Thursday, 21 November 2013

Public-Private Partnership Model to Boost Infrastructure Development

Public Private Partnerships (PPPs) is an effective tool for bringing private sector efficiencies in creation of economic and social infrastructure assets and for delivery of quality public services. The extent of private sector participation in creation of infrastructure, especially through PPP, has shown a promising increase in the recent years. As on January 2012, there were 881 PPP projects with Total Project Cost of Rs. 543,045 crore as compared to over 700 projects with TPC of Rs.371,239 crore by March 2011. These projects are at different stages of implementation i.e. under bidding, construction and operational stages. The broad sectors encouraged under the PPP framework are Highways, Railways, Ports, Airports, Power and Urban Infrastructure etc.

PPP Projects Approved by the PPPAC

The appraisal mechanism for the PPP projects has been streamlined to ensure speedy appraisal of projects, eliminate delays, adopt international best practices and have uniformity in appraisal mechanism and guidelines. The appraisal mechanism notified includes setting up of the Public Private Partnership Appraisal Committee (PPPAC) responsible for the appraisal of PPP projects in the Central Sector. Since its constitution in January 2006, PPPAC has granted approval to 223 projects, with a total project cost of Rs. 212,819.50 crore.

Standardized bidding and contractual documents have been  notified. These include model Request for Qualification (RFQ); Request for Proposal (RFP) and RFP for technical consultants; Model Concession Agreements (MCAs) for different sectors including Highways (both National and State Highways), Ports, Urban Transport (Metro), Power sectors and Manuals of Standards & Specifications have been developed and standardized. Further, Project Sponsors are encouraged toward projects through a transparent open competitive bidding process, which leads to greater transparency and consistency to the bid process and terms of contract.
                                  


Sectoral Distribution of PPP Projects

           The maximum number of PPP projects have been undertaken in the Road sector with 447 projects, constituting 51.6% of the total projects.  This was followed by Urban Development sector with 177 projects (22.4%), Energy sector with 77 projects (8.9%),  Ports with 62 projects (7.2%) and the Tourism sector with 55 projects (6.4%).  225 projects have been completed whereas 410 are under various stages of construction and 184 under bidding stage and the remaining in other various stages. State-wise, Karnataka had the maximum of 105 projects with total cost of Rs. 44,459.85 crore under PPP followed by Andhra Pradesh 98 projects with project cost of Rs. 67,696.31 crore, Madhya Pradesh 86 projects  (Rs. 14,928.7 crore), Maharashtra 76 projects (Rs. 45,916.34 crore), Gujarat 72 projects (Rs. 45,315.02 crore), Rajasthan 65 projects (Rs. 16,479.5 crores), Tamil Nadu 50 projects (Rs. 21,491.04 crores), Haryana 35 projects (Rs. 67,840.57 crore), West Bengal 34 projects (Rs. 6,849.8 crore) and Orissa (Rs. 22,652.88 crore), Kerala (Rs. 22,281.54 crores) and Punjab (Rs. 4,653.7 crores) with  32 projects each.
Viability Gap Funding Scheme
A unique characteristic of infrastructure projects is that the positive externalities caused by projects cannot be captured by project revenues alone. Hence, a project may be economically essential but commercially unviable. Such projects, which are marginally viable or unviable, can be made financially attractive through a grant. Viability Gap Funding (VGF) Scheme was devised for Financial Support to PPPs in Infrastructure. It provides VGF support to PPP projects up to 20 per cent of the Total Project Cost (TPC). So far, 131 projects have been granted approval with TPC of Rs. 67,237.47 crore and VGF support of Rs. 13,077.28 crore. An amount of Rs. 617.00 crore has been disbursed as Viability Gap Funding (VGF) under the Scheme for Financial Support to PPPs in Infrastructure.

The following sub-sectors have been included in the list of sectors eligible for VGF support under the Scheme for Financial Support to Public Private Partnerships (PPPs) in Infrastructure i.e. Viability Gap Funding Scheme.
·         “Capital investment in the creation of modern storage capacity including cold chains and post-harvest storage” vide Department of Economic Affairs (DEA) Notification dated March 17, 2011.
·         “Education, health and skill development, without annuity provision” vide DEA Notification dated May 4, 2011.
·         “Infrastructure projects in Special Economic Zones and internal infrastructure in National Invest and Manufacturing Zones” vide Notification dated February 2, 2012.
·         “Oil/Gas/Liquefied Natural Gas (LNG) storage facility (includes city gas distribution network); Oil and Gas pipelines (includes city gas distribution network); Irrigation (dams, channels, embankments etc.); Telecommunications (fixed Network) (includes optic fibre/wire/cable networks which provide broadband/internet); Telecommunication towers; Terminal markets; Common infrastructure in agriculture markets; and Soil testing laborites” vide Notification dated May 24, 2012.

Scope of Viability Gap Funding (VGF) scheme to support PPP projects in infrastructure has also been extended to attract private investment. The Delhi Mumbai Industrial Corridor (DMIC) is being developed on either side along the alignment of the Western Dedicated Rail Freight Corridor with Central assistance of Rs. 18,500 crore spread over a period of 5 years.


Projects Approved under India Infrastructure Project Development Fund (IIPDF)
The IIPDF assists projects that closely support the best practices in PPP project identification and preparation. The IIPDF supports up to 75% of the project development expenses. So far, 51 projects have been approved with an IIPDF assistance of Rs. 64.51 crore.
National PPP Capacity Building Programme

To intensify and deepen the capacity building of public functionaries at the State and municipal level and to integrate the capacity building programme on PPPs in the ongoing programmes at the State level, a comprehensive National PPP Capacity Building Programme has been developed by Department of Economic Affairs (DEA), which has been rolled out at the State level in collaboration with KfW German Development Bank. Under it, eight different programmes have been conducted and 155 Trainers of Trainers (ToTs) have been covered. 15 States and two Central Training Institutes viz. Indian Maritime University and Lal Bahadur Shastri National Academy of Administration have rolled out training programmes on PPPs and have trained over 700 public functionaries who deal with PPPs in their domain.

National PPP Policy and Rules

Pursuant to the announcement by the Finance Minister in the Budget Speech for the year 2011-12 to come up with a “Comprehensive Policy on PPPs, DEAhas prepared the draft ‘National Public Private Partnership Policy’ which is under finalization. Further, pursuant to the recommendations of the Committee on Public Procurement, and to ensure that the PPP projects are procured and implemented by following laid down process and observing principles of transparency, competitive bid process, affordability and value for money, the draft ‘PPP Rules’ have been prepared. These are undergoing extensive consultation process at the Central and State Governments level before their finalization.
           
 Online Database

An online database on PPP projects www.pppindiadatabase.com  and the website www.pppinindia.com in the country have been developed. The purpose of the website is to provide comprehensive and current information on the status and extent of PPP initiatives in India at the central, state and sectoral level. The potential use of PPPs in e-governance, health and education sectors remains largely untapped across India as a whole, though of late there have been some activities shaping in these sectors.


GOVERNMENT INITIATIVES TO PROMOTE PPP

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The Union Finance Minister in his Budget Speech for 2007-08 announced in the Parliament the setting up of a Revolving Fund with a corpus Rs. 100 crore to accelerate the process of project preparation. To fulfil the commitment, Department of Economic Affairs has notified the Guidelines for India Infrastructure Project Development Fund Scheme to provide financial support for quality project development activities to the States and the Central Ministries through ‘India Infrastructure Project Development Fund (IIPDF)’ Scheme. Public Private Partnerships (PPPs) are being encouraged by Government of India as the preferred mode for execution and operation of infrastructure projects.

