An exercise in futility?

BRP Bhaskar

Gulf Today

India can be proud of its current status as the world’s fastest growing large economy. However, Prime Minister Narendra Modi is not quite happy because he has not been able to match the record of his immediate predecessor, Manmohan Singh, who headed the Congress-led United Progressive Alliance government for 10 years.

The economy was facing serious problems when Prime Minister P V Narasimha Rao picked Manmohan Singh, a noted economist, for the post of Finance Minister in 1991. He initiated reforms and set the economy on an upward trajectory.

As Prime Minister, Manmohan Singh adopted a cautious approach, and the Indian economy weathered the recurrent setbacks countries across the world experienced during 2007-11. It was racing ahead when Modi led the Bharatiya Janata Party to power in 2014.

Heeding calls from abroad for more reforms, Modi went ahead with steps like introduction of goods and services tax on which Manmohan Singh was moving slowly. He also undertook some measures like demonetisation of high-value currencies, without adequate preparations, causing damage to some sectors of the economy.

Within a few months Modi has to face the electorate. His campaign strategy is to run down his predecessors, starting with the illustrious Jawaharlal Nehru, accusing them of wasting the seven decades since Independence without doing anything and making questionable claims about his own achievements of the last four years.

Such a campaign may go down well with his ardent followers but there are others who are inclined to look at facts and figures.

Figures which have been in the public domain for a long time show that the GDP growth rate, which was 9.3 per cent in fiscal 2006 and 9.8 per cent in 2007, slumped to 3.9 per cent in 2008 as the US financial crisis dragged the global economy down.

Recovering quickly, India registered a growth of 8.5 per cent in 2009 and 10. 3 per cent in 2010 but the rate dropped to 6.6 per cent in 2011 and 5.5 per cent in 2012. Thereafter it started climbing again and was 6.4 per cent in 2013 and 7.4 per cent in 2014.

Under Modi, the upward movement continued, with the growth rate rising to 8.2 per cent in 2015. Thereafter it fell to 7.1 per cent in 2016 and 6.7 per cent in 2017 due, not to external developments, but to internal factors. 

The Central Statistical Organisation periodically revises the basis on which the GDP is calculated. In 2015 it changed the base year for GDP calculation from 2004-05 to 2011-12.

Under the revised scheme the share of industry in the economy went up from 19 per cent to 23 per cent, that of manufacturing from 14.7 per cent to 17.4 per cent, and agriculture from 17.8 per cent to 18.5 per cent. The service’s share shrank from 24.7 per cent to 17.4 per cent.

This resulted in a general increase in the growth rate figures, starting with the UPA government’s last two years. But the figures of the Modi years still lagged behind those of the Manmohan Singh period.

Recently the CSO revised the figures of the earlier UPA years, applying the new formula with retrospective effect. The exercise brought down the growth rates of the UPA period. 

The growth rate of fiscal 2010 now fell from 10.3 per cent to 8.5 per cent and that of fiscal 2007 from 9.8 per cent to 7.7 per cent.

Several experts questioned the rationale behind the exercise. Economic journalist MK Venu pointed out that the new data went against the basic laws of macroeconomics. It showed a lower GDP growth rate during the UPA years when the gross investment to GDP ratio was 38 per cent and a higher growth rate during Modi’s four years when the gross investment to GDP ratio was only 30.3 per cent.

This time the National Institution for Transforming India, also known as NITI Aayog, the think tank which Modi set up after disbanding the Planning Commission which had been in existence since the time of Nehru, was involved in the release of the data.

National Statistical Commission Chairman Pronab Sen, who is a former CSO chief, criticising NITI Aayog’s involvement, said it amounted to politicising institutions which dealt with statistics. The newly released data “does not pass the basic smell test linked to ground realities,” he added.

What the CSO and NITI Aayog together did was to shift the goalpost long after the match was over and re-fix the results. The exercise has ruined the high reputation the CSO had enjoyed as a professional organisation working without a political motive. -- Gulf Today, Sharjah, December 11 2018.

Politicking over tax regime

BRP Bhaskar
Gulf Today

When a new tax regime introduced after three decades of debate calls for review and revision within four months, it is evident that the authorities did not act with due diligence. That is what happened with the Goods and Services Tax.

A major overhaul of tax on goods was proposed first by former Prime Minister VP Singh in 1986 while serving as Finance Minister in Rajiv Gandhi’s government. Liberalisation and globalisation were not under consideration at that time. 

Globalisation put service tax also on the agenda. In 2000, Atal Behari Vajpayee, the first Prime Minister belonging to the Bharatiya Janata Party, proposed a goods and services tax regime and set up a committee to design an appropriate GST model for the country.

The committee was headed by Asim Dasgupta, a US-trained economist who was Finance Minister in West Bengal’s Communist Party of India (Marxist)-led government. Before he quit in 2011, following his - and his party’s - defeat in the State Assembly elections, the committee is said to have completed 80 per cent of the work.

Introduction of GST was one of the programmes taken up by the Manmohan Singh government during 2004-2011 as part of the reforms package, and it attempted to enact legislation for the purpose. It could not make much progress because of the stiff opposition from various political parties, including the BJP.

One of the vagaries of India’s democratic system is the propensity of political parties to shift their position on programmes, depending upon whether they are on the treasury benches or on the opposite side. After the change of government at the Centre in 2014, the BJP started pushing the GST project.

The Congress did not turn against it but it raised issues about the structure proposed by the GST committee, leading to further delays. It wanted an 18 per cent cap on GST but this was not acceptable to the government.

Unlike Manmohan Singh, who often shelved reforms, especially when critics pointed out they might hurt the poor, Modi was willing to ram them down. He pushed through the required enactments, including a Constitutional amendment, and ushered in the GST regime on July 1.

While most countries have uniform GST, taking into account the size of the country and the complex ground situation, a three-tier system, comprising a Central GST, a State GST and an Integrated GST, income from which was shared by the Centre and the State, was brought in.

Soon there was an avalanche of complaints from all over, especially about the tax on services, which was new to the country. The high rates of tax which added to the cost of living also came under attack.

Complaints poured in not only from consumers but also from business houses who found the system of filing returns too cumbersome. Evidently the official machinery had not paid adequate attention to the details.

Last week the GST Council, comprising Finance Ministers of several states, reviewed the tax structure and decided to revise the tax rates drastically. It also agreed to simplify the filing procedures.

Under the original scheme, as many as 228 goods and services attracted the highest rate of 28 per cent. The Council brought down the rate on most of them to 18 per cent, leaving only 50, mostly luxury items, beverages and tobacco products, in the highest slab. The rate on many items which attracted 18 per cent was lowered to 12 per cent. 

The biggest relief for consumers was slashing of the tax on bills of restaurants other than those in five-star hotels from 28 per cent to just five per cent. The tax on five-star restaurant bills was also reduced, but to 18 per cent only. 

For the governments at the Centre and in the states, the GST is a major source of revenue. They stand to lose an estimated Rs 200 billion a year as a result of the rate revision.

Congress Vice-President Rahul Gandhi said it was his party’s campaign that led to the rate cuts. Former Finance Minister P Chidambaram claimed the upcoming Assembly elections in Gujarat, Modi’s home state, had forced the Centre to give in.

Assam Finance Minister Himanta Biswa Sarma, who heads the GST Council, dismissed Chidamabaram’s claim as childish. He said the 28 per cent slab would be phased out. 

In the prevailing political climate, it is idle to hope that politicians will stop making GST a partisan issue. --Gulf Today, Sharjah, November 14, 2017.

