Anil Agarwal

IND AS

2011-09-05T05:05:00.000-07:00

The Ministry of Corporate Affair (MCA) has notified 35 Indian IFRS standards (known as “Ind-AS’), without announcing the applicability date. In its press release, the MCA has stated that Ind-AS will be applied in a phased manner, to ensure smooth transition for all stakeholders.

The notification of Ind-AS is a significant step toward the implementation of converged standards in India. Companies may particularly note that the MCA will intimate the implementation date later; however, it does not state if the implementation is deferred. Also, the question regarding whether a company can apply Ind-AS early, if it desires to do so, and the manner of quarterly reporting still remains open.

Companies, which were preparing for conversion based on IFRS, should note that MCA notified Ind-AS are not the same as IFRS as issued by the International Accounting Standards Board (IASB) and there are a number of differences between the two. Also, the notified Ind-ASs are not the same as the near final Ind-AS drafts submitted by the Institute of Chartered Accountants of India (ICAI), some time ago, to the National Advisory Committee of Accounting Standards. This article provides an overview of key differences between MCA notified Ind-AS and IASB IFRS.

Deferment of certain standards/ interpretations

1. IFRIC 12 Service Concession Arrangements and SIC 29 Service Concession Arrangements: Disclosures are not notified with the other Ind-AS’s.

2. IFRIC 4 Determining Whether an Arrangement contains a Lease is not notified with the other Ind-AS’s.

3. IFRS 6 Exploration for and Evaluation of Mineral Resources will be applied from a future date with or without changes. However, the nature of expected changes is not clear.

Companies may need to evaluate whether there is a choice to early adopt the above standards, if they so desire. In making this evaluation, they will also consider paragraph 12 in Ind-AS 108 Accounting Policies, Changes in Accounting Estimates and Errors, which states that a company may consider the most recent pronouncements of the IASB in deciding accounting treatment for transaction, other event or condition not covered by an Ind-AS.

Revenue recognition

4. The application of IFRIC 15 Agreements for the Construction of Real Estate is expected to require many real estate companies to recognize revenue only on completion of construction. Considering the concerns raised by Indian real estate companies, IFRIC 15 has not been included in Ind-AS. Rather, the regulators have amended the scope of Ind-AS 11 Construction Contracts to include accounting for real estate developers. This will require the companies to apply the percentage of completion method, for real estate sales.

5. The ICAI is developing a new guidance note dealing with recognition and measurement of rate regulated assets and liabilities. The requirements in Ind-AS 18 Revenue will stand modified to the extent they are contrary to the said guidance note. A new footnote has been added in to Ind-AS 18 to clarify this aspect.

Employee benefits

6. IAS 19 Employee Benefits provides three options for recognition of actuarial gains and losses on defined benefit plans. However, under Ind-AS 19, all actuarial gains and losses, arising on both defined benefit plans and other long-term employee benefits, are recognized immediately in “other comprehensive income (OCI).”

7. As per IAS 19, the rate used to discount post-employment benefit obligations will be determined by reference to market yields on high quality corporate bonds. In countries where there is no deep market in such bonds, the market yields on government bonds will be used. In contrast, Ind-AS 19 requires the discount rate to be determined by reference to the market yields on government bonds, in all cases.

Exchange differences arising on long-term monetary items

8. IAS 21 The Effects of Changes in Foreign Exchange Rates requires exchange differences arising on restatement of foreign currency monetary items, both long term and short terms, to be recognized in profit or loss for the period. Ind-AS 21, however, allows companies an irrevocable option at the transition date whereby they can choose to recognize and accumulate exchange differences arising on restatement of long-term foreign currency monetary items, directly in equity. The amount so accumulated in equity will be transferred to profit or loss over the period of maturity of the item, in an appropriate manner. The option, once selected, is irrevocable and needs to be applied to all such items.

