GREECE - EUROPE AND THE FUTURE FOR SYRIZA GOVERNMENT

Let us begin with some jottings from history. In our imagination Greece occupies the bedrock of key Western ideas with its first city states and the idea of democracy, but that was ancient Greece. Modern Greece, as we know, has had an important place in Europe after it emerged breaking free from the Ottoman empire in the 1820s with the intervention of France, Britain and Russia. A very poor and essentially rural country then with a limited state under the deep sway of corrupt elites. Located at the confluence of Southern Europe and the Balkans, it was deeply marked by wars with Turkey (also a traumatic transfer of populations agreement with Turkey), a far Right dictatorship in the mid 1930s, the German occupation, its own civil war till 1949. Post civil-war Greece of the 1950s and 1960s remained authoritarian and underdeveloped. The United States called the shots in these Cold War years and then came a spell of dictatorship from 1967 to 1974 to pre-empt the rise of the Left. Greeks have had it very hard and have a great tradition of resistance acknowledged in Europe.

Europe was marked by widespread anti-fascist resistance to overcome the wars that had destroyed and economically drained its people; peace was then seen as crucial for democracy. Communists were at the forefront of the struggle against the colonels’ regime in Greece, in particular the Athens Polytechnic uprising of 1973. Repression of the uprising led to mass mobilisation that resulted in the overthrow of the dictatorship. The 1974 democratic and peaceful transition in Greece was hailed across Europe. It had alternating governments of the Centre-Left PASOK and the New Democracy Conservatives as the two principal political actors.

In 1992 Greece (along with post-Franco Spain and Portugal) signed the Maastricht Treaty and in 2001 it joined the Eurozone—countries with a common currency. Greece has been in the thick of its most severe economic crisis since 2010. The backdrop for this crisis dates to the 2008 financial meltdown that affected the world economy and the Eurozone. Across Europe the economic crisis has fuelled the rise of quick fix, ‘anti-political’ and ‘anti-systemic’ movements and also of the far Right while taking the sheen of the old established mainstream political parties leading to loss of influence. The story of decline of the old Left parties of Europe is independent of this and that started in the 1980s and reached its zenith in the crisis years starting 2007 on.

There has been much excitement among Left circles in Europe and across the world ever since a coalition of the far Left Syriza formed a government in Greece. Syriza is a broad network of political activists from different currents of the far Left, the feminists, ecologists, anti corruptioniks and all of the resistance struggles against austerity of recent years as part of it.

The origins of Syriza go back to the period 2004-2008, the Coalition of the Radical Left, developed through the past years marked by crisis, but expanded its popularity in a somewhat alarming way in 2011. The open secret here is that during the long drawn 2011 Syntagma Square occupations in Athens, Leftwing anti-imperialists and ultra-nationalists rubbed shoulders on the same side in a toxic entente. This has created a short-term spill-over effect where the Right/Left, Left/Right axis appear in a blurred spectrum with a shifting base in crisis-marked Greece.

By the 2012 elections, the Coalition of the Radical Left, Syriza, went from having five per cent to 27 per cent of the votes and making it the second-biggest party in Greece. In the January 2015 elections Syriza won 36.3 per cent votes giving it 149 seats in the 300-seat Greek parliament. It had to tie up with sovereigntyist Right-wing ANEL party [Independent Greeks] to obtain the majority required to form the government; as a result the new government has a rabidly reactionary Defence Minister. Syriza’s own Foreign Minister is a nutty ideologue of the ‘patriotic Left’ (formerly with the still unadulterated Stalinist Communist Party of Greece, the KKE).

Europe’s old Left parties, which were mass parties, have sunk in popularity and ceded ground to the far Right parties that are quite popular with the labouring classes (an uncomfortable reality mostly unacknowledged by the Left). The two though share ‘national sovereignty’ as the common repertoire and a rejection of the Eurozone and espouse economic autarchy vis-a-vis the

European economic union as a solution. We have seen something similar in and around the world where the Left and Right came to share a common language with regard to globalisation.

The past few years has seen a number of governments in Greece collapse while trying to implement a slew of economic austerity measures imposed by the European Commission, the European Central Bank and the International Monetary Fund (the Troika). The scale of the crisis has been enormous leading to the collapse of the basic social infrastructure in Greece, to the denial of access to health care for three million people, quite dramatic for a European country with a population of 11 million.

According to the Organisation for Economic Cooperation and Development (OECD) figures of March 2014, 30 per cent of the Greek population live below the poverty line and 17 per cent of the people are unable to meet their daily food requirements. Umpteen media reports have described the huge increase in disease, suicide and preventable death. A large social crisis emerged, also providing fertile ground for the rise of the far Right and neo-Nazi Golden Dawn party; they went about distributing food to the needy while pushing ultra-nationalism. (Half a million people voted for it.)

The election of a pro-poor Left Government committed to oppose neo-liberal policies and adjustment measures resulting in mass unemploy-ment has the airs of a “Greek spring” with vast support of the population, larger than its real strength. Syriza’s opposition to externally imposed austerity policies is formulated in simple terms of defending national sovereignty against an outsider—the Troika. Syriza’s political campaign has relied a great deal on a patriotic and populist idiom, deploying a ‘saving-the-nation’ device and tapped into the vast reservoir of resentment within Greece. (It is a matter of history now that in 1979-80, the iconic founder and leader of PASOK, Andreas Papandreou, had opposed membership to both the EEC and NATO saying they were part of the same syndicate; but those were different times.)

However, it accepts that political action in and against the European Union is the route to take. In a bold and internationalist stance, the Syriza has broken with the anti-European rhetoric of the old Left and has opposed an exit from the Euro, saying it will be disastrous for the future of Europe. But they are caught in a vortex as they try to negotiate their way with bankers and EU

officialdom. The size of the Greek public debt is gigantic—323 billion Euros— and the hands of the Left Government are tied to prevailing economic agreements across Europe. Syriza is arguing for a bailout package with the EU that would create a new solidarity in Europe based on fair fiscal, and social and labour policies. Millions of people haven’t been paid wages, pensions and unemployment benefits. Discontent has chiselled space for acceptance of violence in daily

politics. Syriza, while it gets down to providing economic relief to citizens, must now to draw the line without fear of breaking its ties with the street, by not closing its eyes to banalisation of xenophobia and anti-outsider/immigrant sentiment. It is an explosive situation. In a time of economic and social unrest the European Union was awarded the 2012 Nobel Prize for keeping the Peace and Tolerance in Europe. Be that as it may, Europe cannot look away from the

serious social crisis in Greece; it has a special responsibility to come up with a social Marshall plan.

Tucked within the Greek turmoil has been another crisis that has been spinning out of control—xenophobic violence against migrants and asylumseekers, on Roma, on Gays and on Leftists, mob violence against migrants from Afghanistan, Bangladesh, Pakistan, North and sub-Saharan Africa; these have been witnessed right through the years 2013 and 2014.

EU officials have agreed to extend the Greek economic bailout for four months at the end of February 2015, allowing the nation a little breathing space not to impose new austerity measures, but also requiring Prime Minister Alexis Tsipras and co. to continue paying back the European Union. The Syriza Government’s economists are framing—with the Troika breathing down their necks—proposals to expand the income generation of the Greek state and reduce its expenditure. At the same time, the new Greek Government is moving to raise pension and the minimum wage levels and ending the previous government’s privatisation programme. A very daunting task. Syriza has come up with its first proposed legislation to partly deal with the humanitarian crisis, but so far it has ducked the class question with regard to structural inequalities in Greece to craft practicable alternatives expected by the movements of the unemployed, poor and disenfranchised that brought Syriza to power. This can be counter-productive in the long run.

