For A Stronger IP Regime

Nineteen days. That is what it took for a government-appointed expert committee to
prepare the first draft of India’s National Intellectual Property (IP) policy
         Pretty quick, one should acknowledge, as the six-member IPR (IP rights) think tank, set up on 22 October 2014, had sought public comments on the shape of the policy till November 30. The policy came out on December 19.
        One of the reasons the think tank was able to respond so quickly was perhaps due to the country’s existing IP framework. As the draft policy itself states, “India has robust IP laws and a strong IP jurisprudence. The legal framework does reflect the underlying policy orientation and national priorities, which have evolved over time, taking into account development needs and international commitments.” The panel’s job, thus, was just to make the underlying policy
orientation more explicit.
         In a nutshell, the draft policy is based on the following assumptions: IP is essential for the country’s growth; the current laws are good enough; most of the benefits of IP protection are enjoyed by overseas entities (especially in the case of patents where 75 per cent of the filings are by foreign entities). The premise itself will be music to the ears of the proponents of a stronger IP regime, especially governments such as the US, as the draft ignores an equally strong opposing view, from civil society groups, some Sangh Parivar constituents and others, that IP protection can be counter-productive to the development needs of the country.
      The proponents of IP will be happy that the draft talks about a review of existing IP laws. The global pharmaceutical industry, for instance, has been seeking a review of the flexibilities built into India’s patent law as it denies them patent protection for incremental innovations. The willingness to engage actively in the negotiation of international treaties and pacts is another area that will be of interest to the global research-oriented industries that are trying to extend the IP protection linked market exclusivity in India.
       The draft policy seeks to introduce a concept of “petty patents” or “utility patents” to enable small inventions to get patent protection. The aim is to protect the inventions of small and medium scale enterprises in the unorganised and informal sectors. The development is worth watching. On 30 September, Prime Minister Modi and US President Barack Obama issued a joint statement that stressed the need to foster innovation, through IP protection. More than the contents of the draft, which may undergo changes before the final version, the timing and the swiftness in
action are interesting at the moment.
(This story was published in BW | Businessworld Issue Dated 09-02-2015)

Low Crude and the Reality

A Not To Be Messed Opportunity:  Falling oil prices and the OPEC-US fight over market share are boons for emerging economies like India by Nayan Chanda
When elephants fight, it is the grass that suffers, goes the saying. But paradoxically, in the latest battle for market share between the proverbial pachyderm forms of OPEC and America’s emerging shale oil giant, the smaller countries beneath them are far from being trampled. Instead, the precipitous drop in oil prices — with a barrel of crude costing less than $50 in early January — has been a bonanza for the vast majority of oil-importing countries. Amid signs that the price may fall further before the end of 2015, emerging economies like India have a clear window of time to balance their budgets and enact economic reforms. The US shale oil industry has accused OPEC of declaring war on shale oil by refusing to cut production despite a glut in the market. Saudis blame US
industries for flooding the market. Although the geopolitical condition today is very different — Saudi Arabia is allied with the US against Islamic State — the US industry’s memory is seared by the experience of 1986. That year the Saudis deflated the oil ambition of US firms by driving price down to $10 a barrel. The collapse in price drove the US oil industry to decline and allowed Saudi Arabia to gain dominant position. Now with the resurgent US boosted by shale revolution and keen to end its dependence on West Asia oil the battle for market share has resumed.
         In recent years, new technologies to extract shale oil has enabled the US to increase output to its highest levels in three decades — over nine million barrels a day — freeing America of its historical dependence on OPEC-sourced oil. In an effort to retain market share, the Saudi-led OPEC has rejected pressure to cut production even though the global demand for oil has slackened. The resultant glut in the market has steadily driven prices down, bringing relief to governments like India and Indonesia, whose budgets have been weighed down by the erstwhile high cost of fuel subsidies. The plunging prices have not been good news for all, however, as evidenced by the recent collapse of the Russian ruble and the heightened economic pressure on Iran. Midsize oil exporters like Nigeria have been forced to devalue their currency, with Venezuela turning in desperation to China to help save its fast-sinking economy.
        The Saudi strategy may be born of a well-founded sense that there is long-term weakness in their rivals’ effort to secure market share. For many US shale oil producers looking at prices below $50 a barrel, drilling new wells is not commercially viable. Already, many have begun cutting back production and laying off workers, and overall investment in US oil and gas sector has fallen by over 30 per cent last year. Environmentalists fear that by continuing to apply downward pressure on the price of oil, OPEC might also be trying to strangle fledgling alternate energy sources such as solar and wind power, which have a higher sticker price than hydrocarbons pumped from the ground.
There is a delicate financial calculus at play in OPEC’s decision-making. For example, the Saudi cost to produce a barrel of oil is just $2, but according to the IMF, it needs to have oil prices of around $89 a barrel to balance its budget. The current price of below $50 means that the House of Saud is absorbing a significant fiscal hit. But the major producers of OPEC have deep pockets and appear to be prepared to suffer short-term losses in a bid to destroy the long-term competition. The success of that approach will depend on how quickly the innovative upstarts in the US shale oil industry
retreat and regroup, with a view to bouncing back with better technology to mount a fresh challenge to Saudi domination in future. In the meantime, nations like India should take advantage of this brief window of opportunity to save large sums of taxpayer money and put their economic houses in order before the battle of the oil-producing elephants resumes.

(This story was published in BW | Businessworld Issue Dated 09-02-2015)

Falling Crude prices and India's Quest

         The dramatic plunge in the global crude oil price from a high of 111 dollars a barrel in June 2014 to its lowest level of 45 dollars on January 13 awhile, registering nearly 60 per cent tumble in a shot span of a few months was unprecedented in the more than half a century annals of the world’s muchfeared commodity cartel, the Organization of Petroleum Exporting Countries (OPEC). With global economic recovery not gaining substantial momentum across the continents to ensure higher energy consumption even at reduced growth prospects, no one is sure as to how far the crude oil price will go down or how long it will take to balance demand supply mismatch so that prices can regain lost or losing ground.

         Energy experts recall that the diminution in OPEC’s omnipotence could be traced to 1985 when Britain’s North Sea and the US Alaskan oil flooded the global oil market, resulting in a shift from monopolistic to competitive pricing. But that period petered out in 2005 when escalating Chinese energy demand triggered off a temporary global oil paucity, letting OPEC’s price ‘discipline’ weapon to get redeployed to the detriment of oil importing emerging economies such as ours. But in recent years particularly after the financial crisis of 2008 when the global economy in general and the

advanced countries in particular suffered low or no growth, the world’s fossil fuel energy demand fell

woefully short of supply. Add to that, the United States was able to succeed in the production of shale

oil which has begun to play a key role when small and mediumsized producers in the US successfully

thrashed out in 200910 as to how to apply to oil production the techniques of horizontal drilling and

hydraulic fracturing that had already been spectacularly successful for natural gas. As a result, US oil

production soared from about five million barrels a day (mb/d) in 2008 to 9.1 mb/d in December 2014. In sum, the reasons for the steep drop in crude prices owed itself to a host of favorable factors that covered among others, growing supply from non OPEC countries, particularly the US, a halting

recovery in global demand and Saudi Arabia’s resoluteness not to continue acting as OPEC’s and the

world’s swing producer, particularly when the US production threatens to outrun the Kingdom’s

substantial and substantive share in the global oil market.
     The International Monetary Fund (IMF) is of the view that “overall, lower oil prices due to supply

shifts are good news for the global economy, obviously with major distribution effects between oil

importers and oil exporters”. But with the share of oil consumption in GDP that determines the energy intensity being high at 7.5 per cent in heavily oilimporting countries such as India and Indonesia, against 5.4 per cent in China and 3.8 per cent in the United States, the authorities may have to keep an unrelenting vigil to avert the painful possibility of how the lower crude prices would work its way into retail inflation if the consumption of oil also goes up on a faster clip. Already, the pump prices ofpetrol and diesel in the country had fallen sharply. While petrol prices are now Rs 12.27 per litre lower than August last, diesel prices were down Rs 8.46 a litre since October with another round of cuts expected in mid January. Lest the persistent fall would accelerate pentup

demand for non renewable and importintensive fuel like crude oil and its derivative products, the authorities are cautious in calibrating the requisite adjustment in whatever feasible manner they can under the new dispensation of decontrol of prices of petrol and diesel. That is partly the reason why the government effected hike in excise duty during November and December in two tranches in 2014 to mop up a huge Rs 10,000 crore in the remaining part of the current fiscal in a bid to shore up its revenue to meet the budget deficit without burdening the consumer but by making the oil marketing companies (OMCs) to take the tab.

