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Thursday, February 28, 2008

Editorial 27-02-08 (English News Papers)

27th Febuary 2008
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1. THE Pioneer - Lalu does it again
2. THE Pioneer - Stronger deterrence
3. THE Pioneer - Pinch of mirchi on devil's radio
4. THE Pioneer - An unhealthy health scheme
5. The Times of India - Message From Deoband
6. The Times of India - Which Train Is This?
7. The Times of India - Revamp The Tax System
8. The Times of India - Money Doesn’t Matter
9. The Times of India - ‘Indians writing in English have a huge advantage’
10. The times of India - Think out of the box
11. Hindustan Times - Faith forward
12. Hindustan Times - Vandals without a cause
13. Hindustan Times - A curious train of thought
14. Hindustan Times - A severe bend in the river History Matters
15. HIndustan TImes - Keeping fiscally fit
16. HIndustan Times - Team India gets, er, ‘tough’
17. The Indian Express - Faster, richer, farther
18. The Indian Express - After the fatwa
19. The Indian Express - As easy as Kosovo
20. The Indian Express - How to hedge against a slowdown
21. The Indian Express - Apology in Balochistan
22. The Financial Express - Chugging along nicely
23. The Financial Express - Indian Railways as a global player
24. The Financial Express - When in doubt, cut out
25. The Financial Express - Passengers as priority
26. The Hindu - Well done, Railways
27. The Hindu - Misplaced priorities
28. The Hindu - An explosion on the road to peace
29. The Hindu - West Asia on the edge after an assassination
30. The Hindu - Pakistani media cannot wait for exit of ancien regime
31. The STatesman - LAC ‘perceptions’
32. The STatesman - Message from Deoband
33. The STatesman - Canned cinema
34. The asian age - On track
35. The Tribune - Passenger is the king
36. The Tribune - World’s new nation
37. The Tribune - Brother’s keeper
38. The New York Times - Lipitor’s Pitchman Gets the Boot
39. The New York Times - Getting Real About the Rescue
40. The New York Times - Vladimir Putin’s Russia
41. The New York Times - WHNT’s Technical Glitches
42. International the News - Targeting friends
43. International the News - PML-Q's problems
44. Pakistan observer - Zardari’s pragmatic reconciliatory stance
45. Pakistan observer - Extremists challenge the Army
46. Pakistan observer - Continuity of HEC initiatives

The Pioneer
Edit Desk
Lalu does it again
It's a good Railway Budget
It is difficult to run down the Railway Budget presented by Mr Lalu Prasad Yadav on Tuesday: He has been mindful of pandering to virtually every segment of society and industry, and has done so bearing in mind that crucial State Assembly elections are scheduled for this year. But if in the past promises made in Railway Budgets were scoffed at, they can be taken more seriously now for the simple reason there is more money available with Indian Railways, demonstrating its ability to marshal resources through better management of its infrastructure. In a sense, this goes to the credit of Mr Yadav who, it must be admitted, has limited his role to setting targets and then insisting that they be achieved by bureaucrats who have, by and large, been allowed freedom that was lacking in the past. It must also be admitted that there has been a palpable improvement in passenger amenities despite the rapidly increasing volume of traffic that has contributed to double digit growth in the earnings of Indian Railways last year -- passenger earnings alone have grown by 14 per cent with a similar growth expected in goods earnings. What is equally commendable is the return on capital -- an all time high of 21 per cent -- and the cash surplus before dividend -- a record Rs 25,000 crore -- that have been posted. From this position of strength, it makes sense for Indian Railways to set high targets for 2008-09, and aim for Rs 52,700 crore in revenue through freight earnings and Rs 21,681 crore through passenger earnings. The notional reductions in fare may help Mr Yadav and his political allies score points, but they need not be taken seriously. Nor should we get needlessly distracted by cries of 'step-motherly treatment' by States which feel they have not got their share of goodies. It's not possible to please everybody.
Indeed, there is little or no reason to reduce fares or rates; what is required is good service and better connectivity, apart from assured safety which still continues to be observed more in the breach, and tragically so. But if the Minister is to be taken seriously, efforts will be made during the next fiscal to both improve and add to the rolling stock as well as concentrate on track renewal, crucial to safety. With a whopping Annual Plan of Rs 37,500 crore, this should not be difficult, provided there is matching intent. High on the agenda are new lines, gauge conversion, electrification, track renewal, signal and telecommunications, and manning of level crossings. The Minister has also promised to spend Rs 852 crore on passenger amenities. Doubts, however, remain over the introduction of new trains, including Mr Yadav's favourite 'Garib Raths' -- unless additional tracks are provided for and dedicated corridors set up for freight, they will only further clog the schedule of passenger trains and lead to delayed arrivals which are now the norm rather than the exception. The Minister would do well to set a new target for Indian Railways: There should be no delayed arrivals unless they are caused by inclement weather. This, more than profits, would be hailed by millions of people. Meanwhile, it is time we got rid of a relic of the Raj and discontinued with the practice of a separate Railway Budget as this tradition no longer serves any purpose. Nobody looks forward to the Indian Railway Budget anymore in Britain where British Rail has been privatised, something we should now begin to consider doing with our own railways. That's the next logical step.
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The Pioneer
Edit Desk
Stronger deterrence
With K-15, India adds nuclear clout
Adding credibility to its policy of nuclear deterrence and strengthening its second-strike capacity, India has successfully tested the indigenously developed K-15, a nuclear-capable ballistic missile that can be launched from submarines. This adds the stealth factor to our strike capability as hitherto with Agni, Prithvi and Akash, it was possible only to fire ballistic missiles from ground and air, and such launch pads are susceptible to detection by the enemy and possible counter-attack. Now having extended to sea the crucial third leg of the nuclear triad, the defence establishment is likely to induct the newly-tested missile (originally named Sagarika) into the Navy under the Western Command as the Arabian Sea is closer than the Bay of Bengal to neighbours considered 'hostile'. Although the K-15 now has a range of 700 km, it can be made to travel a longer distance with enabling technology. The Defence Research and Development Organisation always starts a project as a technology demonstrator but thereon aims for wider applications of its munitions -- a fact evidenced in the case of Agni whose range has been increased stage after stage ever since it was first tested in the late-1980s. Moreover, increasing the range of any projectile is easier than increasing its frequency of firing which comes in handy when a shoot-and-scoot strategy is employed during a war -- a feat the country's defence scientists have promised they will achieve soon. What does warrant urgency is the conclusion of negotiations with Russia that will equip the Navy with Akula-class submarines as soon as possible because the German HDW and Russian Kilo-class submarines that we have cannot launch the K-15. On Tuesday morning, the Submarine-Launched Ballistic Missile had to be test-fired from a makeshift underwater launcher submerged 50 m under the sea surface. But there is no need to lose sleep over this limitation as the missile, capable of delivering a one tonne nuclear warhead to its target, is to be installed on the Advanced Technology Vehicle, the indigenous nuclear submarine that is slated to begin its sea trials next year.
The temporary lack of capable submarines notwithstanding, with Tuesday's test India joins an elite group of five countries that can fire ballistic missiles from beneath the sea. Boosted by its recent successes in the trials of interceptor missiles, the DRDO was confident this time to announce the test beforehand, which it hadn't when the K-15 was secretly tested on five occasions earlier. The scientists, whose endeavour made this test successful, deserve praise as they have overcome the odds posed by technology denial and sanctions to show the world this nation's prowess in science, a calibre that is not contingent on any foreign Government's approval -- be it nuclear science or ballistic technology.
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The Pioneer
Pinch of mirchi on devil's radio
Gautam Mukherjee

Gossip, they say, is the devil's radio -- so what does that make Government propaganda? Going into the last few days before the UPA Government submits its last full Budget on February 29 this leap year, the overall feeling is one of economic slowdown and drift. This Budget, of course, will be dominated by considerations of the general election coming up, perhaps later in 2008, or, on schedule, in 2009. Meanwhile, industrial growth has slowed, high-interest credit off-take is down, sale of white goods, automobiles and real estate has slackened, business returns have moderated, foreign investment is pausing and the stock market is listless.
But you wouldn't think so if you were to listen to the official interpretation of the situation. Fiscal 2008, it is true, is likely to close with at least 8.5 per cent growth of GDP despite progressively slowing quarterly results, and the Prime Minister himself assures us we can look forward to another year of nine per cent growth in 2009. But, while this may be true enough and is commendable in itself, is it sufficient, given the relatively modest overall size of our economy, to tackle the burdens it is forced to carry year after year?
The answer is probably no, but you can't get this Government, probably any Government in power, with its democratic and populist pressures, to admit to it. There is a good explanation for this outlined by psychologist Annie Jia: "What happens when your behaviour and your beliefs don't match up?" she asks, and goes on to say, "You can't change what actually happens to clear up the cognitive dissonance, but memories and opinions are infinitely malleable". So our Government, run by learned people who are all too human, may well be busy spinning their memories and opinions into the economic data available to them.
The pity, however, lies in the fact that the more the economy slows owing to avoidable policies that curb growth to contain inflation; the more onerous do the burden of subsidies, sops and badly executed Government relief programmes become. It must be hellish difficult for the Finance Minister to find the funds for the populist programmes being demanded by the constituents of the UPA.
Ironically, this cannot be lost on the phalanx of eminent economists currently at the helm, including the Prime Minister, the Finance Minister, the Reserve Bank Governor and the Deputy Chairman of the Planning Commission. But, singly and collectively, they seem tired and dispirited when it comes to reform or fiscal probity. Perhaps they are worn down, in this fourth year of their five-year term, by the effort of running a coalition with Left support. The Finance Minister might yet pull a rabbit or two out of his budgetary hat, but it will be difficult to be magical, given there is hardly any room to manoeuvre.
Look at the facts: The Economist of February 16, 2008, quotes a recent International Monetary Fund Report (IMF) to contrast the economic health of the two Asian giants, China and India, though one is infinitely better placed than the other. China "has the best fiscal position of any big country", giving its plenty of room "to cushion the economy if demand suddenly falls", while India, "has one of the worst fiscal positions in the world". China, too, is vulnerable, being highly export-led; but it is in robust financial health to defend its economy, whilst India, despite being domestic consumption-based, is not.
China's public debt stands at 17 per cent of GDP while India's stands at 75 per cent. This is comparable to the Organisation for Economic Co-operation and Development (OECD) average for public debt at 77 per cent, if that is some consolation. China has a Budget deficit of just one per cent of a much bigger economy than ours, which could morph into a surplus of three per cent if you add back the profits of their state-owned firms.
India, conversely, has an actual Budget deficit of eight per cent, though the Government says it is a mere 3.3 per cent projected up to March 31, 2008, down from 6.5 per cent in 2001-02. Our Union Government, however, does not add the State Governments's deficits and various off-Budget items such as the oil bonds to help offset PSU petroleum company losses. Nor does it add on the losses of decrepit State electricity boards. These are intractable haemorrhages that are getting more and more difficult to carry but happen to be political hot potatoes.
Still, you can't fault the IMF for telling it like it is, and inevitably suggesting various fiscal remedies that they know will fall on deaf ears. However, it does set up a certain caveat emptor (Buyer Beware) quality to the India Growth Story underpinned by the positive of our robust democracy. Conversely, China may be doing very well economically but politically it is opaque and authoritarian and that is potentially unstable. The world can, therefore, take six of India and half-a-dozen of China and they actually tend to!
But because it is politically hazardous to tackle many of the long-standing issues that burden and drain the Indian economy; it is all the more important for the Government to do everything in its power to stimulate growth everywhere it can. The odd thing is, knowing what it knows, it still doesn't do this! But if we could grow faster, strongly aided and abetted by the Government, we too could develop an economic cushion, eventually, of the kind that China enjoys today. This, particularly, if we hold the line for a coming decade of high single digit or even double digit growth.
Removing infrastructure bottlenecks will prove crucial, as will sustained growth of agriculture and related value addition in the hinterland. We must allow more competition and let in more foreign investment and technology. Of course, a classical economist's approach would have us do away with subsidies and sops but this would not be fair in a country like ours. Nor can we stamp out the very real threats posed by breakaway movements and internal insurgency if we promote an oligarchic model of growth.
But, having said this, we do need to become more efficient in our governance. Implementation, as always, has been India's Achilles' heel.

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The Pioneer
Second Opinion
An unhealthy health scheme
Sanjog Maheshwari

The healthcare and medical facilities provided under the Central Government Health Scheme suffer from several anomalies. While the right to healthcare and medical facilities should be seen as an integral part of the right to life, bureaucrats have ensured that hassle-free and quality healthcare at good private nursing homes and hospitals at Government's expense is available only to MPs, senior Government employees, pensioners and their families.
The nursing home facilities in Government hospitals, too, are mostly cornered by the high and mighty. Medical specialists attached to CGHS dispensaries are unavailable on the weekdays that are slotted for their visit as they are away on 'VIP duties' for months.
There exists a complex classification of CGHS beneficiaries. The parameters depend on the stage and scale of pay or pension, the position one holds or held in the Government, whether one is an employee or pensioner of some 'purely governmental department' or Central autonomous body. It is astounding that the pensioners among the beneficiaries of autonomous bodies are not treated at par with their counterparts who retired from the 'purely Government service' -- particularly in matters of grant of credit facilities.
Even while the babus perpetuate and practice such blatant discrimination, or create provisions for it in the rulebooks, they are not held accountable for the miseries caused to the beneficiaries of the scheme who are some autonomous body's pensioner. In the evening of their lives, suffering from age-induced infirmities and debilitating diseases, they have to run around complying with absurd formalities, placating highly inflated egos of the babus concerned. They also have to get their department's permission before and after the treatment, incur all expenses on the spot in the first instance irrespective of the enormity of the amount of expenditure, make repeated trips to the hospital for getting the bills verified by the CGHS medical authorities then to the department from which they have retired. They are subjected to this unreasonable discrimination only for the sin of their having retired from an autonomous body.
Is the life of a Class IV employee in any way less valuable than that of a senior class I officer? As the senior citizens of this country, all pensioners should be treated at par, particularly in the matter of healthcare and medical facilities.
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Message From Deoband

One of the most influential theological schools in South Asian Islam, the Darul Uloom Deoband located in Saharanpur, UP, is said to have inspired the Taliban ideology.
It's heartening, therefore, that the same seminary has now convened an anti-terrorism conference that was well attended by scholars and top clerics from different Islamic schools of thought.
It has not only passed strictures against terrorism as anti-Islamic, it has also defined terrorism as any action that hurts innocent individuals.
The Deobandis are one of the more orthodox schools within Islam. Besides inspiring the Taliban they have been an ideological beacon for other sects that support a fundamentalist interpretation of Islam.
This time, however, they may be responding to dismay among Indian Muslims to the hijacking of Islamic tenets by a small group of ideological extremists and the consequent backlash across the world which targets Muslims. India is a democracy and Indian Muslims are by and large moderate.
It's no surprise that such a large body of Muslim scholars getting together to denounce terrorism should have happened in India.
It's also significant that Bashir-ud-din, the grand mufti of Kashmir, has supported the Deoband declaration and reiterated the message that Islam doesn't allow the killing of innocent people.
Deoband reverberates beyond South Asia and its new message could well influence how the Muslim world looks at terrorism. Globally there had been an initial rush of sympathy for Al-Qaida and its cohorts following 9/11 and the American invasion of Iraq.
But that sympathy may be waning now because of the sheer randomness and brutality of the terror that Al-Qaida or Taliban chooses to inflict, quite often on Muslims themselves.
Since Pakistan too is afflicted by Islamic terrorism, and the Deoband school is influential in Pakistan, it's up to the clerics in Pakistan to take heed of the new message that's coming from Deoband. There is room for debate on whether the Deoband declaration amounts to a fatwa against terror or not.
A fatwa is a religious ruling and it isn't yet clear whether this declaration has that status. But whatever its status, the message from Deoband is important.
Deobandi scholars are certainly right when they protest that all madrassa students are not terrorists. However, the question must go further. What can Muslim scholars from Deobandi as well as other theological schools do to delegitimise terrorism and thereby take a load off the Muslim community?
This conference is certainly a start. Now it's time to take it further, by issuing some clear-cut fatwas against terrorism.