In Greece’s economic pyramid, the big untouchables have been the Greek Orthodox Church, always exempt from paying taxes on its vast properties, and The shipping oligarchs who wield immense power and evade taxes and influence political futures. Syriza plans to tax the rich and clamp down on tax evasion, as part of austerity measures; some of these may not pass with the EU. Moreover Greece’s immensely powerful shipping magnates, faced with a property tax dragnet, are likely to fund any forces that undermine and bring down Syriza. The beleaguered far Right Golden Dawn party is likely to see a rise in its funding from dubious sources to destabilise Greece and tie down Syriza.

Syriza’s Left project will certainly have mass popular support to stave off opposition from the wealthy oligarchs inside Greece, but it cannot use its popular support to challenge the unfair demands of the European monetarists in the driving seat at the EU. Syriza has the goodwill and support of a wide number of intellectuals from across Europe. It must therefore internationalise

the campaign across Europe to get support from social movements, trade unions etc. for organising giant protests against austerity in Brussels, Berlin or Paris.

But the prime responsibility for this will have to be shouldered by the European Left. The Spanish, French, Italian and German democrats, labour organisers and social justice campaigners should jointly organise mass actions to hold back the “Troika” from strangling the government in Greece. The common interest of Europe is at stake: today it is Greece, tomorrow it will be other countries. It is difficult to say how long the Syriza Government will survive in Greece and whether it will be successful; but if this is looked at only as a national problem and not taken to be an opportunity by the Left groups across Europe everyone will miss the bus. A failure of the Syriza Government will certainly open the floodgates in terms of rise in the social and electoral prospects of the far Right formations within Greece. Let us not forget that Golden Dawn had had 21 MPs in parliament and got some seven per cent of votes. Elsewhere in Europe too we are already seeing a phenomenal rise of ultra-nationalist extremist forces.

An intense cross-border European solidarity can help shift the question of national sovereignty into a call for democratisation and a Europeanised economic policy. The EU has to stop being a technocratic instrument of economic policing and become socially accountable to the people. A whole new model is needed to deal with the crisis across Europe, the public debt burden and a common poverty and social alleviation programme should be Europeanised without leaving it to national governments. A radical new Euro- Left strategic vision is the key here: A basic requirement would be to shelve the age-old baggage of Left nationalism. It should campaign for a Europe-wide common approach so that the EU doesn’t treat each affected country in a piecemeal manner by placing the burden of crisis separately. It should resist all calls for pre-Schengen closed borders within Europe. It must also actively mobilise to face head-on the growing mutation of nationalist sentiments into fascist hysteria—a grave danger to Europe.

Nurtured and educated by the groundswell of radical grassroots movements against austerity, a new Trans-European Left alliance can (re)emerge as a popular force among the precarious layers of the new labouring poor, not just its traditional forte—the proletariat; with enough bargaining power to refashion a Europe that isn’t just in the service of big elites and capital. Will they rise to the occasion? This isn’t about capture of state power but about capture of people’s imaginations, the Left’s own imagination and energies that connect the local, national struggles with common European (and international) ones. The continued economic crisis is undermining Europe’s

common political and economic future, it is time to take the bull by the horns before it is too late; or else nationalists, populists, and isolationists will have a field day.

The author is a Left-leaning activist who spent several decades in France and

runs the South Asia Citizens Web [http://sacw.net]

US - IRAN TALKS REACHING IDES OF MARCH

The US-Iran negotiations have successfully crossed the boulder that Israeli Prime Minister Benjamin Netanyahu threw in the way via his outreach to the American lawmakers. The conclusion can be safely drawn after Netanyahu’s speech that neither do the US lawmakers feel emboldened to enact new legislation intended to complicate the US-Iran talks nor is President Barack Obama feeling browbeaten to backtrack on his policy toward Iran.

Surprisingly, after all the brouhaha in the recent weeks, Netanyahu failed to rally the political class in Washington behind his thesis that a deal with Iran is only going to punctuate Tehran’s inexorable march toward clandestinely developing nuclear weapons. On the other hand, his theatrical address before the US Congress has raised such political dust and has proved to be so divisive an intervention in American politics—and added, equally, to the reality that the majority public opinion in the US favours an Iran deal—that a question mark can be out on the sheer efficacy of the Senate even passing a bill requiring Obama to submit any agreement with Iran for congressional

approval.

All that the Republican-dominated Congress may end up having will be the reserve power (which it already wields) to delay by an year or two the permanent lifting of sanctions against Iran if a deal is reached which, of course, can also be circumvented through executive action by the President to

waive the sanctions temporarily.

To be sure, there was a discernible swagger in Secretary of State John Kerry’s remarks to the media following his latest round of talks with his Iranian counterpart Mohammad Zarif in Montreux, Switzerland. Kerry claimed “some progress” at the latest round but added the caveat that “there are still significant gaps and important choices to be made”. He seemed to hint at an “increased breakout time” as something that the US is seeking but is yet unsure of it finding acceptability in Tehran. Simply put, we will have to wait till March 15 to find out when the next round of talks is slated to take place. In this case, however, the Ides of March do not necessarily evoke the notoriously dark mood in William Shakespeare’s time, but instead from Kerry’s tone would seem to hark back to the late antiquity signifying the celebratory day it used to be for Romans marking the\ ceremonies of the new year and the expulsion of the old year.

Indeed, the fact that Kerry left for Riyadh to take the Saudi leadership into confidence and to brief his GCC counterparts (who are assembling in Riyadh to hear him out) as well as his travel plan thereafter to proceed to Europe to confabulate with his British, French and German counterparts in the weekend

would suggest that while it is “certainly possible” (as Kerry put it) that the talks may not ultimately yield any deal on time, the odds are possibly moving in favour of a deal being reached.

Ambassador M.K. Bhadrakumar was a career diplomat in the Indian Foreign

Service. His assignments included the Soviet Union, South Korea, Sri Lanka,

Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey. www.mainstreamweekly.net

‘Rebalancing’ Aggregate Demand- Chinese Economy at Present

China needs to return to the original formula of the “four modernisations” propounded by Zhou Enlai.

It is generally agreed that China’s economic growth is now no longer being fuelled by net exports of goods and services to the extent that it was in the few years prior to the 2008 great financial crisis, but gross capital formation has been an even greater contributor to such growth than before. Perhaps what was eventually inevitable has now struck in the form of immense overcapacity and non-performing loans. Over investment in commercial and high-end residential property, steel, cement and automobile capacities  and in other manufacturing sub-sectors is starkly visible, especially in the new uninhabited “ghost towns.” For economists, the fact that producer prices, especially the prices of manufactured goods in terms of their valuation at the time of despatch from the factories, have fallen month after month over the last three years, drives home the point.

The question one needs to ask is: Where is this very signifi cant overinvestment leading to and what needs to be done?

In terms of the components of aggregate demand, what economic observers have been advocating for quite some time is that China should “rebalance” its over-reliance on net exports and investment in favour of consumption. The fact that the share of net exports in China’s gross domestic product (GDP) has come down quite signifi cantly is, of course, the result of the external demand constraint, especially from the world’s two largest markets, the United States and Western Europe. But,

regarding investment, one needs to recall that China was the most adept of the world’s economies in bringing itself out of the slump that followed the great fi nancial crisis of 2008. The Chinese government launched a massive $585 billion stimulus plan and urged the state-owned banks to be liberal in dishing out new loans, the two leading to a massive increase in investment in the years that followed, making up for the decline in the share of net exports of goods and services in GDP. The share of household consumption expenditure in GDP has fallen dramatically from something like 44% in 2002 to 34% in 2013.

