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Too high a price
Unwitting subjects to a 1954 nuclear experiment, the former inhabitants of a Pacific atoll continue to suffer
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Agriculture: no relation to ecology
In India, the issue of food security has always been intimately involved with that of ecological degradation. In 1he late '60s and early'70s, the green revolution was introduced to increase food
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Goa's food bowl getting bare
Environmental degradation, changing land use patterns and poor administrative planning is resulting in the destruction of a unique agro system in Goa.
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Brain drain backs up
India finally tries to give real incentives to stop indigenous intelligence from migrating abroad
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The chemistry of living death
THE world's biggest industrial disaster has been rendered today its most trivial. Criminal corporate culpability and governmental concern for its poorest of the poor are the 2 elements missing in Bhopal a full decade aft methyl isocyanate leaked fro
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Britain sounds red air alert
Searing heat and vehicular emissions skyrocketed ozone levels in Britain, prompting the government to caution against using cars, jogging or even exercising outdoors
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...a taste of dry death
As the Gujarat forest department persists in planting a weed that sucks dry all the water in its vicinity, the Little Rann of Kutch gets...
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To ensure food for tomorrow
Rice and wheat yields are falling. To check it a new initiative has been taken
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Waste behind bars
Waste recycling and optimal resource use is giving the Capital's prison a new purpose
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Where have all the Indians gone?
Until we shed our communal, regional and caste identities, the quintessential Indian will remain a rare species
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The GEF's warped priorities
IN THEIR eagerness to assume global environmental leadership, representatives of the Indian government committed a faux pas recently by trying to grab the chairpersonship of the World Bank-controlled
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Digging its own grave
Despite its glorious past, the future of the Archaeological Survey of India is jeopardised because of internal wrangling and a lack of a concrete philosophy of exploration
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Beating about the bush
Many important issues were hardly touched upon at the recently concluded conference on bioresources
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Revolutionary potatoes
Recently developed hybrid true potato seeds are ideally suited to subtropical climates and are highly disease resistant
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Everything else being equal...
The title would cause non-scientists to groan, "Not another harangue on equity..." Scientists might dismiss it as a bit of hackery -- how could anyone be preposterous enough to say that equity is
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Conspiracy to kill
More than a million people die every year because the government cannot ensure clean air and water. In the years to come, this number will rise further, unless strong steps are taken to start controlling pollution right away
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Pakistan lacks energy efficiency development road map: ADB
Pakistan lacks a comprehensive energy efficiency development road map and investment programme and international experience indicates that the effective implementation and incorporation of energy efficiency into the policy mainstream requires concerted, long-term action and commitment, said Asian Development Bank report. In a project update report on 'Preparing the Sustainable Energy Efficiency Development Programme for Pakistan', the ADB emphasised the need for a comprehensive policy and regulatory framework; energy price and utility rate-setting reforms and incentives; a strong equipment standards, certification, and testing regime; complementary alternative and renewable energy programmes; and easy, widespread access to energy efficiency information, financing, products, and services by all categories and levels of energy market players and end users. According to ADB project study, the energy efficiency assessment conducted under ADB's Energy Efficiency Initiative determined that Pakistan has a large and untapped energy efficiency market. It identifies several energy efficiency improvement opportunities in gas distribution (supply side) and in the government and residential sectors (demand side) that can be tapped into. These opportunities may be explored without extensive precursor preparations, detailed policy design, or framework development, achieving immediate energy savings and deferring additional supply requirements. Further refinement and expansion of such options could result in a portfolio of immediate, bankable energy efficiency investment options for Pakistan, which the government and ADB may consider. According to report, the government and domestic consumers consume more than 60 percent of Pakistan's energy. The public sector is the most inefficient consumer, and the government is looking for more efficient utilisation and conservation measures. The government is eager to procure and adopt energy efficient technology in its operations, including the use of efficient lighting and heating and cooling systems in existing and new buildings, and introduction of energy-efficient building codes. The domestic sector currently uses 45 percent of the power supply. The most effective way to expedite the use of efficient compact fluorescent lamps by domestic consumers is to inject a large volume of such lamps into the market at a low price. This approach has been successful in several countries, where it has immediately reduced customers' monthly power bills. Preliminary analysis suggests that the introduction of 15 million high-quality compact fluorescent lamps into Pakistan's domestic market would save customers $78 million over the lifetime of those bulbs (approximately 2 years). This money could be used more productively in the economy. In addition, 880 MW of power demand would be avoided. The cost of such additional new generation capacity would be $1.15 billion (at $1.3 million per MW), ADB report disclosed. ADB report further pointed out that Pakistan's gas distribution system is ageing and is suffering from high technical losses (25-30 percent in some areas compared to industry standard 5 percent) that could be eliminated by replacing medium and low pressure pipes with more efficient, corrosion-free pipes. Natural gas accounted for half (43 billion cubic meters) of Pakistan's primary energy supply in 2006. A more efficient gas distribution system would result in significant national savings (up to $580 million per year) and increased use of cleaner fuel by more domestic, industrial, and commercial consumers, ADB report mentioned. It said that Electricity consumption, projected to grow an average of 8 percent per annum until 2015 (although recent experience suggests much higher demand growth), will similarly require large power generation capacity additions. Higher energy demand and imports will also require massive investments in associated port terminals, storage facilities, refining capacity, pipeline and transmission networks, and surface fuel transport infrastructure. During 2001-2006, ADB report stated that primary energy supply increased 5.4 percent per year. Meanwhile, consumption of electricity rose at an average annual rate of 6.8 percent, natural gas by 10.4 percent, liquefied petroleum gas by 17.6 percent, and coal by 22.8 percent. Electricity use, in particular, is growing robustly across all sectors-industry, agriculture, domestic, and commercial-recording a 10.2 percent overall jump in 2005-2006, while generation increases lagged at 9.3 percent during the same period. Copyright Business Recorder, 2008
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Budget 2008-09 - Popular or Profligate?
