Citizens' Issues
Western Ghats: Challenges of sustainable development

The World Heritage status could have implications on development in and around the 39 sites from the Western Ghat as UNESCO prescribes creation of additional buffer zones around the natural world heritage sites

UNESCO's World Heritage Committee inscribed the Western Ghats of India as a world heritage site on 1st July. The tag came at the 36th session of the World Heritage Committee (WHC) in St Petersburg in Russia. Altogether 39 sites that dot the Western Ghats landscape will be part of the region that has been designated as WHS. Kerala leads with 20 sites being inscribed in the heritage list followed by Karnataka with 10, Tamil Nadu five and Maharashtra four (see Table 1).

Table 1: List of Western Ghats World Heritage clusters in Maharashtra, Karnataka, Kerala and Tamil Nadu

While environmentalists are rejoicing that constant international scrutiny will curb amassment of forest wealth by vested interests, the state governments have given a guarded reaction. Sceptics are of the view that the tag will make little difference to many ecologically destructive projects that have been implemented or are proposed in the Western Ghats.

Recognition comes after rejection
The world heritage tag for the Western Ghats has come after many glitches. The proposal for including 39 sites in the Western Ghats as world heritage was rejected by the World Heritage Committee in its 35th meeting last year. When the proposal was re-submitted for consideration this year, it was once again on the verge of getting rejected. The International Union for Conservation of Nature (IUCN), suggested that India should review and refine the proposal to redefine the boundaries of the proposed sites to maintain the contiguity of the forests. The Indian delegation in St Petersburg, however, managed to convince the World Heritage Committee on the merits of India's proposal and also discussed the issue with 21 members of the committee. The intense lobbying paid off, as the Russian delegation moved a proposal which was backed by several Asian and African nations.

Importance of Western Ghats

Older than the Himalayas, the Western Ghats are the treasure trove of bio-diversity. In fact they are recognized as one of the eight global hot-spots harbouring a wealth of flora and fauna. The Western Ghats which begin at the Dangs in Gujarat, run through the western parts of Maharashtra, the tiny state of Goa, the Malnad region of Karnataka and the highlands of Kerala and Tamil Nadu, before ending near Kanyakumari.


The Ghats are currently known to have more than 5,000 plant and 140 mammal species, 16 of which are endemic, i.e. species found in that area alone. Notably among these being the lion-tailed macaque and the Nilgiri tahr. Out of the 179 species of amphibians found in the Western Ghats, 138 are endemic to the region. It has 508 bird species, 16 of which are endemic, including the Nilgiri flycatcher and the Malabar parakeet.



The Western Ghats are considered an ecologically sensitive region with nearly 52 species moving one step closer to extinction. Habitat change, over-exploitation, pollution and climate change are the principle pressures causing bio-diversity loss.


The need to protect the ecology of the Western Ghats can hardly be over-emphasized.

The UNESCO Mandate
The UNESCO has noted with appreciation India's ongoing commitment to conserving high bio-diversity values of the Western Ghats, but has clearly underlined that more needs to be done. The World Heritage Committee has suggested to the Indian government to take into account the recommendations of the Western Ghats Ecology Expert Panel. It has also asked the government to strengthen buffer zones to provide increased protection within the nominated sites. The UN body also wants to promote participatory governance approaches through community participation to ensure equitable sharing of benefits. The panel has said that no industrial activity should be allowed without the consent of the locals.