       Ever since the decontrol of the prices of petrol first and diesel later, OMCs were given the elbowroom to adjust selling price of petrol and diesel on import parity cost to leave them with some leeway to help upstream (production) companies to invest more in exploration and production so that

domestic supply of oil and natural gas could also gather traction. This is particularly important

because persistently lower oil prices might reduce exploration and production spending and heighten

risk for offshore oil companies. Energy analysts argue that if the government is able to keep in leash

any abrupt upsurge in oil consumption close on the heels of its drastic price fall in the global market

for the past several months by fostering diversified sources for energy, it can also build a strategic

reserve for energy security in the event of future spike in crude prices which are likely given the

geopolitical stark realities in West Asia and non OPEC producers such as Russia. Already, the Government of India, through Indian Strategic Petroleum Reserves Ltd (ISPRL) is setting up strategic crude oil reserves with storage capacity of 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur. In order to bolster the strategic crude oil storage capacity, ISPRL through Engineers India Ltd, has prepared a detailed feasibility study for construction of additional 12.5 million tones of strategic crude oil storage in Phase II at Bikaner, Rajkot, Chandikhol and Padur. Using the extant soft global crude prices, the construction of oil storage caverns need to be fast tracked so that storage capacity is suffice for securing energy security. As they say the best time to fix the roof is when sun shines and so is the best time to build supply stocks is now and here when imported crude price is cruising downhill for a few more months.

    Since the country had been spending precious foreign exchange of the massive order of 160 billion

dollars annually on oil imports, the soft crude price now prevailing in the global market would enable

India to save at least 50 billion dollars in a year, provided there is no massive import volume to cater

to the insatiable appetite for oil by domestic users, individuals as well as industry. Alternatively, the

authorities could broadbase recovery techniques in the existing oil wells of national oil companies

such as ONGC, OIL and GAIL, both onshore and offshore, making ample use of the slack in the

oilfield service companies (OFS) which must perforce have to renew contracts on their existing rigs at markedly lower rates. This is also an opportune time for upstream oil companies to aggressively step up production of oil and gas. It is no wonder that Secretary, Ministry of Petroleum and Natural Gas, Mr. Saurabh Chandra told a partnership summit under the umbrella of CII and the Ministry of

External Affairs recently that the government is working on a renewed bid to promote exploration

activities in the country’s oil and gas sector. He said in the last couple of months, the government has

taken several steps to augment “activities in exploration including a reassessment of the hydrocarbon

potentials in the country, putting in place a plan to survey all sedimentary basins at a cost of Rs 6000

crore and framing a transparent extension policy for the pre NELP (New Exploration Licensing

Policy) fields”.

     Alongside, using the drastic cut in oil import bill due to the decline in crude oil prices, the country

should seize the opportunity to step up generation of renewable energy as this promises to stem, if not

stop the massive drain on foreign exchange reserves entailed in the import of oil, gas and coal. The

current installed renewable capacity will need to go and grow manifold for the country to move to 15

per cent of energy by 2020. As the initial cost of funding these unconventional sources of energy such as solar, wind, water and biomass are quite expensive with their sale price for users pegged quite high, efforts need to be stepped up by the authorities of the Ministry of Non-conventional & Renewable Sources of Energy to redouble the gains from this source of unpolluted energy for ecological balance and to keep India’s eco system undefiled by noxious fuels. The Prime Minister Mr. Narendra Modi’s ambition of building 100 smart cities cannot be easy in the absence of due focus on fostering alternative transportation fuel options that range from gas, ethanol, methanol to suitable electric power at a time when crude oil prices are on the wane and offering immense possibilities to explore and exploit. With over 70 per cent of the consumption being diesel, the highlypolluting and costly fuel, by the transportation sector mostly heavy duty trucks crisscrossing the country, it is time India plumped for introducing more and more flexifuel vehicles that are run on a medley of compressed natural gas, diesel, ethanol, petrol and methanol. For home consumption of electricity too, the time has come to go in for conserving precious power by opting for LED bulbs with the Prime Minister Mr. Modi recently launching a scheme for LED bulb distribution under Domestic Efficient Lighting Programme (DELP) and a National Programme for LED based Home and Street Lighting. The country needs more such initiatives to solve Its myriad energy needs capitalizing on the recent bonanza being bestowed upon us by the fortuitous fall in the

global crude prices, energy experts assert. There is synergy in energy if only we use innovation and ingenuity.

*Sh. G. Srinivasan is a freelance journalist based in New Delhi and can be contacted at

geeyes34@gmail.com Featured in pib.nic.in

Voters Participation: Soul of Democracy

Louis L’Amour has rightly said that to make democracy work, we must be a notion of
participants, not simply observers. One who does not vote has no right to complain. Democracy can be
seen as an extension of people’s participation. It is a form of government in which the supreme power
is vested in the people and exercised by them directly or indirectly through a representative system of
elections. Democracy will collapse without proper and fair participation of its citizens. Every vote
reassures our democracy and makes it stronger.
           In this context, general elections 2014 were proved to be historic. 66.44 percent voters
comprising of 554.1 million people have accessed their franchise to vote. Prior to this, the highest
turnout was recorded as 64.02 percent in 1984. Not only this, the gender gap between the male and
female turnout was reduced by 1.55 percentage points in Lok Sabha elections 2014. 16 States and UTs recorded a higher women turnout. To add to the glory, women voters surpassed men for the first time ever in any Lok Sabha elections in nine States or Union Territories. The credit for achieving such figures lies with the efforts of Election Commission of India. No doubt engaging with and motivating such a large and diverse population to cast their vote was a gigantic task with myriad range of complexities and challenges.
Election Commission of India adopted Systematic Voters’ Education and Electoral Participation
(SVEEP) programme to increase voters’ turnout both in terms of quality and quantity. SVEEEP
formulates policies, lays down the framework, plans interventions and monitors implementation
besides carrying out continuous interaction with voting publics, civil society groups and media. They
broadly include situation analysis; systematic planning and implementation of targeted interventions
(on IMF model) based on the situation analysis, mid programme review and monitoring and end term
review. The communication interventions include multimedia and interpersonal  communication,
physical events and innovative activities for mobilization of people/community and voter Facilitation.
          National Voters Day is one such initiative which was adopted in 2011 to reach out to masses of
the country. Since then it is being observed every year with the objective to increase enrolment of
voters and to make universal adult suffrage a complete reality. A series of mass interactive activities
like symposiums, cycle rally, human chain, folk arts programmes, minimarathon, competitions and
awareness seminars will be organized on the fifth National Voters Day which will be celebrated on
25th January 2015 across the country. 25th January is also the foundation day of the Commission ,
which came into being on this day in 1950.The theme for NVD 2015 is ‘Easy Registration; Easy
Correction’. The Booth Level Officers (BLOs) in over 6 lakh (0.6 million) Polling Station areas will
felicitate the newly registered voters in a brief ceremony and hand over their Elector Photo Identity
Card (EPIC) to give the younger generation a sense of responsible citizenship. They will also be given a badge with the slogan “Proud to be a Voter – Ready to Vote”. It took a lot of convincing on part of civil societies and NGOs in sensitising people to exercise their valuable right. Several campaigns were launched to encourage masses especially the young generation, women and transgenders for leading them to polling booths. . They acted as a catalyst to spread voter education. It was due to combined efforts of NGOs, Civil Societies, Election Commission of India, etc that India is touching new heights of voters’ turnout.
         Free and fair elections are the life force of democracy. Credible elections at stipulated intervals
have ever since enabled India’s peaceful transformative journey for inclusion and empowerment of
common citizen. The justification of election as a key anchor of democracy comes from the fact that it translates the idea of people’s power to a physical reality. This can effectively happen only when
people are able to exercise such power through informed participation.
*Sh. Rajesh Malhotra is Director (M&C) in PIB New Delhi attached to Election Commission of India.
**Ms. Pankhuri Srivastava is Information Asstt. in PIB New Delhi
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Legal Provisions Concerning Sexual Violence against Women and Children in India

