Wednesday 28 September 2016

Kashmir...A Riparian Dispute

It is just a Territorial Dispute…Really??

The traditional narrative

Kashmir, which has boundaries with Tibet, China, Russia and Afghanistan, has been placed in a pronounced strategic position. The Kashmir region has gone through a tumultuous history through its existence as it has passed from ruler to ruler and empire to empire.

The history of Kashmir is entwined with the history of the broader Indian subcontinent and the adjoining regions - comprising the areas of Central Asia, South Asia and East Asia. It denotes a larger area that includes the Indian-administered state of Jammu and Kashmir (which consists of Jammu, the Kashmir Valley, and Ladakh), the Pakistan-administered territories of Azad Kashmir and Gilgit–Baltistan, and the Chinese-administered regions of Aksai Chin and the Trans-Karakoram Tract.

Islamization in Kashmir took place during 13th to 15th century and led to the eventual decline of the Kashmir Shaivism in Kashmir. In 1339, Shah Mir became the first Islamic ruler of Kashmir. For the next five centuries, Islamic rulers governed Kashmir, including the Mughals, who ruled from 1586 until 1751, and the Afghan Durrani Empire, which ruled Kashmir until 1819. In 1819, the Sikhs, under Ranjit Singh, took over Kashmir. In 1846, after the Sikh defeat in the First Anglo-Sikh War, and upon the purchase of the region from the British, the Raja of Jammu, Gulab Singh, became the new ruler of Kashmir. The rule of his descendants, under the protection of the British Crown, lasted until 1947, when the former princely state became a disputed territory. Kashmir is now administered by three countries: India, Pakistan, and the People's Republic of China.

The Kashmiris are, anthropologically, an Indo-Aryan Dardic ethnic group living in or originating from the Kashmir Valley, located in the Indian state of Jammu and Kashmir (J&K). The bulk of Kashmiri people predominantly live in the Kashmir Valley and also form a majority of the population in the Chenab region's Doda, Ramban and Kishtwar districts. Smaller populations of Kashmiris also continue to live in the remaining districts of the state of J&K.

Kashmiri (or Koshur) is spoken primarily in the Kashmir Valley and Chenab regions of  Indian state of Jammu and Kashmir. As per the 2001 census of India there were over 5.5 million speakers of Kashmiri in India.Interestingly, people from the Azad Kashmir (or Pakistan occupied Kashmir) are neither Kashmiris nor do they speak the Kashmiri language. People from Azad Kashmir are typically related to the people of northern Punjab in Pakistan, and they mostly speak Punjabi, Pahari, Gujjari languages. There are very few Kashmiris (the Indo-Aryan Dardic ethnic group who originally hail from the Kashmir Valley) in Azad Kashmir and while they still speak Kashmiri but many of their younger generation have adopted Pahari or Urdu and do not anymore speak Kashmiri. This essentially means that there remains a linguistic divide between the present day inhabitants of Pakistan-administered territories of Azad Kashmir and the inhabitants of the Indian state of Jammu and Kashmir (J&K).

Islam is practically the singular religion throughout the northern areas of the Indian-administered state of J&K and Azad Kashmir on the Pakistani side of the 1972 Line of Control, accounting for more than 99.5% of the population in every single district of those two areas. On the Indian side of the LOC, Hinduism is the second most numerous faith and accounts for a majority of the population in the three southernmost districts of Jammu and in that region as a whole. Followers of the Tibetan form of Buddhism are a definite majority in the large, but sparsely populated district of Leh and in Zanskar tahsil in the southern part of Kargil district. In the state of J&K as a whole, Islam is by far the leading faith and accounted for close to 75% of the total population by 1981[1].

The overwhelming majority of Kashmiris being Muslims, Islamic identity does plays a very important role in the daily lives of the majority of the Kashmiri people. However, Kashmiris across the religious divide have for centuries shared cordial and friendly ties.
As on date, however, the prickly issue remains the status of the Kashmir Valley, whose inhabitants are divided between demanding independence or allegiance to Pakistan, with a proportion opting to remain within India. The key issues that stems from the traditional narrative on the Kashmir dispute include[2]
  •   Demands of the Islamic majority of the inhabitants of the state of J&K living in the valley are not universally shared by the minorities living in different areas of the state.§  The Buddhist population of Ladakh has never supported the cause for either for Kashmir’s independence or accession to Pakistan, nor has the majority Hindu population of the Jammu region.
  •   To date, the Government of India has refused to reconsider the possibility of holding a plebiscite in J&K. Without, however, holding a plebiscite or referendum it is next to impossible to determine exactly what proportion of the people support which option.
Pakistan has consistently called for the issue to be resolved by means of a plebiscite and has blamed India for going back on its pledge. But although it supports the Kashmiri’s ‘right of self-determination,’ Pakistan has shied away from accepting the third option as a possible outcome - a third option being an independent Kashmir with non-allegiance to either India or Pakistan or China.  India, on the other hand, blames Pakistan for supporting anti India militant groups which it says are fomenting an Islamist insurgency in Indian Kashmir. This strengthens the development of the alternative narrative that Kashmir is more than just a territorial dispute.


