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23 February, 2016

A spurious nationalism project

BRP Bhaskar
Gulf Today

The Rashtriya Swayamsevak Sangh (RSS) has landed the Narendra Modi government in a soup by launching a war against alleged anti-nationals. University campuses and courtrooms are the chosen battlegrounds.

The RSS had played a critical role in getting the BJP to project Modi as its prime ministerial candidate and spearheaded the party’s successful poll campaign in the Hindi heartland which helped it to secure a parliamentary majority.

The Human Resources Development ministry, which oversees education, is one of the government departments in whose working the RSS, which describes itself as a cultural outfit, takes direct interest. A group comprising representatives of 11 RSS affiliates has been liaising with HRD Minister Smriti Irani on a regular basis to ensure that her work is in consonance with its aims.

It is easy for the Centre to influence school education as the Central Board of Secondary Education and the National Council of Educational Research and Training, which decide the curriculum and prepare the textbooks, are directly under it. Since the universities enjoy autonomy, it can influence them only through the Vice-Chancellors appointed by it.

The RSS’s designs on prestigious institutions like the Jawaharlal Nehru University, the Indian Institutes of Technology and the Indian Institutes of Management came to light last year when its two publications, the Organiser and the Panchjanya, carried articles which dubbed them dens of anti-national activity.

The modus operandi is for the Akhil Bharatiya Vidyarthi Parishad, the BJP’s student body, to complain of anti-national activity and for the VCs and the police to initiate action against students belonging to other organisations on the basis of its complaints. If they don’t act, the Centre pressures them.

While in IIT-Madras and the Hyderabad University, the ABVP targeted Dalit groups, in JNU it picked on the Left organisations which have dominated its campus throughout. It used a function organised by a small group to honour the memory of executed Parliament attack case accused Afzal Guru as a pretext to complain of anti-national activities by the Left organisations.

The Supreme Court, in its judgment in the Parliament attack case, had invoked the need to satisfy the nation’s conscience, and jurists like former Law Commission Chairman AP Shah have opined that Guru’s hanging was politically motivated.

Doctored videos attributing slogans and speeches heard at the Afzal Guru function to JNU Students’ Union President Kanhaiya Kumar were soon in circulation, and sensationalist television channels aired them. The police, called into the campus by Vice-Chancellor Jagdeesh Kumar, arrested Kanhaiya Kumar and a few others under the archaic colonial-era sedition provision of the penal code.

The JNU events developed into a huge embarrassment for the government as students and teachers of institutions across India and several prestigious foreign universities condemned Kanhaiya Kumar’s arrest.

Opposition parties denounced the government’s handling of the situation and made common cause with the students. Voices of dissent rose from within the BJP camp too.

Calling for the release of Kanhaiya Kumar, Shatrughan Sinha, a film actor and long-time BJP MP, pointed out that JNU was a seat of learning with some very respectable teachers and some of India’s brightest young minds.

Three office-bearers of the ABVP’s JNU unit quit the organisation, declaring they could not be the mouthpiece of such a government.

To boost the nationalism project, the HRD Ministry directed all central universities to raise the national flag on 200-foot high masts on the campus. JNU has been flying the flag for decades.

The RSS is a new convert to flag-waving nationalism. It flew the national flag atop its headquarters in Nagpur for the first time in 2002, three years after the first BJP-led government came to power and 52 years after the Indian republic was established.

During the freedom struggle, RSS chief MS Golwalkar famously advised Hindus not to waste their energy fighting the British but save it to fight “our internal enemies that are Muslims, Christians and Communists.”

The RSS was banned thrice since Inependence – the first time after Gandhi’s murder in 1948, then during the Emergency in 1975 and finally after its cadres demolished the Babri Masjid at Ayodhya in 1992.

Putting the current situation in perspective, eminent historian and JNU professor emerita Romila Thapar said the battle was between religious nationalism and secular nationalism.

