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Corruption, Technology, and Reform: A Mixed View from the States

CASI

By Jennifer Bussell

Could the computerization of public service transactions help curb petty corruption in India?

Over the last two years, the corruption pervading India’s government has received remarkable media attention, thanks, in part, to scandals surrounding the Commonwealth Games, 2G telecom licenses, and the Adarsh housing society. This has shaken the complacency of many citizens who heretofore saw bribes and kickbacks as an inevitable part of daily life, and has provided fodder for the anti-corruption movement led by Anna Hazare.

Yet the attention to high-level scandals has overshadowed the corruption in basic public services faced by citizens across the country on a daily basis. Individuals who hope to receive a ration card, a driver’s license, or a modification to their land record are often faced with long delays that can only be shortened with “extra” payments, the “speed money” that greases the wheels of government and lines the pockets of bureaucrats and their political superiors.

Not only is this pernicious everyday corruption a drain on the limited resources of India’s average citizen, it can impede efforts to improve the quality of public services in general. There is perhaps no better example of this than the efforts over the past decade to use information technology to reform the Indian government.

The emergence of India’s nascent information technology and services sector in the 1990s brought with it attempts to incorporate technology into government procedures for serving citizens. Starting in 1999, state governments began to introduce a comprehensive model of IT-enabled service delivery in the form of one-stop computerized service centers. In theory, these centers would allow individuals to acquire services traditionally housed across government departments, from income and birth certificates to passports and building permits. This model, first appearing at the state level in Andhra Pradesh’s eSeva centers – initially called “TWINS” after the twin cities of Hyderabad and Secunderabad where the initiative was launched – promised to improve citizens’ service delivery experience by simplifying applications, reducing officials’ discretion, and minimizing the time to receive services. If implemented well, these centers could dramatically improve the quality of services received by citizens throughout the country.

In an analysis of service center programs launched in sixteen of India’s twenty major states, I evaluated the details of these policies and the quality of implementation. While the wave of reform in service delivery is striking in terms of the speed and breadth of initiatives across the country, I found evidence of mixed and limited benefits to citizens. Despite the central government’s enthusiasm to open 100,000 Common Service Centres as a part of the 2006 National eGovernment Plan, the experience of state programs in the period prior to the NeGP provides a cautionary tale.

My analysis shows that the quality and comprehensiveness of state service center programs has varied dramatically. The number of government services made available to citizens ranged from fewer than ten in Delhi and Orissa to more than 30 in Chhattisgarh and Andhra Pradesh by the late 2000s. The services made available were often the easiest to acquire, and least corrupt, in the pre-existing, non-computerized system, or were targeted to a specific group, thereby excluding large segments of citizens. Computerization often did not extend beyond basic data entry, as in Haryana, thereby limiting overall efficiency gains. In some cases, such as Uttarakhand and West Bengal, programs barely got off the ground or became entangled in legal disputes between operators and the state, resulting in the closure of most, if not all, centers.

What explains this diverse set of outcomes across the states? I posit that the promise of these initiatives was also often their downfall: the expectation of improved, and less corrupt, services posed a threat to government actors who depend on bribes acquired during service delivery. Bureaucrats who collect “speed money” or other types of bribes from citizens, and politicians who demand a cut of these proceeds are both at risk of losing access to this source of income with the introduction of computerized, one-stop service delivery.

Where politicians depend on this “petty” or “retail” corruption for supporting their reelection campaigns, the expectation that more transparent service delivery could limit future inflows of cash can imply constraints on incumbents’ ability to retain their seats. This anticipated negative effect of technology-enabled reforms thus has the potential to overwhelm any positive effects on their chances for reelection that may result from improved service delivery. In contrast, politicians in regions with lower pre-existing levels of petty corruption should anticipate that reforms will only minimally affect their access to income, as the availability of bribes is low from the outset. Thus, incumbents in areas with high petty corruption are less likely than their peers in lower corruption regions to support this type of reform.

While all Indian states display some petty corruption, levels of corruption differ quite dramatically. A 2005 survey conducted by Transparency International India and the Centre for Media Studies found substantial variation in petty corruption across the Indian states: bureaucrats typically demanded bribes from fewer than 20% of citizens in states such as Kerala and Gujarat, versus more than 50% of individuals in Uttar Pradesh or Rajasthan. As a result, if the level of petty corruption is linked to choices about computerization of public services, this may help to explain the variation in these policies in India’s states.

This is precisely what I found in the analysis of one-stop service centers. Those states with high levels of petty corruption were less likely to introduce computerized centers, implemented fewer and less bribe-prone services within the centers, and were less likely to fully computerize the service delivery process. Perhaps most striking was that the level of petty corruption was the best predictor of state policy; outcomes were largely unrelated to the wealth or development of a state, with poorer and less developed states with lower levels of corruption implementing some of the most impressive improvements to the quality of public services through these centers. In addition, I found that in states ruled by coalition governments, such as Kerala, departments under the control of powerful coalition partners were less likely to have services under their purview included in computerized service centers.

These findings provide an important complement to the recent attention focused on corruption in India’s highest levels of government. While inappropriate behavior in areas such as 2G spectrum licensing is likely to have important downstream consequences for citizens due to lower state income, it is the corruption that citizens face in attempting to access basic services from the state that directly affects their day-to-day lives. Technology has the potential to drastically improve the quality of public service provision. However, realization of this promise requires strategies to change the incentives for those making and implementing policy, as it is these individuals who determine the ways in which technology is used by the state and thus the actual benefits for citizens.

Jennifer Bussell is an Assistant Professor in the Lyndon B. Johnson School of Public Affairs at the University of Texas, Austin and the author of Corruption and Reform in India: Public Services in the Digital Age(Cambridge University Press, New York and New Delhi; available in India, May 2012). 

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

This article first appeared in India in Transition (IiT). India in Transition(IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

© 2012 Center for the Advanced Study of India and the Trustees of the University of Pennsylvania. All rights reserved.

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Principles and Prospects of Resizing India’s States

CASI

By Louise Tillin

The rationale and process behind the creation of new states in India.

As elections are held in Uttar Pradesh (UP), India’s largest state, attention has been drawn again to the question of whether the numbers and boundaries of India’s states ought to be reconsidered. In a move unthinkable 60 years ago when UP was presented as an indivisible “heartland” territory of the whole of India, UP’s incumbent leader Mayawati went to the polls calling for the division of the state into four parts. Of all federal systems in the world, India (along with Pakistan) has the fewest number of states or federal sub-units per capita. Not only are there relatively few states, but India’s states are also of vastly uneven size and population. For example, UP’s population is 328 times larger than that of the smallest state, Sikkim. By comparison, there is a ratio of 66 to 1 between California and Wyoming in the US, or 91 to 1 between Brazil’s largest state, Sao Paulo and its smallest, Roraima. The average population of an Indian state, 37.7mn is the same population that exists in the largest state in the US.

