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UPSC Essay: Science and Technology is a panacea for the growth and security of the nation

Disclaimer: The below points have been reproduced from memory only and may not be exactly what I wrote in the exam.

Introduction

India was one of the richest nations in the world in the medieval ages i.e. 16th and 17th centuries. Then Akbar rejected the Guttenberg press. Jahangir rejected the water lift. Indian mariners took little interest in adopting the compass and other marine discoveries of the world from the Europeans. The result – within less than a century and a half – India became a slave to those very Europeans!

India’s recent Mars mission – Mangalyaan – was criticised by some. Questions were raised – can a country as poor as India afford to indulge in such scientific ‘extravaganza’? Wouldn’t this money be better spent on reducing poverty, providing drinking water, sanitation etc.? But if history is any lesson, Mangalyaan was every inch worth it at this cost (Rs. 450 crores), if for nothing else then simply for keeping India on top of the technologies of the age and developing scientific temper.

Science is essential for the development of a nation. Its most important contribution is that it helps in creating the larger social ecosystem required for growth. It promotes new ideas, removes all feudal institutions, conservatism, superstitions. It makes society open to change – change which is essential for the development of society. But it also creates many unintended challenges and also may be inadequate by itself. So it is not a panacea and needs to be managed well and supported by appropriate policy framework.

In the remaining paragraphs of the essay, we will explore each sector, see how science is essential for the development of the sector and our security, yet it is not the panacea and needs to be managed.

AGRICULTURE GROWTH AND FOOD SECURITY AND SCIENCE

– Talked about need of science for ensuring food security – our population is growing, but acreage under cultivation is more or less stagnant. So need to increase productivity which can come only by science.

– Talked about irrigation – india is a water scarce nation. so need to encourage micro irrigation techniques.

– Talked about need of science in disaster warning, crop survey, marketing.

– Talked about use of biometrics in PDS to reduce leakages.

– All this way, science can help us reduce poverty as well, because development of agriculture has highest impact on poverty.

– Talked about challenges created by science. Bt crops and farmer suicides. Bt makes agriculture riskier, hence higher number of suicides. Suggested we need to include socio economic considerations as well apart from scientific safety while giving approvals.

– Talked about science alone not enough. we need to better supply chain, invest more etc. On PDS, biometrics not the only solution, we need social audits, universalisation etc. In water, need water audits, water user associations etc.

– So science is essential but not the panacea. It needs to be managed.

INDUSTRY, SERVICES AND INFRASTRUCTURE DEVELOPMENT ISSUES AND SCIENCE

– Talked about Industrial revolution, how it is ongoing and still needed.

– Talked about how technology has transformed our lives. mobiles, IT etc. How we need it to improve governance.

– Talked about how science can help us discover substitutes for imports, develop our own resource base.

– Gave the limitations of science here, need to focus on inclusive growth else it won’t be sustainable. Talked about tribal displacement here.

– Moral of the story, science is absolutely essential, but not the panacea. We need good policies as well.

ENERGY SECURITY ISSUES AND SCIENCE

– Talked about how we import most of our energy. But this is not a sustainable system for a would be global power.

– So we need shale gas, coal bed methane, nuclear energy etc. on the supply side and need more efficient vehicles, green buildings, ultra super power plants on the demand side.

– But we also have lot of coal, gas and oil which we need to explore. To do that we need right policies, land acquisition, environmental clearances, other approvals etc.

– Also need to address the safety concerns of nuclear energy post Fukishama.

– Thus needs appropriate framework with science.

CLIMATE CHANGE SECURITY ISSUES AND SCIENCE

– Gave some findings of recent IPCC report, global warming. Gave the impact of climate change on wheat production, Indian monsoons, cyclones.

– To mitigate i.e. reduce our emissions, we will need to develop own science and tech. can’t import new technologies from west as they not giving aid any more.

– To adapt, again need science. Need drought resistant crop varieties etc.

– In research also, we need advanced satellites, supercomputers. So science needed.

– But climate change affects poor most. So need to ensure that these scientific changes help the poor.

– So science is not the panacea, but is essential. Need appropriate policy framework along with science.

DISASTER PREPAREDNESS SECURITY ISSUES AND SCIENCE

– Talked about cyclone Phailin and Uttarakhand floods. Phailin was so severe, yet life loss was so less… why? because of science, we could accurately track phailin and give meaningful actionable warnings to administration. But in Uttarakhand, IMD’s forecasts are not accurate, vague and not actionable.

– But there are so many other aspects of disaster preparation. Administrative will, planning, vulnerability studies etc. So science again is not the panacea, though is imp. Need other things also.

BIOMEDICAL SECURITY ISSUES AND SCIENCE

– Talked about recent Novartis, Tykreb and Bayer compulsory license issues. But said this cannot go on forever, specially if we want more FTAs.

– MNCs want profit, but we want public health. This conflict needs to be resolved. We are a net patent importer. We need to change this by becoming net patent generator. This can only happen with science.

– But then we ll have to ensure our own companies don’t become like these MNCs. Issues such as clinical trials ethics is also there.

– So again, boss, science is essential, but not panacea. Needs proper policies.

INTERNAL AND EXTERNAL SECURITY ISSUES AND SCIENCE

– Wrote how china is developing its weapons ($100 bio defence budget), talked how naxals, terrorists getting most modern. So we absolutely need modern weapons, drones etc.

– Talked of NSA Prism. Need to safeguard our data.

– But science can only give us the weapon. It still needs to be fired. That will happen only with a political order. So we need political will. We need intelligence coordination.

– So again, without science we can’t do anything, but science is not the panacea. Need political will, policies etc.

CONCLUSION

– Repeated, science is essential, but not maai baap.

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UPSC Mock Essay: Regulatory Institutions in India: White Knights or Trojan Horses?

A white knight is he righteous person who selflessly rescues the weak in distress.

A trojan horse, put into fame by the famous Battle of roy, refers to a person installed in a particular position to serve the narrow, selfish interests of the installer.

In the context of regulators, a white knight regulator would genuinely perform the functions it was actually supposed to do. What these functions are, we would explore in the next section

A trojan horse regulator, on the other hand, would be unable to discharge its duties properly, letting some vested interests have their way. These interests may be of the political executive, or the industry players, or some narrow turf wars. To what extent have the regulators turned into trojan horses in India and what are the factors behind it, would be explored in the subsequent section.

Then in the final part of this essay, we would explore the possible reforms in the regulatory space in India so that we an move these institutions from the trojan horse to the white knight space.