Financial instruments

9. Under IFRS, a FCCB is treated as a hybrid financial instrument having liability and derivative (conversion option) components. While companies measure liability at amortized cost, the derivative component is measured as fair value through profit or loss at each reporting date. However, Ind-AS 32 Financial Instruments: Presentation has been modified in a manner that the derivative component will be treated as a fixed equity component, if the exercise price is fixed in any currency. Hence, such FCCBs under Ind-AS will not be subject to fair value accounting through profit or loss at each reporting date.

10. Ind-AS 39 Financial Instruments: Recognition and Measurement prescribes that in determining fair value of a financial liability, which on initial recognition is designated at fair value through profit or loss, any change in fair value consequent to changes in the company’s own credit risk should be ignored. IAS 39 requires all changes in fair values in such liabilities to be recognized in the profit or loss.

11. Under Ind-AS, the early adoption of IFRS 9 Financial Instruments is not available and hence Ind-AS 39 will apply.

Investment properties

12. IAS 40 Investment Properties permits both the cost model and fair value model for subsequent measurement of investment properties. In a fair value model, a company recognizes any gain/loss arising on the fair valuation in the profit or loss for the period. However, Ind-AS 40 does not permit the use of fair value model but mandates the fair value disclosures for investment property.

13. As per IAS 40, a property interest that is held by a lessee under an operating lease may be classified and accounted for as investment property if, and only if, the property would otherwise meet the definition of an investment property and the lessee uses the fair value model for the asset recognized. This classification alternative is available on a property-by-property basis. Since Ind-AS 40 prohibits the use of the fair value model this option has also been deleted from Ind-AS 40.

Business combinations

14. IFRS 3 Business Combinations excludes common control business combinations from its scope. However, Ind-AS 103 requires such combinations to be accounted using the pooling of interest method. It also requires the transferee company to recognize goodwill computed as below:

Goodwill = (Amount recorded for share capital issued plus any additional consideration) minus share capital of transferor company

Ind-AS 103 also requires that financial information in respect of prior periods should be restated as if the business combination had occurred from the beginning of the earliest period presented in the financial statements, irrespective of the actual date of the combination.

15. IFRS 3 requires a bargain purchase gain on business combination to be recognized in profit or loss for the period. However, Ind-AS 103 requires the same to be recognized in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, companies will recognize the gain directly in equity as capital reserve, without routing the same through OCI.

On similar lines, Ind-AS 28 requires that any excess of the investor’s share of the net fair value of the associate’s identifiable assets and liabilities over the cost of the investment is included in equity as “capital reserve.”

Consolidated financial statements

16. IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures provide companies an exemption from consolidated financial statements (CFS), application of equity method or proportionate consolidation, if certain criteria are met. They also require certain disclosures to be made in such cases. However, these aspects are not included in Ind-AS 27, Ind-AS 28 and Ind-AS 31 since the Companies Act and rules framed there-under will govern the preparation of CFS.

17. IAS 28 and IAS 31 contain scope exclusion with regard to investments in associates/ joint ventures held by mutual funds, unit trusts and similar entities including investment-linked insurance funds, if the such investments, on initial recognition, are either designated as at fair value through profit or loss or are classified as held for trading and accounted for in accordance with IAS 39. However, this scope exclusion has been deleted from Ind-AS 28 and Ind-AS 31 since the Companies Act, 1956, is not applicable to mutual funds, unit trusts and similar entities including investment linked insurance funds.

18. As per IAS 28, the investor should use the most recent financial statements of its associate in applying the equity method. Where the reporting dates of the investor and the associate are different, the associate prepares, for the use of the investor, financial statements as of the same date as those of the investor unless it is impracticable to do so. It also provides that in no case, the difference between the reporting date of the associate and that of the investor can be more than three months. IAS 28 also requires that uniform accounting policies should be used in the preparation of financial statements of the investor.

Ind-AS 28 also contains similar requirements. However, it provides an exemption from both the requirements on the grounds of impracticality.