In India, where states are represented in the upper house on the basis of population rather than on an equal basis as in Brazil or the US, the unequal size of states does not threaten the democratic principle of “one person, one vote” by overvaluing the vote of people in low population states. The continuing freeze on the distribution of parliamentary seats between states in the lower house (Lok Sabha) does, however, intentionally discriminate against voters in states with faster growing populations. If anything, UP is therefore somewhat under-represented in parliament. However, simply creating new states without reallocating or increasing the total number of parliamentary seats across states to reflect patterns of population change would not significantly challenge these imbalances. Debates about resizing India’s states or increasing their number are therefore not typically concerned today with the question of representation at the federal level, nor do they cause significant concern about whether the “Union” can hold together in the face of multiple regional demands.

Debates about the number of states and their boundaries have instead clustered around three main principles. The first can be described as a cultural principle, whereby states are demanded or created to recognize distinct cultural or ethnic communities. The second principle is an administrative one in which the number and size of states should be dictated by concerns about the quality of administration; striking a balance between ensuring access to public services and achieving economies of scale in their provision. The third principle that has been more vigorously asserted in the context of economic liberalization is that creating more, smaller states can act as a driver of further economic growth by spurring subnational competition and policy innovation, or help to address regional inequality. The fact that Chhattisgarh and Uttarakhand (two of India’s three newest states, each created in November 2000) – and Bihar (the “parent state” left over when the third state of Jharkhand was created) – saw some of the highest rates of economic growth among all Indian states in the 2000s, despite being among the poorest, has increased interest in this third argument.

In the 1950s and 1960s, language was the major organizing principle for state reorganization. The states created in north-east India from the 1960s onward enshrine different forms of recognition and protection for local “indigenous” communities. In recent decades, the practice of state creation has not closely followed any one of these principles. The three new states of Chhattisgarh, Jharkhand, and Uttarakhand were created within the Hindi-speaking belt of north and central India in 2000 by a central government led by the Hindu nationalist Bharatiya Janata Party (BJP) that had historically been opposed to a multicultural vision of Indian federalism. Since then, demands for statehood have resurfaced strongly within India’s first linguistic state – for the creation of Telangana from Andhra Pradesh – and elsewhere, bringing language into question as a rationale for organizing territorial space.

A multicultural conception of Indian federalism has been sufficiently embedded – despite the protests of Hindu nationalists – that there remains a tendency to interpret the creation of new states through a cultural, if not linguistic, lens. Chhattisgarh and Jharkhand are thus commonly described using the shorthand “tribal” states, with the implicit assumption that their creation has improved the representation of their sizeable – 32 and 26% respectively – adivasi or “indigenous” communities. Such a shorthand also recognizes the long running peoples’ movement for statehood in Jharkhand, though not in Chhattisgarh. This mobilized, in different ways over time, around a demand for a state which would improve the representation of adivasis and their stake in the governance of the natural resources (especially forests and minerals) which abound in Jharkhand (as in neighboring Chhattisgarh). Another interpretation for state creation, particularly in 2000, sees it as being led by a state acting at the behest of capital restless for new regions to exploit. Such a view reflects unease about the aggressive intensification of natural resource exploitation pursued by the new states of Chhattisgarh and Jharkhand (accompanied by significant new forms of conflict), and the plains-centric industrial policy of the supposedly “hill” state of Uttarakhand.

Yet, the creation of new states in recent decades has in fact reflected neither a straightforward logic drawn from the pressures of capital or claims to recognition. Despite the distinctive demography of the newest states, their creation is not to be seen simply as another example of India’s multicultural federalism in action, in which new states are created to provide better representation to territorially concentrated ethnic communities. By the time statehood demands were conceded by the central government in 2000, broad pro-statehood political coalitions had formed within regions for which statehood was demanded that went beyond particular ethnic groups or coalitions. Furthermore, calls for “recognition” on a cultural basis did not feature strongly in statehood demands in Chhattisgarh and Uttarakhand. In Chhattisgarh there was no strong grassroots demand whatsoever for statehood although it had some support among political elites. Nor, despite their location at the heart of disputed trajectories of industrialization and natural resource exploitation, are the newest states to be seen simply as the gift of a state acting on behalf of capital seeking to gain better access to their natural resources. Such a view underplays the diversity of interests among business and industry, and their views and occasional uncertainty, about state creation given the potential for nativism associated with statehood demands.

The latest process of state creation was a complex one with multiple causes that unfolded over a long time period. The timing of state creation reflected political conditions at the state and all-India levels, rather than the depth or intensity of mobilization within individual regions. New states have not necessarily bequeathed federal units with more cohesive regional political communities, where the rights of “local” populations are protected or privileged, or more business friendly environments are guaranteed. Indeed, pro-statehood campaigns frequently, though temporarily, submerge the tensions between divergent groups, goals, and interests. Therefore, the granting of statehood is best seen as an “ambiguous compromise.”

The prospects for any future resizing also rest on shifting political coalitions, rather than a clear set of principles. The creation of any new state requires legislation by the central government. While the Congress Party calls for the establishment of a new “states reorganization commission” in its election material in UP, it seems to be in no hurry to establish one in Delhi where it leads the central government. Political and electoral questions continue to prevail and shape the prospects for future new states. That statehood demands can be raised and settled through the democratic process is a strength, even if it does not always produce results that satisfy the strongest proponents of statehood.

Louise Tillin is a Lecturer in Politics at the King’s India Institute, King’s College London, and the author of Remapping India: New States and their Political Origins (Hurst & Co/Columbia University Press, forthcoming).

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

This article first appeared in India in Transition (IiT). India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

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Constructing Change: Energy Efficiency and India’s Buildings Sector

CASI — Tue, 21 Feb 2012 23:58:14 +0000

The urban sprawl is creating unique challenges and opportunities related to natural ecosystems. As a result, policy makers need to think innovatively about a range of issues from land-resource planning to broader ecological and energy implications. The resulting challenges include reducing pollution, increasing biodiversity, managing peak energy demand and cost, heat-stress health implications, and ensuring an adequate supply of water and nutrients.
By Radhika Khosla
In 2008, for the first time ever, the urban population of the world outnumbered that of the rural. This visible trend has escalated over the last couple of decades; projections suggest that by the end of the twenty-first century, 80 percent of the world’s population will live in cities (which occupy 0.05 percent of the Earth’s surface).