The emerging narrative

The emerging narrative is that Kashmir is definitely more than a territorial and nationality dispute. The disputes emanates from the very fact that it is situated in the northern part of Indian sub-continent, and has boundaries with China (Tibet), Russia and Afghanistan, and is thus placed in a position of significant strategic importance. The Indian state of Jammu and Kashmir (or J&K in short) is, geographically, a continuation of the plains of West Pakistan into the mountains (western Himalayas).

A certain section of the international community feels, and perhaps rightly so, that over period of many years India and Pakistan have progressively arrived at a tacit agreement for the settlement of ownership of territories and in all likelihood the ‘Line of Control’ can be a step to it, and thus the dispute on Kashmir is no longer about altering its boundaries. It is perhaps not too abstract to infer that the military and civilian leadership of both countries recognize that the idea of going to war on Kashmir is no longer realistic. Water (or the lack of it) has now emerged as more central premise to the Kashmir issue between the two neighbours although initially it was only a territorial issue, or at best an issue of nationality for the original inhabitants of this strategic landmass in Asia.

J&K is emerged as a much prized landmass for both India and Pakistan – essentially to ensure long term sustainability of both nations by way of securing, controlling and harnessing precious waters of this prized landmass.

Pakistan’s population has been growing at an annual growth rate of 2.3 % as compared to India’s 1.3 %. Consequentially, in the last five decades, Pakistan’s per capita water availability has dropped from 5,600 to 1,038 cubic metres[3]. The figure is expected to further fall to 809 cubic metres by 2025, as estimated by the Pakistan’s Water and Power Development Authority. The country is fast moving from a water- scarce nation to a water-starved one. Its sole dependence on the Indus — 70 % of the country’s inhabitants live in the Indus basin — intensifies its critical water position.

Being an agricultural country, it’s rivers – Indus, Jhelum and Chenab –  are its sources of life. These three rivers flow into Pakistan from the State of J&K. Pakistan, readers may kindly note that, is a lower riparian country in the Indus valley system.

According to a dominant school of thought in Pakistan both Kashmir and the water flowing from Kashmir into Pakistan are matters of life and death to Pakistan. The same school of thought also perceives that without securing sovereignty for Kashmir Pakistan's sovereignty and security will always be on threat.

What the Green Revolution gave India and as well as Pakistan — an abundance to export water hungry crops — has now become unfeasible. Even in the most arid areas, farmers have no alternative but to irrigate their fields by flooding them. Few have adopted the much more efficient drip irrigation system, which governments urgently need to subsidize. Climate change too compounds the water problem. Experts say that climate change could alter the timing and rate of snow melt, with an initial increase in annual run-off, followed by a steep decrease as glaciers recede, severely impacting river flows.

The Riparian Rights

Under riparian law, water is a public good like the air, sunlight, or wildlife. It is not ‘owned’ by any government, state or private individual but is rather included as part of the land over which it falls from the sky or travels along the surface. ‘Riparian rights’ is a system for allocating water among those who possess land along its path. Under the riparian principle, all landowners whose properties adjoin a body of water have the right to make reasonable use of it as it flows through or over their properties. If there is not enough water to satisfy all users, allotments are generally fixed in proportion to frontage on the water source. These rights cannot be sold or transferred other than with the adjoining land and only in reasonable quantities associated with that land. The water cannot be transferred out of the watershed without due consideration as to the rights of the downstream riparian landowners.

The Indus Waters Treaty

The Indus Waters Treaty (IWT, or Treaty), a water-distribution treaty between India and Pakistan, mediated by the World Bank (then knows as the International Bank for Reconstruction and Development), was signed in Karachi on September 19, 1960 by then Indian Prime Minister Jawaharlal Nehru and President of Pakistan Ayub Khan. While the World Bank is a signatory to the Treaty for certain specified purposes, it is not a guarantor of the Treaty. The Treaty allows control over the three ‘eastern’ rivers of the Indus river system— the Ravi, Beas and Sutlej —to India and control the three ‘western’ rivers — the Indus, Jhelum  and Chenab — to Pakistan. The treaty stipulates that while water from the rivers Indus, Jhelum and Chenab will be used exclusively by Pakistan, water from the rivers Ravi, Beas and Sutlej will be used by India. The IWT also stipulates that either party (country) must notify the other of plans to construct any engineering works which would affect the other party and to provide data about such works.

While India cannot store any water from these rivers or stop them from flowing to Pakistan, it can construct hydroelectric power projects over these rivers, but has to allow a free flow of water. India can however go in for ‘pondage’, i.e., water being held behind a dam for a short time (as it flows into turbines to generate electricity) but even this is limited. Pondage is very different from storing Indus water, say, for major irrigation projects. Additionally, India must share designs of projects for irrigation and hydro power generation, water flow data and a host of other information with Pakistan.

The IWT, which is largely regarded as one of the success stories of water diplomacy between two neighboring nations, whose relations are often petulant, is essentially an arrangement to implement a fair distribution of a critical natural resource – water – between India and Pakistan. The Treaty also provides for mechanisms to resolve disputes over water sharing.

The treaty was a result of Pakistani apprehension that, since the source rivers of the Indus basin were in India (in the state of J&K), India could therefore potentially create droughts and famines in Pakistan, especially at times of war, by stopping or diverting away water from downstream Indus and its sister rivers. The treaty, signed more than five decades ago has remained in effect even during the wars between India and Pakistan—in 1965, 1971 and 1999. However, the Pakistani State, in spite of the Treaty being in place for over five decades now, has always remained in perpetual apprehension of the possibility of India repealing the Treaty, and the consequences of the same in Pakistani economy. That there is solid ground for this apprehension emanates from the ever worsening water crisis in Pakistani.

