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Correspondent

21 August 2024 at 10:20:16 am

Phantom Promises

The unravelling of the Mukhyamantri Majhi Ladki Bahin Yojana was always a matter of when, not if. Announced with theatrical flourish ahead of the 2024 Assembly election by the ruling Mahayuti coalition, the scheme promised Rs. 1,500 a month to women across the state. It became the Mahayuti government’s showpiece welfare programme and, by all accounts, a decisive political instrument that helped propel the ruling alliance to a comfortable victory. Less than two years later, the curtain has now...

Phantom Promises

The unravelling of the Mukhyamantri Majhi Ladki Bahin Yojana was always a matter of when, not if. Announced with theatrical flourish ahead of the 2024 Assembly election by the ruling Mahayuti coalition, the scheme promised Rs. 1,500 a month to women across the state. It became the Mahayuti government’s showpiece welfare programme and, by all accounts, a decisive political instrument that helped propel the ruling alliance to a comfortable victory. Less than two years later, the curtain has now fallen. Nearly 92 lakh beneficiaries – a whopping 38 percent of those initially enrolled – are now being shown the door as the scheme becomes economically untenable. If such a staggering proportion of beneficiaries never qualified in the first place, what exactly was the government doing when it rolled out the scheme with such urgency? The scheme is a classic case of welfare as a cold election strategy rather than a governance policy. The scheme’s benefits flowed generously just before the election. The scrutiny that has now arrived has exposed it for what it was: a fiscal white elephant. The Comptroller and Auditor General has now compounded the Mahayuti’s embarrassment with its report, which questions expenditure of more than Rs. 3,541 crore under the scheme. Such spending places an unsustainable burden on Maharashtra’s finances. The CAG’s report is an indictment of a style of governance that treats the public exchequer as an extension of the campaign war chest. Across India, governments of every political persuasion have perfected the art of competitive populism. Cash transfers, freebies and subsidies are unveiled with increasing frequency, often without credible fiscal planning or robust verification mechanisms. Welfare has become less about empowering citizens than about cultivating dependable vote banks. Schemes designed primarily for electoral dividends inevitably collapse under their own contradictions, leaving beneficiaries disillusioned and public finances weakened. The greatest injustice is borne not by politicians but by ordinary citizens. Honest taxpayers finance these extravagant promises. Genuine beneficiaries build their household budgets around them. When governments later discover that millions were ‘ineligible,’ it is ordinary families, and not the politicians or their families, who suffer the consequences. If money has indeed been squandered because of political haste, accountability cannot stop with bureaucrats or clerks processing applications. Those who conceived, announced and relentlessly campaigned on the scheme must also bear responsibility. The leaders of the three ruling Mahayuti partners – the BJP, the NCP and the Shiv Sena - who converted public money into political capital should be prepared to answer financially as well as politically. Democracy cannot become an auction where elections are won with taxpayers’ wallets. It is time to end the politics of fiscal bribery masquerading as welfare. Maharashtra deserves governments that create opportunity, not dependency, and policies that survive beyond polling day.

Indian Shipbuilding A Must Win Marathon

Shipbuilding

With a coastline of 7500 KM, it is hard to imagine, that for the first 20 years (1947-1967) India had no ‘shipping ministry’. In 1967 a Shipping ministry “coupled” with ROAD transport was established. Since then, this ministry has been on a name changing ride, not once, not twice but six times. In 2009 the “ROAD Transport and Highways” was de-coupled and ‘Shipping’ ministry was formed. Turning point came in 2015 with a clear maritime vision for 2030 and 2047. Ministry was re-christened, aptly to Ministry of “Ports, Shipping and Waterways” in 2020.


Why is Shipbuilding important for a country?

a. A Shipyard becomes an opportunity hub and like a queen bee requires the support of an industrial colony to manufacture machinery and equipment.

b. National Shipyards support fleet renewal needs of the Navy.

c. Contributes to national GDP, increases inflow of FOREX.


Korea shipbuilding is 8% of GDP. Japan’s automobile industry is 2.9% of GDP. India’s shipbuilding a meagre 0.000578% of GDP. In context, India’s pharmaceutical industry, ranked third largest in the world is 1.72% of India’s GDP.


