The social responsibility agenda now has a wider role in pandemic management, with the Govt expanding the scope of spending to include firms engaged in R&D of vaccines
Sustainability has been on the agenda for us for a while but it never piqued our minds so aggressively. COVID-19 has accelerated the adoption of sustainable practices as never before. It has taught companies that there can no longer be business as usual. We have been provided a once-in-a-generation opportunity to heal the environmental damage caused by overexploitation and unsustainable business practices. It is time now to press the reset button, build resilience and create long term value that is inclusive, equitable and sustainable.
We are seeing a growing realisation that businesses should play an active role in changing the world for the better. Hence, a great deal of money has been flowing into the social sector. Like individual citizens who have moral and social responsibilities, businesses are being perceived as corporate citizens who need to commit a part of their time, talent and resources for the welfare of society as they draw their sustenance from it. Corporate Social Responsibility better known by its acronym CSR is a business approach that aims at managing an organisation in a way that it contributes towards sustainable development by delivering social, economic and environmental benefits to all its stakeholders.
Corporate altruism in India has found a new purpose since the advent of the COVID-19 pandemic. With the nationwide lockdown upending economic activity on the one hand and disrupting lives, especially of the poor, on the other, companies have not only opened their purse strings but also rolled up their sleeves to respond proactively to the pandemic. Over the past few months, corporates have been using all or most of their CSR kitty to combat the outbreak, be it through contribution to the PM CARES Fund, other relief funds, distribution of food, masks, personal protective equipment (PPE) kits or relief material to the needy.
The CSR agenda now has a wider role in pandemic management, with the Government expanding the scope of CSR spending to include companies engaged in research and development (R&D) of new vaccines, drugs and medical devices. These amendments to the CSR rules permit such companies to categorise as CSR activity any Covid-related R&D activity even if it is undertaken as part of its normal course of business.
There have been two more policy changes; the first was to allow all donations for COVID-related efforts to be eligible for 100 per cent tax deduction. The second allows firms who contribute over and above the minimum prescribed amount, to later offset the excess against the CSR obligation arising in subsequent years, if they so desire.
Corporate India has already suggested that the Indian Government approve use of CSR funds for vaccinating their employees. The recommendation came from the Federation of Indian Chambers of Commerce & Industry (FICCI) and Ernst & Young (EY), in a study titled ‘Protecting India: Public Private Partnership for vaccinating against COVID-19.’ The report avers that in order to have 1.3-1.4 lakh centres for inoculation, about 60 per cent of India’s existing public healthcare infrastructure will have to be converted into vaccination centres. The report also mentions how the public sector can potentially provide just about 60,000-70,000 healthcare inoculators, as against the minimum one lakh professionals needed.
CSR is the umbrella term for how a business relates to the broader cultural, economic and political environment in which it operates. It is one of the biggest buzzes in a corporate business, signalling that a company cares; and that it allies profit with principle. It addresses many areas such as corporate governance, human rights, health and safety, the environment, work conditions and contributions towards economic development. The overarching goal of CSR is to drive a change towards sustainability.
This phenomenon has given rise to a new crop of mega donors who are upending long-established norms in the staid world of big philanthropy. Not only are they increasingly willing to take on hot-button social and political issues, they also have a problem-solving and impact-making mindset rather than one focused on publicity.
The CSR movement began as a response to the prevailing opinion that businesses should play a role in ameliorating social problems due to their vast economic resources and overarching influence in the daily lives of people. Steel tycoon and one of the greatest philanthropists, Andrew Carnegie, whose business ethos was “to do well in order to do good” was one of the earliest advocates of the concept of CSR.
Businesses are powerful social entities and the most respected among them feel the need to do much more than making money. They believe in using the power of a business for solving tough problems that plague society. They are involved in a wide variety of causes, such as education, healthcare, skills training, entrepreneurship, women empowerment, food security, livelihoods and supporting services for the differently-abled.
India has a unique law — the Companies Act, 2013 and the CSR Rules — which came into effect on April 1, 2014. It is the first country to stipulate that the companies expend their resources on effective CSR programmes. The approved activities under Schedule VII of CSR include eradicating extreme hunger, poverty and promotion of education, gender equality and women’s empowerment as well as reducing child mortality, improving maternal health and combating diseases. Ensuring environmental sustainability and prompting employment enhancing vocational skills are other activities approved under CSR.
However, there is a crucial difference between CSR as understood in western countries and the way it is implemented in India. A generally accepted gold standard for CSR in the western world is that it must be closely integrated with a firm’s business strategy so that the programmes create a shared value for the company’s shareholders and its stakeholders. In India, that linkage is explicitly prohibited for CSR, focusing solely on its role of contributing towards societal welfare.
CSR could, however, be more socially relevant when it is driven by altruistic motives rather than a mandated policy obligating charitable actions. It is very difficult to legislate moral obligations. Laws set the minimum standards, but they do not create an impetus or ambience for a philanthropic mentality.
There are, unfortunately, marked aberrations in the CSR agenda which need a course correction. Many businesses harbour a variety of secondary aims and often use CSR for enhancing their social profile and boosting their business markets. Charity leaders have a geographic bias with corporations funding projects closer to their headquarters. Consequently, more remote regions where development aid is acutely needed are being bypassed by this new social revolution.
Politics can also skew priorities, with companies looking to gain goodwill by backing Government-led projects rather than initiating more socially relevant initiatives.
Despite all the hyperbole, the great economist Milton Friedman argued in the year 1970: “The doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.” There can be the subtle use of CSR to brush off a bad reputation as well as to camouflage any dark acts.
CSR has usually been peripheral in most organisations and it is not woven into the texture of the business. Even as annual CSR expenditure is on the rise, the impact on the ground remains a matter of debate. Further, it is not always necessarily transparent or mission oriented. Sometimes, it is driven by a need to improve the brand reputation and even worse, to act as a moral counter-balance for unethical practices.
However, a significant amount of any CSR expenditure comes with some strings attached — terms that dictate exactly where and how it must be used. While this may be appropriate in some cases fundamentally it reflects a serious lack of trust in the non-profit entities and hinders their ability to operate effectively.
When donors insist that their money should go exclusively to the people served, there is not enough money left for the non-profit entities to focus on building their own organisations. They are, therefore, unable to invest in talent, technology, systems or reporting. Reporting requirements are often an onerous administrative burden for voluntary organisations which have to devote their scarce skills to educated, English-speaking personnel for writing reports for the donors rather than running programmes.