Pakistan’s Water Crisis

In a report published in 2013, the Asian Development Bank had described Pakistan as one of the most ‘water-stressed countries in the world, with a water availability of 1,000 cubic meters per person per year, a fivefold drop since its independence in 1947, which is about the same level as drought-stricken Ethiopia!



Total annual per capita actual renewable water resources[4] in Pakistan in 2014 had been estimated at 1,306 cubic meters. The graphic below illustrates the depletion in per capita renewable water resources in Pakistan during 1962-2014[5].
A country with annual water availability below 1,000 cubic metres per capita is designated as a water-scarce country. Pakistan is expected to become water-scarce by 2035, however based on current trends it is likely that per capita water availability will decline to around 800 cubic metres by 2025[6], making Pakistan a water scarce country.


According to the Pakistan Council of Research in Water Resources (PCRWR), the country has an estimated population of 187 million with an annual growth rate of 1.57 %. By the year 2050, Pakistan’s population is likely to double and become 63.7% urban. This will definitely put tremendous pressure on water supply for households, industry and agriculture. Pakistan has been facing a number of water related challenges. A few of these challenges include:
  •   Water shortage
  •   Inadequate water harvesting and storage facilities (only 10% of the average annual flow)
  •   Reduction in storage capacities of the existing reservoirs due to sedimentation
  •   Low system efficiency
  •   Conventional methods of irrigation - unleveled basins, improper size of furrows
  •   Low land and water productivity
  •   Non-existent national water policy
  •   Water logging and salinity
  •   Unmanaged dry lands
  •   Lack of monitoring infrastructure for glaciers and trans-boundary inflows.

The aforementioned problems get compounded by the apprehension of the Pakistani think tank that any action –intentional or unintentional– on the part of the Indian authorities to control the water supply of the Indus system can lead to famines and droughts in Pakistan.


Pakistan has also had limited success with harnessing its water resources towards developing hydro power generation capacity in order to meet its ever burgeoning energy demands. As on date Pakistan's energy generating capacity is 24,830 MW; the country currently faces energy shortfalls of over 4,500MW on a regular basis with routine power cuts of up to 5 hours per day, which has shed an estimated 2–2.5% off its annual gross domestic product (GDP).

At the Crux of the Matter

At the root of the Kashmir crisis lies the Indus river system. Pakistan, being largely an agrarian economy, depends heavily on the Indus waters for agriculture, employment, and a significant portion of its GDP. It is widely acknowledged that the Indus river provides Pakistan with:
  •   90% of its freshwater for agriculture
  •   50% of the country's employment
  •   25% of its GDP

It is no wonder therefore that the inhabitants of Pakistan affectionately refer to the Indus[7] as ‘the water of life.’

Tumorous population growth in both India and Pakistan has led to increased strain on the river for power generation and drastic measures on the part of India to secure sufficient hydropower to prevent sudden power outages. Pakistan for quite some time has been accusing India of stealing water from ‘the water of life.’ Pakistan alleges that India is ‘stealing’ its river waters, by violating the IWT. Pakistan’s allegations, at the moment, centre on the Nimmo-Bazgo and Chutak hydroelectric power projects over the Indus river in J&K. The allegation is that by going ahead with these projects, India is trying to divert river waters that rightly belong to Pakistan.

Many reports in recent times have highlighted that India too is a water stressed country and its water disputes (both intra and inter country) are bound to grow as Indian authorities strive to manage water for India’s huge population. Renewable internal freshwater resources in the country (in terms of cubic meters per capita) has come down from 3,089 (in 1962) to 1,116 (in 2014)[8]. In comparison, the neighbouring nation of Myanmar has a per capita renewable internal freshwater resources 18,770 cubic meters in 2014. Even Bhutan with per capita renewable internal freshwater resources of 101,960 cubic meters lead the south Asian nation in 2014.

The face-off between Punjab and Haryana over sharing of Satluj-Yamuna water and as well between Tamil Nadu and Karnataka over sharing of Cauvery water as the has put the spotlight on brewing confrontations between states across India over access to water. Even the newly formed state of Telangana and Andhra Pradesh too have locked horns over numerous water projects. A recent study pegs that 80% of India’s 1.25 billion population faces severe water scarcity for at least a month every year and 180 million Indians face severe water scarcity all year round. No, doubt India is increasingly looking at harnessing hydropower to find sustainable answers to its water and energy crisis.

What if the IWT were abrogated?

The Indus Water Treaty is one of the best examples of cooperation between countries as the most logical response to trans-boundary water management issues. India has not disturbed the flow of water to Pakistan even during wars, acts of terrorism and other such conflicts that have bedeviled relations between the two neighbours. The Treaty gives up to 80 % of the water from six rivers — the Beas, Ravi, Sutlej, Indus, Chenab and Jhelum — shared by the two countries to Pakistan, and has, therefore, been seen in India as being ‘too soft’ on Pakistan.