Introduction:
On 14th November, 2012, a new law was enacted, the Protection of Children from Sexual Offences
(POCSO) Act, which brought in major changes in the law related to sexual violence, as far as children below 18 years are concerned.
The aims and objectives of this Act were:
 To secure a child’s right to safety, security and protection from sexual abuse.
 To protect children from inducement or coercion to sexual activity
 To prevent exploitative use of children in prostitution and generation of pornographic material.
 To provide a comprehensive legislation to safeguard the interest of a child at every stage reporting,
recording of evidence, investigation and trial of offences.
 To provide for establishment of special courts for sensitive and speedy trial
It made the law gender neutral and brought within its purview sexual assault of both girls and boys
below the age of 18 years. It also widened the definition of sexual violence beyond the conventional
penovaginal penetration to include crimes which did not amount to rape under the IPC. It also
prescribed stringent punishment and many procedural safety measures to protect the child during
investigation and trial.
But this statute received hardly any media attention and the police continued to use the existing IPC
sections in most cases of sexual assault on children. Things began to change only by January, 2013,
when, after the gruesome gang rape and murder of a 23 year old paramedic
in Delhi, there were widespread protests and international attention was drawn to the issue of sexual violence against women in India and the question whether we have adequate and stringent laws in place to address the issue became the point of debate in the media. In response, the government set up a committee headed by late Justice J.S. Verma to make recommendations for formulating a new law to deal with sexual violence. As per these recommendations a draft Bill was submitted to the Parliament, and without much delay, on 3rd April, 2013, the Amended law came into effect which changed the relevant sections in the Indian Penal Code (IPC), the Criminal Procedure Code (CrPC) and the Indian Evidence Act (IEA). With these changes the definition of sexual violence and the procedural aspects to provide safety to women and children are more or less, similar.
The same are provided here below in a tabular form for easy reference.
Important provisions under the POCSO Act, 2012
Victim under the Act: Any person, both male and female, below the age of 18 years.
Accused under the Act: Any person, both male and female, adult or child.
Note: As far as the offence of sexual violence against children is concerned, the law is gender neutral.
Also note that the POCSO Act does not use the word “rape” and uses instead the word “sexual
assault”. The definition is very wide and includes a range of offences including nonpenetrative
sexual abuse and also oral and anal sex and insertion of objects into the vagina, anus or other body orifices. If grave harm is caused to the victim or if the offence is committed by a person in authority, the offence is termed as “aggravated” offence.
The present law for sexual violence upon women and children provides for several safety measures for protecting the victim / survivor right from the time of lodging the FIR till the end of the trial. Some of them are summarized below.
While Lodging the First Information Report (FIR) at the police station:
A victim need not come to the police station to lodge the FIR. The same can be given to the police by
a relative or a friend who will be the complainant.
The FIR shall be recorded in writing and shall be read over to the complainant and a copy of the same
shall be provided free of cost to the complainant.
Failure to record an FIR is a cognizable offence.
While recording the statement of the victim:
After the FIR is lodged, the police will record a detailed statement of the victim regarding the crime.
The same shall be recorded in a simple language
The police shall not reveal the identity of the victim to the media or to the public.
A woman or a child shall not be detained in a police station overnight.
If the victim needs a translator the same shall be provided.
Within 24 hours of receiving information the victim shall be taken to the nearest hospital for medical
examination and care
If the victim has any other special needs, the same shall be met.
If the victim is a child,
 The statement shall be recorded at a place where the child resides or where the child feels
comfortable.
 The officer recording the statement shall not be below the rank of sub inspector and should
preferably be a woman officer.
 The police officer shall not be in uniform.
 The child shall not come in contact in any way with the accused
 A person who the child trusts shall be present
 For mentally or physically (temporary or permanent) disabled child, a special educator / expert may be called
 If possible, the statement of the child may be recorded using audiovideo
electronic
 If required, the police shall take the child to the nearest shelter home for emergency shelter and
produce the child before the Child Welfare Committee (CWC)
 The Police shall report all cases of child sexual offences to the Child Welfare Committee and
Special Court within 24 hours
Medical and Forensic Examination:
A person who the victim trusts shall be present at the time of medical examination
A female victim shall be examined only by a lady doctor
The police shall ensure the samples collected from the hospital are sent to the forensic laboratory at
the earliest
The medical practitioner shall treat the child for cuts, bruises, bodily and genital injuries, exposure to
STDs & HIV. S/he shall discuss possible pregnancy and emergency contraceptives with the child or
the person who the child trusts. Rule 5 (4)
The victim may be referred for mental, psychological or other counselling.
Non treatment of a victim by a Hospital is an offence punishable with imprisonment for a term which
may extend to one year or fine or both under S. 166B Cr. P C
The medical and forensic examination shall be conducted as per the Central guidelines or the
guidelines issued by the respective state.
Scheme for Financial Support and to provide support to overcome and physical and mental
trauma caused by the incident:
Many states have introduced schemes for either compensation or financial support to the victim. There are different models for the same.
The Maharashtra state has introduced the Manodhairya Scheme for victims of rape and acid attacks,
where the compensation has to be paid within a few weeks of lodging the FIR.
Legal assistance during the trial is also provided as per this scheme.
During the Trial:
The POCSO Act provides for setting up of special child friendly courts to conduct the trial.
Many states have also set up special courts for all cases of sexual assault concerning women and
children.
All trials concerning sexual assault will be conducted in camera.
The victim shall be allowed to have a support person inside the court during the examination and cross examination.
Questions regarding the past sexual history of the victim or child, or any other humiliating questions
which cause the victim trauma shall not be asked during cross examination.
If the child I below 7 years, there cannot be direct cross examination. The lawyer would have to give
the questions in writing to the judge and the judge shall explain the same to the child.
Conclusions:
If all the protective measures are stringently followed, the investigations and trial will not be a
harrowing experience for the victim and this will in turn provide for maintaining the dignity of the
victim, which in turn will improve conviction rates in the country.
*Ms. Audrey D’mello is Program Director, Majlis Legal Centre.
Majlis Legal Centre provides socio legal support to victims of domestic and sexual violence in
Maharashtra. The Centre has collaboration with the Department of Women and Child Development,
Government of Maharashtra for effective implementation of laws with regard to crimes against Women.
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Antenatal and Postnatal care initiatives

Caring for the mother and child: Health Ministry makes innovative use of technology to provide antenatal and postnatal care