Banks rescued at cost of poor

BRP Bhaskar
Gulf Today

Was demonetisation of high-value currency notes, which inflicted much pain on honest citizens in the last days of 2016, intended to eliminate black money, as Prime Minister Narendra Modi claimed on November 8? If so, it was a colossal failure.

Notes of Rs 1,000 and Rs 500 worth more than Rs 14,000 billion were in circulation when they were demonetised. Out of this, the government expected about Rs 10,000 billion to come back. So it told the Supreme Court. The rest, it assumed, was black money and would go out of circulation.

By December 13, the Reserve Bank of India received demonetised notes worth Rs 12,440 billion and the deadline set for their surrender was still 17 days away. After that there has been no word from the RBI on the subject. Modi, who dwelt on the aftermath of demonetisation in an address to the nation on New Year’s eve, too avoided it.

Dashing the government’s fond hopes, smart criminals converted their black money into legal tender. Misuse of the Jan Dhan accounts which had come up under Modi’s scheme to give the poor access to banking services was one of the tactics they employed.

After demonetisation the number of Jan Dhan accounts went up from 255.1 million to 262.0 million. Deposits in these accounts swelled from Rs 456.37 billion on November 8 to Rs 746.09 billion on December 7 before falling to Rs 710.37 billion. The rise in deposits was 112 per cent in Karnataka and 111 per cent in Gujarat. Evidently crooks laundered black money using the poor as cover. The government has now ordered a scrutiny of the Jan Dhan accounts.

The demonetisation decision came immediately after the government received voluntary disclosure of concealed incomes to the tune of Rs 673.82 billion. It was followed by income-tax raids in several states in which Rs 30 billion in undisclosed incomes was detected. The cash seized included Rs 860 million in new notes issued since November 8.

Modi’s demonetisation differed from similar exercises undertaken by his predecessors. It amounted to virtual impounding of people’s money, at least for the time being, as there were severe curbs on withdrawals from bank accounts. Former Prime Minister Manmohan Singh called it organised loot.

With more money than anticipated coming in and withdrawals subject to restrictions, the commercial banks are flush with money. In his New Year’s eve speech, Modi said the situation represents a golden opportunity for the banking system. To understand the significance of that observation one has to look at the highly vulnerable state of government-owned banks.

The banking system has a large public sector created since Independence with the takeover of large private banks at different times. The largest one is the State Bank of India, created by nationalisation of the British-owned Imperial Bank of India in 1955. Seven banks of former princely states were made SBI’s associates in 1960. The 14 largest private banks of the time were nationalised in 1969. The next six big private banks were taken over in 1980.

Imprudent financial management under political influence endangered the health of most public sector banks during the past few years. RBI data shows that in the financial year ending March 2016, the country’s banks added Rs 4,400 billion of fresh non-performing assets (NPA), defined as “loans or advances of which principal or interest has been overdue for 90 days”. Public sector banks accounted for about 86 per cent of this – the SBI group 20 per cent, and others about 66 per cent.

Between 2006 and 2016, the public sector banks wrote off loans totaling Rs 2,510 billion. As on December 3, 2015, the commercial banks listed more than 7,000 account holders who together owed them Rs 7,054 billion as wilful defaulters.

According to information the government provided to Parliament, in June 2016 the top 20 NPA accounts of the public sector banks stood at Rs 1,450 billion. They urgently needed funds to tide over the situation. The Centre infused Rs 229.15 billion by way of capital into 13 of them last July. They wanted more.

There is reason to suspect that the government went ahead with demonetisation, overlooking its limitations as a measure against black money, to channelise funds into the floundering banking system. It certainly had a duty to rescue the banks but it was immoral to do it at the cost of the honest poor. --Gulf Today, January 3, 2017

A quarter century of reforms

BRP Bhaskar
Gulf Today

The 25th anniversary of economic reforms passed unnoticed last month. A strong votary of economic liberalisation, Prime Minister Narendra Modi is trying to carry the reform process forward. There was, however, no official celebration of the jubilee.

The reform process was initiated by a Congress government. Some give Prime Minister Rajiv Gandhi credit for taking the first steps in this regard. However, if the process is to be assigned a date of birth it must be July 24, 1991. On that day Dr Manmohan Singh, as Finance Minister in PV Narasimha Rao’s government, presented his first budget in which he outlined proposals to move away from the path charted by Jawaharlal Nehru in the 1950s.

Nehru, who set before the nation the ideal of a socialist pattern of society, envisaged a mixed economy in which the private sector will have an assured place but the public sector will occupy the commanding heights. The attempt to establish a regulated private sector led to the evolution of a corrupt system which critics dubbed licence raj.

Narasimha Rao did not formally repudiate the socialist ideal, but acute economic distress compelled him to change the course. A sharp fall in the foreign exchange level had forced the country to raise money from the Bank of England by mortgaging a part of its gold reserves. Later the International Monetary Fund provided a loan to tide over balance of payments difficulties.

The reforms comprised three elements: liberalisation or freeing the economy from bureaucratic control, privatisation or divesting of state undertakings and globalisation or integration of the domestic economy with the world economy. The Left and some sections within the Congress party opposed them on ideological grounds. Businessmen who had prospered under the licence raj were not keen on changes.

In the circumstances, the Rao government and its successors chose to hasten slowly, much to the chagrin of global promoters of the new international order. As Prime Minister, Manmohan Singh too moved cautiously. Ground realities have impeded Modi’s efforts to accelerate the pace of progress in the past two years.

India began globalisation more than 12 years after China did. Today, in terms of exchange rates, China is the world’s second largest economy with a gross domestic product of $10,983 billion, after the United States with a GDP of $17,947 billion. India stands seventh with $2,091 billion. Purchasing power parity valuation puts China above the US with a GDP of $19,392 billion and India in the third position with $7,965 billion.

Manmohan Singh recalled recently that the economy had recovered faster than he had expected. Inflation came down. The balance of payments position improved.

Just as the economic progress achieved during the Mao regime stood China in good stead as it opened up, the foundations laid by Nehru provided the ballast as India ventured into choppy seas. Information Technology units’ earnings from software exports and Non-Resident Indians’ remittances helped the country stabilise the foreign exchange situation quickly after the rupee was effectively devalued.

The service sector is now the main driver of the economy. It contributed as much as 69 per cent to the GDP last year. The manufacturing sector is almost stagnant, despite Modi’s vigorous pursuit of foreign investments under his Make in India programme. Agriculture which is still the mainstay of a large section of the population recorded a meagre 1.1 per cent growth.

The flip side of the economic success story is the heavy price the poor is called upon to pay. Tribes are being dislocated from their traditional homelands to make room for industries. While the rich get away defaulting on bank loans, small and marginal farmers are driven to suicide. The Centre’s slashing of expenditure on health and education adds to the misery of the poor.

A feature of the recent economic growth is that it is not accompanied by job creation. According to the latest census report, the unemployment rate rose from 6.8 per cent to 9.6 per cent during 2001-2011. The trend continues.

What marks the post-liberalisation era apart from the past is the emergence of a middle class pleased with easy availability of consumer goods. Its seeming prosperity deflects attention from the sharp rise in inequality.

In a lecture two years ago International Monetary Fund managing director Christine Lagarde said the net worth of India’s billionaire community had increased 12-fold in 15 years, “enough to eliminate the absolute poverty in this country twice over.” --Gulf Today, August 2, 2016.