Sadly, this treaty between India and Pakistan, which has survived three wars and numerous lows in India-Pakistan relations, stands seriously threatened today. The Indian Government, understandably is under tremendous public pressure to take material actions against Pakistan, to rein in terrorism stemming from the Pakistani soil against India, as a repercussion to the gruesome killing of eighteen soldiers of the Indian Army in the Uri terror attack on September 18, 2016  (in J&K).


An insightful analysis (as illustrated in the figure underneath), undertaken by Data-Analyst Adipta Datta (an alumnus of ICFAI Business School, Kolkata) based on the comments made on social media pages (such as Facebook) of popular traditional media such as NDTV, Firstpost and others immediately in the aftermath of the URI incident and related to the incident, finds a significant percentage (63%) of the commentators viewing the incident with skepticism, which Datta refers to as negative sentiments associated with the incident.
Such negative sentiments stem from such comments wherein the post owners (commentators) have not related positively with the URI attacks i.e., they did not quite believe in the authenticity of the attack, to that extent that many of them felt that the attacks could have even been faked by the Indian State, in order to draw attention of the international community to the Kashmir issue/Pakistan. However, such sentiments cannot be seen as representative of the Indian population, as the reach of English news channel is around 12 million as against the reach of Hindi news channels which is about eight times that of the English news channels.

In what was a much looked up to high-level meeting chaired by the Indian Prime Minister with senior Government officials on September 26, 2016 to review Indus Waters treaty, which had also fueled speculations that the National Democratic Alliance (NDA) government may ultimately seek to alter or scrap the provisions of the 1960 pact with Pakistan, it was decided that India will now expedite the construction of three dams on River Chenab.

It is being widely perceived in India that such a pressure tactic (of altering or scrapping the provisions of the Treaty) is likely to compel Pakistan to crackdown on non-state and state actors acting operating on its soil against India. This is not to say that there are no pockets of cogent thought in India that question the astuteness and practicality of this approach to confronting Pakistan. In this connection, an editorial, published way back in 1998, in The Statesman, a venerable English-language daily published in Kolkata is perhaps still relevant and is worth quoting at some length:
“India, the bigger and arguably the more mature of the two (countries), must take the lead (in heading off an arms race). And no lead is better than a grand policy on Kashmir...India should respond to Pakistan’s tests and the possibility of escalating tensions by making a unilateral posture on Kashmir. It can announce that the government will exhume the nearly five decades old United Nations proposal to hold a referendum on the question of the valley’s (Jammu & Kashmir) territorial loyalty.This will seem preposterous to the BJP, indeed to many Indians. But an astute political party – BJP has shown it can be one – does not remain a prisoner of conventional wisdom. More, a referendum on and in Kashmir, internationally supervised, will again put India in a different league from one defined by sub-continental squabbles – a status the BJP thinks the country deserves. The ‘worst’ possibility is that Kashmir may not choose to remain with India. Is that too bad a prospect compared to the price India pays in blood, money, and a general marring of reputation when the troops ‘occasionally’ misbehave? A Kashmir referendum will also blunt global condemnation of the subcontinent as a mad hatter area full of nuke-wielding hot-heads. As well as forcing Pakistan to drop its belligerence, both verbal and clandestine. These are benefits that can be grabbed only by a government with vision and courage.”

Earlier on September 22 2016 India signalled that it could revisit the IWT on sharing of the waters of the river Indus, against the background of Pakistani State ignoring Indian concerns over its continued support to terrorism. However, a unilateral abrogation of the Indus Water Treaty (IWT) on India’s part is likely to attract criticism from world powers. India definitely runs the risk of alienating the World Bank if it abrogates the treaty, especially the US, the UK, Canada, (then) West Germany, Australia and New Zealand underwrote the facilitation of the treaty by contributing $1 billion (at 1959 rates) and virtually bribed Pakistan by giving it $315 million to enter into negotiations with India. Besides, China will be under no obligation to allow water from the Indus or Sutlej rivers to flow into India. Indus, which is covered by the IWT, originates in China, the fountainhead of this river basin lying in China.

China being not a party to the Indus Water Treaty may decide to divert water from the Indus river in the absence of any international treaty governing the management of this precious resource, India will be deprived of 36 % of the river's entire flow. Countless canals from which cities and towns draw water for daily use would dry up, causing urban and semi-urban distress. If China also decides to shut off water from Tibet that feeds the Sutlej river, huge swathes of northern India would be plunged into darkness and deprived of power. Water from the Sutlej flows into the Bhakra dam, the Karcham Wangtoo hydro-electric project and the Nathpa Jhakri dam which together generate at least 3,600 megawatts of electricity that lights up large parts of Punjab, Haryana, Rajasthan, Himachal Pradesh, Chandigarh and Delhi. Besides, stopping water supplies to Pakistan after any abrogation of the 1960 Treaty is likely to flood extensive areas of Jammu and Kashmir and Punjab.

There is also the possibility that China could utilize the opportunity, in the event of IWT being abrogated by the Indian Government, to divert water from the Brahmaputra river, which forms the lifeline of India’s north eastern region.

Arguments & Counter Arguments

Arguments and counter arguments, as well as allegations and counter allegations have led the two countries nowhere, except that the such instances have only led to unnecessary wars, and mistrust between two very culturally close set of populations. For instance, while Pakistan’s allegation that Indian Government's plans to divert the course of the Kishenganga river (a tributary of the Indus) to build a 330-megawatt hydroelectric power project will reduce the river’s flow by a third in the winter. That would make it unfeasible for Pakistan to move ahead with its own plans for a hydroelectric dam downstream.  