The Ministry of Health & Family Welfare has been making innovative use of technology to reach out to the mother and child for effective delivery of health services under the National Health Mission.
Mother and Child Tracking System (MCTS)
The Health Ministry has introduced web based name based tracking system called Mother & Child
Tracking System (MCTS) across all the States and UTs in 2010 to facilitate timely delivery of
antenatal and postnatal care services to all the pregnant women and immunization to all the children.
The system captures personal details such as name, address, mobile number etc., of every pregnant
woman and child up to five years of age. A total of over 14 crore pregnant women and children,
besides 2.24 lakh Auxiliary Nurse Midwives (ANMs) and 9.31 Accredited Social Health Activists
(ASHAs) have been registered in MCTS till now. The MCTS aims to ensure that every pregnant
woman gets complete and quality antenatal and postnatal care, and every child receives the full range
of immunization services. Under MCTS, appropriate health promotion messages to beneficiaries that
are relevant according to the month of pregnancy or date of birth of the child are being sent on
mobiles of beneficiaries.      
Unstructured Supplementary Services Data (USSD) based solution has been introduced for real time
updation of MCTS database by ANMs using their existing mobile phones. Efforts are being made to
develop tablet based applications which will allow health workers to register and update service
delivery information from tablets, resulting in timely registration and updation of information and
better microplanning. Integration with Aadhaar is being planned for unique identification and generation of records. A self registration web portal is also expected to enable the beneficiaries to maintain and see the details of ANC, PNC, etc., related to them.
Mother and Child Tracking Facilitation Centre (MCTFC):
In addition, the Health Ministry has set up the Mother and Child Tracking Facilitation Centre
(MCTFC) at the National Institute of Health and Family Welfare (NHFW). It is major step taken by
Government of India under the National Health Mission in improving the maternal and child health
care services.
The MCTFC has 86 seats and it is designed to:
I. Provide a supporting framework to MCTS and help in validating the date entered in MCTS by

making phone calls to pregnant women and parents of children and health workers;
II. Be a powerful tool in preceding relevant information and guidance directly to the pregnant
women, parents of children and to community health workers, thus creating awareness among
them about health services and promoting right health practices and behaviour;
III. Contact the service providers and recipients of mother and child care services to get their
feedback on various mother and child care services, programmes and initiatives like JSSK,
JSY, RBSK, National Iron Plus Initiative (NIPI), contraceptive distribution by ASHAs etc.
This feedback would help the Government of India and the state governments to easily and
quickly evaluate the programme interventions, and plan appropriate corrective measures to
improve the health service delivery;
IV. Check with ASHAs and ANMs regarding availability of essential drugs and supplies like ORS
packets and contraceptives.
Kilkari
The IVRS based application called Kilkari is being piloted under which audio messages on maternal
and child health care are being sent to pregnant women and parents of children. A series of 18 health
promotion and awareness generation messages for pregnant women and parents of infants which have
been specially customised for each stage of pregnancy and the age of infant have been professionally
recorded in simple Hindi dialect and would be disseminated as audio messages through mobiles to
lakhs of pregnant women and parents of infants particularly those residing in high priority districts of
high focus States. Another IVRS based application called Mobile Academy had been tested for
training of ASHAs and ANMs. These applications are proposed to be nationally rolled out by 15th
August, 2015 to increase awareness and improve the healthseeking behavior of pregnant women, parents of infants and to provide training to the health workers.
******
*Dr. Manisha Verma, Director (Media), M/O Health & Family Welfare, Govt. of India.
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Make in India- Defence Sector

            Achieving selfreliance and reducing dependence on foreign countries in defence is a
necessity today rather than a choice, both for strategic and economic reasons. The
Government in the past has created production capabilities in defence in form of Ordnance
Factories and Public Sector Undertakings to cater to the requirements of our Armed Forces.
However, there is a need to enlarge the role of Indian private sector as well to develop
capabilities and capacities for production of various defence equipments.
            Our Prime Minister has taken a very important initiative in form of ‘Make in India’ to
promote and encourage domestic manufacturing of various items. The requirement for
domestic production of defence equipment is more than for any other sector because it will
not only save precious foreign exchange but will also address the national security concerns.
Government being the only consumer, ‘Make in India’ in defence sector will be driven
by our procurement policy. The Government policy of promoting domestic defence industry
is adequately reflected in the Defence Procurement Policy, wherein preferential treatment is
given to ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ categories of acquisition over ‘Buy
(Global)’. In the days to come, import is going to be the rarest of the rare option and first
opportunity would be given to the Indian Industry to develop and manufacture the required
systems. As Indian companies presently may not have adequate capabilities in terms of
technology, they are encouraged to partner with foreign companies for joint ventures,
technology transfer arrangements and tie ups.
           If we look at the profile of Acceptance of Necessity (AONs) granted by Defence
Acquisition Council (DAC) in the last couple of months after the new Government has come
to power, proposals worth more than Rs.65,000 crores have been categorized under ‘Buy
(Indian)’ and ‘Buy and Make (Indian)’. The process of further orienting the Defence
Procurement Procedure towards procurement from domestic industry will continue in future
as well. The procurement process would be made more efficient, time bound and
predictable so that the industry can plan its investment and R & D well in advance to meet
the requirement of our armed forces.
           Till now, there were many entry barriers for the domestic industry to enter into
defence sector in terms of licensing, FDI policy restrictions etc. In the last six months, the
Government has taken several policy initiatives to ease the process of entry into defence
manufacturing. The most important is the liberalization of the FDI policy regime for Defence sector to encourage foreign investment in the sector. FDI up to 49% is allowed through
Government route (with FIPB approval). FDI above 49% is also allowed on a case to case
basis with the approval of Cabinet Committee on Security wherever the proposal is likely to
result in access to modern and state of theart technology in the country. Restrictions in
earlier policy related to Foreign Institutional Investment (FII) and majority shareholding to be
held by single Indian shareholder have been removed.
            Even though private sector industry was allowed to enter in defence manufacturing
since 2001, after obtaining industrial licence under IDR Act, the process of obtaining industrial licence was very cumbersome and used to act as a major road block for the industry, particularly small and medium industry, who were in the business of making part, components, sub systems and sub assemblies.
          The Government liberalized the licensing policy and now most of the components, parts, raw materials, testing equipments, production machinery, castings, forgings etc. have been taken out from the purview of licensing. The companies desirous of manufacturing such items no longer require industrial licence and will also not be subjected to FDI ceiling of 49%. A comprehensive Security Manual indicating the security architecture to be followed by various class of industries has been put in public domain, so that companies could easily access the same and follow it accordingly. The initial validity of industrial licence has been increased from two to three years.
          For the first time, a Defence Export Strategy has been formulated and has been put
in public domain. The strategy outlines specific initiatives to be taken by the Government for
encouraging the export of defence items. It is aimed at making the domestic industry more
sustainable in the long run as the industry cannot sustain purely on domestic demand. A
Standard Operating Procedure (SOP) for issue of NOC for export of military stores has been
finalised and has also been put in public domain. Requirement of End User Certificate (EUC)
to be signed and stamped by Government authorities has been dispensed with for most of
the defence items, particularly parts, components, subsystems and sub assemblies. This will largely ease out the export by the domestic industry. A web based online system to receive applications for NOC for export of military stores has been developed and has been put in place. There is a big opportunity in the defence sector for both domestic and foreign investors. We have the third largest armed force in the world with an annual budget of about US$ 38 billion and 40% of this is used for capital acquisition. In the next 78 years, we would be investing more than US$ 130 billion in modernization of our armed forces and with the present policy of MAKE IN INDIA, the onus is now on the industry to make best use of this opportunity for the benefit of both the business as well as the nation. Besides, under offset more than Rs. 25000 crore obligations are to be discharged in next 78 years.
            While on the one hand, Government is making necessary policy changes with regard to procurement, investment including FDI, licensing, export etc., the industry also needs to come up and accept the challenge of upgradation in terms of technology and required investments. Defence is the sector which requires huge investments and technology and is driven by innovation. The industry, therefore, has also to change its mindset and think for long term rather than temporary gains. We need to focus more on Research and Development and state of the art manufacturing capabilities. The Government is fully committed to create an ecosystem for the domestic industry to rise and to provide a level playing field to all sectors of industry, both public and private.
Shri Manohar Parrikar is the Union Minister for Defence (Raksha Mantri) Government of
India (Featured in pib.nic.in)