Several initiatives have been taken by the Central Government to promote PPPs. These include streamlining and standardising the process of appraisal and approval of PPP projects in the Central sector through setting up of the PPP Appraisal Committee (PPPAC); providing Viability Gap Funding (VGF) to projects under the Scheme for Financial Support to PPPs in Infrastructure; setting up India Infrastructure Finance Company Ltd (IIFCL) as a Special Purpose Vehicle (SPV) to meet the long term financing requirements of potential investors; and facilitating dissemination of information on PPPs as well as capacity building of officers of Central Ministries and State Governments to develop, appraise and execute PPP projects. The overall response to PPP as the preferred mode for the implementation of infrastructure is encouraging.

Project development has been identified as a critical area of attention to enable creation of a shelf of bankable Public Private Partnership projects that can be bid out. Accordingly, the Department of Economic Affairs (DEA) has embarked on a technical assistance programme, which provides the selected State Governments with in-house consultants to manage the process for project development. Fourteen states have indicated their requirement to avail of this technical assistance programme.

The IIPDF Scheme aims to put in place a mechanism to fund potential Public Private Partnership projects’ project development expenses including cost of engaging consultants and transaction advisor, thus increasing the quality and quantity of successful PPPs and allowing informed decision making by the Government based on good quality feasibility reports. The IIPDF Scheme will assist projects that closely support the best practices in PPP project identification and preparation.

The salient features of the Scheme are:

• IIPDF will be available to the Sponsoring Authorities for PPP projects for the purpose of meeting the project development costs including expenses incurred by the Sponsoring Authority in respect of feasibility studies, environment impact studies, financial structuring, legal reviews and development of project documentation including concession agreement, commercial assessment studies grading of projects.

• IIPDF would finance an appropriate portion of the cost of consultants and transactions advisors on a PPP project where such consultants and transaction advisors are appointed by the Sponsoring Authority either from amongst the transaction advisers empanelled by Department of Economic Affairs or through a transparent system of procurement under a contract for services.

• IIPDF will not finance the expenses incurred by the Sponsoring Authority on its own staff.

• Sponsoring Authority will create and empower a PPP Cell to undertake PPP project development activities and larger policy and regulatory issues to enlarge the number of PPP projects in Sponsoring Authorities’ shelf.

• IIPDF will be a grant and will ordinarily fund upto 75% of the project development expenses. On successful completion of the bidding process, the project development expenditure would be recovered from the successful bidder.

• In case of failure of bid, the assistance would be recovered and Sponsoring Authority would be liable to refund the amount of assistance received. Balance 25% will be co-funded by Sponsoring Authority. Assistance from IIPDF would be released after the share of the Sponsoring Authority has been released.

• The IIPDF would be on budgetary outlay of Ministry of Finance, Government of India. This would be supplemented through budgetary support by the Ministry of finance.

• The IIPDF would be administered by Empowered Institution under Ministry of Finance with Additional Secretary as Chairperson and Members from Department of Expenditure, Planning Commission, Joint Secretary dealing with the subject in line Ministry and Joint Secretary, DEA.

• Empowered Institution will select projects for which project development costs will be funded, set the terms and conditions under which the fund would be provided and recovered and set milestones for disbursing and recovering the fund.

With the facilitative environment being created by Finance Minister as well as the availability of funds through various Government schemes, PPPs in India are creating a robust enabling framework to catalyse infrastructure development in the country. 

The Food Paradox of India : Hunger a midst plenty

On the eve of Indian Independence Indian agriculture was dominated by feudal landlords and absentee landlord ism. There was widespread unemployment, poverty and hunger. India was dependent on imports for its food grain requirement. After the two severe droughts of 1965 and 1966 gave a wake-up call to India to reform its existing agricultural policy and go from an export dependent nation to a self-sufficient nation.
Ever since 1947 Agricultural sector got a step motherly treatment from the policy makers. Growth rate was upsettingly low. But after the droughts Indian policy makers understood that increasing agricultural production would help to curb the food security concerns of India along with achievement of its goal for achieving self-sufficiency. Green Revolution brought its much needed boost in the country’s economy.
During mid-1960 India adopted the green revolution with the introduction of High Yield Variety of Mexican dwarf wheat and miracle rice IR8, which lead to a remarkable growth in agricultural production. Green Revolution was adopted with a motive of reduction of hunger and reduces food shortage in the country.  It had been true that India has been able to avoid large scale famine death in post-independence era but the widespread malnutrition hasn’t been taken care of yet. Also there are starvation deaths reported every year.  Despite high growth and self-sufficiency in food production over the years, a significant portion of our population still lacks food security.
Food security here I am referring to physical as well as economic security. Where an augmentation of food grain production to meet the food grain requirement is a main goal. Along with that, making sure that the people have enough purchasing power so that they can purchase the required amount of food.  According to Food and Agricultural organization 200 million Indians are still chronically food insecure. This includes Marginal and small farmers, scheduled caste, scheduled tribes, landless labourers and casual labourers.
The elements on which an effective model to achieve food security can be achieved are:
1.       Augmenting food grain production
2.       Limited international trade
3.       Regional food security
4.       Stabilizing food prices and maintain a buffer stock
5.       Subsidized food grains through pds
Though India has been successful so far in achieving a higher level of food production. While the food production increased fourfold during the past 60 years of independence the production of coarse grains also doubled. Although the level of food production has increased in the country the level of population is also increasing. The net per capita availability of food grains had decreased too.  The main vehicle through which government tries to boost food grains production is through its operations of Minimum Support Price announced time to time. However MSP announcements above what is suggested by the Commission for Agricultural Costs and Pricing is putting up questions around whole mechanism. Is it a political move or some kind of bias towards the 67% of farmer population of India? Whatever it might be it is for sure giving a flip to constantly rising food grain prices and working in favour of increasing inflation.
Maintaining a minimum and a limited presence in the world food grain market as a part of our objective to the operation of buffer stock and maintenance of food grain prices. Regional food security will be again a challenging task because; if you see the map of Indian food grain production you will see that the production is highly skewed towards Punjab, Haryana, West Uttar Pradesh and Andhra Pradesh.  Rest of the states is not high producers as these states. So in order to ensure that the food grains are available to every region of the country then a string PDS system need to be established with the help of State governments and local governing bodies. For this the existing system needs to be improved by eradicating every possible loophole. Tamil Nadu stands as a good example to efficient PDS in the country.
So many schemes launched so many mechanisms in place, India being an agricultural country still India is a home to 25% hungry people of the world. Food grain production has jumped fourfold, remunerative prices for farmers and a huge buffer stock, still India is a sham in food security. The food grains spoil in the process of storage and procurement and the hungry people starve.
Professor Amartya Sen quoted, “benefits meant exclusively for the poor often end up being poor benefits”. This is often the reason why the performance of the PDS has been far from being satisfactory in many states. 67% population which is being targeted under the National Food Security Ordinance is in a dilemma if the new scheme will be better as the current system provided a family based food grains i.e. 35 kg per household per month rather than the new initiative to give 5kg per person per month. Along with the purchasing power that they are talking about looks like another slap on their face as how can 5kg suffice individual needs? Nutritional meal is totally out of question here. Hunger though not that widespread now but definitely a chronic problem even today. PDS would only be helping those who have ration cards and major population of daily wage workers and other miscellaneous workers in Urban areas do have ration card in their name that forces them to buy food from retail shops, which in turn is not helping at all.  Though the NFSO is an ambitious move that Government intends to take however within the stipulated time of 180 days it’s not possible to develop the required infrastructure to support the move.
A PPP model in this approach would answer my questions to an extent because a lot of burden is being put on Government agencies for the running of the Public Distribution System. Identification of people to be targeted, providing them with relevant documents to avail the benefits, storage and transportation facilities, procurement methods and the food grain production could only be at the optimum level if a combined effort is made in this direction. Otherwise the current situation of Hunger amidst plenty will continue forever.