1. WHY DO WE NEED A REGULATOR / FUNCTIONS OF A WHITE KNIGHT REGULATOR

The primary task of most regulators is the protection of consumer interests. After the liberalisation reforms, the state has vacated field for private operators in many sectors. When the state was there, it could still be assumed that it would keep the interests of the general public in mind. But the private sector exists for profit. In its pursuit for profits, it may be tempted to pursue shortcuts, leaving the consumers vulnerable. eg. An airlines may try to skip engineering checks of planes to cut costs. But this would put the lives of the passengers in peril!

Similarly, in most of these sectors, the consumers may be unorganized – the general public – whereas the operators may be organized, or even monopoly. In case of broadcasting, the consumers are dispersed while the channels are organized. So if all the news channels start showing excessive advertisements simultaneously, there is little a consumer can do.

Then in some cases, the information needed by the consumer to ensure good service quality may be too costly or too technical. eg. in the case of drugs, the consumer has no option but to buy whatever drug the doctor has prescribed even though cheaper versions may be available. This is because he has absolutely no knowledge of the field and to learn medicine in order to understand it may just not be worth.

Another added layer of complexity in India is that consumers may be poor, illiterate and easy to exploit. The greedy operators may stoop to any unethical level for their profits. eg. the death of tribal girls in the clinical trials of the HPV vaccine (parliamentary panel report).

In all the cases above, a laissez fierre approach would lead to market failures and thus we need a regulator in the form of a white night to protect the consumer interests.

Then another reason for the existence of the regulators is to ensure a level playing field. The marketplace may be full of operators who may follow unethical practices to cut their costs. If a white knight regulator is not there to enforce compliance, a person wanting to operate ethically simply won’t be able to stay in the business. eg. this is what the new drug authority and its ethics committee are supposed to do to ensure clinical trials are fair in India.

A further challenge could be the existence of monopoly or cartels which may make it impossible for a new player to enter the market (apart from its other negatives). Here we need the Competition Commission of India to break these cartels. Similarly TRAI keeps this in mind while recommending policies for spectrum auction.

The third reason for the need for regulators is to provide a credible, cheap and fast mode for dispute resolution. If this is not there, parties may have to resort to regular courts which are painfuly slow and expensive or wait for months and years for mutually acceptable arbitrators to be appointed. That is why this is a very important function of the proposed PPP regulator and the Coal Authority of India.

Additionally, the white knight regulator provides a clear and uniform set of rules for all players to play by, in order to minimise the disputes and distortions. Thus the proposed PPP regulator would also standardise the contract documents and the COal Authority would provide the principles on which coal may be priced.

Finally, in a democracy, even if the service is provided by the executive, a regulator should exist independent of it to provide checks and balance. That is why we need an independent nuclear regulator even though the sector is entirely with the govt. That is why we need the National Human Rights Commission, women, minorities, SC/ST commissions even though the executive is supposed to safeguard them. And above all, the mother of all regulators is an effective Parliament, which regulates the executive itself.

2. STATUS OF REGULATORS IN INDIA

Many of the regulators in India are doing a reasonably fine job within the constraints. The RBI, for instance, has done a marvelous job in protecting the financial system’s integrity. Even in the Lehman crisis, when banks after banks were failing globally or needed bailouts, that not a single bank in India needed such help, bears testimony to the fine job RBI has done. Even now while giving new banking licenses, it is showing great caution. And yet, no one can accuse it of stifling the sector by over regulating as the healthy growth and profitability of the sector shows.

Similarly, SEBI has turned into a professional, mature regulator. Indian equity market disclosure and transparency norms are at par with the world. The participation of the retail investors in large number gives an indication of the faith people have in Sebi.

Turning to the non financial regulators, the Competition Commission of India and the Patents Controller Office have been doing a marvelous job. The CCI has been busting many cartels including the high profile cement cartel, thus protecting the sectors as well as the consumers. The Patents office, too has been resisting big temptations and serving public interest by rejecting frivolous patents and enforcing compulsory licensing (eg. against Bayer for the drug Glivec recently).

Turning to the political field, the Election Commission of India has set high standards for electoral conduct now. The parliament too has provided effective regulation over the executive on many instances. Many bills are pending for the want of consensus (eg. the constitutional amendment bill to ratify the Indo-Bangla Land Boundary Agreement) or had to be amended suitably to get them through parliament (eg. the Land Acquisition Bill initially exempted even the SEZs!).

However, not everything is fine as above in the Indian regulatory space. Before the liberalization, most of our regulators were trojan horses in classic sense. They micromanaged, instead of regulate, their respective sectors. Vast discretionary powers were vested in them and this almost stifled the sector. Thus the RBI used to literally control the boards of the banks. The ruls it framed severely handicapped the private players. The MRTP Commission was a dreaded one. In those days of license raj, this was the general scene in India.

This tendency has reduced after liberalization, but it is still very much present. Many of the regulators are not independent from the executive and toe its line. The classic examples of this are the CBI (which was recently called the ‘caged parrot’), the CVC (which has been largely ineffective since inception), the Atomic Energy Regulation Board (which reports to the Department of Energy secretary himself who it is supposed to regulate), the DGCA (heavily controlled by the aviation ministry), the Railway Board (again heavily controlled by the Railways ministry). The list may go on to include the Lokayuktas of various states, the National Human Rights Commission, the women, minorities, SC/ST commissions.

What is perhaps common to all of the above which makes them a tool piece in the hands of the executive is that they lack financial, operational and administrative autonomy. The appointments to these bodies remain largely political (some recent examples being NHRC, Railway Board, National Women Commission). Transparency and objectivity are not followed and the members can be removed at the sweet will of the govt. Where they cannot be removed at the sweet will officially, the got. makes sure that it appoints only those people to sensitive roles over which it has background levers to operate (like threat of an inquiry in a corruption matter). These bodies also don’t have control over their staff which is appointed by the govt. The govt. also controls their transfers and finances. Thus it is amply clear that they cannot function as white nights in the present setup.

The above tendency of politically motivated appointments is not limited to the above mentioned powerful regulators only. Even weak regulators like the Press Council of India and Censor Board are affected by political patronage.

Sometimes these regulators fall prey to the vested interests and start working in the interests of the very people they were supposed to regulate. The parliamentary panel’s damning report on the functioning of CDSCO in cases of drugs approval was revealing. It highlighted how corrupt the regulator had become that it approved drugs without trials or that many of the drug recommendations it accepted from various doctors were same – word by word! The fake pilot licensing scam eroded the whatever little credibility DGCA had. The fake doctors scam hit the Medical Council of India in 2010. The recent controversy on the clinical trials puts the regulator in bad light again. Every single story is a story of how all standards of morality were put to the sacrificial altar in the pursuit of greed.

