Cloud zero
ECONOMY & POLICY

Cloud zero

Last month's death dance in the Himalayan region - the extent of the loss and the numbers yet to be assessed - has thrown up valuable lessons in maintenance of environment as well as the need for construction norms to be followed in both letter and spirit.

The cavalier disdain for urban planning and construction norms shown both by the authorities and developers has been amply in evidence across India, more particularly in the belt prone to seismic shifts like Uttarakhand and Himachal Pradesh. No less than the state's Chief Minister Vijay Bahuguna has been perceived as being less than sensitive to the ongoing environmental degradation of fragile mountain slopes and construction along river banks - a result of reckless commercialisation - when he rallied against the so-called 'Green Statutes' for hampering development work in a recent meeting with planning commission czars in New Delhi. The cloud burst has brought all this intellectual bravado from 'cloud nine' to 'cloud zero'. Admittedly, the authorities seem to have been ill prepared to deal with a disaster of the magnitude which struck Uttarakhand and seemed to have disregarded calls from the MET authorities and even CAG to have early warning systems installed. But this is not just about the need for equipment as much as the need to embed a culture of preparedness for potential disaster across the nation in which our National Disaster Management Authority has been sadly wanting. What is truly heart warming is the role played by infrastructure firms like HCC, L&T and Jaiprakash to address the widespread damage in the state with their efforts in rescue and support.

Now is the time to have some disruptive engagement: efforts need to be made on a war footing to correct the mistakes in the system, to get rid of the fault lines in construction. Flouting of construction norms has led to debris from hydel projects and roads to be dumped into river-beds causing flooding and instability in slopes cut by roads owing to the absence of protective forest cover.

It is our view that disaster management needs to be embedded into every development programme or project and such inclusion must be made mandatory for funding during allocation of budget. It also needs to be ensured that such funds can only be accessed after installation of disaster management systems.

As if the natural disaster wasn't enough it is raining problems on the financial front with the rupee shooting well past 60. Last year, in order to tackle debt stress the government liberalised ECB norms which meant that Indian companies could access funds at low cost. The rupee's negative gymnastics have made this effort counter- productive. The decline in rupee will also impact infrastructure projects which are dependent on international market borrowings and on imported equipment in a major way. Interest rate reduction needs to come sooner than later to help manage some of the added burden.

There is an upside in all this. Given the depreciation of the rupee, India has now become more attractive for overseas equipment firms which were planning to expand here and were to bring in funds. They will now derive a better exchange rate plus will gain in terms of an investment allowance.

This is a time of the year when CW's focus turns to India's Most Admired Companies - you will find out who the 10 worthies are, along with a lot of other stories like JCB's creation of a historical landmark with its millionth machine, as you turn the pages.

Have a wonderful read!

Last month's death dance in the Himalayan region - the extent of the loss and the numbers yet to be assessed - has thrown up valuable lessons in maintenance of environment as well as the need for construction norms to be followed in both letter and spirit. The cavalier disdain for urban planning and construction norms shown both by the authorities and developers has been amply in evidence across India, more particularly in the belt prone to seismic shifts like Uttarakhand and Himachal Pradesh. No less than the state's Chief Minister Vijay Bahuguna has been perceived as being less than sensitive to the ongoing environmental degradation of fragile mountain slopes and construction along river banks - a result of reckless commercialisation - when he rallied against the so-called 'Green Statutes' for hampering development work in a recent meeting with planning commission czars in New Delhi. The cloud burst has brought all this intellectual bravado from 'cloud nine' to 'cloud zero'. Admittedly, the authorities seem to have been ill prepared to deal with a disaster of the magnitude which struck Uttarakhand and seemed to have disregarded calls from the MET authorities and even CAG to have early warning systems installed. But this is not just about the need for equipment as much as the need to embed a culture of preparedness for potential disaster across the nation in which our National Disaster Management Authority has been sadly wanting. What is truly heart warming is the role played by infrastructure firms like HCC, L&T and Jaiprakash to address the widespread damage in the state with their efforts in rescue and support. Now is the time to have some disruptive engagement: efforts need to be made on a war footing to correct the mistakes in the system, to get rid of the fault lines in construction. Flouting of construction norms has led to debris from hydel projects and roads to be dumped into river-beds causing flooding and instability in slopes cut by roads owing to the absence of protective forest cover. It is our view that disaster management needs to be embedded into every development programme or project and such inclusion must be made mandatory for funding during allocation of budget. It also needs to be ensured that such funds can only be accessed after installation of disaster management systems. As if the natural disaster wasn't enough it is raining problems on the financial front with the rupee shooting well past 60. Last year, in order to tackle debt stress the government liberalised ECB norms which meant that Indian companies could access funds at low cost. The rupee's negative gymnastics have made this effort counter- productive. The decline in rupee will also impact infrastructure projects which are dependent on international market borrowings and on imported equipment in a major way. Interest rate reduction needs to come sooner than later to help manage some of the added burden. There is an upside in all this. Given the depreciation of the rupee, India has now become more attractive for overseas equipment firms which were planning to expand here and were to bring in funds. They will now derive a better exchange rate plus will gain in terms of an investment allowance. This is a time of the year when CW's focus turns to India's Most Admired Companies - you will find out who the 10 worthies are, along with a lot of other stories like JCB's creation of a historical landmark with its millionth machine, as you turn the pages. Have a wonderful read!

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