‘Make in India’: A Lion’s Step to boost manufacturing Part-2

Favourable Milestones:
· India has already marked its presence as one of the fastest growing economies of the world.
· The country is expected to rank amongst the world’s top three growth economies and amongst the
top three manufacturing destinations by 2020.
· Favourable demographic dividends for the next 2-3 decades. Sustained availability of quality
workforce.
· The cost of manpower is relatively low as compared to other countries.
· Responsible business houses operating with credibility and professionalism.
· Strong consumerism in the domestic market.
· Strong technical and engineering capabilities backed by top-notch scientific and technical institutes.
· Well-regulated and stable financial markets open to foreign investors.
              The government has also pledged other focused approaches. Among other things, it intends to leverage the existing incentives/schemes to boost manufacturing. A technology acquisition and development fund has been proposed for the acquisition of appropriate technologies, the creation of a patent pool and the development of domestic manufacturing of equipment used for controlling pollution and reducing energy consumption, official sources said in New Delhi. This fund will also function as an autonomous patent pool and licensing agency. It will purchase intellectual
property rights from patent holders. The government has also to deal with an existing menace in bureaucratic functioning. The bureaucratic bottle necks that hinder ease of doing business need to be removed.
Training of Workforce:
The manufacturing sector cannot develop on its own without skilled labour force and in this context it is heartening to note the government’s initiatives for skill development. The creation of appropriate skill would definitely set rural migrants and the urban poor on a track towards inclusive growth. That would be a vital step for boosting manufacturing.
The New Ministry for Skill Development and Entrepreneurship has initiated the process of revising the National Policy on Skill Development. It is significant to note that under the Rural Development ministry, the Modi government has undertaken another new initiative for skill development under a recast programme named after BJP icon Pt. Deendayal Upadhyaya.
The new training programme envisages setting up of at least 1500 to 2000 training centres across the country and the entire project would result in an estimated expenditure of Rs 2000 crore and will be run on PPP model.
The new training programme would enable the youths to get jobs in demand-oriented markets like Spain, US, Japan, Russia, France, China, UK and West Asia. The government proposes to train about 3 lakh youths annually in first two years and by the end of 2017, it has set a target of reaching out to as many as 10 lakh rural youths.
Other steps:
As part of other steps, there is need to address other issues too like adequate development of basic
infrastructures – the roads and the power chiefly. For long, MNCs and software service companies have relished doing business in India due to a robust market with enhanced purchasing ability of the citizens but in terms of building up ‘manufacturing facilities’, India has been a case of also-ran. In this context it is worth pointing out that a strong political will, business-like approach of bureaucrats and the entrepreneurs, skilled of workforce along with investment friendly policies can unleash the nation’s potential. It is in this context the government’s efforts to develop an “industrial corridor” between Delhi and Mumbai needs to be appreciated.
          The government is also working on multi-pronged strategies like development of infrastructure linkages including pioneer plants, assured water supply, high capacity transportation and logistics facilities. Carrying on the good works on these fronts, the government also has begun the process of reviving five ailing Public Sector units (PSUs). Of the 11 PSUs, the government also feels that for six other units that needs to be closed, it is working on one-time settlement involving voluntary retirement scheme entailing a cost of Rs 1,000 crore VRS for employees.
The state-run units which have been identified by the government for revival include HMT Machine Tools Ltd; Heavy Engineering Corporation; NEPA Ltd; Nagaland Paper & Pulp Co Ltd; and Triveni Structurals.
*Shri Nirendra Dev is a Special Representative with The Statesman
Featured in pib.nic.in

‘Make in India’: A Lion’s Step to boost manufacturing Part-1

This is a path-breaking venture. In fact, the vision statement of official website, www.makeinindia.gov.in commits to achieve for the country among other things an increase in manufacturing sector growth to 12-14 % per annum over the medium term, increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022 and importantly to create 100 million additional jobs by 2022 in the manufacturing sector alone. These are quite highly ambitious targets given the background that the manufacturing sector in India, which accounts for fourth-fifth of the total output, grew a meagre 3.3 per cent in January 2010.

Achievable Targets:
· Target of an increase in manufacturing sector growth to 12-14% per annum over the medium term.
· An increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022.
· To create 100 million additional jobs by 2022 in manufacturing sector.
· Creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
· An increase in domestic value addition and technological depth in manufacturing.
· Enhancing the global competitiveness of the Indian manufacturing sector.
· Ensuring sustainability of growth, particularly with regard to environment.
Tapping Golden Opportunity:
Now let us look at the opportunity, the initiative can actually benefit India from the ground reality, especially when the Chinese manufacturing leaps have come under strain. There are already reports that several western manufacturing players operating in China want to move away from the world’s largest manufacturing hub. Analysts say, Chinese wages are going up and the labour market is getting more challenging and that is driving away investors. Thus companies with operating factories in China should look for other alternatives in the region, such as Vietnam, Indonesia and of course India. What are the advantages Indian business and especially manufacturing sector actually offer?
The country is expected to rank amongst the world’s top three growth economies and amongst the top three manufacturing destinations by as early as 2020. This is far more ambitious scene than promised about 2050 sometime back in the context of India’s role at the BRICS level. Indian manufacturing sector has positive elements like “favourable demographic dividends” for the next 2-3 decades. The sustained availability of quality workforce is another advantage.
Importantly again, in India, the cost of manpower is relatively low as compared to other countries. There are responsible business houses operating with credibility and professionalism. The country has a democratized polity vis-à-vis the rule of law and a strong consumerism intake ability of the domestic market.

DPCO and NPPA

We Are Governed By DPCO, & We Go By It’  The NPPA chairman is betting on its online database to help track fraudulent activities, including drug pricing

Recently, there was talk that the Narendra Modi government had “arm twisted” the National Pharmaceutical Pricing Authority (NPPA), the drug price regulator, into withdrawing an internal guideline for operationalising a public interest clause in the Drugs Price Control Order (DPCO) 2013.The timing of the withdrawal — a few days before Modi’s US visit — lent credence to this view as the global pharmaceutical industry is the biggest anti-India lobby in the US. In an interview to BW| Business world, Injeti Srinivas, chairman, NPPA, dismisses such talk, asserting that the agency’s powers to keep medicine prices under check remain intact. Excerpts:

The NPPA has moved out of a time-tested price fixing mechanism that was linked to actual production cost of the drug to a market price-based system after the introduction of DPCO 2013. Has it changed the NPPA’s role as an independent drug price watchdog?