Many of these cases arise due to conflict of interest. Even the parliament is not untouched from it. For example, it is common knowledge how the high flying industrialists use their money power to get elected to the parliament – the supreme regulator. Then they get themselves included in the parliamentary committees looking at the matters of their sectors and thus effectively make laws / regulate the very sector they operate in! Then some of the bills creating regulatory authorities are pushed despite there being a clear conflict of interest for everybody to see. Thus the Biotechnology Regulatory Authority of India (BRAI) Bill puts the authority under the Ministry of Science – the very ministry which is supposed to promote biotechnology. How much will this regulator regulate can thus only be a matter of imagination.

This brings us next to the very vital issue of what should we do to improve the regulatory situation in India. How to convert these trojan horses into white knights?

3. REFORMS: THE WAY FORWARD

In order to change the situation for better, the executive’s apathy towards respecting the sanctity of the regulators must end. And this should begin with the parliament.

The parliamentary rules and conventions must be changed to ensure that all matters of critical importance are by convention brought to it. A leaf may be sought from the UK where the govt. decided to bring the proposal of the attack on Syria to the House of Commons when it was under no obligation to do so. Then the departmental committees of the parliament, the probe panels must be given more power. The reports of the NHRC, Women, minority, SC/ST commissions are often placed before the parliament years after they are submitted by the respective commission. By this time they lose their relevance and often there is no discussion, thus eroding the parliament’s capacity to regulate the executive. Increasingly bills are passed without discussions and budget provisions guillotined. A common excuse given by the executive is that the opposition doesn’t let teh parliament function. But it is seen that this happens many times because the govt. doesn’t want to bring a sensitive issue to the parliament or put it to vote. This must be changed. parliament represents people’s will and if a certain percentage of members (say 25%) want a discussion and vote on an issue, it should happen.

Close to empowering the parliament further is the recommendation of the Damodaran Committee on regulators. It has recommended that all the regulators must be made to report to the parliament. Clear guidelines and mandates must be given to them. And then they should testify before the parliament quarterly or semi-annually. Regarding appointments, clear guidelines need to be evolved and the system made transparent. Selection must be made by a broad collegium – at least for systematically important regulators – and clear set of qualifications must be laid down (instead of the present practice of nominating ’eminent’ people). These regulators should then be given operational and administrative autonomy and their expenses should be charged directly tot he Consolidated Fund of India like the CAG, EC etc. Then the post retirement perks and lures must also be checked for each regulator. Their tenure and service conditions should be guaranteed to ensure their independence.

Equally important is to be very careful while drafting laws that the powers and mandate of the regulators are clearly defined and the powers are adequate for them to carry out their mandate. The regulatory loopholes, as exposed in some recent financial scams like Saradha, NSEL, Sahara, need to be plugged. An then these regulators must be brought under RTI as far as practically possible.

Finally to ensure that we don’t reach the other end where the regulators start acting arbitrarily despite the above checks, we must also have dedicated tribunals where the aggrieved can get speedy justice.

Once we create such an environment, our regulators would surely serve the purpose for which they were originally created i.e. further public interest and ensure good governance.

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UPSC Mock Essay: Internet: the new battleground for governments and people on free expression, privacy and transparency?

The Neolithic Revolution was symbolized by the invention of wheel. The Industrial Revolution is marked by the coming of steam engine. And the face of the Information Revolution is the Internet. What is common amongst these three revolutions spanned across tens of thousands of years in mankind’s history is perhaps that each one of them changed the way man lived forever. And this they achieved by increasing the span of the possibilities of human interactions and by increasing human productivity.

The wheel increased human reach and made it possible for them to travel faster and farther – seeing and learning from each other. Human knowledge quickly spread and ‘accidents’ such as agriculture were adopted widely and perfected upon. The steam increased human productivity and made specialization of labor possible on a scale witnessed never before. Knowledge was specialized upon and production increased further. Internet dismantled the barriers to communication and brought people closer together than ever before.

A new Age was thus ushered in. Expressing oneself to others became cheaper and freer compared to the traditional media forms. Sharing and accessing information was now at the stroke of keys (later ‘touches’). And all this could be done in the comfort of great anonymity which a heavily crowded place offers. Technologies evolved and privacy of communications was ensured to a great degree too. It seemed that free speech, privacy and transparency would be the cornerstones of this new internet based Age.

With the above advantages, the use and importance of internet grew exponentially. And once it became too big to ignore, the usual counter forces of free speech, privacy and transparency arrived. The traditional conflict groups emerged and began to carry on their activities on internet as well. These traditional conflicts can be divided broadly into three categories – (i) governments vs governments (G2G); (ii) governments vs people (G2P); and (iii) people vs people (P2P).

It seems that the internet has became the new battleground of these traditional conflict forms. In the following, we will examine each type of these struggles. We will then examine if it is possible to reduce, if not eliminate altogether, such conflicts and how alternatively internet can be used in a constructive way to promote well being for all.

I. Governments vs Governments (G2G) Conflicts

The G2G conflicts have emerged mainly as a result of the extension of the traditional interstate rivalry to this medium in the form of cyber wars. It reminds us of the nuclear race age and the space race age. The advantage offered by internet has made most governments rely on it even for their most critical security systems. In many countries, entire government communications, traffic, fire, electricity systems, strategic commands, nuclear stations all rely on internet for their functioning. And this dependence is used by the other states to spy, steal and sabotage such systems. The host government then creates its own defensive and offensive cyber security architecture and a war ensues in the cyber space. This form of warfare is called cyber warfare and in future it will become the most important mode of warfare.

The recent US-China spat accusing and warning each other over such activities is a worrying example. The use of sophisticated Stuxnet virus which paralyzed hundreds of Iranian centrifuges and the Flame virus which transmitted volumes of key Iranian security data to its foes is another example of the damage it can do. Even India is not immune from cyber warfare attacks and there are reports of our critical cyber assets getting hit time and again. To counter such attacks, we have created a cyber security architecture involving agencies such as CERT-In and NTRO.

However, the incidence, sophistication and damage caused by cyber attacks is only increasing. Thus, before it leads to irretrievable deterioration of international relations as the nuclear race and the space race before it threatened to do, it is essential that the major powers of the world today sit down and devise international standards, MoUs and threat mitigating mechanisms guiding the use of cyberspace in warfare.