Tuesday, 19 November 2013

Indian energy sector: an overview

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Energy has been universally recognized as one of the most important inputs for economic growth and human development. There is a strong two-way relationship between economic development and energy consumption. On one hand, growth of an economy, with its global competitiveness, hinges on the availability of cost-effective and environmentally benign energy sources, and on the other hand, the level of economic development has been observed to be reliant on the energy demand.
Energy intensity (Table E.1g) is an indicator to show how efficiently energy is used in the economy. The energy intensity of India is over twice that of the matured economies, which are represented by the OECD (Organization of Economic Co-operation and Development) member countries. India’s energy intensity is also much higher than the emerging economies—the Asian countries, which include the ASEAN member countries as well as China. However, since 1999, India’s energy intensity has been decreasing and is expected to continue to decrease. 

The indicator of energy–GDP (gross domestic product) elasticity, that is, the ratio of growth rate of energy to the growth rate GDP, captures both the structure of the economy as well as the efficiency. The energy–GDP elasticity during 1953–2001 has been above unity. However, the elasticity for primary commercial energy consumption for 1991–2000 was less than unity (Planning Commission 2002). This could be attributed to several factors, some of them being demographic shifts from rural to urban areas, structural economic changes towards lesser energy industry, impressive growth of services, improvement in efficiency of energy use, and inter-fuel substitution. 

The energy sector in India has been receiving high priority in the planning process. The total outlay on energy in the Tenth Five-year Plan has been projected to be 4.03 trillion rupees at 2001/02 prices, which is 26.7% of the total outlay. An increase of 84.2% is projected over the Ninth Five-year Plan in terms of the total plan outlay on energy sector. The Government of India in the mid-term review of the Tenth Plan recognized the fact that under-performance of the energy sector can be a major constraint in delivering a growth rate of 8% GDP during the plan period. It has, therefore, called for acceleration of the reforms process and adoption of an integrated energy policy.

In the recent years, the government has rightly recognized the energy security concerns of the nation and more importance is being placed on energy independence. On the eve of the 59th Independence Day (on 14 August 2005), the President of India emphasized that energy independence has to be the nation’s first and highest priority, and India must be determined to achieve this within the next 25 years.

Demand and supply scenario

In the recent years, India’s energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. Primary commercial energy demand grew at the rate of six per cent between 1981 and 2001 (Planning Commission 2002). India ranks fifth in the world in terms of primary energy consumption , accounting for about 3.5% of the world commercial energy demand in the year 2003. Despite the overall increase in energy demand, per capita energy consumption in India is still very low compared to other developing countries.
India is well-endowed with both exhaustible and renewable energy resources. Coal, oil, and natural gas are the three primary commercial energy sources. India’s energy policy, till the end of the 1980s, was mainly based on availability of indigenous resources. Coal was by far the largest source of energy. However, India’s primary energy mix has been changing over a period of time.

Despite increasing dependency on commercial fuels, a sizeable quantum of energy requirements (40% of total energy requirement), especially in the rural household sector, is met by non-commercial energy sources, which include fuelwood, crop residue, and animal waste, including human and draught animal power. However, other forms of commercial energy of a much higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector.
Resource augmentation and growth in energy supply has not kept pace with increasing demand and, therefore, India continues to face serious energy shortages. This has led to increased reliance on imports to meet the energy demand.

Coal 

India now ranks third amongst the coal producing countries in the world. Being the most abundant fossil fuel in India till date, it continues to be one of the most important sources for meeting the domestic energy needs. It accounts for 55% of the country’s total energy supplies.
Through sustained increase in investment, production of coal increased from about 70 MT (million tonnes) (MoC 2005) in early 1970s to 382 MT in 2004/05. Most of the coal production in India comes from open pit mines contributing to over 81% of the total production while underground mining accounts for rest of the national output (MoC 2005). Despite this increase in production, the existing demand exceeds the supply. India currently faces coal shortage of 23.96 MT. This shortage is likely to be met through imports mainly by steel, power, and cement sector (MoC 2005). India exports insignificant quantity of coal to the neighbouring countries. The traditional buyers of Indian coal are Bangladesh, Bhutan, and Nepal.
The development of core infrastructure sectors like power, steel, and cement are dependent on coal. About 75% of the coal in the country is consumed in the power sector (MoC 2005).

Power

Access to affordable and reliable electricity is critical to a country’s growth and prosperity. The country has made significant progress towards the augmentation of its power infrastructure. In absolute terms, the installed power capacity has increased from only 1713 MW (megawatts) as on 31 December 1950 to 118 419 MW as on March 2005 (CEA 2005). The all India gross electricity generation, excluding that from the captive generating plants, was 5107 GWh (gigawatt-hours) in 1950 and increased to 565 102 GWh in 2003/04 (CEA 2005).
Energy requirement increased from 390 BkWh (billion kilowatt-hours) during 1995/96 to 591 BkWh (energy) by the year 2004/05, and peak demand increased from 61 GW (gigawatts) to 88 GW over the same time period. The country experienced energy shortage of 7.3% and peak shortage of 11.7% during 2003/04. Though, the growth in electricity consumption over the past decade has been slower than the GDP’s growth, this increase could be due to high growth of the service sector and efficient use of electricity.
Per capita electricity consumption rose from merely 15.6 kWh (kilowatt-hours) in 1950 to 592 kWh in 2003/04 (CEA 2005). However, it is a matter of concern that per capita consumption of electricity is among the lowest in the world. Moreover, poor quality of power supply and frequent power cuts and shortages impose a heavy burden on India’s fast-growing trade and industry.

Oil and natural gas

The latest estimates indicate that India has around 0.4% of the world’s proven reserves of crude oil. The production of crude oil in the country has increased from 6.82 MT in 1970/71 to 33.38 MT in 2003/04 (MoPNG 2004b). The production of natural gas increased from 1.4 BCM (billion cubic metres) to 31.96 BCM during the same period. The quantity of crude oil imported increased from 11.66 MT during 1970/71 to 81 MT by 2003/04. Besides, imports of other petroleum products increased from 1 MT to 7.3 MT during the same period. The exports of petroleum products went up from around 0.5 MT during 1970/71 to 14 MT by 2003/04. The refining capacity, as on 1 April 2004, was 125.97 MTPA (million tonnes per annum). The production of petroleum products increased from 5.7 MT during 1970/71 to 110 MT in 2003/04.