A sincerely and honestly run charity always delivers rich dividends in the long run. That is the lesson we learn from both philosophers and business leaders. It is wise to remind ourselves of the advice of Henry Ford: “A business absolutely devoted to service will have only one worry about profits: They will be embarrassingly large.”
(The writer is a well-known development professional of international repute. The views expressed are personal.)
The incident of people clubbing a Gangetic dolphin to death raises serious questions about our ability for compassion
There are times when it is difficult to love humanity and all that it stands for. When a newborn or an 80-year-old grandmother is raped, one can’t help wondering what we are all about and how did we descend to such depths? The news of a Gangetic dolphin being beaten to death with sticks, rods and axes by a group of men in Uttar Pradesh’s Pratapgarh is one such moment. The heartbreaking incident took place on December 31 as the world was in good cheer and preparing to usher in the New Year. A video of the deadly assault on the Gangetic dolphin, which by the way is a protected species, is doing the rounds on social media and those who have had the heart to watch the extremely disturbing clip are appalled. In a display of extreme cruelty, the men are seen raining blows on the hapless dolphin as blood gushes from its body. Some men can be seen holding down the helpless creature. Someone can be heard saying: “Faaltu mein maar rahe ho, yaar (You are assaulting it for no reason).” However, this half-hearted overture did nothing to stop the men. It reminds one of the disinterest and weak response of the three policemen in Minneapolis, US, as a policeman Derek Chauvin knelt on the neck of a supine George Perry Floyd who struggled to breathe and eventually died. If the three officers had put up some resistance, Floyd would have been alive today. Similarly, if the bystanders watching the gruesome hacking to death of the aquatic mammal had been more forceful, the dolphin could have been saved. That this comparison between the death of a human and a dolphin may offend many will not come as a surprise. Because, after all, haven’t humans always considered their lives to be more important than that of the other species we are supposed to share the world with? What else can explain this mindless act of abject cruelty? An official of the forest department, who responded to a call pertaining to the dolphin’s torture, reportedly found it lying lifeless by the side of a canal. His First Information Report states that there was a crowd of villagers surrounding it but nobody was willing to reveal how it died. This bid to protect the perpetrators makes the villagers complicit in the crime. That the three men were arrested after the video went viral on social media is small consolation. They will most probably be out of prison in no time as implementation of laws is half-hearted at best when it comes to animal rights.
So, the question is this: How is it that the perpetrators of such heinous crimes often go unpunished when cruelty against animals is a cognisable offence under Section 428 and Section 429 of the Indian Penal Code and the country has one of the strictest wildlife protection laws in the world? While some countries are now waking up to regulating trade in wildlife, India leads the prohibition on ivory trade. Some of the biggest triumphs for animal welfare in India in the last decade saw the ban of dolphinariums in 2013, prohibition on animal testing for cosmetics in 2014, followed by a ban on the import of cosmetics tested on animals. India also prohibited the export of shark fins for use in soup and the country does not allow wild animals in circuses. Despite all the good work that is being done by the Government in framing such stringent laws, why is it that on a daily basis we are confronted with heart-wrenching stories of depraved human behaviour towards animals? We obviously need to take such cases more seriously and there should be heavier fines, harsher sentences and the rate of convictions must go up. For this to happen, we must sensitise our law-enforcement agencies to the rights of animals to be treated with kindness and dignity and about how grave an offence it is to subject an animal to cruelty. We must make them realise that as animals can’t defend or speak up for themselves, it is the duty of the enforcers to defend them by upholding the laws meant to protect them. The law-enforcement agencies must not always wait for activist judges to lead the way in this regard. Plus we, as a society, must teach our children the basic truth that the world is meant to be shared by all of God’s creations and we must learn to live together with them. They have as much right to live on this planet as we do. In fact, animals form a vital part of the eco-system and biodiversity and each creature has a role to play in the circle of life. If we disrupt that, we will have to bear the consequences. For instance, the recent pandemic is a result of our utter disregard for the laws of nature and biodiversity. We must unequivocally raise our voices against cruelty to animals each and every time such aberrations occur and schools must create awareness about this vital issue. We need to raise a more sensitive and humane society than we are raising now. Else, we just don’t have the right to call ourselves humans anymore.
Among the top priorities for the incoming Biden Administration would be to effectively deal with the Taliban's violent surge in Afghanistan
Perhaps the second-most important problem — the first being the COVID-19 pandemic — that President-elect Joe Biden would inherit on assumption of office as President of the United States would be the situation in Afghanistan. The danger of the Taliban taking over the country has never been more real than now since their ouster from power in 2001. The question is: What should and can the Americans do at this juncture? For answers, one must start by looking at what is now happening in that country.
The first thing that strikes one is the sharp escalation of the Taliban’s ruthless drive to capture power by mounting fierce attacks on the Government’s forces in the countryside and terror strikes in Kabul ever since the Trump Administration signed a peace treaty with them on February 29, 2020. Particularly alarming is their new emphasis on targeted killing of individuals such as journalists, civil society activists, physicians, champions of democracy and Government officials.
Besides the Islamic State, which has claimed to have perpetrated a couple of attacks, nobody has claimed responsibility for the rest. In a report in The Washington Post datelined January 2, 2021, Pamela Constable and Sharif Hassan cited a voicemail response in which the chief Taliban spokesman, Zabiullah Mujahid, said that the militant outfit had nothing to do with the killings. Blaming these on the Afghan Government’s intelligence agency, he said that the country would need “educated” Afghans when peace finally came.
The Afghan Government officials have, on the other hand, held the Taliban responsible for the growing violence and the killing of individuals. The Washington Post report mentioned above cites them as saying that they had made a number of arrests, and the Interior Minister, Massoud Andarabi, as telling Afghan lawmakers that, according to those arrested, the attacks were planned by a cell in Logar province. The report also quotes First Vice-President Amrullah Saleh, a former national intelligence chief, as tweeting that unclaimed bombings and targeted assassinations of civil society activists were “pillars of the Taliban terror campaign linked to their negotiating strategy”. It quoted him as further saying that they wanted to break the Afghan people’s political will and demand impossible concessions.
Anyone familiar with the Taliban’s ways, and those of their masters — Pakistan’s notorious Directorate-General of Inter-Services Intelligence (ISI) — would know that the Afghans are right. An analysis of the purpose of the terror strikes will also support this conclusion. These are clearly aimed at achieving three objectives — to terrorise people into not resisting their violent take-over bid, to delegitimise the Afghan State by projecting it as one incapable of protecting the people, and to warn the incoming Biden Administration not to change the terms of the February 29 treaty.