Rapid urbanization is creating vast opportunities through an unprecedented demand for the construction of buildings, which already account for more than 30 percent of India’s total electricity consumption. In line with expanding development, the country’s buildings sector is expected to increase five-fold from 2005 to 2050. India is at a unique crossroads where two-thirds of the commercial and high-rise residential structures that will exist in 2030 are yet to be built. Implementing energy efficiency in buildings that are being constructed in the next ten years thus presents a singular opportunity to lock in energy and cost savings for the next several decades.

The imperative for efficient construction is much more crucial than individual savings from which owners and end-users benefit. India's total energy requirement is projected to grow at 6.5 percent per year between 2010-11 and 2016-17 to support the country’s projected 9 percent growth rate. The meeting of this demand, however, is fraught with the challenges of peak demand shortages, dependence on energy imports and vulnerability to the volatility in international energy prices. Furthermore, India is en route to becoming the world’s second largest emitter of greenhouse gases. Each of these challenges can be met simply and effectively by addressing the energy-guzzling nature of the booming buildings sector, and by making energy efficiency a central plank in the country’s long-term growth planning.

Current Policy Environment

The current policy environment is beginning to promote energy efficiency and the execution of national and state level programs will be the key determinants of its success. India’s National Action Plan on Climate Change (2008) points to building efficiency measures as essential to carbon emission reduction. Several national missions which focus on scaling building efficiency have recently been initiated, such as the National Mission on Sustainable Habitat and National Mission on Enhanced Energy Efficiency. National policy is thus giving perspective though the serious implementation of these efforts remains to be seen.

As a starting point, it is important that there are clear frameworks that can be reference points for quality. To facilitate this, the Bureau of Energy Efficiency launched the Energy Conservation Building Code (ECBC) in 2007. The ECBC establishes minimum requirements for energy-efficient design and construction for buildings with a connected load of 100 kW/120 kVA or more and provides guidelines for building design, including the envelope, lighting, heating, air-conditioning, and electrical systems. In addition to the code, the presence of independent rating standards is important. Currently, this is managed by two private building rating systems: Leadership in Energy and Environmental Design (LEED) and Green Rating for Integrated Habitat Assessment (GRIHA), both of which incorporate ECBC requirements.

Challenges to Energy Efficiency

In spite of these initial policy instruments, barriers exist to wide-scale efficiency adoption. The key challenges can be grouped into three broad categories: the lack of information and awareness, economic, and structural constraints.

The ECBC is currently voluntary, which has resulted in its slow uptake and a reliance on the market to steer progress. However, there is an economy-wide lack of information and awareness about the economic and other benefits that energy efficiency provides. In the absence of mandatory policies, the decision to invest in efficiency is driven by developers, building owners, and end users, all of whom do not have access to reliable information on the advantages that efficiency offers to them. Additionally, a lack of skilled expertise on how to employ the measures impedes implementation even when there is a will to invest.

Efficiency technologies also have a higher upfront cost, which deters investors seeking to make nearer-term economic returns. As there is no rigorous source of information on the return on investment for the higher upfront cost, real estate developers are reluctant to include an additional budget for efficiency. This lack of information on the business case has so far inhibited financial institutions from offering attractive products (e.g., loans with reduced interest rates for efficiency) that can incentivize investment by reducing the burden of the higher first-cost. An additional constraint is that while building owners undertake the expenditure, the benefits of lower energy bills are accrued by the tenants who pay the utility bills.

From a structural perspective, the lack of skilled technical expertise and of energy-efficient product vendors hinders the development of an able workforce that an energy-efficient economy requires.

Opportunities and Recommendations

In order to overcome barriers and transform the buildings market, action is required by a variety of public and private decision makers. Making the ECBC mandatory will ensure that all applicable new buildings constructed meet a minimum level of efficiency in their energy use. While the code remains voluntary at the national level, some states – Rajasthan, Orissa, Delhi, Maharashtra, Uttar Pradesh, Haryana, Tamil Nadu, Andhra Pradesh, Karnataka and West Bengal – have announced plans for a mandatory code by 2012 recognizing this low-hanging opportunity. However, the victory of these efforts will lie in the code compliance achieved. To enable this, state governments can create compliance-conducive environments by focusing on local adaption of the ECBC to their particular climactic conditions; incorporate the code into the region’s building bye-laws; develop mechanisms for third party verification; and train municipal officers, architects and engineers on code technicalities. Having structures in place for monitoring and enforcement are key to the successful uptake of efficient construction by the community.

Analogously, the private sector can play an important role in leading the market. Real estate developers, as drivers of the demand for building development, have significant influence over the adoption of efficiency practices by end-users. As the ultimate financial decisions regarding investment in efficient construction lies with this group, they have vast potential to showcase the opportunities that arise from the favorable business case that these buildings attract – through cost savings, short payback times, and increased premiums and occupancy rates. Piloting “green leases” that align the costs and benefits of efficiency investments between landlords and tenants can help overcome some of the financial barriers. Financial institutions can include services for energy efficiency in their portfolio of products and gain from the significant untapped opportunity of expanding the efficient buildings market.

Transitioning to a low-carbon buildings sector will spur a market for new services and technologies, requiring a skilled workforce that the new wave of construction will demand. As ECBC compliance gets more stringent, there will be an increased need for professionally accredited third-party verifiers who can measure and verify the savings that are taking place. To meet this impending demand, an energy efficiency curriculum must be put in place for both the new and existing workforce. Engineering, architecture and vocational education institutes can provide energy simulation and building certification training, and work with professional networks to establish an independent auditing organization that will verify ECBC compliance. The Prime Minister’s National Council on Skill Development (with a target of creating 500 million skilled people by 2022) can be used as a forum to train this skilled green workforce.

India’s commercial energy consumption is projected to double by 2035. Energy efficiency offers the fastest, cleanest, and cheapest opportunity to meet this growing demand and its associated challenges. While there is rising awareness and action in the public and private sphere, the immediate focus should be to better understand and leverage this invisible resource. With the correct combination of policies, incentives, and structural support, an efficient built environment will enable India to successfully meet its economic and environmental development goals while achieving its national commitments to address climate change.

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

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Money, Muscle, and the Market for India’s Criminal Politicians

CASI — Wed, 15 Feb 2012 19:24:43 +0000

Insight into why corruption and criminal records are common characteristics for election candidates in India.

By Milan Vaishnav

This month, a great deal has been written on “criminals” in the electoral domain, as voters have been going to the polls in five states across India. It is perhaps a sign of the times that one of the most often quoted statistics on modern Indian politics is that more than a quarter of the sitting Members of Parliament (MPs) face criminal indictment (at the state level, that number hovers around twenty %). Yet despite all the attention paid to the often sordid biographical details of India’s political class, there has been a surprising lack of analysis about why we observe this phenomenon. Why do parties give tickets to candidates with criminal records? Why do voters vote for them? And what are the implications for India’s democracy?

