National Council of Applied Economic Research Centre

I am very happy today, to be here on this occasion, to lay the foundation stone of the new building of the National Council of Applied Economic Research. The institute is a great asset to us, and it is obligatory on all those who work, or are associated with this magnificent institute, to never lose sight of the vision of the founding fathers of the NCAER. I remember Dr. P.S. Lokanathan, who, after serving as the first Secretary General of the Economic Commission for Asia and the Far-East, took over as the first Director General of this great institute – and I reflect on what he stood for.

The purpose of the study of economics is not to provide settled answers to unsettled and difficult questions, but sometimes to warn economists and the world-at-large, how not to be misled by clever governments.

I would like to say, that when we study economics, our impulse is not the philosopher’s impulse – knowledge for the sake of knowledge – but for healing that that knowledge may help to bring. These are the words of past thinkers: Wonder is the beginning of philosophy; but it is not wonder, but social enthusiasm, which revolts against the silence of fixed life, and the orderliness of the mainstream, which is the beginning of economic science.

I sincerely hope that this institute will stay faithful to the ideals which the founding fathers stood for, and I must say that with the passage of time, the need for creating purposeful, applied economic research is not diminished, it has actually gone up. Meaningful research has been done by past Chairmen and past members of the NCAER. I sincerely hope that this building which is now going to come up, will provide a hospitable environment for the pursuit of applied economic research. With these words, I once again express my sense of joy to be associated with this function.

Steps taken to curb Corruption

Farmer's Portal

Farmer's Portal

NE Infrastructure Development Project Meeting

PM clears additional funds for Railways and Power sectors in the North East: Directs Planning Commission to call a meeting of all NE Chief Ministers

The Prime Minister chaired a meeting to review the status of infrastructure development in the North Eastern region. The meeting was attended by the Finance Minister, the Civil Aviation Minister, the Railway Minister, the Minister for Road Transport and Highways, the Telecom Minister, the Minister for Power, the Minister for DONER and the Deputy Chairman of the Planning Commission.

The review covered the railway, road, airport, power, and telecom projects in the region. The focus was on speeding up implementation of ongoing projects and also fill-in gaps to ensure full physical and electronic connectivity to and in the North Eastern region. The Deputy Chairman of the Planning Commission emphasised that on the Prime Minister's direction a special section was for the first time included in the XI Plan document on North Eastern Region which has accelerated the growth process in the North Eastern States. This section is continued in the XII Plan. He reported the eight states of the region grew at 9.95% during the XI plan period, well above the national average of 8%.

At the meeting, it was agreed that the Finance Ministry will provide an additional Rs. 400 crores to complete three critical rail projects before March 2014. These are

i)                  The Harmati- Naharlagun project to provide the first rail connectivity to Arunachal Pradesh.

ii)                The Dudhnoi- Mendipathar project to connect Meghalaya and

iii)             The Rangapara- North Lakhimpur gauge conversion project.

The Ministry of Railways committed that the first trial runs will begin on these lines in January 2014. The Finance Ministry will also provide upto Rs 200 crore for two more projects

i)                  The Lumding – Silchar gauge conversion and

ii)         the Bogibeel bridge.

It was also decided to provide additional funds from the NLCPR for Intra- State Transmission line networks in Arunachal Pradesh and Sikkim. The Ministry of Power will expedite work on many hydro-projects which are held up due to various reasons. Priority will be given to building strong transmission capacities to transmit power from this potential power rich region, both in hydro and gas based power.

An Empowered Committee will be set up to monitor progress on all infrastructure projects in the North East region.

The Prime Minister has also directed the Planning Commission to call a meeting of all the Chief Ministers of the North Eastern States to improve inter-state coordination for speedy completion of the Infrastructure projects.

Present Status of FDI in Different Sectors of Economy

Decisions taken on FDI in the meeting chaired by the Prime Minister on 16.7.2013 .

• FDI cap in telecom raised to 100 percent from 74 percent; up to 49 percent through automatic route and beyond via FIPB.

• No change in 49 percent FDI limit in civil aviation.

• FDI cap in defence production to stay at 26 percent, higher investment may be considered in state-of-the-art technology production by Cabinet Committee on Security (CCS).

• 100 percent FDI allowed in single brand retail; 49 percent through automatic, 49-100 percent through FIPB.

• FDI limit in insurance sector raised to 49 percent from present 26 percent, subject to Parliament approval.

• FDI up to 49 ppercent in petroleum refining allowed under automatic route, from earlier approval route.

• In power exchanges 49 percent FDI allowed through automatic route, from earlier FIPB route.

• Raised FDI in asset reconstruction companies to 100 percent from 74 percent; of this up to 49 percent will be under automatic rout

• FDI limit increased in credit information companies to 74 percent from 49 percent.

• FDI up to 49 percent in stock exchanges, depositories allowed under automatic route.

• FDI up to 100 percent through automatic route allowed in courier services.

• FDI in tea plantation up to 49 percent through automatic route; 49-100 percent through FIPB route.

