At this juncture, government estimates of the 12 oilfields brining in 4000 crore to Assam would act as a big boost to development of the state. This is, apart from the money that would flow into the state coffers, in form of oil royalties.

This auction must also be seen as an opportunity to develop homegrown potential within the state. Today, Gujarat Power Corporation Limited takes part in auctions for oilfields and has ventured into new areas like solar energy. Tripura has a similar success story with regards to gas exploration. The process of auction opens the possibility of reviving Assam Oil as a premier oil and gas exploration company. Also if such small oilfields are developed, not only would a large number be employed, but also create the human resource of trained manpower to work for oil companies in the future.

The debate around privatisation of oilfields, therefore, has to be approached in a nuanced manner. A jingoistic approach cloaked in unwillingness to reason would harm the interests of Assam, rather than protect it.


-          Ibu Sanjeeb Garg ( Views expressed are personal)

      This article also appeared in thediplomat.com/2016/07/should-india-privatize-assams-oilfields/


Thursday, June 30, 2016

Demand for new states in the North East

Of late, there has been a persistent demand for a separate Garo homeland that is being voiced with much intensity across the Garo dominated areas of Meghalaya. As the movement grows in pace, it is perhaps pertinent to look into the history of state reorganisation in India and place North East in that paradigm. The history of states reorganisation goes back to the freedom movement of India. The earliest comment on states organisation or reorganisation came from Mahatma Gandhi who opined that states should be divided on the basis of linguistic differences. This was based on his own experience of Congress witnessing a massive fillip when it starting releasing periodicals in their own languages. It was a belief on these experiences which saw Gandhi as one of the first supporters of linguistic separation. However immediately after independence, the Dhar commission was formed which negated the need for division along linguistic lines. This was followed by the JVP Jawaharlal Nehru,Vallabhai Patel and Pattabhi Sitarammya committee which too rejected division of states along linguistic lines.

A major shift in stand towards state organisation came in 1952 when Potti Sriramlu succumbed to a 56 day hunger strike demanding creation of a separate Telugu speaking state. Once Andhra Pradesh was created out of the Telugu speaking provinces of erstwhile Madras state, the floodlights opened towards new demands for creation of newer states.Finally, the States Reorganisation Act, 1956 signalled the creation of 14 states and 5 Union Territories (UTs). Yet this did not end the clamour of new states and the hopes and aspirations of people for separate statehood continued. In 2000, three new states of Uttarakhand, Jharkhand and Chattisgarh were formed;  in 2014 the newest state of India,Telengana was born.

The history of statehood formation in NorthEast has not been any different from the rest of the country. At the time of independence, North East was composed of the Province of Assam in existence since 1912, the princely states of Manipur and Tripura and the North Eastern Frontier Province (NEFA). In 1949, Manipur and Tripura became Union Territories eventually becoming states in due course of time. Nagaland was created in 1963 while Meghalaya came into being in 1969. The Mizo hills of Assam were converted into a Union Territory in 1972, which eventually became a full fledged state in 1987. NEFA, too, became a full fledged state in 1987.As the rest of the country, North East continues to shimmer with demands for a separate homeland ranging from ideas of a separate state to sovereignty. Bodoland, Kamatapur(Assam),Garoland in Meghalaya are fermentations of those ideas that continue to dominate the  troubled political landscape of  the North East.

Yet, it would not be sufficient to see the present demand for a separate homeland on the basis of history alone. The debate has to be seen on the twin paradigms of how the new states have fared since its inception and also the ethnographic landscape of the NorthEast.The three states that were created in 2000, were carved on the basis of backwardness rather than linguistic considerations. Yet the results have not been too encouraging. Despite having huge mineral and natural resources, Chhattisgarh and Jharkhand have not been able to focus on development. Today, Chattisgarh has become a hotbed of Maoist activities. The government has taken many steps to improve the lives of the people. Educational hub in Dantewada, for example, seeks to redefine how Maoist areas in India are perceived, yet a large ground remains to be covered. While states like Tamil Nadu, Rajasthan have marched ahead either on growth or human development index, the newly carved states continue to find the right path towards growth. At the same time historically smaller states like Kerela, Nagaland and Mizoram continue to post impressive numbers in terms of human development. These states have phenomenal literacy rates for example. But one glance will make it amply clear that most of these come from the traditional structures that these states have had. For example, among the tribes in North East, impressive literacy numbers can be attributed to the fact that missionaries have had a positive influence in these regions.