Empirical evaluation of this subject has been greatly aided by the fact that since 2003, candidates for state and national office in India are required to publicly disclose their pending criminal cases and financial assets and liabilities. Working with this data, we can start to establish some basic patterns about the selection of criminal politicians. However, to protect against frivolous or politically motivated charges, I focus only on criminal cases involving “serious” charges; infractions not plausibly related to electioneering (i.e., libel) or a politician’s day-to-day vocation (i.e., unlawful assembly).

India’s political parties have an array of potential candidates to choose from, so one wonders why they choose candidates with criminal records. Money is clearly one major consideration. It is no secret that elections in India have grown increasingly expensive. Because parties need resources to fund activities such as campaigning, voter mobilization and vote buying, they place a premium on selecting self-financing candidates who will not be a drain on finite party coffers. Candidates linked to criminal activity are attractive in this regard. If one looks at the assets of the more than 45,000 candidates who contested state elections between 2003 and 2009, the median “clean” candidate has a personal wealth of roughly 400,000 rupees, compared to assets of 1.1mn rupees for the median indicted candidate. Parties place a premium on criminality (ie, muscle), in part, because it often brings with it the added benefit of money.

To be fair, money is only part of the answer. The role of financial resources sheds light on why parties embrace candidates with criminal records, but it does not tell us much about where parties are most likely to field such candidates and why voters vote for them. To understand these questions, one needs to consider the role of identity in Indian politics. As a top official from a national party remarked, “Parties support criminals because they have ‘currency’ with the masses.” This “currency” is both literal as well as figurative in terms of the candidates’ ability to mobilize popular, caste-based support.

In areas where social divisions are particularly prevalent, candidates can use their criminality as a signal of their credibility to protect the interests of their co-ethnics and their allies. There are three distinct ways this can be accomplished. First, a candidate’s criminality serves as a clear indication of his willingness and ability to bend the rules to suit his group’s own interests. For instance, criminal candidates are willing to use extra-legal means to safeguard a community’s economic interests – intervening in land disputes – or influence the distribution of public benefits. Second, a candidate’s criminality can provide a bulwark against opposition from political rivals. In a context of dynamic competition for local dominance, a candidate’s willingness to “flex his muscles” allows him both to enhance his credibility to deliver benefits and keep rivals at bay, through use of coercion and threats. Third, criminality signals credibility in the sense that voters often believe criminal candidates – because they are personally wealthy and willing to take action by any means necessary – will be better able to act as a social safety net.

If criminal candidates do in fact provide benefits to voters in places where social divisions are most pronounced, this should be reflected in the choice of where parties field such candidates. Although this is a difficult proposition to assess, consider the differences between open seats and those reserved for Scheduled Castes (SCs) and Scheduled Tribes (STs). In reserved constituencies, the candidate pool is restricted to aspirants who belong to the reserved group, but the entire electorate is eligible to vote. The diminished relevance of identity-based divisions, and the pre-ordained caste identity of the winner, weakens incentives for parties to mobilize strictly on caste lines. As a result, they will refrain from fielding criminal candidates whose popularity rests on their comparative advantage in stoking such sentiments. On average, in reserved constituencies, the probability of indicted candidates standing for election to the state assemblies decreases by 13%.

Similar logic underlies why we observe less criminality among India’s indirectly elected legislators in the Rajya Sabha compared to their counterparts in the directly elected Lok Sabha. Because Rajya Sabha members are not elected through popular voting, the legislators who elect them are less concerned about their ethnic authenticity. If identity politics serves as a motivation for parties to choose criminal candidates, this incentive is weaker for indirect elections.

What are the implications of the prevalence of criminal politicians for India’s democracy? The prevailing consensus among academics is that the presence of “bad politicians” in a context of free and fair elections is indicative of a breakdown in democratic accountability. Yet, the Indian case shows that criminal politicians and accountability can be compatible and need not be contradictory. Popular embrace of criminal candidates at the ballot box does not necessarily mean India’s voters are being duped by wily politicians and party bosses; in fact, it is quite possible that many citizens are making a self-interested calculation. Voters are not ignorant or uninformed; they are simply looking for candidates who can best fill a perceived representational vacuum.

Viewing India’s criminal politicians as an issue about aspiration rather than lack of information has ramifications for public policy. Indeed, a growing body of research suggests that it is identity politics that reinforces the appeal of criminals in politics (with money as an additional driving factor). The influence of identity politics in this regard should not come as a surprise, as evidenced by the experiences of advanced democracies such as the United States. The past electoral success of corrupt former Massachusetts politician James Michael Curley and former Washington DC mayor Marion Barry demonstrate that a candidate’s connection to illegal activity can indeed be a badge of honor, especially in places where social divisions run deep. As a former supporter of the “unapologetically corrupt” former four-term Louisiana governor Edwin Edwards recently admitted, “We all knew he was going to steal, but he told us he was going to do it.”

The views expressed in this article are the author's own and do not necessarily reflect 51�Թ�’s editorial policy.

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A New Era for Environmental Litigation in India

CASI

By Shibani Ghosh

Analysis on the recent establishment of a tribunal for environmental issues in India.

2011 was a landmark year for environmental litigation in India, a country with a rich history of environmental movements, grass-roots activism and a responsive higher judiciary. Although litigation on environmental issues has flourished for more than three decades, 2011 is distinctive for the establishment of the National Green Tribunal (NGT) by the Ministry of Environment and Forests (MoEF). It is not just the fact that it was set up, as earlier on, there was a similar tribunal, albeit a less powerful one. It is the manner in which the MoEF was galvanized by the Supreme Court in this direction, the first tentative “steps” of the NGT, and its continuing struggle to fully establish itself. Created to focus on environmental issues, the law constituting the NGT received presidential assent in June 2010 but was only enforced by October 18th of that year through a Notification of the Central Government. On that date, Justice L. S. Panta, a former judge of the Supreme Court of India, was appointed as the NGT's first Chairperson, though none of the other members had yet been appointed, nor was there much infrastructure or staff.

The coming into force of the NGT Act implied an automatic repeal of two existing laws: the National Environment Tribunal Act 1995 and the National Environment Appellate Authority Act 1997, and therefore the closure of the National Environment Appellate Authority (NEAA) - a quasi-judicial body empowered to hear appeals against the environmental approvals granted (or not) to projects. All the cases pending before the NEAA were to be heard by the NGT. Its closure created a judicial vacuum as there was no forum for new cases, and the pending cases were left in limbo. Without the appointment of at least one other member besides the Chairperson, the NGT could not function. While the MoEF continued to grant regulatory approvals, there was no judicial redressal mechanism to challenge the same. This situation might have continued indefinitely had it not been for the Supreme Court's direction that the MoEF regularly report on the progress made in establishing the new tribunal. As a result, three judicial members and four expert members were appointed on May 5, 2011 and the NGT held its first hearing on May 25, 2011.