The massive increase in investment spending (as a proportion of GDP) is what has kept China’s real GDP growth rate high, though not as high as the 10.5% average annual fi gure for the first decade of the 21st century. The trend in growth rates now seems downward, that is, if one were to also include what has been forecast—from 7.7% in 2012 and 2013 to 7.4% (estimated) in 2014, the lowest in 24 years, and 7.0% (7.1% forecast earlier) in 2015, a fi gure announced on 5 March by the Chinese Premier Li Keqiang in his opening address to the annual National People’s Congress in Beijing last week. The fi scal defi cit is expected to rise this year but the chairperson of the government’s planning agency, Xu Shaoshi, has stressed that this should not be viewed as a massive stimulus—it involves an investment spending of 1.6 trillion renminbi ($260 billion) on infrastructural development, including railways and water conservancy projects, which, in magnitude, is less than half of the massive stimulus announced in November 2008.

The lowering of the 2015 target GDP growth rate to 7.0% from the 7.1% targeted earlier, and the fact that the earlier official forecasts for 2016 and 2017 expected a further decline reflects a number of developments, national and international. First, the steady fall in producer prices of manufactured goods over the last three years in the face of massive excess capacities in a number of manufacturing sub-sectors evokes the apprehension of deflation.

Second, in the face of the fall in the value of a number of major currencies (e g, the Japanese yen, the euro, the Brazilian real) vis-à-vis the dollar and the Chinese renminbi, the Chinese central bank, the People’s Bank of China, anticipating currency wars, has considered it prudent not to engage in competitive depreciation. Third, the credit elasticity of aggregate demand seems to have gone down quite signifi cantly with creditors using much of the additional loans to roll over existing debt. And lastly, the lower Chinese GDP forecasts seem to also take into account the fact that despite massive quantitative easing by the US Federal Reserve earlier, and now the European Central Bank and the Bank of Japan, the world’s major economies have failed to recover. With the economies of the Triad (North America, Western Europe, and Japan) mired in stagnation, China’s economy has been widely viewed as one of the principal means of lifting the world economy. The suggested way in the form of China’s economy rebalancing the components of aggregate demand, namely, the sum of investment and net exports in favour of household consumption, is fraught with a fundamental contradiction. It requires a dismantling of the low-wage, “global labour arbitrage” model of capital accumulation in global supply chains wherein China is the world’s assembly hub, for it is only with a very significant increase in the real wage rate that the path of economic growth can shift to a mass consumption-led track. 

Nevertheless, one needs to be reminded, that the “four modernisations” as originally propounded by Zhou Enlai in 1963 and adopted by Deng Xiaoping in 1978 were to be implemented by the adoption of policies based on the so-called “three imperatives”— social justice, regional balance and command over external relations. Sure, China does not have the kind of mass poverty, misery and degradation that one encounters in other parts of the Third World, but surely social justice calls for a return to the “clay” and “iron rice” bowls, albeit redesigned, and a redistribution of income in favour of workers and peasants.

(Published in www.epw.in)

How not to treat agriculture

If Budget 2015 is any indication, the Modi government is going beyond what could be called benign neglect of agriculture to policy moves that are likely to harm its viability.

 IT is scarcely surprising that farmers are upset with the Narendra Modi government. Indeed, the rosy dreams created by that famous campaign advertisement of the Bharatiya Janata Party (BJP), when farmers spoke of the high crop prices and better cultivation conditions that they would get once the “achhe din” of the new government arrived, probably seem like a cruel joke now.

The most immediate concern is the Land Acquisition Bill that the government is trying to force through Parliament (apparently even considering a joint session to get around the opposition in the Rajya Sabha) after promulgating an ordinance to that effect. In a surreal replay of arguments made by some members of the previous government, those who are demanding fair compensation and proper rehabilitation for farmers are being branded “anti-development”—as if those who will lose their land and their livelihood are not even meant to be part of the development process and should simply make sacrifices for the profits of others.

This reflects a basic unwillingness on the part of this government to accept that economic progress must be sought for in ways that do not trample on basic human rights, and that respect for both nature and people cannot be allowed to wait until some desired goal of per capita income is achieved, but must be a part of the overall growth strategy itself. But it also reflects a degree of contempt for both farmers and farming, a contempt that is manifest in a number of other acts of omission and commission of this government. Consider the acts of omission first. The decade of the United Progressive Alliance (UPA) governments had turned out to be relatively better for farmers because of more public spending directed to agriculture and the rural areas generally as well as higher global prices for many crops, which also influenced domestic crop prices. But signs of deceleration were already evident in the later years of the UPA-II government. Gross capital formation in agriculture has been falling, both as a share of GDP (gross domestic product) in agriculture and as a share of total capital formation in the economy. And things have deteriorated significantly since.

Growth of value-added in agriculture is estimated to have declined from 3.7 per cent in 2013-14 to only 1 per cent in 2014-15, the first year of the Modi government—and that too despite weather conditions that turned out to be much more favourable than expected. The minimum support prices (MSPs) of important grains were increased only slightly, ostensibly to control inflation (which was anyway substantially lower because of favourable global trends). Meanwhile, farm input prices did not really come down despite falling world oil prices, mainly because the government grabbed the benefits by raising taxes and excise duties. Meanwhile, the perverse incentives created by the structure of fertilizer prices, with huge imbalances in the use of nitrogenous and phosphatic fertilizers and consequent adverse effects on soil and yield, have been worse in the past year.

Agricultural credit, which increased quite a bit in the early years of the UPA, has barely increased under the Modi government, and much of it rather than reaching small and marginal farmers has been captured by the wider range of beneficiaries classified under the broad head of “priority lending”. All these forces have combined to create conditions in the countryside far worse than what have been witnessed for around a decade. This situation cries out for much greater policy focus on agriculture. Instead, the Modi government is going beyond what can be called benign neglect of agriculture to policy moves that are likely to harm its viability.

Budgetary allocations

The Union Budget is only the most recent manifestation of this. Budgetary allocations for agriculture have been slashed drastically—and this after a year in which the Modi government spent 26 per cent less than it had allocated in its first Budget on agriculture, irrigation and flood control (in terms of both Central government Plan spending and transfers to the States under these heads). Compared to 2013-14, the last year of the UPA government, actual spending by the Central government and transfer to States is currently budgeted to decline by 22 per cent in nominal terms. If inflation is taken into account, this amounts to a real decline of nearly one-third. And given the Finance Minister’s propensity to enforce fiscal cuts in the middle of the year, even this amount is not guaranteed and could well turn out to be much lower than the budgetary outlay. So, precisely at a time when agriculture needs much more assistance and public spending, this is set to decline sharply.

The cuts in irrigation are particularly mystifying because this government has already declared itself to be in favour of increased public investment in necessary infrastructure. The allocation for the Accelerated Irrigation Benefit Scheme has been savagely cut from the Rs.4,630 crore that was actually spent in 2013-14 to only Rs.1,000 crore for the Budget year 2015- 16. A part of this shortfall is supposed to be met by the newly constituted Pradhan Mantri Krishi Sinchai Yojana, for which Rs.1,000 crore has been allocated. But since a similar amount had been budgeted for that last year and only Rs.4 crore was finally spent, there can be justified scepticism about how much of that will actually see the light of day. There are other acts of policy commission that have significance. 