The Western Ghats Ecology Expert Panel was constituted by the ministry of environment & forests in February 2010 under the chairmanship of noted environmental expert Professor Madhav Gadgil. The panel has identified several eco-sensitive zones in the region and recommended that they should be declared no-go areas. Among its recommendations, the panel has also called for scrapping of Karnataka's Gundia and Kerala's Athirapally hydro-projects, and gradual phasing out of mining activities in ecologically highly-sensitive areas of Goa by 2016. It has also suggested setting up of a Western Ghats Ecology Authority (WGEA), as a statutory authority appointed by the ministry of environment and forests, with the powers under Section 3 of the Environment (Protection) Act, 1986. The 24-member body is to have ecologists, scientists, representatives of civil society, as well as tribal groups, officials from the Union environment ministry, Planning Commission, National Biodiversity Authority, Central Pollution Control Board, and representatives of the state government as its members.
Both the Karnataka and Kerala governments have been opposed to the recommendation to scrap the hydro-projects in their respective regions. The Karnataka government had also been opposing the World Heritage tag citing regulatory hurdles in the development of places falling under these regions. Goa's lackadaisical attitude in conserving the Western Ghats has resulted in the state not getting any site in the list of 39. Maharashtra government has welcomed the World Heritage Status to Western Ghats, but that is unlikely to change the state's present stance of not imposing a complete ban on mining and industries, except in the core areas. The state, nevertheless is encouraging green fuel movement in the villages of Western Ghats by way of up to 75% subsidy on biogas and 50% subsidy on shift to low yielding cattle, which rely on domestic fodder instead of open grazing.
Impact of UNESCO World Heritage Site
The World Heritage status could have implications on development in and around these sites as UNESCO prescribes creation of additional buffer zones around the natural world heritage sites and putting in place an overarching management authority for conservation of the selected 39 serial sites. Conservationists also fear a mad-rush to these sensitive areas in the guise of eco-tourism. "This might trigger commercial activities in the Western Ghats, followed by construction activities like building roads, structures, power lines and other infrastructure, which will defeat the purpose of protecting the green cover and habitat protection," says an activist associated with the Kudremukh Wildlife Foundation in Karnataka.

The Western Ghats expert Prof Madhav Gadgil has welcomed the UNESCO gesture saying, "It will hopefully strengthen the Acts like Biological Diversity Act of 2002, which empowers the local bodies like panchayats to take appropriate steps for conservation." The participation of locals is going to be crucial in determining the success of conservation efforts and promising sustainable development.

All along the Western Ghats in five states, there are lakhs of tribal people who have made their homes in the Ghats. The Thodas of Nilgiris, Soligas of BR Hills, Malekudiyas of Belthangady, Halakki Vokkals of Uttara Kannada, the Sidhis of Kumta, Paniyas of Waynad, Kattunayakans of Malabar and many others in Goa and Maharashtra are some of them. The Perspective Plan for Protection of Biodiversity 2001-16 states that "tribal communities are part of the biodiversity and the state governments should not take them out of their natural surroundings, but empower them democratically and let the government facilities go to them."
The ground situation for people's participation in development is conducive in most parts of the Western Ghats. The region has some of the highest levels of literacy in the country, and a high level of environmental awareness. The democratic institutions are well entrenched, and Kerala leads the country in capacity building and empowering of Panchayat Raj institutions. Goa has recently concluded a very interesting exercise, Regional Plan 2021, of taking inputs from Gram Sabhas in deciding on the land use policies. Evidently, Western Ghats are an appropriate region of the country to attempt to make the transition towards an inclusive, caring and environment friendly mode of development.

(Manish Desai is director-media, Press Information Bureau, Mumbai)




Kotak fears bad loans may put pressure on bank margins

HDFC Bank, ICICI Bank and IndusInd Bank are expected to be among the better performing banks in the private sector, and SBI, Bank of India and IOB among PSU banks, according research by Kotak Institutional Equities

A recent report released by Kotak Institutional Equities (Kotak) has highlighted that the performance of the Indian banking sector this quarter would largely depend on banks ability to restructure loans. The report said, "Large-ticket restructuring (primarily of SEB loans) will be the key highlight of the quarter for public banks. Recovery trends for banks are likely to be mixed. Overall earnings growth is likely to be driven by State Bank of India and large private banks." It expects HDFC Bank, ICICI Bank and IndusInd Bank to be among the better performing banks in the private sector, and SBI, Bank of India and India Overseas Bank among Public Sector Unit (PSU) banks. It expects private banks' earnings to grow by 23% year-on-year (yoy)