19. A format for the preparation of CFS has been added in an Appendix to Ind-AS 27. It requires a parent to use the said format, or as near thereto as circumstances admit, in the preparation of its CFS. IAS 27, however, does not contain any specific format for the preparation and presentation of CFS.

Government grants

20. IAS 20 Accounting for Government Grants and Disclosure of Government Assistance gives companies an option to measure non-monetary government grants either at their fair value or at nominal value. Ind-AS 20 requires measurement of such grants only at their fair value.

21. IAS 20 also gives companies an option to present the grants related to assets, including non-monetary grants at fair value in the balance sheet, either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset. Ind-AS 20 requires presentation of such grants in balance sheet only by setting up the grant as deferred income.

Borrowing costs

22. Ind-AS 23 Borrowing Costs provides specific guidance on computation of exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. However, this guidance is not there in IAS 23.

First time adoption of Ind-AS

23. Ind-AS 101 First-time Adoption of Ind-AS is applicable to the first set of annual Ind-AS financial statements prepared by a company. The first Ind-AS financial statements are defined as the first annual financial statements in which a company adopts Ind-AS by an “explicit and unreserved statement of compliance with Ind-AS.” Ind-AS 101 does not recognize or allow any fall back on IFRS for this purpose. This suggests that companies, which are already IFRS compliant, e.g., in accordance with the option given by the SEBI or to comply with foreign listing requirements, will need to prepare their opening Ind-AS balance sheet again.

It may be noted that the near final draft of Ind-AS 101 submitted to the NACAS had given companies, which have filed financial statements prepared in accordance with IFRS as issued by the IASB with regulatory authorities, an option to adopt the balance sheet so filed as at the end of the immediately preceding financial year as their opening Ind-AS balance sheet after making adjustments, for differences between Ind-AS and IFRS. However, this option has been deleted from Ind-AS 101, notified under the Companies Act.

24. IFRS 1 defines previous GAAP as the basis of accounting that a first-time adopter used immediately before adopting IFRS. Ind-AS 101, however, defines previous GAAP as the basis of accounting that a first-time adopter used immediately before adopting Ind-AS for complying with the reporting requirements in India.

25. IFRS 1 explains “transitional date” as the beginning of the earliest period for which a company presents full comparative information under IFRS. However, Ind-AS 101 provides transition date as the beginning of the current period, because comparative period information is not required. Thus, a company will not have an option to adopt Ind-AS from the beginning of the comparative period. However, if it desires to give comparative information as per Ind-AS, it has to be given on a memorandum basis.

26. Ind-AS 101 gives certain additional exemptions. The following are the key ones:

(a) IFRS 1 permits a first-time adopter to measure long-lived assets such as property, plant and equipment, intangible assets and investment property at deemed cost at the transition date. The deemed cost can be either equal to fair value at the transition date, or a revaluation under previous GAAP.

In addition, Ind-AS 101 also allows a first-time adopter to continue with the previous GAAP carrying value for all of its property, plant and equipment as recognized in the previous GAAP financial statements at the transition date and use the same as deemed cost at that date, after making necessary adjustments for decommissioning liabilities. Similar exemption is also available for intangible assets and investment property.

The near final draft of Ind-AS 101 had restricted this exemption only to property, plant and equipment, intangible assets and investment property, as recognized in the financial statements for the financial year ending as at 31 March 2007 or the relevant date, in case of a different financial year. However, this restriction does not exist in the final Ind-AS 101 notified by MCA.

(b) A first-time adopter can apply the option given in Ind-AS 21 to recognize exchange differences arising on long-term monetary items in a separate component of equity, on a prospective basis.

(c) Ind-AS 101 allows a company to use the transitional date circumstances to measure non-current assets held for sale and discontinued operations at the lower of carrying value and fair value less cost to sell.