A related issue here is the control over the critical internet architecture including the DNS. Currently most of it is located in / controlled by US based entities. The naming allocation system i.e. the DNS is controlled by ICANN, major payment gateways are controlled by US companies, most of the major social media websites and search engines are US based. This gives that country immense advantage over the others in the cyber space. The US has resisted the calls to give away this control to international organizations citing the threat to free speech, privacy and transparency of ordinary people from the authoritarian regimes in many other countries. However, as the recent PRISM revelations have shown, it itself doesn’t shy away from violating these principles for its own benefit. The real reason, then perhaps is that it doesn’t want to share the control of internet and the power it gives with others.

However, such an exclusive control is not only detrimental to peaceful international relations, but is also a threat to the principles of free speech, privacy and transparency. Here again we need an international treaty (like the one on outer space where all parties accepted it as a common resource and agreed to its peaceful use) putting the critical internet architecture under UN control and explicitly seeking to preserve the above principles.

Also, it would be unfair to say that internet exists only as a battleground in the international sphere. Let us not forget the role it plays in increasing coordination among various state parties. Things such as sharing of tax information and information on money laundering among various states would have been very time consuming without internet. The work of many UN based agencies, many international government sponsored research projects, have received a tremendous boost from the internet. Thus what we need is only to evolve international standards and principles guiding the use of internet like we did earlier for nuclear weapons and outer space.

II Governments vs People (G2P) Conflicts

Internet has demolished communication barriers and thus has facilitated people to people communication greatly. This has made it a very useful tool to mobilize people bypassing the traditional media. Thus regimes after regimes in the Middle East blew apart in the winds of the Arab Spring and the ordinary people there were organized against the government not by the traditional media but by the social media services like twitter.

And who can forget the photograph of the Egyptian woman in the blue bra being lifted and manhandled by the police? Or that of a lone man being stripped and beaten mercilessly by the state police? The standing man of Turkey has become the face of the ‘new’ passive resistance movement there. Nearby in Bangladesh, it were the bloggers and not the media houses or political parties who created a nation wide movement opposing the religious fundamentalist forces there accused of committing unspeakable war crimes. Perhaps if Tianammen Square had happened today, its outcome would have been completely different and the ‘tank man’ would have been the biggest hero of our times?

What internet has done is to turn ordinary people like you and me into journalists and given us a potentially viral audience. These photographs and videos were captured live by ordinary people, uploaded on youtube or social media and within minutes went viral getting millions of hits. And telling the tale of oppression in its rawest form, they quickly build more public opinion and thousands more pour in next day to join the protests. Even in otherwise ‘peaceful’ times, various popular social media pages and handles constantly build a public opinion against the unpopular acts of the government, be it corruption, inflation, casteism or communalism / pseudo secularism. The traditional media is today, unfortunately, involved in dubious connections with business houses and political parties (even the recent TRAI report says over 80% of the news channels in India including some of the biggest ones are loss making and receive questionable private funding from time to time) and the Chinese wall between the editorial management and owners no longer exists. People’s trust in it is going down and internet has emerged as the medium where speech has never been freer, more private and transparency never higher than ever before.

But clearly with the internet becoming so influential and a potential ‘threat’ the governments of the day could no longer afford to sit back. Internet had to be monitored and public opinion sensed and movements quelled before they could be born. Almost sounding like a plot of some sci-fi movie are the revelations made by Edward Snowden about the PRISM program. Shocking… what we thought was private was being snooped upon by the government. It is an open secret how the authoritarian Middle East regimes forced the ISPs to provide information about the twitter handles of the protestors and how arrests were made overnight. Even in our own country, a day after the PRISM revelations, the government disclosed that it is planning to constitute the Coordination Committee on Cyber Space (CCCS) to better carry out snooping activities on internet communications. Blocking of social media pages and twitter handles by executive action is not unusual in our country as we have seen lately in the wake of disturbances following the Rohingya muslim violence in Myanmar when the handles / blogs of various right wing and anti-corruption activists were blocked by executive action without giving any explanations. The arrests of the ‘facebook girls’ of Thane and the Jadhavpur University professor for ‘irking’ the state chief minister are other glaring examples of arbitrary executive action against free speech and privacy on internet.

What is common in the above cases is that everywhere the governments claim to be doing such actions to protect people’s lives by projecting such actions as important tools in fighting terrorism or maintaining public order. Such a claim cannot be dismissed off hand. Terrorists and social miscreants have grown sophisticated today and use the privacy and freedom of speech offered by internet to further their own causes. How easy it has now become for some intelligence agency of some country to mobilize people in the Arab countries sitting thousands of miles away or for the terrorist organizations and intelligence agency in our neighborhood country to fuel communal violence in our country. Such activities need to be spied upon and curbed before lives are lost.

But in doing so we must respect one principle almost universally accepted in all national / international laws. Action taken should be proportionate to the threat perceived. For otherwise, a brute force action can result in culling even the genuine birds and not just the sick ones. There are many reasons for that. First, almost everywhere such executive actions do not have any legal backing. Even if legal backing is there, the proceedings are shrouded in so much secrecy that it becomes very difficult to establish if the principle was followed. Second, power corrupts. Giving so much power in executive hands will make it prone to use such power not only in public interest but also to defend its own interests. So while targeting the terrorists, it may begin to target the political opponents, civil society, important citizens who speak differently from what it wants. There are allegations time and again against the misuse of IB for political reasons. What can assure us that the fate of internet snooping authority would be any different?

Perhaps what we need is a clear cyber snooping law laying down transparent mechanisms and effective oversight mechanisms to ensure that while citizen lives are protected against terrorism and other miscreants, genuine dissent is not curbed. The law must protect the public, not the public office holders.

At the same time, the constructive role played by the internet in promoting government – people interaction and the three ideals of free speech, privacy and transparency cannot be overlooked. It has strengthened the RTI – its procedures have become so easy now and various departments have made their information easily accessible to the public by putting it on their websites. It has increased citizen awareness about government policies and laws. It has increased citizen participation in governmental activities. Citizens can now directly send their comments to the various committees setup to examine different issues. The finance minister makes himself available on Google hangout to explain the budget to the general public. The Planning Commission’s ‘Hackathon’ is an innovative way of increasing citizen participation and awareness about the major programmes shaping the destiny of the nation in next few years. And the ‘Open Data’ movement is such an important step where most of the data generated by the use of public funds would be shared with the general public. This would not only increase transparency but also lead to better analytics and ultimately better policy formulation and implementation.

