Redevelopment of Eloor-Edayar region

The Times of India report, “CPCB report shows need for urgent action” (Aug 24, 2016), illustrates another instance of decentralized responsibilities resulting in gridlock, health hazards, and government agencies lacking purpose.

“A report submitted by the Central Pollution Control Board (CPCB) before the NGT (National Green Tribunal) on action to be undertaken in the Eloor-Edayar contaminated area, says remediation measures are to be given utmost priority.”

In addition, “It says that multiple contaminants including DDT, endosulphan chlorobenzenes and metals such as manganese, vanadium, zinc and chromium have been found in soil, groundwater, sediments and surface water and that immediate remediation measures must be taken to rejuvenate the water body.”

Kerala State Pollution Control Board (KSPCB) had informed CPCB that “the four main industries identified (causing the pollution) were Hindustan Insecticides Ltd (HIL), Fertilizers and Chemicals Travancore Ltd (FACT), Merchem and Indian Rare Earths (IRE).”

The report adds, “A preliminary investigation of the Eloor area [2] was carried out in 2006 wherein it was found that the soil and sediments in Kuzhikandom Thodu (creek) and the adjoining paddy fields are contaminated (pdf) with DDT (dichloro-diphenyl-trichloroethane) [2, 3, 4], BHC (Benzene hexachloride) [2, 3] and endosulphan [2, 3, 4],” and more.

Besides, “The NGT is hearing a petition filed by local residents demanding zero-discharge by industries into the Periyar. Periyar Maleenikarana Virudhha Samithi (PMVS), an NGO which is in the forefront of protests against the pollution of the river has a Clean Periyar Green Periyar action plan on the lines of the Ganges Action Plan.”

The report adds additional details: “The Eloor-Edayar industrial cluster is home to more than 280 industrial units, out of which 75 are in the red. The discreet discharge of trade effluents and waste in slurry form into Periyar has turned the river into an illegal “Treatment Storage and Disposal Facility (TSDF), the Supreme Court Monitoring Committee on hazardous waste has observed.”

Many state and central government agencies are involved in controlling or preventing the Periyar river pollution. But the net result, as the Supreme Court says, is “the river Periyar has has turned into an illegal ‘Treatment Storage and Disposal Facility.” Even with all these agencies, pollution control is practically non-existent, and “massive fish kill is a frequent phenomenon downstream of river Periyar.” (“75% of waste water released back into river”)

One thing striking about the situation is that in spite of the state and central government agencies (Central Pollution Control Board, Kerala State Pollution Control Board. National Green Tribunal) to protect the environment, it is the NGO, Periyar Maleenikarana Virudhha Samithi (PMVS), that is actually trying to do something about it through legal action.

Greenpeace India reports, “Eloor has become one of the most toxic parts of the country and figures on the list of most polluted areas put out by the Central Pollution Control Board in India. Poisoned land, waters and air, hreaten the health and very existence of people and the ecology of the area. Polluted rivers transport the toxins over much larger distances endangering more people and other living creatures.” [2]

In addition, the Status of Human Health report says, “Contrary to the expectations based on the initial literature survey about possible increases in particular types of diseases due to air and water pollution; this health assessment has discovered that there is an overwhelming increase in most types of systemic diseases across Eloor (target village) when compared to Pindimana (reference village). Broadly one can say that the cocktail of poisons in the air and water of Eloor affects all body-systems adversely. Potentially the immune system seems to be affected too.”

The Kerala State Pollution Control Board produced a “preliminary” report stating that there is a serious problem in 2006. The polluted Eloor-Edyaar site was selected as one of the priority sites in the country needing remediation under a National Clean Energy Fund (NCEF) project to be executed by CPCB. The Central Pollution Control Board produced a report and submitted to the National Green Tribunal, which is conducting a hearing on the issue. It looks the state and central governments are geared towards producing reports and conducting legal proceedings, but not taking action. Since nothing was been done even after the 2006 report, the NGO (PMVS) petitioned the Supreme Court, which concluded that the polluted site, which in reality should be nourishing river, has turned into a “illegal Treatment Storage and Disposal Facility” for highly toxic pollutants.