India’s consumption of natural gas has risen faster than any other fuel in the recent years. Natural gas demand has been growing at the rate of about 6.5% during the last 10 years. Industries such as power generation, fertilizer, and petrochemical production are shifting towards natural gas. India’s natural gas consumption has been met entirely through domestic production in the past. However, in the last 4/5 years, there has been a huge unmet demand of natural gas in the country, mainly required for the core sectors of the economy. To bridge this gap, apart from encouraging domestic production, the import of LNG (liquefied natural gas) is being considered as one of the possible solutions for India’s expected gas shortages. Several LNG terminals have been planned in the country. Two LNG terminals have already been commissioned: (1) Petronet LNG Terminal of 5 MTPA (million tonnes per annum) at Dahej, and (2) LNG import terminal at Hazira. In addition, an in-principle agreement has been reached with Iran for import of 5 MTPA of LNG.

Renewable energy sources

Renewable energy sources offer viable option to address the energy security concerns of a country. Today, India has one of the highest potentials for the effective use of renewable energy. India is the world’s fifth largest producer of wind power after Denmark, Germany, Spain, and the USA. There is a significant potential in India for generation of power from renewable energy sources—, small hydro, biomass, and solar energy. The country has an estimated SHP (small-hydro power) potential of about 15 000 MW. Installed combined electricity generation capacity of hydro and wind has increased from 19 194 MW in 1991/92 to 31 995 MW in 2003/04, with a compound growth rate of 4.35% during this period (MoF 2005). Other renewable energy technologies, including solar photovoltaic, solar thermal, small hydro, and biomass power are also spreading. Greater reliance on renewable energy sources offers enormous economic, social, and environmental benefits.

The potential for power production from captive and field-based biomass resources, using technologies for distributed power generation, is currently assessed at 19 500 MW including 3500 MW of exportable surplus power from bagasse-based cogeneration in sugar mills (MNES 2005).

Future scenario

Increasing pressure of population and increasing use of energy in different sectors of the economy is an area of concern for India. With a targeted GDP growth rate of 8% during the Tenth Five-year Plan, the energy demand is expected to grow at 5.2%. Driven by the rising population, expanding economy, and a quest for improved quality of life, the total primary energy consumption is expected to about 412 MTOE (million tonnes oil equivalent) and 554 MTOE in the terminal years of the Tenth and Eleventh Plans, respectively (Planning Commission 1999). 

The International Energy Outlook 2005 (EIA 2005b) projects India’s gas consumption to grow at an average annual rate of 5.1%, thereby reaching 2.8 trillion cubic feet by 2025 with the share of electric power sector being of 71% by that time. Coal consumption is expected to increase to 315 MT over the forecast period. In India, slightly less than 60% of the projected growth in coal consumption is attributed to the increased demand of coal in the electricity sector while the industrial sector accounts for most of the remaining increase. The use of coal for electricity generation in India is expected to increase by 2.2% per annum during 2002–25, thus requiring an additional 59 000 MW of coal-fired capacity. Oil demand in India is expected to increase by 3.5% per annum during the same time.

It is quite apparent that coal will continue to be the predominant form of energy in future. However, imports of petroleum and gas would continue to increase substantially in absolute terms, involving a large energy import bill. There is, therefore, an urgent need to conserve energy and reduce energy requirements by demand-side management and by adopting more efficient technologies in all sectors.


Renewable Energy an Important Source

Electricity is one of the prime requirements for any country to develop. Without it, infrastructural bottlenecks accentuate, causing hurdles in growth across the board. Industries, Agriculture, services and in fact every walk of life need electricity to move forward. With this in view, India has been making all efforts to generate as much electricity as possible from different sources. These include Hydro, thermal, nuclear and even non conventional sources like solar and wind energy.
           
 The country is facing acute power shortage and its per capita consumption is one of the lowest. 75 % of the electricity is generated by burning coal and natural gas. If we continue to bank on our coal reserves so heavily these are estimated to last just for another 40 years. Besides, burning of coal raises environmental issues which should be avoided to the extent we can. Twin challenges of power and clean environment have to be met squarely.

It is in this backdrop that the government of India has made energy generation through non-conventional sources one of its top priorities. Creation of a separate Ministry of new and renewable energy is a testimony to this effort.  Because of these efforts generation from renewable sources of energy has trebled since 2005 from 5 to 15 GW. By 2022 it should reach 40 GW. According to an estimate, Potential of power generation through renewable sources of energy in the country is 150 GW. A lot more needs to be done therefore.
As of now, electricity generation from renewable sources of energy is only 3.5%. It is likely to increase to 10% by 2022.

 Jawaharlal Nehru National Solar Mission, launched on the 11th January, 2010 by the Prime Minister Dr. Manmohan Singh is a major initiative in the field of giving a boost to utilisation of non-conventional sources of energy. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022 . It is aimed at reducing the cost of solar power generation in the country through long term policy; large scale deployment goals; aggressive R&D; and domestic production of critical raw materials, components and products. The  Mission will create an enabling policy framework to achieve this objective and make India a global leader in solar energy.

The 11th Five Year Plan witnessed an impressive progress in research and development and deployment in renewable energy sector. Ministry of new and renewable energy has sponsored 169 R&D projects in the area of solar energy, bio-energy and hydrogen and fuel cells with a total outlay of about Rs.525 crore. Renewables contributed to nearly 14,660 MW power during the 11th Plan and they will become more important in future.

The Ministry is providing subsidy of 30% of the benchmark cost  of the solar photovoltaic (SPV) systems. It is also providing subsidy  for installing solar lanterns, home lights and small capacity PV plants  through NABARD, Regional Rural Banks and other Commercial Banks.  Banks also extend credit facility to the beneficiaries at usual commercial rates to meet the rest of the cost. Upto 31st March, 2012 over nine lakh five thousand  solar lanterns, eight lakh sixty two thousand  solar home lights and about eight thousand  solar water pumping systems have been installed in the country. During 2011-12, the  Ministry sanctioned a project for installation of standalone SPV power plants aggregating to 8740 kWp capacity in 4115 schools and 9 examination centers. During the current financial year,  a project for installation of 560 SPV water pumping systems in six districts of Bihar has been sanctioned. A Plan has also been prepared for increased exploitation of various renewable energy sources in the country during the 12th Plan .

The 12th Plan proposals envisage 29,800 MW grid-interactive and 3267 MW off-grid power generation capacity addition from various renewable energy sources and deployment of 7 lakh biogas plants, 35 lakh cook stoves, 8.5 lakh solar cookers and 80.5 lakh solar thermal energy systems in the country.

Twenty  million solar lighting systems and 20 million sq. solar thermal collector area is envisaged by 2022.
Efforts are also on to promote wind power through private sector investment by providing fiscal and promotional incentives such as concessional import duty on certain components of wind electric generators and excise duty exemption to manufacturers. 10 years tax holiday on income generated from wind power projects is also available.  Besides, loans for installing windmills are available from Indian Renewable Energy Development Agency (IREDA) and other Financial Institutions. Technical support  is provided by the Centre for Wind Energy Technology (C-WET), Chennai.  The Government had announced a Generation Based Incentive (GBI) during 11th Plan period. Efforts are being made to continue the GBI scheme in 12th Plan.
National Tariff Policy was amended mandating State discoms to have a solar RPO of 0.25% by 2013reaching  3% by 2022. The Government has already implemented a scheme to procure 1000 MW of solar power and supplying it to State discoms after bundling with equivalent capacity of thermal power.
Even generation of power from garbage and municipal solid waste is also being given due attention. The 16 megawatt project installed at Okhla in New Delhi is the only such project in operation in the country. The project, commissioned in May this year, has so far generated about 24 million units (kWh) of electricity. Projects on energy from municipal solid wastes (MSW) are being taken up by the Municipal Corporations in public private partnership mode by tying up with selected private companies.

