India's move to ratify Land Boundary pact, opens new possibilities in regional cooperation

Pratim Ranjan Bose

Astrologers predict. Journalists use their experience to put jigsaw pieces together.

 In June this year, I anticipated that the Narendra Modi government is set to take definite steps in implementing the long pending Land Boundary Agreement with Bangladesh. 

My guess proved correct on November 25, as all the stake holders (including Modi’s BJP and West Bengal Chief Minister Mamata Banerjee’s Trinamool Congress, who were staunch opponents to the move in the past) in the Parliamentary Standing Committee on Foreign Affairs; unanimously cleared the final draft for land swap bill. It will be placed in the Rajya Sabha or the Council of States in the current session. 

The consensus was needed because, Modi’s, BJP that has a brute majority in the Lok Sabha or the House of the People; is a minority in the Rajya Sabha. It means, ratification of the bilateral agreement, the last of which was inked in 2011, is now a certainty.

I expect all the formalities be cleared in the current session of the Parliament. But that does not mean land will be swapped immediately. For, it would require due and lengthy administrative exercise to settle many issues including the most important of all – rehabilitation for the international migrants or refugees.

The task at hand

A grave omission during the Partition (1947) saw India and Bangladesh claiming hundreds of small villages, as their national territories, on either side of the border.

In the Constitution of either country they are referred as adversely possessed land (APL) and enclaves.

Mostly located on either side of the border along Barak Valley in Assam, the APLs are connected to the country by a small strip of land which is difficult to access. A total of 665 acres of land is in adverse possession of either country in Assam border.

Enclaves are completely land locked. India has 111 enclaves spreading over 17,000 acres at Lalmonirhat, Nilphamari and Kurigram districts in Bangladesh. Bangladesh has 51 enclaves over 7100 acres at Cooch Behar in India.

According to a head count conducted last year, a little over 51,000 people are living in a total of 162 enclaves. This includes 37,000 so-called Indian citizens living in captivity in Bangladesh and 14,000 in Bangladeshi enclaves in India.

I am saying “so-called citizens”, because they are deprived of any service that an Indian or Bangladeshi citizen can expect from its government.

There is no civic amenities be it electricity, school, health care facilities or so on. They are captives in a foreign territory that refuses to serve them. Their home country, at least on paper, cannot reach them any services either. They don’t figure even in the voters list of either country. They are citizens without a country.

 Once the international border is redrawn, people living in such land parcels will be offered the option of switching their nationality. Alternatively, they may migrate to their ‘home country’.

According to a survey by India Bangladesh enclave coordination committee, in 2013, only 743 people out of 37,000 living in Indian enclaves in Bangladesh were interested to migrate to India following land-swap. No one from the over 14,000 people in Bangladeshi enclaves in India are interested to migrate.

Once the Parliament decides to make necessary constitutional amendments; both the governments will engage into a more dependable study to finalise the details to the last mile. And, that should rightly take a little time. We could for nearly seven decades to reach this far, we can surely wait another couple of months or a little more to complete the deal and redraw the international border.

Huge Gains

An immediate gain for both the countries is the scope to tighten the border security and prevent infiltrations. The infiltration primarily takes place from Bangladesh to India for economic opportunity. But some Islamic terror outfits are using the border in their advantage. It’s time to hit them hard.

But what is important this is going to give Bangladeshi Prime Minister Seikh Hasina, some added handle to ignore Islamic outfits and strengthen economic ties with Modi’s India.

 And, that is the real advantage of this deal – greater regional co-operation. I am extremely hopeful that ratification of the land boundary pact will open doors for transit of Indian goods and services through Bangladesh to remotely located North Eastern States.

Better and cheaper connectivity should help improve India’s national integration both in economic and political front.

In fact, if Bangladesh grants India access to the Chittagong sea port, the landlocked North Eastern states may turnout to be into a lucrative investment destination to tap the South Asian markets.

I am sensing a flurry of announcements from Bangladeshi side sooner than later. Lets hope, I will prove correct, once again.

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Mr Modi will you consider selective opening of underground coal mining?

Pratim Ranjan Bose

 The P V Narsimha Rao government, that liberated Indian economy in 1991, bypassed the issue by enhancing scope of captive mining. The Atal Bihari Vajpayee government abandoned the proposal in the face of still opposition.

Now, it’s the turn of Narendra Modi government to propose de-nationalisation of commercial coal sector, in the Coal Mines (Special Provisions) Ordinance, 2014 that will be placed before Parliament in the ongoing winter session.

The manner in which such a major change was proposed, in all-important coal sector that is fueling 72 per cent of India’s electricity consumption - leaves room for doubting intentions of the government. 

