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Jairam Ramesh: Common man's commerce minister
Aditi Phadnis & Bhupesh Bhandari | September 04, 2006
What do Chirala, Aizawl, Raipur and Moradabad have in common?
That these are among the small, unglamorous, underdeveloped towns that contribute as much as 20 per cent to India's export earnings. That they show a brave but frail spirit in the race to sell the treasures they produce. And that Jairam Ramesh has visited them all as minister of state for commerce.
In many cases he's the first commerce minister in the history of independent India to have visited these and other centres like Moradabad, Ferozabad, Varanasi, Kanpur, Aligarh, Darjeeling, Coorg, Nirmal, Panipat and Dehra Dun in his quest to seek out the little guys who need handholding in the big, bad world of exports.
Jairam Ramesh's room at Udyog Bhawan, the red sandtone structure that houses the commerce ministry in Lutyens' Delhi, has small knick-knacks you would expect to find in an exporter's godown.
A chased steel sword from Dehra Dun rests in its scabbard on a table that has intricate woodwork from Nirmal. A large bellmetal Nandi made by tribals from Bastar stretches contentedly on his table. Tinted lamps from Ferozabad glow softly in the corner. And in the midst of all this is a cardboard box intriguingly labelled "Mom."
"Cough medicine," he explains. "India exports herbal medicine worth Rs 700 crore (Rs 7 billion). But 65 per cent of this is just plants. Why shouldn't we add value to our exports ourselves instead of selling raw materials to others, letting them make the money?"
Ramesh has spent the last seven months travelling to small-town and rural India in search of the small exporter and the even smaller artisan and farmer.
He may not yet be able to rattle off the export dollars his initiatives have earned or the stomachs they've fed, but he doesn't mind being called the "aam aadmi ka commerce minister" (the common man's commerce minister). In fact, this is what he aspires to be -- different, but politically correct.
Traditionally, junior ministers have found little work in Udyog Bhawan, especially when there has been a strong commerce minister at the helm. (Remember Rajiv Pratap Rudy's constant complaints against Murasoli Maran during the National Democratic Alliance regime?) Kamal Nath, Ramesh's superior in the ministry, too is no lightweight.
He jetsets all over and rubs shoulders with the world's top trade leaders and negotiators; at home, he has fought pitched battles with colleagues in the Cabinet over special economic zones. (Did you know there is even a third minister in the commerce ministry, Ashwani Kumar?)
When Ramesh became minister in February this year, he met Kamal Nath and told him what he didn't want to do: WTO (you couldn't have two people negotiating mulitlateral trade), joint business councils (boring, boring, boring) and SEZs.
What he wanted was the charge of employment-intensive sectors -- plantations, leather, and gems and jewellery. When the work order was taken out, Kamal Nath gave Ramesh all he wanted but kept away the crown jewels -- gems and jewellery, and leather.
"I got 80 per cent of what I wanted. True, gems and jewellery, and leather, were out of my charge, but I keep making suggestions in these areas as well," says he.
Whatever he got, Ramesh has been able to find what he wanted to do. He has been on only one foreign visit (Dhaka, for a SAARC ministerial chinwag when Kamal Nath had to opt out because of some other engagement that cropped up in the eleventh hour) and claims that he has avoided the high profile and prosperous export promotion councils, preferring to work with the needier ones.
Having marked his space with Kamal Nath, Ramesh says his next stop was the Prime Minister's Office (he was a key member of the Narasimha Rao-Manmohan Singh team 15 years ago when economic reforms and liberalisation were first undertaken) where he set out his four priorities: how to generate more employment through exports, how to use exports for balanced regional development, how to add more value to exports, and how to make exports a catalyst for social change.
In sum, Ramesh made a strong pitch for giving a human face to exports. His political masters couldn't have asked to hear anything better. "You have to create a niche for yourself," Ramesh laughs. "You can either crib and grouse. Or you can work."
Exports provide direct employment to about 9 million people and indirect employment to another 7 million. Out of the 9 million, two-thirds are in the unorganised sector.
Given the high employment elasticity in this sector, the upside for creating more jobs is tremendous. The NDA could not bring the strong economic growth to the masses and paid a heavy price for it. Maybe Ramesh will succeed where the NDA failed.
In Ramesh's calculations, five states -- Gujarat, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh -- account for a large chunk of the country's exports. How large, Ramesh doesn't know, though he has some clues: "Almost 75 per cent of the export-linked incentives go to these states."
To spread the benefits of exports to other parts of India, Ramesh says, "I don't accept invitations from engineering councils, joint business councils, and certainly don't go to Mumbai, Ahmedabad, Chennai and Hyderabad if invited by these people. We need to sensitise bureaucracy that there is a world beyond trade negotiations and global exports. Gender, social disparity, equity are alien to the world of export. I want to change this."
It took Ramesh little time to reckon that at least one sector that notches up large exports employs Muslims and scheduled castes in large numbers in Uttar Pradesh: leather. "Indian footwear sells at the higher end of the market than China. And what do these people get? It is the middleman who makes the money," says Ramesh.
He is yet to do a proper supply chain analysis of the leather industry, but the political overtones are evident. These communities were staunch Congress loyalists in the past who have since drifted towards Mulayam Singh Yadav and the Bahujan Samaj Party. If he can win them back, their support could turn the tide in favour of the Congress in the next elections to the state assembly.
Ramesh admits there is some politics in all this. "Chirala exports handlooms but is struggling to get a market. Several handloom weavers have committed suicide. The issue of bamboo export is crucial in Mizoram. Bamboo is flowering this year and this is traditionally associated with famine, so the chief minister was frantic. The Aligarh lock-making industry is in a crisis. They met Sonia Gandhi and it was she who referred them to me. The Aligarh MLA is from the Congress," he says candidly.