Essentially, both India and Pakistan were fighting over control of Kashmir since independence in 1947, where several Indus tributaries begin, because control of Kashmir means gaining the much needed control of the waters of the Indus system, until the IWT was signed between the two countries in 1960. Yet Pakistan's rows with India have intensified as its water situation has worsened over the years. On the contrary, observers in India say Pakistan is simply looking for a scapegoat as it struggles to manage its internal water politics – citing instances of the especially arid Pakistani province of Sindh, blaming the prosperous upstream Pakistani province of Punjab for consuming too much of Indus waters. But off-late even farmers from the Punjab province have been complaining that agricultural yields and incomes have dropped by a third in the past five years because of water shortages. In the past, canals used to supply water for irrigation year-round. They are now empty for about four months each year, forces farmers and villagers to pump groundwater, which is fast turning brackish and causing diseases like hepatitis.

Pakistan's rows with India have intensified as its water situation has worsened over the years. In 2005 Pakistan had raised issues with the Baglihar dam, an Indian power project on the Chenab river alleging  that the dam would store too much water upstream and reduce downstream flow to Pakistan. Subsequently in 2007 the World Bank mediated by appointing an independent expert, who ruled that India had to make minor modifications to the dam, such as lowering its height. Pakistan now contends that the dam, which began operations in 2008, is reducing the flow of the Chenab below levels stipulated in the treaty. India denies such an allegation. The Indian projects that Pakistan believes are draining its water resources are primarily on Indus tributaries in Kashmir.

B.G. Verghese, a veteran journalist who has studied water issues closely and is a visiting professor at the Center for Policy Research, a New Delhi based think tank, says,
"They're saying, 'We must liberate Kashmir to save our water.'"

Case for an Alternate Dispute Resolution for Kashmir

It is quite understandable why the popular Pakistani conscience revolves around Kashmir being the jugular vein of Pakistan, because without Kashmir and its rivers, its dream of economic independence is likely to remain utopian. This explains, why in spite of being supportive of the Kashmiris ‘right of self-determination,’ Pakistan has never accepted the third option as a possible outcome - a third option being Independent, and allegiance to neither India nor Pakistan. The same logic is also perhaps true, as to why India remains so steadfast on not conducting the much awaited promised plebiscite.

The predominant reason why India and Pakistan have been bickering over the control of Kashmir is because that is where several of the Indus tributaries begin. Needless to say, that there is an immediate need that, both India and Pakistan develop a transparent, participatory, democratic, and rule-based management – with integrated regional approach – of waters of the Indus system.

It needs to be appreciated by the Indian think tank that success of the region (south Asia) is critical to India's long term prosperity. Taking everybody along in the region, instead of being the 'Big Brother' in the region, has to be Indian strategy for ensuring nation’s long term sustainability.

It is the need of the hour that both nations realize there are absolutely no brownie points to be acquired by keeping control over a common natural resource – water of Indus system – which is for public good for the riparian communities – upstream as well as downstream. Any developmental activities being carried out on the upstream of a river system, which has been conceived for good for the upstream communities and without any regard to the downstream communities, is bound to impact devastatingly the downstream communities. This in the long run will only create animosity and mistrust between the communities; which will eventually lead to nuclear polarization of the sub-continent – thereby putting lives of billions of people in the region at stake.  Governments and States have no right to act so irresponsible.

It will therefore require policy makers, researchers, advocacy groups, development professionals and civil society groups from both nations to come together on one platform and build mutual awareness and understanding of the common water resource challenges and put pressure on their respective Governments to works towards achieving sustainable development in all its three dimensions – social uplift, economic development and environmental conservation.

Beyond Kashmir

India, owing to its demographic size and nuclear arsenal, sees its role as a potential counterweight to China on the global platform, and expects that this would translate into economic importance and the much coveted seat on the United Nations Security Council. However, by and large, global strategic currents still continue to bypass India.

India, perhaps instead of looking at China as a potential aggressor, needed to have attempted at understanding China’s global trade and business aspirations and interests, and in the process could have seen itself as a major ally.  The Indian policy makers need to understand that the principal measure of power in the 21st century is connectivity, specifically to global infrastructure networks, trade flows, capital markets and the digital economy; and by that measure China is already a dominant global power. China, as of today, ranks as the top trade partner of more than 120 countries in the world, which is double the number for the US (56), and far higher than for India (just one). Many decades back, when the United States was by far the dominant economic super power, India was far from anything that could have been remotely termed as ‘being on friendly terms’ with the United States. Even now, India views China with great mistrust. In fact, India not mistrusts China but is also equally sceptic about having a trustworthy relationship with its major neighbours – Pakistan, Bangladesh, Myanmar and Sri Lanka. It is sad, all these nations have had a shared past for millennia of growth, prosperity, trade and culture, and even very recent shared experiences of colonial hardships. People to people connect, owing to shared culture across Indian subcontinent still remains strong, and yet, India has miserably failed to convert such powerful connects into formal avenues for economic growth and prosperity.