Ways of looking at the economy

BRP Bhaskar
Gulf Today

India’s star shines bright amid global economic challenges, International Monetary Fund Managing Director Christine Lagarde said in New Delhi earlier this month. It now has the fastest growing economy and the largest and youngest workforce and is in the process of reforming the system, she noted.

The reform process began in 1991. A quarter century later, it still faces many obstacles. The first Congress-led United Progressive Alliance government could not go ahead with some proposals due to strong opposition from the Left parties which sustained it in office. When UPA II came up with a constitutional amendment to provide for a uniform pattern of tax on goods and services across the country the Bharatiya Janata Party, which was in the opposition, did not cooperate. Now, as the ruling party, the BJP is eager to take the measure forward but the Congress stands in the way.

The BJP and the Congress agree on steps to make it easy to acquire land for industries but the people who stand to lose their farmlands and homesteads are up in arms against them. Changes of the kind the International Monetary Fund is pressing for may not, therefore, come easily. However, India is well set to retain its status as the fastest growing economy as no credible challenger is in sight.

According to World Bank data, China’s growth rate stood at 9.5 per cent in 2011 and India’s at 6.6 per cent. Since then China’s growth has fallen continuously and India’s has risen except in one year. In the process, they levelled at 7.3 per cent last year. The projection for India in the current financial year is 7.5 per cent against China’s 7.1 per cent.

On the strength of the growth rate, Finance Minister Arun Jaitley claimed that the economy had recovered from the effects of the global slowdown. But former Prime Minister Manmohan Singh, who, as Finance Minister, had initiated the economic reform process in 1991, termed the recovery very fragile. Touched to the quick, Jaitley said, “In a global slowdown situation, to have the fastest growth rate in the world certainly does not make the Indian economy fragile.”

Chief Economic Adviser Arvind Subramanian sought credit for the government for the fast growth rate. He said the manufacturing and service sectors, which were under the government’s control, had done well while the farm and export sectors, which were not under its control, had not done so well.

The steep fall in oil prices in the international market helped India, which imports 70 per cent of its crude requirements, to contain inflation and the current account deficit. But it also hurt to some extent by reducing foreign demand for its products.

Alyssa Ayres, Senior Fellow at the Council on Foreign Relations, in a testimony before a Congressional committee urged the US to “elevate support for India’s growth to the highest bilateral priority” and to “work more comprehensively to integrate India in the global economic institutions”.

She mentioned in particular the Asia Pacific Economic Cooperation (APEC) forum, which has not acted upon India’s application for membership for two decades, the Organisation for Economic Cooperation and Development (OECD), where India has the status of “key partner”, and the International Energy Agency (IEA).

China, which is watching the US moves, is of the view that unrealistic praise and forecasts for India are painting a false picture. “There is no possibility of India surpassing China,” the Communist Party’s English tabloid, Global Times, said in an article last week.

Growth rate is not a reliable measure of the robustness of the economy. A developed economy cannot be expected to chalk up a high growth rate. The US growth rate in the last four years, for instance, ranged between 2.9 per cent and 4.1 per cent. Assessment of the economy entirely on the basis of the growth rate will, therefore, be misleading.

“It is inescapably clear that India won’t easily outgrow China as predicted by the West,” the Global Times article said. “From a macro perspective, China’s GDP in 2015 was nearly $10.42 trillion, which is around five times as much as India’s $2.18 trillion.”

IMF data of GDP shows that vast gaps separate India from China, and China from the US. In per capita terms, China’s GDP is 25 per cent of the US’s and India’s 11 per cent. Until India is able to carry with it the vast excluded sections of its population, the high growth rate will be of little avail. - Gulf Today, Sharjah, March 22, 2016.

Modi’s record is good in parts

BRP Bhaskar
Gulf Today

As Prime Minister Narendra Modi completes one year in office, opinion on his performance is sharply divided. Fans affirm he has redeemed India but opponents say he is ruining the country. Then there are observers who wonder whether there has been a change of administration at all.

Modi, like Muhammad Ali, believes he is the greatest. So do his loyal followers. According to BS Yeddyurappa, Vice-President of his Bharatiya Janata Party, Modi is running a clean, efficient pro-people government. For the first time in many years there is a government that is scam-free, he says.

Yeddyurappa ran a corrupt administration in Karnataka and does not have the right credentials to issue a certificate of integrity. There are other reasons too for not taking his statement at face value.

Scams generally surface years late, when reports of the Comptroller and Auditor-General become available. The cases instituted against some members of Manmohan Singh’s second government were based on what they did as members of his first government. Modi’s acceptance of a custom-made suit, reportedly worth Rs1 million, from a businessman and the windfall gains his corporate financiers are making cast doubts on Yeddyurappa’s claim.

Political opponents who were alarmed by Modi’s emergence on the national scene in view of the Hindutva-engineered riots in Gujarat under his watch cite the rabid outbursts of some BJP MPs and the attacks on churches and reconversion campaigns in some states as evidence of the regime’s communal agenda. However, there is reason to believe he is trying to restrain the hotheads, though belatedly, since their activities are giving his government a bad name at home and abroad.

Modi is on the verge of setting a globe-trotting record with visits to 18 countries in 12 months. The travels were planned with the twin objectives of improving bilateral and multilateral relations and securing investments to make India a manufacturing hub. They have provoked the good-humoured comment that he is the first Non-Resident Indian prime minister.

The Make-in-India programme is Modi’s main employment generation scheme. Several countries, including China and the United States, have evinced interest in it. Since big projects necessarily take time to materialise, it is too early to decide how successful the programme is.

Meanwhile, Modi has some hurdles to cross at home. Several measures he has initiated to ease the way for domestic and foreign investors – these include relaxation in laws relating to land acquisition and employment of children – have met with opposition.

In his election speeches, Modi had accused the previous governments of wasting nearly six decades. He is now reassessing the past more realistically. Last week, at Shanghai, he spoke of a backlog of only three decades when he took over. That means he has exonerated all prime ministers up to PV Narasimha Rao, including his bete noire, the Nehru-Gandhi dynasty.

Manmohan Singh, who headed the two United Progressive Alliance governments, is still on Modi’s list of defaulters, but observers are finding it difficult to differentiate between the economic policies of the two. Much of the economic legislation Modi has pushed through Parliament so far, such as the insurance, coal and general sales tax bills, are measures initiated by Manmohan Singh. As one scribe puts it, “Modi has achieved the impossible: he has given us another year of UPA.”

However, Modi has reason to be happy. The global downturn had slowed down economic growth during Manmohan Singh’s second term. With the US and other major countries on the path of recovery, the pace is picking up again, and the International Monetary Fund has forecast that India will register an expansion of 7.2 per cent, outstripping China’s 6.8 per cent.

Indian and foreign business interests are hopeful that Modi will be able to keep his promise and make changes of the kind they wish to see. The Associated Chamber of Commerce gives him only seven marks out of 10. But the global consultancy firm PwC’s 2015 survey says Indian CEOs are the most optimistic in the world.

Modi has not been able to infuse the same degree of optimism in the poor who constitute one-fourth of India’s population. Economic distress continues to drive peasants to suicide. Sensing trouble on this front, the BJP has drawn up a campaign plan designed to give him a pro-poor image.

Modi’s progress card for the year, like the curate’s egg, is good in parts. Opinion polls indicate that his personal popularity is still high. He will face a field test when some states go to the polls later this year. -- Gulf Today, Sharjah, May 19, 2015.