The new DPCO 2013, which replaced the DPCO 1995, has three major departures. The first is its market-based pricing approach, in place of the cost-based pricing approach. The second departure is over the identification of the “scheduled” drugs that should come under price control. While the earlier DPCO identified certain bulk drugs and controlled the prices of all formulations that had any of these bulk drugs as ingredients, the new order follows a principle of essentiality. It treats all medicines included in the National List of Essential Medicines (NLEM) of the health ministry as “essential” for inclusion in the “scheduled drug” list for the purpose of price control. The third important departure is the exclusion of bulk drugs from price control. Unlike the DPCO 1995, today you only control the formulation prices; that too, formulations of specific strength and dosage form as specified in the NLEM. However, that doesn’t mean the overall mandate of the NPPA has changed. The NPPA continues to strive to ensure that all essential drugs are made available to people at an affordable price. Most importantly, the “essentiality” factor became the underlying criteria for price control after a Supreme Court directive to the government to ensure that “essential” medicines are not left out of price control. The SC directive carries the force of law, and overrides anything to the contrary.

The NPPA has been accused of going beyond the NLEM list and bringing many drugs/versions of drugs under price control. Should an extended release (ER) or a sustained release (SR) form of a scheduled medicine also come under price control?

A new or novel drug delivery system (NDDS) does not automatically exempt a scheduled drug from price control. As far as the delivery system is concerned, we have a separate provision in the DPCO (paragraph 32 of the Order). If any medicine qualifies for exemption under para 32 by virtue of having a novel delivery system developed through indigenous research and development, it has to get a certification to that effect from the DCGI (Drugs Controller General of India), and we will honour it instantly. Even if a scheduled drug does not qualify for price exemption, it may qualify for differential pricing if it meets the criteria of “new drug” as defined in the DPCO. Second, in case there is a well-acknowledged therapeutic gain associated with the NDDS in question, then the health ministry will have to make a separate entry for that advanced version in the NLEM list as an ER category, or as a SR category, etc. Then we will compare similar versions of the medicine. Ordinary tablets will have one price, and sustained release will have another price. We are governed by the DPCO, and we go by it alone.

Going by the number of litigations involving drug firms and the NPPA, each price notification seems to be resulting in a fresh set of complaint. Why so?

 Sometimes, there will be bona fide mistakes that the NPPA may have committed. We do issue corrigendum in such cases. But then, there is the larger issue of poor database. How are we monitoring overcharging today? We are purchasing random samples from the market (to see if the pack price matches the ceiling price fixed by the NPPA). This is always subjective. Companies can always say why you have picked us, not others. Errors will always be there as long as we do not have a comprehensive data (collection and management) system. The problem will persist until we make this exercise totally non-discretionary and until every case of breach of the ceiling price gets a show cause notice.

How to move towards this system?

Especially when the NPPA does not have its own data collection mechanism, and depends on private databases such as IMS, Pharmatrac, medical bulletins, etc Technology has gone very far, and we have developed, with the help of NIC, IPDMS (integrated pharmaceutical database management system), a multi-purpose tool for this purpose. It is an online platform that allows companies to provide essential information about the products they are manufacturing, procuring through import or third-party arrangement, the quantities they sell, the prices of those products, the price revision status, etc. The current NLEM list, prepared by the health ministry in 2011, is undergoing a revision now. What will be the NPPA’s recommendations to the NLEM revision committee? The NLEM needs certain modifications in order to fully meet this requirement from a strictly price control angle. We are making an independent assessment to see how far the NLEM has served as an effective tool for price control and an affordable access to essential drugs, what has been the impact of the medicines already included in the list and what more needs to be included. The NPPA is part of this exercise.

Why should the NPPA get into a separate exercise to assess this? Why cannot it be a combined evaluation with the health ministry committee, especially since the NPPA representative is also a member of the NLEM revision committee?

The reason is simple. It is not a separate exercise, but a specific input from the price control angle. The NLEM is primarily meant to promote scientific and rational use of medicines, which is what the health ministry committee will look into. They will look at the disease burden of the country, prevalence of diseases, and then map drugs across therapeutic groups. In each therapeutic group, they will look at the molecules, and the cost-effective options for public health procurement. This may not exactly match our mass consumption and affordability parameters.

The NLEM does not reflect the prescription pattern. So, what does one do if despite having a set of price-controlled medicines, people continue to buy high-priced ones that are commonly prescribed? How do you intend to address this problem?

Well, those medicines, the ones that are consumed most but are not part of the NLEM, should be closely scrutinised as very important candidates for inclusion in the revised list. We are looking at the top 300 molecules volume wise, and then distributing it as per therapeutic groups and sub-groups to study the situation. We have found out that 92 of the top 300 molecules are already in the NLEM list. Then, we need to do two exercises. One is to see which are those 208 molecules that are left out, understand whether there are any equivalent NLEM medicines (molecules). We need to see the sale volumes of each of these brands. So if the NLEM volumes are very low, and those of the equivalent, close substitutes or analogs are very high, we will have to add that (in NLEM) to capture the prescription behaviour. Also, we need to see the coverage (in terms of volume across dosage forms) for the balance 92 molecules. Even within the 92, one would tend to seek the inclusion of the most consumed form of medicine.

Companies have approached courts against price fixation for 108 drugs under Para 19 of the DPCO, a public interest clause that allows the NPPA to control the prices of non-scheduled drugs. The withdrawal of the “internal guideline” was also seen as an attempt to bring all medicines under the ambit of Para 19. Your comments.

The matter is sub judice. I would not like to comment on this. Though, one thing must be stated upfront — the withdrawal of internal guidelines had nothing to do with the PM’s US visit. It was done (related to 108 drugs) to strengthen price notification orders, which are speaking orders. Each price notification order itself is a DPCO. They are very much standing and much of it has already been implemented to the consumer’s benefit.

Industry fears that too much reduction in prices in the home market can impact export revenues. For instance, the US Congress asked 14 companies, including three Indian firms, to give details of the lowest price of their drug internationally. Do you see merit in this argument?

You see, reference prices are seen in relation to comparable countries in terms of purchasing power. Every country has a reference basket. And in the reference basket they have similar countries. India cannot be in the reference basket for the US. India has a per capita income of $1,500($5,400 on the purchasing power parity scale), whereas the US per capita income is $53,000. Even after adjusting it to purchasing power parity, the difference will remain so large that you cannot compare the two. So, it is not a valid argument at all.But they say drug prices in India are already lowest…No. When you factor in the per capita income and purchasing power parity, many drugs in the generic drug category (99 per cent of India’s drug market is generic) are cheaper in the US than in India.

The price of medical devices is another concern. Industry says the NPPA is trying to fix the prices of medical devices by using the parameters meant for chemical drugs. What is your view?

See, there are 22 medical devices that have been notified as drugs under the Drugs and Cosmetics Act and Rules. Therefore, they are drugs. Nobody can dispute that. When a separate statute will come for medical devices, it will apply. But until that happens, they would be governed under the Drugs and Cosmetics Act. So, if they are drugs, they are well within the ambit of price control. That much is clear. Already two of those are under price control (Copper T and condom). The rest are not. We have got inputs from some state drug controllers that orthopaedic implants and cardiac stents need to be brought under price control. These are important recommendations because many of these are imported goods. The landing price and cost to patient are often three to four times higher. A cardiac stent comes at Rs 40,000, but it ends up being sold at Rs 1,30,000, which is exploitative. And something has to be done.The problem, which we are facing and needs to be solved, is that these are not identical across brands like chemical compositions. So making the simple average is a problem. I agree that will have to be addressed. But that is more of a formula problem.(This story was published in BW | Businessworld Issue Dated 29-12-2014)

Indo-US Synergies from Mr Alan Krueger

‘India Has Potential For High Economic Growth’: The Princeton professor sees a fresh start to US-India relations with Narendra Modi getting elected as prime minister Shailesh Menon

The proud American in Alan Krueger, former chairman of President Barack Obama’s Council of Economic Advisers, comes to the fore when he speaks about US’s contributions to the world. Answering a question — why America was at the centre of every global controversy? — he conceitedly shrugs and says: “You certainly bear a lot of responsibility when you are the only superpower in the world.” He is also unequivocal in his praise for the economic recovery made by India after the financial crisis, saying, “Your country is in a much stronger position today.” In a wide-ranging interview to BW|Businessworld, on the sidelines of Zee Leadership Summit, the Princeton professor validates the sightings of ‘green-shoots’ in the US economy, declutters the enormous possibilities of the Indo-US trade and blames former US president George W. Bush for the West Asian muddle. Edited excerpts:

The world is worried as to how the US Federal Reserve would exit its quantitative easing (QE) programme. Could it be a painless affair?