27. IFRS 1 requires reconciliations for opening equity, total comprehensive income, cash flow statement and closing equity for the comparative period to explain the transition to IFRS from previous GAAP. Ind-AS 101 does not require comparative information to be given as per Ind-AS. It provides an option to give comparative period Ind-AS financial statements on memorandum basis. Accordingly, companies that do not provide comparatives need not provide reconciliation for total comprehensive income, cash flow statement and closing equity in the first year of transition but will disclose significant differences pertaining to total comprehensive income of the current year.

Interim financial report

28. In Ind-AS 34 Interim Financial Reporting, a footnote has been inserted which states that unaudited financial results required to be prepared and presented under clause 41 of the listing agreement are not an “interim financial report” as per this standard. This suggests that preparation of quarterly financial information will continue to be governed by the requirements prescribed in the listing agreement.

Presentation of financial statements

29. IAS 1 Presentation of Financial Statements permits companies to present all items of income and expense recognized in a period either in a single statement, or in two statements. Ind-AS 1 does not permit the two statements approach. It requires all items of income and expense to be presented in a single statement of profit and loss.

30. IAS 1 requires a company to present an analysis of expenses recognized in profit or loss using a classification based on either their nature or their function within the company. However, Ind-AS 1 mandates only nature-wise classification of expenses.

31. IAS 1 requires presentation of the statement of changes in equity (SOCIE) as a separate statement. Ind-AS 1 requires the SOCIE to be presented as a part of the balance sheet.

Statement of cash flows

32. In case of non-financial companies, IAS 7 Statement of Cash Flows gives an option to classify the interest and dividends paid and received as item of operating cash flows. Ind-AS 7, however, does not give this option. It requires interest and dividend paid to be classified as item of financing activity and interest and dividend received to be classified as investing activity.

Related party disclosures

33. Unlike IAS 24, Ind-AS 24 Related Party Disclosures exempts companies from making disclosures required in the standard if making such disclosures will conflict with the company’s duties of confidentiality prescribed in a law. This exemption may particularly help banking companies whose governing law prohibits certain disclosures.

36. IAS 24 contains a substance based definition of the term “close members of the family”. As per the standard, “close members of the family” of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. They may include (i) the individual’s domestic partner and children, (b) children of the individual’s domestic partner, and (c) dependants of the individual or the individual’s domestic partner. However, Ind-AS 24 restricts the definition of the term “close members of the family” to the persons specified within meaning of “relative” under the Companies Act 1956 and that person’s domestic partner, children of that person’s domestic partner and dependants of that person’s domestic partner.

37. Ind-AS 24 provides an additional guidance whereby items of similar nature to be disclosed in aggregate by type of related party. However, this is not done in such a way as to obscure the importance of significant transactions. IAS 24 does not provide any such guidance.

Earnings per share

38. Unlike IAS 33, Ind-AS 33 Earnings Per Share does not give an option to present EPS only in CFS. It requires EPS to be presented both in the standalone financial statements (SFS) and CFS. Also, no exemption from presentation of EPS is given to unlisted companies.

39. Ind-AS 33 recognizes that due to legal override, certain items of income and expense may be charged directly to equity, which, as per the requirements of Ind-AS, should have been recognized in profit or loss for the period. It requires that for the purpose of calculation of basic and diluted EPS, these amounts should be included in profit or loss for the period, irrespective of whether these amounts are debited or credited to equity.

Others

40. Under IFRS, IAS 41 Agriculture requires biological assets to be measured at fair value. However, Ind-AS does not contain any standard corresponding to IAS 41.

41. Unlike IFRS, the Framework for Preparation and Presentation of Financial Statements has not been notified under Ind-AS. However, there are certain Ind-ASs, e.g., Ind-AS 1 and Ind-AS 8 that refer to the Framework.

