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Relocate clearance procedures away from the border and partner countries must adopt well-established practices

Of late India has been active in improving volume of trade flows through the land route with its eastern neighbours under the preamble of India’s Act East policy. With this in mind improving border management for faster movement of cargo has been a one-point agenda of the present government. If one travels to the important border crossing point like Petrapole/Raxual one comes across cargo traffic mayhem with lines of trucks waiting to cross over parking chaos etc. The first impression one gets is that the situation is same as five years backs. The fact is that the pace of capacity expansion in border management falls short of the growth of cargoes. This calls into question whether India is following the right path for border management?

Worldwide experience on streamlining cross-border management suggests three pathways: capital investment new legislation and regulatory reform. Capital investment was the key component of the strategy for developing the Pan-American Highway but its performance suffered from absence of desired attention given to the regulatory reform and legislation to facilitate cross-border movements.

On the other hand the EU has relied on legislation to implement strategies for the development of the trans-European transport network. It must be mentioned that India has been pro-active lately in adopting the legislation route with neighbouring countries so that trans-border truck movement becomes a feasibility.

Capital investment at border points is costly for developing countries like India Nepal Myanmar Bhutan and Bangladesh. Indeed none has funds to undertake such improvements at all the officially designated border points. What has happened in reality is capital investment at only a few of the principal border points. However the volume of trade has grown significantly faster than the expansion of capacity.

In India it has become increasingly difficult to acquire land for any project. At the border crossing point one comes to realise that procuring land for infrastructure expansion is a herculean task as empty space does not exist. Rapid urbanisation coupled with encroachment on public land imply that forceful eviction will lead to law and order issues unless hefty compensation is doled out. Thus capital investment route is not a reality. Our focus should be on the other two avenues to decongest border.

While legislation may be one of the ways there is no denying that probably the best option for increasing the efficiency of clearing import and export cargoes is to relocate the clearance procedures away from the border. Indeed this is one of the basic insights of the EU’s programme. Inspections of truck registration driver’s licence and certificate for road-worthiness can be conducted along the corridor but away from the border as part of the domestic programme of roadside inspections.

Train inspection can take place at marshalling yards where they are supposed to stop instead of border-crossing points. Cargo inspection and clearance procedures can be relocated at inland-bonded warehouses container depots and dry ports. This approach was pioneered to alleviate congestion in international seaports but is now being adapted for imports arriving through land borders in Europe and transition economies. It allows movement of goods under bond from the border to inland customs facilities special economic zones or other enclaves that are granted duty-free status. This may include allowing cargo to be cleared at factories. This is a way to decongest border points.

International conventions

To facilitate measures for cross-border movements of goods the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) at its 48th session adopted resolution 48/11 of April 23 1992 on road and rail transport modes. It recommended that the countries in the region if they had not already done so consider the possibility of acceding to seven international conventions in the field of land transport facilitation which were originally developed under the auspices of the Economic Commission for Europe (ECE:14): (a) convention on road traffic 1968; (b) convention on road signs and signals 1968; (c) customs convention on the international transport of goods under cover of TIR carnets (TIR convention) 1975; (d) customs convention on the temporary importation of commercial road vehicles 1956; (e) customs convention on containers 1972; (f) international convention on the harmonisation of frontier controls of goods 1982; and (g) convention on the contract for the international carriage of goods by road 1956.

India and its neighbouring countries are yet to ratify adopt all these conventions. The absence of ratification to the international convention implies that trade between India and neighbouring countries cannot be governed by an international efficient system. They need to develop their own systems for trading between themselves which is basically the practice that both countries follow.

However it must be noted that it is always better to adopt best international practices than go for self-developing a process ratified by partner countries. Already there exist a well-established process for on-road cargo movement across border namely TIR convention which facilitates movement of goods in sealed vehicles or containers from a customs office of departure in one country to a customs office of destination in another country without requiring extensive and time-consuming border checks at intermediate borders while at the same time providing customs authorities with the required security and guarantees.

To date more than 33000 international transport operators had been authorised (by their respective competent national authorities) to access the TIR system using around 1.5 million TIR carnets per year. It is high time that South Asian countries adopt it fast without going for developing cumbersome process/procedures which need to be ratified by partner countries and at the same time build capital infrastructure at the border for which funds are in short supply.

The writer is a Professor at NCAER. Views are personal

Water tables have fallen drastically and we need paradigmatic changes in agricultural practices for resource conservation.