The Federal is not going to move in an unpredictable manner… the moves will be in small steps — especially in terms of interest rate changes. I don’t expect them to raise rates until the middle of next year. It will end its bond-purchasing programme towards October. The big question now is what the Fed will do with the portfolio it holds. It is not elaborating on that point. The QE has helped the real economy in theUS. It has not helped as much as better fiscal policy would have helped, but given that the Congress gridlocked last year, the actions of the Fed have helped to strengthen the markets — especially the housing and automobile markets. The effect of it all is reflecting in home prices, which have gone up considerably since last one year. Without QE, the housing sector could have been weaker. The central bank is trying to understand the slackness in the job market. The unemployment rate dipped from 10 to 6.1 per cent. We are seeing stronger job growth now — averaging about 2 lakh jobs every month. We are also closer to the point where we’d start to see some strong wage growth and inflation. The Fed is wise to wait until they see stronger evidence that wages are growing and there is a pick-up in inflation. I think, we are near that point where the economy can stand on its feet.

The programme had a spill-over effect on the world economy, in terms of capital flows. Now with the exiting QE, do you expect liquidity crunch?

The mission of the Fed is to create stable prices and maximum employment.  It has de-facto added a third mission to its list of tasks — that is ensuring financial stability. Now, Europe will have to do its bit. Europe will have to address its economy-related problems. Mario Draghi (European Central Bank president) moved a bit slow to form QE. Its form of QE will help the European economy and other markets immensely. In terms of the impact of QE in emerging markets, it has resulted in greater investments, particularly India. India has also done well during this period. Exchange rates have stabilized, current account deficit declined, reserves built up, inflation has moderated a bit. What matters most for the Indian economy are structural reforms that it has undertaken now. Removing labour market distortions, promoting more competition in product market et al will have greater impact on India’s economy than the US monetary policy. Some of our industries are reposing faith in the US recovery. We’re hoping outsourcing contracts, research mandates and exports to pick pace in the next few months.

Are we reading the trend right?

The election of Prime Minister Narendra Modi offers a fresh start for US-India relations. India moved slowly to address concerns in terms of tax policy, localisation and compulsory licensing requirements; this has made the US businesses more cautiously optimistic. In general, America has benefitted from its trade relations with India. Lot of services provided by the US firms are done cost effectively in India. Quality of services has improved. At the same time, the US businesses are now finding advantages in on-shoring (taking back more work to the US) as a result of lower wages back home. This is happening more in the manufacturing sector. Also, the US firms now understand risks in having far-off supply chains. We’re going to see, over the next decade, are balancing where more manufacturing activity will move back to the US. Automobile production, advanced manufacturing, plastic and special chemical industries will benefit from lower natural gas prices. With regards to more IT and pharma mandates, it depends on the investment climate in India. The US businesses can count on stable investment climate, if they are assured of no retrospective taxes and prohibitive licensing rules, India will continue to see more business flowing.

What can bring the best in the Indo-US trade?

India’s retail and agriculture sectors are very inefficient. This is causing problems of food inflation. In a city like Kolkata, vegetable prices soared as infrastructure is not good for its delivery as  they spoil on the way. Companies like Walmart are incredibly efficient in purchasing and delivering perishable wares. If we have better relations, that even has the potential to lower prices of consumer goods. Look, India needs to have more clarity on what it wants to be in the world trade. I consider it unfortunate; India has put up roadblocks at the WTO. I hope India reconsiders its position. But our concerns are legitimate. Without adequate farm subsidies, India’s food security initiatives could fail. We’ll not be able to provide food to our people at low prices...India’s agriculture sector can be more productive and efficient. It can yield a lot more at lower cost. It can be more efficient in terms of delivering subsidies to its large low-income population. It can re-allocate by reducing subsidies in fuel, etc. It has tremendous potential for high economic growth. It should invest more in education, healthcare, transportation infrastructure, and to improve the efficiency in governance. It will be able to sustain high growth rates. If these are done properly, it will bring down poverty.

You are emphasising on reducing fuel subsidies against the backdrop of falling crude prices. Do you expect America’s resurgence in oil and gas production to have significant effect on global petroleum prices?

Yes, there has been resurgence in the US energy production. We have shale gas deposits in abundant; this may have geo-political impact, too. Oil production in the US is also breaking new records. We are producing more than our imports from the Arab and African countries. Oil is a commodity and is sold on the world markets. Therefore, we’ll never be totally independent in that trade. But what is going on in the Middle East will affect oil prices in the US. There’s still be some downward pressure on oil prices — as we are seeing now. With the US production hitting the market, oil prices have fallen by a great measure over the past few months. Lower prices will help India a lot. India will have a current account surplus, if you take out oil.

The US always had a big role in shaping West Asia. Were there miscalculations on your part?

The administration of George W. Bush (former US president) made a terrible miscalculation when it came to invading Iraq. The miscalculations were in a number of aspects: Firstly, the Bush administration grossly miscalculated how much it would cost the US treasury. Secondly, it over-estimated as to how the US would be welcomed in the region. The war against Iraq and Saddam Hussein was a tragic error, and we are still paying the price for it. The US had imposed sanctions on Iraq… Had we not invaded Iraq, the sanctions could have continued and we would have left the region more stable than it is now.(This story was published in BW | Businessworld Issue Dated 12-01-2015)

Service Tax on Remittances from Abroad

A Disservice To The Diaspora: The move to impose 12.36 per cent service tax on remittances will ultimately burden the remitters or the recipients Nayan Chanda

A recent report on indices of global connectedness has revealed an interesting fact that throws light on the unsung heroes of the country’s economic growth. The latest DHL Global Connectedness Index shows India as a top destination for international phone calls — second only to Mexico in calls originating from the US and first for British international calls. What statistics show is not just the number of calls Indians in the US or the UK made to chat with family back home. It also highlights the role of the 25-million-strong diaspora, that has toiled to make India the world’s biggest recipient of overseas remittances, to the tune of $71 billion a year. The reward for this contribution, though, seems to be higher Indian service tax that would ultimately be borne by remitters or recipients. The scale of remittances is more remarkable when one considers the humble origins of most of the remitters. They are mostly ignored by Indian media, which celebrates policies ensuring higher FDI flow and praises jet-setting foreign investors for choosing India as their destination. Acres of column inches and hours on TV have been spent on analyzing the impact of the US Federal Reserve’s tapering or patting the backs of policymakers for the success in attracting FDI back to India. But few have taken note of the steady flow of money pouring in increasing amounts from NRIs, whose contribution to the national economy has consistently surpassed that of FDI. Remittances from the diaspora have risen from a mere $2.1 billion in 1990 to $71 billion last year — three times higher than FDI in 2013-14, and rivaling earnings through telecom and software services exports. Irrespective of the financial crisis and economic slowdown in the West, or falling oil prices, remittances by Indians abroad have kept growing. Nearly 31 per cent of the total remittances come from 3.3 million Indian workers in the Middle East, who endure terrible working and living conditions for years to help their families back home. About 30 per cent of the remittances come from the US, and 20 per cent from Europe. Although NRIs are among the wealthiest immigrant groups in the US and parts of Europe, they face increasing hostility from politicians and anti-immigrant groups in their adopted countries. From Europe, where joblessness remains high, to the US, where the mood remains anxious despite an improving employment situation, immigrants are seen as exacerbating economic malaise. The majority believes there are more immigrants than there really are. The DHL report notes people in eight countries of Europe believe immigrants constitute one-quarter of their country’s population, while in reality, it is half that. The US citizens estimated 42 per cent of the population was born overseas; it was actually only 14 per cent. Given the significance of remittances to the Indian economy, one would expect the government to take measures to recognize their sacrifice and contribution, and thank families in India, who suffer from separation as the price of the money orders that come in. But to the dismay of families and their breadwinners abroad, the Centre has decided to impose 12.36 per cent service tax on remittances. Although ostensibly intended as a service fee earned by the disbursing institutions, the burden will inevitably be passed on to either the remitters or the recipients. India government’s effort at the G-20 summit at Brisbane to urge developed countries to cut cost of remittance is laudable, but it would be more credible if the relief for the remitters started at home. As it has become customary, in January the Indian government will celebrate overseas Indians, where successful and rich NRIs will be duly recognised. It is high time that India also extends recognition to millions of hardworking citizens abroad, who cannot even dream of attending the Pravasi Bharatiya Divas, but whose sacrifice enables others to dream.(This story was published in BW | Businessworld Issue Dated 15-12-2014)