It is now to be seen if the Parliament approves the bill.

There is every possibility that it would be blocked. Because Modi’s, BJP that has a brute majority in the Lok Sabha or the House of the People; is a minority in the Rajya Sabha or the Council of the States.

The government is yet to clarify on the road-map to privatise coal sector.

But rest assured any hasty move will put the country face-to-face with major disruptions in fuel supplies, which has been growing at a healthy pace for last two years, as coal unions have taken the agitation path.

Simply put, privatising India’s coal sector is not an easy choice. And, politics apart, there are some valid reasons behind it.

All monopolies are not bad

That cheap electricity is a corner stone of growth, is a common knowledge.

And, a look at growth economies around the world will tell you, there are reasons for the Indian government to maintain a firm grip on the coal mining sector so as to achieve this goal.

The developing China and Developed South Korea does it through State monopoly in power sector. In both the countries industry gets electricity at relatively cheaper rate than in India. 

Ideally, it should be cross subsidised by the retail and household sector. But, in reality, utilities often absorb huge losses or sacrifice profit potential for national good.

South Korean monopoly incurred amajor loss in 2008. In China, which is relatively low on affordability, State-owned generation companies lost billions of dollars between 2010 and 2012. 

The India model is just opposite. Here electricity generation companies, half of which are owned by private capital, make money. The national miner sacrifices profit opportunity to provide them with cheap fuel.

Disturbing the set up may lead to as dangerous consequences, as evident in coal-rich Indonesia and South Africa.

Little scope in surface mining

The liberals, however, argue that it is possible to regulate a private coal mining sector.

The large number of complains of windfall gain against the Chinese miners indicate it is easier said than done.

Yet, assuming they are correct, it is doubtful if a whole-hogged privatisation would increase the country’s coal production significantly.

The reason lies in limited scope to fast forward the growth in surface mining, the least-cost production method, contributing 93 per cent of India’s 550 million tonne (mt) coal production.

Need to step up production at a higher rate, low price of fuel, coupled with failure to bring in new underground technologies; led the national miner - Coal India (CIL) - to focus its energy on low hanging fruits of opencast mining.

The sector is now plagued with a series of problems, which are more social than technological. 

Considering the increasing resistance against land acquisition and deforestation, surface mining has limited growth potential in the years to come – with or without private capital.

If allowed, private sector would surely try to enter this area. But that has to come at the cost of national miner’s growth and greater social tension over land acquisition.

To cut the long story short, India can only expect to add to its trouble, by opening up the surface mining to private participation.

Open underground mining

Do I sound a pessimist? Not at all. And, here is a prescription for the Prime Minister to reform the coal sector.  

Ask the national miner to reserve cheap opencast coal only for the regulated electricity generation sector. And, throw underground mining, which has little relevance to the country’s energy needs, open to competition. Allow free market price of fuel produced from such mines to make it lucrative opportunity for the private capital.

Let us face it. With a mere 40 million tonne (seven per cent) production India’s underground capacities are highly under utilised. Going by the reserve potential India underground mines should contribute 25 per cent of domestic production.

Approximately 20 per cent of Australian production (over 400 mt) comes from underground, nearly 40 per cent in USA (over 1000 mt) and 86 per cent in China (over 3500 mt).

While the world is moving towards 10 mt a year long-wall phase; the largest underground project in India promises produces 2 mtpa. (Long-wall technology helps extract more coal from the same mine.)

Private players can correct this anomaly. Low requirement of land acquisition will reduce the scope of social conflict. The country should enjoy rapid production growth at minimum compromise with nature.

It’s a win-win strategy and, is destined to change the face of Indian coal mining for ever without disturbing the electricity sector.

Win-win strategy

Cancellation of allotment to steel, cement and other such sectors, operating in the open market; should improve immediately availability of cheap fuel for electricity generation. This coupled with CIL-led growth in surface mining should be adequate to feed the power sector for some time to come.

Since steel and cement sector currently meet majority of requirement through imports (200 million tonne per annum including metallurgical coal), creation of domestic market should go in their favour. The country will save precious foreign exchange by replacing part of the import demand.

The national miner should be happy as well.

Free market pricing should offer a fresh lease of life to its nearly 300 underground mines losing approximately Rs 10,000 crore a year. Higher realisation will directly reflect on the company’s bottom line. And, a happy CIL means, coal unions may not find much logic in opposing the move. 

Only the illegal miners - extracting anything between 20 and 30 million tonne coal a year - may be hard hit.

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(Disclaimer: Graphics are collected from the web. Will be removed in case of any objection)

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