As to the first, there is, by all accounts, a climate of fear and a feeling of siege in Kabul as well as the countryside, at least one-half of which is under the Taliban’s control. People are afraid to come out of their homes. Many are beginning to believe that a take-over by the Taliban is inevitable and, hence, it is best to hedge their bets.
As for the attempt to delegitimise the Afghan Government, the latter has not been sitting on its hands. First Vice-President Amrullah Saleh, whom President Ashraf Ghani has put in charge of the Afghan capital’s security, has produced a plan, called the ‘Kabul Security Compact’. While it has produced some results in terms of reducing crime, continuing terror strikes and targeted killings are perpetuating a climate of intense insecurity. A report by Thomas Gibbons-Neff and Fatima Faizi in The New York Times of November 7, 2020, shows how the terror strikes and the targeted killings by motorbike-borne terrorists or through the attachment of magnetic bombs to vehicles, have led to growing popular discontent with the Afghan Government for failing to protect its citizens — promises notwithstanding.
The third possible objective, to warn the incoming Biden Administration not to change the terms of the February 29 treaty, indicates how advantageous the terms are to the Taliban. These bind the US to reduce its forces in Afghanistan to 8,600 — with its allies drawing down their forces proportionately — within the first 135 days of the agreement coming into force. A complete withdrawal of the US forces will be effected within 14 months. It also calls for an exchange of 5,000 Taliban fighters held by the Afghan Government with 1,000 Afghan security force prisoners with the Taliban by March 10, 2020, when talks between the Afghan Government and the Taliban were due to start. Also, the US would not only lift the sanctions it had imposed on the Taliban but work with the United Nations to lift those that the latter had imposed on it.
The question here is whether the incoming Biden Administration would stand by and watch if the Taliban sought to storm into power by terrorising into inaction all those who are opposed to it, and undermining the Afghan Government’s credibility and ability to resist through a campaign of unremitting violence and terror. Or, would it intervene and, if so, in what manner? The question that follows is: Why should the US intervene? There are two dimensions to any discussion on the matter — strategic and geo-political in terms of the US’s interests, and moral in terms of protecting and furthering human freedom that it always swears by.
The consequences of not doing anything or enough to stop the Taliban from coming to power would be disastrous for the US. It turned its attention away from Afghanistan after the withdrawal of the Russian troops in February 1989. It did nothing even when the Taliban, formed in 1994 by Pakistan’s ISI, turned Afghanistan into a medieval hell and put all women virtually under house arrest, besides enabling Osama bin-Laden and the al-Qaida to function freely. The result was 9/11. It may be a different kind of attack this time, and the target, instead of being in mainland US like the two World Trade Centre buildings, may be American interests abroad. There, however, will be an attack or attacks because the Taliban is committed to imposing its own joyless, puritanical and anti-women brand of Salafist Islam and Sharia rule worldwide. The US, with its massive military and economic power, is not just a major roadblock on its way. The country is the embodiment of a way of life that is anathema to it. Based on the modernity evolving in the matrix of the Renaissance and 18th century Enlightenment, its ethos is defined by its enshrinement of “Life, Liberty and the pursuit of Happiness” in its Declaration of Independence as among the inalienable rights given to all humans by their creator, and its life is marked by forward movement towards greater gender justice and personal and sexual freedom.
There is thus a deep cultural component to the visceral hatred that the Taliban and all fundamentalist Islamist entities harbour towards the US. President-elect Biden must bear this in mind and chart America’s strategy toward the Taliban accordingly. The need to attend to the strategic and military compulsions arising from such a situation is increased by the moral dimension, deriving from the Taliban’s attitude to women as mentioned above. How the Taliban treated them when in power becomes clear from the following account by Lt-Gen Kamal Moinuddin (Retd) of the Pakistan Army in the Taliban Phenomenon: Afghanistan 1994-97:
“Girls are being denied education; women have been prevented from working. If they leave their house, they have to be covered from head to foot with a veil (burqa); besides being veiled, the women have to be accompanied by a male relative when they venture out on the streets. Shopkeepers have been directed not to sell goods to unveiled women. Rickshaw drivers are not to pick up women passengers unless they are fully covered. Women caught violating these rules are imprisoned, as are the shopkeepers and rickshaw-drivers.”
The argument that the Taliban have changed does not hold. In an article titled The false inclusivity of the Taliban’s emirate (www.aljazeera.com), datelined October 26, 2020, Mehdi J Hakimi writes: “Notwithstanding repeated claims that they support women’s rights, for instance, the Taliban has continued to attack girls’ schools. Also, women and young people, while comprising most of the country’s population, are conspicuously missing from the Taliban’s negotiating team.”
The conclusion is simple. The incoming Biden Administration must not shrink from intervening to prevent the Taliban from storming into power riding a wave of escalating violence.
(The author is Consulting Editor, The Pioneer. The views expressed are personal.)
Is the worst economic impact of the Coronavirus over? How will the Govt create 10-15 million jobs in a year?
We can all agree that 2020 was an awful year and economic growth across the world, other than in just a few countries, came to a grinding halt. In India, the pitiable sight of millions of labourers and workers walking home to their villages, some not able to complete their journeys due to fatal accidents or the virus itself, was possibly the most tragic sight of the year. Even well-heeled white collar workers in several industries, including the media, found themselves pushed to the wall and tens of thousands lost their jobs in several industries across the world. But as more details emerge and demand rebounds, the most pessimistic projections for economic growth, which seemed doomed after the contraction in the first quarter, and projections of a 15-20 per cent decline seemed like reality. But as the economic activity seems to have revived, projections for the total decline for this fiscal have gone down from the earlier 15-20 per cent to now a decline of under eight per cent for the entire year, as predicted by the National Statistical Office. Even if you do not trust the Government, the predictions by other global financial institutions and banks are showing that the economic decline in India has been mitigated. The demand for products like automobiles and consumer durables appears to have come back, and even grown, as the December sales figures for cars have displayed. And predictions for the next year have grown dramatically, with some figures showing as much as 10 per cent growth.
But will the job growth come back? With a net decline in jobs last year, and many millions of young people joining the market over the past year, that is the biggest single problem with the Indian economy. How will the Government create 10-15 million jobs in the public and private sectors in the coming year? Can it be done through demand creation with lower taxes and incentives such as reductions in the Goods and Services Tax? That is an open question. The hands of the Indian Government are tied; with some farmers demanding higher prices for their produce and taxes already quite high, what can be done? This will require creative thinking from the Government’s quarters, and the mandarins should carefully listen to the economists and domain experts with different thoughts across the board. The stock markets are booming but, without the creation of jobs, the problems will just be kicked down the road and an army of unemployed youth will pose a major problem for any Government that is in power. And, sadly, this is a problem not just in India but one that is haunting almost all countries across the world.