The NGT’s mandate is much wider than that of its predecessor, the NEAA. It can entertain cases raising “substantial questions relating to the environment” which arise from the implementation of seven laws including those on air pollution, water pollution, environment protection, and biodiversity. It is not just an appellate body, but also has original jurisdiction to decide certain categories of cases. It can award compensation and direct restitution of damaged ecology and property.

Today, regular hearings take place but the NGT is still faced with major institutional challenges. The NGT functions from two different premises as the building it is supposed to be seated in is yet to be vacated by the current occupant, the National Human Rights Commission. Of the minimum ten judicial and ten expert members, only two judicial members and four expert members have been appointed, and the Chairperson has since resigned. The government appears unable to provide appropriate accommodation to the members. The circuit benches at Pune, Kolkata, and Chennai are yet to hold hearings, although an “inaugural” hearing was held at the Bhopal bench this past November. Interestingly, when the NGT Act was initially introduced in Parliament, the then-Minister of State for Environment and Forests was keen to locate the principal bench of the NGT at Bhopal as a symbolic response to the Bhopal Gas tragedy of 1984. However, the idea was dropped before the Act was passed.

Over the past nine months, around 80 cases have been filed in the NGT. Given the NGT's broad mandate, a variety of issues have been raised. These issues range from cases challenging environmental approvals granted to power projects, to those questioning governmental permission to use forest land, to issues of air and noise pollution. Unlike the NEAA, where the parties approaching the Authority were mostly project-affected persons or community-based organizations, the NGT attracts a wider spectrum of applicants ranging from small and medium-sized enterprise owners who are affected by decisions of pollution control boards, to big companies seeking to challenge regulatory conditions on which they have been imposed.

Since its establishment, the NGT has pronounced some significant judgments. On the issue of delay in bringing matters to the notice of the tribunal, the NGT has adopted a liberal position, thereby keeping the doors of the NGT open longer for justice seekers. The law provides that anyone who wants to challenge a decision of the government must approach the NGT within 30 days from the date on which the decision was made. An additional period of 60 days could be granted to approach the NGT, however this delay would need to be explained to the Tribunal, which may or may not find “sufficient cause” for the delay. After a lapse of 90 days, no recourse lies in the NGT. In a case challenging the diversion of forest land for the construction of a hydro power project in Himachal Pradesh, the appellant approached the NGT on the 90th day from the date on which the decision was taken. The NGT condoned the delay, maintaining that there was no “strait jacket formula” to accept or reject an explanation for delay, and relied on decisions of the Supreme Court advocating a liberal approach when there is no negligence and the delay on the part of the litigant is bona fide.

A second important decision of the NGT was on the issue of who could approach the Tribunal (i.e. who has legal standing). The NGT held that any person can approach the Tribunal to agitate a grievance relating to the protection and improvement of the natural environment as long as it is not a frivolous petition. This decision is extremely significant as it opens up the arena for environmental litigation to a much wider group of stakeholders. Persons need not be directly affected or injured by a particular decision of the government (such as giving approval to a thermal power plant or a dam) to approach the NGT. Any person who has reason to believe that a decision will have an adverse impact on the natural environment can approach the Tribunal.

In one of its first judgments on merits, concerning a mining operation, the NGT, while identifying lapses in the environment impact assessment (EIA) for the project, commented on the inadequacies of the EIA system in India: first, the lack of cumulative impact assessment of other projects within a 10 km radius (which was not done in this case); second, as EIA is done by consultants who are paid by the project proponent, a conflict of interest arises and there is a possibility that “intrinsic information which may go against the proponent” is not revealed; and third, the consultant, whose EIA report is the basis for the decision making, is not accountable to anyone for the information it provides. These issues have been raised time and again by environmentalists, with no policy or legislative response from the Government. The NGT finally decided that the approval would be kept in abeyance until the project and its environmental impact were reassessed by the MoEF.

While these examples have been hailed by environmental lawyers as “progressive,” there are, at the same time, NGT orders that have taken a more cautious approach. For instance, the NGT has refused to stop work at project sites during the pendency of cases, maintaining that companies cannot claim equity at a later stage, or in other words, take the defense of fait accompli. However, that is of little solace for the affected communities, as the environment once destroyed is hard to restore to its natural state.

The NGT has been formed for an “effective and expeditious disposal of cases” relating to environmental protection and conservation of forests and other natural resources. While it is perhaps too soon to evaluate the NGT, the very existence of this specialized tribunal, with such wide powers and jurisdiction, brings a timely and much required degree of prominence to environmental legal issues in India.

The views expressed in this article are the authors' own and do not necessarily reflect 51�Թ�’s editorial policy.

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A Ray of Light in the Forests of India

CASI

Better forest laws and a more sustainable use of India’s forests could be instrumental in changing the lives of forest tribals.

The 250 million forest-dependent people in India have been victims of major historical injustices such as continuation of repressive colonial forest laws and are amongst the poorest in the country. To empower forest communities, India has passed two historic laws in the last 15 years. However, their effects on the ground have been disappointing. While all of this sounds desultory, a number of “transformations” have been taking place recently, which if harnessed properly, could significantly better the lives of these communities.

Background

When Devaji Tofa, the community leader of Mendha Lekha village in tribal Gadchiroli district received a transit pass from his Gram Sabha in April 2011 that would allow his community to harvest and sell bamboo, it was more than just a symbolic act. It provided the possibility of a better future to all forest-dependent people. While for most, India’s forests conjure up images of tigers, flora, and fauna, there is another world out there that often goes unnoticed; a world of toiling humans living at the margins of existence. It is estimated that more than fifty million people known as “forest dwellers” live in or in the fringes of India’s forests, and up to 275 million people known as “forest dependents” depend on them for at least a part of their livelihood. Both forest dependents, and especially forest dwellers are the most economically backward and socially vulnerable. They have also been victims of major historical injustices such as the continuation of colonial forest laws that did not give them any rights over land and resources or participation in forest conservation. Until 2006, communities living in forests did not have tenurial security or property rights over the land they had lived in for centuries.

The First Winds of Change

Fifteen years ago, India took the first steps towards changing the status quo. The 1996 Panchayat Extension to the Scheduled Areas Act (PESA Act) decentralized governance in scheduled tribal dominated areas by bringing the Gram Sabha or “village assembly” into center stage of resource management and recognizing the right of tribals over “community resources” such as land, water, and forests. Ten years later, in 2006, the Forest Rights Act (FRA) took the cause of empowering forest dwelling communities one step further and gave tenurial rights to forest dwellers over the land they have lived in, and legitimized their right of ownership and use of minor forest produce (MFP).