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Which Train Is This?

Lalu Prasad is credited to have turned around the Indian Railways. Some people even call him a management guru for making the public sector behemoth a cash surplus organisation. With an annual surplus reaching Rs 25,000 crore, Lalu can revel in the applause. But should we all join in?
True, in these inflationary times he has managed to keep passenger ticket costs down. A defining feature of Lalu's tenure as railway minister is the aggressive push to lower fares. His vision for the Railways so far is limited to restricting passenger fares.
Massive increases in freight revenues helped by a robust economy and some smart management have helped him offset the burden of such passenger subsidies. Ideally, the cash surplus should have revolutionised the working of the Railways. But that has not been the case.
Indian Railways has a long way to go before it can match global standards. The infrastructure creaks. Safety concerns are not adequately addressed. Trains are still slow. Let us not forget that the excess load of cargo and commuters is mounted on tracks built over a hundred years ago.
An overhaul of this infrastructure is long overdue. Lalu has an advantage his predecessors didn't have. The Railways now has money to spend, and, of course, he can take credit for the turnaround.
The money should be invested in infrastructure since the Railways is the lifeline of this country, especially since there are not enough roads yet.
Suburban railway networks in cities like Mumbai and Kolkata are falling apart and need urgent attention. We need faster trains, better suburban services and metros, cleaner railway stations and efficient management of the available resources.
The Rajdhanis and the Shatabdis are a clear indication that the Railways can indeed provide clean and efficient services. Shouldn't these set the standard for all trains? Lalu has made a beginning on these concerns in the current budget.
Green toilets, lifts and escalators at 50 stations and more automatic ticket vending machines are welcome steps. Lalu is justifiably proud that the Railways is in better financial health than many private companies. He should now address the quality of services offered by his organisation.
Indian Railways should not remain a symbol of old-styled state capitalism and disregard customers. It has to reflect the enterprise of the new India, which now must live up to world standards.

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Revamp The Tax System
M Govinda Rao

The media hype surrounding the Union Budget makes one believe that it is a magic pill for the economic fortunes of the country. Unfortunately, the reality is different and the budget has ceased to be a prime determinant of resource allocation after 1991.
Even in the public sector, state governments play an important role in the provision of social services and physical infrastructure. Yet, the hype has continued.
Indeed, the budget sets the macroeconomic policy stance, signals resource allocation changes through tax and expenditure policies and provides an opportunity for the ruling party to make important policy announcements.
This year's budget is formulated in the background of a difficult international environment, moderating growth scenario and decelerating exports. The strong linkage with international markets combined with rapid surge in capital inflows has imposed serious constraints on the calibration of domestic macroeconomic policy instruments.
Attempts to decouple the domestic economy from the international environment have not succeeded.
The recessionary environment in the US could squeeze export demand. In this scenario, it is necessary to continue austerity, and aggregate fiscal deficits will have to be restrained at levels lower than that set in the fiscal restructuring plan.
The record of the Centre's fiscal adjustment since the enactment of Fiscal Responsibility and Budget Management Act has been impressive. Yet, there are some serious concerns. The fiscal deficit reduction is likely to be on target at less than 3 per cent of the GDP, even though it may not be possible to eliminate the revenue deficit altogether for that would require compression of revenue deficit by 1.5 percentage points from the budget estimates of 2007-08.
However, there is a build-up of large off-budget liabilities through food, fertiliser and oil sector subsidies and these could be in excess of 2.5 per cent of GDP. Furthermore, the deficit reduction has been achieved mainly by increasing revenues rather than compressing unproductive expenditures, and the impact of the two on the economy is different.
While the credit for increasing revenues should go to the tax information system and improvement in compliance, higher revenues have softened the resource constraint and enabled larger allocations to populist schemes. As the funds for these are transferred to implementing agencies and local bodies without passing through state budgets, there are questions about capacity and efficiency of delivery systems and accountability.
High buoyancy of direct taxes seen since 2003-04, coupled with a booming economy, provides an opportunity to rationalise taxes.
Notably, revenue from direct taxes has shown an average annual growth rate of 26 per cent since 2003-04. This cannot be explained by the high growth of the economy alone. In fact, much of the increase during the last few years did not come about by changing the structure of the tax but by strengthening the information system.
The National Security Depository Ltd has done a commendable job in this regard.
Similar initiatives to strengthen the information system in customs and excise duties entrusted to a competent agency could help improve the efficiency and equity of indirect taxes as well. This could go a long way in expanding the base of consumption taxes and help to set the goods and services tax (GST) rate at a reasonable level in 2010 when it is introduced.
On the direct taxes front, large-scale changes in the structure of taxation are unwarranted though some indexation for inflation may be done in the exemption limit and rate brackets. High revenue productivity also provides opportunity to abolish cess and surcharge.
Surely, the finance minister could get rid of the fringe benefit tax and the cash withdrawal tax, but he may not revisit them.
The budget should be used to initiate preparatory steps for introducing the GST. This involves rationalisation of excise duties and services taxes. The budget should transform the selective taxation of services into a general tax with a small list of exemptions, and unify the rate with excise duty. To keep the rate of tax low, it would be useful to do away with small-scale industry exemption.
General taxation of services will avoid discrimination among various services, simplify administration and reduce litigations. Of course, it is not politically easy to convert selective taxation into a general taxation of services, but that was the route followed in the case of excise duties as well and there is no reason why this cannot be achieved.
The preparatory step for GST also includes rationalisation of excise duty rates. Unification of tax rates is necessary. This entails that except for sumptuary items, the tax rates should be unified at 14 per cent. In the case of items such as cigarettes, the rate should have a GST component at regular rate and a sumptuary component which may be specific.
This would also provide an opportunity to convert specific duties on items such as cement to ad valorem rates. The seriousness of the government in introducing the GST in 2010 should be seen in the preparatory measures that this budget will initiate.
(The writer is director, National Institute of Public Finance and Policy.)

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Money Doesn’t Matter
Avijit Ghosh

"I don't care too much for money, money can't buy me love" sang the Beatles back in the sixties. But if last week's breathless Indian Premier League bidding was any indication, the eight franchise owners firmly believe that money can buy them success in the Twenty20 cricket carnival.
Previous experiences, however, show that spending big money on big cricketers is no insurance to either a great individual performance or overall team success.
At the inaugural rival ICL league last year, no-nonsense Australian all-rounder Ian Harvey outshone all mega stars — Brian Lara, Inzamam-ul-Haq, Chris Cairns — to claim the man of the series prize. Lara, perhaps the most expensive star on show, also turned out to be the biggest flop of the league. He was out for a first ball duck in the first match and scored 4, 3 and 9 in the following three games.
The West Indian maestro was such a huge failure that he had to drop himself down the batting order in the last league game. His team, Mumbai Champs, finished last.
The flip side of Lara is Ali Murtaza, a 17-year-old left-arm spinner from Allahabad. It wouldn't be erroneous to surmise that he would have earned just a fraction of the West Indian superstar's pay cheque for the tournament. But playing for Delhi Jets, Murtaza emerged as one of the meanest and craftiest bowlers of the series and finished with 12 wickets at an average of 10.83.
In an interview to the London Times, former England wicketkeeper Paul Nixon, who also played in the ICL, was full of admiration for the young spinner. It is India's loss that a talented bowler has been banished to anonymity for playing in the rebel league. But the point in highlighting the performances of Lara and Murtaza in last year's ICL isn't to compare their capabilities.
It is to underline the fact that the younger, less expensive Tier II boys could hold the real key to success in the IPL. The superstars will draw in the crowds.
But the young guns with a hunger to prove themselves on the big stage will perhaps perform with more enthusiasm and heart than their famous counterparts. Money can buy stars, manufacture hype. It cannot create passion.

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‘Indians writing in English have a huge advantage’

Lynn Nesbit is one of the world's most successful and powerful literary agents. The writers she represents include former US presi-dent Jimmy Carter, novelist Tom Wolfe, Tom Crichton, Amartya Sen and Jhumpa Lahiri. Rahul Singh spoke to her in Mumbai:

Q: What exactly does a literary agent do?
literary agent is basically an author's advocate with the publisher. I negotiate the contract with the publisher and sell ancillary rights, like TV and film rights, or the use of extracts from the book in a newspaper or magazine. I also negotiate the size of the advance and royalties, as well as discuss the advertising budget needed to help market the book and guide it to publication, so that the author is free to write and create. An author should not get involved in these unpleasant things!

Q: Tell us something about your background and how you became a literary agent.
I was brought up in the mid-West, near Chicago, and studied in the Sorbonne (Paris), After graduating from Harvard, i went to the Radcliff Publishing Programme, which is when i decided to be a literary agent. My first big client was a short-story writer, Donald Barthelme, who went on to become very famous. I was with an agency, International Creative Management, for 20 years and then in 1989 i started my own company with a partner, Janklow and Nesbit Associates.
Q: What kind of writers attract you?
I have very catholic tastes. I have a great interest in fiction, but also a curiosity about world history, international affairs and various socio-political, economic and cultural matters. There is a vast range in my client list, from Amartya Sen writing on the interplay between economics and democracy, to Joan Didion (Year of Magical Thinking) on the political scene in America or Tom Wolfe on cultural foibles.

Q: As a literary agent, what advice would you give an author?
Writers should have a day job until they have at least two financially successful books.

Q: In what way has publishing changed in recent years?
Books have got longer with the use of the computer and writers resist cutting a book. A lot of books are also being sold online, like via Then, there are chains like Barnes and Noble, which also sell online. The small, independent booksellers are being squeezed, which is too bad. People like to relate to a knowledgeable bookseller who knows their reading habits.

Q: Why are there no literary agents in India?
There aren't any in France or Germany, either. There, the publisher acts as the literary agent. But there is great scope for agents in India. Indians writing in English have a huge advantage over writers who have to be translated into English.

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Think out of the box
Vaijayanti Wagle

WASHINGTON DC: Nandan Nilekani of Infosys astutely points out that a 'flat-world' economy values versatile workers. Such workers are as fluent with technology as they are with business and as at ease working in the US as they are in India.
In other words, they have the ability to interact with people with different perspectives and points of view. They can switch careers and have the ability to acquire the competencies needed. To produce such a workforce, Nilekani recognises the need for a 'globally relevant' education. Such an education, then, must give an individual the mental agility to interact in multiple, diverse communities, geographically and organisationally.
Given the current model of education, this is a challenge for schools, preparing children to participate in their community. In a 'flat-world', they must prepare children not for their respective communities alone but for the many in which they are likely to interact.
A globally relevant education calls for a new approach. One that shifts the focus from trying to teach everything to equipping students to educate themselves independently in diverse situations.
Teaching for understanding is one such approach. Teachers assume that they teach to develop understanding. In fact, their modus operandi is to disseminate know-ledge. While knowledge is essential for understanding, it alone does not make for understanding. For understanding to occur, it is important to recognise a conceptual idea that underlies the body of knowledge.
For example, body systems is a popular topic. Studying it involves giving mounds of information, most of which students tend to forget. To teach for understanding we chose an underlying conceptual idea: "The human body is a system made up of many subsystems that work together to enable the body to function". The concept of 'system' was vital to understanding.
After some deliberation, the students described a system as having parts that form a whole, which is designed to achieve a goal. Each part plays a role and failure on any part compromises the goal.
The concept gave the students a contextual framework within which to receive the content.
This approach empowers students to become independent learners. Students can carry the contextual frameworks created by the conceptual ideas beyond the classroom to receive information and interpret events and experiences.
Moreover, conceptual ideas are universal in nature and explain how the world works. Teaching to them inculcates the recognition of what is common, rather than different, amongst human beings.
This facilitates learning even in circumstances that are unfamiliar and unknown, and allows learners to be more discerning in their perceptions and judgments.
Unlike information, understanding cannot be delivered and must be constructed. Models have emerged to guide this. The reactions of teachers in two Mumbai schools to such a model, with whom one interacted, were revealing. Its value in promoting learning was unanimously hailed.
However, there was scepticism about using it in India. Aspects of the model were considered challenging.
Given that the teachers themselves have studied in the existing system where teaching comprises of disseminating information, evaluation calls for verbatim recall, and rote memorisation is an effective learning tool, this is not surprising.
Teaching for understanding would require specialist training. Many questioned using a model aimed at understanding when faced with a voluminous syllabi and limited time within which to cover them. To all, the rigid exam system was a threat. These concerns would need pivotal changes.
India has penetrated the global market. To advance up the value curve and produce increasingly sophisticated and competitive products and services, education will have to keep pace and develop in workers the mental agility to absorb new ideas and technologies and to interact adeptly in a wider cultural arena.
For India to advance further, the quality of instruction must improve. It will if the emphasis is on conceptual learning. (The writer is a US-based teacher.)