III People vs People (P2P) Conflicts

The battle over free speech, privacy and transparency on the internet is also being fought among the people themselves. And these manifest most openly around the issues surrounding defamation, pornography and intellectual property protection. The Indian Constitution subjects free speech to the restriction of defamation and morality (among others) and internet is no exception. But what complicates the issue here is the nature of the technology which renders the traditional methods of media control either ineffective or too aggressive.

Recently there was the case of a video containing explicit sexual activity involving a leading politician from the ruling party. He rightfully obtained a court order to restrain the circulation of the video and its removal. However, when the original video was removed, many other copies sprang up from different locations. When they were removed, many more would come up. This was because of the ease which internet offers in sharing content. The traditional methods were rendered virtually ineffective.

On the other side of the scale is the case of defamation suits filed by Arindam Choudhary of IIPM. He uses court orders to indiscriminately block any and every site hosting content critical of IIPM or himself. That the truthfulness of the allegedly ‘defamatory’ content is not verified while giving the blocking orders is justified saying they are not final verdicts but only interim injunctions to provide immediate relief to the complainant. This way even the UGC website carrying an official circular that IIPM is not recognized by it was blocked! And that the bloggers and websites hosting the content are not given a chance to defend themselves before being blocked is justified by erroneously claiming in many cases that due to the nature of internet it is not possible to reach out to the other party. And while implementing the blocking orders, entire websites are found to have been blocked instead of those specific sections only which hosted the allegedly ‘defamatory’ content. Criminal cases are filed in courts in the far flung areas of the country and thus the blogger is effectively bulldozed into silence by the sheer power of Mr. Choudhary’s institutions irrespective of the final verdict of the court.

The above cases clearly highlight that the courts, the executive, the implementing agencies need to understand the nature of the technology better and such ways need to be evolved which strike a fine balance between defamation and free speech. What makes this issue more delicate than the traditional media forms is that while in the traditional media, both sides are likely to be big with the capacity to fight it out in the courts, on the internet, one side is an ordinary citizen unable to match the might of the other side and thus likely to be silenced by the mere threat of legal action.

Similar is the case of intellectual property protection. Internet has given a great boost to piracy and has resulted in great loss to the content generators and copyright holders. Traditional methods have been found to be ineffective. On the other hand are the blanket John Doe orders obtained by many filmmakers recently (for example Singham) which led to blanket ban on file sharing websites. The SOPA/PIPA acts were perceived as being too stringent and crude in their attempt to protect IPRs and unsurprisingly witnessed some of the biggest online protests which included some of the biggest internet names like Wikipedia.

Thus again a need is highlighted to step out of the traditional thinking and draft laws and regulations which strike a fine balance as has been done for the other form of media in the past. At the same time the constructive impact of internet in spreading harmony among people while at the same time promoting free speech, privacy and transparency should also be emphasized. Various geographical / functional unit / interest based groups have emerged which lead to greater people to people interaction and exchange of thoughts. One can stay in touch with her loved ones in a safe and private way (at least private from other people if not the government). Activists dedicated to the same cause now collaborate on the internet through multi authored blogs, social media pages and online forums, educating people and thus promoting transparency in the system.

Conclusion

Thus in the conclusion, it must be accepted the internet is emerging as a new battleground for various kind of conflicts. But this is because it is a new technology and clear rules of the games are not established. This is not a new phenomenon and has happened in the past every time a new technology has surfaced. So we need to sit down and devise universally acceptable standards and guidelines which strike the fine balance of preserving free speech, privacy and transparency while at the same time protecting people’s lives and dignity, maintaining national security and safeguarding intellectual property. At the same time we must recognize the constructive role played by the internet and strive to build upon it.

UPSC Essay: Is the criticism that PPP model of development is more of a bane than a boon in the Indian context justified?

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Public Private Partnerships (PPP) model of development is no alien concept to India. In the age of the Chola kings as well the state used to give tax concessions and land grants to those who got tanks and canals built. Closer to our times, the construction of Indian railways is a classic example of PPP in operation. Post Independence, given our explicit preference for the state led development, the PPP took a back seat for some time. However, after liberalization PPP is back with a new vigor. Thus in the 10th Five Year Plan nearly 21% of the expenditure on infrastructure came from the private sector, this climbed to 33% in the 11th Five Year Plan and in the 12th Plan it is expected to be about 50%.

Clearly our planners think that PPP is the way forward, so we must pause here and examine the rationale behind preferring it.

The biggest rationale, perhaps, in favor of PPP is that the government simply doesn’t have enough money. After all, still not a generation has passed when one had to wait for years to get a landline telephone connection. Just imagine, would we have been able to scale up our education, power, roads, ports and airports to meet the demands of a rapidly growing economy like ours? Reliance on public funds alone would have choked off our growth even before it could have taken off.

Another reason for preferring PPP is that the governments are slow and tend to work in silos. Thus a project is broken into many parts and every part is handled by different people / departments. They tend to work in vacuum unmindful of what is happening to the other part. But a project is a project and needs the success of all its parts for it to bear fruits. A good example here is the case of roadways. While road development is a part of the ‘plan expenditure’, road maintenance falls under ‘non-plan expenditure’ and is often neglected. But what is a road without maintenance! PPP overcomes this by treating the project as a single unit. So the operator itself is required to maintain the road in a good condition.

Finally, PPP is attractive because it is in alignment with the twin pillars of modern economic logic. These pillars are –
Everyone should only do what he is good at or in other words everyone should assume only the risk one specializes in; and
Governments must step in to correct the market failures.
PPP enables separation of jobs. Thus the job of the government is to provide land, help the project in meeting various regulatory requirements while the job of the private party is to build and operate. Moreover wherever the social good is more and private benefit is less (for instance a road connecting a village to the highway), the government can always correct the likely market failure by its Viability Gap Funding Scheme.

Despite these, many criticisms are levied against PPP. Perhaps the biggest among them is that it breeds corruption and rent seeking. If there is any truth in the CAG reports on coal, 2G, GMR or in the joint parliamentary committee report on CDSCO then indeed there appears to be a serious flaw in the model. However, a closer examination tells us that the flaw lies not in the model per se but in the method of implementation of the model. The alleged corruption happened in coal and 2G because of opaque processes and in GMR and CDSCO because of the weakness of the regulator. If we had transparent processes in coal and 2G and strong regulators in GMR and CDSCO cases then the corruption would never have happened. Moreover, by no means is corruption limited to PPP only. Should we also close down MGNREGS and NRHM because there have been reports of corruption? No, clearly no. We should instead find ways to tackle such corruption.