It needs to be understood with immediate effect, where India has been failing, w.r.t cultivating a mutually beneficial relationship with neighbors, China is having great success at that – creating and forging alliances (especially in the Indian ocean rim) for the future.

The China–Pakistan Economic Corridor often referred to by the acronym CPEC is one such example. The CPEC, is a collection of projects currently under construction at a cost of $46 billion[9], intended at rapidly expanding and upgrading Pakistani infrastructure as well as deepen and broaden economic ties between Pakistan and China. Infrastructure projects under the tutelage of CPEC is expected to span the length and breadth of Pakistan, and will eventually link the city of Gwadar in southwestern Pakistan to China's northwestern autonomous region of Xinjiang via a vast network of highways and railways. Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help alleviate Pakistan's chronic energy shortages, which regularly amount to over 4,500MW. Over 10,400MW of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor. CPEC will be a strategic game changer in for Pakistan’s economy and also in the south-Asian region. The Government of India instead of seeking benefits from this regards portions of the CPEC project negatively as these pass through the Pakistani-administered side of Kashmir, a territory that India disputes.

In response to India’s objection to the corridor, the Chinese Government has stated that the CPEC which passes through Pakistan occupied Kashmir, is not designed to target India or take Pakistan’s side on the Kashmir dispute; instead is certainly a platform to further strengthen China-Pak cooperation. The Chinese position on the CPEC is that the corridor also benefits the region and is likely to positively contribute to the peaceful and steady development of the south Asian region and that many countries have already expressed their willingness to be a part of the project.

It remains open to speculation whether India will choose to oppose the CPEC or seek an active role for itself in the integrated regional development, that the CPEC is expected to facilitate. Even as India seeks to improve trade relations with countries along the Indian Ocean periphery, it must focus on improving its trade balance with China through higher value-added exports, and at the same time also on attracting more and more foreign direct investment from China into power, transportation and other key sectors – sectors that will lead to – social uplift and economic development in India.

To not connect to India’s neighbors – China, Pakistan, Myanmar, Bangladesh, Sri Lanka and beyond is to further cede strategic ground along the 21st century’s new trade routes.



Disclaimer / Caveat: The article reflects the views of the writer alone and does not seek to offend any community within or outside India. Its purpose is to purely encourage discussion.

(This post is not copyrighted and may be reproduced freely with appropriate attribution of source)


[1] JAMMU AND KASHMIR: DISTRIBUTION OF RELIGIONS, http://www.kashmirstudygroup.com/awayforward/mapsexplan/religions.html
[2] Victoria Schofield, "Kashmir's forgotten plebiscite", BBC News World Edition (17 January, 2002),
http://news.bbc.co.uk/2/hi/south_asia/1766582.stm
[3] Manipadma Jena, "NOT A SINGLE DROP TO DRINK", The Telegraph (May 6, 2010), http://www.telegraphindia.com/1100506/jsp/opinion/story_12381918.jsp
[4] As per the Food and Agriculture Organization (FAO) of the United Nations renewable water resources are computed on the basis of the water cycle. They represent the long-term average annual flow of rivers (surface water) and groundwater. Natural renewable water resources are the total amount of a country’s water resources, both surface water and groundwater, which is generated through the hydrological cycle. The amount is computed on a yearly basis. Not all natural freshwater, surface water or groundwater, is accessible for use. Exploitable water resources (manageable water resources or water development potential) considers factors such as: the economic and environmental feasibility of storing floodwater behind dams or extracting groundwater; the physical possibility of catching water which naturally flows out to the sea; and the minimum flow requirements for navigation, environmental services, aquatic life, and others.
[5] Food and Agriculture Organization, AQUASTAT data, https://knoema.com/atlas/Pakistan/Total-renewable-water-resources-per-capita
[6] http://www.gwp.org/Global/GWP-SAs_Files/CWP%20reports/World-Water-Day-Events-report-2015-Pakistan.pdf
[7] https://www.youtube.com/watch?v=2cUJ8IeNXd0
[8] Food and Agriculture Organization, AQUASTAT data, http://data.worldbank.org/indicator/ER.H2O.INTR.PC?year_high_desc=true
[9] https://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor

Friday 23 September 2016

A Tale of Two Riparian Zones

Flotilla at Amsterdam
'Riparian zone' is the green ribbon of life alongside a stream/river/waterbody. This ribbon is a mixture of vegetation types, which varies greatly from place to place. The riparian zone is critical to the health of every stream and its surroundings.

The images illustrate the riparian zones at Amsterdam and Ahmedabad. Needless to even judge, which city has given the due importance to conservation and maintenance of their respective riparian zones. Therefore, while Amsterdam can serve as a model for conservation and maintenance of riparian zones inside city limits, the Sabarmati riverfront at Ahmedabad certainly cannot be one such model. 
Riparian zone at Ahmedabad

No Environment Impact Assessment of the project was conducted nor was any credible public consultation process held, while planning the Sabarmati river front at Ahmedabad. The Sabarmati channel, for effecting this showpiece development, had to be uniformly narrowed to 275 metres during the riverfront development project from its natural width of about 350 metres. In this attempt of “pinching the river”, the original character of the river has changed completely from a seasonally flowing river to an impounded tank. 