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T HIS YEAR'S World Economic Fo- rum (WEF) summit in Davos re- minds one of cricket. Cricket, the colonial game originally went in- ternational in Anglo-Australian rivalry, only to eventually become the leading sport of the subcontinent, with India pulling the purse strings of the game worldwide. The global economy may be going through a similar metamorphosis involving the West and Asia. This year's Davos summit is a far cry from the days when Asian leaders queued up to woo Western foreign direct invest- ment (FDI), showcasing their reformist policies. Among the hot topics this year is the perceived Western reluctance to ac- cepting funds from sovereign wealth funds of Asian and Middle Eastern na- tions flush with cash and foreign ex- change reserves. Suddenly, the FDI boot seems to be on the other foot, and those who argued against the "colour of mon- ey" a couple of decades ago seem to be showing signs that it matters who is in- vesting in a country Sovereign wealth funds' assets are set to reach $ 12 trillion by 2015, almost 10 per cent of all financial assets in the world. Nations1ike South Ko- rea, United Arab Emirates, Singapore, Kuwait and Saudi Arabia are among the new investment elite. The US is staring into a possible recession, and Asian funds are in the forefront of buying shares and offering capital to shore up brandname banks of Wall Street that are reeling un- der the impact of the sub-prime home loan crisis spawned by reckless lending to people with poor credit records. While that happens, also at Davos, the Secretary-General of the Organisation of Economic Cooperation and Development (OECD), Angel Gurria, urged that India, China and three other emerging nations be included in the leading Group of Eight (G-8) to help resolve the world's economic instability The hot debate over 'decou- pling' is to what extent emerging economies and Asian prosperity are in- ter-linked to US growth. Mr Gurria sees no room for doubt, and believes the G-8 must become G-13 without much ado to resolve the world's problems. It is also clear that China and India are also criti- cal to fighting climate change and the West must take them in as serious negoti- ating partners than patronise them with moral posturings on what needs to be done. While all that went on at Davos, Mi- crosoft billionaire Bill Gates pleaded for 'creative capitalism' to help the world's poor Whether it is including the poor of the world in the gains of growth, or the once lagging and now emerging economies, the writing on the wall should be clear for those who see reason: the rich cannot pull their own line and expect oth- ers to simply fall in.
Faith forward

For decades now, moderate Islamists have spared no effort to convince the world that Islam and violence are incompatible. But so far, they have been preaching to the converted. After 9/11, Islam has come to be viewed with greater hostility than ever before, in great measure helped by acts of terrorism across the world in the name of the great religion. So it has come as a breath of much-needed fresh air that the influential Darul Uloom seminary in Deoband, long known for its hardline stand, has come out in no uncertain terms against the outrages being committed in the name of Islam. Its rector Maulana Marghoobur Rahman has said, “Killing of innocents is not compatible with Islam. It is anti-Islamic.” This is the first time that a religious institution has so strongly condemned violence in the name of Islam.
Hopefully, the seminary’s statements will reverse the trend of equating Islam with the misguided actions of fanatics. Coming as it does from scholars and men who are held in high esteem in the community, it will be difficult for hotheads to challenge these statements. It is clear that there has been considerable internal debate and discussion before the Darul Uloom made its pronouncements. This will prove a shot in the arm for moderate Muslims not just in India but in the region who have been uncomfortable with the new jehadi Islamic tradition that has been promoted by certain sections. So far, the Indian Muslim community has been reactive in its public position, normally articulated after some terrorist outrage or the other. Now the Deobandis have broken that mould and assumed a proactive role. This will not only take the wind out of the sails of those within the community who have chosen to interpret Islam to serve their own nefarious ends, but also fundamentalists within the Hindu fold who have always been quick to equate Islam with terror.
This provides a golden opportunity for clerics of other faiths to engage in dialogue with their Muslim counterparts in the true spirit of secularism as envisaged in our Constitution. India could well provide a framework to resolve inter-faith conflicts across the world if it can build on these positive developments and those in our region like the complete rejection of fundamentalist parties in Pakistan’s recent elections. If all concerned play their cards well, the ‘clash of civilisations’ could become an outdated concept.

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Vandals without a cause

In the world of petty politics that involves seeking out grievances where there are none, the Akhil Bharatiya Vidyarthi Parishad (ABVP) has touched a new low. On Monday, members of this agit-prop brigade went about ransacking and damaging Delhi University’s Department of History. All this in the presence of police personnel and mediapersons. And what was the cause of their incredible outrage? The inclusion of an essay by the late Padmashri scholar, AK Ramanujan, ‘Three Hundred Ramayanas: Five Examples and Three Thoughts on Translation’, in the recommended reading list for second year History BA Honours students. Ramanujan’s essay is part of a unit called ‘The Ramayana and Mahabharata: Stories, Characters, Versions’ — that includes supplementary readings like the detailed and scholarly introduction by Robert P Goldman to the Valmiki Ramayana.
All this still doesn’t explain why the ABVP goons went on a rampage in one of the country’s most prestigious higher education institutions. One would have thought that the dissemination of various interpretations and narratives of the Hindu epic would have pleased the ABVP. After all, Ramanujan’s essay in question illustrates and analyses the great dynamism and variety in what the scholar describes as “tellings” of the story of Rama within India and across the world. But from when did goons sit down and start thinking that they might be barking up the wrong tree? So barking and biting they did. Add to that the fact that Upinder Singh of the History Department, targeted by the protestors for ‘compiling’ a collection of the course readings including the concerned essay, actually did no such thing — an unauthorised spiral-bound photocopied collection has her name typed on it — and one proves how politically motivated this ugly episode really is.
So how did the vandals manage to do what they did? The controversy over the inclusion of the Ramanujan essay was known since early last month. It’s bad enough that stupid ways of finding grievances as an excuse to have one’s 15 minutes of fame are allowed to intrude into the world of scholarship. It’s worse that law and order broke down in the presence of those supposed to uphold those very two things.

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A curious train of thought

As we were trying to get the cheapest tickets on the cheapest budget airlines to go to the farthest place from our work stations, there was Union Railway Minister Lalu Prasad Yadav unveiling his fifth Railway Budget in Parliament. Now that we know the Indian Railways has made a whopping Rs 25,000 crore profit this year, Mr Yadav will surely present his strategies before graduates at the Harvard Business School. We also got to know that all trains and stations will very soon have ‘green toilets’ that will urge us to not only buy platform tickets but train tickets as well. But Mr Yadav’s penchant for being drop dead serious not only impressed us, but actually made us forego the cheapest ticket on the cheapest airline.
For among the many other things the Minister said was that in two years, there will no longer be train ticket queues. That may bring grief to hundreds of thousands of Indians whose livelihoods as touts will be grievously threatened. But Indian Railway back offices will indeed warm the cockles of the hearts of the rest of us. Mr Yadav also made us sit up when he mentioned that he will make ‘world class stations’ of the New Delhi Railway Station, the Chhatrapati Shivaji Station in Mumbai and Patna station.
Which has made us decide to take a train to Patna as soon as we’re done with this editorial. Not only will we get ‘world class’ settings to visit, but we won’t have to deal with the rubbish of arriving an hour ahead of flying and grapple with delays, cancellations and bad food. Hurrah!

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A severe bend in the river History Matters
Does the Nobel Prize provide the kiss of death for writers, RS Naipaul in particular?
Ramachandra Guha Historian & Author of India After Gandhi

Like some other writers of my generation, I have a deeply ambivalent attitude towards the work of VS. Naipaul. I was moved and charmed by his early stories of social life in the Caribbean. I admired the understated style of his non-fiction. I marvelled at his readiness to challenge the pieties of political correctness, as in his book, Among the Believers, a prescient analysis of the pathologies of Islamic fundamentalism. On the other hand, I was irritated by his E-judged comments on Indian politics (as in his seeming endorsement of Hindu fundamentalism). And I was seriously put off by his vanity and pettiness, as in his disparaging remarks about his contemporaries and the simultaneous suggestion that he was the only living writer worth considering. In the middle of last year I was asked to review Naipaul's new book, A Writer's People. I found it a disappointing and at times even obnoxious book. He could not, it seems, mention another writer without putting him down (thus Philip Larkin was dismissed as a "minor poet", and Derek Walcott accused of insinuating himself into the good books of the Americans). The subliminal and at times open message of this say little book was: Once there was Mahatma Gandhi, who transcended the boundaries of caste, religion, and nation to become a Universal Being. After him came VS. Naipaul, who did likewise. In between lay a barren desert of under-achievement. The two Naipaul books I had read before this one were his late novels. A Half Lift and Magic Seeds, books without a coherent plot and whose characters led anaemic lives. After reading A Writer's People my anti-Naipaul sentiments were confirmed. I did not think I would ever read another work by this writer But then I went into one of my favourite bookshops and found there an older work of his that I had not read. There was nothing else that attracted my attention that day, and since I am always loth to leave a bookshop without purchasing a book, I bought this one. A Turn in the South (to give the book its name) was first published in 1989. It is based on a trip made by Naipaul to the southern parts of the United States. He wished to explore here the relations between White and Black, the residues and torments of a society with a slave-owning past. It is a richly textured and at times profoundly moving book. The sights and smells of the region are captured beautifully - the charred remains of a burnt-out sugar plantation, for example, or the sou11essness of cities who live in a remembered (and wrongly remembered) past. The characters he meets are captured with skill and empathy He writes with equal understanding of a White Christian fundamentalist and a Black civil rights leader It was in books such as Among the Believers and A Turn in the South that Naipaul perfected the genre now known as 'narrative non-fiction'. Here Naipaul showed that works of travel and history could be as readable as the best novels, in good part because the characters in these books sparkled as they did in the best novels. But it was Naipaul's special genius to be able, from time to time, to stand apart from thick description to offer more general observations about society and history at large. In A Turn in the South he compares the cult of Elvis Presley to the cult of the Black politician in the islands he grew up in. "In colonial days in the British West Indies," writes Naipaul, "for about a hundred years after the abolition of slavery, the Black people had no heroes. They began to get heroes very late, and these heroes were sportsmen, cricketers mainly No other kind of hero was possible. But then, when a political life developed, towards the end of the colonial period, West Indian Blacks acquired leaders, union men in many cases, who then became political leaders and later, in independence, prime ministers. For these early leaders who were their very own, West Indian Blacks had more than adulation. They wished these leaders to represent them, and more than in a parliamentary way They wished their leaders (who had started as poor as everybody else) to be rich (by whatever means) and powerful and glorious. The glory of the Black leader became the glory of his people. The leader lived (or lived it up) on behalf of his people; and the people lived through their leader Ordinary ideas of morality and propriety didn't apply A leader wasn't required to be modest and correct; those were the virtues of another world. A leader was invested as a Black man with a responsibility: to be grand, larger than life, for the sake of all Blacks. This idea of the leader - which has caused such havoc in the West Indies - has changed in recent times, but it is stn there." The truths offered by the finest literature are said to be timeless. In fact, they are not bound by constraints of space either What Naipaul writes about the adoration of Black leaders in the Caribbean of the 1940s speaks to us also in India today, as a way of understanding the cult of Mayawati, the leader who represents her flock in more than a parliamentary way the leader to whom ordinary ideas of morality and propriety do not apply the leader who lives and lives it up on behalf of her people. Prudent, proper, middle-class (and usually upper-caste) Indians object to Mayawati cutting a 200-pound cake, or wearing an approximation of the crown jewels, or paying many crores in income tax when her income is actually a fraction of one crore. But her followers do not object; to them, she has been 'invested with a larger responsibility'; to be 'grand, larger than life', for the sake of them all. Through his early novels and the braiant nonfiction books of his middle period, V S. Naipaul did enough to count as one of the greatest writers of the 20th century His more recent works are another matter altogether. They are unmemorable; lacking in warmth and empathy and in insight and understanding as well. The once great writer has become a pompous bore. How to explain this discrepancy between the early/middle Naipaul and the late Naipaul? A publisher friend attributes it a11to the Nobel. This greatly esteemed and cherished prize, he tells me, is the kiss of death for the creative writer There has been a perceptible decline in the quality of the novels published by J.M. Coetzee after he won the Nobel Prize. Even Naipaul's great contemporary and rival, Derek Walcott, has not published much good poetry after being dignified by the award. Naipaul's later trajectory is of a piece with this trend, with the caveat that in his case it has been a descent not so much into banality as into vanity It is too late now to redeem Naipaul, but my friend's thesis makes me fear for the future career of one of my favourite modern writers, Orhan Pamuk. His recent essay-collection Other Colours was a disappointment. A collection of not particularly sparkling odds and ends, it does not sit well with books such as Snow, the Black Book or Istanbul. The portents are bleak, not least because at the same time as he won the Nobel, the threats from extremists forced Pamuk into exile in New York, away from the materials and characters that have made his work. Has Pamuk then written his last great book? In that case, one must hope that it wn be some years and many novels before either Philip Roth or Ian McEwan are obliged to travel to Sweden in December ramguha@vsnl.comL IKE SO1VIE other writers of my generation, I have a deeply ambivalent attitude to- wards the work of VS. Naipaul. I was moved and charmed by his early stories of social life in the Caribbean. I admired the under- stated style of his non-fiction. I marvelled at his readiness to challenge the pieties of political cor- rectness, as in his book, Among the Believers, a pre- scient analysis of the pathologies of Islamic funda- mentalism. On the other hand, I was irritated by his E-judged comments on Indian politics (as in his seeming endorsement of Hindu fundamentalism). And I was seriously put off by his vanity and petti- ness, as in his disparaging remarks about his con- temporaries and the simultaneous suggestion that he was the only living writer worth considering. In the middle of last year I was asked to review Naipaul's new book, A Writer's People. I found it a disappointing and at times even obnoxious book. He could not, it seems, mention another writer without putting him down (thus Philip Larkin was dismissed as a "minor poet", and Derek Walcott accused of insinuating himself into the good books of the Americans). The subliminal and at times open message of this say little book was: Once there was Mahatma Gandhi, who transcended the boundaries of caste, religion, and nation to become a Universal Being. After him came VS. Naipaul, who did likewise. In between lay a barren desert of under-achievement. The two Naipaul books I had read before this one were his late novels. A Half Lift and Magic Seeds, books without a coherent plot and whose characters led anaemic lives. After reading A Writer's People my anti-Naipaul sentiments were confirmed. I did not think I would ever read another work by this writer But then I went into one of my favourite bookshops and found there an older work of his that I had not read. There was nothing else that attracted my attention that day, and since I am always loth to leave a bookshop without purchasing a book, I bought this one. A Turn in the South (to give the book its name) was first published in 1989. It is based on a trip made by Naipaul to the southern parts of the United States. He wished to explore here the relations between White and Black, the residues and torments of a society with a slave-owning past. It is a richly textured and at times profoundly moving book. The sights and smells of the region are captured beautifully - the charred remains of a burnt-out sugar plantation, for example, or the sou11essness of cities who live in a remembered (and wrongly remembered) past. The characters he meets are captured with skill and empathy He writes with equal understanding of a White Christian fundamentalist and a Black civil rights leader It was in books such as Among the Believers and A Turn in the South that Naipaul perfected the genre now known as 'narrative non-fiction'. Here Naipaul showed that works of travel and history could be as readable as the best novels, in good part because the characters in these books sparkled as they did in the best novels. But it was Naipaul's special genius to be able, from time to time, to stand apart from thick description to offer more general observations about society and history at large. In A Turn in the South he compares the cult of Elvis Presley to the cult of the Black politician in the islands he grew up in. "In colonial days in the British West Indies," writes Naipaul, "for about a hundred years after the abolition of slavery, the Black people had no heroes. They began to get heroes very late, and these heroes were sportsmen, cricketers mainly No other kind of hero was possible. But then, when a political life developed, towards the end of the colonial period, West Indian Blacks acquired leaders, union men in many cases, who then became political leaders and later, in independence, prime ministers. For these early leaders who were their very own, West Indian Blacks had more than adulation. They wished these leaders to represent them, and more than in a parliamentary way They wished their leaders (who had started as poor as everybody else) to be rich (by whatever means) and powerful and glorious. The glory of the Black leader became the glory of his people. The leader lived (or lived it up) on behalf of his people; and the people lived through their leader Ordinary ideas of morality and propriety didn't apply A leader wasn't required to be modest and correct; those were the virtues of another world. A leader was invested as a Black man with a responsibility: to be grand, larger than life, for the sake of all Blacks. This idea of the leader - which has caused such havoc in the West Indies - has changed in recent times, but it is stn there." The truths offered by the finest literature are said to be timeless. In fact, they are not bound by constraints of space either What Naipaul writes about the adoration of Black leaders in the Caribbean of the 1940s speaks to us also in India today, as a way of understanding the cult of Mayawati, the leader who represents her flock in more than a parliamentary way the leader to whom ordinary ideas of morality and propriety do not apply the leader who lives and lives it up on behalf of her people. Prudent, proper, middle-class (and usually upper-caste) Indians object to Mayawati cutting a 200-pound cake, or wearing an approximation of the crown jewels, or paying many crores in income tax when her income is actually a fraction of one crore. But her followers do not object; to them, she has been 'invested with a larger responsibility'; to be 'grand, larger than life', for the sake of them all. Through his early novels and the braiant non- fiction books of his middle period, V S. Naipaul did enough to count as one of the greatest writers of the 20th century His more recent works are another matter altogether. They are unmemorable; lacking in warmth and empathy and in insight and understanding as well. The once great writer has become a pompous bore. How to explain this discrepancy between the early/middle Naipaul and the late Naipaul? A publisher friend attributes it a11to the Nobel. This greatly esteemed and cherished prize, he tells me, is the kiss of death for the creative writer There has been a perceptible decline in the quality of the novels published by J.M. Coetzee after he won the Nobel Prize. Even Naipaul's great contemporary and rival, Derek Walcott, has not published much good poetry after being dignified by the award. Naipaul's later trajectory is of a piece with this trend, with the caveat that in his case it has been a descent not so much into banality as into vanity It is too late now to redeem Naipaul, but my friend's thesis makes me fear for the future career of one of my favourite modern writers, Orhan Pamuk. His recent essay-collection Other Colours was a disappointment. A collection of not particularly sparkling odds and ends, it does not sit well with books such as Snow, the Black Book or Istanbul. The portents are bleak, not least because at the same time as he won the Nobel, the threats from extremists forced Pamuk into exile in New York, away from the materials and characters that have made his work. Has Pamuk then written his last great book? In that case, one must hope that it wn be some years and many novels before either Philip Roth or Ian McEwan are obliged to travel to Sweden in December