The RSS having queered the pitch, Modi has no option but to brazen it out. He has said the current furore is an attempt by political opponents and non-government organisations to destabilise his government.

The government’s offer of a full discussion of the JNU issue in Parliament is beside the point, which is whether it is capable of reining in its supporters who are posing an open challenge to the rule of law.

The lengths to which they are willing to go in pursuit of the spurious nationalism project became clear when lawyers owing allegiance to it assaulted Kanhaiya Kumar in the trial court premises and stoned and chased away a team deputed by the Supreme Court to report on developments there. Some of them have also sought to bait the apex court by seeking contempt proceedings against Kanhaiya Kumar for allegedly criticising its judgment in the case against Afzal Guru. --Gulf Today, February 23, 2016

16 February, 2016

Troubled banking system

BRP Bhaskar
Gulf Today

How healthy is India’s banking system, especially its large public sector component? The question has assumed significance following reports that state-owned banks wrote off bad debts to the tune of Rs 2,110 billion between 2004 and 2015.

Based on material provided by the Reserve Bank of India, the country’s central bank, in response to a Right to Information query, the Indian Express said the banks had written off as much as Rs 1,141.82 billion in the last three years alone. Bad debts which stood at Rs 155.51 billion in March 2012 had shot up to 525.42 billion by last March, it added.

Public sector units dominate India’s banking sector. The British-owned Imperial Bank of India, which the government took over in 1955 and renamed State Bank of India, is the country’s largest commercial bank. It now has more than 16,000 branches, including 191 abroad. Its assets stood at Rs 20,480.80 billion a year ago. Banks set up by former princely states function as its associates.

Fourteen large private banks were nationalised in 1969 and six more in 1980.

The SBI topped the list with write-offs of Rs 400.84 billion in the last three years. The Punjab National Bank, the second largest bank, stood next with a write-off of Rs 95.31 billion.

Responding to media reports, the Finance Ministry, the RBI and the SBI said loan write-off was basically a technical exercise to cleanse the balance sheet and achieve taxation efficiency. It was done at the head office level and did not preclude the branches from continuing recovery efforts.

However, many financial analysts voiced concern over the rise in bad debts and the recent fall in bank share prices. RBI Governor Raghuram Rajan accused critics of making claims bordering on scare-mongering. He attributed the fall in share prices to the turmoil in the world markets but conceded that the performance of some banks, particularly public sector units, was not pretty.

There may be no need for panic, as Raghuram Rajan says, but there is certainly cause for worry. The RBI recently put the value of banks’ stressed assets (including restructured loans) at Rs 7,400 billion. This means 10.9 per cent of all loans is stressed. Standard and Poor’s has forecast an 11-to-12 per cent growth in stressed assets during the year.

The issue of bad debts was a well-kept secret until the All India Bank Employees Association released a list of top defaulters in 2014. It contained names of 406 account holders who owed the banks Rs 703 billion.

Liquor king Vijay Mallya’s Kingfisher Airlines headed the list with debts of Rs 26.73 billion. The Winsome Diamond and Jewellery Company was a close second with debts of Rs 26.60 billion.

Among the other big defaulters was a construction company owned by KS Rao, who was Textile Minister in the Manmohan Singh government at that time. Raghavendra Rao and Deepak Puri, two businessmen whom the government had honoured with Padma awards, also figured in the list.

The AIBEA said bad debts of public sector banks had risen from Rs 390 billion in 2008 to 2,360 billion in 2013.

It alleged that banks, including private and foreign ones, had written off loans totalling Rs 2,040 billion between 2001 and 2013 under political pressure. It asked the RBI to publish the names of defaulters and demanded enactment of legislation to improve the recovery process and to make wilful default a criminal offence.

Raghuram Rajan, professor of finance at the University of Chicago and a former chief economist at the International Monetary Fund, took several steps to help the banks deal firmly with defaulters immediately after he took over as RBI governor in 2013. Guidelines issued by the RBI allowed banks to convert debt into equity and take control of defaulting companies if debt restructuring failed. The banks could then find new promoters to run the companies.