One of the key issues that banks face today is the quantum of toxic loans that they are sitting on, especially the PSU banks. It has been a recurring issue for quite some time, but now the problem has grown by leaps and bounds. One area of particular concern is the inability of State Electricity Boards (SEBs) to pay off their debts. It is reported that they're sitting on Rs300 thousand crore of losses and bad loans combined - not a small number by any means. It is also a big number for banks to start pulling up their socks. According to the report, "We expect banks, specifically PSU banks, to report higher restructured loans as they complete select SEBs that were pending to be restructured (only 35% of the overall SEB exposure was restructured in 4QFY12). Select mid-corporate restructuring is likely to continue, as corporate balance sheets continue to remain under stress." However, it is a different story for private sector banks as their exposure to SEBs is minimal though their exposure to retail assets is significant.

One of the more important metrics for banks is net interest margins, which is an indicator of profitability and health of the banks. Ability to maintain NIM at these levels is becoming difficult for banks as downward re-pricing of loans has begun while the same is yet to begin for retail deposits, said the report. In other words, as banks restructure their loans (i.e. make it easier for SEBs or potential defaulters to settle loans) their income get revised downwards in form of lower interest rates charged for restructured loan. When the Reserve Bank of India (RBI) cut interest rates, so too will deposit rates go down. However, there is a time lag before deposit rates reflect underlying interest rates. Thus in the interim, which is to say the current quarter, the banks are likely to face margin squeeze. Even more so, it is learnt that banks are resorting to short-term borrowings, or repo, to manage the shortfall between deposits and loans, wherein the latter is more than the former. This increases the costs of funds and results in higher cost, but not much. Nevertheless, Kotak expect net interest margins to remain stable.

A weak economy has taken a toll on banks' fee income, which is their core business. The report said, "We expect overall non-interest income to grow 20% yoy (14% qoq decline) primarily on the back of higher contribution from treasury income. Core fee income growth would be muted primarily due to weak business activity."

The infrastructure vertical, as expected, has taken a hit due to policy paralysis, red tape and poor implementation. The report stated, We note that there is a visible slowdown in the growth to the infrastructure vertical. As of May 2012, overall loans to infrastructure grew 13% yoy as compared to overall loan growth at 17-18% yoy". The bottom-line is that it will be tough for banks to make good profits for a sustained period of time. Unless there is a fillip to economic activity and a consolidation in the banking sector, it will be difficult to play the sector for the medium term.


Axis Bank ties-up with Xpress Money for mobile fund transfer

Under the tie-up, people can send money through any agent location of UAE Exchange and Financial Services called Xpress Money to a registered mobile number in India


Mumbai: Private sector lender Axis Bank said it has entered into a tie-up with UAE Exchange and Financial Services to launch inward remittances through mobile.

Under the tie-up, people can send money through any agent locations of UAE Exchange and Financial Services called Xpress Money to a registered mobile number in the country, the bank said in a statement issued.

Xpress Money has 1.35 lakh agent locations operational in 125 countries.

The recipient has to register at any Axis Bank branch once and can withdraw the money sent from any Axis Bank ATMs with the help of codes sent to their registered mobile number, the statement said.

“This solution will help customers eliminate the need to visit physical agents and provide documentation every time they receive a money transfer,” the bank's president and head of treasury and international banking P Mukherjee said.

A beneficiary can receive a maximum of 30 transactions in a calendar year and the maximum amount one can receive is presently capped at Rs18,000, per remittance transaction, it said.

Meanwhile, Federal Bank, also announced a tie-up with Saudi Arabia-based Samba Bank for inbound remittances which can be collected by the beneficiary through any of the bank's 976 branches in the country, it said in a statement.

This is the 68th such tie-up the bank has stitched with financial institutions in the Gulf region having significant population from the diaspora, it said.


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