42. If section 391/394 gets amended, accounting in the case of restructuring and merger would have to follow Ind-AS. However, there is no clarity on whether the amendment to section 391/394 will apply retrospectively or prospectively. Nevertheless, it appears to be highly unlikely that section 391/394 amendment will apply retrospectively in which case, the accounting under erstwhile court schemes will continue, though it may otherwise not meet the requirements of Ind-AS.

43. Further differences may arise, depending on the manner in which the Companies Amendment Bill is passed, particularly provisions relating to section 100, 78, schedule VI, schedule XIV, consolidation requirements, etc. In addition, differences may arise in the way in which future changes in IASB IFRS standards are updated under Ind-AS. Also, local interpretations of Ind-AS by standard setters and regulators may differ from global practice.

Conclusion

The notification of Ind-AS is an important step toward the application of IFRS converged standards in India. However, before the actual implementation of these standards, regulatory bodies need to take certain further actions. These include regulatory changes in the Companies Act, particularly, sections 391, 394, 100, 78, schedule VI and schedule XIV, to implement Ind-AS.

As can be seen there are numerous differences between Ind-AS and IASB IFRS, making it practically difficult for many companies to make an assertion that their Ind-AS financial statements are IASB IFRS compliant. Nevertheless, every company should endeavor to apply Ind-AS in a manner that the departures from IASB IFRS are minimal. This may enhance the understandability of the Ind-AS financial statements by global investors. Depending on the need, such companies can simultaneously prepare IASB IFRS financial statements or convert with minimal effort Ind-AS financial statements to IASB IFRS financial statements. It may also be possible for a few companies to achieve dual compliance at a future date, provided the mandatory differences (for example, real estate accounting) do not impact them or are immaterial.

2011-08-24T08:56:00.000-07:00

ANNA HAZARE

Anna Hazare is one of India's well-acclaimed social activists. A former soldier in the Indian army, Anna is well known and respected for upgrading the ecology and economy of the village of Ralegan Siddhi which is located in the drought prone Ahmednagar district of Maharashtra state. The erstwhile barren village has metamorphosed into a unique model of rural development due to its effective water conservation methods, which made the villagers self-sufficient. Earlier, the same village witnessed alcoholism, utter poverty and migration to urban slums. Inspired by Hazare’s unique approach of salvaging a hopeless village, the state government has implemented the `Model Village’ scheme as part of its official strategy. Hazare is now synonymous with rural development in India.

RALEGAN SIDDHI : A MODEL OF SUSTAINABLE DEVELOPMENT

Swami Vivekananda’s philosophy has great bearing on Anna Hazare. His thoughts and work have been a constant source of inspiration for him. While serving in the Indian Army, he had decided to dedicate his life to social work, but he did not know how to begin.

While in the army, he used to visit his village for two months, every year during his leave period. The condition of the village was pathetic and awful. The land was barren and undulated. As the village is located in the rain-shadow area, the annual rainfall is a meager 400–500 mm. All of the rainwater use to run off and get wasted. There were no means to harvest this precious resource. Whatever rainwater use to get collected was sufficient to cultivate only one crop on 300–350 acres of land out of a total 2200 acres of land available in village. 80% families were surviving on one square meal in a day.

As food production was insufficient and no employment opportunities were available in the village, some villagers started brewing liquor to earn their livelihood. Gradually the number of breweries rose to 35. They were aware that what they were doing was socially and morally incorrect, but the circumstances forced them to adopt this profession for their livelihood. Some villagers had to walk 5–6 km. each day in search of employment in the nearby villages.

The helplessness due to poverty and indebtedness led people to desperation and ultimately to alcoholism. Quarrels and street fights became daily chores. Hazare’s house was in a hamlet just half a km. away from the centre of the village. Hazare avoided going to the heart of the village due to this pathetic condition. He always felt helpless since he could not do anything to change the conditions prevailing in the village.