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Keeping fiscally fit
Ajit Ranade

February 29 is the birthday of former Prime Minister Morarji Desai, who, like Prime Minister Manmohan Singh, also served as a Finance Minister. On this day, P Chidambaram will present the national budget for the seventh time, just one short of Desai’s record. Much of the Desai-era economic policies like import and credit controls have outgrown their relevance. But his fiscal conservatism is worth remembering.
This is the last budget before next year’s elections, and the coffers are quite full. Hence the list of sop-seekers is long. Coalition partners will impose hefty demands. Exporters hurt by the rising rupee are asking for compensation. The Cabinet is already thinking of a massive loan waiver for farmers. Hence the FM will find it very difficult to exercise fiscal restraint.
But this may be the year to stand firm, even though tax collections have grown like never before. Corporate taxes grew by 40 per cent, twice of what the FM budgeted last year. Even import duty collections have grown handsomely despite lower tariff rates. Much of this is because the country has enjoyed four years of high growth, a tax machinery that is more efficient, and an ever-widening tax net. The wealth effect of the rise of the Sensex from 5,000 to 21,000 swelled the kitty too. It was after all Chidambaram who introduced the securities transaction tax that effectively linked the stock market fortunes to tax buoyancy.
But the reasons for fiscal caution lie ahead of us, not behind. Strong GDP growth in 2008-09 is not guaranteed. There is a demography induced momentum that will continue. It is reflected in the high savings rate (now at 35 per cent). But for that high savings rate to translate into high investment rate, we need corporate profitability to remain robust. This has been dented by at least two factors — a rising rupee and relatively high interest rates. The global recession-like condition, especially in the West, has clouded domestic sentiment further. Hence if corporate profits don’t rise as vigorously, then tax intake will slacken too. Another reason for caution is the Sixth Pay Commission, whose recommendations will be implemented during this financial year. The pay hikes could put the exchequer back by a full percentage of GDP. The only way that pay hike can be absorbed is by ensuring high growth (as in the previous four years).
To provide such a growth impulse, the FM would do well to consider pruning surcharge on corporate income tax, and also reduce excise taxes. The former would provide a boost to corporate sentiment and profitability; the latter would additionally help reduce inflationary pressures. Excise is a form of indirect taxation and is regressive. It also cascades — i.e. you pay tax on the tax. Even though with the Cenvat credit system, some of the distortion of excise has been curtailed, there is enough room to cut excise further. The indirect tax burden on mass consumption items like petroleum products and cement is huge. The auto sector too deserves lower indirect taxes. Excise taxes will eventually wither away, when the country shifts to a goods and services tax in 2010. The Eleventh Plan calls for increasing infrastructure spending to go up from 5 to 9 per cent of GDP. Most of this will need to come from public sector, and the incremental load on the public treasury will be significant. Hence this is one more reason to be tightfisted today.
The FM also needs to be extremely cautious in treading the slippery slope of subsidies. The fertiliser subsidy, which is the difference of price paid by farmers and the price received by producers (domestic and foreign), is going to be a whopping Rs 70,000 crore next year. This figure is fast approaching India’s entire defence budget! The rise of this subsidy is entirely due to imports. It is benefiting foreign producers, since Indian fertiliser capacity has been frozen by policy paralysis. Fertiliser feedstock being related to oil and gas industry has become very costly internationally. Further, since India is a big buyer in the international market, the prices always move adversely whenever India enters the world market. Hence there is an urgent need to increase domestic capacity drastically, and also weed out inefficient producers. Just as half the fertiliser subsidy benefits foreign or inefficient domestic producers, so also much of the food and kerosene subsidy leaks out to the non-poor. There is a serious issue of inability to target subsidies effectively. Even the self-targeting Employment Guarantee scheme is reaching only 3 per cent of intended beneficiaries in some states as per the CAG. The same question can be raised about the proposed mega-loan waiver, whose bill could run into Rs 90,000 crore. The government’s own statistics show that less than half of all farm households have access to formal credit. So the loan waiver will leave out more than half of all farmers. What then is its efficacy?
Subsidies are increasingly being pushed as obligations for future budgets, through bond financing. That way they don’t show up as this year’s deficit. But to the extent that these are non-productive non-capex items, it is best to recognise them today, and not punish future generations.
These are heady days. Cricketers getting auctioned for millions of dollars, real estate at stratospheric prices and the tax kitty brimming. But this is the time to remain sober, cut a bit of taxes and a lot of subsidies, do better targeting, think of impending pay commissions and loan waivers and maintain fiscal restraint. Chidambaram need not be as adamant as Desai, who resigned as Deputy PM since he was opposed to bank nationalisation. But surely, Chidambaram can be firm, and can keep his belt tight.
Ajit Ranade is Chief Economist, Aditya Birla Group

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Off track
Team India gets, er, ‘tough’
Ishan Chaudhuri

It could be a good strategy, but frankly, it has the hallmark of whining all over it. The Indian media — seemingly more patriotic than Subhas Chandra Bose and Mohandas Karamchand Gandhi put together — is going on and on about how the patience of the Indian cricket team, under constant verbal assault from the Aussies, is wearing thin. Meanwhile, the team itself has decided to make a screeching U-turn from the mannish moves started under Sourav Ganguly’s captaincy, taken a few steps forward by Sreesanth’s literally in-you-face aggression, and made into an iconic moment by Harbhajan Singh’s ma ki only son, Harbhajan Singh in the Australia-India Test series.
Now, with the team management ‘acting tough’ by sending off a letter to the match referee of the ongoing tri-series expressing ‘displeasure’ in the way the Aussies have been conducting themselves in the tournament, I smell a ‘Ma’am, ma’am, Ashu is saying bad words’ pre-school moment here.
Just when we were getting the idea that cricket was not only about gentlemanly behaviour but whatever it takes (under the scheme of the rules) to win, we start knocking on the door of the staff room to complain. Ishant Sharma being fined 15 per cent of his match fee for ‘showing’ Andrew Symond the Aussie dressing after dismissal in the Sydney one-dayer was apparently the provocation. Nope, says Team India. It was agent provocateur Symonds who started things by abusing Sharma.
Clearly, Symonds knows how to rile Indian cricketers and get away with it. Kudos for that. While our blokes, unclear whether their mothers are listening in on the stump mike, complain to the teacher... sorry, match referee, that the Aussies use “strong language which has gone unchecked”. Boo-hoo. Do our Babies in Blue want their Bournvita now?

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A FTER French President Nicolas Sarkozy's passionate defence of India's case for nuclear cooperation last week, the Manmohan Singh government can surely claim to have addressed an important domestic political objec- tion to its nuclear diplomacy. The Communist opposition to the Indo- US nuclear deal is rooted in the mis- perception that it was all about build- ing a new strategic partnership with Washington at the expense of India's traditional foreign policy. By mobilis- ing Russian, British and French sup- port and winning Chinese neutral- ity in an intensive round of diplo- matic effort over the last two mon- ths, the government has put the nu- clear deal with the US in perspective. All the other four permanent members of the United Nations Se- curity Council are now ready to re- sume nuclear cooperation with In- dia, but only after the Indo-US deal is implemented. The CPM and BJP are unable or unwilling to recognise one plain truth - the Indo-US nu- clear deal is the necessary first step towards ending India's nuclear iso- lation. That India had to hold back from signing negotiated agreements on nuclear cooperation with France and Russia underlines the in- escapable reality - either we get to cooperate on nuclear matters with all the countries or none. In the last few weeks, the government's big power diplomacy has also demon- strated India's enduring commit- ment to an independent foreign pol- icy. Barring the ideologically blink- ered, most Indians can see and feel the achievement of India's current foreign policy - deepening of part- nerships with all the great powers. Never before did we have positive re- lations with the US, Russia, China and Europe at the same time. Having disproved the tendentious Left thesis that India has ‘aban- doned' its independent foreign pol- icy, the prime minister must address another equally important charge. It is not always articulated openly; but there is a strong sentiment, even within the Congress party, that India has downgraded its relations with the Muslim countries in search of better ties with the US and Israel. The PM must blame himself for let- ting this misreading of his foreign policy, which has real political con- sequences at home, gain ground. He has long-pending invitations to visit the world's most important Muslim countries - including Indonesia, Saudi Arabia, Iran and our immedi- ate neighbours, Pakistan and Bangladesh. By limiting his foreign travels to multilateral conferences and the capitals of major powers, he has willy nilly undermined the sense of balance necessary for any successful foreign policy. The PM needs to quickly schedule the long-delayed tour of Saudi Arabia and other Gulf kingdoms.
The Indian Express
Faster, richer, farther
The line separating Lalu Prasad Yadav’s dreams from Railways’ fruition is politically thick. With a remarkable turnaround behind him, and one that is showing no sign of abating, the minister is firing on all engines. This year’s cash surplus (that is, dividend-unadjusted profits) is expected to cross Rs 25,000 crore, making the Railways India’s largest profit maker. The key that has unlocked the potential of Railways can be compressed into four words: low per unit cost. This strategy has allowed Lalu to lower costs, both passenger and freight, and make money from volumes. In this year’s Rail Budget, he is at it again, lowering freight rates, however marginal (and often reversible) they may be, as well as passenger fares, adjusted for inflation. In possibly his last budget, in a year that holds important state elections, we see a smarter politician behind a smart turnaround artist.
But Lalu’s bigger statement in this budget is the clear focus on public-private partnerships (PPPs), on a scale that would make investment bankers drool. Of the Rs 250,000 crore investment in the 11th Plan, Lalu hopes to attract Rs 100,000 crore through PPPs. Inspired perhaps by the privatisation of airports at Delhi, Mumbai, Bangalore, Hyderabad and Kochi, Railways hopes to provide world-class facilities at railway stations of New Delhi, Mumbai, Patna and Secunderabad, through global competitive bidding. Private entrepreneurs would also be invited for PPPs in setting up diesel and electric locomotives and rail coach factories. The Rail Land Development Authority, an organisation we thought had turned defunct, would raise Rs 4,000 crore by making commercial use of Railways land. All told, 25 per cent of the Rs 100,000 crore PPPs would happen in 2008-09. And hopefully, as Lalu informed Parliament, work on Eastern and Western freight corridors should begin. Meanwhile, Indian Railways Finance Corporation is expected to raise Rs 6,907 crore from the market to part-finance the plan outlay of the Railways in 2008-09; beyond the budget, the RITES IPO is likely to hit the market this year.
This is welcome. The fact is that the 150-year-old infrastructure of Indian Railways is bursting at the seams. New lines need to be laid, high-speed trains that move at tomorrow’s speeds of 320 kmph not today’s 60-70 kmph need to be introduced. In other words, the Rs 72,755 crore rail transport monopoly that’s beginning to move fast, serving and riding a fast growing economy, needs to look beyond productivity jumps and see how it can be a mass transporter of the 21st century. While major political scheming in the form of minor concessions to elderly, women, servicemen, students, coolies and gangmen may create and strengthen constituencies, it is infrastructure development at a furious pace that will finally deliver the economic goods. Having said that, all this should be readily gleaned from a statement of accounts of Railways. Presentation of a budget for the sector with due parliamentary fanfare is just too archaic a tradition.

I DEOLOGY NEVER proved to be a barrier in our friendship. We were three old friends and though we sparred once in a while, there were never any serious trou- ble. While 'M' was a staunch Marx- ist, 'R' was an avid follower of Ayn Rand, and I was a staunch Gandhi- an. My Marxist friend was a vora- cious reader. His knowledge of his- tory and philosophy never failed to amaze me and 'R' and 'M's' inter- est in fiction was much beyond the regular ones. Russian author An- ton Chekhov was his favourite, so was Salman Rushdie and Rohinton Mistry Poets Faiz and Sahir Ludhi- anvi also attracted him. 'M' was a poet too and not too bad at that I remember that evening vividly when a regular discussion led to major fire- works. We were dis- cussmg Marx and my friend was givmg me an ab- sorbing dis- course on the ideology He could have carried on for a while but 'R' interrupted him. "Marxism is no cure and Communism creates a totalitarian State. Only the gospel of Rand will lead us to salvation," he said. The Marxist replied in stronger words and much to my chagrin the de- bate took an ugly turn. I tried my best to convince them that both Marx and Rand had talked about liberating man, but in their own ways. I added: "The Mahatma's ideology of non-violence is perhaps the only way to achieve it, provided we show the courage to remain un- deterred from the path shown by the apostle of peace". As the deci- bels rose, the restaurant owner gen- tly encouraged us to head home. Quickly heeding to his advice, the Marxist bid us goodbye to catch the last train home. The other friend too left in a hurry And, I was left to pick up the restaurant tab . The price of Gandhigiri, you see!
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After the fatwa
With his dark essay on the ‘murderous ideology’ of Islamism, The Age of Horrorism, novelist Martin Amis horrified many liberals and voiced the corrosive, culturally blinkered argument that casts all Islam as a totalitarian cult — “Like fundamentalist Judaism and medieval Christianity, Islam is totalist. That is to say, it makes a total claim on the individual. Indeed, there is no individual; there is only the umma — the community of believers.
Islam follows you everywhere, into the kitchen, into the bedroom, into the bathroom, and beyond death into eternity. Islam means ‘submission’ — the surrender of independence of mind. That surrender now bears the weight of well over 60 generations, and 14 centuries.”
The Darul Uloom’s statements in Deoband opposed exactly this brand of illogic, condemning terrorism as well as the easy conflation of Islam and terrorist activity. The Deoband seminary is heavy with history and association, though undermined by the crank fundamentalist groups (including the Taliban) that claim ideological descent from Deobandi syllabi. Though all Deobandi movements stress utter adherence to the textual standards set by Hanafi tradition and are “illiberal” in that sense, they are vastly different from what Amis tars as “Islamist”. As Barbara Metcalfe has written, politics is an empty box for Deobandi movements, filled expediently with what is best in a given situation — and they work best in secular regimes that give them the autonomy to prescribe “correct practice”. And this statement fits right into their policy of pragmatic response, protecting their flock and highlighting Islam’s concept of peace, in this current climate of suspicion and hostility, and the spiralling alienation of Muslims worldwide.
But the more heartening reading is that unlike Amis’s claim of Islam’s cold immutability, this statement also reflects the ongoing contests among the ulema, the way Muslim scholars have attempted to engage with and accommodate democratic values within the framework of Islamic law. And now it’s up to them to hold the faithful to it.
Deoband has called upon itself a standard of engagement with modern democracy it will have to strive to match.