Finding a real solution means going into history to understand the causes of the current problems. The origin of the problems started in the 1930s with the decisions of the Travancore Administration to establish chemical industries for economic development. “A policy decision of the Travancore administration in the 1930 — to attract large-scale, chemicals-based industries to the State by the advertisement of cheap hydroelectricity as the basis for industrialization,” says Jayan Jose Thomas, an an Associate Professor at the Indian Institute of Technology Delhi. Unfortunately, it was an administrative policy decision lacking sound industrial development plan and follow-up actions.

Industrial scale chemical production, to be viable, need to act as a feeder to a strong supply chain manufacturing derivative products. Downstream industrial ecosystem failed to develop for the these chemical factories. Most of the industrial production, especially chemical industries, are centered around the MumbaiPune [2, 3] metro-regions in Maharashtra [2, 3, 4] and Gujarat [2, 3, 4]. With underdeveloped transportation systems, it was not feasible for Kerala based chemical industries to be viable suppliers to those distant regions. As a result these industries have been stagnating, except when India operated a centrally planned economy. Most of these industries now are not profitable, making it impossible to implement effective pollution control systems.

The logical solution is to disband results of the 1930s failed industrial policy and create a redevelopment plan for the region. However, it needs to be implemented after a careful review of the possibilities. Some parts of the chemical factories and businesses in the Eloor-Edyaar region are profitable and can be self-sustaining. A redevelopment plan need to be formulated consisting of these components:

  • Identify factories and businesses with current and long-term sustainability
  • Identify factories and businesses without current and long-term sustainability
  • Implement assistance programs to strengthen factories and businesses with long-term sustainability to incorporate strong pollution controls
  • Implement assistance programs to help factories and businesses that do not have a sustainable future to exit or migrate to other areas/ sectors
  • Develop and implement a cleanup plan for the Eloor-Edyaar region to remove accumulated pollution
  • Make Eloor-Edyaar redevelopment part of a Kerala Transformation Plan

Such a comprehensive approach is necessary to solve the pollution problems in the Eloor-Edyaar region. Bandage efforts like offering financial loans will not produce a permanent solution.

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A power grid gridlock

The Times of India report, “City stands to lose central funding for power project,” (Aug 15, 2016), reveals critical skills deficits in Kerala for project implementation.

According to the report, “The delay in executing the Rs 240 crore ($36m) ring main project is likely to cost Kochi a central assistance of nearly Rs 94 crore. The project — which aims to reduce transmission loss and ensure steady power supply in city and suburbs — has to completed by October 31 to receive the full central aid of Rs 188 crore ($2.83m). KSEB (Kerala State Electricity Board Ltd) was to provide the rest of the amount.”

“The problem is that the implementing agency has finished only half the work in two-and-a-half years though the Center extended the project deadline twice. The project under restructured accelerated power development and reforms program (R-APDRP) was awarded to NCC, a Hyderabad based firm, in June 2014 and the deadline set was 20 months.”

“Once complete, there won’t be power failure in the city and suburbs even at night,” said a KSEB official.” The Ring Main Initiative is an automation of power substations and their networks. Once completed, there won’t be power failures due to technical snags. All substations, feeders included in the project would be networked in such a way that if a particular substation develops a problem, power would be drawn to its supply lines from other substations and feeders.”

Here is summary of the situation. Government of India, ministry of power, has an initiative, “Integrated Power Development Scheme.” Under this scheme there is a program, R-APDRP to improve the electric power supply performance and loss reduction. KSEB was awarded Rs 188 crores ($2.83m) grant for upgrading the power grid in the Kochi area. KSEB contracted the work to NCC in 2014, for completion by February, 2016. Due to project delays, an extension has been granted till October, 2016. Based on the progress so far, the project is unlikely to be completed by the October 2016 deadline. The Government of India will make payments only after project completion.

The problem facing Kochi region is that due to the delay in the work by a Hyderabad based company, the power grid may not be upgraded resulting in the continued unpredictable power outages.