While both legislations were historic, their effects on ground have not been satisfactory. State laws have not been in line with the spirit of the Act and in many cases excluded community ownership of the most valuable forest produce. Moreover, the progress in giving Community Forest Rights has been slow. Entrenched governance systems, resistance from local bureaucracies and the forest department’s dependence on revenue generation from forest produce, have stymied real substantive empowerment of forest communities.

The Four Transformations in the Lives of Forest Communities

While all of this suggests a desultory state of affairs for India’s forest-dependent communities, at least four major recent trends suggest that a ray of light may finally be reaching their lives driven by a strong civil society and recent government action. The first major transformation relates to the implementation of legal entitlements. For the first time since its implementation in 2006, the enforcement of the FRA is being taken seriously. Compliance with the FRA has been made a condition for the granting of forestry clearances for new projects by the Ministry of Environment and Forests as of August 2009. Even in high profile projects, the government is taking a view that demonstrates that it is serious about this Act. For example, the stopping of Vedanta Group’s Bauxite mining project in Orissa, sent a clear and unequivocal message that the legal rights given to forest dwellers are unimpeachable and will be enforced.

In addition, further legal provisions are being enacted to end historical prejudices. In a proposed amendment to the Indian Forest Act, the Union Cabinet has approved the requirement that forest officers shall have to consult the concerned Gram Sabha before imposing compounding fines on local people for minor offenses. This is being seen as a major step in arresting the harassment of forest-dependent communities at the hands of forest officials.

The second major transformation involves local communities in forest management and conservation. Local communities have traditionally been largely excluded from forest conservation and management, which has long been the domain of the forest department. Engaging forest dwellers in conservation as “community foresters” has a win-win benefit which is finally being recognized, and experiments are being undertaken across the country. Local tribal youth are being trained and employed for forest management. Due to a major new impetus over the last two years, about 2.5 million mandays of employment for these local communities are being generated annually. For example, the Van Gujjars at Corbett seem to be effective frontline “foot soldiers” against poaching.

On the same theme of engaging local communities, the government has just launched an ambitious ten-year, ten billion dollar projected titled National Mission for a Green India, which has people-centric forestry at its core. The revamped Joint Forest Management Committees (JFMCs), tasked with implementation of the mission at the grassroots level, will be set up by the Gram Sabha and also be accountable to it. This presents a major paradigm change towards people-centric decisions in investment and management.

The third transformation – perhaps the most significant from a livelihoods perspective – relates to “bamboo.” Access to bamboo, an economically valuable crop, many argue, could hugely enhance livelihoods of forest-dependent communities. Rough estimates show that if communities were allowed to harvest bamboo, it could add 20,000 - 40,000 rupees crore each year to their incomes and benefit over fifteen million people. The debate on whether bamboo is a “grass” and therefore MFP (which forest communities “own” and can harvest and use for value-addition or sell), or whether it is a timber (which can only be harvested and sold through the forest department), had been raging for a while, until the Environment Ministry recently clarified in March 2011 that bamboo is indeed an MFP. What this implies is that communities can now harvest bamboo with the permission of their Gram Sabha, which has been authorized to issue the “transit passes” allowing for its transport and sale. This could have significant livelihood benefit for forest-dwelling communities, as bamboo commands a good price and is an essential raw material for many indigenous crafts and cottage industries. The symbolic ceremony at the Mendha Lekha village was the first step in this direction. Initial anecdotal evidence from Mendha Lekha already suggests a major increase in the incomes of the villagers.

The fourth transformation enables forest communities to benefit from their traditional knowledge of local biodiversity. India has been a prime mover of the Access and Benefit Sharing Protocol (ABS) under the UN-Convention on Biological Diversity, which was signed in October 2010. This protocol obliges countries to ensure fair and equitable sharing of benefits arising from the use of “traditional knowledge” associated with genetic resources with local communities holding such knowledge. The ABS Protocol, backed by domestic legislation (FRA and the Biological Diversity Act) is the first step in ensuring that forest communities are compensated fairly.

Similarly, India has been an active advocate in international negotiations of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) initiative, where countries that reduce emissions and undertake initiatives for the sustainable management of forests will be entitled to receive resources as incentives. Although still at a nascent stage, some studies estimate that REDD+ initiatives in India could provide more than three billion dollars as carbon service incentives. The government has committed that all the monetary benefits from REDD+ will flow to local, forest-dependent, forest-dwelling and tribal communities.
Thus, the fourth transformation is about safeguarding, monetizing and incentivizing the flow of benefits from forest-based resources to local communities.

A Ray of Light, But a Thin One at Best: The Challenge of Implementation

Many challenges lie ahead however. Getting the governance machinery right for these transformations will be a huge challenge. We are on a long learning curve which started with the “JFMC’s version 1.0” in the late 1980s, and is evolving as we go along. Bridging this will require sustained leadership and commitment from the top echelons of government and ongoing monitoring by civil society.

The concept of representative, well-functioning Gram Sabhas that make decisions through consensus is good in theory, but difficult in practice. Even if we assume that Gram Sabhas can reach agreement and are not prone to elite capture (or hijacking by special interest groups), they will require major capacity building to be able to make informed decisions.

Moreover, the mindset, training, and behaviors of the forest department and other local government functionaries towards forest-dwelling and dependent communities will need to undergo a major change at all levels. This will be far from straightforward. Forest departments may not take easily to their new role as just, benevolent facilitators allowing local communities to access MFPs, especially as bamboo and other MFPs have been a core revenue channel and a source of power and control for them.

Well-functioning competitive markets for MFPs will need to be created so that forest dwellers get a fair value for their produce. This will require innovative mechanisms that go well beyond declaring a minimum support price. It will require, for example, institutional support to organize forest dwellers into effective supplier groups; a non-trivial challenge given our experience with cooperative movements in the past.

Conclusion
Empowering forest-dependent communities will not only undo historical injustices and enhance livelihood, but also help protect our natural forest and heritage. An additional “co-benefit” is that social and economic empowerment of these communities could also be an effective tool to fight Naxalism (which draws strength from local forest villages and funds from forest produce).

We hope that the momentum which has created the four transformations, powers on, and the silent journey from the village of Mendha Lekha lights up the lives of our forest communities.

Varad Pande works as Officer on Special Duty to the India’s Minister of Rural Development.

Pranjul Bhandari works as Economist at the Deputy Chairman’s Office, India’s Planning Commission.

The views expressed in this article are the authors' own and do not necessarily reflect 51�Թ�’s editorial policy.