Our policies to ensure food sufficiency and assure farmers income have unfortunately also caused crop distortions that have led to excessive drawing of groundwater and its depletion.

A disastrous water crisis has been creeping up on us for years. Water tables have declined precipitously even by thousands of feet in some parts of Punjab Haryana and Andhra Pradesh. Tanks and wells have gone dry. Some rivers have shrunk while other smaller ones have completely dried up. Water rationing is routine in many urban areas while in many villages women are trudging longer distances to fetch water.

In my March column on the entangled economics and politics of the farmers’ agitation (Mint 19 March 2021) I had explained that the Green Revolution which made India self-sufficient in food was also the origin of the policy distortions underlying the agitation. I also pointed out the terrible ecological consequences of the same policy distortions in particular the depletion of ground water. I had suggested that among other measures the government should gradually shift from the near exclusive procurement of wheat and rice (95%) at assured minimum support prices (MSPs) to the procurement of other crops such as jowar bajra ragi and other nutri- cereals and also pulses oilseeds etc. The announcement of MSPs for 23 major crops means little without significant quantities of these crops being procured at those prices.

This was suggested to help correct our long prevailing relative price distortions favouring wheat and rice in agricultural markets and to incentivize a shift in cropping patterns towards nutri-cereals pulses and oilseeds. Shah M. and P.S. Vijayshankar (S&V) have now explained in a recent paper why such cropping pattern shifts are also essential for addressing the country’s water crisis (‘Symbiosis of Water and Agricultural Transformation in India’ 2020). They point out that agriculture consumes about 90% of India’s water supply and of this 80% is consumed by just three water-guzzling crops: rice wheat and sugarcane.

India’s gross cropped area has increased by over 120 million hectares since the 1980s mainly due to an increase in ground water irrigation especially through tubewells. In the past 40 years about 84% of the increase in net irrigated area has come from ground water. At 250 billion cubic metres per year India is the largest consumer of ground water in the world consuming more than China and the US—the next two largest—combined. It is not surprising that our water tables have fallen so drastically.

But how can we address this looming water crisis? S&V have detailed the many paradigmatic changes required in agricultural practices and in the management of water. Here is a brief summary:

In addition to the cropping pattern shifts mentioned above S&V propose a shift to water-saving seed varieties even in rice and wheat. They also propose the use of water-saving practices such as rice intensification conservation tillage drip irrigation land-levelling and direct seeding of rice. Field trials suggest that these practices can save between 17% (Rajasthan) to 80% (Tamil Nadu) of our blue water compared to conventional practices. In most states the blue water saved is between 25% and 50%.

Second groundwater use is completely unregulated resulting in its catastrophic over- exploitation. The common law of absolute domain prevails giving landowners the right to extract unlimited amounts of water with their tube-wells ignoring the externality that the aquifers tapped by them may also be tapped by others’ tube-wells. Competitive water extraction becomes a race to the bottom accelerating the fall in water tables. Hence legislation to regulate the use of ground water is most urgent. States can adapt the model Groundwater (Sustainable Management) Bill of 2017 to local conditions and pass their own legislation. This can be supported by rationing the availability of power to run pumps and restricting it to just a few hours a day. The alternative of licensing and metering the use of some 45 million wells and tubewells seems impractical at present.

Third protective irrigation for conserving green water is another key measure along with the protection and rejuvenation of catchment areas. S&V point out that there has been a decline in the annual run off in many major river basins not because of any decline in rainfall but because of encroachment and other activities that have damaged catchment areas. China Brazil Mexico and other countries are considering paying local residents to protect catchment areas and keep river basins healthy and green. Similarly the employment of local residents in India for micro-level watershed management schemes suitably adapted to local conditions could protect catchment areas and also generate large-scale employment.

All this points to the key role of farmers as agents of change. Whether it is agricultural practices to conserve blue water or local watershed management to preserve green water or local cooperation for sustainable ground water use farmers themselves will have to champion these initiatives. Governments have a crucial role in aggregating such local initiatives and scaling them up but at the local level participatory management by farmers is essential to ensure positive outcomes.

Top-down administrative arrangements will have to be replaced by participatory bottom-up systems led by farmer producer organizations (FPOs) along the lines of the Kaira District Co- operative Milk Producers’ Union. Women’s self-help groups (SHGs) which have gone beyond collective credit to various agricultural activities in several states are closely-related institutions. Governments need to support the development of these institutions but FPOs and SHGs will have to be the leading agents of change in this new paradigm.