For Nagarjuna Construction Company Limited (NCC), upgrading power grid in the Kochi region may not be a priority, as the Government of India is giving out development projects left and right (“304 plans worth Rs 12,75,877 cr ($191.4B) stuck; stalled projects continue to haunt policymakers“) [2, 3].

Based on the funding arrangement, the Government of India seems to be interested in concentrating control through the funding mechanism. The R-APDRP program structure involves the use the following categories of consultants:

  1. Process consultant, Web Advision, and Cap Bldg consultant
  2. Capacity building – RIs (Resource Institutes) and PTIs (Partner Training Institutes)
  3. Third party Independent Evaluation Agencies (TPIEAs)
  4. IT Implementation Agencies (ITIA)
  5. IT Consultants (ITC)
  6. SCADA (supervisory control and data acquisition) DMS (distribution network management) consultants (SDC)
  7. SCADA/ DMS implementation agencies (SIA).

The R-APDRP program structure creates artificial problems for the KSEB. The R-APDRP program mandates external dependencies in the project implementation by requiring consultants, causing potential delays. By providing funding only after project completion, the Power Ministry is creating contingent liabilities for the KSEB.

The R-APDRP program can be improved in so many ways that are too numerous to describe here.

The KSEB should improve their project execution and management skills, and incubate businesses in Kerala that can develop the skills needed to execute KSEB projects.

Providing political support to the KSEB is a job for the Kochi Corporation, if they can get their act together.

Many of the issues are systemic. Hence the problems are unlikely to be isolated to Kochi, but similar problems must be occurring throughout India.

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Building Smart Cities in India

By Shamika Ravi, Adie Tomer, Ankit Bhatia and Joseph Kane – Launched under Prime Minister Narendra Modi in 2015, the “Smart Cities Mission” is an ambitious multiyear effort to boost economic development, technological innovation, and sustainable growth across 100 cities.

Learning from previous national urbanization initiatives, the Smart Cities Mission promises to simultaneously improve the infrastructure and built environment in India’s expanding cities while offering a new path to urban fiscal health. If successful, Indian cities will position themselves as clean, modern, and competitive places for years to come.

Simply put, installing digital technologies alone will not deliver the results India hopes to achieve.

India’s growing tide of urbanization necessitates significant governance reforms to successfully manage such growth.

Following a variety of reforms during the past few decades—including those included under prior national urbanization programs—many regions across India have assumed greater control over managing and financing their urban development. However, states and Urban Local Bodies (ULBs) can still vary widely in the amount of control they exercise in these matters and are continually exploring new ways to drive investments.

The creation of new local units to manage urban infrastructure—called Special Purpose Vehicles (SPVs)—offers the potential to guide more comprehensive planning efforts, but their long-term role must be more clearly defined.

India must elevate the financial standing of its urban areas, making them more attractive destinations for future investment.

Across all levels of government, particularly among different city agencies, India must ensure that dependable capital is available to meet economic goals in years to come.

Increased private-sector engagement should be a paramount concern, which requires more active, coordinated leadership in project management, technical guidance, and risk mitigation. more> https://goo.gl/R44Kzp

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Wishy-washy government programs

The Times of India feature, “Transforming traditional sectors” (Aug 14, 2016), reveals the wishy-washy thinking prevalent in the Kerala Government.

The report says, “The need of the hour is a comprehensive strategy that would lead to the region’s sustainable development.”

“Only 7-8 per cent of our coastline is ecologically stable.” But, “Kerala’s 590-km coastline is home to 20% of the state’s population.”

Promising immediate action to address the woes of the cashew industry under her portfolio, J Mercykutty Amma, minister for fisheries, and harbor engineering, remarked, “The industry is in chaos. It is now completely dependent on import for for raw material. 600 out of the 800 factories have shut down and intermediaries are stealing all the benefits. There will be strong intervention to restore some order in the sector in the next six months.”

T Peter raised the concern of plastic waste dumping and discharge of sewage into water bodies. “A fund of Rs 15,000 ($225) has been granted to each ward for the purpose. An intensive awareness and monitoring campaign and strict regulations have been initiated to bring about a change in coastal pollution,” she explained.

