Getting all “POSCO’s” Moving

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by B.G. Verghese
Jairam Ramesh has finally given conditional clearance to the mega POSCO steel-mine-port project in Orissa that he vetoed last August after much palaver. This is good news but is something that could have been done long back without the prodding and pushing it entailed. There is nothing in the order, including stipulating action in consonance with the Forests Rights Act, that could not have been said or sought earlier from the project authorities and the State government.

Precious time has been lost considering that initial clearance for this 12 m tonne, $ 12 bn project was given in July 2007, after a MOU was signed with the South Korean Pohang Steel Company in 2005. The subsequent Forest Rights Act, retrospectively applied, was to undo earlier approvals as in the case of the Vedanta aluminum project. One clear lesson is that piecemeal, stop-go clearances and incremental approvals, subject to revision in the context of future legislation, constitute an appallingly clumsy and muddled way of doing business. This inspires no confidence and can only undermine the credibility of governance.

No surprise if investors, Indian and international, should pause before staking too much in an uncertain future. The contretemps over coal mining caused by the Ministry of Forest and Environment’s “go and no-go” classification of forests for mining approvals brought a word of caution from the Planning Commission Deputy Chairman in December that this could retard infrastructural and industrial development. The Reserve Bank followed, lamenting the decline in inward FDI flows resulting in delays and stop-go’s in relation to environmental clearances for a wide range of projects on account of procedural and land acquisition hassles and (the consequent) paucity of quality infrastructure which lies at the heart of Government’s growth and poverty alleviation strategy.

The Coal Minister has now assessed that as a result of MoEF embargoes on mining, the country faces a possible shortfall of 142 mtonnes in coal production next year with implications for prices and industrial production. With oil prices rising, the foreign exchange burden will also increase.

The Prime Minister has upheld environmental conservation as a matter of prudence and inter-generational equity but has expressed concern that we should not return to the permit-license raj. Ramesh has countered by stating that most coal mining applications have been cleared and that he is seeking to maintain a delicate balance between conservation and growth. The MoEF argument, as reported, that no-go mining areas serve to preserve a national strategic reserve is unconvincing. Worked mines can and should be ecologically restored as green parks and water bodies, as is indeed being done in certain cases with considerable success.

The notion that growth caters solely to corporate greed is fallacious. A sustained high rate of growth is necessary not merely to generate incomes and employment to absorb the net 12 million annual addition to the labour force as a result of given demographic factors but to mitigate if not obviate the 30 million annual distress migration of Malthusian refugees seeking life-saving opportunities. It also helps support inclusive growth by generating the revenue surpluses that make possible the funding of large rights-based programmes such as the Employment Guarantee Act, the Sarva Shiksha Abhiyan and so forth. A sustained 8-9 per cent rate of growth over the next decade should enable the country to overcome destitution by 2020. High growth is therefore more essential for the poor than it is for the well off. However, widening disparities between different classes and regions must also be countered in the interests of social and political stability.

A further proposition that merits wider understanding is that poverty, which breeds survival economics, is inimical to conservation and the environment.

The Government’s new line on POSCO has not unexpectedly aroused the opposition of sundry activist groups that have opposed not only this but a whole series of large projects across the broad in every part of the country. Relevant conditionalities are in order; but any set of ideological red lines can only harm the welfare of the tribals and other disadvantaged groups who are being falsely instigated to forego opportunities of transforming their lives and their environment.
The land can no longer sustain the numbers still scratching a marginal livelihood from it. Mega industry is obviously not the sole answer and must be buttressed by the development of off-farm, rural based small and medium enterprises in food and by-product processing and a range of services. The khadi and village industry and handloom and handicraft sectors are well poised to be infused with modern technological, marketing and management inputs to give a thrust to a new generation of SMEs, assisted with micro-finance that post office savings banks could provide. Gandhi has to be reinterpreted for modern times in a manner that he would surely have approved.

Energy represents another vital sector that required impetus. After virtually banning any new hydro projects in the higher reaches of Uttarakhand and Himachal, there has reportedly been a welcome relaxation – at least for survey and investigation – in North Sikkim though not in Arunachal. However, strong opposition to the mega 6 x 1650 MW nuclear plant proposed to be set up at Jaitapur, in Ratnagiri district, remains. There is again evidence of a touch-me-not attitude in the opposition to the project, apart from objections to adoption of new technology being brought in by the French collaborator, Areva.
Issues concerning public hearings, land acquisition, fisheries, the temperature of return coolant water flows, seismicity, radiation and green cover have all been gone over and answered. Some of the objections to the Jaitapur project would appear to be ideologically driven on account of positions taken on the merits of the civil-nuclear deal. These have been amply debated and answered, though those who are determined to oppose nuclear power and the route followed will continue to do so. But none can have a veto on development. Nuclear power is not the sole option and thee can be no disagreement about going forward with solar and other forms of non-conventional sources of energy. Nor is it sufficient to argue that nuclear power is currently high cost and that its immediate contribution over the next decade or two will be limited in relation to India’s total energy budget.

The underlying national strategy is to move on to a second and third stage of nuclear power generation, graduating from uranium-based to cheaper and more efficient breeder reactors operating on the plutonium-thorium cycle. That the country has gone slow in developing nuclear power for a variety of reasons is every reason to expedite rather than further retard the process today. Yesterday’s people fear tomorrow, which is where the future lies.

www. bgverghese.com

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