• No decision taken on FDI cap in airports, media, brownfield pharma and multi-brand retail

PM gives go ahead for Strategic Industries Initiative

The Prime Minister held a meeting of the High Level Committee on Manufacturing. The meeting was attended by all the Ministers and officials of departments relating to the manufacturing sector including the Ministers of Science & Technology, Heavy Industry, Civil Aviation, Steel, Textiles & MSME and the Deputy Chairman of the Planning Commission. The discussion centred around the proposals made by the National Manufacturing Competitiveness Council which were presented by the Chairman, Dr. V. Krishnamurty.

2. The meeting was convened to discuss the strategy for boosting competitiveness and output in two important sectors – textiles and steel – and for formulating a long term approach in three strategic industries – civilian aircraft manufacture, electric and hybrid vehicles and advanced materials and composites. Decisions relating to the short term and long term strategies for the five areas were taken and it was agreed to move ahead on all of them.   

Salient Features of National Food Security Bill 2013

Salient Features of National Food Security Bill 2013

• Coverage of two thirds population to get highly susidized foodgrains
• Poorest of the poor continue to get 35 kg per household
• Eligible households to be identified by the States
• Special focus on Nutritional Support to women and children
• Food Security Allowance in case of non supply of foodgrains
• States to get assistance for intra-State transportation
• Women Empowerment Eldest women will be Head of the household
• ‘Aadhaar’ for unique identification of beneficiaries
• Grievance Redressal Mechanism at district level
• Social Audits and Vigilance Committees to ensure Transparency
• Penalty for non compliance

After promulgation of the Ordinance By His Excellency President of India

• The Ordinance has to be laid on the Table of each House of Parliament and shall cease to operate at the expiration of six weeks.
• Any Member can give a notice of statutory resolution for disapproval of the Ordinance and if the resolution for disapproval is adopted by both the Houses before the expiration of six weeks, the Ordinance shall cease to operate (as per Article 123(2)(a) of the Constitution).
• The Government in order to give a statutory status to the Ordinance will have to bring a Bill in either House of the Parliament replacing the Ordinance. (In this case the National Food Security Bill is already pending in Parliament).
• The convention in both the Houses is that the Resolution for disapproval as well as the Bill replacing the Ordinance are discussed and debated together to save the time of the House.
• Resolutions for disapproval are first put to vote of the House and after there being defeated, the Bill is put to the Vote of the House for Passing.
• If the contents of the Ordinance are different from the Bill already pending, the Government will have to bring forward official amendments and get them Passed.
• Even if a Bill pertaining to any subject is pending in either House of the Parliament, an Ordinance pertaining to the same can be promulgated.  

National Water Policy 2012

The main emphasis in the Draft of National Water Policy 2012 is to Treat Water as Economic Good which the ministry claims to promote its conservation and efficient use. This provision intended for the privatization of water-delivery services is being criticized from various quarters. The draft also does away with the priorities for water allocation mentioned in 1987 and 2002 versions of the policy. The other major recommendations are :

·   To ensure access to a minimum quantity of potable water for essential health and hygiene to all citizens, available within easy reach of the household

·   To curtail subsidy to agricultural electricity users

·   Setting up of Water Regulatory Authority

·   To keep aside a portion of the river flow to meet the ecological needs and to ensure that the low and high flow releases correspond in time closely to the natural flow regime.

·   To give statutory powers to Water Users Associations to maintain the distribution system

Project benefited families to bear part of the cost of resettlement & rehabilitation of project affected families

·   To remove the large disparity between stipulations for water supply in urban areas and in rural areas .

PSLV - C 22 IRNSS 1A

National Cyber Security Policy

The "National Cyber Security Policy" has been prepared in consultation with all relevant stakeholders, user entities and public.

•        This policy aims at facilitating creation of secure computing environment and enabling adequate trust and confidence in electronic transactions and also guiding stakeholders actions for protection of cyber space.

•        The National Cyber Security Policy document outlines a road-map to create a framework for comprehensive, collaborative and collective response to deal with the issue of cyber security at all levels within the country.

•        The policy recognises the need for objectives and strategies that need to be adopted both at the national level as well as international level.

•      The objectives and strategies outlined in the National Cyber Security Policy together serve as a means to:

i.     Articulate our concerns, understanding, priorities for action as well as directed efforts.

ii.     Provide confidence and reasonable assurance to all stakeholders in the country (Government, business, industry and general public) and global community, about the safety, resiliency and security of cyber space.

iii.    Adopt a suitable posturing that can signal our resolve to make determined efforts to effectively monitor, deter & deal with cyber crime and cyber attacks.

Salient features of the policy

In brief, the National Cyber Security Policy covers the following aspects:

•        A vision and mission statement aimed at building a secure and resilience cyber space for citizens, businesses and Government.

•        Enabling goals aimed at reducing national vulnerability to cyber attacks, preventing cyber attacks & cyber crimes, minimising response & recover time and effective cyber crime investigation and prosecution.

•        Focused actions at the level of Govt., public-private partnership arrangements, cyber security related technology actions, protection of critical information infrastructure and national alerts and advice mechanism, awareness & capacity building and promoting information sharing and cooperation.

•        Enhancing cooperation and coordination between all the stakeholder entities within the country.