Half-hearted anti-graft measures

BRP Bhaskar
Gulf Today

The largest single factor that contributed to the resounding defeat of the 10-year-old Congress-led government in last year’s parliamentary elections was the corruption scandals that engulfed it. Some Congress party leaders and a former minister belonging to coalition partner Dravida Munnetra Kazhagam were facing criminal charges when the country went to the polls.

A Gandhian movement led by Anna Hazare and backed by civil society groups raised the issue of corruption high up in the national agenda, and Narendra Modi, as Bharatiya Janata Party’s prime ministerial candidate, cashed it in his vigorous election campaign.

Last week, nearly a year later, the Modi government announced a set of proposals to tackle the issue of corruption. It provides for enhancement of the minimum term of imprisonment for corruption from six months to three years and the maximum term from five years to seven years.

The higher penalties will raise corruption to the level of a heinous crime. However, some of the proposed changes may render the legal framework weaker than at present. For instance, there is a proposal to extend the protective umbrella of prior sanction for prosecution of public servants to those who have retired or resigned.

Under the Prevention of Corruption Act 1988, a public servant is guilty of criminal misconduct and liable for punishment if “he while holding office obtains for any person any valuable thing or pecuniary advantage without any public interest.” Bureaucrats have long been unhappy that this provision as it renders them liable for action even when they have not derived any pecuniary benefit from their actions. One of the contemplated changes seeks to vest the power to grant prior sanction for investigation in such cases in the Lokpal or Lok Ayukta instead of the government.

On an average, trial proceedings in a case under the Prevention of Corruption Act last more than eight years. The government plans to fix a two-year time-frame for completing the proceedings. The cumbersome legal procedures and dilatory tactics employed by either of the parties involved may defeat the objective.

In the Transparency International’s global corruption index, India ranked 85th among the 175 countries surveyed last year. The authorities were pleased with the finding as the previous year the country was in the 94th position.

The licence raj which flourished under the restrictive economic policy which the country followed in the early years of Independence was widely believed to have bred corruption at the political and administrative levels. The 2G scam case in which the former DMK minister and several high-ranking bureaucrats are involved indicates that under economic liberalisation the situation has become worse. Not better.

Under the law, the bribe-giver and the bribe-taker are both liable for prosecution. A company official who bribes a bureaucrat can be prosecuted but not the company on whose behalf he makes the payment. An amendment under consideration envisages prosecution of the company as well.

Corruption takes place at the lower levels as well as the higher levels of the administration. At the lower levels, it takes the form of demanding or accepting illegal gratification to provide services which officials are bound to provide anyway. This hurts the poor. At the higher levels, it takes the form of payment of consideration for doing a favour. This benefits the rich.

When prosecution is rare and conviction even rarer, enhancement of punishment is an exercise with little practical significance. Except in rare instances like the 2G case, which, incidentally, was the result of exertions by constitutional functionaries like the Comptroller and Auditor General and the Supreme Court, only small fry are caught in the net.

Corruption is an affliction that affects many sectors. Studies have identified defence sector companies, all of which are government-owned, and the health care system, which is dominated by the private sector, as areas where ethical practices are extremely weak. 

The proposed changes are, at best, half-hearted measures. They cannot make any material difference since they do not address the core issue of political corruption, arising from the parties’ growing need for funds to fight elections. On the face of it, the BJP, which is now the main beneficiary of corporate munificence, and Narendra Modi, who used a business tycoon’s private aircraft for campaign tours and accepted a custom-made suit reportedly worth Rs 1 million presented by a businessman, are unlikely agents of change in this crucial area. -- Gulf Today, Sharjah, May 5, 2015.

A law unto itself

BRP Bhaskar
Gulf Today

For 12 years the Gujarat government, under Narendra Modi, relentlessly sought to enact a draconian law ostensibly to combat terrorism.

But the Centre – first the Bharatiya Janata Party-led government of Atal Behari Vajpayee and then the Congress-led government of Manmohan Singh – blocked assent to the measure.

Last week, the State Assembly passed the Gujarat Control of Terrorism and Organised Crime (GCTOC) Bill for the fourth time.

With Modi in the Prime Minister’s chair, it may now be cleared by the Centre.

Two high-ranking police apologists, former Central Bureau of Investigation Director RK Raghavan and former Maharashtra police chief D. Sivanandan, immediately commended the measure publicly.

They conceded it was not perfect but wanted it to be viewed “as a piece that would hone itself over the years in the hands of those in authority.”

But the history of India’s black laws and the record of the Gujarat police leave no room for optimism.

When the Centre returned the bill to the state for the second time, it had suggested changes in three clauses.

However, Modi got the Assembly to pass it again without any change.

In their laboured defence of GCTOC, Raghavan and Sivanandan did not explain why the state wants a separate law to deal with terrorism when it can use the laws enacted by the Cenbtre from time to time.

First, there was the Terrorist and Disruptive Activities (Prevention) Act (TADA) of 1985, which was in force for 10 years before it was allowed to lapse in view of strong public criticism.

In 2002 the Vajpayee government enacted the Prevention of Terrorism Act.

The first Manmohan Singh government repealed POTA but incorporated some of its harsh features in the Unlawful Activities Prevent Act, brought in to check threats to the nation’s sovereignty and integrity 40 years earlier.

Many of the provisions of the Gujarat law are copied from the Maharashtra Control of Organised Crime Act (MCOCA), enacted in 1999 to deal with gangsterism in Mumbai.

It was made applicable to Delhi in 2002.

An official committee which reviewed the working of MCOCA found that on an average about 40 cases were registered under it each year and six or seven arrests were made in each case.

Only a small number of persons hauled up under it belonged to minority communities.

The fond hope of Raghavan and Sivanandan about Gujarat police patterning themselves after their Maharashtra counterparts is unsustainable.

A National Human Rights Commission study found that Gujarat accounted for as many as 19,000 of the 65,000 TADA cases although there was no significant militant activity in the state during the decade that the law was in force.

Modi, of course, bears no responsibility for the misuse of TADA in Gujarat since he became Chief Minister only in 2001.

But he cannot be absolved of blame for the misuse of POTA under his watch.

According to Dr Mukul Sinha, an advocate, in the wake of the communal riots of 2002, the state government used POTA to perpetuate the communal divide.

In all but one of the 287 POTA cases the accused were Muslims.

The lone exception was a case against Sikhs.

Gujarat police officials were involved in several cases of fake encounters and illegal snooping.

Coinciding with Modi’s rise on the national stage the noose around their necks has loosened.

But the Supreme Court’s damning conclusion that the state police implicated innocent persons in the Surat blast and Akshardham encounter cases cannot be brushed under the carpet.

The police love black laws because they make things easy for them.

Recognising the police’s propensity to extract confessions from those in custody, the colonial regime made them inadmissible as evidence in courts, and that is still the law of the land.

However, the black laws allow such confessions as evidence, permit tapping of telephones and provide a time-frame of 180 days, instead of the normal 90, to file charge-sheets.

They also make it hard for the accused to get bail.

There is nothing to prove that black laws have a deterrent effect.

On the contrary, there is evidence to show that they are counterproductive.

No charges were framed against 18,708 of the 76,166 persons on whom TADA was slapped till 1994, and only four per cent of those charged were found guilty.

As the well-known human rights organisation People’s Union for Civil Liberties has pointed out, such laws are actually tools of state terrorism. -- Gulf Today, Sharjah, April 7, 2015.