So far, Ramesh has no tangible results to bring to the table, though he claims the ministry's plan expenditure is being skewed in favour of neglected sectors and states.
"What is needed is improvement in export infrastructure." Some Cabinet colleagues have been sympathetic to Ramesh's cause and some have promised to help. But that's all.
When he discovered that 400,000 men from the Koraput and Gankjam districts in Orissa were working in Surat's diamond industry, he suggested to Orissa Chief Minister Naveen Patnaik that he set up a training institute in the state to replicate Surat's success in Orissa.
The suggestion, Ramesh says, fell on deaf ears. He has now asked the Gems and Jewellery Export Promotion Council to find out what it will take to set up such an institute in Orissa.
In Kanpur, where he'd gone to understand the leather trade, another problem surfaced: there was only one freight train between Kanpur and Mumbai, and even that is erratic and never runs on time. He arranged a meeting with the minister of state for railways. "He's promised to set this right," says Ramesh.
Still, there are some places where he's met with more success. When Uttaranchal needed an office of the Director General of Foreign Trade (when the state was carved out of Uttar Pradesh, the office did not move to Dehra Dun), Ramesh was on hand to help out.
He had a word with Defence Minister Pranab Mukherjee on behalf of exporters from the North-east to get the defence services to vacate Bagdogra airport and move to Hashimara instead, so that Bagdogra could be developed as an international airport and a hub for the entire North-east and parts of Bengal.
"The defence minister and I are going to Siliguri on September 10 to sort this out," Ramesh says. "Solutions don't lie in my domain. But I can push, pull and stretch to find them."
It is with plantations that Ramesh seems to have made most headway. Historically, the plantations sector has been the neglected baby of the commerce ministry. They, after all, contribute no more than 1.5 per cent to the country's exports.
"Everything about plantations is old. Old, meaning old. On a tea plantation in Assam, I found a tea-bush that was planted by Andrew Yule in 1884. The machines are old, the technology is old, the plants are old," Ramesh says.
But aren't the plantations a hopeless sector where investments would only mean throwing good money after bad? Like jute and indigo, for which the world has no use any more?
"So what do you propose?" Ramesh asks silkily: "Should we forget about plantations, the people who work there, and just let them rot on the dungheap? Do you realise that of all the Parliament questions that come to the commerce ministry, 60 per cent relate to issues in the plantation sector? MPs worry when plantations are in distress."
Ramesh flags a point that is not generally known -- that 95 per cent of rubber plantations and 98 per cent of coffee plantations are small farms. Tea is the only plantation commodity that is corporatised. So this is politics at work again. Six states -- Kerala, Andhra Pradesh, Tamil Nadu, Karnataka, West Bengal and Orissa -- depend critically on plantations.
Ramesh is convinced that unless strong remedial measures are taken quickly, India will lose its hold in key commodity markets.
"In tea, we are under threat from Sri Lanka and Kenya, in pepper from Sri Lanka, in cardamom from Guatemala, in coffee from Vietnam, and in rubber from Thailand and Malaysia," he insists.
The first step is to restore the financial health of the plantations. Recognising that money for modernisation is a problem, Ramesh has devised a Special Purpose Tea Fund which will be inaugurated on November 1.
Over the next 15 years, Rs 4,700 crore (Rs 47 billion) will be spent by the centre, the state and the private sector to mechanise, replant and rejuvenate the tea sector. Similar packages Rs 600-700 crore (Rs 6-7 billion) over seven years are in the offing for the coffee, rubber, cardamom and pepper sectors.
Next, the plantations need to be provided with technical support. Here, because of Ramesh, plantations have won a major battle. Scientists working in government-owned research laboratories in the plantation sector will now be treated on a par with those in the Council of Industrial and Scientific Research and Indian Council for Agricultural Research.
The problem so far was that the best scientific talent could not be attracted to these laboratories because of high levels of professional stagnation. Now, professional mobility will mean these laboratories will bustle with life again.
They will nurture talent and interface with private sector research and development units to put muscle in modernising plantations. Ramesh refers to a recent initiative for developing non-carcinogenic uses for tobacco. This could be the lease of life the flagging tobacco sector needs.
But where is the need for the minister to get exercised over R&D? If a plantation company needs anything, it is free to buy it off the shelf from scientific laboratories anywhere in the world. "We are the largest grower of tea in the world? So, who will carry out research if not us," Ramesh argues. "The small farmers cannot afford to buy new technologies. They need support."
The only missing link now remains marketing of plantation products abroad. Tea and coffee plantations went through severe trauma because of the collapse of the Soviet Union. Overnight, India's market went whoosh into the air.
To reclaim India's rightful place in the sun, Ramesh has planned two international events -- an international tea festival in Guwahati in March 2007 along the lines of the biennial Dubai tea festival, and a coffee festival later next year in Bangalore.
The plantation sector has another problem: price volatility. Three years ago, the government established a Price Stabilisation Trust Fund with a corpus of Rs 500 crore (Rs 5 billion).
All this does is it gives a farmer a cash grant of Rs 1,000 every time his crops collapse. "This an insult," Rames says. "So I've set up a four-member committee headed by Vijay Kelkar to recommend an effective insurance instrument."
Ramesh's office is freezing cold on account of an excessively efficient air-conditioner. But what warms the heart is that it has no real doors -- there is only a glass door that enables passers-by to peek into the office, symbolic of openness and accessibility.
There is a wooden Saharanpur screen for privacy, but more for the convenience of Ramesh's visi-tors than for him -- he agrees with a grin that there are some who might not want to be seen in his company. It is a cold place but with a warm heart.