The dissolution of the Planning Commission and all the structures and mechanisms in which it was involved, without any clarity about what exactly the NITI (National Institution for Transforming India) Aayog will do in its place, has consequences for many sectors and areas, and agriculture is certainly one of them. Under the Rashtriya Krishi Vikas Yojana (RKVY) of the UPA government, the increased Central spending on agriculture under the Plan was linked to States’ spending. The RKVY provided 100 per cent Central funding if States maintained their share of public spending on agriculture—and this led to a substantial increase in public spending on agriculture across States. This had positive effects on agricultural research and extension systems in particular. Now all of that has simply dissolved, and it is unclear what will happen to such public expenditure other than a basic sense that it will decline.

States’ spending

It could be argued that States will have more funds to spend because of the higher tax devolution as a result of the 14th Finance Commission award. But the additional resources likely to come to States is estimated to be only 0.7 per cent of GDP and the Centre has already clawed back most of this by drastically reducing its spending on many social sectors, including health and education. If the State governments now have to shell out much more simply to pay for salaries under the Integrated Child Development Services (ICDS) Scheme and the National Health Mission as well as to maintain their public educational institutions, how will they possibly find more resources for agriculture? Instead, it is likely that we will see near-chaos in many social sector programmes across the country as well as in public systems set up to assist farmers.

There is another angle to the issue of State spending, which links up to the point about land acquisition and its costs. Whenever land is acquired according to some definition of public purpose, it is State governments that are supposed to provide the resources for compensating those who are displaced. In the current government’s apparently aggressive plans for infrastructure expansion, including its various proposals for new roads, railway expansion, “smart cities” and the like, it

is unclear whether the likely costs of compensation and rehabilitation have been adequately budgeted for. But the threat of these increased costs being passed on to State governments could well be used as a weapon to persuade some political parties ruling State governments to support the NDA’s Land Acquisition Bill, which they would otherwise decry as antifarmer. This may explain the surprising support recently extended to the Bill by the Akali Dal, for example. So there are now greater chances of farmers being thrown off their land and worse chances of them eking out viable livelihoods from their holdings. Either way, the immediate future does not bode well for agriculture, which still accounts for around half of India’s workers. That India can never succeed economically without a vibrant agriculture is obviously a lesson yet to be learned by the current government.

(This piece of article published in Frontline.in)

The discreet silence on the NPT

The discreet silence on the NPT
A. Vinod Kumar
March 02, 2015

Roughly two months from now, over 190 member states will assemble in New York for the 9th Review Conference (RevCon) of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), and the fourth since its indefinite extension in 1995. As a quinquennial event, the RevCon is supposed to review the functional health of the Treaty, resolve its shortcomings and update it according to the times, in order to progress towards its objectives. However, unlike the previous RevCon in 2010, and many earlier versions, there is no hype or happening this time around – either in the non-proliferation circuit, prominent world capitals or among civil society groups – on the state of the Treaty, the prospective nature of debate at the RevCon, the future course of action that has to be agreed upon or other systemic issues that had traditionally confronted the Treaty’s functioning.

This is in sharp contrast to the cacophony witnessed during the months running up to the 2010 RevCon. What does this signal? Does this indicate that the Treaty is now in the pink of health? Or does it suggest the advent of a post-proliferation world? Assuming that many deficiencies of the Treaty continue to persist, will there be a fresh impetus for structural reforms? Or does the current lull indicate continuance of the status quo? Above all, will the coming RevCon slip into a ritualistic event with no concrete outcomes expected?

A vision gone astray
The 2010 RevCon came after a decade of tumultuous developments coinciding with or accentuated by the George W. Bush presidency. The non-proliferation regime was in a state of perpetual crisis with recurring cases of deviance by countries like Iran, which seemed to be on the verge of going nuclear, an ever-defiant North Korea, which exited the Treaty and tested nuclear weapons in 2006 and 2009, and the looming threat of terror groups accessing resources for weapons of mass destruction (WMD). Bush’s vision of tackling this spectrum through a new framework of proactive counterproliferation initiatives, with emphasis on coercive use of force, had put immense stress on the regime, with traditional mechanisms like the NPT being relegated to irrelevance.

Barack Obama took over the US presidency a year before the Revcon with the promise of reversing the muchcriticized Bush Doctrine and reinstating the centrality of the NPT-oriented order. In a landmark speech at Prague in April 2009, Obama rekindled hopes for the total elimination of nuclear weapons, though prevising its improbability in his lifetime, by promising to revive and strengthen all those means and measures that will lead towards this objective.1 He vowed to strengthen the NPT by garnering “more resources and authority for international inspections” and providing for “real and immediate consequences for countries caught breaking the rules or trying to leave the treaty without cause” – the apparent reference being to North Korea and Iran.2

The Prague moment symbolised the Obama administration’s impendent crusade on the NPT, though ending with a dismaying outcome at the 2010 RevCon. Months before the event, then US Secretary of State Hillary Clinton had promised a 21st century version of the NPT, even indicating that India will be a full partner at the high table.3 Obama stretched this imagination further when he chaired a special session of the UN Security Council (UNSC) that passed Resolution 1887. Among other things, this resolution exhorted states to “pursue negotiations on effective measures relating to nuclear arms reduction and disarmament,” and for “a Treaty on general and complete disarmament.”4 Many construed this reaffirmation of Article VI as not just an indicator of Obama’s resolve to revive the NPT, but also probably propose a new standalone disarmament or elimination treaty at the 2010 RevCon.

No such revolution happened, however. Instead, the US delegation spearheaded efforts to dilute the
recommendations of the RevCon’s Main Committee for a new disarmament plan, which included “convening an international conference in 2014 to finalise a roadmap for the complete elimination of nuclear weapons within a specified timeframe by means of a universal, legal instrument.”5 The P-5 forced a Subsidiary Revision to remove all timelines and discard the conference plan, and instead confined the language on their commitments to “promptly engage” to “accelerate concrete progress on steps leading to nuclear disarmament.” The US action not just subverted the disarmament momentum at the RevCon but also punctured Obama’s grand vision. That no subsequent initiatives were made to redeem the Treaty, or for that matter the CTBT or FMCT, underlines the insurmountable gap between ideational posturing and actual policymaking. No wonder then that the US has no particular agenda or promising initiative to put forward on the eve of the 2015 RevCon.

The US Bureau of International Security and Non-Proliferation webpage lists three documents to highlight Washington’s contribution to the upcoming RevCon: the joint statement of the London P-5 Conference of February 2015,6 a Report of the USA Pursuant to Actions of the 2010 RevCon,7 and a speech by the Under Secretary for Arms Control and International Security, Rose Gottemoeller, at Prague in December 2014.8 All three have one common character – emphasising the commitment of the United States, and the Nuclear Weapon States, to the NPT. The P-5 document goes a step forward to underline their commitment to the 2010 RevCon’s Action Plan (a document which they diluted), the long-term disarmament measures enshrined in that document, as well as of earlier RevCons. The Report to the 2010 Action Plan largely acts as a face-saver by describing the reductions of America’s nuclear arsenal, shifting to a credible deterrent with the lowest number of nuclear weapons and reducing the role of nuclear weapons in the US defence posture. The Report lists the trimming of the stockpile to around 82 per cent since the NPT’s entry into force; capping the stockpile to no more than 1550 warheads deployed (in sync with the New START); restricting the arsenal to 400 deployed
ICBMs, 240 SLBMs and 60 nuclear bombers; de-MiRVing (ICBMs carrying only single war-heads), and so on.