The need to  tap new and renewable sources of energy to meet energy requirements of the country  and protect the environment from greenhouse gases can hardly be overemphasised. Fortunately, there is abundance of solar energy available in most parts of the country. Ladakh, for instance has bright sunshine for 300 out of 360 days a year. No wonder it is one of the focus areas of the ministry in exploiting solar energy. What matters is to tap it for electricity generation or for other useful purposes. To make it affordable and cost effective, sincere efforts have to be made and suitable policies formulated. A total of around 1000 MW capacity solar power plants have been installed in the country in last two years and if this trend continues, the country will indeed achieve the target of 20000 MW by 2022. Alongside, due attention has to be paid to provide quality product and service  to develop confidence among the users.


Monday, 18 November 2013

The National Food Security Ordinance – Highlights

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The National Food Security Ordinance is a historic initiative for ensuring food and nutritional security to the people. It gives right to the people to receive adequate quantity of foodgrains at affordable prices. The Food Security Bill has special focus on the needs of poorest of the poor, women and children. In case of non-supply of foodgrains now people will get Food Security Allowance. The bill provides for grievance redressal mechanism and penalty for non compliance by public servant or authority. Other features of the Ordinance are as follows.

Coverage of two thirds population to get highly susidized foodgrains

            Upto 75% of the rural population and upto 50% of the urban population will have uniform entitlement of 5 kgfoodgrains per month at highly subsidized prices of Rs. 3, Rs. 2, Rs. 1 per kg. for rice, wheat, coarse grains respectively .It will entitle about two thirds of our 1.2 billion population to subsidised foodgrains under the Targeted Public Distribution System (TPDS.

 Poorest of the poor continue to get 35 kg per household
            The poorest of poor households would continue to receive 35 Kg foodgrains per household per month underAntyodaya  Anna Yajna  at subsidized prices of Rs 3, Rs 2 and Rs 1. It is also proposed to protect the existing allocation of foodgrains to the States/Uts, subject to it being restricted to average annual offtake during last three years.

Eligible households to be identified by the States
           
            Corresponding to the coverage of 75% rural and 50 % of urban population at all India level, State wise coverage will be determined by the Central Government. The work of identification of eligible households is left to the States/UTs, which may frame their own criteria or use Social Economic and Caste Census data, if they so desire.
Special focus on nutritional support to women and children
            There is a special focus on nutritional support to women and children. Pregnant women and lactating mothers, besides being entitled to nutritious meals as per the prescribed nutritional norms will also receive maternity benefit of at least of Rs. 6000/-. Children in the age group of 6 months to 14 years will be entitled to take home ration or hot cooked food as per prescribed nutritional norms.
Food Security Allowance in case of non supply of foodgrains
            The Central Government will provide funds to States/UTs in case of short supply of food grains from Central pool, In case of non-supply of food grains or meals to entitled persons, the concerned State/UT Governments will be required to provide such food security allowance as may be prescribed by the Central Government to the beneficiaries.
States to get assistance for intra-State transportation and handling of foodgrains
            In order to address the concern of the States regarding additional financial burden, Central Government will provide assistance to the States towards cost of intra-State transportation, handling of foodgrains and FPS dealers’ margin, for which norms will be developed. This will ensure timely transportation and efficient handling of foodgrains.
Reforms for doorstep delivery of foodgrains
            The Bill also contains provisions for reforms in PDS through doorstep delivery of foodgrains, application of information and communication technology (ICT) including end to end computerisation, leveraging ‘Aadhaar’ for unique identification of beneficiaries, diversification of commodities under TPDS etc for effective implementation of the FoodSecurity Act. Some of these reforms are already underway.
Women Empowerment-- Eldest women will be Head of the household
            Eldest woman of eighteen years of age or above will be head of the household for issue of ration card, and if not available, the eldest male member is to be the head of the household.
Grievance redressal mechanism at district level
             There will be state and district level redressal mechanism with designated officers.  The States will be allowed to use the existing machinery for District Grievance Redressal Officer (DGRO), State Food Commission, if they so desire, to save expenditure on establishment of new redressal set up. Redressal mechanism may also include call centers, helpline etc.
Social audits and vigilance committees to ensure transparency and accountability
             Provisions have also been made for disclosure of records relating to PDS, social audits and setting up of Vigilance Committees in order to ensure transparency and accountability.

Penalty for non compliance
            The Bill provides for penalty to be imposed on public servants or authority, if found guilty of failing to comply with the relief recommended by the District Grievance Redressal Officer (DGRO).

Expenditure
At the proposed coverage of entitlement, total estimated annual foodgrains requirement is 612.3 lakh tons and corresponding estimated food subsidy for 2013-14 costs is about  Rs.1,24,724 crore.

China to move towards mixed ownership economy to check economic slowdown

The Chinese leadership of Communist Party of China (CPC) has decided to allow more private capital into the market including equity stakes in projects with state funds with the intention to develop a mixed ownership economy.

The Chinese leadership has decided to:

Allow non-state-owned capital to acquire equity stakes in projects featuring investment by state-owned capital, and employees of multi-ownership enterprises will be allowed to hold shares in their companies.

Develop mixed ownership to improve the basic economic system while keeping the role of public ownership dominant, with the state-owned economy playing a key role, while encouraging the non-public sector to flourish.

Allow cross shareholding of state capital, collectively owned capital and non-public capital to maintain and increase the value of stated assets and achieve common development of various ownerships.

Provide support for the development of the private economy, and stimulate its vitality and creativity.

Protect of property rights in the public sector as well as in the non-public sector.

Enhance regulation of income secondary distribution through taxation.

Establish an information system on personal income and property to narrow income gaps between urban and rural areas, different regions and sectors.

To create a standardized risk-warning system to handle government debts in a better way.

China has the highest Gini coefficient index, reflecting the disparity between rich and poor reached 0.474 in China in 2012, higher than the warning level of 0.4 set by the United Nations.

What is Gini coefficient?

The Gini coefficient (Gini index or Gini ratio) is a measure of statistical dispersion intended to represent the income distribution of a nation’s residents. It was developed by the Italian statistician and sociologist Corrado Gini.

A Gini coefficient of 0 expresses perfect equality, where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of 1 (or 100%) expresses maximal inequality among values (for example where only one person has all the income).

Procurement of Foodgrains For PDS

The Government of India extends Minimum Support Price (MSP) for wheat, paddy and coarse-grains to the farmers by declaring MSP for these crops in advance in order to give price signal to farmers before beginning of a crop season. The MSP of wheat and paddy has been constantly increased in the last few years to make it remunerative for farmers. Simultaneously, various measures have also been taken to enhance production and productivity of foodgrains. The procurement of foodgrains is open ended and government agencies purchase all the quantities offered by the farmers at MSP.