New Delhi, Jan 7 (IANS) The employment scenario in the country, which improved post the lifting of the lockdown, has worsened in December, according to data from the Centre for Monitoring Indian Economy (CMIE).
The unemployment rate in the country increased sharply to 9.1 per cent in December from 6.5 per cent in November, as per the data. The numbers indicate that the stress in the economy is far from over and the road to normalcy would be longer.
According to CMIE's MD and CEO Mahesh Vyas, the December number is the highest unemployment rate since the beginning of India's recovery from the lockdown in June.
He noted that the rise in unemployment comes along with high inflation, which has been in the vicinity of 7 per cent in recent months, and has made the situation worse. He also raised concerns that the sharp increase in unemployment strengthens worries regarding the recovery process.
As per the think tank, the rise in unemployment in December is the result of a partial recovery of the labour participation rate (LPR). The LPR had fallen to 40 per cent in November from 40.7 per cent in the preceding two months.
LPR is a measure of an economy's active workforce. It is calculated by dividing the labour force by the total working-age population.
In December, the LPR recovered partly, to 40.6 per cent. The influx of people looking for work swelled and the labour force increased from an estimated 421 million in November to 427 million in December. But, labour markets were not ready for this six-million surge in labour, leaving them largely unemployed, Vyas said.
CMIE noted that the primary reason of the rise in unemployment in December was the failure of the farm sector to absorb the influx of labour. Farming is the last resort of many who are rendered jobless, but December is not the suitable month for absorption of labour, it said.
This is the month when farming sheds jobs. In each of the past five years since 2016, labour employed in farming in December has shrunk compared to November. In December 2019, the job loss from farming was 10 million. In December 2020, this sector shed an estimated 9.8 million jobs, showed the CMIE data.
As of December end, India had around 38.7 million unemployed people compared to 27.4 million in November, registering a massive increase of 11.3 million. This huge increase places the unemployed higher than it was before the lockdown.
With many traditional industries currently stagnated, India urgently needs an eco-friendly sector whose economic potential has not yet been fully realized
The rapidly spreading new strain of the COVID-19 virus indicates that the fight against the pandemic and its fallouts is far from over. The UK has announced a complete lockdown until mid-February in order to cut the spiralling infection rate, while India is also witnessing a sudden spurt in cases of the new strain in various States. These developments are bound to take a heavy toll on an already beleaguered economy. However, humanity has not lost hope and believes that the global economy will bounce back.
The socio-economic destruction in the wake of the COVID-19 pandemic brought the Indian economy to its knees. Unemployment rose sharply from 6.7 per cent in March 2020 to 26 per cent in April 2020. This translates to nearly 140 million people losing their jobs in a shockingly short span of time. The same period also witnessed a fall in business activity from 82 per cent to 44 per cent, eventually followed by the largest-ever Gross Domestic Product (GDP) contraction of minus 24 per cent in the First Quarter of the Financial Year 2020-21.
In fact, India suffered a staggering loss of Rs 32,000 crore per day during the first 21 days of the lockdown. These tremendous economic reverses need the intervention of innovative measures such as an increased focus on marginally leveraged areas such as the ‘Blue Economy.’
The World Bank defines the Blue Economy as sustainable use of the global oceanic resources for economic growth, improved livelihoods and for sustaining a healthy ocean ecosystem. Originally coined by Belgian economist Gunter Pauli in 2010, the term ‘Blue Economy’ holds tremendous environmental and economic relevance for the Indian economy which holds fifth position in the world.
Judicious development of the Blue Economy is critical for the country’s efforts to revive its crippled fiscal health. This sector will not only help resurrect the comatose economy but can also lead to sustainable growth in the coming decade and beyond. With many traditional sectors currently stagnated and bogged down in the recession, India urgently needs an eco-friendly and long-term sector whose economic potential has not yet been fully realised.
The oceans abutting India’s nearly 7,000-km-long coastline have the capacity to provide just what the nation needs. According to the Ministry of Earth Sciences, currently the Blue Economy in India comprises just 4.1 per cent of the GDP, which demonstrates the need to scale up this sector.
India already has robust traditional oceanic activities such as fisheries, tourism, maritime transport and so on. For the Blue Economy, the Government can increase its focus on certain emerging areas such as maritime renewable energy, seabed extractive activities, marine biotechnology and bioprospecting. Of all the avenues, bioprospecting is the most exciting because it has the potential to become a long-term economic resource as it involves eco-friendly exploration and harnessing of plant and animal species from which medicinal drugs, biochemicals and other commercially valuable material can be obtained. With a sea of opportunities waiting to be tapped, the Blue Economy can prove to be the next level of growth for India but at the same time, we need to exercise extreme caution in order to ensure that any harm to the environment or the delicate marine biodiversity is not only predicted beforehand but also avoided properly. For instance, bioprospecting can sometimes cause overharvesting of individual species which leads to their extinction. It causes immense damage to the environment as the role of any particular species in the ecosystem cannot be replicated by any other breed. The Government must also ensure that the private sector enterprises engaged in the Blue Economy abide by strict norms and regulations for safeguarding the marine ecosystem. Only then we will be able to have environmentally responsible economic growth for our nation.
As a first step towards leveraging the oceans for responsible economic growth, India needs to up the explorative extent of the oceans under its purview. This area definitely needs improvement. Furthermore, the achievements and potential of Blue Economy-related activities mostly go unreported which results in less awareness among the citizens and investors regarding its potentiality. Therefore, it does not attract private sector enterprises or investments and these conditions are detrimental to its development and growth.
The Blue Economy can turn the proverbial economic page for India as it entails multiple socio-economic benefits. It can not only help in livelihood generation, providing energy security and improving the health and prosperity of coastal communities but can also increase the ecological resilience of the oceans surrounding India. If piloted properly, the Blue Economic development drive will help India achieve its Sustainable Development Goals by 2030 and also pave the way for marine sector services to assist the Indian economy to become a $10 trillion one by 2030. But careful planning and implementation are needed for these goals to be achieved. Oceans constitute over 70 per cent of the Earth’s surface and if their vast resources are harnessed with a sense of responsibility and due respect for the environment, they can provide infinite assets for our economy. India is gifted with abundant oceanic resources making it possible to power the country’s future with the aid of the Blue Economy.