Drug Resistant Antibiotics and Superbugs

Incredibly Unwell India must follow up quick delivery of tourist visas with efforts to tackle the emergent threat of super bugs by nayan Chanda

India has recently launched an online visa program- me in the hope of doubling the inflow of tourist dollars, which has been well below the country’s potential. Quick delivery of visas is, however, only the first and easiest step. It is much harder to provide the facilities for a safe and enjoyable visit for millions wishing to taste what the country’s tourist promotion has billed as ‘Incredible India.’ It is high time the country redoubled its efforts to tackle the emergent threat of superbugs that has increasingly come to be associated with India. In recent years, the so-called superbugs — the catch-all for pathogens resistant to known antibiotics — have caused thousands of deaths around the world. Even developed countries like the US and those in Western Europe see nearly 50,000 deaths each year from infections caused by antibiotic-resistant bacteria. In 2010, a British scientist named a superbug NDM-1 — after New Delhi where it was found, — and it caused an uproar. Some even spoke of a plot to harm India’s rising medical tourism. Now, a research paper published by the US National Institute of Health has named India as the likely home of superbugs. The paper warned that health care providers should be aware of the increased risk of superbug infection “among returned travelers, especially those from India”. Shortly thereafter, in September, President Obama concluded that superbugs pose a serious public health risk and appointed a commission to prepare a five-year plan to confront the potential spread of the disease. The seriousness and international nature of the problem was highlighted by the fact that in addition to the relevant health authorities the commission included the state and defence departments. In a way, those afflicted with the superbug are victims of India’s success. The rise of the country’s $12.4 billion pharmaceutical industry, producer of nearly one-third of the world’s antibiotics, has seen the proliferation of powerful generic drugs to every corner of India. Until recently, local chemists in any small town would hand strips of antibiotics, without a prescription, to customers complaining of common ailments like diarrhoea, fever or cough. The indiscriminate use of such magic drugs has provoked an inevitable response: these ‘bugs’ have gradually developed a resistance to antibiotics. According to Yale University’s Manisha Juthani-Mehta, a specialist in infectious diseases, between 70 to 90 per cent of Indians have drug resistant variety residing harmlessly in their intestines. The problem is that open-air defecation and poor public hygiene have allowed the superbug to contaminate the river, waterways and even drinking water. If such bacteria infects other organs or enters the blood stream it can be lethal.  There have been incidences in India’s private hospitals where international patients after undergoing routine bypass surgery have died of an infection from superbug. Global concern led India to set up a taskforce in 2011 to address the issue of the superbug. After initially blaming unnamed foreigners for plotting to damage India’s medical tourism industry (which brought in $872 million in revenues in 2010) the government has taken some long overdue measures. A decision earlier this year requiring chemists to insist on a doctor’s prescription before selling common antibiotics should help in reducing the overuse of antibiotics. However, the efficacy of the rule will depend on its enforcement. The Modi government’s cleanliness campaign and the drive to build toilets in the countryside, where millions relieve themselves in the open, is a good start. Along with measures to provide toilets, clean drinking water and build sanitation infrastructure, India needs to launch mass education campaigns about public hygiene and preventive healthcare. The country certainly needs more international visitors, but the easy availability of tourist visas should not merely open the door to an incredibly unwell India.

Make In India

A Shield That Is Not Required: The ‘Make In India’ plan effectively bars Indian firms from competing with the best in the world by Nayan Chanda

          In a bid to boost domestic manufacturing through its ‘Make in India’ programme, the Narendra Modi government may have taken an inadvertent, but backward step. Its decision to oblige ministries to procure only locally-built electronic products not only marks a protectionist turn but also undermines the government’s avowed goal of fighting corruption and increasing transparency. Government procurement of goods and services worldwide accounts for nearly $1.7 trillion in revenues every year. Opening that market to international competition has been the goal of the WTO plurilateral Agreement on Government Procurement (GPA). Its 42-member countries, including the United States, the European Union, Canada and Japan, open their government procurement to bidding by fellow members. In 2010, several countries, including China and India, joined the groupas observers in preparation for full accession. China since, has begun negotiation to accede to the pact, but India has restricted its ministries to domestically-made electronic goods. Supporters of the move argue that the decision will boost domestic producers of electronic goods and encourage foreign firms to invest in Indian companies that are assured of a big government procurement market. Central government procurement is estimated to be $125 billion a year. It is most likely that India’s electronic goods manufacturers will be overwhelmed by large-scale orders and import foreign components to meet the orders. This may not be a bad outcome in itself, but shielding Indian manufacturers from foreign bidders will deprive India of accessing low-cost bids by international suppliers. It cannot but have a negative impact on efficiency and quality of Indian manufacturers. Indian companies know how opening the country to foreign competition has forced them to improve their product quality and enabled them to compete abroad.The move to bar foreign suppliers diminishes India’s earlier expressed interest in eventually acceding to the GPA. China’s accession would enable its companies to compete in the international market on a par with rivals in developed countries. In contrast, the Modi government’s protectionist approach will hamper efforts by Indian firms to bid for foreign contracts. A recent example is the US Buy America Act (2009) that stipulates an additional 2 per cent tax on bidders from nations that are not members of this pact. Another cost of this plan would be borne by Indian citizens, whose frustration with the corruption of the previous government inspired them to elect Modi. The ‘Buy India’ decision will likely perpetuate the opaque, corruption-ridden system that Modi had pledged to dismantle. Indeed, India’s biggest recent corruption scandals — including the 2G scam, the Commonwealth Games fiasco and revelations about illegal mining contracts — were products of a non-transparent system in which venal officials had a free hand. Joining the GPA and opening procurement to international bidding would have obliged India to undertake measures to enhance transparency and accountability. It would have signalled to the world that India is ready to join developed countries with what is supposed to be a clean, predictable and transparent system that rewards efficiency and quality and not mollycoddle national firms, however non-competitive they may be. The GPA accession requirements would have pushed India towards adopting good governance methods compliant with international norms, while ensuring that the government got the best available goods and services at competitive prices.India’s emerging protectionist stance on government procurement will raise fresh doubts among foreign investors about the Modi government’s commitment to economic reform and liberalisation. If Modi wants local firms to be the best in the global marketplace, he has to start by first allowing them to compete against the bestforeign firms inside India. Like charity, competition too should begin at home.(This story was published in BW | Businessworld Issue Dated 26-01-2015)