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Vedanta Refinery Expansion


Issn 0012-9976


Issn 0012-9976

Ever since the first issue in 1966, EPW has been India’s premier journal for comment on current affairs and research in the social sciences. It succeeded Economic Weekly (1949-1965), which was launched and shepherded by Sachin Chaudhuri, who was also the founder-editor of EPW. As editor for thirty-five years (1969-2004) Krishna Raj gave EPW the reputation it now enjoys.


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Economic and Political Weekly 320-321, A to Z Industrial Estate Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013 Phone: (022) 4063 8282 FAX: (022) 2493 4515

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Newborn Girl Subsidy

hank you for your editorial entitled “Impassioned Slogans, Half-hearted Actions” (EPW, 11 June 2011) on female foeticide. In addition to the policy proposals made therein, it may now be time to seriously consider the use of financial incentives. It is widely thought that financial considerations play a role – perhaps even a decisive role – in the desire of some parents to identify and abort f emale foetuses. If that is indeed the case, why not fight fire with fire? The situation has gotten so dire that a sizeable subsidy to the parents of every newborn girl should now be considered. Such a subsidy may well persuade some parents to be merciful.

As you pointed out in your editorial, a recent study in The Lancet has found that “selective abortion of the female foetus is the highest in the most educated and in the richest 20% of the households”. This may provoke a natural objection to any proposal for a newborn girl subsidy: a rich family that wishes to abort a female foetus would not be swayed by a subsidy. My answer to such an objection is that, given that the annual number of female foeticides is now estimated, in several studies, to be in the millions, even a moderately successful newborn girl subsidy will save many lives.

A second objection will inevitably be about the cost of such a subsidy. Of course, the cost of the newborn girl subsidy must not be ignored. However, consider the discussion of The Lancet’s findings in your editorial: “[W]hen the first child was a male, there was no fall in the sex ratio of the second child. But when the first born was a female, the sex ratio of the second births declined.” In other words, the danger of the murder of a f emale foetus is particularly serious only when the mother has already had a daughter and is now hoping for a son. So, instead of giving a subsidy for every newborn girl, it may be a good idea to start with a less ambitious subsidy paid to parents if their second child is also their second daughter. This would keep the subsidy’s cost low without seriously reducing its effectiveness.

july 30, 2011

The cost of the subsidy could also be kept low by targeting it to the states where female foeticide is a particularly severe problem. Of course, this could enrage the states that are denied the subsidy; they would rightly complain that their residents were missing out on the government’s largesse because they happened to be more humane towards female foetuses. A way to politically address this issue would be to turn the subsidy into a matching grant. The central government would pay Rs X to parents if their second child is also their second daughter, provided the state government also chipped in with Rs Y. Under this system, a state with a serious female foeticide problem would be likely to participate, whereas a state with a low level of female foeticide would not. This way, the goal of restricting the subsidy to the states where the problem is severe would be achieved, but without the lowfoeticide states complaining.

Finally, if the subsidy is limited in this manner, the size of the subsidy could be made large – large enough perhaps to tempt even rich families to refrain from female foeticide.

Udayan Roy

Economics Department Long Island University

Brookville, New York, USA

Interstate Procurement

amana Murthy’s article on “Paddy Glut and Farmer Distress in Andhra Pradesh” (EPW, 16 July 2011) captures the intensity and root cause of the procurement problem in the state though it does not give a clear-cut solution. Murthy simplifies the importance of self-help groups (SHGs) in procuring paddy in Andhra Pradesh (AP), which calls for a discussion. Further, the article explores the possibility of an interstate procurement (ISP) system as a remedy to the procurement problem.

Farmers, after bearing the brunt of high prices of inputs, high labour charges and uncertainty of weather, face another daunting and challenging task, i e, of selling their produce at the minimum support price (MSP) set by the government, at which the government, despite its good

vol xlvI no 31

Economic & Political Weekly


intentions, is not able to procure. This leads the farmers to sell their produce to middlemen at lower prices at which, sometimes, they are not even able to recover the cost of inputs. The fact of the matter is that farmers are still being e xploited by the conglomerate of rice millers and middlemen. A key part of the current problem lies with the state procurement system. Despite the strengthening of the procurement mechanism of state governments, thousands of farmers have been waiting in line for their produce to be sold. Unable to wait longer, farmers are being forced to sell their precious crop to traders for less than the MSP.