At the same time, however, it must be understood that debate centred on small states cannot be seen from the point of development alone. There are advantages towards a small state that cannot be denied. A smaller state brings administration closer to the people. The administration has a greater understanding of issues on ground. A smaller state ensures lesser diversity, not only in terms of ethnicity or language alone, but also economic systems. For example, a separate Bodoland would have different areas of focus compared to the government of Assam where the economics revolves around tea and oil. Thus, smaller states ensure better economic policies.

However, while looking at small states and the North East, one has to account for the ethnic diversity that North East has. Every tribe of NorthEast has a collective imagination of a homeland which is rooted in territorial identity. However this “collective imagination of a homeland” often clashes with the “collective imagination of a homeland” of another. For example the area, claimed by the Bodos as “homeland” is also claimed by the Koch Rajbonshis, for example. The Greater Nagalim dream of a homeland spans across a number of states and spills over to the neighbouring country of Myanmar as well. A new Kuki identity being spun across Manipur seeks to weave those across the international borders. Or at other times their “collective imagination of a homeland” stands opposing to the modern territorial boundaries. For instance, the Garos are spread across Meghalaya and Assam .If a new Garo state is introduced out of Meghalaya, then the dreams of the Garos of Assam stand unfulfilled.

One must also remember that declaring new state in NorthEast is difficult because the ethnographic compositions seek to indulge itself in a vociferous us versus them debate. If one looks back into the history of the NorthEast, the first statehood demand from Meghalaya came precisely because the Assam cabinet chose to impose itself on the rest of the hill people. The “us versus them” debate is real because the ties of ethnicity are not encompassed to territory alone but the rights within the territory and the economic resources. The Kokrajhar riots of 2012 were less of one community against another and more of the fight of two economic systems –one sedentary; the other which followed a non sedentary cultivation. At the root lies the fundamental issue of land rights, forest rights, the depletion of community grazing centres and a burgeoning population that stands unemployed. Thus ethnographic tensions stemming from territorial aspirations, have found a place in the socio-political landscape primarily because of the economic rationale.

Hence, any move towards creating a new state or a demand for a new state has to be seen on these parameters. A new state is not a question of administrative ease alone. Nor is it a question of fulfilling the idea of a collective homeland. It would need imaginative policies like formation of a Garo Cultural Council for addressing the Garo identity issue, which would encompass Garos from all regions without disturbing the present territorial compositions. In the long run, if a new state has to be formed,  it has to be judged from multiple angles. There is no verdict whether a new small state would completely succeed or fail but the greater goal of any democracy is giving wings to the aspirations of the people. And it is with this premise that we must keep looking at the constantly changing narrative of the NorthEast.

-          Ibu Sanjeeb Garg ( Views expressed by the author are personal.)


Monday, June 20, 2016

Skilling with a broader vision

Demographic dividend of any nation is defined as the economic growth potential that can occur in any nation due to rapid increase in its percentage of working population (15-64 years) to the total population. In 2011 a working paper by the International Monetary Fund predicted that in the next two decades due to this demographic shift, India may witness almost a two percent growth rate in its GDP.

The country is witnessing radical steps in the skill development spectrum with ‘Skill India’ as the new buzzword and rightly so, since India will have the world’s youngest work force. Recognizing this potential, the government has identified skill development as an important target. The primary role of skill development is to empower people to finding better livelihood opportunities while at the same time endeavoring to bridge the social, regional, economic and gender divide. The government has set up an ambitious target of skilling 40.2 crore people by 2022. During the target year 2015-16 the government envisaged to train 1, 22 Lakh people between 21 ministries. At the end of the first quarter the results have been fairly positive with the government achieving 23.64% of the target in the same time period.