•        Objectives and strategies in support of the National cyber security vision and mission.

•        Framework and initiatives that can be pursued at the Govt. level, sectoral levels as well as in public private partnership mode.

•        Facilitating monitoring key trends at the national level such as trends in cyber security compliance, cyber attacks, cyber crime and cyber infrastructure growth.

A Train Journey Worth Making

After the Banihal-Baramulla railway, the Indian Railways should now plan to build a line in the plains of Ladakh along the Indus River. Its alignment could be from Batalik-Khalatse-Leh-Karu to Chushul. The stretch, of approximately 500 kilometres, is plain, interspersed with populated and fertile regions and is along an arterial road in Ladakh, from Batalik to Chushul.

We propose this idea inspired by the popular, standalone 119 km Baramullah-Qazigund railway line in the Kashmir Valley, in operation since October 2009. With the recent inauguration of the 11 km Qazigund-Banihal tunnel by Prime Minister Manmohan Singh, the Kashmir Railway will now extend from Baramulla to Banihal. The railway tunnel, constructed at a cost of Rs.1172 crore, will be operational round the year unlike the Jawahar Road tunnel which closes during heavy snowfall for a few days. This railway line is a popular all-weather mode of transportation for passenger and freight in the valley, evident from the fact that there have been no threats by insurgents to this service. It is run by a 1,400 HP diesel engine with a heating system for quick and trouble free service in winter. The Qazigund-Banihal section does not connect the Kashmir Valley with the national network of the Indian Railways. It is only an internal rail point of Kashmir touching Banihal which is a part of the Jammu region.

Strategic lines

The importance of all-weather connectivity by rail to remote regions has been recognised by the Government of India not only as a strategic necessity but also as a more economical mode of transport for development. It has so far accepted 11 national railway projects to enable greater integration of remote regions with the rest of India. One of them is the Udhampur-Srinagar-Baramullah stretch. The construction of a 290 km-long railway line with a budget of Rs.19,565 crore is to be completed by December 2017.

Green project

Approximately one-third of the work has been completed which includes Banihal to Baramullah. The remaining work, from Udhampur to Banihal, is one of the greatest engineering challenges in the world and across the mighty Pir Panjal range. Perhaps the only system it can be compared with is the Qinghai-Tibet Railway connecting Golmund to Lhasa, which has been in service from July 1, 2006.

In addition, some more strategic projects are in the pipeline. These include a major 500 km-long Srinagar-Kargil-Leh line. The Railway Budget of 2013-14 includes a survey for this project. This would again be a great engineering feat over the Zanskar mountains and a part of the Great Himalayan Range.

A railway line along the Indus in the Ladakh plains, similar to the Banihal-Baramullah railway in the Valley, would in comparison be a low cost project. The alignment suggested is from Batalik, 40 km north east of Kargil along the northern bank of the Indus, to Loma Bend-Khalatse, to Ladakh’s capital, Leh, which is also a military base, to Karu-Upashi, another military base. From here, it can connect to another proposed line from Manali (the Rs.22,831 crore Bilaspur-Manali-Leh line is understood to be under consideration by the Planning Commission). Here, the line would leave the Indus and move northeast towards Pangong Tso/Chushul. The route, of approximately 500 km, is plain; it needs no tunnelling and the construction of very few bridges. It is a cost-effective proposal and would be of immense help to the people of Ladakh, in the same way the Banihal to Baramullah link is to the people of the Valley. It can be constructed in a few years while the mega projects to connect these regions with the rest of the country take shape. There are already audit and seismic issues on these mega projects.

Environmentally speaking, this project will also be a clean one, as it will provide a green alternative in the Ladakh desert to the hundreds of military and civil vehicles which ply everyday on the Battalik-Leh-Karu-Chushul artery. It will save millions of barrels of fuel, which, when transported to Ladakh now ends up becoming even more expensive. The Army always prefers rail transportation as a quicker and cheaper mode of transport for troops and material. The suggested 500 km of alignment is all along army bases. The recent incident at Depsang highlighted the lack of good roads in Ladakh; an Indus Valley Railway may help in improving infrastructure at a low cost.

Helping Ladakh

Tourism will also get a boost. Travelling in air-conditioned coaches in moonscape-like country would be so much better than riding in polluting vehicles on high altitude roads. In March 2013, certain scenic areas close to Pangong Tso, a beautiful lake — a third of which is in India and the rest in Tibet — were opened to foreign tourists (“Ladakh areas to open to tourists,” The Hindu, March 2, 2013). There would be hardly any place so beautiful and serene as this region of Ladakh. The economy of the Ladakhis will improve substantially, especially along the railway route. The Ladakhis had a flourishing border trade with Xinjiang, the Central Asian countries and Tibet. After the closure of the Karakoram Pass to Xinjiang in 1949, and Demchok and other passes to Tibet in the late 1950s, Ladakh has had no impetus for economic growth. Tourism has benefits but the local people complain that the main beneficiaries, mainly transporters, are outsiders. The suggested Indus Valley Railway line would benefit local and small transporters.

( Virendra Sahai Verma and P. Wangdus are former army veterans from the military intelligence who have served in the Ladakh region )