The Sabarmati Riverfront Development Project has converted a 10.4 KM stretch of Sabarmati River within Ahmedabad city limits into an urban space by reclaiming nearly 200 ha of land and displacing nearly 10,000 people. Over 3,000 people have been moved to a marshland in the outskirts of the city with negligible compensation, little and infrequent access to drinking water and minimal sanitation facilities. Concrete embankment walls of height 4 to 6 meters have been created for this stretch of 10.4 KM on both banks with walkways. The mainstay of the project was the sale of riverfront property. 21 % of the reclaimed land which was developed by concretising the river bank has been sold to private developers for commercial purpose.

Even more sadly, the water that is impounded in this Sabarmati Riverfront stretch is not Sabarmati river water, but Narmada river Water. Water from Narmada canal is released in Sabarmati upstream of the riverfront project; water on which the city of Ahmedabad has no right. This water from Narmada was justified and originally meant for the drought prone areas of Kutch, Saurashtra and North Gujarat.Sadly, water meant for addressing drought were diverted for a cosmetic facelift of the Ahmedabad city. Thus the water we see in Sabarmati in Ahmedabad is water deprived from the drought prone areas.

The Sabarmati Riverfront Project has also not resulted in cleaning of the Sabarmati river. Instead the pollution from untreated sewage and industrial effluent gets diverted near the Vasna Barrage downstream of riverfront project stretch. Even after the riverfront development project, water quality of the Sabarmati river downstream of the Vasna Barrage is extremely poor. The 10.4 KM long stretch is like a canal, upstream of it is a dry river in most days and downstream is one of the most polluted stretch.


The All-Concrete Sabarmati River Front
The National Institute of Hydrology and the IIT Roorkee has re-evaluated the project design. Their report say that the original calculations did not take into account any simultaneous rainfall over the entire catchment area. The report also states that riverfront development is not a flood control scheme, and therefore the municipal corporation needs to work out other measures to meet the impending challenge of floods.

This is the famed Gujarat model of Urbanization!

Years back, while working on an urban rejuvenation plan for the former industrial township of Howrah, some of the famed international urban rejuvenation experts, with whom I had the great fortune of working with, had categorically advised against adopting a "Sabarmati Riverfront" style of development for the Hooghly.

Disclaimer / Caveat: Whatever I have stated is publicly available information and does not represent the view of the firm I work for.
(This post is not copyrighted and may be reproduced freely with appropriate attribution of source)

Saturday 10 September 2016

When in Crisis..Call for Concessions

Tata Motors’ small car plant at Gujarat’s Sanand has an installed capacity to make up to 200,000 cars per year. The capacity however remains vastly underutilized with the Nano’s sales averaging a little over 1,000 units per month! In March,  2017 Tata Motors sold just 174 units of the Nano.


No wonder, after attempting and failing to stimulate demand for the Nano in a sluggish car market, Tata Motors is now looking at producing other automobiles at its factory in Sanand. In fact, recent reports in the media indicate that Tata Motors' management’s entire focus is now on new platforms such as Tiago and upcoming launches. There has been reports that the that the company is no longer investing in the Nano.

The company, reportedly in 2015 was already exploring options to to make amendments to the so-called state support agreement it signed with the Gujarat government in 2008 before starting production of the Nano in Sanand, where it moved after abandoning its plant in Singur. Under the agreement, Tata Motors could avail of tax benefits and soft loans from the Gujarat government exclusively for manufacturing the Nano.  Besides Nano, the Sanand factory now manufactures the hatchback Tiago. As per a PTI report production of Nano has been curtailed to 10 % of the Sanand unit's small car capacity.

Last year, on 22 February 2016, nearly 400 permanent workers of the company at the Sanand plant had called the flash strike, demanding re-instatement of 28 suspended workers, two of them were suspended in December, 2015 on charges of indiscipline. After an extensive consultation with Sanjay Prasad, Principal Secretary, Labour Department, Government of Gujarat along with Tata Motors officials and other labour department officials, the striking workers decided to call off nearly a month-long strike on the night of March 22, 2016.

CIRCA 2009

Credit rating and market research firm Crisil on January 29, 2009 had downgraded the ratings of both Tata Motors and Ashok Leyland's debt. As per Crisil's official release, while it attributed the downgrade in Ashok Leyland's rating to the company's business and financial risk because of the expectation of "continued weak demand for medium and heavy commercial vehicles, coupled with its ongoing debt funded capital expenditure"; in case of Tata Motors, the downgrade reflected the "significant impact of the weakening business environment on the company's global and Indian operations", and the resultant strain on its financial risk profile.

"Significant impact of the weakening business environment on the company's global and Indian operations"...Indeed!

For Tata Motors, the problem had got even harsher due to some of their high profile but expensive acquisitions in the overseas market. After the takeover of European steel major Corus by Tata Steel, Tata Motors had acquired the British auto firm Jaguar Land Rover (JLR) in June 2008, paying a hefty sum of $2.3 billion. Since then, their sales had fallen 22 %, production had been slashed by 60 %, 1800 jobs had been cut and Tata Motors have had to pump in $1.2 billion of working capital into JLR. As the condition did not improve, in March 2008 the company had then approached the British government for a loan guarantee of $730 million. Added to this, back home, the sales of the Tata Motor’s heavy vehicles had fallen by 60 % (may be to utilize the excess capacity, Nano was then being assembled in their Pantnagar plant). All these factors had put the company into a severe crisis and Standard & Poor’s had downgraded the credit rating of the company days after it launched the world’s cheapest car, the Nano. The downgrade, had put Tata Motors deeper into “junk debt” territory, highlighting the view that the Nano will contribute "little" to profits soon despite hopes it will one day revolutionize travel for millions of people.

