NMDC's decision to slash iron ore supplies to steel-makers in Karnataka came following an apex court order last Friday which said that even supplies of iron ore by the state-run firm from mines in the state will be done through the e-auction route only
New Delhi: The Sajjan Jindal-led JSW Steel today said it may have to shut down its 10 million tonnes per annum (MTPA) Vijayanagar plant in Karnataka due to a continuous shortage of iron ore, reports PTI.
"We may have to shut entirely (Vijayanagar plant)...
There is a good possibility of that (closure) if the situation does not improve," JSW Steel vice chairman and MD Sajjan Jindal told reporters here on the sidelines of an Associated Chambers of Commerce and Industry (Assocham) conference on mining.
He added that the plant is currently running at 30% capacity and the company does not have any inventory of iron ore, the key raw material for steel-making.
"We don't have any inventory. We are running the unit at 30% capacity and managing to source iron ore from here and there... Chhattisgarh and Orissa, which is too costly," he said.
On Saturday, the Sajjan Jindal-led firm had cut down production from the Karnataka unit by 70%, following a cut in supplies of iron ore from NMDC on Friday.
Terming the acute shortage of iron ore as unfortunate, Mr Jindal said it has a damaging impact on the steel industry.
"It is pretty unfortunate, what has happened, because industry has got collateral damage. You know without any fault of industry, it is suffering," he said, adding that the production cuts at JSW's unit are likely to push up the steel prices.
"Steel prices are likely to go up quite a bit because the largest plant of the country is being shut down... It will have an impact on inflation and steel imports will have to take place to continue to meet the domestic requirement," he said.
The JSW vice chairman added that company is also looking at reducing its steel production target of 9 million tonnes for the current fiscal due to the paucity of iron ore.
"I cannot tell you right now by how much (the target will be reduced), but it's obvious," Mr Jindal said, adding that currently, only one blast furnace out of the six installed at the Vijayanagar plant is operational.
NMDC's decision to slash iron ore supplies to steel-makers in Karnataka came following an apex court order last Friday which said that even supplies of iron ore by the state-run firm from mines in the state will be done through the e-auction route only.
The apex court order had further said that an e-auction will be done for NMDC's iron ore, irrespective of the long-term supply agreements it has entered into with various steel units in the state.
Following this, the Navratna firm had cut the supplies to all companies, including JSW, with whom it has long-term supply agreements for iron ore.
The company's scrip was being traded at Rs608.70 apiece on the Bombay Stock Exchange in post-noon trade, down 1.58% from their previous close.
The microfinance credit bureau has not been set up yet due to lack of strong leadership, no serious regulatory support, unrealistic targets, lack of reliable ground-level data, IT issues and lack of focus on execution
It has almost been over 12 months from the 2010 microfinance crisis and a transparent use of the microfinance credit bureau appears to be nowhere in sight-at least for outsiders like me. While the intentions to establish the credit bureau may have been genuine and well-founded, the lack of real-time implementation progress raises several important questions with regard to the process of establishing the (Indian microfinance) credit bureau in the first place. In my opinion, the current delay could be due to several factors articulated below, and I would like the proposed Microfinance Bill drafters to take this into account while finalising the forthcoming microfinance legislation which proposes the establishment of a credit bureau as an integral part of the overall regulatory architecture.
So what then has caused a delay in establishment of the microfinance credit bureau? Here are some plausible reasons:
Lack of strong and committed leadership—This is on the part of those involved in promoting the credit bureau initiative—to ensure that the credit bureau is indeed functional within the stipulated timeframe. Several deadlines have gone by and we still keep hearing statements that the credit bureau is ready and will be operational soon. It has been getting ready from December 2009 and two years have already gone by and it is about time that we began objectively analysing as to why these deadlines have constantly shifted. It would surely help us understand the real issues better in terms of why the delays are occurring (data availability and integrity, willingness of MFIs or microfinance institutions to walk the talk with regard to the credit bureau initiative, etc.,) and thereby pave the way for quicker and timely implementation on the ground.
The credit bureau initiative has no serious regulatory support whatsoever—I have not seen a single statement from the RBI (the Reserve Bank of India) affirming the validity of the ongoing credit bureau efforts and wonder what role will the RBI have in ensuring data integrity, especially given the proliferation of agents, multiple loans to shared JLGs (Joint Liability Groups) and clients and also the lack of a unique ID for low-income clients. The MIS (management information system) at many MFIs is weak and unless robust standards are created and enforced with regard to the MIS at MFIs by the regulator/supervisor, I doubt that any meaningful (reliable and valid) data will go into the credit bureau. I hope that the RBI looks into the various issues as soon as possible so that it is not caught on the wrong foot later when it becomes the sole regulator for microfinance.