While we all get ready for elections, fiscal rectitude will be a priority for the next government. The curtains have finally come down. The Budget has provided a clear indication of things to come. In a year when 11 states will go for elections and the sword of Damocles for the general elections hanging, a populist fiscal stance is only to be expected. Unfortunately, a populist Budget never fully appeases anyone. Those who get the sops want more and those who do not get them get more upset. This Budget attempts to target the benefits to sections of farmers and urban middle class and when the Pay Commission report is submitted, to the government employees. It is yet to be seen whether the largesse will translate into votes, but surely, these measures will impact for several more years. The Economic Survey was candid about the need for austerity in the prevailing environment, but the Budget does not seem to care. The Budget for 2008-09 has been formulated in the background of moderating growth, a difficult international environment, unimpressive agricultural performance, rising world oil prices, surging capital flows and continued infrastructure bottlenecks. Austere fiscal policy was required not only to provide a counter-cyclical stance but also to keep interest rates low and manage capital inflows better. Acceleration in growth required significant augmenting infrastructure investment. Rationalising subsidies and increase in investment were necessary to accelerate the agricultural growth rate to 4 per cent. It was also hoped that the finance minister would initiate reforms in the excise tax regime to move towards a goods and services tax (GST). To be fair, higher allocations have been made in the Budget for some of the infrastructure sectors though capital expenditure as a ratio of GDP shows a decline. The energy sector's allocation is 30 per cent higher, the roads and transport sector's 22 per cent higher, and communication sector's 32 per cent higher. There are substantially higher allocations to the six components of the Bharat Nirman Programme, which are in the nature of improving connectivity and rural infrastructure. The total plan expenditure in the Union Budget shows an increase of 17.3 per cent over the revised estimate for 2007-08, though this is just about one-half of the level in 2004-05. However, plan capital expenditure shows an increase of just 5.3 per cent, and at 0.6 per cent of GDP this is worrisome. Thus, there has been a significant increase in plan expenditure, but not for creating infrastructure but for various schemes, most of which are in the states' domain. The funds for these programmes are transferred directly to the third level of government or other implementing agencies because the central government wants to claim ownership and clearly, in many places accountability and delivery systems have yet to be put in place. Economists judge the Budget on the basis of its likely macroeconomic impact and policy signals it gives. In the context of surge in capital flows, it was necessary to keep the interest rates low and allow the RBI to undertake market stabilisation to ensure relatively stable exchange rates at least in the short term. That called for containing the fiscal deficit at even lower than the target set under the FRBM Act. For 2007-08, thanks to the buoyant revenues from direct taxes, it was possible to overreach the target, though some expenditure liabilities, particularly on subsidies, have not been fully taken account of. The revenue deficit for 2008-09 relative to GDP is estimated at 1 per cent and the fiscal deficit at 2.5 per cent. Indeed, although phasing out the revenue deficit is mandated in the FRBM Act, it was unrealistic to expect reduction in the deficit by 1.5 percentage points in one year. Budgets are like fashion girls on the ramp; what they hide raises more curiosity than what they reveal. However, most observers have been quick to point out that the fiscal deficit is clearly an underestimate for it does not take account of some important liabilities. First, the Budget estimates do not include the impact of implementing the Sixth Pay Commission. It may be recalled that it was the pay revision in 1997-98 that led to an era of high fiscal imbalances and this alone could add to the fiscal deficit by about half a percentage point of GDP. The second important omission is provision for loan waiver. This is estimated to cost Rs 60,000 crore and or a little over 1 per cent of GDP. That is not all. Despite claims to transparency, the subsidy numbers clearly look under-budgeted. In the case of fertilisers, for example, the Budget estimate for 2008-09 at Rs 30,986 crore is close to the revised estimate for 2007-08 (Rs 30,501 crore). Of course, this does not take account of the Rs 7,500 crore bonds given to fertiliser companies. That is not all. The subsidy accruing to fertiliser companies based on the estimated sale of fertiliser would not be less than Rs 60,000 crore in 2007-08 and to that extent the deficit numbers for 2007-08 are suspect. This is the problem with a Budget prepared on the basis of cash and not accrual accounting. Finally, it is not clear how the finance minister will find an additional Rs 10,000 crore for Gross Budgetary Support for the plan when revenues are estimated to grow at 17.5 per cent and direct taxes at close to 20 per cent even after taking into account the increase in the exemption limit in personal income tax and reduction in excise duties. By this reckoning, the fiscal deficit and off budget liabilities should at least be higher by another 2 per cent of GDP. On changes in tax policy, reduction in the CENVAT rate to 14 per cent, increase in the threshold for service tax and reduction in the Central Sales Tax would help in eventually introducing GST. But the measures stop there. This was the opportunity to extend the base of service tax to all services and universalise input tax credit to convert the CENVAT into a manufacturing stage GST. The tinkering in excise rates has continued and this does not make sense. The policy makers are still to understand that crowding the tax policy with too many objectives only adds to administrative complexity and creates pressure groups. On the whole, difficult days are ahead and while we all get ready for elections, fiscal rectitude will be a priority for the next government, whoever comes to power!
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Spare change
Resources devoted to health care systems are neither divided equitably nor in proportion to the distribution of health problems