When he decided to dedicate his life for social cause in 1975, he believed charity should begin from home. Swami Vivekananda’s words resonated in his mind - people would not listen to philosophical ideologies with empty stomachs. Social change is not possible if people are haunted by the daily problem of making two ends meet. Hazare taxed his brains on how to solve this crucial problem. He remembered that Late Mr. Vilasrao Salunkhe had in 1972, started experiments in watershed development and water management in some villages near Saswad in Pune district. His work used to be frequently discussed in informal gatherings everywhere. So, Hazare visited his project and was inspired. States Hazare, ``This visit gave a direction to my ideas and I decided to undertake similar work of watershed development in my village. ‘’

Hazare then paid a visit to the office of the then Director of Agriculture, Mr. Dikshit, and told him that he had decided to work for betterment of his fellow villagers. He expressed his desire to undertake water conservation work in his village under his guidance. After some days, Mr. Dikshit paid a visit to Ralegan Siddhi along with his subordinates and made a geographical survey. He was convinced that the topography of the village was suitable for undertaking the watershed development programme and took a decision to implement it.

On resumption of the watershed development work in the village, Hazare started supervising the work at sites from dawn to dust, without taking a farthing as remuneration. He considered it as social work; and day by day his experience and knowledge was building up. With his experience and knowledge, he constructed many water harvesting structures with people’s participation. So far, 48 nulla bunds, 5 cement check dams and 16 Gabion structures have been constructed. The villagers under Hazare’s guidance, also undertook fodder development, continuous contour trenches and loose boulder structures on 500 acres of land.

The watershed development work helped in conserving each drop of rainwater in the village itself and in recharging the groundwater aquifers. This ultimately raised the water table. In the same village where earlier it was not possible to cultivate more than 300–350 acres of land for one crop, now the villagers are harvesting two crops in 1500 acres of land. Due to availability of water, the agricultural production has boosted up. The agricultural development has created lot of employment in the village itself. Not only has the distress migration completely stopped, but now wage labourers have to be hired from other villages in order to get various intercultural operations done in time.

Today the villagers have completely given up brewing of liquor. Nobody sells liquor in the village. Further, the shopkeepers do not sell cigarettes, beedies and tobacco too for the last 13 years.

Earlier only 300 liters of milk was sold from the village. Now the milk production has gone up to 4000 liters. This milk is purchased by cooperative and private dairies. This brings in Rs. 1.3 to 1.5 crores (13 to 15 million) annually to the village. The dairy business has flourished as a subsidiary to agriculture which has provided a new income generation avenue to the unemployed youths of the village.

The per capita income of the villagers has increased from Rs. 225 to Rs. 2500. This has completely transformed the economy of the village. The living conditions of the villagers have improved and the gap between the haves and have-nots has narrowed down. After the economic transformation of the village, villagers constructed buildings worth Rs.1 crore (10 million) for school, hostel and gymkhana and renovated the old village temple through financial contributions and shramdan.

Mass marriages are arranged in the village (generally 25 to 30 marriages at a time) in order to curb expenditure. This has helped in removing caste barriers and promoting social cohesiveness.

After the success of watershed development programme in Ralegan Siddhi, Hazare replicated it in the neighbouring four villages. The results are encouraging. Now the same project is being replicated in 80 – 85 villages of Maharashtra. Like any other village in India including Ralegan Siddhi, there was a social problem of untouchability. Today people of all castes and creeds live together in peace like members of the same family. The consecutive droughts led to non-payment of bank loans taken by the Dalit community for agriculture purposes. The bank decided to sell their mortgaged land to recover the loans. At this critical time, rest of the villagers decided to toil on the farmlands of Dalits and repay the loan by harvesting crops. The villagers cultivated their land in 1983-84 and 1984-85 through shramdan (voluntary labour), repaid the bank loan, and saved their land.

In the last 35 years, many institutions and cooperatives like Gram Panchayat, Cooperative Consumer Society, Cooperative Credit Society, Cooperative Dairy, Educational Society, Women’s Organization and Youth Organization, with different mandates are operating in Ralegan Siddhi. Till date no elections were held for the selection of members of these institutions. The members were selected unanimously by the villagers in the Gram Sabha. The Gram Sabha has emerged as a powerful forum for taking collective decisions at the village level. All the developmental programmes are implemented in the village after taking consent of the Gram Sabha.