Absolutely unrealistic targets which means that quick wins and early results are not possible to show—This gets further exacerbated by the microfinance industry's underestimation of data quality and information technology issues which are dealt with below. Quick wins provide a great momentum and that has not been possible in the Indian scenario. This is what makes the credit bureau a real red herring! From December 2009, when MFIN (Microfinance Institutions Network) has been formed to date, I have seen a number of public statements on when the credit bureau is likely to be ready and used and I would like someone to get into the reasons for the shifting goalposts. I, for one, feel that this could be occurring because of lack of proper data at the grass-roots mainly due to the use of the agent-led decentralised model at this level.
Lack of reliable ground-level data—A number of issues affect data quality in microfinance and especially in India. There are both structural problems (agent-led modelsi , shared JLG, shared clients) and bad credit-granting practices (over-lending, multiple lending, successive greening, ghost lending and fraudsii , etc). Among the data issues observed are: lack of unique identifiers (several people in villages especially can have the same names and initials); lack of location identifiers (e.g., village/street names and building numbering, especially in rural areas are hugely duplicated); unavailability of key credit information (e.g., especially because of the highly prevalent agent-led model); and poor data quality of available information (e.g., errors in data entry, data conversion/manipulation, frauds as you have been reading, etc). Please recall that when the Andhra Pradesh government requested data from MFIs, errors were reported in the media to wrong data conversion.
A range of information technology issues—Different IT-related constraints prevent the smooth establishment of a credit bureau and much of these constraints arise due to the remote physical spread of Indian microfinance. Among the IT issues observed are: the lack of a standardised core MIS system at the MFI level; weak IT infrastructure within MFIs (branches not connected to headquarters, etc.); basic IT commodities are not available or not reliable (e.g., unstable power supply; slow or unreliable Internet connections); hardware and software provisioning issues (e.g., limited availability of hardware brands and models to ensure quick and efficient processing of very, very large volumes of small amounts of repetitive data that characterise microfinance); and lack of experienced service providers for infrastructure setup and maintenance.
Design of MIS at MFIs is not using accepted standardised best-practices—The problem is further compounded because MIS at the MFI level is not up to commonly-accepted standards. This means that consistency and integrity of data will continue to be a major issue in credit bureau implementationiii .
The lack of focus on execution to overcome lack of implementation capabilities—I also see no serious effort whatsoever by the microfinance industry to overcome the implementation bottlenecks. All I get to hear is, "the job is very difficult as this is a low-income financial services industry and therefore what the industry has achieved so far is commendable". Sorry, but that is not a fair argument as we are talking of commercial microfinance that seeks to become a part of the larger financial sector. Surely, under such circumstances, no handicap is permissible because the microfinance industry has always wanted to mainstream itself as an extended arm of banking and hence, there can be no compromise whatsoever with regard to quality of the MIS and related standards (accounting, internal control, etc.,) that influence the quality of data going into the MIS.
All of the above issues do indeed make setting up a credit bureau in an emerging market like India an extremely challenging task—if serious efforts are made, it could take at least 3-4 years (or maybe even 5 years) from initial discussions to regular use of the credit bureau (that produces transparent, reliable and valid credit information reports and not just some reports). So, folks, it is time to tune down our expectations and I hope that the powers that be, who argue that a credit bureau will solve all problems in Indian microfinance, do look into the above and other issues of practical relevance. I would also like various stakeholders—DFIs (Development Financial Institutions) like SIDBI (Small Industries Development Bank of India), commercial banks, international agencies like CGAP (Consultative Group to Assist the Poor) and donors supporting the credit bureau initiative—to come out and vouchsafe the integrity and quality of the data being supplied to the credit bureau by MFIs. This must be done in terms of data integrity, internal consistency and physical compatibility with client existence and records and these stakeholders (especially SIDBI and commercial banks) must make themselves accountable and responsible for the quality and integrity of such data. Unless all of the above are done, the credit bureau will just remain another idea like the multiple codes of conduct, supposedly operational on paper in the Indian microfinance industry for a long time now! I hope that the proposed Microfinance Bill drafters, key regulators and the RBI take these aspects into account while formulating a strategy for implementing a microfinance credit bureau.