In order to meet enhanced requirement of foodgrains under the proposed National Food Security Act, there is a requirement of increasing production and procurement of foodgrains in non-traditional procurement areas of the country, particularly in the eastern States.

Implementation of the proposed Food Security Act would also mean raising the annual procurement level to about 65 million tonnes. Majority of this increase will have to come from the non-traditional procuring States.

Production and procurement in the major procuring States viz. Punjab, Haryana, Andhra Pradesh and western UP has already reached a saturation stage as most of the marketable surplus of foodgrains is being already procured in these States. To meet the additional requirement of foodgrains, procurement will have to be increased from the emerging procuring States. Of the newly emerging procurement States, Chhattisgarh has emerged as a large contributor of rice while Madhya Pradesh and Odisha are also giving large surplus of foodgrains to the Central Pool. Efforts are required to increase productivity / yield of rice and wheat in deficit States, especially in eastern States coupled with increase in the usage of fertilizers / irrigation facilities to improve marketable surplus.

A special scheme namely “Bringing Green Revolution to Eastern India” was launched by the Ministry of Agriculture to enhance rice production and productivity in eastern parts of the country. To enhance procurement, the non-traditional procuring states need to strengthen their procurement machinery by creating suitable institutional mechanism and by adopting the Decentralized Procurement (DCP) system and by leveraging Food Credit facilities offered by Reserve Bank of India and the consortium of Banks. These States also need to step up rice milling facilities to encourage procurement.

Two critical areas for increasing and stabilizing procurement would be development of State agencies capable of handling procurement operations and increasing milling capacity for rice particularly in Assam, Jharkhand, Bihar, West Bengal and Eastern UP. There is also a need for increased involvement of Co-operatives and Self-help groups for procurement operations.

Decentralized Procurement (DCP) system should be adopted by the State Governments in Assam, Bihar, Jharkhand, Andhra Pradesh and Rajasthan. Proposals have already been given to these States to adopt to DCP system. These States need to respond earlier.

Availability of adequate storage capacity is a pre-requisite for enhancing procurement and improving PDS distribution. Apart from new storage capacities being created under PEG by the Central Government, States should also endeavour to create intermediate storage capacities for their own use by taking advantage of funding available under RIDF from NABARD and under Rural Godown Scheme. Under the Rural Godown Scheme, subsidy norms have recently been relaxed. State agencies / cooperatives should take advantage of this to build their own storage capacities. 

Tuesday, 12 November 2013

Indo - Sri Lanka Relations by Luv Sharma

India pursued a policy of non-alignment, intended to guide Cold War
geostrategic struggles away from its borders.With the terms of the 1987 Indo-Sri Lankan Accord (ISLA), India sought to gain Sri Lanka’s allegiance as a way to eliminate the USA’s strategic presence in Sri Lanka.Under the ISLA, Sri Lanka had to scrap the American contract for the Trincomalee oil storage facilities, and remove the Voice of America outlet with which the USA broadcast radio messages into Soviet-friendly territory and transmitted intelligence reports. This geostrategic thinking

reflected the Indian policy-makers’ aim to push the USA’s Cold War meddling a safe distance from India’s borders. During the 1980s and early 1990s India’s strategy to avoid the Cold War power struggle eclipsed efforts to support Sri Lanka’s peace and stability. 

Read more from the link below

https://docs.google.com/file/d/0B55HMwMMvIHpZUZxWEQyREdYTHM/edit?usp=drive_web

Monday, 11 November 2013

India - Pakistan International Relations By Ashutosh Aditya

India - Pakistan relations
For any country, in the way of development, needs cordial relations with its neighbors in political, social and global issues to create a healthy environment for development. Pakistan, one of the most important neighbor of India was once homogeneous political unit with India before independence and the struggle for freedom was fought collectively. India’s relations with Pakistan are the most complex of its ties with its neighbors and can be understand by following historical events :

Historical background :

Before independence, India was a single unit in its composition i.e. Hindus and Muslims were living together and the struggle for freedom was fought collectively against British Empire. Indian national congress & Muslim league were two groups among various others who fought for freedom. During this struggle many differences of opinion were emerged among the elites of Muslim league and Indian national congress. Muslim league wanted to club all Muslim dominations to create separate country i.e Pakistan, but INC was against it. Finally, when India got freedom, many small states, provinces & princely states joined independent ‘India as Union of States’ except Hyderabad, Junagarh & Kashmir. Pakistan was separated from India and became a Muslim country. Pakistan was in greed of assimilating these 03 states who didn’t join India, but couldn’t succeed. Junagarh & Hyderabad joined India and Kashmir accepted Indian sovereignty. Thus the Islamic country Pakistan failed in its intention to enlarge its political boundary. This bitterness travelled along with the time and still existing in terms of Pakistan’s approach towards India in all international spheres. Four wars with India, terrorism & Ceasefire violation along the boundary of Kashmir & Gujrat depicts clear bitterness and bad intention of Pakistan against India.

Issues in bilateral relations with India & Pakistan:

We can categorize bilateral relations with India & Pakistan in three ways
1.      Difference in world views
2.      Dispute Over Kashmir
3.      Nuclear Confrontation

Difference in world views

India and Pakistanas two core countries of South Asia had different worldviews that determined their foreign policies.

India’s world Views

1.   During the early years after independence, the Indian worldview had been dominated by concerns about building a regional identity of the post-colonial   nations of Asia.
2.      One of the important aspects of this policy was opposition to the extra regional intervention in South Asia. India sought to keep the South Asian issues within the ambit of South Asian countries.
3.    Opposition to the entry of Cold War alliances in Asia and eventual path of non-alignment is part of this worldview.
4.    The period from 1947 to 1971 saw two trends in India’s approach towards South Asia. One was the trend that was initiated by Nehru. It focused on regionalism as the dominant theme. The second emerged during the Lal Bahadur Shastri years. This came in the aftermath of the 1962 war and the need for resetting the Indian worldview keeping in mind its capabilities. Shastri was to stress on bilateralism as the key to foreign policy, especially in relationto South Asian countries.

Pakistan’s world views

1.      Pakistan’s perception of its role emerged from the realisation of two simultaneous forces—the geopolitics of the country that was divided between East and West Pakistan and the Islamic worldview. The former placed Pakistan firmly in the South Asian regional state system while the latter brought it close to the Islamic world of West Asia.
2.      Pakistan thus saw itself as a nation with two distinct identities and roles, that of a South Asian power and that of an Islamic West Asian power that was to eventually emerge as an important country of the Organisation of Islamic Conference.
3.   One of the dominant security concerns that Pakistan sought to address right from its inception is that of fear of India. The problem of Pakistan’s foreign and defence policy revolved around this central theme of Indian domination and safeguards that were to be instituted to counter this threat.
4.     Pakistan’s attempts to establish linkages with the Islamic world, with China and participate in the military alliances of the United States can be understood within this security concern of Pakistan. These links provided an opportunity for Pakistan to counteract India’s desire to dominate in what India considered its sphere of influence.


Dispute Over Kashmir

This fundamental diversity in the views of India and Pakistan manifests on the issue of Kashmir, an issue that has come to be identified by Pakistan as the core of the bilateral divide. 