This article first appeared in India in Transition (IiT). India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

© 2011 Center for the Advanced Study of India and the Trustees of the University of Pennsylvania. All rights reserved.

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Beyond Acquiescence and Surveillance: Media Regulation in India

CASI — Tue, 11 Oct 2011 01:37:32 +0000

A critical analysis of current media policy and regulation in India.

The increasingly complex and elusive media landscape has thrown fresh challenges to an unsettled ecosystem of media policy in India. Advanced communications technologies have fundamentally altered the ways in which information and meanings are delivered, organized and received. These new advancements call into question the efficacy of existing policy approaches to media, including the still-dominant conventional media. The multiple bills introduced in the last decade reveal a fragmented framework shaped as much by the Indian state’s staggered acquiescence to corporate interests as by the entrenched colonial structures of governance aimed at “reining in” the media, or using the technologies for targeted surveillance. Regulatory authority is currently divided between several government departments, even as the Communication Convergence Bill (2001) and Broadcasting Service Regulation Bill (2007) are still far from realizing their stated objective of introducing a comprehensive and coherent policy framework. It is thus one of the most crucial moments for media policy discussions to funnel their energy towards a meaningful debate, since, as Christian Sandvig rightly comments on Internet architecture, “the unsettled character of today’s advanced communication systems is not our burden; it is our chance to act.”

First, policy energy should be directed at comprehending and more fully incorporating the latest technological changes which have pushed the communications sector towards a functionally unbundled and modular form of organization where communication functions are distributed across different platforms through interoperable standards. In contrast, content, services and transmission are yoked together in a single entity in a bundled architecture. Media policy scholars are advocating a “layered approach” to media regulation to address and benefit from these latest changes in the communications sector. The layered approach recognizes that a vertical orientation of regulating specific communications technologies through specific laws should give way for a horizontal orientation towards addressing different functional components of communication delivered through multiple entities and technologies. This implies that proprietary control and other regulatory issues should be verified at each functional layer of communication – most prominently content and physical infrastructure layers – since single entity need no longer deliver these two together. Second, policymakers should recognize the intricate layers of control, ownership, and media praxis which are driving rapid expansion of conventional as well as new media at the ground level. Thus, the broader policy approach should be simultaneously attentive to the technological changes and the ground realities of media organization ‒ a combination of technological, legal and anthropological insights into the nature and implications of media expansion. These three issues are flagged here as a way of pushing the policy debate towards such a perspective, by focusing especially on the news media and public service broadcasting since they are normatively positioned to play a crucial role in democratic politics.

Any meaningful policy effort for the rapidly expanding news media in India should begin with the recognition that the structure and nature of news production is not uniform across the country. If, in some states like Karnataka, the dominance of national commercial news groups such as The Times of India remains relatively uncontested in the last two decades, other news markets like Tamil Nadu are structured firmly through political partisanship resulting from direct ownership of television news channels as well as local cable networks by prominent political parties. In Karnataka, despite the trends towards consolidation in the print industry, anthropological inquiry into the field of news practices reveals that commercial logic of expansion and profit aggrandisement advanced by many media groups comes into direct confrontation with a wide array of cultural logics which are themselves set within the overarching matrix of global and regional capital. Underwritten by a long history of “print communalism” in princely Mysore, caste practices in the news field both build on and diverge from a distinct form of journalism which arose at the turn of the twentieth century during the course of journalists’ active role in the non-Brahmin movement. Among journalists and news proprietors, there are blurred boundaries between affective bonds, instrumental ties, and professional networking. Often, these multiple strands converge in caste identities. Hence, jāti bala (caste-based strength), jāti samīkaraṇa (caste attraction) and jāti network (caste-based news networks) remain as interlinked aspects of journalistic sociality perpetuated by, and perpetuating, caste-based allegiances. Equally significant are language-based solidarities which are reframed and revived in the context of ongoing liberalization projects of the state. The unstable, fissured, yet effective forms of politics assembled through these logics of what I call the "bhasha" media confound modernist assumptions of rational critical public discourse, but nevertheless hold democratic potential for a range of publics, just as they equally efficiently curl back to reactionary cultural politics. These multiple logics, which structure the news field in Karnataka, might not map out in the same way in other news markets in the country. There is very rich literature to compare news systems across different nations and transnational regions, such as Daniel Hallin and Paolo Mancini’s pioneering work on different models of journalism existing in North America, continental Europe, and Mediterranean countries. Similar exercise in mapping the news fields within India will benefit policy makers to, at once, address multiple loyalties structuring the news fields and differences in patterns of control, ownership, and media practices.

More importantly, the rhizomic existence of heterogeneous news practices in the commercial sector call for a robust public service media and innovative forms of state and community interventions. Although important, top-down regulation based on the assumption of bundled communications architecture is not sufficient to create a vibrant, inclusive, and reflective media ecosystem.

In their recommendations to the Federal Communications Commission (FCC) in the U.S., Ellen Goldman and Anne Chen proposed a comprehensive plan to revive public service broadcasting precisely through a modular and unbundled approach to media. These recommendations have pushed the layered model of regulation beyond the rationale of state control to instead help policymakers to design innovative environments for public media interventions. While several of their recommendations are rooted in the American experience of rapid digitization and several more are aspirational, even by the standards of developed countries, some lessons can be drawn for the Indian context. Drawing on the layered and network architecture of the Internet, they propose that different streams of communications engaged in public service media should be connected, scaled up, and curated through the available and revived facilities of public service media. They contend that the state should move away from considering television and radio as the sole recipients of state support. Instead, public service media should encompass a wider range of content providers and information activists through a decentralized mechanism that addresses all the four layers – physical infrastructure, connection (between various platforms engaged in public service media), curation (supporting content and services of public value), and creation (creating content which the market insufficiently or erroneously addresses).

The current structure of Prasar Bharati (Broadcasting Corporation of India) firmly holds the physical infrastructure layer but other aspects of the modular approach are yet to be charted in generative ways. There are many platforms available today to generate useful public media content and practices: community radio, NGOs, innovative news portals, anti-corruption civil society watchdogs, public ombudsmen, and activist groups covering several villages at sub-regional levels. Prasar Bharati should actively connect, curate, and scale up these networks in a multilateral way instead of relying only on the hub-spoke model of connecting national broadcast stations with regional stations. This involves a deeper ideological shift from technology-led state pedagogy to a network model of communication and community building. It also involves concerted efforts to release the Corporation from being an object of political gambit for successive governments. Doordarshan, All India Radio, Media Academies, professional media associations drawing state support (however minimal), as well as non-media information activists, should form part of a larger network of public service media in which various streams of non-commercial content are linked and curated to maximize their effect, reach, and appeal.