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The Indian Express
As easy as Kosovo
Pratap Bhanu Mehta
It is difficult to shake off the feeling that the birth of Kosovo is really the culmination of a series of old and unhealthy trends in global politics. Major powers of Europe seem to relish the fact that for the first time a small Muslim majority state has been carved out in Europe, thus testifying to Europe’s progress. But the truth is that the birth of Kosovo is also a profound testament of the failure of the nation state form in Europe to accommodate ethnic diversity. As Michael Mann, in an important article on the “Dark Side of Democracy” had noted, modern European history has built in an irrevocable drive towards ethnic homogenisation within the nation state.
In the 19th century, there was a memorable debate between John Stuart Mill and Lord Acton. John Stuart Mill had argued, in a text that was to become the bible for separatists all over, including Jinnah and Savarkar, that democracy functions best in a mono-ethnic societies. Lord Acton had replied that a consequence of this belief would be bloodletting and migration on an unprecedented scale; it was more important to secure liberal protections than link ethnicity to democracy. It was this link that Woodrow Wilson elevated to a simple-minded defence of self-determination. The result, as Mann demonstrated with great empirical rigour, was that European nation states, 150 years later, were far more ethnically homogenous than they were in the 19th century; most EU countries were more than 85 per cent mono-ethnic.
Most of this homogeneity was produced by horrendous violence, of which Milosevic’s marauding henchmen were only the latest incarnation. This homogeneity was complicated somewhat by migration from some former colonies. But very few nation states in Europe remained zones where indigenous multi-ethnicity could be accommodated. It is not an accident that states in Europe that still face the challenge of accommodating territorially concentrated multi-ethnicity are most worried about the Kosovo precedent. The EU is an extraordinary experiment in creating a new form of governance; but Europe’s failures with multi-ethnicity may yet be a harbinger of things to come. Kosovo acts as a profound reminder of the failure of the nation state in Europe.
Kosovo also sets a dangerous precedent in international law. A unilateral declaration of independence has been recognised without an appropriate form of institutional mediation; every unsavoury separatist is gloating. Milosevic represented barbarism of the highest order and that history has a profound bearing on Kosovo’s claims. But it should be a matter of some regret that a democratic post-Milosevic government was not given opportunity to find a workable and just solution. Indeed, there is more than ample evidence that the way in which the major powers like the US framed the issue, there was little prospect of any accommodation between the Serbs and Kosovars. For it appears that any solution short of independence was ruled out right from the start. The assurance that the US and major European powers would back independence surely would have altered the structure of internal negotiations.
Europe may think it is expiating guilt over its mishandling of Bosnia. Some even suggest that it might win brownie points by being seen to facilitate the creation of a small Muslim majority state. How this turns out remains to be seen. But the truth is that US and European support for Kosovo’s independence in this form is nothing but unprincipled and opportunistic. It is unprincipled because there is no way of distinguishing the Kosovo case from dozens other cases that could be subject to similar treatment. When Europe and the US try and assure countries struggling with the challenge of accommodating multi-ethnicity that this is simply a one-off case, what do they mean? Since when has a “one-off” instance become a principle of international law? All that it can possibly mean is that we, the US and three powers in Europe, decide what case is fitting for recognition — world opinion, international law or a prudent analysis of consequences be damned. In some ways the Kosovo crisis is yet another reminder of how the major powers have broken the back of the global governance system, and ad hoc power is filling the vacuum.
Vladimir Putin is, by no stretch of the imagination, a savoury character. But there is something extraordinary about the extent to which the West is going all out to humiliate Russia and marginalising it from the world system. It is true that if genocide is an imminent possibility, the sensitivities of one or other great power will have to be ignored. And the Russians, it could be argued, have no locus standi in the matter. But the same could be argued for the US in most parts of the world. With what locus standi does the US counsel restraint to Taiwanese who want to declare independence? (It may not be a wise move, but Taiwan’s case is probably stronger than Kosovo’s.) But under current arrangements, with Kosovo already under European protection, that was hardly the case. Yet the blatant disregard for Russian sensitivities has become part of an unhealthy Western engagement with Russia. Indeed, as commentators have pointed out, there is marked asymmetry between the way in which the West treats Russia and China. On this view Russia is to be contained and restrained at all costs; while China is to be accommodated as far as possible. The truth is that Russia is a sulking great power, and if the West, in its profound arrogance, does not give Russia its due space, it is setting the world up for a great deal of mischief. Nothing is more dangerous to the world system than a former great power being humiliated. Even after 1999, the West took some steps to placate Russia on Kosovo; it will need to do the same.
And India has been again caught in a familiar foreign policy stance: pusillanimous napping. It is not in India’s interest, for peace in the subcontinent, that the Kosovo precedent be recognised in the form it has. Make no mistake: this precedent has all kinds of unsavoury implications for the subcontinent. It is absolutely extraordinary that India has taken so long to respond to an event of such importance. Whether this is sheer indecision, or yet another instance where we dare not openly come out against the Americans, remains to be determined. But even if we resign ourselves to the birth of a new nation, we ought to worry about the manner in which it has been engineered.
The writer is president, Centre for Policy Research

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How to hedge against a slowdown
Subhomoy Bhattacharjee
Let's be clear at the outset — the Indian economy is not slipping into recession. Instead, after accelerating for three years since 2004-05 from 7.5 per cent to reach 9.4 per cent in 2006-07, the growth of the gross domestic product has slowed just a bit to 8.7 per cent this year. That still makes India the second fastest growing economy in the world. Not bad at all. Just seven years ago, in 2001-02, GDP grew at 5.8 per cent.
This kind of growth has never been achieved by India in the past but it is quite possible to sustain it into the future. Going into the new fiscal year, the factors that sustained this growth rate are still strong. These are high rates of domestic savings and investment, strong corporate performance and, based on those, a high tax mop-up which has turned around the finances of state and Central governments. The last is particularly important as this means the government does not have to dip into the citizen’s pockets as taxes to pay for its own existence.
In that case, why is the economy showing signs of a pause? Because, the government is unwilling to make some changes, that would give business the additional wind to push ahead.
This is the biggest downside risk that the Indian economy faces. Alan Greenspan, former governor of the US Federal Reserve, said at a recent seminar in New York that the only reason why the US economy was still not in recession was the muscle built up by US business in the long period of growth post-9/11. The implication is, without that muscle, the recession would have already been a full gale.
Looking at the Indian economy at an inflection point, it is clear that in the last few years business in some sectors has not built up those muscles. A big reason is government inaction. Describing the phenomenon, the economic advisory council of the prime minister says: “There are some downside risks that can stem from not being able to take much needed decisions.” Among them, it lists the reluctance to change prices in fuel sector and absence of a long-term fertiliser policy. Not changing the prices has not helped the people. In this fiscal the government has issued bonds as off-budget liability of over Rs 1,00,000 crore on these two counts. We will pay for them later as taxes, when the government redeems the bonds. Meanwhile, the oil marketing companies will bleed, since they are short of the cash they need to invest in improving their network. Since they cannot stretch their networks further, the queues for LPG cylinders in cities and for kerosene in villages have begun to lengthen.
The same holds true for fertilisers. The last time prices were revised for urea was in 2002. Since then, costs have multiplied and therefore supply has dwindled. Subsidised fertilisers have not pushed production of grains. Instead banning futures trade in commodity exchanges for all grains has taken away farmers’ ability to gauge the real price of their produce. The simultaneous curbs on the development of organised retail in foodgrains and vegetables have only reinforced the role of middlemen in the market, at the expense of farmers.
The other area of concern is, of course, power. In 2007-08, the economy has added record generation capacity but that is just nowhere near what is required to feed a 9 per cent GDP growth rate. So every industry is resorting to power back-up, which is very expensive, and drives up costs all round. The power tale is of course the biggest soap opera that has been on in the Indian economy for as long as anyone cares to remember.
But in a downturn, the plot can very quickly turn cruel. Acceleration in the growth rate, just like a speeding car, makes the discomfort of potholes fleeting. The bumps appear more acute and wearying when there is even a slight slowdown, like now. These bumps are the impact of the sharp spike in interest rates on auto loans and consumer durables. Consumers are disappearing from the show rooms. The impact on the industrial sector has been felt in the metals sector. The December IIP figures show the trend very clearly. Industrial activity has weakened very sharply in construction too. The only two sectors which have bucked the trend are basic chemicals and machinery plus equipment. The latter has been holding up, as spending on infrastructure has risen in some sectors.
So the growth rate in the industrial sector is now poised pretty delicately in some sectors. The industrial sector therefore needs the support of the government not for tax breaks but to think through the right combination of policies to make consumers return to their buying ways. The alternative of a pay commission to put some cash in the pockets of government employees would not work. The upshot is, the economy could log less than an 8 per cent rate of growth of GDP in 2008-09.
But of course that would immediately remove the need for the government to be apologetic about the accelerating growth rate. Much as the Indian cricket team plays well only under pressure, the environment of slowdown would give the government the justification to carry through changes in the policy regime to prepare businesses to take advantage of the next burst of a favourable wind.
The writer is resident editor, Delhi, ‘The Financial Express’ subhomoy.

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Print Line
Apology in Balochistan
The apology made by the Pakistan Peoples Party on behalf of all Pakistani people to the people of Balochistan marks an important break with the past. In the first place, the strongly-worded resolution makes no bones about conceding that “atrocities and injustices” have been committed and as such, by accepting wrong, provides some hope that a new relationship with Pakistan’s largest, but most sparsely populated, province can indeed be built. Till now, the insistence from the centre that armed action in Balochistan is directed against “miscreants” or those who “threaten national security” has acted only to fuel deeper anger and distance from what is perceived as a Punjabi-dominated establishment. Indeed, even while unrest and armed conflict persists in parts of Balochistan, a huge effort — involving media suppression — has been used to portray a false image of calm.
Of course, in the days ahead, the PPP will need to deliver on its pledge of embarking on a new road to peace in Balochistan. One hopes that for this purpose the leaders of the party are genuinely committed to what will inevitably be a slow process ... Mistrust and apprehensions created over decades of animosity and aggravated by recent acts that include the murder of leaders such as Nawab Akbar Bugti and Balaach Marri, cannot vanish in days, weeks or even months...
In this respect, it is obvious the policies of the past have failed...until people are given a genuine say in what kind of change and progress they want in their province, there will be little improvement... It is essential that benefits from these are offered to Balochistan’s people and their rights considered ahead of tribal chiefs, who despite being linked closely to the Baloch nationalist cause are in many cases the worst oppressors of their people.
From an editorial in ‘The News’, Karachi

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Chugging along nicely

The Railway Budget has, by some strange quirk of history, found exaggerated importance in Parliament. The Railways constitutes only a single percentage point of India’s GDP, but the way it does so—veering from clarity to jumblehood and perhaps to clarity again—has been a subject of more than mere academic interest. This is all the more so because this intricate network has defied impossible odds, lately, to record a turnaround under Railway Minister Lalu Prasad. It has even managed to reshape its fender-grille as an effective track-clearer as it chugs its confident way into the 21st century.
On Tuesday, Lalu Prasad had his moments of joy, playing to the gallery. There were enough fare cuts to go around, winning him approval from far beyond the treasury benches. This generosity was enabled, of course, by the Railways’ financial performance, which has bounced back so strongly that the entire Indian public sector seems to be basking in the possibilities of state-ownership in perpetuity. In recent years, the Railways has been one of the very few government fields of operation that has maintained its share of GDP, even as the role of the overall public sector has rapidly shrunk. The dynamism of the railway minister has had something to do with this, especially in empowering the rail bureaucracy to throw out some dog-eared operating manuals to suit the ministry’s expansionary objectives. This business-like pragmatism set into motion a chain of commands that led to several constraints being re-examined and done away with. In all, there has been a renewed focus on boosting earnings, and the results have indeed exceeded the expectations of even the most diehard optimists. The “cash surplus” before dividend, as announced, for 2007-08: Rs 25,065 crore.
The economic boom, and the momentum generated by it, deserves a big thank-you note, of course. As for lingering doubts about the sustainability of the performance and its vulnerability to cyclical trends in the economy, 2007-08 was a good test year. Both GDP and exports showed mild slowdowns, and the Railways’ upper-end passenger market was seized upon by aggressive competition from no-frills air carriers offering discount fares galore. From the 2007-08 figures presented by the railway minister, it is clear that pessimists have been a bit too harsh about the fragility of the turnaround. The slowdown has not affected railway finances so far. The budget estimates have been bettered on several counts other than the cash surplus.
Yet, the engine could still lose steam in 2008-09, going by emerging trends. Look at 2007-08’s numbers a little more closely. While both freight volumes and passenger numbers exceeded budget projections, things did not go exactly as planned. In fact, the specific targets set for many of the bulk goods (the big earners) went widely off the mark. This was mainly because of unrealistic freight pricing and budgetary expectations. In such cases as iron ore, the frequency of rate changes was surreal, to say the least. Anyhow, while the carriage of coal met budget projections, that of raw materials to steel plants, foodgrain, fertilisers and cement missed targets. But the gains from the larger than anticipated pickup in pig iron, finished steel and export iron ore freight more than made up for this. Similarly, passenger earnings were boosted by the growth of the non-suburban segment—which grew faster than expected—even as the larger suburban segment fell marginally below budget targets.
In all, the going has been good. Take away depreciation and the interest earned on railway funds, and the operating surplus for 2007-08 is Rs 13,534 crore. This is about Rs 2,000 crore more than the budget projections for the year, and offers us a look at the operating ratio. This is the proportion of revenues absorbed by expenses, and has come down to 76.3%, which is 3.3 percentage points below the budget projections for the year and the best in the last four decades. However, this ratio is projected to rise to 81.4% in 2008-09. This will signify the first reversal in a steadily improving trend in over eight years. By projections, the increase in volume of freight and passengers has been largely left at the same levels as the previous year, and growth of earnings from traffic is projected to fall marginally. This, together with the ad hoc provision of Rs 5,000 crore to meet Pay Commission recommendations, will reduce the surplus in 2008-09—for the first time under Lalu Prasad—by about Rs 2,000 crore.
The big question, at the end, is the public sector’s sense of self-perpetuation. While Indian Railways has done well, this should not be taken as fuel for fantasies of public sector predominance in the economy for decades to come. It is reassuring that the ministry is looking towards private investment to make the breakthroughs it now needs. In fact, the most exciting figure is the Rs 1,00,000 crore target for public private partnerships over the next five years. Realism must reign.