1.     Kashmir, like Junagadh and Hyderabad, opted to decide its future as to whether to join India or to merge with Pakistan.
2.   In case of Hyderabad and Junagadh, the Indian government took steps to ensure that the wishes of the overwhelming local Hindu populace were respected and hastened the process of merger of these two states in the Indian Union.
3.      Kashmir had a peculiar problem. Ithad distinct distribution patterns of its population, with the Ladakh area being predominantly Buddhist, the Jammu region Hindu and the Kashmir valley Muslim. Pakistan sought to force the pace of the decision making on Kashmir by permitting the ‘irregular army’ to enter Kashmir.
4.      Maharaja Hari Singh, realising the potential problems, signed the Instrument of Accession with India, thus merging the state of Jammu and Kashmir with the Indian Union.

The first Indo-Pakistan war that followed the merger of Kashmir into India left the state partitioned. India took the matter to the United Nations and agreed to hold a plebiscite in Kashmir to ascertain the wishes of the Kashmiris. According to the cease-fire resolution adopted by the UN Security Council, the plebiscite was conditional upon the withdrawal of Pakistani troops from Kashmir and the restoration of the situation to the pre 1947 position. This condition was never met by Pakistan and the plebiscite also never came to be conducted.

Kashmir has seen a tumultuous history since the first war of 1948. The new government formed by Sheikh Abdullah, a Kashmiri leader of long standing, came to be dismissed in 1953. Sheikh Abdullah was relieved of his post as his party the National Conference refused to accept the accession to India as final and vaguely talked of the final settlement of the state of Kashmir in the future. Sheikh Abdullah was brought back to head the government in Kashmir in 1975 after he and Indira Gandhi signed an agreement. Now Sheikh Abdullah had given up the earlier separatist demand and had accepted Kashmir to be legitimately a part of India. In 1965, India and Pakistan fought a war over Kashmir. This war, as the Pakistani Air Marshal Asghar Khan put it, was a war to solve the problem once and for all. The Tashkent Conference (1966) also failed to provide any results. Though, the 1971 war was more a war about the future of East Pakistan and the creation of Bangladesh, it had a definite aspect of Kashmir about it.

The Simla Agreement of 1972 formalised the emergent situation on Kashmir. The agreement sought to establish some basic principles of Indo-Pakistan interaction. The Agreement specifically refers to bilateralism and acceptance of durable peace as the framework of resolving future India-Pakistan problems. On the very vital issue of Kashmir the agreement states: ‘In Jammu and Kashmir the line of actual control resulting from the cease fire of 17 December 1971, shall be respected by both sides without prejudice to the recognised position of either side. Neither side shall seek to alter it unilaterally irrespective of mutual differences and legal interpretations. Both sides further undertake to refrain from the threat or the use of force in violation of this line’.

The Simla Agreement sought to create a new framework of interaction for India and Pakistan and freeze the issue of Kashmir along the Line of Control indefinitely. One understands from the writings of Indian leaders involved in the making of this agreement that there was an implicit understanding of converting the LOC into a boundary in the eventual future. It is in this context that the return of Sheikh Abdullah became significant. Now India had a Kashmiri leader, heading a Kashmiri party the National Conference, taking the position that Kashmir is part of India. This was tantamount to a plebiscite. This was the test of the right to self-determination that the Kashmiris had been promised by the plebiscite. India could now talk of political legitimacy for the accession of Kashmir to India.

Several developments appear to complicate the problem in Kashmir in the 1980s. Global Islamic resurgence came to be a force to reckon with. The growth of fundamentalist Islamic groups and the spread in their activity had become a matter of concern even for the United States. Pakistan was in a unique position in those days. Given its relatively liberal Islamic posture and the possibility of emergent democratic governments in Pakistan led it to retain a relatively close relationship with United States. On the other hand, it had excellent relations with the core Islamic world. It had an excellent access to the new Afghan government of Taliban and also to other radical Islamic organisations. Pakistan thus appears to have benefited from the then international situation.

The post-1975 developments on Kashmir constitute the beginning of an entirely new chapter in its history. Adverse reactions to Sheikh Abdullah rule started in the late 1970s. Partly it was a product of the growing divide between the ruling class in Kashmir and the common populace that remained deprived of the fruits of development that the state sought to create. Partly, it was the product of resultant frustration that came to be created in the minds of the Kashmiri about the utility of Indian rule. One of the significant popular level movements came in the form of the Jammu & Kashmir Liberation Front (JKLF). As an organisation that had strong Pakistani connections, the JKLF demanded the right to self-determination for the Kashmiris to join Pakistan.

The 1980s saw two significant developments that had their impact on the developments in Kashmir. One was the Soviet intervention in Afghanistan that led to the massive arms supply by the United States to the Afghan rebels (Mujahideen) situated in Pakistan. Second was the change in Pakistani strategy regarding Kashmir. The American arms supply to the Afghans had a spillover effect in Kashmir. This was linked to the change in Pakistani tactics in terms of shifting from direct conflict to insurgency.

Infiltration and insurgency has been a long pattern in Pakistani strategy on Kashmir. Prior to the 1965 war Pakistan had used this approach with little success. The failure to solve the problem
through the use of force in 1965 and 1971 had led to a change in strategy. Now infiltration took the shape of low intensity conflict. Efforts to paralyse the local law and order situation and create uncertainty in the region came to be the tactics of the day. The large scale exit of the Kashmiri pundits from the valley was part of this protracted strategy.

This Pakistani strategy was buttressed with a new clarion call of human rights violation. In the early 1990s, concern about violation of human rights had suddenly acquired newly found acceptance. In Bosnia, Chechnya and elsewhere, the world appeared to have suddenly become sensitive to human rights. In Kashmir too, the old paradigm of self-determination was fast replaced by the new paradigm of human rights violation. Suddenly the situation in Kashmir came to be analysed almost entirely along the human dimension. Demands came to be made by the Organisation of Islamic Conference (OIC), followed by the European powers for an on-the spot survey of violation of human rights by the Indian forces. The Indian government was persuaded enough to create a National Human Rights Commission of its own to monitor the problem. It took several years for the international community to acknowledge that terrorist outfits also violate human rights and that the responsibility of violation cannot be that of the Government alone.

In 1999 India and Pakistan came into conflict over an intrusion by Pakistan into Kargil. Was the crossing of the LOC by the Mujahideens, and the Pakistani troops a logical culmination of the ongoing approach taken on Kashmir? Did it represent an assessment by Pakistan that time was ripe to exert direct force by crossing the LOC and force India to resolve the Kashmir problem? Several explanations may be given for this Pakistani adventurism. One, that Pakistan must have assessed the time as being ripe for such an action to achieve its goal about accession of Kashmir. The political uncertainty in India and the obvious lack of consensus across the political spectrum in India would have also been one of the considerations. Two, this assessment must have been a military and intelligence assessment based on the active participation of the militant outfits. It was quite likely that the civil government was pulled into this decision after it was in place. If this be true it confirms the pattern of Pakistani politics that is dominated by competing interests of the army, the civilian representative elite, the intelligence units and the Islamic groups. The Pakistani premier’s constant disclaim about the involvement of Government in the Kargil action may not be entirely true. Such actions cannot take place without the knowledge and participation of the government (and that includes the army). But his statement may also indicate the truth that he has very little control over the Pakistan army and militant groups in Kargil. History shows that the creators of such groups eventually cease to control them as they tend to have a momentum oftheir own.