Rajmohan Pillai lamented that Kerala’s cashew industry which used to control 97% of the world market had now fallen to a measly 11% and called for measures to improve productivity. “An empowered committee has been appointed to suggest steps to rejuvenate the sector financially,” the minister replied. “My dreams are big and in the next five years, I plan to initiate a process that would engender a revolutionary transformation in these sectors,” she concluded.

“Local Self Governments Department is linked to the daily lives of people and giving power to the people is our priority,” said K T Jaleel, minister for local self governments, welfare of minorities, wakf and Haj pilgrimage. “A corruption-free Kerala is our aim and as the first step, we will start with the LSG department. A website named “For the people,” will be launched by October, through which common people can interact with the officials in the department. From peon to the minister, if anyone has a bitter experience from anyone in the department they can complain and immediate action will be taken,” he informed.

Shaji Joseph talked about the poor quality of the works done by LSG (local self government) Department. The minister said, “The Consumer Protection Forums were established to ensure quality of work but unfortunately it is not happening.”

For the cashew industry, the problem is “government intervention.” What is needed is for the government to create conditions for a thriving cashew industry by encouraging and supporting private businesses to grow cashews trees, process cashews, and create derivative products. A necessary first step will be to define a “Mission and Vision” for KSCDC (Kerala State Cashew Development Corporation Limited).

Granting Rs 15000 ($225) to each ward and focus on awareness campaign demonstrates utter lack of understanding of the waste/ garbage problem. Waste and garbage are intrinsic part of a consumer economy. The first step is for local governments to take responsibility for waste/ garbage clean up to implement systemic solutions.

“A corruption-free Kerala” is good aim. However, building a website will not achieve it. People are not interested in “interacting with officials in the department” and have “bitter experiences.” What they need is efficient processes that deliver the services the LSG department is responsible for. For example, Consumer Protection Forums are “Red tape paradises.”

If the ministers are genuinely interested in bringing about transformative changes in their respective ministries, they need to do more than make wishy-washy proclamations, platitudes and token actions. Since the proposed programs do not take into account the full scope of the problems, but propose token solutions, the problems continue to grow and fester.

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Discard primitive beliefs for industrial progress

The Times of India report, “City roads turn fatal, one death in every two days” (Aug 2, 2016), provides yet another example of the lack of purpose for the authorities in Kochi.

The report says, “Data available with the city police showed that on an average, one life was lost every two days due to road traffic accidents (RTAs) in Kochi city between January and June this year. Within a span of 182 days, 88 fatal accidents claimed 91 lives.”

“Fatal accidents are a combined result of negligent driving, drunken driving, unauthorized parking, narrow and potholed roads. Poor condition of roads is a major risk factor, said a senior officer. Transportation expert Dijo Kappen said most accidents due to “hurry” when motorists try to make up the time they lost on bad roads and traffic jams. “The state had 14,000km of PWD roads in the state in 1975 for 1.17 lakh (117K) vehicles. Though length of PWD roads had increased 32,000km, the number of vehicles will touch one crore (10m) very soon,” he added.

“Mayor Soumini Jain and district collector MG Rajamanickam had recently blamed each other for the bad condition of city roads after the high court sought a progress report on road repairs.”

It looks as if Kochi authorities secretly believe in the primitive practice of human sacrifice “to bring good fortune and to pacify the gods.” It is high time authorities discarded primitive beliefs, quit squabbling, and developed an effective governance structure for Kochi. Current division of roles and responsibilities seems to be optimized for creating gridlock, squabbling, avoiding responsibility, and promoting inefficiency.

There are probably two primary reasons for the deplorable condition of Kochi roads:

  1. Continued use of materials that were suitable for traffic conditions several decades ago, and
  2. Lack of funds for using quality materials that can withstand current traffic conditions that include heavy vehicles.


Solving these problems require a change in mind-set. It involves taking ownership and providing leadership to make Kochi a regional industrial center, the potential for which exists due to its unique geographical location: “Cochin is strategically located. It is in southwest India, just 11 nautical miles off the international sea route from Europe to the Pacific Rim. With direct sailings to important markets of the world could position it as an industrial and logistical hub for South Asia.”