Gottemoeller’s speech is, however, a testimony to why the US approach is the most practical way towards disarmament. Affirming that only “multiple concurrent paths” could lead to the goal of total elimination, Gottemoeller insisted that the US reliance on calibrated steps, including NPT, CTBT and FMCT, is the most realistic route, instead of “amorphous” efforts like the Nuclear Weapons Convention (NWC) or a “fixed timeline for elimination.” Though given as a message to the Vienna Conference on the Humanitarian Impact of Nuclear Weapons, this was a rare articulation of the US rejection of the NWC and other alternative routes suggested by countries like India. Gottemoeller also announced a new initiative – the International Partnership for Nuclear Disarmament Verification – probably the only significant US intervention in the run-up to the RevCon, but without expounding upon its utility.

The Lightning from Greece Strikes Germany

K. P. Fabian
On January 25, the Greek electorate gave a verdict that has raised questions about the survival of the Euro, and even of the European Union (EU). The Greeks voted for a leftist party (Syriza), led by Alexis Tsipras. An acronym for Coalition of the Radical Left, Syriza contested elections first in 2004 and gained only 3.3 per cent of votes. In contrast, in the recent elections, it gained 36 per cent of the vote, capturing 149 seats in the 300-strong parliament. Tsipras has taken over as Prime Minister with the support of a right wing party, the Independent Greeks, which is virulently opposed to the European Union. Syriza and the Independent Greeks have nothing much in common except for their hostility to EU and its harsh treatment of Greece – imposing austerity as the price for the ‘bail out’ in 2010.

The rise of Tsipras is a clear defeat for German Chancellor Angela Merkel who did not promptly send the customary congratulatory message to him. The Chancellor’s office issued a statement
sternly reminding Greece that it had to abide by the commitments of the previous Samaris government, commitments which led to the latter’s humiliating defeat. In other words, the message from Berlin is that despite the verdict of the people of Greece the new government is bound to follow the policy of the defeated government.

It is necessary to examine the wisdom of the austerity policy advocated by Germany and, because of Germany, by the EU. The basic approach was that Greece has sinned by living beyond its means and by borrowing beyond its capacity to repay; and, therefore, it should be punished. The Greek government should cut expenditure, sack employees, reduce pensions, and reduce allocations to schools and hospitals. The bailout of $ 270 billion was given by a troika of EU, ECB (European Central Bank) and IMF. The troika thought that they were physicians treating a patient who should have no say in the prescription. It had confidently calculated that the patient will respond to the stiff medication and start recovery by 2012, when the budget would be balanced if interest payments are excluded. Instead, the budget got balanced only by 2014. The prognosis was that unemployment will go up from 9.4 per cent in 2010 to 15 per cent in 2012 and then come down. As a matter of fact, unemployment shot up to 28 per cent by 2014.

What the pundits ignored, only because they wanted to ignore, was the plight of the people who lost all hope. Live births declined by 20,000 during the first three years of austerity. Miscarriages doubled. Married women rushed to brothels but were rejected because legal brothels cannot employ married women; as a result, many took to the streets. Some women doctors doubled up as escorts. 20,000 lost their homes and for them and many others the soup kitchens run by the church and others prevented death by hunger. The policy makers in Brussels, Berlin, and Washington knew all this, but they couldn’t care less. What mattered was balancing of books irrespective of the human cost, and there was no need to change the medication.

Tsipras as candidate had said that if he comes to power he would default on debts. Naturally, as Prime Minister, he has to be more responsible. He has categorically denied any intention to default, but has demanded “a just, viable, mutually beneficial solution.” He has promised to his people a series of measures to reverse the austerity policy. 300,000 new jobs would be created, especially for the young among who half are jobless. The minimum monthly wage would be raised from Euro 580 to 700. Those below the poverty line would get free 300 kWh of electricity and food subsidies.

Would Prime Minister Tsipras be able to deliver on these promises? Where will he find the money? What will be the response of the troika? There are signs that the troika’s solidarity is weakening despite tough statements from Germany. While Merkel was tardy in greeting Tsipras, the French President has invited him to Paris. As a matter of fact, not all in the Eurozone shared Germany’s advocacy of austerity. But, since Germany provides a huge share of the money, the others maintained a respectful silence. Italy and Spain are inclined to be less tough with Greece. Germany can count on support from the Netherlands and Finland, at least for a while.

If Germany does not budge, Greece might default and walk out of the Euro. Pundits in Germany and elsewhere have argued that such a walk out is a desirable outcome. With Greece out, the Eurozone can look forward to good health since the former accounts for only two per cent of the EU. But, sadly, the pundits are going to be proved wrong once again. If Greece defaults and walks out, the EU will be in crisis. Speculators will go for Spain and the EU will not be able to find the money to bail out a large economy such as that of Spain. Moreover, the Spanish government might not agree to austerity. And  if it agrees, it will lose the election due in December 2015.

The implications of Germany’s policy failure need careful study. The first ambassador to call on the Greek Prime Minister was the Russian. Tsipras had recently gone to Russia after the annexation of the Crimea. EU solidarity against Russia over Ukraine will be dented. Hungary is not abiding by the sanctions imposed by the EU. Greece will speak out against the policy of sanctions.

Merkel’s worry is that if Tsipras has his way and discards austerity with the concurrence of the troika, in the December 2015 election in Spain, Podemos, a Spanish version of Syriza, will seize power. But the question is whether Germany can persist with a flawed policy? In conclusion, the EU can survive the lightning stroke from Greece if it responds with reason and prudence. But the answer to the question whether it will survive, is not that clear. There is a chance that Germany, with its mind set of punishing those who live beyond their means, might persist with the flawed policy.

Incidentally, there might be a demand from Greece for repayment of a loan that Nazi Germany took from its  client government in Greece way back during the Second World War. That loan works out to $11 billion in current terms. Germany has to act with prudence. One of the banners after the declaration of the Greek election results read: Das ist eine wirkliche gute nacht, Frau Merkel (This is a good night to you, Mme Merkel).

Tsipras will be attending a EU summit in February. He will be the only one without a tie. Greece has asked for an international conference on its debt, recalling that a similar conference held in London in 1953 wrote off half of Germany’s debt. In the duel between Tsipras and Merkel, the younger leader has a better chance to win.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India
(Accessed from http://idsa.in/idsacomments/TheLightningfromGreeceStrikesGermany_kpfabian_300115.html)

Some issues in respect of Indian’s nuclear liability law - I

G. Balachandran
February 10, 2015

Seemingly, the highlight of President Obama’s visit was the announcement that India and the
United States had come to an understanding on the two major issues that stood in the way of
the successful full implementation of the Indo-US nuclear deal. While the first issue related to
some of the provisions of the Indian Civil Liability for Nuclear Damage Act (CLNDA), the second
concerned a successful negotiation of the administrative arrangements for the implementation
of the India-US 123 nuclear agreement. The issues in respect of CLNDA related to:
(i) the conformity of CLNDA with the provisions of the Convention on Supplementary Convention
(CSC), signed - but not yet ratified - by India;
(ii) Sec. 17(b) of CLNDA, which allowed for Right of Recourse against the supplier; and
(iii) Sec. 46, which allowed for legal cases against the operator under Acts other than the CLNDA. The administrative arrangements under discussion were with respect to the accounting and tracking of US-supplied nuclear materials and materials produced with the use of US-supplied equipment.
Neither side initially chose to share any further information on the subject. The Indian Foreign
secretary merely stated the following:

“Based on three rounds of discussions in the Contact Group, we have reached an understanding on two outstanding issues namely civil nuclear liability and the administrative arrangements for implementing our 123 agreement. Let me underline, we have reached an understanding. The deal is done. Both these understandings are squarely within our law, our international legal obligations,
and our practice. Insofar as liability is concerned, during the Contact Group meetings the Indian side presented our position concerning the compatibility of the Civil Liability for Nuclear Damage Act, and the Convention on Supplementary Compensation for Nuclear Damage, which we have signed, and responded to questions from the US Members concerning this position.”