To coordinate the skilling process the government has set up a well-structured framework. With  a full fledged Ministry of Skill Development and Entrepreneurship at the apex level, this framework comprises of the National Skill Development Agency (NSDA), National Skill Development Corporation (NSDC) and Directorate General of Training (DGT) at the central level, as well as the State Skill Development Missions (SSDMs) at the state level. The country is witnessing radical steps in the skill development spectrum with the Union Cabinet approving the National Skill Development Mission to usher in convergence of activities from various stakeholders.

The National Skill Development Agency acts as the coordinating body for all skill development programmes in the country. It also acts as the nodal body while interacting with the State Skill Development Missions. The NSDA is responsible for operationalization of the National Skills Qualifications Framework.(NSQF) which acts as an outcome measure of skill development. Unlike most other outcome outliers NSQF, is a broader framework where competency levels have been clearly defined between Level 1 and Level 10. The whole process is monitored by the National Skills Qualifications Committee which comprises of representatives from Ministries, regulatory bodies, States and Industry bodies.

On the other hand the National Skill Development Corporation (NSDC) works on the lines of a Non Banking Finance Corporation which grants loans to training providers as well incubates the Sector Skill Councils (SSC).Established in a PPP mode, NSDC is expected to reflect the viewpoint and stakes of industry and the private sector. Industry driven, Sector Skill Councils for different sectors, act as the industry input providers for the government in order to drive the mechanism forward.
This is the standard skilling ecosystem where the end result is the placement of an individual who acquires the desired skill level. However in truth the target of skill development is twofold-  to enable an individual to find a job as well as to ensure lifetime learning of an individual. This would ensure that every individual has a clear career path progression irrespective of the sector he/she works in. This is in turn countered by a twofold challenge - the availability of jobs as well as the employability of an individual.

Since the turn of the new decade though the economy though has grown steadily, it is yet to mark a rapid progress. The economic growth of a nation is closely linked to the placement of skilled individuals. Conventional logic tells us that only a steadily expanding economy can produce a large number of jobs. A number of studies point that 2016 would be a good year for Indian economy with almost 10lakh new hirings in the organized sector. While this is a welcome development, this pace of job creation must be continued.

Underemployment of an individual however has deeper connotations. Many reports in India, time and again have pointed out the under employability of Indian students across various sectors.For example a survey conducted by “Aspiring Minds” in 2013 pointed out that close to 50% graduates of India were unfit to be employed.This should drive us to a deeper introspection as itcould be closely linked to the first step of a person’s learning, which is elementary education in itself. Sustained efforts in developing programs like the SarvaSikshaAbhiyan and the Mid Day Meal Programs and far reaching legislations like the Right To Education have produced tremendous results in terms of enrollment and access to primary education. 

Yet as the PRATHAM(ASER) surveys have pointed out each year that while the enrollments have increased their has been little change in terms of learning outcomes. In the report of 2014 it states that while India has achieved almost 96% enrollment in primary school levels yet the learning level outcomes are quite shocking. For example 25% of Class 8 students couldn’t read Class 2 text, while this has been a improvement compared to the past few years, yet such details do remain point of concern. Andherein lies in the root of underemployment which can act as a serious hindrance to skill development. It is important to reflect on this to have a more sustainable view of skilling initiatives. Thus the solution lies in understanding skill development not as an employment tool alone but a larger framework that builds within education of an individual and which starts from the elementary level. Skilling efforts cannot be complete with government funding alone and the private sector has to be partner equally, if not more. Significant efforts are underway to encourage a strong industry-academia linkage. While academia assimilates quality in the workforce, industry absorbs the skilled workforce and empowers them with social and economic welfare. Such steps would have to be jointly initiated by the Ministry of Skill Development and Entrepreneurship in congruence with the Ministry of Human Resource Development (MoHRD). Vocational educational framework in schools must be strengthened with inputs from industry experts so that students understand the requirements of present day industry framework.