(The writer is an environmental journalist. The views expressed are personal.)
Changing the name of Mount Everest to Mount Sikdar Everest will perhaps do full justice to Radhanath and give him global recognition which was his legitimate due
All of us are aware from the days of our childhood that the highest mountain peak in the world is Mount Everest and it was named after George Everest. It was only much later that one came to know that Sir George Everest was the Surveyor-General of India and the peak was so named as he had “discovered” it to be the highest in the world. As the Surveyor-General he had his offices at Dehradun and used to stay in Mussoorie. He left India in 1843, almost 200 years ago, but his house in Mussoorie is still being preserved and is now a place of tourist interest.
The truth, however, is somewhat different. It is indeed a fact that Sir George Everest was the Surveyor-General of India from 1830 to 1843, but it is also a fact that during his tenure, Mount Everest, as we know it today, was known only as peak XV. Everest had neither initiated the process of measuring the height of this peak, nor was he instrumental in its naming, which was done much later, long after he had proceeded to England, to enjoy his retirement after 1843.
Located on the border of Nepal and Tibet, peak XV was worshipped as a holy place by Tibetans, who called it Chomolungma, the mother goddess of the world. In Nepal this peak is known as Sagarmatha, meaning the peak of the heavens. Even these days this peak is addressed by its traditional names both in Tibet and Nepal, while we have followed what was given to us by the British i.e. Mount Everest. In fact the name Everest was given by Colonel Sir Andrew Waugh of Bengal Engineers, who succeeded Everest as the Surveyor-General of India from 1844 to 1861. The circumstances under which peak XV was named as Mount Everest are rather peculiar and reveal a very biased handling of the matter so that the entire credit went to the British officers of the East India Company.
Going through the historical records of the Survey of India Volume IV, 1830 to 1843, pertaining to the tenure of Everest, one can at a glance observe that he had shown no interest in peak XV during this time in office. It was his successor Andrew Waugh, who made the official announcement of peak XV being the highest-known peak of the world in 1856. The measurements had of course been initiated much earlier and finalised by our own Radhanath Sikdar.
Recognising the work of the brilliant mathematician Radhanath Sikdar, the Government of India issued a postage stamp in his honour in 2004. However, his work is of such great importance that issuing a postage stamp and then forgetting about him does not do justice to him or his contribution. Ironically, it was Everest, who recruited Sikdar in the Great Trigonometrical Survey and became extremely fond of him. Volume IV of the Historical Records of the Survey of India, pertaining to his tenure, has the following mention about Sikdar.
“Radhanath is high in favour with everybody, and universally beloved in the GT Survey. You will not know him for the same person when you see him again, for he is no longer a puny stripling, but a hardy, energetic young man, ready to undergo any fatigue and acquire a practical knowledge of all parts of his profession...
“There are few of my instruments which he cannot manage; and none of my computations of which he is not thoroughly master… Eventually he will furnish a convincing proof that the aptitude of your countrymen for the practical, as well as the theoretical, parts of mathematics is in no wise inferior to that of Europeans.”
“Of the qualifications of the young man himself I cannot speak too highly. In his mathematical attainments there are few in India, whether European or Native, who can at all compete with him, and…even in Europe those attainments would rank very high.”
Later, on account of a special technique developed by Sikdar for accurate computation of heights and distances through spherical trigonometry, he virtually became indispensable to the organisation and rose to become the Chief Computer in the office of the Surveyor-General of India. In that position he moved from Dehradun to Kolkata in 1849. As to why Andrew Waugh gave the name Everest, even though he had left the scene long ago, is an interesting piece of history.
Had Sidney Gerald Burrard, a later Surveyor-General of India, not acknowledged the good work of Sikdar through a research paper published in 1904 in the scientific journal Nature, these facts would not have come to light. He published in detail various steps taken for the measurement of peak XV.
This, in a way, also exposed the machinations of Waugh, who had tried his level best to take credit away from Sikdar. It is human nature that, in case something important is achieved, one tries to take or give credit to someone but in this case Waugh specifically mentioned that Sikdar had nothing to do with this work, indicating his bias.
Later, he could be seen placating Sikdar by telling him that he should be happy that the peak had been named after his mentor. Waugh also gave the additional charge of the Indian Meteorological Department to Sikdar, raising his salary to Rs 600 per month, which was unheard for an Indian in those days. Clearly all these efforts were to keep him happy but away from the core of the survey work.
Burrard’s publication in Nature specifically mentions that the Chief Computer (who was Sikdar) from Kolkata (then Calcutta) had informed Waugh in 1852 that the peak designated XV had been found to be higher than any other highest measured peak in the world at that time.
The raw data from theodolites taken from seven observation stations at Jirol, Mirzapur, Janjpati, Ladiva, Haripur, Minai and Doom Dongi was collected at the trigonometrical survey at Kolkata. This was processed by Sikdar who then conveyed to Waugh that peak XV had been measured at 29,002 feet taking the mean value of all the observations. Considering that the scientific instrumentation available at that time was only of a rudimentary nature, the level of accuracy reached was almost 100 per cent and this figure has not undergone any major change despite the current state of technological progress.
Significantly, after years of debate, China and Nepal recently agreed on a precise elevation for Mount Everest. The new agreed height of 29,031 feet was announced at a virtual ceremony. Such a minuscule change in the height of the peak despite the sophisticated technology used is a great proof of Sikdar’s excellence.
Correspondence between Waugh and Sikdar reveals that Waugh did privately acknowledge the achievement of Sikdar, but did not recognise his work on record and in public. In his letter dated August 25, 1856, Waugh wrote to Sikdar that he was glad to hear that naming the peak as Everest had given the latter a lot of satisfaction. Thus it is clear that the name Everest was given to ensure that Sikdar, who could have been the rightful claimant for credit, did not object as he was extremely fond of Everest who had recruited him in service. This information would have remained obscure, but for the research paper of Burrard in 1904. Later, Professor Meghnad Saha acknowledged this feat in 1938 by giving Sikdar full credit. Earlier Kenneth Mason in 1928 had recognised his work as also John Keay in his book, The Great Arc.
Changing the name of Mount Everest to Mount Sikdar Everest will perhaps do full justice to Sikdar and give him worldwide recognition which was legitimately his due, long time ago. We do not have to seek anybody’s approval for such a change as the rationale is well-documented. Even if the world continues to call it Everest, in India, we could still call it Sikdar Everest.
On several occasions, achievements of Indian scientists have not been recognised. For instance, Sir JC Bose could have got the Nobel Prize for Physics or at least shared it with Marconi for his work on the wireless and radio.