Another criticism levied against PPP is that often the ‘public purpose’ in the PPP is pushed to the background and private operators work simply to maximize their own profits. A case can be made out of the many ‘super profitable’ toll roads like the Jaipur – Kishangarh one and the KG gas basin project.

While this is a meritorious criticism, it must be emphasized that it is again specific to the implementation of the model. If the terms and conditions of the project clearly link the rewards to the private operator to certain well defined public good then such a situation will not arise. For instance, while auctioning the coal fields to power producers, we should award the coal to the party which will provide electricity at the lowest cost. There will be no contradiction between transparency and public good then.

Next a case is made out that in PPP mode there is information asymmetry. Because the operator is closest to the project, he can take the government for a ride. An example here is the KG basin project where now the wells are full of water. ‘Coincidently’ the operator is also demanding that the gas price be raised from $4.2 per mmBtu to $14 per mmBtu.

The government has appointed the Rangarajan committee for that. And one of its ToRs is to specifically look into ways to monitor the project more effectively. Perhaps making the initial terms and conditions of the project clearer and having more regular and better audits can help here.

Then some argue that the infrastructure projects require high end technology and have long gestation periods and hence are not suitable for private operators. While in the 50s and the 60s this argument could have held great merit, today our companies own some of the most sophisticated technologies and have finished some massive projects.

Finally before writing PPP off, one should think of what really is the alternative? Clearly a return to the public funding is ruled off due to the reasons mentioned earlier. Similarly total reliance on private markets would generate their own complications as well. There would be massive market failures – there would be no PURA, no electricity in our villages and who will teach our children? A good example of what can go wrong in private markets is the case of micro finance in Andhra Pradesh while that of what can be right with PPP is the case of self help group based finance in Assam. Here the state government assists these SHGs by providing easy credit from the Rajiv Gandhi Vikas Nidhi.

Thus what we need is transparency in procedures and strong, independent regulators. The functions of policy planning, implementation and regulation must be separated. It may also be a good idea to make these regulatory bodies report directly to the parliament. After all, isn’t the parliament the supreme regulatory body in our country? Then to check the information asymmetry problem, we need better terms and conditions and audits.

Perhaps then PPP can truly be a boon for India.

UPSC Essay: Credit Based Higher Education System – Status, Opportunities and Challenges.

Education in India has always assumed a larger than life role in the society. Whether it be the “Guru Gobind Dono Khadey, Kaakey Laagun Paaye…” of Rahim or the twice born doctrine in the Vedas, education has always had that spiritual connection and the business of imparting education was never considered a business at all. Perhaps out of this conceptualization only, education has always received the patronage of the taste and the wealthy through our history and was never a financial burden on the students. Whether it be the Kumaragupta founded Nalanda, or the Gangai Konda Chola Mandap mentioned in the Anaiyyavaram inscription of Rajendra Chola, or the madarassas founded by Sher Shah, the students and the teachers were always comfortably maintained out of the donations and India maintained its distinction of being one of the most sought after destinations of higher learning.

Things changed for the first time under British India where it was clearly felt that “free education would not be valued properly by the natives”, and hence should be changed. But post independence, the Indian conceptualization again took the center stage and the seats of higher learning became the temples of modern India. Nehru knew the central importance of higher education in his vision of a planned economic development and hence ensured that the doors of these temples remained open to the very best of minds – irrespective of their financial capabilities. So liberal state grants were made for this cause and thus the fees were maintained low as well. Within all its constraints such a system functioned remarkably well in serving the needs of the economy.

However, by the 1990s the structure of this economy began to change. State led approach gave way to a market determined pattern of development and the enterprising potential of the economy was unlocked. Naturally the wants of this economy from its education sector were much larger in scale and more diverse and dynamic in character.

To meet these new demands, the higher education sector had to reform as well. First of all its size was simply not big enough. India had a particularly unimpressive record of the penetration of higher education and this was simply not consistent with the ambitions of taking the economy on a high growth trajectory.

Next there was a need to meet the new unconventional needs of the economy. No longer, thus, it sufficed to produce graduates with standard degrees possessing standard skills. One needed to be dynamic. Similarly, as our economy competed on a global scale, we needed human resources who could work with world class technologies and management practices as well. Thus a large scale investment in the sector was needed.

Now this is where the reliance on government could become a constraint. Because public funds are scarce and slow in coming and are just not suited for such a dynamic environment. Thus budget constraints became hard and the sector was forced to rely more on internal resource generation and thus the credit based education system proliferated.

There were other factors driving the change as well. For instance the new economy offered a larger number of better paying jobs. So people were now prepared to pay more for the higher education which could land them with such jobs. And it is always difficult to run against the market forces in full swing. If we hadn’t allowed the higher education institutions to increase their fee, it would simply have created more compliance issues as the higher ‘fee’ would have been pushed under the table, because market forces can’t be resisted on a macro scale without significant costs.

Moreover as the economy became more integrated with the world, so did the people. Migration, specially of the qualified people, increased and if our institutions didn’t offer better terms to the teachers, the more qualified ones would have simply migrated away. Similarly if our institutions didn’t offer world class facilities and education to the students, both the students and their prospective employers would migrate away as well.

Thus there was a clear need for higher investment in the sector and so the credit based system emerged. With time there has been a gradual strengthening of the system as more and more private institutions come up, government institutions increase their fee, private jobs develop more and banks reorient their business to take advantage of the opportunity. Finally as we speak, there are proposals to allow foreign universities into India and a bill to that effect is in the parliament.

Having examined the transition towards the credit based education system, let us pause and ask ourselves what are the implications of such a transition. Can it continue to suit us in future as well? What are the opportunities which lie forward? Or what does it do to the student and to our cherished dream of equal opportunities to all?

Let us look at the opportunities first. Clearly the biggest strength of the model, as seen earlier, is that it is aligned with the market forces. This makes it smooth. This makes it dynamic and this makes it scalable. This gives us the potential of creating world class human resources. The model is capable of generating and attracting resources for developing state of art infrastructure, for retaining top level teachers and students and thus create a positive feedback mechanism. Apart from providing the lubricant to run the economy efficiently the model can also help enhance India’s soft power. As our highly trained professionals go abroad, they will help create the image of a new, rich India. Finally, this model is unique in the sense that it can produce the ‘barefoot engineers’ needed to advise on the MGNREGS projects and can also produce the best investment bankers capable of dealing in complex derivative transactions. Thus the opportunities offered by the model are immense. But before passing the verdict, let us also look at the potential causes of concern.