It needs to be recalled in this context that in March 2006, Tata Motors had announced their intention of establishing an automobile plant at Singur in West Bengal and the company had planned to roll out a small and cheap car priced at around US $2000 by 2008, . According to the then Managing Director of Tata Motors, among other sites, they had chosen Singur for its location advantage - link to a metropolitan city like Kolkata, an international airport, major ports (Kolkata and Haldia), railway and the golden quadrilateral. The company had thus planned an ambitious project of rolling out ‘250,000 vehicles per year with flexibility to raise it to 350,000 per year; targeting both foreign and domestic markets. However, as indicated in the earlier paragraph, like all other steel and automobile companies across the world, Tata Motors and other Tata Group companies too had been affected adversely by the recession that the global economy had been passing through since 2007-08. Tata Motors management, therefore, definitely needed to buy some crucial time- till the economy showed some genuine signs of recovery, and one definite way that time could be bought could have been only if the small/mini car project got delayed, which would naturally delay the launch date of the Nano. Any delay in project implementation due to reasons ‘beyond their control’, would not only secure the much needed time but also justify a rise in the price of the car. Besides, taking advantage of this impasse, possibilities of getting better financial incentives from other states, which compete with each other following a ‘race to the bottom approach’ for attracting investment, could also be explored.

It was as if destiny seemed to be in favour of Tata Motors, and in keeping with destiny's favour, it was on July 18, 2006 that Ms.Mamata Banerjee, the chief of All India Trinamool Congress, had sown paddy near Singur to show her first mark of protest. Soon after on December 3, 2007 Ms.Banerjee had announced an indefinite hunger strike on the issue. However, after 25 days following personal appeals by the then President and Prime Minister of India Ms.Banerjee had called off her indefinite hunger strike on the Singur issue. However, subsequently on August 24, 2008 Ms.Banerjee had re-initiated the dharna (this time around an indefinite oneat Singur and remained steadfast on this cause. 

Finally on October 7, 2008 Tata Motors announced the shifting of the car plant from Singur to Sanand, Gujarat. The most crucial gain for Tata Motors was to get those seven crucial months between November 2008 (when the launch was initially scheduled) and March 2009 (when the Nano was actually launched). These additional seven months, in hindsight, appears to have had benefited the company in three ways:
  1. Firstly, the production cost could be reduced. Now, in March 2009 the cost of production could be much less compared to the beginning of 2008. Since January 2008, the prices of two major inputs namely cold rolled steel and rubber have decreased by 28 % and 19 % In addition to this, the Government of India too had slashed the excise duty from 16 % to 8 %. Moreover the price of crude oil too had decreased by over 51 % in the said period.
  2. Secondly, Tata Motors had an opportunity to mobilize funds, at a negligible cost, by asking the prospective buyers of Nano to place deposits in advance. This had been made possible at a time when the company has been facing severe financial crisis. It was estimated that prospective Nano customers, combined, were expected to place deposits worth up to $1 billion with Tata Motors at the time of placing order for the car. The company would retain that amount, without paying any interest, for at least three months before the first phase allocation of limited numbers of cars could be completed. And only those willing to be considered for the second batch would be paid interest, but below the market rate, and after one year. Had Tata Motors launched the Nano, as per their their original plan, in the month of November 2008 at a time when the economy was worst hit, the company is unlikely to have been successful in mobilizing such a huge sum of money and at such a negligible cost. By the July–August of 2008, Tata Motors management could realize that the impact of the prevailing global recession would be severe. It may be recalled that the crude price per barrel had risen up to $147 in July 2008. Certainly that (November 2008) could not have been the most opportune time to launch a motor car that was targeted at the price sensitive middle-class customers.
  3. Thirdly, the decision to abandon the Singur project had helped Tata Motors extract huge concessions from the State Government of Gujarat. It is widely speculated that the benefits the company had secured from the Gujarat Government were much higher than the prohibitively large concessions which Tata Motors had obtained from the Government of West Bengal. It may be noted that governments are often driven to offer concessions to multinational corporations since promoting such mega investments, typically served the political interests of host-state politicians. Attracting big ticket investments benefit specific constituencies, from whom politicians derived support.  Tata Motors could assess accurately the political interests and compulsions of the competing state governments in India. They simply utilized such weakness to their advantage. Even in 2006 they had successfully deployed the same strategy before selecting the Singur site. At that time, Tata Motors had projected Uttaranchal as another likely contender for the Nano project. The West Bengal Government out of desperation, had ended up offering huge economic concessions to the company, and in the process committing an act that the Honourable Supreme Court of India has now (in 2016) judged as illegal - land acquisition in Singur by the  former CPI(M)-led government in West Bengal towards the allotment of nearly 1,000 acres to Tata Motors in 2006 for the company's now aborted project to start a car plant in Singur.


Disclaimer / Caveat: Whatever I have stated is publicly available information and does not represent the view of the firm I work for.
(This post is not copyrighted and may be reproduced freely with appropriate attribution of source)