The Modi government, which assumed office the following year, announced a seven-point programme to revive public sector banks. It has only been implemented partially.

The latest debt figures indicate that the steps taken by the RBI and the government have not yielded anticipated results. The government told Parliament last year that 30 top defaulters owed public sector banks Rs 951.22 billion. This was more than one-third of their non-performing assets.

The name-and-shame policy adopted by some banks also does not seem to have had any effect on the defaulters.

The RBI and the government must urgently come up with foolproof measures to ensure the good health of the banks with a view to safeguarding the interests of the depositors and honest borrowers. --Gulf Today, Sharjah, February 16, 2016.

02 February, 2016

Decoding Davos signals

BRP Bhaskar
Gulf Today

There were confusing signals from this year’s World Economic Forum meet at Davos, Switzerland, where, according to some observers, India figured as a potential saviour as its economy happens to be the fastest growing at the moment. What’s more, no country appears to be in a position to wrest that distinction in the immediate future.

Optimism about the world’s fastest growing economy contrasts with the economic gloom facing other emerging markets, an international news agency reported from Davos. But an Indian columnist who has not missed a single meet in the last 20 years wrote that the buzz around India 10 years ago was missing.

The difference between the Indian and international perceptions is understandable. India is seeking an opportunity to boost its exports, which registered a fall in the last two years. The developed nations are looking for an opportunity to sell more to India rather than buy more from it.

The interests of the two sides coincide at one point. India is looking for foreign capital to increase manufacturing facilities and developed nations are looking for safe investment destinations. However, building upon this coincidence of interests is not easy.

There was flight of capital from India when the current global slowdown began. But as the other emerging markets present a bleak picture Western investors are forced to gravitate towards India which has a seven per cent growth rate and a market of one billion plus consumers.

The theme of this year’s Davos meet was “Mastering the Fourth Industrial Revolution”. In a theme paper, Klaus Schwab, who founded WEF 46 years ago, wrote that unlike the first Industrial Revolution which used steam power, the second which used electric power and the third which used electronics, the fourth, which began in the last century, is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.

Breakthroughs now occur at an incredible pace and disrupt almost every industry in every country, Klaus said, adding: “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale and scope, and complexity, the transformation will be unlike anything humankind has experienced before.”

Every one of the earlier industrial revolutions he listed too had altered the way we live and work. They also divided the world into haves and have-nots. Such divisions took place between countries as well as between peoples within each country. By and large, the second and the third reinforced the divisions caused by the first one. No discussion of the global economy can be divorced from the fact that the fourth too holds the potential to accentuate the division, this time at a much faster pace than before.

Klaus referred to the importance of people and values in his theme paper. “In its most pessimistic, dehumanised form, the Fourth Industrial Revolution may indeed have the potential to ‘robotise’ humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature – creativity, empathy, stewardship – it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails.”

This ominous aspect did not receive attention in the Davos discussions because the primary objective of the meet was to advance the interests of the haves. The breakthroughs that triggered the earlier industrial revolutions too held out prospects of conferring immense benefits on the people as a whole but the driving force behind them was optimisation of profit and there is nothing to indicate that capital can outgrow its predatory nature.

The World Bank, in its latest ease-of-doing-business survey, places India at 140th position. Both foreign and domestic businessmen have been pressing the government to make it easy to do business. Essentially what they want is relaxation of laws relating to taxation, labour and environment.

With a score of 38 in the 0-100 scale India was at the 76th place in a field of 168 in Transparency International’s corruption perception index last year. However, strong anti-corruption measures do not figure prominently in the demands of either foreign or domestic commercial interests because they can find their way around the problem on their own.

The Swedish Chamber of Commerce in India, which has a membership of 141 companies, said after an internal survey that one out of three companies expressed the view that not paying bribes is a ‘competitive disadvantage’. -- Gulf Today, Sharjah, February 2, 2016.