In a sort of official statement, US Ambassador to India Richard Verma was reported in the media to have said – although the US Embassy refused to either clarify or deny his having ever made such a statement – that the liability issue was to be resolved through a “memorandum of law within the Indian system” that would not require a change of the Indian law. Later on, the spokesperson of the Indian Ministry of External affairs clarified the situation by the mere statement that “We will indeed be providing you that information and that will be copious in nature, it will answer all your questions.” This was done a few days back in a Frequently Asked Questions (FAQ) format, although this still leaves many questions unanswered. For instance, it does not answer how the understanding between the two sides will be formalised. On the contrary, the FAQ answers raise further questions that need to be answered. Obviously, a FAQ will not carry much weight in business decisions that have to be made in respect of nuclear transfers.

This silence of officials from both sides as well as the alleged ambiguous statement of the US
Ambassador left the field open for much speculation by commentators. These speculations
ranged from: “the “memorandum of law — designed for, and enforceable in, the Indian system
— that is at the heart of the new accord is aimed at stemming the right of recourse against
suppliers and permitting tort claims to be pursued only in India, thus blocking victims from filing
claims in the supplier’s home country” to “it seems the Modi government has committed itself
to providing a written legal assurance to the US that Indian victims will not be allowed to sue
American suppliers under Section 46 of the CLNDA.”

While the exact nature of the understanding between the two countries is yet to be announced and in fact may never be officially released, it is possible to offer an outline of the possible “memorandum” with possible understandings on all the three liability issues as well as the administrative arrangements. This commentary will deal only with the issues surrounding Sec. 46 of CLNDA. It will be followed by three commentaries dealing with
 (i) the compatibility of CLNDA with CSC provisions;
(ii) Sec. 17(b) of the CLNDA dealing with the “Right of Recourse”; and
(iii) the administrative arrangements to operationalise the 123 agreement.
Section 46 of CLNDA Sec. 46 merely states that:

“The provisions of this Act shall be In addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator from any proceedings which might, apart from this Act, be instituted against such operator.”

Before proceeding further, some words of explanation outlining the environment under which
the “memorandum” will operate need to be offered: Some issues in respect of Indian’s nuclear liability law - I | Institute for Defence Studies and Analyses

i. It is extremely unlikely, given the current and near future distribution of membership in the two Houses of Parliament that the CLNDA can/will be amended in any manner to address the various concerns;
ii. It is not possible either for any government or any current or future statute to prohibit any citizen from instituting proceedings against a supplier;
iii. It is not possible for any government or government lawyer or for that matter anybody else to guarantee that a judge will not allow such a case to be proceeded with;
iv. It is not possible for any government or for that matter anybody, lawyer or otherwise, to guarantee the outcome of such a proceeding, before the proceeding starts, except, of course, the judge;
v. No government can give a special preferential assurance to any one country, i.e., no government can give a special preference in respect of Sec. 46 to only the  United States. It is very likely that such an action may be in violation of one or more of India’s international commitments or obligations.
So what can be expected from any understanding or “memorandum” exchanged between the
two governments on the issue of Sec. 46 of CLNDA?

The suppliers’ concern about Sec. 46 arose from the possibility of their facing an unspecified,
and potentially unlimited, liability on account of an action brought against them under the provisions of Sec. 46. Under the environment described above, what assurances can be given to suppliers about the non-possibility or near impossibility – a 100 per cent certain assurance is impossible – of any such liability ever arising as a result of an action under Sec. 46? Such an assurance will rest on one of the cardinal principles of a modern functioning democracy – the separation of powers between the judiciary and legislature. Under this doctrine, while it is the prerogative of the legislature to pass laws, it is the judicial interpretation of the meaning of the statute that is meaningful and authoritative in a case before the court.

In Shanker Raju Vs Union of India, the Supreme Court held that:
“In a court of law or equity, what the legislature intended to be done or not to be done can only be legitimately ascertained from what it has chosen to enact either in express words or by reasonable and necessary implication – Where the Legislature clearly declares its intent in the scheme of a language of Statute, it is the duty of the Court to give full effect to the same without scanning its wisdom or policy and without engrafting, adding or implying anything which is not congenial to or consistent with such express intent of legislature.”

Elaborating further, the judges held that:
“In a court of law or equity, what the legislature intended to be done or not to be done can only be legitimately ascertained from what it has chosen to enact either in express words or by reasonable and necessary implication. Where the Legislature clearly declares its intent in the scheme of a language of Statute, it is the duty of the Court to give full effect to the same without scanning its wisdom
or policy and without engrafting, adding or implying anything which is not congenial to or consistent with such express intent of legislature. Hardship or inconvenience cannot alter the meaning employed by the Legislature if such meaning is clear on the face of the Statute. If the Statutory provisions do not go far enough to relieve the hardship of the member, the remedy lies with the Legislature and not in the hands of the Court.”

With this as background, how would a case against a supplier be interpreted in a court?
Fortunately in the case of the CLNDA, irrespective of whether one belongs to the “textualist” (the law is embodied in the language of the statute, as expressed in its plain meaning) or the “intentionalist” (the law is to be interpreted relying on the legislative history of the statute) schools, it is reasonably certain that a case under Sec. 46 cannot stand judicial scrutiny. Sec. 46 is very clear from the language of that section that an action under it can be brought only against the operator (“be instituted against such operator.”). Therefore, a textual
interpretation of the statute would not support action against the supplier.
What about the “intentionalist” interpretation of the statute? Fortunatel y due to the untiring and ceaseless efforts of the Left parties, especially the CPI and CPM, in Parliament this too was made abundantly clear during the passage of the CLNDA.

Considering the very high level of emotionalism against foreign, especially US, suppliers, during
the debate on the bill – in view of the just then announced “Bhopal Gas” verdict – the Left
parties pressed for inclusion of “suppliers” in Sec. 46, not once, but three times during the
progress of the bill in parliament.