With respect to emplybility skills the government has made it mandatory to include soft and employability skills mandatory for all skill development programs, by notifying “Common Norms”. This is indeed a welcome step. Soft skills are an often discussed but frequently forgotten component of employability of an individual. New ways must be figured out to ensure that soft skills are imparted to a child right at the elementary education level itselfThe National Skills Qualifications Framework is another component that plays a major role in this regard. Industry must give recognition to the skill development framework which would then be linked up to the employability of an individual. This in turn has to be acknowledgedwith agreed pathways for higher learning as well. There are tall statistics that tell us that the labour force in India comprises of a high number school dropouts who could not continue with general education due to various socio-economic compulsions. The skilling efforts in the country target these youth to offer them gainful employment. However, a competency based framework does not end there. It carves out a pathway for life long earning. For example, if a class 8 dropout working as a plumber gains requisite experience and skills to acquire competencies equivalent to class 10can eventually go back to higher learning with minimum additional training. This would increase the seamless lateral entry movement between conventional education as well as skill development courses in different sectors. The relevance of this is enhanced in a country like India, where it is feared that vocationaltraining is destined towards blue collared fate for all times to come.

In the end, skilling in itself, is not just skilling in itself but  part of a holistic development of an individual. A skilled individual would achieve job recognition only when he is seen as an individual who is capable of learning and contributing and not merely a cog in a factory wheel, churning out products in regular intervals.

-          Meghna Sharma
Ibu Sanjeeb Garg

( Meghna Sharma works with the World Bank as a Consultant .Ibu Sanjeeb Garg is an Indian Revenue Service probationer)

Monday, June 13, 2016

Assam –its place in a competitive environment


The socio cultural milieu of Assam have always emphasised a prime on education. Since the advent of modern education in India, Assam has seen a steady flow of students to cities like Calcutta , Delhi, Bangalore, Hyderabad and so on. The earliest socio cultural doyens of Assamese literature like Laksminath Bezbaruah were among the first who understood the value of better education and moved out to cities like Calcutta seeking higher education for themselves. That the Assamese society places a premium on education can also be gauged from the fact that annual civil services results, Matriculation results and Higher Secondary results are like festivals . Of course the “toppers” are forgotten within a week because public memory is indeed short.

Yet when one seeks to compare students of Assam with the national paradigm, there is a wide gap compared to the counterparts of the rest of the country. For a number of years now there has been a larger debate with regard to the contribution of students who have topped in Matriculation and has apparently failed to give back to the society. This indeed reeks of misdirection towards what the debate should have been and also an unnecessary judgment of the toppers.

The real question that needs to be asked is what is the status of education in Assam, especially at the school level . The first point that comes to the mind is the large number of students that fail every year. This was the news that needs to be dealt equally importantly alongwith the toppers and their stories. However the media and society has failed to do so. If such large number of students fail at the first level of schooling itself, what opportunities remain for them. Can they aim to attain a decent livelihood eventually? Why has the endemic cause of failures happened in the first step itself ? These are the questions that need to be addressed in the first place.

Very often the narrative of the past few years have been one of the consistency of vernacular medium schools in matriculation exams. While acclaiming indeed the noteworthy achievements of the vernacular medium schools, one needs to analyse why frontline English medium schools who previously were accommodated within the SEBA system have now moved to the CBSE curriculum. Will SEBA cease to function as a bilingual board eventually or will it reinvent itself to attract the best minds within the state of Assam. The endemic erosion of SEBA’s credibility is another issue that needs to be addressed with concern.