SN Bose could have got the Nobel Prize way back in 1932 for his work with Einstein on the Bose-Einstein condensate but at least he was recognised, though belatedly by the naming of the God particle, Higgs-Boson after him. Naming Everest as Sikdar Everest would be a recognition of a scientist whose work has stood the test of time. Besides it would also justifiably add to our national pride.
(The writer is a former Police Commissioner and ex-Governor of Uttarakhand. The views expressed are personal.)
The bird flu is no good news but India seems to be putting to good use the lessons learnt during the COVID pandemic
The new decade has not begun on a good note for India. Anyone who followed what the health experts and virologists had been predicting about the path the pandemic would take must have been mentally prepared for the fact that the Coronavirus would continue to haunt humanity at least till the winter of 2021. However, with the start of a new year and in spite of a new, mutated strain of the Coronavirus wreaking havoc which made even the British Prime Minister cancel his India visit, people had hoped to put the nightmarish experience of 2020 behind them. But now New Delhi has another, emerging worry on its hands. At least four States — Himachal Pradesh, Madhya Pradesh, Kerala and Rajasthan — have reported confirmed bird flu cases. Thankfully, already in fighting mode due to the pandemic, the Government sounded an alert with speed and the health authorities have stepped up efforts to contain the spread of the flu’s H5N8 strain. Karnataka and Tamil Nadu too are on their toes as thousands of ducks have died in the neighbouring Kerala. Similarly, Haryana, where over four lakh poultry birds perished at Panchkula farms in the past 10 days, and Jammu and Kashmir are alert and taking evasive action. Though there have been no reported cases of transmission to humans despite the disease being zoonotic, health authorities are not taking any chances as the avian flu’s mortality rate is 30-50 per cent as against the casualty rate of COVID-19, which is pegged at 0.31 per cent. But even if the nation is able to avoid human infections, the avian flu will be a body blow to the domestic poultry and meat industry as bird flu viruses can infect both birds and animals. As it is, the poultry industry suffered the most on account of rumours during the pandemic and chicken sales in India dipped to over 50 per cent in 2020 and the prices fell by 70 per cent. The sales had started to pick up only towards the end of the year as COVID fatigue set in.
Now, the fresh outbreak will sound the death knell not just for thousands of birds; it will make it difficult for the industry to survive. We are already seeing its effects as the slaughter, sale, purchase and export of any poultry birds, fish and related products have been banned in Kangra district, marked as the epicentre of the infection in Himachal. In Kerala, around 24,000 birds, mostly ducks, were culled and more States are expected to follow suit. But one good thing is that India has learnt many vital lessons from the COVID outbreak and the Government and health authorities are now putting these to good use. As many as 12 epicentres in the affected States have been identified and the Centre has issued an advisory apart from setting up a control room in Delhi. In Indore, the health department has begun door-to-door medical check-ups of people living in areas where hundreds of crows were found dead. Such quick, coordinated and concerted action by all stakeholders, including the Centre and States, would have been unthinkable a year ago. Yes, the pandemic did ruin our economy and resulted in major socio-economic trauma but every dark cloud has a silver lining. And the bright side for India is a ramped-up healthcare infrastructure, lessons in speedy response to a health emergency, quick identification of hotspots, testing, quarantining and evasive action.
Xi Jinping hopes that his ‘Health Silk Road' can justify his refusal for a WHO-led probe into the pandemic
There is no doubt that China has been stained by its mishandling of the Wuhan contagion and the world had to pay a huge price for its wilful suppression of facts that led to the pandemic of our lifetime. And though it has been trying to buy back goodwill by supplying vaccines and medical kits to the needy and affected countries, its rigidity against the global probe into the origins of the virus is proving counter-productive. Porosity has to work both ways but China is adamant about the denial of its role in the spread of COVID-19, claiming it was as much a victim as everyone else. The problem is that the more it tries to disown its part in exacerbating matters, the more the trust deficit piles up against its “Health Silk Route”, a diplomatic initiative to heal the world and, thus, silence the critics. Now even the World Health Organisation, which came under fire for buying into China’s story in the initial days of the outbreak, is “very disappointed” with it. That’s because China has still not cleared the entry of a team of international experts tasked with investigating the origins of the virus. But China sees the mission as part of yet another global shaming effort and this stand-offish approach is certainly not doing anything to obviate its complicity in hiding the scale of the pandemic.
Its seemingly altruistic effort to offer test kits earlier and the vaccine now has clearly backfired. With the First World and even its allies like Turkey rejecting the faulty test kits, it had hoped to dump its vaccines on lesser developed countries. But with domestic scepticism over them and little or no information available about their safety or efficacy vis-à-vis Moderna, AstraZeneca and Johnson & Johnson, even its neighbours are wary of picking them up. Besides, the conditional nature of the deals has put even ASEAN nations on the back foot, with China demanding that they withdraw support to a demand for a global probe into the origins of the virus. So, some of these nations have ended up sealing deals with the Western pharma majors. Suspected of hegemonistic designs by nations it had debt-trapped, they are even going cold on its much-touted Belt and Road Initiative (BRI), seemingly a strategic cooperation but practically an economic slavery of sorts. So China is betting big on healthcare dependence, not only to deflect the negativity against it but to boost the market for its science and bio-tech sectors. Its desperation can be gauged from the fact that its controlled media is publishing images of normal life with concerts, parties and celebrations to show how it has tamed the pandemic. But reports of cluster outbreaks demolish such planted narratives. Despite the unease of nations, China is continuing to accelerate its production line of vaccines and supplying millions of doses in lesser time than the other pharma majors so that even countries not keen on sourcing from it are bound to do so. It has already signed deals with Malaysia and the Philippines, hoping that it would prevent them from talking against Beijing’s expansionist ambitions. China is cleverly using its vaccine as a bait to push its agenda. In fact, its “health first” is just an umbrella approach to spread wings across the greatest constituency it can mine for its use, the public health systems of various nations. A Hong Kong-based brokerage firm has estimated that if China can capture just 15 per cent of the market in the middle and low-income countries, it would net around $2.8 billion in vaccine sales and command the global health economy. In fact, China’s vaccine push could help it revive its infrastructure invasion in other nations, which has clearly been hit by the pandemic. It’s believed that it has already got E-commerce giant Alibaba to build warehouses in Ethiopia and Dubai that will serve as vaccine distribution hubs for Africa and the Middle East. And that it is already building vaccine production facilities in countries like Brazil, Morocco and Indonesia which have participated in trials, too. But the question is will it be able to negotiate its image through such deals while being allergic to global scrutiny? For the world has seen through much of China’s designs and is unlikely to be taken in by President Xi Jinping’s new agenda of building a “community of common health”.