Taking such visionary leadership will automatically solve the funding problems. For example, Los Angeles took advantage of its geographic location to become “a global city with a diverse economy in entertainment, culture, media, fashion, science, sports, technology, education, medicine and research. And is and is one of the most substantial economic engines within the United States.”

“The economy of Los Angeles is driven by international trade, entertainment (television, motion pictures, video games, music recording, and production), aerospace, technology, petroleum, fashion, apparel, and tourism. Other significant industries include finance, telecommunications, law, healthcare, and transportation.”

Los Angeles is currently “self funding” an initiative for building next generation transportation system.

Kochi has the potential to develop into a similar “global city.” What is needed is will and visionary leadership. And discarding primitive beliefs, squabbling and narrow mind-sets.

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A new kind of lawyers want a new kind of rights

the right to abuse judges, beat up reporters
By TJ S George – Imagine a robed lawyer barging into an open court room, exhorting his colleagues to support an ongoing boycott campaign against judges, then telling the Bench: “If you have guts, take action against me.” Well, you don’t have to imagine. It actually happened in the Madurai [2, 3] Bench of the Madras High Court [2] not long ago.

In Delhi’s Patiala court compound, the world watched in amazement as lawyers attacked student leaders, policemen and journalists. Senior lawyers appointed by the Supreme Court to look into the matter were also attacked. The violent lawyers were later seen boasting about their violence.

Bangalore [2, 3] still shudders with the memory of lawyers fighting pitched battles against policemen, press reporters and sundry onlookers. A judge was among some 90 people who were injured when the lawyers hurled chairs, smashed vehicles, set a police post on fire, threw water-bottles and bricks and helmets at whoever came within throwing range.

Across Kerala last month, lawyers have been gunning for journalists. There were fisticuffs and shouting of unprintable slogans. Police kept a safe distance. Judges made little effort to assert their overriding powers in court premises, even when the media room in the high court building was locked up under lawyer pressure.

These are unparalleled happenings in the history of India, or any democracy for that matter. more> http://goo.gl/cIf1Kg

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How to be a model State again

By Jayan Jose Thomas – Kerala today is not generating enough jobs to meet the expectations of educated Keralites entering the labor market. Changing this is vital and doable.

On the one hand, Kerala has made spectacular achievements in land reforms, education, and health since its formation. Amartya Sen [2, 3] has attributed these results to public action, brought about by State governments and by the political, social and labor movements in the State.

On the other hand, a serious cause of concern emerged by the 1980s: Kerala’s inability to kick-start economic growth despite its social progress. This thankfully changed by the early 2000s: while Kerala’s per capita income was 16 per cent less than the Indian average in the early 1980s, it was 34 per cent more than the Indian average by the end of the first decade of the 2000s.

The biggest stimulus to Kerala’s economic growth comes from the remittances sent by its migrant workers, mostly skilled and working in West Asian countries.

Kerala’s failure to build a diversified manufacturing sector has often been attributed to the activist role played by labor unions. However, my research has shown that the roots of Kerala’s industrial backwardness can be traced to investments to the State starting from the 1930s. Investments were mostly in chemical-producing industrial units.

These industries have hardly built any linkages with the rest of the economy. Further, they have been constrained in growth in the State due to power shortage, unavailability of land, and environmental problems. more> http://goo.gl/Anxg0L

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Mismanagement of a high potential industry

The Times of India report, “Futile int’l bid forces cashew corp to turn to desi markets” (Aug 9, 2016), illuminates lack of understanding of basics of market economy by the Kerala Government, and flawed decision making.

The report says, “In a last ditch attempt to reopen the 30 closed down factories of Kerala State Cashew Development Corporation (KSCDC), the government has finally given up efforts for global tender owing to poor response and has decided to bid locally to procure raw cashew nuts.”

“After the eighth international bid for procurement of raw cashew failed to yield results, the cabinet gave clearance to float local tender, in which the raw cashews that have been imported and stored here can be procured.”