The third question is narrative built around the results itself. Toppers of public level  exams like felicitated and then forgotten. Students too are drawn by these felicitation, but once they realise the system is actually fiercely competitive, most of them give up . In the case of UPSC, for example, while civil services have given consistent results for the past few years , yet students from Assam fail to make it to the top ranks with the regularity that students of other states exhibit. In the civil service itself, the last top rank that was acquired by a student from Assam was Varnali Deka who secured the 16th rank. Since then, while students have cleared the civil services with regularity, a single digit rank still seems elusive. Compare this with the state of Jammu and Kashmir which has produced a Rank 1 and a Rank 2 in a space of five years alone. While the media has played a positive advocacy role in inspiring students to clear these exams, there should be a heightened zeal and motivation among students to also ace these exams by learning from their fellow competitors in other states. And this is not limited to UPSC civil services alone , students from Assam have failed to get top ranks either in IITJEE,AIPMT , law entrance examinations like CLAT, or premier research institutes like IISc, IIAS etc . With the honourable exception of social sciences in  premier institutions like Delhi University and JNU, where the number of candidates clearing these exams have increased in the past few years, yet the percentage of top ranks still remain low .

The root cause of this is in the narrative that students in Assam build for themselves . They are hampered by twin faults of lack of awareness as well as lack of self belief. Students from Assam are never aware that every year thousands of students appear for SSC, Railways, Banks PO examinations around the country. Most of the students in Assam are not aware of these institutions or the process to apply for these institutions. 

The second problem relates to the question of self belief. Students from Assam are often seen deterring from national level examinations whether for jobs or for entry into premier institutions for as these are long drawn process with tough levels. They fail to realise that the only perquisite to success is hard work alone . Every year one institute in Bihar select 30 students in Bihar and train them for the IITJEE examinations. And every eyar invariably all 30 of these students make it into the IIT’s and this is despite all of them belonging to poor families. 

To stand at par at a pan India level, students from Assam whether from academia or other professional field must have a belief in themselves. They must believe that the results are not about one night of media felicitations alone , but far deep and harder realm of hardwork .And it is with this mindsight of “We can” that the Assamese society must direct the next generation .Assam has a history of proactive social organisations like Assam Sahitya Sabha , Bodo Sahitya Sabha among others .Such organisations must act with the twin objective of creating awareness and kickstarting mindset change at the same time . The discourse of education in Assam has to move beyond the traditional realms and acquire newer dimensions ,one that would seek to truly empower the students.


Thursday, June 9, 2016

Inner Line Permit and its politics of Manipur


ILP or Inner Line Permit is a document that is issued by the government of India for inward travel of an Indian citizen into a protected area for a limited period. This owes its origin to the British administration, in the Bengal Eastern Frontier Regulations, 1873 which controlled movement of British subjects into certain areas of their dominions. In independent India it has been seen both as a security measure as well as an effort to conserve the ethno-social demographics of certain societies.  Presently ILP system is in place for entering Nagaland, Mizoram and parts of Arunachal Pradesh.

It is with this background that the recent controversy regarding imposition of the ILP in Manipur must be understood. Manipur, with the city of Imphal as its capital, has a total population of 2,166,788 persons according to the 2011 census. There are a number of ethnic groups in Manipur. The major ethnic groups of Manipur are the Meiteis, the Meitei Pangals (Muslims), Nagas, Zomis and Kuki. It is bounded by the Indian states of Nagaland to the north, Mizoram to the south and Assam to the west; it also borders Burma to the east. The Meiteis (Meiteis), who live primarily in the state's valley region, form the primary ethnic group (60% of the total population) but occupy only 10% of the total land area. Their language, Meiteilon (Meeteilon), (also known as Manipuri), is also the lingua franca in the state, and was recognized as one of the national languages of India in 1992. The Muslims (Meitei-Pangal) also live in the valley; the Kukis, Nagas, Zomis and other smaller groups form about 40% of the population but occupy the remaining 90% of the total land area of Manipur. Out of the total population of Manipur 46.01% follow Hinduism, 34.04% follow Christainity, 8.81% follow Islam and the rest follow others.

