Return of Cauvery crisis and the way ahead:-
With the Southwest monsoon falling short this season, the story of any other monsoon-deficient year is being repeated: Tamil Nadu rushing to the Supreme Court citing the crisis faced by its farmers, the court ordering release of some water, and protests erupting in Karnataka.
The reason for this endless cycle of sporadic litigation and ad hoc adjudication is that the two States continue to avoid any mutual engagement to share the shortfall during distress years. And there is no permanent, independent mechanism to ensure this.
The Cauvery Water Disputes Tribunal, which gave its award in 2007, has asked the parties to share the deficiency on a pro rata basis.
However, a major problem in implementing this aspect is the absence of a ‘Cauvery Management Board’ and a Regulatory Authority, which the Tribunal had wanted created to oversee implementation.
Instead, after notifying the final award in 2013, the Union government set up a Supervisory Committee comprising officials from the Union government and the Central Water Commission and representatives of both States. The court has now asked Tamil Nadu to approach the committee, which will decide on further releases.
The Supreme Court’s direction, when implemented, will ensure about 13 thousand million cubic (tmc) feet of water to Tamil Nadu over 10 days. This will not be adequate to save the entire samba crop, Tamil Nadu leaders argue, while their Karnataka counterparts contend that this itself is a huge burden, given the State’s own storage deficit.
It is understandable that the political leadership of any State would not want to be seen as betraying the interests of its farmers. Yet, the desire to protect one’s own interests should not shut out empathy for one’s neighbour.
Ideally, any distress-sharing formula should come from a technical body. It would have helped if the Centre, which dilly-dallied for six years before notifying the final award under a judicial direction, had set up the Cauvery Management Board and Regulatory Authority.
In the longer term, experts will have to devise a sustainable agricultural solution for the Cauvery basin, as the river does not seem to have the potential to meet the farming requirements of both sides.
In a world of depleting water resources, fewer crop seasons and lower acreages, a resort to less water-intensive crops and better water management hold the key. Non-political initiatives, such as the ‘Cauvery Family’, a body formed a few years ago covering farmers of both States, could help disperse the clouds of hostility that gather over the border whenever the Cauvery crisis erupts. Politics and passion should not be allowed to hold sway
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.