Coal block corruption

BRP Bhaskar
Gulf Today

A Delhi special court last week asked former Prime Minister Manmohan Singh to appear before it next month, along with industrialist Kumar Mangalam Birla, to answer charges of conspiracy and impropriety in coal block allocations. Is this a case of upholding the majesty of law? Or is it one of judicial activism? Time alone can tell.

The coal scam came to light three years ago when the Comptroller and Auditor General reported that during 2004-09 the government had allocated coal blocks to various companies without competitive bidding. He estimated that the government’s inept handling gave the companies an estimated windfall gain of Rs10,673 billion. He later scaled down the figure to Rs1,856 billion.

The first Congress-led United Progressive Alliance government was in power at the time and Prime Minister Manmohan Singh himself was in charge of the Coal ministry for a while. Acting on a complaint filed by the Bharatiya Janata Party, then in the opposition, the Central Vigilance Commission directed the Central Bureau of Investigation to probe the matter. The CBI registered first information reports against a dozen companies and, apart from company officials, some officers, including Coal Secretary PC Parakh, were cited as accused.

Last year the Supreme Court ordered the setting up of a special CBI court to hear the coal scam cases and appointed a special prosecutor to conduct them. It also cancelled all but four of the 218 coal blocks allotted since 1993, covering the periods of Prime Ministers PV Narasimha Rao (Congress), AB Vajpayee (BJP), and HD Deva Gowda and IK Gujral (both Janata Dal).

The CBI was on the point of closing the case relating to Hindalco Industries Limited and its chairman Kumar Mangalam Birla when special court judge Bharat Parashar asked it to record the statement of Manmohan Singh, who was holding charge of the ministry when the company was allotted coal block. Accordingly, CBI officials interrogated him at his residence and filed a status report.

Former CBI director RK Raghavan said the judge’s order reaffirmed the position that a Prime Minister – in office or outside – had no immunity from criminal prosecution. That a Prime Minister is not above the law was established years ago when Narasimha Rao faced three criminal cases, all of which were conducted by the CBI. Trial courts acquitted him in two cases for want of evidence. In the third, relating to bribing of MPs to buy support for his minority government during the voting on a no-confidence motion, the trial court found him guilty and sentenced him to three years’ rigorous imprisonment and a fine of Rs100,000. On appeal the high court set aside the conviction.

While the principle of supremacy of law has thus been asserted, there is room to doubt the reliability of the legal processes.

Created in 1963, the CBI traces its origin to the Special Police Establishment which India inherited from the British regime. It established an early reputation with its success in some sensational cases in which the role of the state police was suspect. However, in sensitive cases, like the Bofors scandal of Rajiv Gandhi’s time, it too failed miserably.

In 2013, on finding that the CBI had amended a coal block case affidavit at the instance of the Law Minister, Justice RM Lodha of the Supreme Court dubbed it “a caged parrot”. The court thereafter took certain steps to help it to function without political interference. However, few believe it is now a free bird.

There is something curious about the coal block cases. The CAG only accused the government of inefficiency. He did not allege corruption.

The conspiracy charge levelled against Manmohan Singh rests on the CBI report about a meeting between him and Birla before his firm was allotted the coal block. Neither the CAG nor the CBI has suggested that Manmohan Singh derived financial benefit from the allocation or that there was any quid pro quo.

Former Confederation of Indian Industry president Adi Godrej expressed surprise at the citing of Manmohan Singh and Birla as accused on the basis of their meeting. “It is not uncommon for senior industrialists to meet a minister or even the Prime Minister when an important matter needs to be discussed,” he said in a television interview. “If you keep summoning everybody as an accused, businesses will get disheartened and wouldn’t want to invest in the country.” --Gulf Today, March 17, 2015.

Control over levers of economy

BRP Bhaskar
Gulf Today

Months of uncertainty over the future of planning ended last week with the government deciding to set up a National Institution for Transforning India (NITI) Aayog.

Like the Planning Commission which it replaces, NITIAayog will have the Prime Minister as its chairman. Unlike it, the new body will have a governing council comprising the chief ministers of the states and the lieutenant governors of the union territories.

A brainchild of the first Prime Minister, Jawaharlal Nehru, who was an admirer of both Soviet planning and post-war Japanese reconstruction, the Planning Commission was established in 1950.

Finance Minister John Mathai, who was inducted into the Cabinet from the business house of Tatas, announced the decision to set up the Commission in his budget speech. As it happened, he quit shortly afterwards saying the Commission was ill-timed and its working and set-up ill-conceived. He feared that it would take away the finance ministry’s powers.

High inflation, steep capital costs and low savings rates were factors that demanded governmental intervention to determine the course of the economy. Nehru expected the Planning Commission’s labours to result in improvement of living standards of the people through efficient exploitation of resources, stepping up of production and expansion of employment opportunities.

The Commission’s main task was to formulate five-year plans for economic development and apportion funds for implementation of plan projects. Unusual circumstances interrupted formulation of five-year plans. On both occasions planning was continued on an annual basis. The fate of the 12th five-year plan, which is due to run till 2017, now hangs in the balance.

It is wrong to suggest, as some critics have done, that planning was a failure. The public sector undertakings, the ownership of which is now being divested to find money for new projects, were the products of the first eight five-year plans. Just as Deng Ziaoping’s reforms could not have succeeded without the modest achievements of the Mao period, the accelerated development of the Indian economy in the period of globalisation would not have been possible without the limited growth of the period of five-year plans.

Centralised planning was a failure inasmuch as the fruits of development did not reach the poor. Not long after the process began it became clear that intermediaries were siphoning off benefits that should flow to those at the bottom. The administration could not fashion measures to redress the situation.

As early as the 1970s Sukhmoy Chakravarty, a leading economist who was associated with the Commission for long, said it was not functioning the way it should. He suggested that it was suffering from “plan weariness”. But Prime Minister Indira Gandhi ignored the criticism. Her son and successor, Rajiv Gandhi, referred to the Commission members as “a bunch of jokers.” He too made no effort to reform the body.

The globalisation project, which led to further growth of inequality, brought the Commission’s failure into sharp focus. Large-scale suicide by impoverished farmers cried for immediate action. Initially the Commission and the government remained impassive. Later they sought to mitigate the situation by laying emphasis on inclusive growth.

Prime Minister Manmohan Singh, himself an economist, started talking about the inadequacies of the Commission as he began his second term in 2009. But he too failed to act. Just before laying down office, he was still voicing doubts about the Commission’s role. “Are we using tools and approaches which were designed for a different era?” he asked at the Commission’s last meeting he addressed as its chairman.

Within days of assuming office Prime Minister Narendra Modi received a report from the Independent Evaluation Office, which the Planning Commission itself had set up to study its working and recommend measures for reform. It said, “It is clear that the Planning Commission, in its current form and function, is a hindrance and not a help to India’s development.” It proposed that a think tank be constituted in its place.

While the Planning Commission was dominated by economists, the composition of the NITIAayog indicates that control of the levers of the economy will now be fully in the hands of politicians. It remains to be seen if this will improve the quality of developmental activity. -- Gulf Today, Sharjah, January 6, 2015

Xi, Modi cosying up to each other

BRP Bhaskar
Gulf Today

China-India relations appear set to enter a new stage, overcoming the mutual distrust left behind by the 1962 border war and presumed rivalry.

Both countries have new helmsmen who are ready to work together. Xi Jinping became president last year, and has a 10-year term under the succession formula the Communist Party of China has lately evolved.

Having secured a comfortable majority in the lower house of Parliament, Prime Minister Narendra Modi has an assured term of five years. Given the demoralised state of the opposition, as of now, he can reasonably look forward to a second term.  