The debate centred on ILP hinges on the edifice of ethno centricity driven by the narrative of  territorial homelands with historical roots and identity . Today Manipur and indeed large parts of NorthEast are actively engaged in the “us versus them” debate. While self assertion movements ideologically seem all encompassing in parts, eventually most of them fall prey to the low hanging fruit of exclusion politics. Manipur seems no different. The present struggle for the ILP is centred around the Imphal valley which is dominated by the Meites. The Meites are a resilient race which has a rich cultural heritage as well as long association with history. The Imphal valley is surrounded by hills which are inhabited by the Naga tribes mostly of Rongmei and  Tanghkul stock . Historically, while the Meiteis and the surrounding hill tribes enjoyed a cordial relationship, the question of Greater Nagalim or unification of all Naga inhabiting areas in recent times has become a perpetual thorn in this cordial relationship. Because of this burgeoning conlict, the hill tribes have mostly been immune to the issue of ILP. The other major ethnic group in Manipur, the Kukis, too refuse to be drawn into this struggle with their sights on their own battle for an independent Kuki homeland.

In such an environment Meities of the Imphal valley have a fear of being eventually outnumbered in their own lands. The overwhelming voice of the movement has been that ILP will ensure that outsiders will not be able to buy land in Manipur. A large part of the social narrative of Imphal valley today is that of “foreigners” of Bangladesh, Burma and Nepal taking over their traditional land and livelihood. Thus, ILP seems to be a last resort against this “onslaught” of the outsiders. Incidentally at this point it would be worthwhile to note that Manipur already has its law that forbids non-tribal people from within as well as outside the state from buying and owning land in the tribal/hill areas in Manipur.

Yet the question of ILP itself would not limit itself to the question of entry rights alone. The demands also are supplemented by calls for granting Scheduled Tribes (ST) status to the Meiteis which would in effect turn Manipur into a complete tribal state. Such demands are rising more frequently in North East now, even sections in Assam demand tribal state status. This is seen as a guarantee against invaders from outside. However in the case of Manipur, granting of ST status to Meities, would have far reaching consequences. An equality of status among the hill tribes and the plains people will have its own ramifications in the socio political narrative of Manipur .Today there is a trans border unification of imagined communities which are not limited to the Nagas alone . A unified community cutting across territorial boundaries also seem to take shape among the Kukis as well . At this juncture, if the Meiteis are given ST status, these identity assertions would indeed take new dimensions which are very hard to predict. And given the trust deficit between the Kukis and the Meities, any move to grant ST status to the Kukis would have its own faultlines.

At the root of these demands however, is the question of identity of a homeland which is squarely dependent on territory. North East is composed of hundreds of tribes of varying stock and often their idea of “historical homeland” overlaps with the idea of historical homelands of someone else. Hence the question of ILP in Manipur is merely not a question of administration alone but a deeper engagement with all stakeholders . And it is the Meitei society that has to play the larger part. Today a large part of ethnic problems including insurgency stem from the question of ethnicity .And questions that are juxtaposed in ethnicity cannot be solved by administrative measures and laws alone. Manipur once called the “crown jewel “ is today vexed by insurgency and low economic growth . But most of all Manipur has become a victim of its own history bogged by its geography. Despite the Meities consistenly punching above their weight in academics and sports , the twin goals of peace and development seems a distant dream . ILP cannot hope to take care of any of these issues, neither development nor the question of homelands. While it may or may not be a successful tool for “protecting” Meitei interest, the distant goal has to be creative engagement with all stakeholders within its society for a developed successful Manipur of the future.


-          Ibu Sanjeeb Garg ( Views expressed by the author are personal)

( (This article first appeared in http://thediplomat.com/2016/06/the-complex-politics-of-the-inner-line-permit-in-manipur/   )

http://www.theshillongtimes.com/2016/06/21/inner-line-permit-and-its-politics-in-manipur/