First, when the bill was being examined before the Parliamentary Standing Committee (SC) on
Science and Technology, an amendment to Sec. 46 was put forward by CPM member Mr. Saman Pathak. Stating that “Further, as the Section stands, it may be limited to only operators
and not suppliers,” Mr. Pathak proposed an amendment as follows: "Clause 46: The provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force. Nothing contained herein shall exempt the Operator and/or the Supplier of any material, design or services, from any proceeding which may, apart from this Act, be instituted against such person,
either in any Indian or any external court."
The amendment was rejected by the Standing Committee. Mr. Pathak then submitted a
Dissenting Note stating: “Since these changes have not been accepted, 1 am constrained to draw the
conclusion that the provisions of the Bill will unduly favour the foreign suppliers of nuclear equipments. This is being done to make the provisions compatible with the Convention on Supplementary Compensation (CSC). I am not convinced why India should join the CSC.
I am of the form opinion that any legislation on civil nuclear liability should keep the interests of the Indian people, who may be affected in a nuclear accident, as its core concern. The provisions suggested in the Bill and those proposed by the Committee fail to ensure that. Hence my dissent on the Report.”
The second opportunity to include suppliers in Sec. 46 was during the debate of the bill in the Lok Sabha. On this occasion, another CPM member, Shri Basu Deb Acharia, moved an amendment that proposed substituting the phrase “shall exempt the operator and/or the supplier of any material, design or services, from any proceeding which may, apart from this Act, be instituted against such person either in any court located in India or abroad” for “shall exempt the operator from any proceeding which might, apart from this Act, be instituted against such operator.” This proposed amendment, too, was rejected. As the report of the Lok Sabha stated, “The amendment was put and negatived.”
The third opportunity arose during the debate on the bill in the Rajya Sabha. During the debate, two left party members, Mr. D. Raja of the CPI and Mr. Sitaram Yechury of the CPM moved two separate amendments to Sec. 46 of the bill. As reported in the Rajya Sabha proceedings:
“Mr. DEPUTY CHAIRMAN: Are you pressing?
SHRI D. RAJA (TAMIL NADU): Sir, I move:
(No. 16) That at page 13, for lines 33 to 35, the following be substituted, namely:-
"46. The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator or supplier of the material, equipment or services from any proceeding which might, apart from this Act, be instituted against such operator or supplier".
MR. DEPUTY CHAIRMAN: There is one more amendment (No. 4) by Shri Sitaram
Yechury. Are you pressing, Mr Yechury?
SHRI SITARAM YECHURY (WEST BENGAL): Sir, I move:
(No. 4) That at page 13, for lines 33 to 35, the following be substituted, namely:-
"46. The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force, and nothing contained herein shall exempt the operator or the supplier of any material, design or services, from any proceeding which might, apart from this Act, be instituted against such person either in any Indian or any external court."
The questions were put and the motions were negatived. Clause 46 was added to the Bill.”

The above possible explanation of the resolution of the Sec. 46 dilemma should go a long way
towards allaying the fears of suppliers both Indian and foreign, even though they are not iron
clad assurances either at the bilateral or legal levels, which is not possible. There are still a
few things that can upset the above reasoning. A future parliament may decide to amend the
CLNDA either way – explicitly including the supplier or excluding the supplier. A future Supreme
Court may decide to override or reinterpret the Doctrine of binding precedent and hold that
the present CLNDA does admit the possibility of a case against a supplier. Or, who knows, the
Supreme Court may even hold the CLNDA to be unconstitutional! After all, it has already
admitted a writ petition challenging the constitutional validity of CLNDA, which is yet to be
decided upon.

The above discussion does not, by any means, preclude any business/commercial transaction
between the suppliers and the operator. It only points to the obvious fact that such decisions,
as in any other business decision, will carry some risks. It is up to the various players to judge
the costs and benefits of entering into business contracts and make sound financial decisions
from their own vantage points.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the
Government of India
(Can be Accessed in http://idsa.in/idsacomments/issuesinIndiansnuclearliabilitylaw_gbalachandran_100215.html)

Realising India’s solar potential

Delhi’s T3 airport has a sculpture series depicting ten postures of the Surya Namaskar (salutation to the Sun), a yoga routine. It is a symbol that Indians recognise the vital importance of the Sun, without which life cannot exist on this planet, and worship it for this. Yet, we have not harnessed the full potential of the Sun for our everyday energy needs, which seem to be on the rise.

Our planet receives solar energy amounting to 3,500 times the energy that the entire human race is expected to consume in 2050. If only we knew how to harness this energy cost-effectively, we would not have polluted the earth’s environment as much as we have with our reliance on fossil-fuel-fired thermal power. The ministry of new and renewable energy (MNRE) has estimated that India alone has a solar energy potential of 7,48,990 MW, as against the current commissioned capacity of around 3,000 MW. The slow pace of tapping solar energy has been due to its high costs compared to thermal energy, though the latter damages environment through high carbon emissions. But lately, the costs of solar energy have come down dramatically, partly because of innovations in manufacturing photovoltaic (PV) systems and partly due to innovative ideas to save on land costs. The latest that we are aware of is being installed at R4.99/kWh right in the heart of Delhi at India Habitat Centre, without any subsidy from the government. This is cheaper than thermal energy based on imported coal from Australia. Therefore, wisdom lies in scaling up solar energy with all the speed and skill that India can muster and unleashing a revolution of clean energy, saving millions of lives from ever increasing pollution from thermal sources.

The government is targeting the generation of 1,00,000 MW of solar energy by 2022, including the electrification (through off-grid solar power) of about 20,000 villages that have been completely deprived of electricity so far. But the costs they are counting on still range from R6.50-8/kWh. This cannot create enough traction for a demand pull revolution without substantial subsidy (about 30%) from the government. However, the manufacturing developments in this field and open bidding process, suggest that the cost can be brought down to less than R5/kWh, provided land is supplied by the government/consumer. Roof-tops of all large commercial, government, and residential buildings in polluting cities are the first natural choice to install solar panels. Delhi chief minister Arvind Kejriwal, who is reported to be trying to buy coal mines to provide power to Delhi—already the most polluted city in the world—should instead focus on converting Delhi to a solar city, saving people from respiratory and lung diseases, including cancer.

But rooftops alone may not be sufficient to meet the growing needs of energy. The MNRE has been taking some initiatives in this direction and targets the setting up of at least 25 solar parks in the country, with each holding a capacity of 500 MW and more, between FY15 and FY19. A 750 MW solar plant project in Rewa district, Madhya Pradesh, with 50% World Bank funding, is a step in that direction. It will generate power at R5.50/kWh, occupying about 1,500 hectare of land. Acquiring such large tracts of land is going to be increasingly difficult. So, one has to think innovatively to save on land. In this context, the MNRE is also looking to generate 100MW from grid connected PV installations atop canals by 2017. A 10 MW canal-top plant was inaugurated in Vadodara in January 2015 by UN secretary-general Ban-Ki-Moon. The plant is expected to generate about 16.2 million units in its first year, but the cost works out to R6.48-7 per unit. That is where we need to get innovative ideas to scale up in a cost-effective manner, with costs trimmed to below R5/kWh.
Looking around the globe, we find that in 2013, China installed about 12 GW of solar power which is by far the most installed by any country in a year. This is also more than the cumulative installation till 2013 in China itself. India currently records about 3 GW of installed solar capacity, having added about 950 MW in FY 14, mostly attributed to the state solar policies and renewable energy certificate (REC) scheme. If India wants to compete with China, we need to focus on 3Ss (a catch-phrase coined by prime minister Narendra Modi)—speed, scale, and skill.

Japan is practising ‘solar sharing’, an innovation credited to Akira Nagashima in 2004. It is based on the premise that beyond an optimal level, sunlight does not contribute to photosynthesis in crops. So, lightweight PV structures are installed above the crops grown in a given piece of farm-land, with sufficient spacing to allow air flow. In addition, it acts as a shade for cattle and also reduces the cost of irrigation by increasing the moisture retention level of the soil.