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Indian Railways as a global player
Rajiv Kumar

Indian Railways is on a roll. The minister justifiably started his budget speech with the announcement of a cash surplus before dividends of Rs 25,000 crore in 2007-08, compared to Rs 20,000 crore in 2006-07. Over the last five years, a total surplus of more than Rs 65,000 crore has been generated. This is quite a turnaround from a situation not long ago where it was unable to even declare a dividend. Not surprisingly, the railways and its minister have become case study in international management schools. Without wishing to take anything away from this splendid achievement, I do wish to point out that the growth in earnings in 2007-08 of both goods and passenger segments were 14%, just in line with the economy’s nominal growth rate. This is not, then, an exceptional performance. Merely that it is started keeping up with the rest of the economy at last. Good, but hardly anything to be complacent about. This implies that despite its good showing, the Railways has perhaps been unable to increase its share in total goods and passenger traffic. It would have, therefore, been better if the railway minister had given us an indication of performance vis-à-vis other means of transport (like road and civil aviation). It is important both from an economic and ecological standpoint to ensure that rail traffic increases its share of overall traffic in India.
Given that passenger traffic continues to be cross-subsidised from revenue generated by goods traffic, there seems to be little justification for the reduction in passenger fares that has been undertaken annually. We cannot quarrel very much with a reduction of Re 1 per passenger for fares upto Rs 50. However, the reduction in AC First Class and AC Second Class fares and a 5% discount across-the-board for Second Class passenger fares above Rs 50 can hardly be justified. The objective of attracting more passengers from low-cost airlines could have been achieved by speeding up trains further, as time is the crucial element for weaning passengers away from air travel. This has become amply clear from the European experience, where the French TGV and the Franco-British/Eurostar have eaten into the airline traffic primarily by reducing travel time.
The reduction in freight charges, nominally by 5% in case of petrol and diesel and higher for fly ash and incremental traffic booked from good sheds and private sidings, is welcome, however. This will reduce industry costs and make Indian producers more competitive. The 6% concession on traffic booked for stations in northeast India is a symbolic gesture that nonetheless is welcome.
This is indeed a popular (populist?) budget, but even here, the tenfold increase in the per capita contribution to the railways’ staff benefit fund is a real surprise. A number of concessions were announced perhaps to enhance the minister’s electoral appeal. These include free monthly season tickets for girl students upto graduation and boy students upto 12th standard; 50% concession for lady senior citizens, increased from 30%; concession to Ashok Chakra awardees along with the existing winners of military valour awards; 50% concession to Aids-affected persons; and the running of a Mother-Child Health Express in collaboration with Rajiv Gandhi Foundation!
While one cannot question the minister’s right to award these handouts, in light of the surpluses being generated, it may have surely been better to allocate greater funds to capital investment for modernising and upgrading railway infrastructure. This is necessary because the Indian Railways, though a matter of pride, lags badly behind its counterparts in several parts of the world.
In this context, it is reassuring to hear that construction work on both the western and eastern dedicated freight corridors will commence in 2008-09. It is my hope that similar high-speed corridors both for passenger and freight traffic will be considered for other regions as well. The investment of about Rs 75,000 crore over the next seven years to augment line capacity on high-density traffic lanes is commendable. However, I am a bit disappointed at the inclusion of both the eastern and western corridors within this allocation. This would actually imply that only an additional Rs 15,000 crore will be spent on other projects over seven years. This is not going to be enough to upgrade and modernise capacities on these high-density routes.
Indian Railways represents one of the country’s greatest competitive strengths. The combined network of goods and passenger services, production facilities for locomotives and rolling stock, and all the other related services constitute a system which is perhaps unique in the world. Given its present size and its expected double-digit growth for the foreseeable future, Indian Railways and its allied sectors can emerge as a globally leading sector for India.
It is, therefore, important that the government focuses more attention on technological development and modernisation so that the benefits can be fully exploited. It is time now to set our sights on the global railway market!
The author is director & chief executive of Icrier, a Delhi-based thinktank, and member of India’s National Security Advisory Board

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The Financial Express
When in doubt, cut out

Tamil Nadu politics is as Machiavellian as ever. Judge by Chief Minister M Karunanidhi’s latest diatribe. Without warning, he made an outburst against the “cut-out culture” that’s rampant among political parties in the state. The CM's outburst had its desired effect. Civic bodies instantly started pulling down unauthorised cut-outs all over the landscape, even issuing ban orders against the practice. The CM’s motivation, however, became clear only once his archrival and AIADMK supremo
J Jayalalithaa announced her 60th birthday. Amma loyalists had to scurry around for other means to mark the auspicious day. But what about the giant cut-outs erected across the state for the CM’s son’s birthday a few months ago?

Cable wars
Dayanidhi Maran has been lying low, minding his own family business, after his unceremonious ouster from the Union Cabinet, precipitated by a rift with his grand-uncle and DMK chief M Karunanidhi. The family business, however, happens to be mass media. Just the other day, Maran had to make a beeline to the Chennai police to lodge a complaint against a rival cable network allegedly arm-twisting franchisees of Maran-controlled SCV to switch allegiance. The stakes, clearly, are high. Visual dominance has always held sway in the state, and cable TV wars are common in the grand political fight to control popular opinion.

Cyclone Naidu
Telugu Desam leader Chandrababu Naidu is under attack from the Congress in Andhra Pradesh. The ruling party has blamed Naidu’s whirlwind tour of a particular district for the crop-destroying torrential rains that occurred soon after. The former chief minister had dubbed his tour an “onset of monsoons”. Last heard, Andhra Pradesh’s dry districts were eagerly awaiting his visit.

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Passengers as priority
RC Acharya
Once again Lalu Prasad has spared railway passengers a fare hike. On the contrary, he has carried out token reductions and opted for the annual ritual of tweaking freight rates to squeeze out an extra rupee wherever he could. For once, he has refrained from promising the moon, and avoided mentioning the word “high speed” for passenger trains, restricting his list of goodies to more mundane things such as passenger amenities.
Bullet trains hurtling through the vast Indian countryside have been promised by almost every worthy occupant of the high office in Rail Bhavan for the last decade, and the incumbent minister has been realistic here, given the vast financial resources needed for even a short stretch of 492 km from Mumbai to Ahmedabad (which has been on the cards for a while).
For a billion plus population, over 8,000 passenger trains being run daily is still not enough, and every railway minister adds another hundred or so every year. Lalu Prasad has done just that, though his promise of terminating long queues at booking offices is something he should be held to. Ticket counters are being upped from the present 3,000 to 15,000 over the next two years. Also, with e-tickets expected to increase from the present one lakh to three lakh in one year, the minister has decided to allow even waitlisted passengers to avail of this facility. He also exploring the possibility of issuing reserved and unreserved tickets through mobile phone networks.
‘Go Mumbai’ cards for harried commuters of that metropolis, enabling cardholders to travel by either bus or rail—on the London transport model—will also be on trial, and should offer welcome relief. Delhi Metro Rail Corporation had also been toying with this idea, but lack of any interest on the part of Delhi Transport Corporation has not made it functional. ‘Go Mumbai’ cards may meet the same fate if Best refuses to play ball.
Other good initiatives include enhancing the capacity of railway enquiry call centres, which have been receiving about two lakh calls daily, to prepare for five lakh daily in a year’s time. The minister also proposes to link all these call centres with control rooms which keep track of trains, and thus create a National Train Enquiry System.
Online display boards on coaches, indicating the likely time of reaching a destination and name of the current station etcetera, are also a good idea. But with the punctuality of passenger trains still abysmally low, with practically every train reaching its destination a couple of hours late, such visual finesse may quickly lose its charm.
Discharge-free green toilets, introduced for the first time in India with the induction of LHB coaches a few years ago, have been long overdue, and at a cost of about Rs 3 lakh per coach, they should keep Indian railway tracks and stations relatively clean. However, getting the logistical details of this operation right would be vital.
Stainless steel had been introduced for ICF coach underframes almost a decade ago, and its use was extended with the induction of LHB coaches a few years ago. A large-scale changeover to stainless steel bodies—even at higher cost—would be a worthwhile measure, increasing the coaches’ life and enhancing their appearance.
At the popular level, the show was stolen by Lalu Prasad’s list of passenger amenities, with the minister going the whole hog to please train travellers: modular toilets, better public address systems in passenger coaches, platform shelters, foot-over bridges and escalators were some of the new provisions. Escalators, specifically, will help keep travel fatigue low, a factor Indian Railways has rarely bothered with, and hopefully encourage people to travel light. Of course, breakdowns could lead to still greater fatigue, and the grumbles could grow.
In terms of capacity additions, people would look forward to 24-coach trains, and the conversion of metre-gauge routes to broadgauge.
Lalu Prasad has left his stamp on Indian Railways, no doubt. But “Safety, Security and Punctuality”, the slogan in use around a decade ago, has not found favour with the minister, who studiously avoids the vital subject of punctuality of passenger trains. Perhaps he knows something we don’t.
The author is a former member of the Railway Board. These are his personal views

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The Hindu
Well done, Railways

For the fifth consecutive year, Railway Minister Lalu Prasad has succeeded in presenting a budget that not only does not raise fares and freight charges but actually lowers most passenger fares and the freight on inflation-sensitive goods. With the economy on a roll and the Indian Railways maintaining its competitive edge, Mr. Prasad has been able to sustain the growth momentum, projecting a freight loading of 790 million tonnes this year. He has reported a cash surplus of Rs.25,000 crore, the highest ever, which he boasted “makes us better than most of the Fortune 500 companies in the world.” What makes this performance even more commendable is the fact that the Railways has managed easily to digest the additional input costs, especially the increase in diesel prices, over the past few years. At least in freight movement, the ‘dynamic fare’ system, which raises the charges by 6 to 7 per cent during the ‘peak season’ that lasts nine months in a year, has taken care of these costs. It is on the passenger front that the productivity improvement comes through strongly: despite the frozen fares, there was a 14 per cent increase in earnings.
The highlight of the 2008-09 budget is the Plan outlay itself. Quite remarkably, the Railways has managed to secure a Rs.37,500 crore plan for the year ahead, marking a 21 per cent increase over 2007-08. With just Rs.7,874 crore coming from the general revenues of the Central government and another Rs.774 crore from the Central Road Fund, 79 per cent of this Plan will be funded through internal and external budgetary resources. The concessions to passengers include a 5 per cent reduction in second-class fares and (partly to compete with dropping air fares) a 2 to 7 per cent lowering of fares for air-conditioned sleeper coaches ranging from three-tier to first class. The railway fare concession for senior women citizens has been raised from 30 to 50 per cent and girls and young women will be eligible for free season passes on suburban trains until they graduate. The Minister has promised a Vision 2025 document in six months, and a massive scheme for ‘Green toilets’ in all coaches. The rationalisation of the freight structure has been completed, with a 5 per cent reduction in the rates for petrol and diesel. Where Mr. Prasad needs to do better is to get a strong focus on safety: the scheme to man unmanned level crossings with gangmen must be implemented speedily. As a more intensive use of the tracks means faster wear, renewals, gauge conversion, and doubling should get top priority. The unmet demand for route extensions and complaints of discrimination against some States, notably in the north-east, need to be responded to positively. Overall, the Railway budget tries to harness the growth momentum in the economy and sustain its own growth in both freight and passenger traffic with services that compete well in the market. The bottom line is it has shared the profits with its customers and passengers.

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The Hindu
Misplaced priorities

The Stockholm International Peace Research Institute (SIPRI) has estimated the World military expenditure in 2006 to be $1204 billion , which is 3.5 per cent more than in 2005. The United Nations compared these figures with the amount spent on peacekeeping and estimated that such collective security spending was only half of one per cent. If this raises issues of continued piling up of arms, a comparison with social spending required to achieve millennium development goals compels a rethinking on priorities. In the World Bank’s reckoning, countries need to spend about $40 to 60 billion a year, which is four to five per cent of global military expenditure, if those goals are to be reached by 2015.
The Human Development Report 2005 has it that $4 billion is all that is needed to finance basic health projects. Similarly, eliminating starvation, getting rid of homelessness, and achieving total literacy require relatively small outlays that appear eminently attainable. But funds are not to come by easily. Rich countries spend $10 on military budgets for every dollar invested in aid, according to the HDR. Military expenditure incurred for the basic security of a nation is understandable, but it is the ambitious geopolitical policies and the quest for global or regional dominance that have often stretched the military expenditure of rich countries. This curtails the scope for increased assistance. The U.S. military budget is a case in point. Studies show that even countries with poor human development indicators tend to spend more on their military and arms than on social development. The HDR 2006 notes that Ethiopia spends 10 times more on its military budget than on its water and sanitation budget. India spends about eight times and Pakistan 47 times. The U.N. recommends that a minimum of one per cent of the GDP should be spent on water and sanitation. On the ground, some countries seem to spend only half of it. It is disconcerting to find that only one of the eight world regional groups is on track to achieve all the millennium development goals. Even a fractional cut in global military expenditure by both the industrial and the developing countries and a corresponding step-up in development funding could help achieve the much-desired quality of life the world over.