Modi’s electoral victory led to a race by foreign leaders to woo him. Xi had an advantage over US President Barack Obama and Russian President Vladimir Putin since Modi had been to China and was an admirer of its development. Although he made some harsh remarks on China during the election campaign, the Chinese reckoned that economic considerations would temper his hard nationalist line.

The China Daily, which often takes an ultranationalist position, wrote that Modi’s preoccupation with development, which echoes China’s own experiences and development philosophy, had inspired unprecedented optimism in the country over India’s growth potential.

“Western rhetoric about China and India,” it added, “is seldom free from a conception that the two countries are rivals, as if the two were destined to stand against each other. But the fact that Beijing and New Delhi have, by and large, managed their differences well over the decades is proof they do not have to be.”

Modi’s first month in office saw an exchange of high-level visits. Xi sent his Foreign Minister, Wang Yi, to New Delhi with a message in which he spelt out his vision of India-China relations. Noting that the two countries’ dreams of building their strength and improving the condition of their peoples had a lot of commonalities, he said they should make an in-depth convergence of their development strategy, support each other with their respective strengths, build a close development partnership and hold hands to realise peaceful, cooperative and inclusive development.

Pre-scheduled visits to China by India’s Vice-President, Hamid Ansari, and Army chief, Gen Bikram Singh, came in quick succession thereafter.

Xi told Ansari that India, as an important strategic partner, is a priority for Chinese diplomacy. Three agreements negotiated while the Congress-led United Progressive Alliance was in power were signed during Ansari’s visit. One of them envisages setting up industrial parks in India for Chinese investors.

Gen Bikram Singh’s discussions in China covered regional security and other issues of common concern. Although the border dispute which precipitated the 1962 war remains unresolved, the two countries have been holding joint military exercises since 2007. Last week Xi and Modi had their first meeting when they were in Brazil for the BRICS summit. What might have ended up as a meeting on the sidelines of the summit turned into an 80-minute exchange of ideas.

Xi reiterated his perception that, judging by bilateral, regional and global perspectives, China and India are longlasting strategic and cooperative partners rather than rivals. The Chinese news agency Xinhua quoted him as saying: “If the two countries speak in one voice, the whole world will listen attentively. If the two countries join hand in hand, the whole world will watch closely.”

In response, Modi said he was willing to maintain close and good working relations with Xi.

The Xinhua account indicates that Xi repeatedly used the term “strategic” while talking of China-India relations. The term was first used in the joint declaration issued by Prime Ministers Wen Jiabao and Manmohan Singh in 2005. In it they said the incremental improvement in the relations between the two countries had acquired a global and strategic character and they had, therefore, agreed to establish a strategic and cooperative partnership for peace and prosperity.

Wen’s successor, Li Keqiang, chose India for his first foreign visit as prime minister last October. He and Manmohan Singh signed an agreement establishing a framework to manage any situation that may emerge in the disputed border region. This has cleared the way for the two countries to proceed confidently with measures to improve bilateral relations.

The benefits to be expected from increased economic cooperation are a major factor that is bringing the two countries closer together. The recent decision to hold a joint anti-terrorism exercise later this year shows they are aware of the need to extend cooperation to other areas as well. -- Gulf Today, Sharjah, July 22, 2014

CHOGM dilemma

BRP Bhaskar
Gulf Today

To go or not to go, that is the question before Prime Minister Manmohan Singh as the Commonwealth Heads of Government Meeting in Colombo approaches. 

India has been an active participant in the Commonwealth of Nations, a grouping of Britain and its former colonies, since its formation in 1949. In fact, it was India’s readiness to be associated with the former colonial power which made the grouping possible.

Since 1971, CHOGM has become institutionalised as a summit held once in two years in the different member countries by turns. Beginning 1977 the host country has set a theme for each meeting.  The theme selected by Sri Lanka for this year’s meeting is “Growth with Equity; Inclusive Development,” a subject of great relevance to India.

Manmohan Singh’s dilemma arises from the vociferous opposition of the government and major political parties of Tamil Nadu to his visiting Sri Lanka when the island’s Sinhalese-dominated government pursues a discriminative policy towards the Tamil minority.

Last month the Tamil Nadu state assembly passed a resolution, moved by Chief Minister J Jayalalithaa, demanding that India boycott CHOGM and seek Sri Lanka’s suspension from the group until it grants equal status to the Tamils.  All parties, including the Congress, which heads the government at the Centre, voted for the resolution.

With parliamentary elections due early next year, the state’s parties are engaged in a competition to emerge as the greatest champions of Tamil interests. Jayalalithaa has been pursuing the issue with the Centre since March when she wrote to Manmohan Singh asking that he work for shifting the CHOGM venue.

State legislatures have no role in matters of foreign policy. Yet the Tamil Nadu Assembly has passed resolutions on the Sri Lankan Tamil issue on three occasions. Although the problem has not generated much interest outside the state successive central governments have taken note of Tamil sentiments and intervened on behalf of the island’s ethnic minority.

Video recordings which surfaced recently have yielded conclusive evidence of gross human rights violations by the Sri Lankan army during its successful campaign against the Liberation Tigers of Tamil Eelam, which had posed a violent challenge for three decades. Apart from LTTE chief Velupillai Prabhakaran, his teenage son and several mediapersons, at least one of them, a woman, were murdered in cold blood after being caught alive.

In a report to the UN Human Rights Council five weeks ago, High Commissioner for Human Rights Navi Pillay noted that the Sri Lankan government was evading an international inquiry into the rights violations and stressed the need for an independent investigation of the alleged war crimes.

Several human rights groups and Sri Lankan Tamil refugees in foreign lands have called upon Commonwealth members to boycott the Colombo CHOGM. So far only Canada has responded favourably. Its prime minister, Stephen Harper, has decided to stay away and send a representative instead.

Jayalalithaa has said it is unfortunate that India with 80 million Tamils has not acted with the same determination as Canada which has only a small Tamil population. She deliberately glosses over the fact that, unlike Canada, India has much at stake in Sri Lanka.

Sri Lanka received tactical support from India and weapons from China in the last stages of the war against LTTE. Coinciding with the cooling in the relations with India, which had been pressuring it since the end of the war to take political measures to meet Tamil aspirations, President Mahinda Rajapaksa has expanded ties with China. 

So far China has committed about $4 billion for infrastructure development in Sri Lanka. Its contributions include a $500 million container terminal which was commissioned in August and a $292 million airport highway which was opened last week. Work on a $272 million railway project has just begun. 

After India voted against Sri Lanka on a US-sponsored resolution in the Human Rights Council, the Rajapaksa administration announced it would renegotiate the 2003 agreement with India with regard to the use of oil storage tanks.

Yielding to Indian pressure, Sri Lanka held elections in the Tamil regions, and a provincial government headed by CV Vigneswaran, a former judge, has taken office. He finds himself in the unenviable position of being disliked by both the Sinhalese majority and the Tamil minority. Manmohan Singh still has more than a week to make up his mind as the actual meeting of heads of government will begin only on November 15. Such influence as New Delhi has over Colombo will be in jeopardy if he stays away from CHOGM. -- Gulf Today, November 5, 2013.

 

To Russia, China with love

BRP Bhaskar
Gulf Today

The outcome of Prime Minister Manmohan Singh’s visits to China and Russia last week testifies to the maturing of India’s relationship with the two countries, which, with Brazil and South Africa are its partners in the BRICS grouping. He was able to deepen ties with China, thanks to the spadework done by officials.