Given the alignment of the model with the market forces and its potential to serve us, should we then leave it entirely to the market? Well, certainly not. To begin with ECO 101 tells us that education has positive externalities and thus if left to the market, the market will always over price it and provide too little of it. Thus state intervention is needed to correct this distortion.

Then think of what the model is doing to its principal stakeholder – the student. It is upping the stakes. And by upping the stakes it is putting her under a lot of additional pressure. And in an educational system not exactly known for its sensitivity towards the students, add one more woe to her already long list of woes – how will I ever repay the credit if I fail? There is already at least ne suicide every year in my alma mater since at least a decade – do we want to increase that any further?

Next think of the implications in the current context when an effective regulatory mechanism is lacking. One aspect clearly is that this puts the students (and their guardians) in a worse situation since they are locked in and thus subject to being manipulated by the college authorities. Even apart from it, think of the wider context. Higher education is a sphere where there is a clear information asymmetry with the students being at the receiving end. This credit based model will create a classical ‘lemons problem’ since because one would expect the better institutes to charge higher fees, even the worse ones wold charge a higher fee for otherwise they would be considered ‘bad’ by the virtue of charging a lower fee. Then having put so much at stake, these institutes would be inclined to publish ‘paid rankings’ in the media and thus compounding the information problem.

Worse still, what would happen if such institutes come together and form cartels – creating artificial scarcity and higher fee. And in all this let us not forget what happens to the research output in such a case. Clearly having paid so much for the education, students would be inclined to take up jobs in industry rather than donning the scientist’s coat.

And finally the concept of equity – what happens to it under this model. We all know credit flows towards the ‘haves’. It filters out the ‘have nots’. How can we expect a poor man’s child to ever furnish a hundred thousand dollars loan guarantee notwithstanding however deserving she may be. Thus the system automatically weeds out the poor.

Having seen the practical limitations of the model, it is clear that we need to build in sufficient safeguard mechanisms first. This would ensure it contributes to growth – meaningful inclusive growth and not just a number called growth. Clearly there is a need to safeguard the interests of the financially poorer children. Is there any way of doing this without putting a strain on the public funds? Perhaps we can draw upon the Universal Service Obligations (USO) Fund model from the telecom sector. Or we can look towards a RTE kind of feature (25% reservation).

To address the other issues, specially to protect the interests of the students at large and also to prevent a lemons problem from occurring, we need to put in place strong and independent regulatory mechanisms. The proposed bill on the higher education is certainly a welcome step in the direction. Student counseling must invariably be a part of this regulatory package and we need to bring laws which empower the students. And finally, to make sure that research activity is not sacrificed in the din, we would need to put in place larger incentives structure so as to make India a hub for global R&D.

The credit based model is powerful because it is aligned with the trends of the age. It offers tremendous potential to serve the country as well. And certainly we must encourage it. But at the same time we need to put in sufficient safeguards as well. The future awaits…

UPSC Essay: Are our traditional handicrafts doomed to a slow death?

The success of any business in today’s competitive world depends upon how well it is able to capitalize upon its core competencies. Indian handicraft industry, too, can’t be any different. So it is natural to ask ourselves – what are these core competencies of this sector?

Indian handicraft industry can be divided into two broad segments – one being the ‘high end’ segment comprising of the luxury products and catering often to the foreign markets. Examples could be the pashmina shawls or the fine sari works of Kanchi. The other segment is the one catering to the local market and often selling the ‘no frills’ products at cheap rates. Examples could be the temporary stalls put up around festival times in many cities selling flower garlands or pots for the ‘pooja’. Both are obviously different and have different sets of core competencies. Some further thought quickly tells us that while the former segment draws its strength from the rich socio-cultural heritage of India, the ‘no frills’ sector depends upon its ease in cost effective geographical penetration. Clearly the wants of both segments are very different.

Next we must ask ourselves what does it take for a business to be able to successfully draw upon its core competency or what are the key factors driving success. In the framework we use, such factors can be broadly classified under three ‘pillars’:

– The Knowledge Pillar,
– The Linkages Pillar, and
– The Environmental Pillar.

The knowledge pillar includes factors like how well is the business using modern management techniques, or how is it faring on the technology front. Is the entrepreneur willing to take the needed risk to grow his business or are there certain factors which are systematically suppressing the risk taking appetite in the industry? Finally, is the entrepreneur being able to impart the needed skill training to the labor employed (including his self labor and that of his family as the case may be). Needless to say the importance of this pillar cannot be under emphasized and it is often this one which becomes a determinant of how the business fares in the other pillars as well.

The second pillar of business success is the linkages pillar and this stems from the fact that every business today is linked with other businesses in the economy. It draws from others and supplies to others. Thus an entire supply chain is formed and constraints arising anywhere in this chain may hamper the development of this business. In our framework, this supply chain includes the forward linkages, the backward linkages, the infrastructural linkages and the capital linkages. Here the questions we ask are – is the business able to reap the rewards of its venture and sell its output profitably or are there other players in the supply chain who cream off all the profits leaving little for our business? Are the poor infrastructural amenities driving up the costs too high so as to nullify any advantage arising out of our core competencies? Or despite having everything else, the business just can’t get enough capital to make it big?

Finally there is the environmental pillar which means are the macro (both national as well as the international) conditions favorable for the business? Are the governmental policies really enabling? Also (and with growing importance in modern times), is the business being able to comply with the new environmental regulations being set across the world?

Having defined the framework let us now see how does the Indian handicraft industry (both segments) fit into it so that we may be able to determine if its doomsday is inevitable. A convenient tool for such purposes is the SWOT analysis tool i.e. analyzing the strengths, the weaknesses, the opportunities and the threats to the business.

Let us begin with a quick review of the current situation. it is no secret that the Indian handicrafts are struggling. We had expected that post-WTO, our handicraft exports would increase due to improved market access. And they did for a while though not quite as much as we had expected. And finally in 2008 when we were expecting them to increase from Rs. 17,000 crore (in 2008) to Rs. 30,000 crore in 2010, they actually almost halved (Rs. 8,000 crore in 2010) and have stagnated since! One easy way out is to ascribe the phenomenon to the global meltdown and definitely its role can’t be denied, but the consider this. China which commands a much larger export share than us in the global handicrafts market (despite having considerably less cultural diversity than us) is now again seeing an exponential growth in its handicrafts exports after the 2008-10 blip. So clearly our SWOT analysis needs to probe deeper and into each of the pillar. Since the current state of affairs is not particularly an exciting one, let us begin by seeing why it has come to what it is today.