But, against all odds, a system is developing in far-flung villages of AP, where women SHGs have taken up the challenging task of procurement of paddy and some other foodgrains under the guidance of the Society for Elimination of R ural Poverty (SERP). Hundreds of Community Procurement Centres (CPCs) have been formed by the Indira Kranti Patham (IKP). At the inception there was a lot of scepticism about whether women – illiterate at that – will be able to handle the pressure of management in procurement of foodgrains. But after six years of continuous running and existence, the IKP has provided appro priate answers to all the questions that were raised against its feasibility and viability. A total of 9.07 lakh tonnes of paddy has been procured by CPCs run by members of SHGs in AP as of end-May 2011. This clearly shows the importance of SHGs in procuring paddy in the state. But still the procurement problem is continuing.

Here we can see the role of the ISP system in tackling the present problem. As we know, Kerala is a state with the highest rice deficit – 85%. At present Kerala needs 40-45 lakh tonnes of rice but the availability is just 5.90 lakh tonnes. Therefore, Kerala is heavily depending on other states, including Andhra Pradesh. One important question is: Why does not Kerala procure paddy from AP or other paddy-surplus states? If Kerala procures paddy from AP, it will give a big relief to farmers who are suffering from low MSP there and Kerala’s consumers who have to purchase rice at a high price. The procurement price of paddy in Kerala is Rs 1,300 per quintal. It can be used to procure paddy from Andhra Pradesh. For instance, the Kerala government can procure paddy from farmers of AP at Rs 1,100 per quintal and Rs 200 may be used to bear the cost of transport. In this way Kerala can procure 5 lakh tonnes to strengthen food security through the public distribution system in the state. Moreover, this will arrest the cartel of private traders to some extent. In sum, the interstate procurement system will enhance not only livelihood security of farmers in Andhra Pradesh but also food security of Keralites. Furthermore, the ISP can improve the federal set-up of the country and also economic and political relations of the people across states. Rohit Joshi and A D Manikandan

National Institute of Rural Development


Vedanta Refinery Expansion

mnesty International (AI) has urged the Indian authorities to order the immediate clean-up of an alumina refinery in Orissa, following a high court decision to reject plans for its expansion by a subsidiary of the UK-based Vedanta Resources.

The High Court of Orissa upheld the I ndian government’s decision made in A ugust 2010 to reject Vedanta Aluminium’s plans for the sixfold expansion of the Lanjigarh refinery, finding that the project violated the country’s environmental laws. Vedanta Aluminium had challenged the Ministry of Environment and Forests’ decision in the high court on November 2010. According to Madhu Malhotra, AI’s Asia-Pacific D eputy Director:

This decision is of tremendous significance for the local communities, who have been fighting to prevent this expansion going ahead. The refinery, which has been in operation for four years, fails to meet accepted national and international standards in relation to its environmental, social and human rights impact. The authorities must order an immediate clean-up of the site and monitor the health status of the local communities. The Ministry of Environment and Forests must also carry out an independent audit to ascertain whether the refinery’s almost-full 28 hectare red mud pond, from which two breaches have been reported in April and May, is operating in compliance with India’s environmental protection laws and international standards.

Residents of 12 villages who live in the shadow of the massive refinery – mostly Majhi Kondh adivasi (indigenous) and dalit communities who rely on agriculture for their livelihoods – have long campaigned against the expansion, arguing it would further pollute their land and water.

The Ministry of Environment and F orests rejected the expansion plan on 24 August 2010. It also rejected plans by Sterlite India, another Vedanta Resources’ subsidiary and the state-owned Orissa Mining Corporation, to mine bauxite at Niyamgiri Hills near Lanjigarh after finding that it would violate forest and environmental laws and the rights of the Dongria Kondh adivasi communities.

Challenges against this by Sterlite India and the Orissa Mining Corporation are pending in India’s National Green Tribunal and Supreme Court.

Ramesh Gopalakrishnan,

South Asia Team, Amnesty International,


Precapitalist Community

urely any improvement in the condition of rural women or any decisive blow against the caste system requires the breaking up of the old precapitalist community. The failure of Indian capitalism to break up such a community is the reason for the existence of khap panchayats. Actually, these caste panchayats are functioning as the modern-day ethnic blocks. They are more adaptable to m odern-day democracy and elections, even as they dictate the private and public life-styles of their members. The brute logic of caste patriarchy is being imposed on their members and any dissident voices are being suppressed. Rather than proletarian consciousness, caste-communitarian consciousness is being strengthened at the cost of Indian democracy. This castecommunitarian block has strong sociocultural and material roots too. C K Vishwanath Kannur Kerala

Economic & Political Weekly

july 30, 2011 vol xlvI no 31

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