At an earlier phase in India’s diplomatic history, personal equations had played a major part in defining its relations with these countries. Ties with the Soviet Union were extremely formal until Nikita Khrushchev and Leonid Brezhnev established warm personal relations with Jawaharlal Nehru. The camaraderie that Nehru established with prime minister Zhou Enlai at Bandung kept Sino-Indian relations on an even keel until the 1962 border war drove the countries apart.

There has been a shift in the relative position of these countries in the global context since then. The Soviet Union has disappeared and its successor, Russia, does not possess the clout that it had. China, which the United States forcibly kept out of the world stage for a quarter century, has catapulted itself into the Number 2 position and is aiming for the top slot. Leaders still try to cultivate personal friendship but they know it cannot override political, economic and strategic factors.

At the end of the tour, Manmohan Singh said the visits had served their purpose and he was satisfied with the results.

His meeting with Vladimir Putin was the 14th successive annual Indo-Russian summit. A joint statement issued later referred to the cooperation between them in varied spheres such as space, energy, investment, high-tech trade, science, education, culture and tourism.

While Manmohan Singh was in Russia, the Indian government announced the commissioning of the first of two units of the Koodankulam nuclear project supplied by that country but the planned agreement for the supply of two more units did not materialise as the terms could not be settled in time.

The China visit yielded many agreements, some of which represent a significant advance. The most important of them aims at ensuring peace along the 4,000-kilometre long disputed border, which was the scene of a bloody conflict in the early 1960s. Beijing’s official assessment was that the visit sent a positive and powerful message that the two countries are committed to working together.

During the half-century that has elapsed since the war, the two countries have been in talks on the border issue with little progress. China has been arguing for some time that since the issue is highly complex a quick resolution cannot be expected and a framework should be established to prevent border incidents.

According to Chinese Foreign Minister Wang Yi, the border defence cooperation agreement has codified the good practices evolved in the handling of developments along the line of control. It also provides for the establishment of a hotline between the two military headquarters and increased contacts between the military commands.

On the contentious trans-border rivers issue, the two countries signed a memorandum of understanding which expands the scope of the existing expert-level mechanism beyond providing hydrological data on the Brahmaputra during the flood season.

The Central Committee of the Communist Party invited Manmohan Singh to address its Party School, which nurtures the country’s future leaders. He took the opportunity to stress that the Chinese and Indian economies can be complementary and outlined certain specific areas where they can cooperate for mutual benefit.

“We both know that the benefits of cooperation far outweigh any presumed gains from containment,” he told China’s emerging young leaders. “Therefore we should engage with each other in a spirit of equality and friendship and with confidence that neither country is a threat to the other.”

Reciprocating the sentiments he expressed, Wang Yi said there are unprecedented opportunities for cooperation and the leaders of the two countries have agreed on deepening strategic partnership. The national television quoted a Party School student as saying Manmohan Singh made many useful suggestions and he would “try to advance bilateral cooperation from my position”.

Looking beyond the prism of bilateral relations, Manmohan Singh and Chinese Prime Minister Li Keqiang decided to work on the proposed BCIM economic corridor project, which will bring Bangladesh, China, India and Myanmar together and link up with the Asean, China-Asean and India-Asean free trade areas to create the world’s largest free trade area. Tantalising as its prospects are India is inclined to hasten slowly, pending detailed examination of its implications for the northeastern states.-- Gulf Today, Sharjah, October 29, 2013.

Threat to peace process

BRP Bhaskar
Gulf Today

With guns booming across the line of control in Jammu and Kashmir for more than a week, the India-Pakistan peace progress has been thrown into jeopardy. In the present context, Prime Minister Manmohan Singh and Nawaz Sharif will find it difficult to take any meaningful measures to normalise bilateral relations.

Nawaz Sharif had spoken of his desire to improve relations with India during the election campaign and reiterated it immediately after the victory of his Pakistan Muslim League (Nawaz). Last month, Pakistan’s National Security Adviser Sartaj Aziz discussed confidence-building measures with India’s External Affairs Minister Salman Khurshid on the sidelines of the Asean summit at Brunei.

Later Sharif sent his special envoy, Shahryar Khan, to New Delhi with a letter to Manmohan Singh. Following this, the two governments made tentative plans for a meeting of the prime ministers when they are in New York for the United Nations General Assembly session next month.

The LoC developments have set these initiatives at naught. Public opinion, incensed by the killing of five Indian soldiers while on patrol duty in the Poonch sector on the night of August 5, has forced New Delhi to slow down the peace process.

Ceasefire violations in the region are not unusual, especially at this time of the year, when terrorist infiltration into Kashmir from across the line of control is at its peak. India has accused the Pakistan army of providing the infiltrators fire cover. Pakistan claims India is guilty of more truce violations than it.

The Indian army blamed the Poonch killings on Pakistani troops. However, in an apparent attempt to soft-pedal the issue, Defence Minister AK Antony told Parliament that the assailants were terrorists in Pakistani army uniform. Loud protests led by the opposition Bharatiya Janata Party forced him to make a fresh statement a day later, laying the blame at the door of the Pakistan army.

Most Indian analysts believe the spurt in truce violations and the gruesome incidents like the Poonch killings and the beheading of an Indian soldier in the same sector a few weeks earlier are part of a deliberate plan by a section of the  Pakistan army to queer the pitch for Nawaz Sharif. They say the army fears improved ties with India will reduce its clout in the Pakistani power structure.

As in Pakistan, hawks and doves are in contention in India too.

Parliamentary elections are due in less than a year, and the BJP, which is making a bid to return to power after a gap of ten years, has picked Gujarat chief minister Narendra Modi, a hardcore Hindutva exponent, as its prime ministerial candidate. The party sees stoking India-Pakistan tensions as a means of boosting Hindu sentiments against the Congress-led government.

BJP President Rajnath Singh has demanded that the government scale down diplomatic relations with Pakistan and declare that there would be no talks until Islamabad stopped supporting terror activities directed against India.

The way Samajwadi Party chief Mulayam Singh joined the BJP in the anti-Pakistan chorus in Parliament illustrates how electoral compulsions can weaken a political party’s commitment to the secular ideal.

Beyond the realm of electoral politics, there is a body of opinion which believes it is in India’s interest to help bolster the position of the democratically elected government of Nawaz Sharif. Those who subscribe to this view want Manmohan Singh to go ahead with the plan to meet Sharif.

Developments in Afghanistan have a bearing on the current state of India-Pakistan relations. The United States is looking up to India to play a role in stabilising the situation in that country after it pulls out next year.  Extremist forces operating in Afghanistan and elements of the Pakistan army which support them do not favour the idea.

Those who are keen that the peace process must continue uninterrupted point out that direct engagement between the governments of India and Pakistan at the present stage is necessary to negotiate the Afghan imbroglio in such a way as to ensure regional security.

While Indian experts are agreed that a section of the Pakistan army does not share Nawaz Sharif’s enthusiasm for improved relations with India, there is sharp disagreement among them on how India should respond to the situation. Some want the peace progress to be abandoned, some others want it to be delayed and some others want it to go on. Strangely, those who want the process stalled do not seem to realise that they are on the same side as the hawks in Pakistan.--Gulf Today, Sharjah, August 13, 2013.

Way forward in South Asia

 BRP Bhaskar
 Gulf Today

Cautious optimism illumines Indian and Pakistani assessment of the prospects of bilateral relations under Nawaz Sharif who is back at the helm in Islamabad after 16 long years.