To see the weaknesses / challenges in the knowledge pillar first, it is important to analyze the background of the Indian handicrafts sector first. Virtually the entire sector lies in the unorganized sector. Not just this, the entrepreneurs are marred by chronic poverty (the percentage of poor in this sector is abnormally high), social injustice (due to cultural factors, it is mostly the scheduled castes / tribes or the other backward sections – specially the backward minorities who are engaged in the sector) and serious insecurities relating to health and education. The net result of these disabilities is that the entrepreneurs are forced to be risk averse (how can we expect a person on the verge of starvation to assume any risk when his survival could be at stake). Thus they are not able to adopt modern management practices, latest technology or even provide the needed skill training to the labor.

Now this has the effect of landing them into a vicious cycle. For the lack of above means a denial of capital since the potential lenders / investors suffer from informational asymmetry and our entrepreneur suffers from lack of credibility. With no capital his bargaining position becomes weak and he can be easily denied even his rightful gains by the supply chain. That would mean lack of capital generation and thus he would never be able to make a transition to the modern management, technology and skills. Hence the loop.

Similar loop exists in the linkages pillar as well. By definition the handicraft units are small and thus suffer from diseconomies of scale. Add to it the fact that most of them lie in the rural areas where the infrastructure access is poor or else they are too poor to afford infrastructure access even when it exists. Thus a ‘crowding out’ mechanism sets in as they now become cost inefficient which further weakens their bargaining power and thus the vicious loop.

Finally in the environmental pillar as well, the challenges are not any less daunting. The government policies no doubt appear to be favoring the handicrafts. But for a long time they suffered from over emphasis on reservations for the sector or we can say were anchored in a Keynesian framework. The logic was simple that reservations would create enhanced demand and thus enhanced production. But Keynesian policies alone are not found to be as effective in the traditional sectors of developing countries due to the presence of the large number of market distortions. So there is a need for supply side ‘enabling’ measures in such cases and such a need was felt in our case as well. Then we took some supply side measures like ‘cheap’ credit. But we failed to address the ground level problems effectively and such measures as the ‘cheap’ credit remained an illusion since credit itself was simply not available. The 4th Census of small industries (2006-07) reveals that over 92% of such units don’t have access to any form of credit (institutional or otherwise)! In the international front also the OECD countries accounted for a large market share and when the financial crisis struck, the demand for the ‘luxury’ items from India crashed as well. Then the sector also became victim to the various environmental regulations – genuine or otherwise – imposed by the developed countries such as the REACH regulations by EU on leather works.

Clearly the challenges are immense both on domestic and international front and it may very well explain the stagnated state of affairs today. However before writing off the case of the Indian handicrafts industry to doom, let us also look at the various strengths and opportunities and evaluate whether they present a genuinely viable case or not.

As we have already highlighted the strength of the industry is the rich cultural heritage of India and nothing can ever take that away (at least for perhaps next few centuries!). On the other hand, it were the other challenges mentioned earlier which prevent us from reaping the dividends of this heritage. So is there any feasible way to overcome such challenges? We believe yes, and we also believe that those very weaknesses vis the rural, unorganized setup are its biggest strengths.

Indian villages are unique in having immense ‘social capital’. True they may be lacking in finance capital but finance capital can easily flow in from outside if the conditions are appropriate. We saw how the informational asymmetry and diseconomies of scale prevented this and led to the denial of capital and crowding out. But if we utilize the social capital of the villages to form self help groups such information asymmetry and scale problems can be effectively addressed. We can then train these SHGs to adopt modern management practices, we can incentivize them to get credit ratings done from standardized agencies which will then address the informational and scale problems and thus the capital will flow in (and there will be no need to dedicate public capital here as private capital specially the micro finance groups have shown to effectively step in such cases). Banks too have found it useful to lend to such SHGs via the new Business Correspondents model and if we amend some laws, these SHGs may have the potential to raise capital directly from the markets via SME exchanges. By creating viable SHGs of critical mass, we are also doing away with the bargaining weakness problems since the entrepreneurs will be able to negotiate better terms. Thus the inefficiencies in the supply chain will be weeded away by a market based process and the entrepreneurs will now be able to generate capital, invest in technology and skill training and thus be able to create a virtuous cycle out of the vicious one. Also, importantly, we already have seen that the SHG model works in real life as well (NRLM, Kudumbshree in Kerala, NE-RLM in Assam). Similarly while it may be a tall order for the government to provide infrastructural facilities to every village, the ‘cluster’ based approach can help us overcome the infrastructure barrier and can also increase the bargaining power of the entrepreneurs.

Another important challenge which we saw was how these entrepreneurs are forced to be risk averse out of socio – economic disabilities. Definitely we need to remove the impediments to their risk taking ability. And such impediments as we saw were the chronic poverty, health and educational insecurities and social injustice. This is where the fundamental right to education (implemented via Sarv Sikhsha Abhiyan), providing food security (proposed under National Food Security (Draft) Bill, 2012) and universal health care (Planning Commission high level group recommendations) step in. Once such ‘unfreedoms’ (to borrow from Prof. Sen) are removed, there is no reason why can’t unleash the enterprising potential of the handicrafts sector in India as China has already done.

Finally, like any other business, handicrafts too will need an enabling policy environment framework. Focus needs to shift from Keynesian approach to a more enabling approach. Some of the aspects of the enabling approach we have already covered above. To address some other concerns like the skill training in the knowledge pillar, we have come up with the National Skill Development Programme directed by the National Skill Development Council. The increasing penetration of cellular and broadband services (as envisaged under the National Telecom Policy, 2012) can help address many of the concerns under the knowledge pillar and the linkages pillar. The PURA 2.0 scheme of the 12th FYP too is a highly cost effective scheme to improve the rural connectivities and thus help overcome the infrastructure constraints.

Finally in terms of improving the international environment, we need to diversify into newer markets (and for this we already have a Focus Product Market Scheme under the Foreign Trade Policy 2009). To help our handicrafts comply with the international regulations, we definitely need the state to disseminate information and to aid the entrepreneurs in making the transition. We have already seen this in the leather industry of Kanpur where the state provided grant (60% center and 15% state) to the leather units to set up waste treatment plants to comply with EU’s REACH regulations. Such informational exchange can also be enhanced along with improved supply chain efficiency if we increase the participation of our entrepreneurs in various trade fairs.

Thus we see step by step, how there is a genuine viable case for the handicrafts here. We don’t need to ape other countries and spend huge sums of public money, rather just need a change in approach and follow a unique model to utilize our own core competencies – and we can turn our handicrafts around.