“The corporation is already a loss-making one, and the factories were shut following allegations of corruption in large-scale procurement of raw cashews.” The report adds, “The corporation had floated eight international tenders since January seeking suppliers. But, there was not a single respondent, except in the last bid. It was rejected because there was only one bidder. According to sources, several bidders backed off after the government appointed two IAS (Indian Administrative Service) officers as the chairman and managing director of the corporation, who began strictly enforcing the guidelines for bidding, on the basis of the expert committee report constituted by the industries department, led by the then principal secretary (industries) P H Kurien.” In addition, “The committee also found that the tender was seen awarded to JMJ Traders, even when they did not participate in the bid.”

Putting together the pieces from the report, this is the picture that emerges. Motivated by the need to provide employment for the workers of the 30 cashew factories that are closed, KSCDC sought bids from international raw cashew suppliers 8 times this year. There were no bidders, except for the last one in which there was one. The tender process was defined by a committee of bureaucrats, apparently lacking basics of global market economy. Since the international bidding process has failed, the Kerala Government cabinet of ministers has given clearance for local tenders, from bidders who stock imported raw cashew. Inside sources say the lack of participation was because in an earlier tender the contract was awarded to a company that did not participate in the bidding process.

One of the conclusions is that the Kerala Government tender process is a sham. The bureaucrats and ministers apparently want to manipulate the outcomes of the tenders, but give an appearance of legitimacy and transparency. (The one bidder in one of the international bids could not be accepted, because the rules of the tender process was written such that there is an appearance of due process and transparency.)

The problems facing cashew industry and potential solutions are not hard to find. For example, “Cashew Industry in Kerala: Problems and Potentials,” (pdf) K A Retheesh, Cochin University of Science and Technology, provides extensive background details. Even a casual assessment of the situation leads to the conclusion that there is gross mismanagement of the cashew industry [2] by the Kerala Government. The scope of the mismanagement may be inferred from the fact that the “Mission & Vision” page of the KSCDC website is empty.

There are many systemic flaws. What should be the legitimate role for the of Kerala State Cashew Development Corporation? Why should the Kerala government cabinet of ministers need to authorize operational decisions (approving local tender, for example) of KSCDC?

Market development for cashew products would be a logical mission for a Kerala cashew development agency. Instead, KSCDC seems to think its mission is providing short term jobs for the workers in its factories. Market development means promoting steps for increasing cashew production, which necessarily means growing cashew trees. But KSCDC seems to think its role is in trading and processing raw cashews. Idiotic decisions by past governments in Kerala cut down cashew trees and planted rubber trees. Now, price of natural rubber has crashed due to industrial scale production of synthetic rubber. And Kerala government is providing subsidies to rubber growers. While there is high demand for cashews, cashew cultivation in Kerala is far below its potential.

A rational government that understands its purpose for existence would take steps to improve the situation. Reduce or eliminate growing rubber trees and increase cashew growing. Instead, Kerala government and KSCDC engages make-believe activities, such as the ill-conceived international tendering.

Why is the Kerala Government operating loss-making cashew factories?

Currently, Kerala Government (cabinet) is operating as a bottleneck in cashew related decision making, inhibiting industry development. Instead, Kerala Government should be creating conditions for a thriving cashew industry by encouraging and supporting private businesses to grow cashews trees, process cashews, and create derivative products. Kerala Government could provide additional industry level support such as branding, marketing (similar to that for tourism), research on improving the yield and other biological attributes of cashew and better methods for its cultivation.

The plight of the cashew industry provides yet another example that the Kerala Government does not understand its purpose for existence.

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Triggering industrial development

The Times of India feature, “The Cooperative Way Forward” (July 24, 2016) offers examples of bland planning efforts by Kerala Government.

According to the report, A C Moideen, minister for cooperation and tourism said, “A committee headed by an expert who has worked in the Reserve Bank of India will be established to prepare a detailed report on the project. The bank will be launched after seeking consensus from all the stakeholders.” He added, “Kerala Cooperative Bank will reach more people and boost agriculture, industry, and entrepreneurship in the state.”

About tourism, the minister added, “Waste management is a major challenge in the (tourism) industry.”

