India's dilemma

Paradoxes and Dilemmas

N.N.Sachitanand

 Here is a perfect analysis of India's dilemma which no body wants to look at and do the needful to resolve it. Not sure whether even Modi will resolve it

That India is a land of extreme contrasts and diversity  has almost become a cliché. What is much lesser known is that it is also a nation of paradoxes. And, arising from these paradoxes are dilemmas which almost paralyse the government from taking bold, curative  steps.

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Take , for example, energy. The country has the fourth largest  coal reserves in the world . Coal is crucial to the growth of electricity availability in the country since 60 % of our power generation comes from coal-fired power plants.  Logically, our  thermal power plants should have been having comfortable stocks of coal.  In fact,   India should have been a major coal exporter.

Contrarily, our output of domestic coal  has been so low as to leave  many of our power plants  perennially teetering on low coal stocks.   Instead of exporting coal  our  imports of the mineral have been steadily rising for the past decade . Last year we were the world’s third largest importer of coal at 180 million tonnes.

Why have we not been able to raise our domestic  coal production in line with the growing demand from the power sector ?  Part of the problem is  the inefficiency of the public sector mining company,  Coal India Ltd., which was a near monopoly till recently.

But,  the short supply is also  because most of our coal deposits lie in forested  and tribal areas and tough environmental as well as land acquisition laws prevent quick opening up and expansion  of mines. The dilemma here :  how can we  preserve our forests and protect  tribal habitations and yet mine more coal to provide  energy for the nation’s growth ?

For those advocating alternatives , here are some cold facts. The nuclear route has proved very expensive and is dependent on imported fuel; big hydro has its own environmental issues while   solar and wind power cannot provide base loads.

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Let us come to the issue of food security. The foundation of providing this security  is the store of grain with the Government - owned Food Corporation of India ( FCI ). The paradox here is that FCI’s godowns are bulging with grain, so much so that there is no covered storage place left. A 2013 report  estimated that FCI had a 40-percent shortage in storage space, for a total stock of  82 million tonnes. The corporation has to store fresh purchases in the open, with consequent loss from rain and rodents.   Yet, there are millions who, if not starving , do not have enough to eat.

But the FCI cannot just  give away the grains it cannot store for that would cause a collapse in the market price of food grains and put farmers in distress.  Nor can it stop purchase of grains from the farmers since  procurement by the FCI is not just to shore up for an  emergency backup but also to provide a floor price, to ensure that farmers are not forced into  a distress sale. So, even with bulging stocks, part of which is rotting and no place to store, the FCI has to go on buying. There is the dilemma.

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India is  known to contain the world’s largest population of diabetics, somewhere around 65 million. And  this number is growing by leaps and bounds due to our genetic makeup ( higher degree of insulin resistance ) , increasingly sedentary lifestyle and poor food habits. In such a situation, the last thing one would expect the Government to do is to enable the general population to access sugar at lower, controlled prices  and support sugar cane farming. Yet, that is precisely what it has been doing all these years.

 Sugar cane is one of the most irrigation-intensive crops ( several times that of cereal crops ) and surface water is quite scarce in most regions of the country. So , sugar cane farmers resort to ground water irrigation. In fact, ground water accounts for over 80 % of the irrigation of sugar cane fields in two of the major sugar producing states – Uttar Pradesh and Maharashtra.  This has resulted in drastic  drops in the water table in most of the sugar cane producing regions.    The dilemma for the Government is that if it frees sugar from controls, prices of the commodity could rise in this sugar-crazy nation, alienating a large   chunk of the electorate.

It is very well known that alcohol addiction leads to domestic disharmony and violence, law and order problems. It  takes an annual toll of 2.5 million lives due to diseases like liver cirrhosis, accidents arising from drunk driving etc.  Spending on alcohol  is one of the primary causes of sustained  poverty among the low income group .  Mahatma  Gandhi’s impassioned plea for temperance was based on this fact.

Rightfully, for the welfare of the people, all state governments should impose prohibition.  Yet, barring Gujarat, the home state of the Mahatma,  prohibition is not in force elsewhere in the country. The dilemma here for the states is that taxes from liquor sales are a major source of their revenue. Then again, prohibition brings in its wake the production and  distribution of illicit liquor as well as smuggling , with the consequent crime and health problems.

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Air pollution arising from motor vehicle exhaust has become a major health problem in urban India. This has been the fallout of the economic liberalisation of 1991 which germinated a booming automobile industry with motor vehicle sales zooming up to 15 million 2/3 wheelers, 1.81 million passenger vehicles and 0.69 million commercial vehicles in 2013.  In the coming years, this large annual addition to the stock of motor vehicles populating our roads is just going to go up, if the automobile industry’s plans fructify.

The problem is our cities are not designed , in terms of their road infrastructure ( both quality and quantity ) , to carry  such a huge volume  of  motor vehicles. All it will lead to is more traffic chaos,  more air pollution and more deaths and disabilities  due to road accidents . The answer is staring the Government in the face :  increase public transport and reduce the ease of acquisition of personal vehicles as the Singapore Government has been doing all these years.

But the dilemma is that the automobile industry is a major growth driver of the new  economy .  At its  present rate of growth , the automobile industry’s  turnover ( vehicles plus components )  is expected to touch $ 145 billion by 2016. It will account then for  10 % of the GDP and employ over 25 million persons.

If the Government tries to deccelerate the automobile industry’s  growth by  restricting acquisition of personal vehicles, the effect on the economy may be catastrophic.  It is a Hobson’s choice for the country – endure increasing ill health due to pollution or economic ill-health due to curbing the indsutry !

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The most ironic paradox, perhaps, concerns tobacco.  That the consumption of tobacco products leads to cancer, pulmonary problems ( particularly TB ) and other diseases is well established. A research paper estimated that the economic cost of dealing with the deleterious effects of  tobacco use in India in  2004 was around to be $1.7 billion ,   which was 16% more than the total excise tax revenues collected from all tobacco products in the financial year 2003–04 !

So far , the Government’s way of dealing with this is in a mild, peripheral manner, such as advertisement campaigns in the media about the ill effects of tobacco consumption, ban on distribution of chewing tobacco products, prohibiting smoking in public places, imposing  heavy taxes on tobacco products  etc. All these have hardly dented the consumption of tobacco in the country.

The most effective way to eradicate the problem is to put an end to the cultivation of tobacco in the country. India is the world’s third largest producer of tobacco.  But this banning  will mean jeopardising the livelihood of some 3.5 million persons engaged in  tobacco farming, 5 million employed in bidi rolling  ( mostly impoverished women ) and  a few lakh  tribals involved in collecting tendu leaves used in bidis, not to mention the loss of income to the lakhs of petty shop owners vending tobacco products.

So , there we have it :   very tough choices faced by the Government  -  lives versus livelihood; health versus revenue; development versus environment; employment versus status quo and so on. It almost seems as if it  is damned if it does and damned if it doesn’t .