Its terror-conducive justice system, backed by the machinations of the politico-military-clergy triad, is a hoax. The country had better be prudent
Pakistan’s overall criminal justice system on terrorism is a creaking sham, not just owing to the complicity of the politico-military-clergy triad but also due to the compromised nature of the two essentials of any criminal justice system, i.e. prosecution and the judiciary. Despite various Anti-Terrorism Acts (ATAs), Anti-Terrorism Courts (ATCs) and even more grandiloquent National Action Plan (NAP) — the conviction rates in terror cases in Pakistan remain abysmally low, if at all the convictions take place. The judiciary has historically been an integral part of the Pakistani establishment’s machinations as exemplified in the mid-50s when Chief Justice Muhammad Munir had propounded the “doctrine of necessity” to legalise General Ayub Khan’s extra-legal takeover of the country by suggesting that “which is otherwise not lawful is made lawful by necessity”. But the fickle nature of intrigues and inter-institutional one-upmanship can result in the judiciary taking on the politicians and Generals also — not necessarily to uphold the law but pursuant to their own institutional turf wars. A special court trying the former Pakistan Army chief and President, Pervez Musharraf, had stunningly announced for him the death penalty by majority votes (which was later overturned); and, more recently, the Pakistani Chief Justice had rejected a petitioner’s last-minute withdrawal plea that had initially challenged the extension of the Pakistan Army chief’s tenure. It was followed by a tense three-day drama which kept the politicos and the Generals on the tenterhooks. The wheels-within-wheels of manipulation and vested interests by all the competing arms of governance have ensured the perpetuation of the rot that facilitates “terror nurseries”.
Pakistan is precariously poised to potentially get “blacklisted” for supporting and financing terror and is under constant review by the watchdog agency, the Financial Action Task Force (FATF). But a few weeks ago, the Sindh High Court had set aside the provincial Government’s detention orders pertaining to the four terrorists held for the abduction and gruesome murder of US journalist Daniel Pearl. The horrifying case of the journalist’s decapitation had shocked the conscience of the international community but the provincial court declared it “null and void” and not warranting “any sort of detention”. The acting Attorney-General of the US, Jeffrey Rosen, indignantly remarked that the “separate judicial rulings reversing conviction and ordering release are an affront to terrorism victims everywhere”, and the family of the journalist called it a “travesty of justice”. For its part, India is well versed with the Pakistani judicial system as a similar fate was bestowed upon the likes of Hafiz Saeed, Zaki-ur-Rehman Lakhvi and the other masterminds of the Mumbai 26/11 carnage who are often “detained”, “kept under house arrest” and even “sentenced” to appease the international community and keep the FATF proceedings from reaching harsh and punitive action, but are able to indulge in their nefarious activities nonetheless.
Intelligence sources had named the terror and Sunni-supremacist organisation, Lashkar-e-Jhangvi, as being one of the key participants in the Daniel Pearl murder case. The dilly-dallying, obsequiousness and the long rope afforded by the courts to such organisations ensure that they continue to thrive irrespective of their crimes. The complicated history of the Pakistani military and its intelligence agency, the Inter-Services Intelligence (ISI), in nurturing and supporting such outfits from time to time has always ensured that there are crucial “contacts” and “sympathisers” within the military and the additional pusillanimity by other levers like the judiciary, completely enfeebling the anti-terror commitments that exist only in name. Unsurprisingly, last week, the same Lashkar-e-Jhangvi and ISIL (ISIS) cadres were said to have killed 11 Hazara Shia coal miners after abducting them, tying up their hands and shooting them in cold blood — another statistic was added to Pakistan’s bloody societal violence that is unmatched in its brutality, and apparent acquiescence and leniency from the Government’s side, at the same time.
To add insult to injury in the lamentable circus that besets Pakistan, Minister for Human Rights Shireen Mazari inconceivably said: “India-funded terrorists in Balochistan are getting more desperate as development comes to the province!” The reality of the supposed “development” in the region barely masks the fact that the persecuted Shia Hazara community, from which these miners had come, is huddled in two heavily guarded ghettos in Quetta and surrounded by high walls and barbed wire, after hundreds of them were killed in sectarian violence over the past couple of decades. For the religious minorities and the “deemed minorities” like Shias, Ahmediyas and several others, justice is a far cry.
Even if the odd individual wishes to stand up for justice and for upholding the constitutional provisions, the societal regression that envelops the Pakistani judicial system is all-pervasive and powerful, as was seen when the proud murderer Mumtaz Qadri (who had killed Punjab Governor Salman Taseer in broad daylight) was showered with rose petals by the resident lawyers when he attended court. The judge who finally gave Qadri the death sentence had to face an impromptu strike by the District Bar Association, had his office vandalised and was forced into exile out of the country, fearing for his life. Further, the witness protection programmes in Pakistan are completely ineffective as “influential” bodies routinely and brazenly ensure intimidation and retractions, and people are simply too scared to testify.
The patent sophistry of ascribing the booming terror network in Pakistan onto the so-called “non-State actors” is a bogey that has lost all credibility. No such apparatus or ecosystem can survive for so long with such impunity despite so many Acts, laws and military exercises aimed at “uprooting terror” — unless the elements of the lawmakers (politicos), law enforcers (police/paramilitary), military, religio-social leaders and the judiciary themselves are hand in glove with the perpetrators. Indeed, many a time these terror elements also turn onto their one-time benefactors to settle scores and, therefore, the disentanglement of the murky terror wirings is not very obvious, linear or simple, given the multiplicity of the individual and institutional cross-support afforded to them from time to time. Therefore, Pakistan Prime Minister Imran Khan’s unconvincing posturing as the “victim of terror” is akin to crying wolf as the Frankensteinian reality convinces nobody. The quartet of Pakistan’s military-politicians-clergy-judiciary can never come clean or abort their inter-linkages with such elements. But they will do well to remember that the slippery slope of terror spares absolutely no one.
(The writer, a military veteran, is a former Lt Governor of Andaman & Nicobar Islands and Puducherry. The views expressed are personal.)