Having committed itself in Kargil, Pakistan appeared to have taken on more than it could digest. The international public opinion has shifted away from Pakistan. Its old and trusted ally China took a neutral position and advised restraint and dialogue. The Pakistani premier was not able to move the United States either. The US visit of premier Sharif proved counter productive. The Americans asked Pakistan to withdraw its troops to the LOC and begin a dialogue with India. Eventually, India did manage to push back the Pakistani infiltration.

Wars with Pakistan

Indo-Pakistani War of 1947
This is also called the First Kashmir War. The war started in October 1947 when it was feared by the Pakistan that Maharajah of the princely state of Kashmir and Jammu might accede to India as choice was given to him on the matter to accede to any of the newly independent nations. Tribal forces from Pakistan attacked and occupied the princely state, resulting in Maharajah signing the Agreement to the accession of the princely state to India. The United Nations was invited by India to mediate the quarrel resulting in the UN Security Council passing Resolution 47 on 21 April 1948. The war ended in December 1948 with the Line of Control dividing Kashmir into territories administered by Pakistan (northern and western areas) and India (southern, central and northeastern areas).
Indo-Pakistani War of 1965
This war started following Pakistan's Operation Gibraltar, which was designed to infiltrate forces into Jammu and Kashmir to precipitate an insurgency against rule by India. India retaliated by launching an attack on Pakistan. The five-week war caused thousands of casualties on both sides and was witness to the largest tank battle in military history since World War II. The outcome of this war was a strategic stalemate with some small tactical victories. However, most neutral assessments agree that India had the upper hand over Pakistan when ceasefire was declared.  The war concluded after diplomatic intervention by the Soviet Union and USA and the subsequent issuance of the Tashkent Declaration.
Indo-Pakistani War of 1971
The war was unique in that it did not involve the issue of Kashmir, but was rather precipitated by the crisis created by the political battle between Sheikh Mujib, Leader of East Pakistan and Yahya-Bhutto, leaders of West Pakistan brewing in erstwhile East Pakistan culminating in the declaration of Independence of Bangladesh from the state system of Pakistan. Following Operation Searchlight and the 1971 Bangladesh atrocities, about 10 million Bengalis in East Pakistan took refuge in neighbouring India. India intervened in the ongoing Bangladesh liberation movement.  After a large scale pre-emptive strike by Pakistan, full-scale hostilities between the two countries commenced. Within two weeks of intense fighting, Pakistani forces in East Pakistan surrendered to the joint command of Indian and Bangladeshi forces following which the People's Republic of Bangladesh was created. This war saw the highest number of casualties in any of the India-Pakistan conflicts, as well as the largest number of prisoners of war since the Second World War after the surrender of more than 90,000 Pakistani military and civilians.
Indo-Pakistani War of 1999
Commonly known as Kargil War, this conflict between the two countries was mostly limited. During early 1999, Pakistani troops along with Kashmiri insurgents infiltrated across the Line of Control (LoC) and occupied Indian territory mostly in the Kargil district. India responded by launching a major military and diplomatic offensive to drive out the Pakistani infiltrators. Fearing large-scale escalation in military conflict, the international community, led by the United States, increased diplomatic pressure on Pakistan to withdraw forces from Indian territory. By the end of July 1999, organized hostilities in the Kargil district had ceased.

Nuclear Confrontation

In 1998, India conducted a nuclear Test and shortly after Pakistan too demonstrated that it possessed the nuclear bomb. South Asia suddenly became a sensitive zone on account of these two antagonistic states. Pakistan’s new nuclear deterrence made India hesitant in retaliating against its support to the secessionist movement.
This nuclear blackmail continued with the infiltration in Kargil. This was a challenging period for India and the American scholars argued that South Asia was literally on a short fuse.
The nuclear conflict between both countries is of passive strategic nature with nuclear doctrine of Pakistan stating a first strike policy, although the strike would only be initiated if and only if, the Pakistan Armed Forces are unable to halt an invasion (as for example in1971 war) or a nuclear strike is launched against Pakistan while India has a declared policy of no first use.
Breief details of wars between India & Pakistan is as following :
·    Pokhran-I (Smiling Buddha): On 18 May 1974 India detonated an 8 Kiloton nuclear device at Pokhran Test Range becoming the first nation to become nuclear capable outside the five permanent members of United Nations Security Council as well as dragging Pakistan along with it into a nuclear arms race with the Pakistani prime minister Zulfikar Ali Bhutto swearing to reciprocate India. The Pakistan Atomic Energy Commission Chairman Munir Ahmed Khan said that the test would force Pakistan to test its own nuclear bomb.
·       Kirana-I: In 1980s a series of 24 different cold tests were conducted by Pakistan Atomic Energy Commission led by chairman Munir Ahmad Khan under extreme secrecy. The tunnels at Kirana Hills, Sargodha, are reported to have been bored after the Chagai nuclear test sites, it is widely believed that the tunnels were constructed sometime between 1979 and 1983. As in Chagai, the tunnels at Kirana Hills had been bored and then sealed and this task was also undertaken by PAEC's DTD. Later due to excessive US intelligence and satellite focus on the Kirana Hills site, it was abandoned and nuclear weapons testing was shifted to the Kala Chitta Range.
·   Pokhran-II (Operation Shakti): On 11 May 1998 India detonated another 5 nuclear devices at Pokhran Test Range. With jubilation and large scale approval from the Indian society came International sanctions as a reaction to this test. The most vehement reaction of all coming from Pakistan. Great ire was raised in Pakistan, which issued a severe statement claiming that India was instigating a nuclear arms race in the region. Pakistan vowed to match India's nuclear capability with statements like, "We are in a headlong arms race on the subcontinent."
·      Cagey-I: (Youm-e-Takbir) Within half a month of Pokhran-II, on 28 May 1998 Pakistan detonated 5 nuclear devices to reciprocate India in the nuclear arms race. Pakistani public, like the Indian, reacted with a celebration and heightened sense of nationalism for responding to India in kind and becoming the only Muslim nuclear power. The day was later given the title Youm-e-Takbir to further proclaim such.
·   Chagai-II: Two days later, on 30 May 1998, Pakistan detonated a 6th nuclear device completing its own series of underground tests with this being the last test the two nations have carried out to date.

In spite of the many contentious issues, India and Pakistan have made major strides in reducing the "trust deficit” over the past few years. Bilateral dialogue was resumed after the two Prime Ministers met on the sidelines of SAARC Summit in Thimpu in April 2010 and reaffirmed the importance of carrying forward with the dialogue process with a view to resolving peacefully all outstanding issues. Subsequent regular exchanges between the two countries, including at the highest level, have kept the discussions active on Counter Terrorism, Humanitarian issues, Commerce and Trade, Sir Creek and Siachen, Peace and Security including Confidence building Measures and Jammu & Kashmir. The second round of the resumed dialogue is nearing completion and the two sides have expressed satisfaction on progress made so far.

India has welcomed Pakistan’s efforts to normalize trade relations by moving from positive to negative lists and their eventual elimination. India in turn has allowed foreign direct investment from Pakistan and is ready to formalize new visa regime with Pakistan.

Prime Minister met with the President of Pakistan during his pilgrimage tour to India in April 2012 and reiterated their willingness to find practical and pragmatic solutions to all outstanding issues through constructive and result oriented engagement. They reaffirmed that people are at the heart of the relationship between the two countries and that people to people contacts and cultural exchanges should be promoted.



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