International Shipbuilding Market

The market is estimated to reach around USD 200 billion by 2029, growing at a CAGR of 4.84%. While India is at bottom with 0.07% of world share, behind Philippines 1.5% and Vietnam 1%, however on the positive side, India has done well in taking care of its defence needs, with 37 of 39 Naval ships being built in India yards. Rear Admiral S Shrikhande researching on maritime as a Fellow at Wollongong University, Australia, says “Shipbuilding in India needs both, serious incentivisation and dogged determination and not harping on being a big ship breaking country. That Garden Reach shipyard has a $54 million order for merchant ships from a German owner, is a good sign.”


Were Shipyards of 20th century in Flight mode?

Prominent shipyards in India were built in the colonial period. Mazagon Dock 1774, Garden reach 1884, Hindustan shipyard 1941 to cater to British navy and merchant fleet needs. Cochin shipyard 1972, Adani Katupalli 2013, Reliance Naval and Engineering, Rajula Gujarat 1997 and others have limited capacity, hence a lot more work to do. Capt. Subhangshu Dutt (Singapore) a mariner and now a shipowner, says “GOI should hold hands in any collaboration till the marriage with the foreign entity is reasonably stable. He also suggests that “new shipbuilding sites should be given to existing successful shipyards since they have decades of experience and talent. Consortium of 3 or more parties may also be good idea”.


Shipbuilding GOLD

As per SPLASH report the demand for LCO2 carriers could reach 2,500 ships by 2050. As per other estimates, 40% of global fleet of ships could have wind propulsion by 2050. A surge in such vessels is due to an unparallel waves of decarbonization in the shipping industry. Demand for ships with ‘carbon neutral’ badges, such as Dual fuel, Wind assisted, Nuclear fuel ships, Hydrogen powered ships, Liquified CO2 (LCO2) carrier, is outstripping supply. A must in the ‘bucket list’ of every Shipyard. Pinning down a standard ROI in shipbuilding is not easy, but experts suggest it could range from 4% to 15% for the high demand ‘carbon neutral’ ships. While an LNG new build vessel could cost US$ 250 million upwards.


International collaboration

On China’s shipbuilding success story, Manoj Pandalanghat (Singapore) a mariner and ship owner believes that “China has around 50 active Shipyards. Each have a few large dry docks. In each dock two or more large vessels are built simultaneously. Thus, a single yard is able to roll out 2/3 vessels/month, 36 vessels/year and 50 shipyards roll out 1800 vessels/year”.


China could be a jaldi-5, but India needs a sturdy Mount Fiji. Besides technology, Japanese bring the most important hand baggage of soft-skills and culture, essential for success from keel laying to delivery. Maruti’s is a standing example.


Food for thought for New Delhi

a. Expertise: Hire Naval Architects and shipbuilding experts with current international experience.

b. Government assistance: Land, Financial support, subsidies and timebound clearances.

c. Monitoring: PMO should monitor the first 5 to 10 years till Shipbuilding takes-off on this long-haul flight to destination 2047.


India’s Shipbuilding is expected to grow to $237 billion by year 2047. On a back of the envelope calculations this works out to about 4% of India’s 2047 projected GDP of $ 5 trillion. While cars are driven on roads, however the Ministry of roads and transport has little to do with “Automobile manufacturing”. On a similar note, ‘Shipbuilding’ as an industry has little to do with Ports, Shipping and Waterways, thus it may be worthwhile to consider a separate ‘Ship-building’ wing in the Ministry of Ports, Shipping and Waterways headed by a dynamic cabinet rank minister. Since 2047 targets are stiff and an uphill task, so in all probabilities, the officials in Ministry of Ports, Shipping and Waterways are likely to push beneath the carpet, delays and failures of Shipbuilding with sweet success stories of “Ports, Shipping and Waterways” and if this does happen then India will not only miss the Shipbuilding bus of 21st century but a lot more from a national security and strategic perspective.


(The author is a Shipping and Marine consultant. Member Singapore Shipping Association and empaneled with IMO as a specialist consultant. Views personal.)

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