i Please see previous Moneylife articles on microfinance agents - http://www.moneylife.in/article/how-and-why-did-microfinance-agents-become-a-part-of-the-indian-microfinance-business/19301.html, http://www.moneylife.in/article/implementation-safeguards-against-notorious-agents-are-an-imperative-for-the-proposed-microfinance-bill/19017.html and http://www.moneylife.in/article/proposed-microfinance-bill-has-to-look-at-the-re-leader-as-a-microfinance-agent/20019.html
iiPlease see previous Moneylife article on frauds - http://www.moneylife.in/article/increasing-frauds-internal-lapses-at-mfis-need-to-strengthen-supervisory-arrangements-to-protect-the-poor/18309.html
iiiPlease see Moneylife article on MIS for MFIs - http://www.moneylife.in/article/establishing-standards-for-effective-management-information-systems-for-mfis/19655.html
(The writer has over two decades of grassroots and institutional experience in rural finance, MSME development, agriculture and rural livelihood systems, rural/urban development and urban poverty alleviation/governance. He has worked extensively in Asia, Africa, North America and Europe with a wide range of stakeholders, from the private sector and academia to governments).
Making noise is a political statement just as speeding in a sports utility vehicle with number plates in local script. It is the “dare-you-stop-me” challenge which has to be countered by sticking to the rule book. People must not take this issue lying down. They must approach the environment secretaries in the respective state governments and also the secretary in the Ministry of Environment and Forests
In Maharashtra, efforts are on by the government through notification and to some degree follow up by the Maharashtra Pollution Control Board (MPCB) to reduce noise levels during festivities such as the recently-concluded Ganesh immersion, Eid, Navaratri, Durga Puga immersion, Diwali, Christmas and New Year. A mild campaign starts, even by educating school children on the noise issue. There is a formal course on environment science in schools from the 5th Standard. Then why are our festivities noisy?
Noise Pollution (Regulation and Control) Rules, 2000 clearly categorises noise levels at four zones—residential, commercial, industrial and silence zones. The decibels (dB), the unit of measuring noise levels, for daytime and nighttime are specified—the nighttime levels are lower by 10 dB(A) generally and by 5 dB(A) for industrial areas. The noise rules specify that nighttime starts at 10PM and ends at 6AM. Rest of the time is daytime.
The noise rules themselves have undergone a change over the past 22 years. In the aftermath of the Bhopal Gas Tragedy in 1984, the Environment (Protection) Act was enacted in 1986, commonly known as the EP Act (1986). Noise was not addressed to any degree of detail until 1989 when World Health Organization (WHO) norms were adopted as studies showed that noise had health repercussions not limited to causing hearing impairment. This rule specified nighttime as 9PM to 7AM. Meanwhile, the police continued to treat noise as of a mere nuisance value and 11pm was specified by various forces as the start-time of night. With much gain in knowledge and requirements of our social norms and much Parliamentary debate and 'public consultation', the year 2000 saw the emergence of the Noise Pollution (Regulation and Control) Rules 2000, commonly known as Noise Rules 2000. This relaxed the 9PM to 7AM nighttime period and the redefined period was specified as 10PM to 6AM.
To ensure that peace prevailed to enable people to get restful sleep and the noise levels during the nighttime were kept within the specified limits, further restrictions were imposed on activities like blowing horns, playing noise-emanating musical instruments and using loudspeakers in unenclosed areas. These restrictions were valid for silence zones irrespective of day or nighttimes. The Rules also specified that an area not less than 100 metres from a hospital, educational institution, court or religious place falls under a silence zone.
The Rules 2000 underwent amendments to cater to some situations not anticipated at the time of finalisation. Some were getting stricter while one major concession or relaxation was introduced in the amendment on 11 October 2002. What that is, is best to quote the amendment: while the portions in normal font are of the original rules, the ones in italics were made in the 11 October 2002 amendment and the ones in bold were made in the 11 January 2010 amendment.
5. Restrictions on the use of loudspeakers/public address systems and Sound Producing Instruments.
(1) A loudspeaker or a public address system shall not be used except after obtaining written permission from the authority.
(2) A loudspeaker or a public address system or any sound-producing instrument or a musical instrument or a sound amplifier shall not be used at night time except in closed premises for communication within, e.g. auditoria, conference rooms, community halls, banquet halls or during public emergency.