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The Hindu
Leader Page Articles
An explosion on the road to peace
Will the dialogue process on Jammu and Kashmir survive the new political order in Pakistan?
Praveen Swami

Back in October 2007, when Pervez Musharraf was re-elected President of Pakistan, supporters of the secessionist leader, Mirwaiz Umar Farooq, burst on to the streets of downtown Srinagar, setting off firecrackers in a demonstration of their support for the General. In their imagination, a historic peace — and the enthronement of the Srinagar cleric as Jammu and Kashmir’s ruler — was just round the corner.
Now, the fantasy has exploded. Last month, when Pakistan’s voters chose to blow the former General off the political centre stage, Jammu and Kashmir was far from their minds. But the shock waves set off by the elections have profound consequences for India-Pakistan dialogue on the region which has been the cause of four wars between the neighbours — and a key factor in the fifth.
Most Jammu and Kashmir secessionists — barring gleeful Islamists hostile to Gen. Musharraf — have been silent on the events in Pakistan, too shocked to offer meaningful comment. So, too, has India’s Jammu and Kashmir policy establishment, which betted on status quo in Pakistan. No one is quite certain where the dialogue process on Jammu and Kashmir might go from here but this much is certain: the parties need to move fast if it is to be saved.
Contained in a set of unsigned notes exchanged between two retired diplomats who have been meeting in secret since 2005 is a roadmap for peace. During their meetings, Prime Minister Manmohan Singh’s envoy, S.K. Lambah, and his Pakistani counterpart, Tariq Aziz, arrived at five points of convergence.
First, insiders involved in the dialogue told The Hindu, the two men agreed that there would be no redrawing of the Line of Control. However, they agreed that minor readjustments were needed to rationalise access to both Indian and Pakistani forward positions.
Secondly, Mr. Aziz and Mr. Lambah exchanged extensive notes on greater autonomy for both sides of Jammu and Kashmir. While they accepted that the process would encompass the entire region, they agreed that local conditions made it difficult to impose symmetrical arrangements on both sides of the LoC. Pakistan, for example, said it needed time to arrive at a consensus on the political future of the Northern Areas. India’s proposals, for their part, closely resembled PDP leader and Jammu and Kashmir Deputy Chief Minster’s proposals for devolving power to regional and sub-regional elected bodies. However, they fell well short of the National Conference’s calls for the restoration of the pre-1953 status of Jammu and Kashmir, which would remove it from the jurisdiction of the Supreme Court and the Election Commission.
Thirdly, a half-way house was arrived at on Gen. Musharraf’s calls for the demilitarisation of Jammu and Kashmir — a position backed by the People’s Democratic Party. India committed itself to reducing troops as the activities of Pakistan-backed jihadist groups scaled down, a process that has been in place since 2005 when India replaced troops in urban areas with police. Despite the Aziz-Lambah dialogue having been placed on hold, forward movements on troop cuts continue. For example, elements of the Rajouri-based 27 Mountain Division are currently being moved to their base station in Kalimpong, along with their organic artillery assets.
Fourthly, Mr. Aziz and Mr. Lambah discussed Gen. Musharraf’s calls for “joint management” of the region at length. India insisted that the phrase suggested a dilution of sovereignty, which it would not countenance. In its place, Mr. Lambah pushed for the cooperative management of mutually-valuable resources such as watersheds, forests and glaciers.
Last, both sides agreed that, in practice, the border between the two sides of Jammu and Kashmir would be open, allowing for free movement of people and goods.
Did these areas of agreement constitute a final settlement? No. On important issues of timing, sequence and nuts-and-bolts implementation — not the least, the transformation of the LoC into a border — considerable work lay ahead. Nor had the principals — Prime Minister Manmohan Singh and Gen. Musharraf — even begun to sell the five agreed principles to sceptical political allies and the electorate.
But the fact is that agreed principles were in place, a major step forward. Enthusiasts began believing that the rest were just petty matters of detail. “I think the agenda is pretty much set,” Mirwaiz Farooq told an interviewer in April last year, based on his discussions with Mr. Aziz in Dubai. “It is September 2007,” he said, “that India and Pakistan are looking at in terms of announcing something on Kashmir.” As that deadline approached, rumours of an early election — a precursor to putting an Assembly in place to endorse the India-Pakistan deal — proliferated.
No agreement, insiders say, was announced because events overtook the dialogue. Under siege in Pakistan, Gen. Musharraf simply could not push major concessions past his political adversaries, Islamist or otherwise. Mr. Aziz asked Mr. Lambah for more time, during which both sides hoped the crisis in Pakistan would pass.

Looking to the future
Will last year’s peace-deal-that-wasn’t be just one more in a long series of failed dialogues on Jammu and Kashmir? Eminent columnist Prem Shankar Jha suggested as much in December 2007, when he argued that had “the two governments announced the pact in March or April, the history of the subcontinent might well have taken a bright turn.” Mr. Jha’s prognosis seems well founded. While both former Prime Minister Nawaz Sharif and the Pakistan People’s Party chief Asif Zardari are known to favour peace with India, it is unclear if they will have the authority needed to push through a potentially divisive peace deal on Jammu and Kashmir.
Another obstacle could lie in the post-Musharraf Pakistan military establishment. Unlike Gen. Musharraf, Pakistan army chief Ashfaq Kayani sees himself as a military professional — not a visionary leader whose manifest destiny it is to transform Pakistan. During his tenure as chief of the Inter-Services Intelligence Directorate, Gen. Kayani had overall command over offensive covert operations against India. As Chief of Army Staff, he has done nothing to buck the ISI-led consensus that jihad must not be abandoned as a policy tool.
Nor does the politics of Mirwaiz Farooq’s APHC give reason for optimism. Despite its stated commitment to dialogue, elements within the secessionist coalition seem determined to reach out to anti-negotiation Islamists. Last month, for example, one-time secessionist heavyweight Shabbir Shah chose to deliver an address to the Jamaat-ud-Dawa — an organisation widely recognised as the parent body of the internationally-proscribed Lashkar-e-Taiba. Shah later said he was “obliged to the Jamaat-ud-Dawa for giving me this opportunity.”
While the Jamaat-ud-Dawa claims it has no links to the Lashkar, its leaders make no secret of their politics. Last year, at a February 5 function in Lahore, Lashkar chief Hafiz Muhammed Saeed declared that the “jihad in Kashmir will end when all the Hindus will be destroyed in India.” And soon after Shah delivered his talk to the Jamaat-ud-Dawa, Lashkar commander Nasr Javed told the audience that the “jihad will spread from Kashmir to other parts of India [and] Muslims will be ruling India again.”
Signs also exist that Pakistan’s position is shifting. On February 20, Islamabad’s ambassador to the United States, Mahmood Ali Durrani, asserted that “various initiatives and multiple rounds of dialogue since 1947 have not brought us any closer to the resolution of the dispute”— initiatives which presumably include the Aziz-Lambah dialogue. General Durrani proceeded to call for a “paradigm shift,” a dialogue in which unspecified Kashmiri leaders “become equal participants in a triangular dialogue.”
New Delhi appears to be bracing itself for a worst-case outcome. In January, Union Water Resources Minister Saifuddin Soz was made Jammu and Kashmir Congress party chief, in part because of his long-standing commitment to dialogue with the APHC. Mr. Soz’s appointment signals that New Delhi is willing to take to leaders like Mirwaiz Farooq — a dialogue disrupted after he backtracked on promises to participate in the Prime Minister’s round-table conferences on Jammu and Kashmir.
What is less clear is whether secessionists are still willing to talk to New Delhi, now that Gen. Musharraf is no longer in a position to influence their decision-making. At a recent conference in New York, the influential Islamist leader, Ghulam Nabi Fai, threw his weight for a renewed struggle for independence — a prospect Gen. Musharraf had made clear was off the table. Fai said: “today we are celebrating the birth of a new nation, Kosovo, which became a reality through the support, understanding and engagement of the United States. The emergence of Kosovo as the 193rd independent country has contradicted the misperception that after September 11, the international community does not support freedom struggles.”
It is for this renewed political legitimacy for war that Islamist terror groups have long been waiting. “Jihad,” proclaimed Saeed last year, “has been ordained by Allah. It is not an order of a general that can be started one day and stopped the next day.”
Both New Delhi and Islamabad must now drive fast to ensure that the agents of death do not overtake the dialogue process — but bear in mind that the road to peace is still pitted with mines.

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The Hindu
News Analysis
West Asia on the edge after an assassination
The fallout of the killing of Imad Mughniyeh is expected to be extensive as it has broken the unwritten rules of engagement that had locked the Hizbollah and Israel at the end of the Lebanon war of July-August 2006.
Atul Aneja

The assassination of Imad Mughniyeh, a top commander of the Lebanese Hizbollah, has set off a new round of tensions involving Lebanon, Israel, the United States, Syria and Iran. His killing in Damascus in a car bomb explosion, widely believed to be the handiwork of the Israeli Mossad, has stirred powerful emotions in the region. To his supporters, Mughniyeh was an iconic hero who petrified his adversaries — Israel and the United States. For those who were at the rece iving end, he was a hate figure — a ruthless murderer and an arch-terrorist.
Mughniyeh has been ascribed the responsibility of masterminding the 1983 bombing of military barracks in Beirut, in which 241 American Marines were killed. The incident led to the exit of U.S. forces from Lebanon. The blame for the 1992 bombing of the Israeli embassy in Buenos Aires, which killed 29 people, has also been pinned on him. This attack was widely viewed as Hizbollah’s retribution for the assassination of its head, Abbas Al Mousawi, by Israel in February 1992. Mughniyeh had also been accused of masterminding the hijacking of a passenger airliner and staging a spate of high-profile kidnappings.
Critics, however, say there is hardly any evidence in the public domain suggesting that Mughniyeh masterminded these acts — all of which required a variety of complex skills that are unlikely to be rolled into any single individual.

The fallout of Mughniyeh’s assassination is expected to be extensive as it has broken the unwritten rules of engagement that had locked the two adversaries, Hizbollah and Israel, at the end of the Lebanon war of July-August 2006. The car-bombing which killed Mughniyeh has reopened the strong possibility of renewed conflict, which could draw Israel, actively backed by the United States, Hizbollah and its key supporters — Iran and Syria — into a bitter confrontation. The assassination of Mughniyeh has implanted a dynamic of unmitigated violence that could now profoundly alter the political and ideological discourse in West Asia.
The Hizbollah leader, Hassan Nasrallah, has announced that Israel — whom he blamed for Mughniyeh’s killing — would be targeted. In rain-drenched Beirut, he said before a crowd of hundreds of thousands who had gathered to attend Mughniyeh’s funeral: “You have killed Hajj Imad [Imad Mughniyeh] outside the recognised battle zone. Our battle with you has been, and continues to be, on our Lebanese land. You used to kill us on our Lebanese land and we fought your usurping entity back. You have crossed the border.”
Then came the stern warning: “If you want this kind of open war, then let the entire world listen: Let it be an open war. We have a sacred right to self-defence and we will do everything this right entitles us to do to defend our country, brothers, leaders, and people.”
For Hizbollah, Mughniyeh’s assassination is not about revenge. Instead, it is a major episode that demands a befitting response within the framework of its ongoing resistance to Israeli occupation and persistent efforts to dominate Lebanon. While seeds of resistance were visible among Lebanese Shias in the early 1950s, the Hizbollah movement became a vehicle against Israeli preponderance after the latter’s invasion of Lebanon in 1982.

Substantial growth
At the present juncture, Hizbollah views itself as a movement with a core Shia support base that has grown in strength substantially. It says it is now strong enough to effectively counter Israel, as was demonstrated in the 2006 Lebanon war. On the military front, Hizbollah argues with considerable conviction that it successfully repulsed the Israeli invasion of south Lebanon during the 33-day conflict. From a political standpoint, it thwarted the plan of the United States and Israel to co-opt Lebanon into their orbit of influence. It also undermined the Bush administration’s goal of making Lebanon a springboard for shaping a “New Middle East.” Hizbollah acknowledges that Iran and Syria are its strategic allies.
In an interview with Lebanese academician Amal Saad Ghorayeb published in the monograph In Their Own Words: Hizbollah’s Strategy in the Current Confrontation, the head of Hizbollah’s foreign policy unit, Seyyed Nawaf Al-Mousawi, has been quoted as saying: “We do not deny this alliance [with Iran and Syria], we shout it from the rooftops. We are part of a resistance axis to American hegemony in the region, from the resistance in Afghanistan to the resistance in Palestine.”
However, Hizbollah denounces attempts to characterise it as a proxy of Tehran and Damascus. Mousawi points out that Hizbollah’s agenda “intersects with part of, I repeat, part of, the Iranian and Syrian agendas.” In saying this he is implying that the group freely pursues its own priorities which fall outside the ambit of this common agenda.
Mughniyeh’s assassination comes at a time when Hizbollah has been seeking a prominent role for itself inside the Lebanese government.
Hizbollah wants that out of the total strength of the Lebanese Cabinet, one-third of the members plus one should belong to the group. Hizbollah has been staging a long-drawn protest to fulfil this demand, which would allow it to veto any move that, in its view, would be detrimental either to its own interests or Lebanese national interests.
Hizbollah functionaries have been openly saying that they do not trust the March 14 forces, its key rivals, who currently head the government. In fact, they are accused of pursuing an American and Israeli agenda in Lebanon. In an interview with the Associated Press, Mahmoud Qomati, the head of Hizbollah’s politburo, said: “Now we are demanding it [a greater share of Cabinet posts] because our experience during the war and the performance of the government has made us unsure. On several occasions they pressured us to lay down our weapons. So after the war, we had no choice but to demand this guarantee that would give us legal and constitutional strength. If we take one-third plus one, the government will not be able to impose its decision on us.”
Nai’im Qasim, Hizbollah’s deputy secretary-general, has said on several occasions that the opposition does not wish to dominate the government. Instead, armed with a minority veto power, it wants “to participate in fateful and strategic decisions.” To its critics, who see in Hizbollah’s political demand an attempt to foist Iranian and Syrian interests on Lebanon, Hizbollah has a credible counter-argument. Nasrallah has pointed out that once a new national unity government is formed, its composite composition would ensure that neither side would be capable of imposing a foreign agenda on Lebanon.
Hizbollah officials have repeatedly said that their political struggle adds another dimension to the resistance. Sheikh Nabil Qaouk, the Hizbollah commander for South Lebanon, has been quoted as saying: “Although the war ended on the military level, it did not end on the political level. There is now a political assault to achieve the same aims as the military war. And this time the instruments are Lebanese.”
There is speculation that Israel and the United States might turn Mughniyeh’s assassination into an opportunity to attack Hizbollah, in order to derail the organisation’s attempts at political consolidation as a follow-up to its military gains in the war. Despite Israel’s military embarrassment in 2006, a full-fledged attack is now possible as Hizbollah has so far defeated the core objectives of Israel and the United States in Lebanon. It has refused to disarm. It has also declined to rubber-stamp the proposal for an international inquiry into the assassination of the former Prime Minister, Rafik Hariri, unless its concerns about the tribunal’s terms of reference are fully addressed. It has continued to remain a key ally of Iran, which Israel says is pursuing the development of nuclear weapons and is a threat.
Hizbollah itself has been well aware of the possibility of a major attempt by the United States and Israel to change the political landscape of West Asia. In an address on January 15, Nasrallah pointed out that from the beginning of this year till May, the U.S. could mount a major effort to alter the situation in its favour in three areas — Gaza, Lebanon and Iran. He stressed that this was on the agenda during the recent visit of U.S. President George Bush to the region. During this visit the “green light” for mounting a fresh onslaught on Gaza was shown to Israel, he asserted.

Potential for retaliation
Hizbollah is bound to retaliate vigorously against Israel following Mughniyeh’s assassination. Nasrallah has warned that his commander’s killing marks a new phase in Hizbollah’s resistance against Israel. He declared during his address at Mughniyeh’s funeral: “From the July 2006 war, which was closely linked to Imad Mughniyeh, to the blood of Al-Hajj Imad Mughniyeh in February 2008, let the whole world note — and I take responsibility for this — that we should start writing the history of the phase which signals the beginning of the collapse of the State of Israel.”
While a major Hizbollah strike against Israel is expected, there is a real danger that it could become a pretext for a prolonged conflict that spills into the region and that would be hard to contain. A scarred but resource rich region, which is part of India’s extended neighbourhood, could once again experience a renewed cycle of violence, undermining New Delhi’s vital interests.