“43 rivers and sumptuous rainfall from an active south-west monsoon have blessed Kerala with an abundance of water resources. But over the years, drastic ground water depletion, rampant urbanization climate vagaries have all lead to acute water deficiency in the state.” (“Clean drinking water for all”)

Mathew T Thomas, minister for water resources, said, “Currently only 30 per cent of the state’s population has access to clean drinking water. Our target target is to take it to 100 per cent.” He added, “We aim to strengthen it (Kerala Water Authority) making it more competent, accountable and customer friendly. There are projects to the tune of Rs 2000 crores ($300m) on the anvil, so we need to beef up operations and manpower gaps. Unscientific processes that burden the customer will be revisited and there will be more vigilance in project implementation.”

Statements of the ministers are examples of what the minister of finance and coir T M Thomas Isaac, termed “lackadaisical ways“. The statements of the cooperation minister, A C Moideen, is lacking ambition. The minister’s statement “a committee headed by an expert who worked in the Reserve Bank on India will prepare a report” for the bank reform is bland, to say the least. The scope of the cooperative bank reform is being diminished. The goal is preparing a project report. By limiting the scope of the effort, the results will automatically be reduced.

There is a breakthrough opportunity with the planned cooperative bank reform. “The finances of Kerala are in dire straits,” so says the “White Paper on State Finances“. The mainstay of the state economy, foreign remittance, is in decline. The boom years of remittance [2] from labor migration are behind us, and the flow is beginning to reverse. The remittances were a cause of the financialization of the Kerala economy and was inhibiting economic development. The current gulf crisis is generating an urgent need to develop local jobs. The proposed co-operative bank could become a key institution for instigating economic development in Kerala by building capital formation channels from the huge amount of bank deposits and gold in the state.

One of the current global problems is the excessive importance given to finance in the economy [2]. Overuse of financial stimulus methods over the past several decades have left them ineffective. Economic successes of Japan, Korea, Taiwan, China, Germany and France were the result of focus on “wealth-generating economic activities.”

Luckily, all critical ingredients for jump starting economic development in Kerala are present, if the Kerala government can take the initiative. What is needed is breakthrough thinking. Banking, as the economic activity regulator, has a critical role. But banking needs to go back to its roots, funding the real economy, as was the case, for example, with the Chemical Bank in 1820s. Misplaced faith in finance has resulted in the decline of American economy [2]. It also resulted in the near collapse of Boeing, among other business disasters.

The key requirement is for the planned Kerala Cooperative Bank to develop expertise in the industries it wants to finance. This will overcome the real bottleneck businesses currently face — banks have their own language and terminology. And businesses and industries have to translate their business needs into financial terminology to get financing. Instead, if the banks have expert knowledge of businesses and industries they are targeting, then financing economic development will become much easier.

If the new Kerala government is able to master breakthrough thinking to take advantage of the current opportunity, it can trigger industrial development that has eluded Kerala so far.

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The Time to Reform India’s Education System is Now

BOOK REVIEW

Building Golden India: How to Unleash India’s Vast Potential and Transform Its Higher Education System. Now, Author: Shail Kumar.

By Shail Kumar – The writing is on the wall. India’s higher education system is in crisis and everyone is paying a hefty price for it: students, parents, industry, society and the nation.

Private coaching costs of preparing for premier institutions such as the Indian Institute of Technology (IIT) have soared by 250 to 500 times in the last 30 years. Over the same period, the time required to prepare for the IIT Joint Entrance Examination (IITJEE) has gone up from a one-year grind to four years at a minimum.

As if this wasn’t enough, parents are investing in 24/7 preparation by sending their children to coaching factories in places like Kota [2, 3, 4]. Students are facing extreme pressure, anxiety and uncertainty of receiving admissions into premier institutions, and some pay the ultimate and tragic price of committing suicide.

This pressure has found another outlet: cheating and corruption. The Vyapam scandal [2], where students cheated, parents paid bribes to politicians and bureaucrats, and all of them colluded with police to facilitate the cheating, is a case study of everything that is wrong with the higher education system in India. more> http://goo.gl/Wb6ioB

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