(3) Notwithstanding anything contained in sub-rule (2), the State Government may subject to such terms and conditions as are necessary to reduce noise pollution, permit use of loudspeakers or public address systems and the like during night hours (between 10.00 p.m. to 12.00 midnight) on or during any cultural or religious festive occasion of a limited duration not exceeding fifteen days in all during a calendar year. The concerned State Government shall generally specify in advance, the number and particulars of the days on which such exemptions shall be operative.
(4) The noise level at the boundary of a public place, where loudspeakers or public address systems or any other noise source is being used shall not exceed 10 dB (A) above the ambient noise standards for the area or 75 dB (A), whichever is lower.
(5) The peripheral noise level of a privately owned sound system or a sound producing instrument, shall not, at the boundary of the private place, exceed by more than 5 dB (A) the ambient noise standards for the area in which it is being used.
[Complete Noise Pollution (Regulation and Control) Rules 2000 as amended up to the last amendment of 11 January 2010 can be accessed at https://sites.google.com/site/noiserelated/home/updated-noise-rule-2000-as-of-2010].
Having placed before you the background, one can now look at the politics of noise. Most contentious is the clause 5 (3) which grants permission to use loudspeakers etc., even during the night hours till 12 midnight. What is being forgotten is that it asks the state government to take all measures to keep noise levels low, i.e., within the stated limits.
The government has been sensitising Ganesh Mandals and social organisations and the police too have not been lagging behind. That is one of the reasons that one sees the loudspeakers not blaring and switched off at 10PM. If this has been the case, why did the four larger Ganesh Mandals in Pune not adhere to the 10PM shutting-off of the loudspeakers?
Going by the arguments put forth by the representatives of these Mandals, they feel that it is an infringement on their rights to continue with traditional celebration of the Ganesh immersion, notwithstanding that the tradition never existed in this form and that the method of celebration causes untold misery to the people living along the route of the immersion procession and last but not the least, the Noise Rules have come about in 2000 and the relaxation of use of loudspeakers till midnight came about in 2002, superseding 'tradition' or any other rule that existed up till then, including the police rule on noise. These representatives went on to argue that they would ask the government of Maharashtra to allocate one full night for such immersions.
Following an extract from the Supreme Court ruling is sufficient to let not only these Mandals but also the State government and the Ministry of Environment and Forests of the Union government that such tampering with the rule will not stand the provisions of Article (14) and Article (21) of the Constitution.
The Supreme Court Ruling of 11 October 2005 extract says it all:
Looking at the diversity of cultures and religions in India, we think that a limited power of exemption from the operation of the Noise Rules granted by the Central Government in exercise of its statutory power cannot be held to be unreasonable. The power to grant exemption is conferred on the State Government. It cannot be further delegated. The power shall be exercised by reference to the State as a unit and not by reference to districts, so as to specify different dates for different districts. It can be reasonably expected that the State Government would exercise the power with due care and caution and in public interest. However, we make it clear that the scope of the exemption cannot be widened either by increasing the number of days or by increasing the duration beyond two hours. If that is attempted to be done, then the said sub-rule (3) conferring power to grant exemption may be liable to be struck down as violative of Articles 14 and 21 of the Constitution. We also make it clear that the State Government should generally specify in advance, the number and particulars of the days on which such exemption will be operative. Such specification would exclude arbitrariness in the exercise of power. The exemption, when granted, shall not apply to silence zone areas. This is only as a clarification as, this even otherwise, is the position of law.
With the oncoming Navaratri and Diwali festivals, there is a need to talk on this subject. Diwali also brings in air pollution aspects. We shall take these issues up in the run-up to these events.
Before closing, I must express my appreciation of efforts of the Pune Police to (a) sensitise the public and Mandals on noise pollution and (b) charge-sheeting the people who violated the rule even as they were told to stop making noise after 12 midnight. Though Mumbai was by and large noise-free, there were violations here too and it would be interesting to know whether the Mumbai Police took any strong measures to dissuade future noise-making by anyone.
[Sudhir Badami is a civil engineer and transportation analyst. He is on the Government of Maharashtra's Steering Committee on Bus Rapid Transit System (BRTS) for Mumbai and the Mumbai Metropolitan Region Development Authority's (MMRDA) technical advisory committee on BRTS for Mumbai. He is also member of the Research & MIS Committee of Unified Mumbai Metropolitan Transport Authority (UMMTA). He was a member of the Bombay High Court-appointed erstwhile Road Monitoring Committee (2006-07). He has been an active campaigner against noise pollution for over a decade and he is a strong believer in a functioning democracy. He can be contacted on email at [email protected].]