Since last 15 years, thousands of visitors, not only from neighbouring states of India, but also from abroad, have viusited & are still visiting Ralegan Siddhi to study the impact of watershed development. They include researchers, academicians, farmers, government officials, people’s representatives and students.

While implemainting the watershed program trained manpower is required and realising that there was paucity of trained manpower in Ralegan Siddhi. a training institute to impart training in watershed development was established. So far, about 17–18 thousand people from different states of India have been trained at the Training Centre on Watershed Development.

Ralegan Siddhi should not be viewed from the narrow angle of materialistic development, i.e. structures in watershed or economic development. The developmental process in Ralegan Siddhi is beyond this. There is a social and nationalistic thread passing through the process of change.

The big dams are getting filled with silt due to soil erosion which is the result of uncontrolled tree felling in the catchment areas. No emphasis was given to soil conservation and range development. The top loose soil is getting washed away each year by the rainwater and getting deposited in the big dams. The top soil is the creamy layer of the land. According to scientists, it takes more than hundred years to form 1 inch of top soil. On one hand, this precious resource of top soil is being washed away from the villages; and on the other hand, it is getting deposited in big dams thus reducing the life of the dams. This is going to create many problems in the near future.

All the major cities are supplied drinking water from a nearby dams. All the industries and sugar factories are provided water from the same dams. The hydro-electricity power generation plants are situated on big dams. All these facilities will come to standstill one day when the dams get filled with silt completely. These dams will meet the fate of death; say after 100 or 200 or 500 years. Nobody can avoid this sorry fate. Neither the government nor the people would be able to de-silt these big dams as the back-water spread of these dams is 60 – 90 km. It will not be possible to remove the huge mountain of 90 km. length and 200 – 300 ft. height from the dam site. There won’t be any alternate sites available for construction of new dams. What is going to happen to all these big dams? That is the question.

Transformation of village economy alone could bring in transformation of the economy of the nation. That is possible only through watershed development programme. Today, our concept of development is based on exploitation of environment and humanity. We are dreaming of development by uncontrolled extraction of subsurface and surface resources like petroleum, coal, groundwater, vegetation and aquatic resources.

The growing population is putting tremendous pressure on the available resources. The demands will continue to grow. Villages in India are facing the problem of scarcity of drinking water due to depleted groundwater resource. Water tankers roaming the rural roads for supplying drinking water to villages is a common sight now. If the trend continues in future, one day water will not be available even for supplying by tankers. What will happen to our coming generations if all the resources of groundwater, petroleum and coal exhaust one day?

The development of an individual, family and village is not possible by exploiting environment indiscriminately, but by sustainable use of available resources. Watershed development and water management is the right approach in that direction. Today, every country is facing the problem of environmental degradation. International leaders and scientists are worried about the future of the Earth alike. Watershed development will certainly provide a solution to maintaining ecological balance.

Our idea of development is limited to construction of skyscrapers and wide roads only. On one hand, the height of buildings is going up day by day and; on the other hand, the level of human values is coming down. This is not real development. An individual should be able to stand on his own and at the same time think of betterment of fellow beings, which is true development. One should be able to look beyond oneself, think of one’s neighbour, village and the nation. Today, there is a need to create such individuals who are capable of looking beyond oneself. Such individuals are not created through donations, subsidy and grants. This is possible through local leadership building programme where stress would be given on character, right values and dedication. Somebody has to make sacrifices.

A field full of swaying crop tells us that a grain has buried itself into the ground to give birth to thousands of grains. The grains which do not burry themselves are taken to the flourmill and ground into flour. The grains which sacrifice by burying themselves in the soil, give birth to a swaying field of crop.

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