Closely connected to this is the possibility of institutionally linking RTI (Right to Information Act) provisions with mainstream media content. This involves the risky step of content regulation, which is fiercely resisted by the industry. While several national news channels, especially English, have decided to give themselves the mandate of provisioning “development” and “positive news” in their daily news coverage to avert possible government intervention, much remains to be done at the regional and local levels where news channels and newspapers are expanding at a blistering pace. Unfettered “massification” of television news channels has not resulted in a boom in public information since many channels are firmly tied to the interests of politician-owners or those who pride themselves as “kingmakers” in regional politics. On the other hand, while many print journalists have been actively invoking RTI to mine information, this is often confined to what the editorial policies and marketing strategies of the news companies consider as relevant for their target audiences. Information mined by concerned citizens or citizen groups on a range of issues is not reflected in sufficient measure, especially if these audience groups do not fall within the boundaries of “monetizable” readership. In such a scenario, vital information procured through RTI loses its vigour since any information is useful in so far as it generates sufficient publicity to incite action. The government should consider mandating the mainstream media – at national, regional, and local levels – to provision regular RTI revelations concerning key government departments’ projects and decisions in their daily news coverage. This is especially important in light of declining resources available within the mainstream news media for investigative reporting and a sharp decline in the investigative component of business journalism. After all, most of the recent “exposures” have resulted from the painstaking groundwork of alert bureaucrats, rival politicians, public ombudsmen, and civil society activists. While the media certainly amplified their visibility, they were neither initiated nor incubated by mainstream commercial media organizations.

Sahana Udupa is a doctoral candidate at the National Institute of Advanced Studies, Bangalore, India. Her work explores the interface between the globalizing city of Bangalore and the news cultures that have emerged since 1990, with a broader goal of theorizing the inter-relationship between contemporary journalistic practices and formation of publics. She was a Spring 2010 Visiting Scholar at the Center for Global Communication Studies, Annenberg School of Communication, University of Pennsylvania.

This article first appeared in India in Transition (IiT). India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

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India’s Defense Production Policy: Challenges and Opportunities

CASI — Tue, 30 Aug 2011 23:58:44 +0000

An overview of India's efforts to modernize her military and defence systems.

In response to security concerns in the neighborhood and as it emerges as a regional superpower, India has embarked on a grand scheme of defense modernization. A recent study published by the Stockholm International Peace Research Institute (SIPRI) places India as the largest importer of arms between 2006 and 2010 and estimates the modernization of the industry at $80 billion. With annual GDP growth rates between 7 and 9 percent in the past decade and the government’s commitment to steady investments in military capabilities, India’s spending on defense as a share of its GDP has remained relatively steady at 2.5 to 3 percent. Consequently, India’s defense budget has grown by 64 percent (in real terms) since 2001 – reaching $36.3 billion in the 2011-2012 budget – and enabled the implementation of long-term acquisition plans.

India therefore possesses both the desire and the ability to make significant strides in modernizing its military. Of the total defense budget, approximately 40 percent ($14.5 billion) is allocated to the defense capital outlay budget, which funds arms procurements, construction and maintenance of installations, additional infrastructure, and other military equipment modernizations. Interestingly, the Indian Air Force has experienced a 6 to 7 percent growth in its share of the capital outlay budget over the past decade, while the Indian Army and Navy have seen their shares decrease. The Air Force also receives the lion’s share – 40 percent – of the current capital outlay budget, while the Army and Navy receive 25 and 20 percent, respectively. The remainder is spent on R&D and military production elements in the Ministry of Defense.

However, unlike in the past, India hopes that the current military modernization efforts will not rely predominantly on imports. In January 2011, India’s Defense Minister unveiled India’s first ever Defense Production Policy (DPrP). The DPrP was prepared with inputs from various stakeholders from both government and industry. These included the three Services, the Coast Guard, the Integrated Defense Staff, the Defense Research and Development Organization (DRDO), the Indian Industry Associations (IIA), the Confederation of Indian Industries (CII), and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Two key elements drive the desire for increasing the capacity of the domestic industrial base supporting defense: a desire to boost domestic defense-related sectors of industry and the belief that providing for its own defense requirements is indicative of being a global power. And contrary to past efforts at achieving this goal, the recently released DPrP is significant in that it concisely articulates the Ministry of Defense’s agenda for supporting a domestic defense industrial base, rather than couching these intentions in dense procurement documents. Moreover, the DPrP highlights the need for greater involvement by the country’s private sector (including small and medium-size enterprises) and for broadening the country’s defense research and development base.

The DPrP, which came into immediate effect, states that priority will be given to indigenous design, development and manufacture of defense equipment. In instances where the Indian industry is not able to deliver, procurement from foreign sources will be sought. The decision to procure from foreign sources will depend on the urgency of the requirement of the equipment and the time required to deliver the equipment. In cases where foreign sources are considered, the Indian Ministry of Defense will deliberate a multitude of approaches such as public-private partnerships, joint ventures and formation of consortia.

Implementing the DPrP presents significant challenges and opportunities for policymakers and industry in India and amongst its international partners. For Indian defense officials, key challenges to be addressed include: what is expected of the domestic industrial base? Does India have the required workforce? Will the level of defense investments match expectations? What lessons in building a domestic industrial base can India learn from other sectors? Key opportunities include the opportunity to leverage its position to strike unique and innovative partnerships, both industrially and politically, to negotiate for more generous technology transfer and to create a globally competitive defense and security industrial base.

For India’s international partners, especially the United States, which is expected to see a reduction in its defense budgets in the coming years, the Indian defense market will be a lucrative one. However, while business opportunities in India will be abundant, it is advisable for these partners to view the Indian defense market in the context of a broad strategic partnership that includes opportunities for engagements on issues such as counterterrorism, Maritime Domain Awareness and Space Situational Awareness. As the DPrP is implemented, it will cover not just defense companies, but a broader array of aerospace, IT, and security sectors that international partners would do well to identify in advance.

India’s DPrP is a significant document in that, for the first time, an agenda is articulated by the Ministry of Defense (MoD) to bolster the domestic industrial base supporting defense. In addition, this document highlights the need for greater involvement and participation from the country’s private sector (including small and medium-size enterprises) and for broadening the country’s defense and research development base. India’s first ever DPrP presents momentous opportunities for India and its international partners. The Indian MoD should leverage this position by being more receptive to innovative and creative partnership agreements, and international partners would benefit from taking a strategic approach to the emerging defense and security industrial base in the country.

Bharath Gopalaswamy is a Scholar at Cornell University’s Reppy Institute for Peace and Conflict Studies Program.

Guy Ben-Ari is a fellow at the Center for Strategic and International Studies and Deputy Director of its Defense Industrial Initiatives Group.

This article first appeared in India in Transition (IiT). India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

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