China has also been following a similar practice over rows of eggplants, but more substantial installations have been executed over ponds and shrimp farms. Solar panels installed above ponds and fish farms in Dali county in Shaanxi province generated 1,100 MW to power the local village as well as to sell to the local grid. Additional income source for farmers and the reduced need for land are two important features that make this an important innovative process to be potentially adopted in India, particularly in shrimp farms in states like Andhra Pradesh and other coastal states.
For water bodies, floating solar plants are also being attempted in the UK, Israel and Japan. Japan’s Yakamura dam will see the biggest floating plant in terms of output capacity once installation is complete in March 2016. It is quoted to offset about 8,000 tonnes of CO2 emissions per year. This innovation frees the surrounding land for agriculture, conservation and other development purposes.

India can take a leaf out of these experiments in Japan and China, taking solar panels to various dams, canal-tops, fish-ponds, large lakes, and agricultural fields with the states’ agricultural universities. Once the experiments show good results and stabilise, they can be extended to the farmers’ fields, giving the latter some rental for their land, without displacing or adversely impacting the crops productivity. This can help not only augment farmers’ incomes but also provide power to their pump sets, cold storages in rural areas, and homes in villages, transforming the entire rural landscape. That would be a true salutation to the sun empowering our daily lives!

Gulati is Infosys Chair professor for agriculture and Manchanda is a research assistant, ICRIER
(Published in FinancialExpress.com)

Why even the new mining Bill needs a relook

Amidst protests by the Opposition, the Lok Sabha, on March 3, passed the Mines and Minerals (Development and Regulation) Amendment Bill (MMDR) 2015 to replace the Ordinance promulgated in January. The Bill has a few more steps to go before it becomes law. But it is important that we understand its implications on people and environment, and on the future of the mining sector itself.

For over a decade, we have debated the need to amend the MMDR Act 1957. The conversation intensified with the publication of the report of the High Level Committee on National Mineral Policy (2006) and the 2008 report of Centre for Science and Environment (Rich Lands, Poor People: Is ‘Sustainable’ Mining Possible?). Then the Mines and Minerals (Development and Regulation) Bill 2011 was drafted and introduced in Parliament. But due to disagreements within the UPA government and pressure from industry, this Bill was allowed to lapse in February 2014.
The MMDR Bill 2015 is a distorted version of the MMDR Bill 2011. A coherent whole has been truncated to suit the short-term interests of industry and all progressive ideas to improve the environmental and social performance of the sector have been thrown out of the window.

Institutional reforms
The mining sector is plagued by multiple regulations, discretionary decision-making powers, weak institutions, inadequate monitoring and feeble enforcement. These are the reasons for large-scale irregularities—illegal mining, destruction of environment or ill-treatment of mining-affected communities. Simply put, the entire governance structure of the sector is outdated. The reforms proposed include introduction of an auction mechanism for allocating all mining concessions; provisions for timely decisions; increase in penalty for violations; and creating special courts for speedy trial of offences.

Considering the challenges, these reforms are inadequate and some of them may create more problems. For example, simply increasing penalty for violations within the existing institutional framework makes rent-seeking behaviour lucrative and will not be effective in curbing illegality. Similarly, auctioning of mineral concessions requires scientifically competent institutions to establish reserves and valuation. In the absence of such institutions, auctioning can be manipulated. Auctioning, thus, is not a substitute to but a part of the larger reform in governance. The biggest problem is that the Bill jeopardises all efforts made in the last 10-15 years to improve environmental and social practices in the mining sector.

Environmental practices
Environmental performance is closely linked to how a mine is opened and how it is ultimately rehabilitated and closed. In fact, it is said that a mine should not be opened if it cannot be closed. The MMDR Bill 2015 undermines this very principle.
Under the new Bill, all mining leases will now be granted for 50 years. The lease for existing mines has also been extended to 50 years. After expiry, leases can be re-auctioned.
From an environmental perspective, it doesn’t make sense to keep thousands of mines opened at one point of time as every open mine is a source of pollution. But this is what the 50-year mine lease provision will do. From an economic perspective, it doesn’t make sense why mines should compulsorily be given a 50-year lease period; it amounts to sitting and speculating on resources. Thus, it makes sense to open a mine, remove all minerals quickly and progressively rehabilitate and close the mine and return the land to the landowners. But the long lease period with subsequent re-auctioning provision means leaseholders will do the opposite. They would keep the mines open and shift the burden of rehabilitation to future generations. The long lease period means it will be difficult to establish appropriate financial guarantees to ensure that mine closure will happen. This will bring back the practice of “dig and run”, adding to India’s poor legacy of “orphaned” mines.

Alienation of communities
The MMDR Bill 2015—along with the changes proposed in environment and forest clearances, Land Acquisition Act and Forest Rights Act—will further alienate communities and increase conflict in mineral rich areas. The relationship between mining companies and communities has a legacy of abuse and distrust. This is reflected in the fact that India’s most mineral-rich districts are also its poorest, as communities have benefited the least from the wealth of mining. Recognising this, the MMDR Bill 2011 had specified that for major minerals, the leaseholder should pay the local community an amount equivalent to royalty each year. For coal and lignite, it was to be an amount equal to 26% of profit after tax. This money was to be put in a fund for certain specified benefits. The Bill has considerably diluted these provisions.

First, leaseholders are now required to pay not more than one-third of the royalty for all minerals. Second, it is now up to the states to decide how these funds will be used. So, not only the size of the funds has been considerably reduced, they can now be potentially misused too.

The MMDR Bill 2015 will lead to more displacement of people. The Centre now has discretionary power to allow mine leases beyond the stipulated 10 sq km lease area. In general, larger lease area means more displacement. With an already poor record of resettlement and rehabilitation, this provision can create more conflicts. The government’s other move, the proposed changes in the Land Acquisition Act, will alienate communities further as it removes the requirement of consent of landowners for acquiring land for private and public-private infrastructure projects (which includes mining). Similarly, the provision of public hearing and consultation is being diluted in the environment clearance process. All these changes mean that neither are the benefits from mining going to be shared adequately with the affected people, nor will they be asked before their lands are acquired for mining activities.

Not a win-win for the sector
Despite diluting social and environmental provisions, the MMDR Bill 2015 will not help the mining sector in the long run. The development of the mining sector requires fair play, clarity of processes and security of investments. Though the Bill intends to achieve all these objectives, its prescriptions may achieve the opposite.

The Bill provides for granting all types of mineral concessions through auctioning. However, auctioning doesn’t work in all situations. Auctioning is the best way to allocate concessions where deposits can be accurately established and assessed. But in cases where mineralisation is not properly established, auctioning can result in undervaluation of minerals and subsequent lower revenue for the government, or overvaluation, resulting in the inability of the concession holder to meet commitments. Auctioning, therefore, is not suited for prospecting. For prospecting, a transparent first-in-time principle is used globally. By mandating auctioning of prospecting-cum-mining leases, the Bill has introduced huge uncertainty. Similarly, the Bill might end up restricting investments in exploration.

The long-term growth of the sector is dependent on advanced technologies and large investments in exploration. Though public investment in exploration is important, reconnaissance/regional exploration requires private risk capital. The Bill discourages this. On one hand, it promotes “open sky” policy for reconnaissance by granting non-exclusive permits, while on the other hand it does not guarantee any return to the investors. This will restrict investment in hi-tech exploration, which is urgently needed for deep-seated strategic minerals.

The proponents of the MMDR Bill 2015 have decided to ignore past mistakes. For short-term growth, they are taking the sector back to the exploitative practices of the past. This will hurt the long-term sustainability of the sector itself.
By Chandra Bhushan
The author is deputy director general, Centre for Science and Environment
(Published in FinancialExpress.com)