In 1999, as prime minister, Sharif had taken a decisive step towards improved relations with India when he signed the Lahore declaration with his Indian counterpart, Atal Behari Vajpayee. Their Lahore meeting was made possible by Vajpayee’s tradition-breaking bus journey to Pakistan.

The peace process they initiated was interrupted by the then chief of the Pakistan army, Pervez Musharraf, who first engineered a bloody conflict on the icy heights of Kargil in Jammu and Kashmir and then ousted Sharif and sent him into exile. As military ruler, Musharraf later met Vajpayee to carry the process forward but the attempt failed.

Even before the election results, which brought him to power for the third time, became known Sharif expressed his desire to make a new beginning, telling visiting Indian mediapersons he would pick up the thread from where he had left it in 1999.

Prime Minister Manmohan Singh, reciprocating the sentiment, warmly greeted Sharif, whose return to office marks transfer of power from one civilian government to another through elections for the first time in Pakistan’s history. However, he let go an opportunity to transform word into deed when he decided not to accept Sharif’s invitation to attend his swearing-in ceremony.

The Indian diplomatic establishment, overlooking the symbolic value of a break with tradition, advised against a prime ministerial visit to Pakistan without first preparing the ground at official level meetings.

The political climate also was not conducive for Manmohan Singh to take a bold initiative. In dealing with Pakistan, he does not have the freedom of action which Vajpayee, as leader of the Hindu right-wing Bharatiya Janata Party, had. Any positive gesture by him is sure to invite charges of appeasement from the BJP, which has been calling for action against Pakistan in the light of the beheading of two Indian soldiers who had strayed across the line of control in Kashmir and the fatal attack on an Indian prisoner in a Lahore jail.

Discussing India-Pakistan relations, Farrukh Khan Pitafi, a young, liberal Pakistani columnist, recently wrote: “We have spent far too much energy in trying to weaken each other. As a result, India has not been able to realise its true potential and the Pakistani state has gone soft.” He reckoned that the time between now and next year’s Indian parliamentary elections provides a window of opportunity to mend relations.

However, it is unrealistic to expect any dramatic developments. Domestic compulsions will not allow Manmohan Singh to take any initiative on the eve of the elections. Sharif, too, has his limitations.

Pakistan’s immediate need is revival of its economy, which is in a terrible state, prompting some observers to talk of it as a failed state. Improved relations with India can offer Sharif a double advantage. It can help reduce military expenditure and boost bilateral trade and facilitate inflow of investment.

However, there are elements in Pakistan which are wary of such developments. The military, which lay low during the past five years but cannot be said to have reconciled itself to the idea of civilian supremacy, will not want expenditure cuts. Army Chief Ashfaq Pervez Kayani has reportedly advised Sharif to move gradually and with the utmost caution in trying to improve ties with India.

Pakistani businessmen are apprehensive of steps that may open up the possibilities of Indian economic domination. The last government decided to grant India most favoured nation treatment but was unable to take the necessary follow-up measures.

Sharif owes his electoral victory to the massive support that he and his party, the Pakistan Muslim League-Nawaz, command in Punjab province, which accounts for more than half of the country’s population. But, then, there are limits to his hold on this province, which is also the stronghold of the army and of various extremist groups, some of which enjoy the patronage of a section of the army.

The extremists made their own contribution to the PML-N victory by sparing its men when they trained their guns on campaigners to discourage voting. However, Sharif cannot overlook the fact that the people rejected their call to boycott the poll.

India and Pakistan, which have been bogged down in Kashmir for long, may be able to find a way forward if they can work together on Afghanistan to ensure stability in South Asia after US troops pull out of that country next year. --Gulf Today, Sharjah, May 21, 2013

Learning the wrong lessons

BRP Bhaskar
Gulf Today

The political leadership has developed a penchant for drawing the wrong conclusions, which does not augur well for Indian democracy.

Time was when the leadership of the Congress party, the premier political organisation, possessed the moral courage and authority to ask a holder of public office accused of misdemeanour to step down and stay out until he is cleared of all charges.

Now the party is in a debilitated state and its leadership has neither the courage nor the authority to act swiftly and decisively at a time of crisis. They vacillated for more than a week before asking Law Minister Ashwani Kumar and Railway Minister Pawan Kumar Bansal, who were caught in acts inconsistent with the solemn oath they took on assumption of office, to put in their papers.

Ashwani Kumar had summoned the officials of the Central Bureau of Investigation, which is probing irregularities in the allocation of coal blocks, and made certain changes in the status report the agency had prepared for submission to the Supreme Court. He also got the agency to show the report to officials of the prime minister’s office and the coal ministry, giving them also the opportunity to make changes in it.

When CBI director Ranjit Sinha acknowledged in an affidavit that the agency had shared the report with the law minister and the officials and that they had made changes in it, government spokesmen sought to justify the interference in the investigation, advancing specious arguments. The law minister claimed he had only made minor verbal changes in the report.

External Affairs Minister Salman Khurshid nonchalantly declared, “The government may be under the scanner but we have a right to find out what is happening.”

The interference of the PMO and the coal ministry constituted a grave impropriety since their acts are under scrutiny in the CBI probe. What’s more, the Supreme Court had specifically instructed the CBI not to share the report with the political executive.

While the government underplayed ministerial and bureaucratic interference in the investigation, the Supreme Court took a dim view of the situation. It described the CBI as a caged bird parroting the words of its many masters.

Pawan Kumar Bansal came under a cloud when the CBI caught his nephew Vijay Singla as he was accepting Rs9 million from a member of the Railway Board alleged as part payment of a hefty bribe for shifting him to another position, which will offer scope for collecting kickbacks in the award of contracts.

In keeping with the current level of political morality, the two ministers sought to brazen out the charges with Prime Minister Manmohan Singh extending silent support. Ashwani Kumar argued that the court’s stinging remarks did not contain any personal reference to him. Bansal claimed he had no business links with his nephew.

When the Congress won the assembly elections in Karnataka, where the Bharatiya Janata Party’s government was embroiled in serious graft charges, Manmohan Singh led an attempt to use the electoral victory to whitewash his beleaguered colleagues. He said it was a verdict against corruption, and the Congress party’s spokesmen attempted to project the Karnataka mandate as implicit rejection of the corruption charge against its own ministers.

Bansal’s continuance as minister became untenable as the CBI’s railgate investigation led to the arrest of some more persons close to him. Since the Supreme Court put off further hearing of the coalgate case until after the summer recess, the government thought there was no need to take an early decision on Ashwani Kumar’s future.

According to media reports, Manmohan Singh was forced to end pussy-footing and seek the resignation of the two ministers when Congress President Sonia Gandhi, realising that procrastination was damaging the party’s image, asked him to resolve the issue without delay. Many believe these reports are part of preparing the ground for Rahul Gandhi’s projection as the prime ministerial candidate ahead of the parliamentary elections due next year. 

It is not just the Congress party that is given to drawing the wrong conclusions from adverse developments. The Karnataka vote has dampened the BJP’s hopes of benefiting from the poor image of the scam-hit Manmohan Singh government. Its leadership appears to be looking up to Gujarat Chief Minister Narendra Modi as the saviour overlooking the reservations of its allies about him in view of his image as an accessory in the communal riots of 2002.

There is a rising demand to take the CBI out of the government’s hands and make it independent. This may be a case of the remedy being worse than the disease. The problem is not that the CBI is under the government but that there is a dearth of men of integrity in the agency and the government. -- Gulf Today, Sharjah, May 14, 2013.