There might be a delay, some re-scheduling or loan restructuring may be required but eventually the bank will get its money back with interest. There is no need to panic
As we step into the new decade, the woes of the last decade seem to have spilled over into the new one, especially where the beleaguered banking sector is concerned. According to the Reserve Bank of India’s (RBI’s) estimates, the Gross Non-Performing Assets (GNPAs) of banks may increase from 8.5 per cent in March 2020 to 12.5 per cent by March this year. For public sector banks (PSBs), the deterioration is estimated to be more problematic and the GNPAs could be anywhere between 11.3 to 15.2 per cent under the “baseline scenario.” Some Cassandras warn that the situation could be worse. Their relentless scaremongering could potentially hurt economic revival that requires a major increase in bank lending.
In December 2020, scheduled commercial banks had total outstanding deposits of Rs 145,91,773 crore while their outstanding loans and advances added up to only Rs 105,04,536 crore. A bank’s primary function is to lend against deposits and earn enough to make profits after servicing deposits. Data show that banks have enough money to lend more and they must be helped to give more loans. However, a lot of good borrowers are out of the banking net. Banks no doubt face certain risks especially in the prevailing situation due to the pandemic but there is no need to panic. But first, we need to answer the question, what is an NPA? For a bank, an NPA is the amount of loan or an advance for which repayment of any due instalment of principal or due amount of interest is not cleared within 90 days of the “due date.” Interestingly, for agricultural loans it is “within two crop seasons for short duration crops” or within “one crop season for long duration crops.”
If default of payment continues beyond one year of the due date, the NPA is called “Substandard Assets.” If a NPA default continues beyond two years of the due date the NPA is called “Doubtful Assets.” If auditors find that the NPA is due to an incurable default, they classify it as “Loss Assets.” Does anyone expect a business to always make a profit? The answer is an emphatic “no.” Because this is an unrealistic expectation and every business will face a loss or just about break even, many times in its years of existence. This is because how a company makes its money depends a lot on external factors. Likewise, lending is also a business and a bank always runs the risk of a loan or a part of it or the interest not coming in. A bank hoping to lend money only to safe borrowers will not run for long because 100 per cent safe borrowers generally don’t need to take loans or are disinclined to do so.
Past efforts for resolution of Stressed Assets seemed to be showing results because, after reaching a peak of 11.5 per cent at the end of March 2018, the GNPAs of scheduled commercial banks came down to 8.5 per cent by the end of March 2020. So the first thing to note before resorting to scaremongering is that more than 90 per cent of bank loans and advances are being serviced with a delay of 90 days at the most. It does not mean that the remaining bank loans where debt servicing is delayed beyond 90 days are a dead loss for banks because they have enough securities to cover most of these balance loans suffering from problems in debt servicing.
As a pandemic relief measure, all borrowers whose loan accounts were classified as standard as on February 29, 2020, were allowed a moratorium till August 31. This was done to ensure that this period was not counted in the 90 days’ default period and was not classified as an NPA account.
The Supreme Court had in September 2020 directed that no bank account should be declared an NPA until the disposal of pleas seeking an extension of the moratorium period. The final verdict on this is expected soon.
What perhaps escapes attention is that the concerns regarding NPAs or bad loans in popular parlance are exaggerated due to the conservative approach of the RBI. Banks are told to classify loans as performing or non-performing only on the basis of timely repayments of loans and interest, even when there is no erosion in the availability and value of the security or net worth of the borrower/guarantor.
The 90 days’ default rule to tag a loan account as an NPA is a rough and ready, easy to implement, blunt regulatory tool. It indicates an income impairment of the borrower or liquidity risk but certainly not solvency risk. The “income impaired” borrower may or may not be “asset impaired.” Therefore, if we create a new subclass of NPAs based on the 90-day rule, with an assessment of solvency risk, then it should be possible to refine capital adequacy norms and evolve a differential capital adequacy requirement for NPAs where underlying securities are not materially impaired. Betting on the banking sector’s NPA level once the loan moratorium is lifted amounts to betting on the extent of the pandemic’s impact on economic growth and on the incomes of borrowers. Such betting is not economics or mathematics but politics.
If the banks have enough security behind the loan they have given out (house, vehicle, gold, shares, bonds and so on) and the borrowers are not all crooks, the loans will be serviced. There might be some delay, some re-scheduling or loan restructuring required, but eventually the bank will get its money back, with interest. There is no need to press the panic button. Heavens will not fall merely because some loans, interest or equated monthly instalments (EMIs) are not paid within 90 days of the due date.
The Government and the RBI have to take some steps to see that the loans and advances of good borrowers are properly restructured and the debt recovery process becomes efficient in terms of time and value recovered. Banks need to raise additional capital to meet regulatory requirements, depending upon what kind of NPAs emerge. Banks also need liquidity support to service the deposits during the period the borrowers face liquidity problems but have sufficient assets to cover their loan liability.
Every code and every rule book has enabling clauses to deal with exceptional situations. Rules of normal times don’t apply in abnormal times. The pandemic is the time to invoke these exceptional powers to fine-tune the regulatory policy on recognition of a bad loan and the level of additional capital needed by banks to cover definite loss from irrecoverable loans due to the lack and erosion of underlying securities.
The impact of the contagion on the economy is temporary and low inflation has softened what would have otherwise been a harder blow. Assessments and perceptions about population segment-wise distribution of pain may vary according to commentators but it is abundantly clear that at an aggregate level, the nation will recover from the crisis fast enough. A high recovery and low fatality rate, fast resumption of economic activity in several sectors, both formal and informal, as evidenced by several high frequency indicators, are very good signs. Hence, loan servicing will happen albeit with some delay.
By and large, Indian banks are pretty conservative and most of the loans are heavily secured, backed by good valuable securities. The problem comes in enforcing the security because the legal system does not allow it so easily. What we need is a system of vigilance and diligence on the assets mortgaged for the loans and advances. The genuineness and continued existence of assets must be watched and digital tools can be deployed for this.
There is no harm in giving borrowers providing adequate security an extended moratorium. But what we need is a system that will protect the banks’ securities during the moratorium period so that these are not diluted or alienated or encumbered further. We require a robust system of oversight on these securities. This is particularly so for small borrowers below Rs 2 crore who have been helped by the Government based on the Rajiv Mehrishi Committee report.
In India, the credit-to-GDP ratio is just 50 per cent. Many good borrowers like households and businesses depend on informal channels of finance. Indian banks are not lending enough and they are being far too risk-averse. Banks need to use modern digital tools to improve loan surveillance and lend more by using digital technologies to improve credit product design, pre-sanction appraisal and post-sanction oversight on end use. This will help boost the economy of the country in the long run.
(The writer is former Special Secretary, Ministry of Commerce and Industry. The views expressed are personal.)
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