Sudipto Mundle is distinguished fellow National Council of Applied Economic Research New Delhi. These are the author’s personal views.

The 2nd Covid-19 wave rose sharply from mid-March and peaked on 9th May 2021 (NCAER Quarterly Review of the Economy). The peak number of cases and deaths in second wave were four times higher than the peak in the first wave. 

Daily deaths (7-day moving average) peaked at 4190 on 24th May 2021 compared to first wave peak of 1167 in September 2020.   The sudden and unexpected surge in cases exposed the failures of markets as well as governments (economic inefficiency). While public sector capacity was overwhelmed market mechanisms became prohibitively expensive. 

In those dreadful days however there were also instances where communities provided much needed relief for their members. While most expect community engagement to come from well-meaning neighbors non-profit organisations and religious institutions the role of a workplace as a shared community among employees has not been explored. Employees are one of the intangible assets for any firm.

Hence one expects businesses to step up and protect their workers. In this article we use NCAER’s Business Expectations Survey (N-BES) to explore different ways businesses may have curbed the impact on their employees during the second wave of COVID.

We asked firms about the additional health related expenditure they incurred for their employees between April and June 2021. This allowed us to observe the dynamics of business response with changing conditions during the second wave. Notably the firms we surveyed are located in 6 cities which accounted for 14 per cent of the total COVID-19 deaths in the country in June 2021 (Chennai Bengaluru Delhi Kolkata Mumbai & Pune). 

If businesses do provide a shared community for their workers then the response should become sharper as the situation worsened between April and May and then subside with waning number of cases in June.  Figure 1 provides summary of our findings.

How did firms help in protecting their workers?  

1. Expenditure on Medical Equipment such as Oxygen Cylinders etc. (dotted black line): Consistent with our expected view the proportion of firms incurring expenses on medical equipment for their employees increased from 33% to 44%. This proportion declines in June 2021 when the number of cases started coming down rapidly.  Our further probing revealed that firms bought oximeters thermometer and sanitation machines.  
2. Expenditure on COVID-related treatment for employees (solid red line): A similar pattern as above is observed for expenditure on health treatment costs for employees infected with COVID. While 37% of businesses shared that they covered treatment costs for their employees in April 2021 nearly half the firms were doing so in the month after that. This proportion falls back to 35% in June 2021 when the incidence of cases declined. It is noteworthy that this expenditure is over and above health insurance coverage provided by employees. 88.3% of firms reported providing health insurance to permanent workers and 50% to temporary workers.
3. Organising Vaccination Camps in Offices or Covering Vaccination Costs for Workers (dashed green line): The proportion of firms which organised vaccination camps or covered vaccination costs for employees increased substantially from 27% in April 2021 to 47% in June 2021. This increasing pattern is consistent with the expansion of pace in vaccination over these three months.  

Expenditure on Health Care: April-June 2021

                      Source: NCAER Business Expectations Survey Round 117 July 2021.

These results imply that businesses and workers are not tied by merely transactional relationships. They protect their intangible assets in times of needs. In addition to health costs firms also provided food & residential services to workers (25.4% of firms in April 2021 34.2% in May 2021 and 20.7% in June 2021) and transport facilities to workers (35% of firms in April 2021 54.7% in May 2021 and 41.6% in June 2021). 

What does this mean for public policy? First while nearly 88% of firms shared that they provided health insurance coverage to their permanent workers only half the firms did so for temporary workers. Government insurance program such as Ayushman Bharat can be offered through employers. This directly benefits workers and smaller firms especially who are burdened with elevated costs.  

Rebates on employee provided health insurance to temporary workers may allow higher coverage of health risks.  Second layoffs have been common among businesses. Information from businesses can serve as a data repository for extending government support to the laid-off workers in the form of unemployment insurance through Direct Benefit Transfer mechanism.

This will also enable more flexible labour market decisions for firms during future crises.  Third in case of a third wave firms especially MSMEs could be reimbursed for their employees’ hospital bills or their hospital related expenditure can be made tax deductible. This could also have a direct impact on firms’ working capital.

Our findings compel us to re-position our understanding of relationship between firms and workers as not adversarial but that of a community where workers can seek solace and can be leveraged for purposes like re-skilling/upskilling.

The authors are Bornali Bhandari Senior Fellow NCAER. Samarth Gupta and KS Urs Associate Fellows NCAER AK Sahu Senior Research Analyst NCAER.  Views are personal.