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The Hindu
News Analysis
Pakistani media cannot wait for exit of ancien regime
After Pakistani voters swept out the old and swept in the new in last week’s election, the electronic media were the first to begin testing the waters. And the effort has started to pay off.
Nirupama Subramanian

When Nusrat Javeed, a popular television anchor whose programme was banned after President Pervez Musharraf imposed an emergency last November 3, decided to make a comeback on Aaj channel last Friday night, he lasted exactly seven minutes on the cable network. It was the second time he tried to return on the small screen after the February 18 elections, and both times, the Pakistan Electronic Media Regulatory Authority pulled the plug on the channel blac king it out for hours.
After Pakistani voters swept out the old and swept in the new in last week’s election, the electronic media, brought to its knees by the Musharraf regime after the November emergency, were the first to begin testing the waters. And the effort has started paying off even though the new government is still days, if not weeks, from falling into place. On Monday, Mr. Javeed made a third attempt with his co-host Mushtaq Minhas to put his show Bolta Pakistan on air, and this time the programme stayed on television screens for the its full one hour duration, so did the channel.
Asma Shirazi, a deceptively demure-looking anchor on ARY whose sharp political programme Parliament Gallery was among those that earned the ire of President Musharraf — she was accused of “provoking” the Pakistanis into unrest and agitation — also came back on air for the first time since November 3, as did her colleague Kashif Abbasi with his popular Off The Record.
“It’s really exciting to be back, and to be covering all the political developments that are taking place. We missed many thrilling moments, we missed covering the elections, but it’s great to be back,” said Ms. Shirazi, the hijab-sporting anchor who is a household name in Pakistan for her tough interrogation of political personalities.
Pakistani television was poorer for the absence of several popular programmes in the crucial months from the Emergency up to the election. Gone were the late night discussions and debates on current issues that had so riveted the nation from the time President Musharraf sacked the ousted Chief Justice Iftikhar Chaudhary last March. Instead, viewers watched a small screen gone tame as television channels went big on breakfast shows.
But since last week, the situation has changed. Ms. Shirazi has done interviews with Pakistan People’s Party leader Asif Ali Zardari, prime minister in waiting Makhdoom Amin Fahim and the Pakistan Muslim league (N)’s Javed Hashmi.

PEMRA ordinance
But with the Pakistan People’s Party and the Pakistan Muslim League (N), the victors of the election and their other allies engaged in the arduous task of building coalitions and finding allies for government formation, the ancien regime still continues. The infamous PEMRA ordinance that imposed a crippling code of conduct on the television channels as a condition for putting them back on air remains in place.
“We are still not entirely free. We cannot have discussion programmes, we can do only one-on-one interviews, but nothing is censored, and we are doing mostly live programmes,” said Ms. Shirazi. Under the post-Emergency code of conduct, private channels had to use a time-delay device so that anything “objectionable” or violative of the code could be snipped out.

Some still off air
Also, some anchors are still off air. Hamid Mir, Pakistan’s most recognised television personality, used to host a programme called Captital Talk. When Geo was allowed back on air in mid-January, Mr. Mir and another host had been axed, and Mr. Mir’s show handed over — “temporarily” the channel advertised – to another journalist.
“We are being told that we are still banned. So we don’t want to take the risk of going on air and have the channel blacked out. We suffered big financial losses when we were off air and we have felt the impact of that,” said Mr. Mir.
Geo remained off air the longest, its separate money-spinning sports, entertainment and youth channels blacked out on cable along with the news channel.
But Mr. Mir is only biding his time, and may not have a long wait ahead. There is an air of expectancy and anticipation over Pakistan’s media scene as journalists, like the rest of country, wait to see what changes the new government will make.
“The expectations from the new government are very high,” said Ms. Shirazi. According to her, not only must a state-imposed code of conduct go, the role of PEMRA must be minimised and it must be separated from the government’s Ministry of Information.
A PPP government supported by the PML(N) is likely to take over the reins from the caretaker government by mid-March. At every press conference, among the first questions that PPP and PML(N) leaders are asked is one about their position on media freedom..
PPP leader Zardari and Mr. Sharif have both promised that among their first tasks after forming the government would be to roll back the PEMRA restrictions. The PML(N) has even said that it has only a two-point agenda : restoring the judiciary to its pre-November 3 position, and removing all restrictions on the media.
In a sign of the coming new wind in the corridors of power, the topmost bureaucrat in the powerful Information Ministry, Secretary Anwar Mahmood, has already handed in his resignation to the President, although it has not yet been accepted. The Pakistan Federal Union Of Journalists is in informal contact with leaders of PPP and PML(N) as journalists try to drive home that it is for media organisations to sit together and formulate a code of conduct.
“We accept that there have to be checks and balances, but we will not accept blackmail,” said Mr. Mir.
And what if the new government fails to keep its promises on media freedom?
“We seriously hope they will, otherwise they will meet the same fate as the last government did on February 18,” said Mr. Javeed.

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The STatesman
LAC ‘perceptions’
Not all that simplistic

Although not everyone would agree with him, the Chief of the Army Staff did well to caution against attributing sinister motives and ringing alarm bells over recent reports of Chinese incursions in the eastern sector. Nothing should be done to disturb the arrangement to maintain peace and tranquillity along that heavily militarised frontier. Yet there is a disturbing, revealing sub-text to the explanation from General Deepak Kapoor, and indeed others in positions of high authority, that what are deemed incursions are actually the result of varying perceptions of the Line of Actual Control (LAC). And no comfort is to be drawn from suggestions that Indian soldiers occasionally make similar errors, or that a ground-level mechanism is in place to sort things out quickly. The admission from the national leadership that there is no firm agreement on where the LAC runs testifies to only minimal, token progress having been made during several rounds of high-level interaction to resolve what we mislead ourselves by calling a “boundary dispute”. In reality it is a huge territorial dispute, the contours of which have changed little since 1962. The “acceptance” that Sikkim is now part of India, in no way points to the Chinese relenting on their refusal to accord legitimacy to the British-drawn McMahon Line. Against that larger backdrop the absence of agreement on the LAC might appear trivial, but the significance lies in it being the starting point of any practical movement towards dispute-resolution. Any troop pull-back, or border realignment is based on an acceptance of where things stand as of now ~ and all this business of “varying perceptions” cannot camouflage how distant is that critical first-step.
Unlike the western front, there was no formal cessation of hostilities in 1962, so no parallel can be drawn to the Line of Control of Jammu and Kashmir which was first charted as the Cease-fire Line in 1948, then “adjusted” and re-designated after the 1971 war. The LAC in Tibet, all three sectors, is more akin to what is referred to as the Actual Ground Position Line in the Siachen sector: disagreement over “authenticating” positions currently held has stymied moves towards demilitarisation of what we befool ourselves by romanticising as “the world’s highest battlefield”. Hence if we run away with notions that increased trade with China, and occasional bouts of bonhomie among soldiers in Nathu La and elsewhere, impact on the “boundary” issue we are inviting charges of self-deception. The hard bargaining hasn’t even begun.

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The STatesman
Message from Deoband
The terrorist must abide by the diktat
Monday’s condemnation of terror as un-Islamic by the Darul Uloom of Deoband, the flagship seminary, is nothing particularly novel. This has been the standard response of the ulema the world over. Such appeals and denunciations over the past few years have had no effect on the militants, still less on the fidayeen. What may be striking nonetheless is that the Deoband school has taken a fairly forthright stand on severing connections with the jihadi variant of Islam, that is executed so murderously by the Al Qaida and the Taliban. What will raise eyebrows is the fear of the religious class that “misguided” Muslim youth are getting involved in acts of terror. This is clear from the statement that “any terrorist activity that targets innocent people directly contradicts Islam’s concept of peace”. The clergy of Darul Uloom must be acutely aware that it is the innocents who invariably perish wherever the terror strike occurs ~ be it in Varanasi, Mumbai, Hyderabad or at the Akshsardham Temple.
Overall, the Darul Uloom, the fountain-head of a series of fatwas, may have made a politically correct statement in an election year. But it will be difficult to accept its contention that governments across the country have undertaken what it calls a “malicious campaign” against madrasas. On the contrary, the official attempt by the Centre and at least in West Bengal has been to modernise the syllabus, increase the funding and ensure that madrasas are in step with the times. If there has been a campaign, so-called, it is specifically against the mushroom growth of unaffiliated madrasas in the border areas and their fundamentalist course content. These are institutions on which there has been a crackdown even in Pakistan, indeed more successfully than in India. It is the terrorist who must abide by the diktatof the Darul Uloom of Deoband.

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The STatesman
Canned cinema
No scope for a pretentious jury
The freedom of cinematic expression is once again under threat in a saffronite state. A year after Gujarat banned Parzania, a celluloid portrayal of the pogrom of 2002, the Madhya Pradesh government has stopped the screening of Jodhaa Akbar in the face of protests by Rajputs. The film has been called a “threat to peace”. Yet the move is more religious than political. With the state scheduled to go to the polls this year, the Bharatiya Janata Party dispensation can’t afford to antagonise the party’s 40-odd Rajput MLAs in a 230-member House. Unlike Parzania, whose thematic content was factual and objective, Ashutosh Gorwarikar’s Jodhaa Akbar appears to have been enmeshed in a tangled skein of fact, faith and fiction. To begin with, as the film-maker claims, even historians are divided over the name of Raja Bharmal’s daughter. Confusion has been worse confounded with the Rajput claim that Jodhabai was the wife of Jehangir, not Akbar. And a section of the state BJP plays on religious sentiment by asserting that Jodhabai was a Christian and not a Rajput. The performing art of cinema has been the worst casualty in the increasing divergence over data and inference. Perhaps to clear the air, the director needs to spell out his source material. He has obviously depended on secondary and not primary sources of Mughal social history. That said, it must be acknowledged by the Hindutva lobby that a film is a film, essentially a work of art and not a historical essay. If cinema is eventually subject to the government’s interpretation ~ invariably bereft of cinematic appreciation ~ then the Board for Film Certification is gradually being reduced to irrelevance. There have been occasions when the latter has screened a feature film before the Service chiefs and the defence secretary before stamping its approval for release. This is an ominous trend, the tendency to have a film vetted by a pretentious jury representing the establishment.

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The asian age
On track

That the 2008-2009 Railway Budget would be populist, was expected, considering this was railway minister Lalu Prasad Yadav’s last full-fledged budget before the next general elections. But the minister has shown that he can refrain from increasing fares and freight rates and still give away concessions and make life comfortable for travellers through the use of information technology to eliminate serpentine queues at booking counters by providing Internet facilities. This can be said to be good budgeting and makes him a good businessman and a bigger attraction for foreign business management universities. The Railways is the largest and most profit-making public sector organisation in the country, and its reputation has been enhanced with this budget. Mr Yadav has shown that he does not have to play Robin Hood and rob Peter to pay Paul. He uses his internal resources. He has shown that cheap fares can mean increased volumes, for he has shown double digit growth in passenger earnings and a 16 per cent increase in gross traffic revenues. He has an enviable cash surplus of Rs 25,000 crores. While he has no competition, with the Railways being a monopoly, he is giving a healthy competition to the low cost airlines by further reducing AC fares. He has also introduced 53 new trains which can give severe competition to road transport and in the bargain curtail the tremendous pollution that road transport is famous for. He could be a dream come true for environmentalists. His a budget for all people — from the business community because of freight corridors which can lead to increase in employment, to senior lady citizens and students, particularly girl students for the increased giveaways. Even the humble porter will see his status being upgraded as "gangsman" and to other Group D posts. There are many who will criticise his budget as those MPs did who walked out of Parliament, because they felt that not enough had been done for their areas. But overall, it is a budget that is to be lauded for its vision and focus on employment generation, the comfort of the travelling public and private public participation which could give a fillip to the manufacturing sector which has seen a slowdown. There is a lot of aam aadmi quotient in the budget.

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The Tribune
Passenger is the king
Lalu opts for the election track

Mr Lalu Prasad, who knows how to be popular, has kept up his image of being a public-friendly railway minister. He has presented five budgets and has not raised the fares even once. In the last two he has rather lowered the fares. In the fifth one, presented on Tuesday, he cut the AC and second-class fares and the freight rates for petrol, diesel and fly ash apart from giving more concessions to elderly women and girl students. He plans to open welfare cells for the minorities and run a health express to provide medical facilities to mothers and children. The Railways has appointed more SC/ST/OBC candidates than allowed by their quota. He has awarded Bihar maximum possible railway projects. The Railways is even laying a track to link his ancestral village to that of his wife.
Despite all this, the Railways, which was declared in July, 2001, to be “on the edge of fatal bankruptcy”, hopes to achieve a profit of Rs 25,000 crore this fiscal with an operating ratio of 76 per cent. The minister is using increasingly more information technology to improve operational efficiency and provide better services to customers. Expect more counters and online booking of tickets. All railway stations will have metal detectors and CCTV sets. All Rajdhani and Shatabdi trains will have new coaches in three years. He will roll out 53 new passenger trains and 10 more Gharib Raths. Elevators will be installed at 50 railway stations for Senior Citizens. Before him, no railway minister has ever spared a thought for porters.
How has he achieved all this? His management, based on common sense, is focussed on increasing volumes. The Railways offers discounts in the lean season and levies a surcharge in the busy season. The minister cleverly avoids unpleasant announcements in the budget. Still, the Railways has miles to go before it can achieve global standards of comfort and efficiency. When it comes to security, cleanliness and amenities for passengers, the Railways disappoints. Trains often run late and unmanned crossings are a nightmare. He should spend more on safety and improving facilities in the trains and on railway stations. At least in the election year he seems to be bearing in mind.

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The Tribune
World’s new nation
Kosovo sends out a different message

The expected birth of Kosovo as an independent nation has finally come about despite protests from Russia and many European Union members. Those who saw a serious threat to peace and stability in Europe and elsewhere in the world because of the unilateral declaration of independence by Kosovo, a province of Serbia, failed to stop the addition to the number of countries in Europe as they were pitted against the US and its powerful Western allies. Kosovo has quickly got recognition from the US, Britain, France, Germany, Italy and certain other countries not having any separatist problem. The development is being seen as a success of the US foreign policy, now directed at changing the perception of Muslims about the super power. Kosovo’s 2 million population of Albanian descent is predominantly Muslim. The US had another interest to protect: it has a large military base near Pristina, the capital of Kosovo.
Kosovo’s declaration of independence without formal UN authorisation has led to uneasiness in many European countries like Spain, besides Russia and China, which have been faced with separatist movements for a long time. The most vulnerable position is that of Russia, which has 20 autonomous ethnic republics like Chechnya and each of these are like Kosovo. The separatist leadership in these Russian republics can cite the “Kosovo precedent” to secede. Of course, Serbia has lost its Kosovo province owing to its own short-sighted policies, which led to the Kosovars suffering untold miseries. But there is also the danger of the Kosovo case opening Pandora’s box.
It is bound to encourage separatist tendencies. The message may go out that the US and its Western allies are no longer interested in upholding the time-honoured principle of inviolability of a country’s sovereignty and territorial integrity. What they have done clearly shows their preference for ethnic self-determination. These big powers have failed to see the destabilising consequences of their policy option. There was no harm in accepting, at least on a trial basis, the Russian proposal for maximum autonomy to Kosovo within Serbia. Nothing should be done that promotes hatred among people having different ethnicity and religious beliefs.

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The Tribune
Brother’s keeper
Cuba’s chance for transformation

CUBA seems to be in for some changes with the change of guard in Havana. The newly elected President, Raul Castro, is the one who is believed to have smooth talked his brother and predecessor Fidel Castro to effect some changes in the past like allowing private enterprises in selected sectors and encouraging the tourism industry. Now that the senior Castro will only give advice from time to time, though he has not yet relinquished his post as first secretary of the Communist Party of Cuba, he can bring about more changes in the system with fewer problems. However, a caveat will be in order. Raul Castro and his newly-elected first vice-president Jose Ramon Machado Ventura were among the guerillas who fought alongside Fidel Castro against Batista. In other words, they are of the same flock who have flown together. It is, therefore, too much to expect them to make a radical departure.
That Cuba needs changes of a far-reaching nature cannot be overemphasised. While change is a constant everywhere, Cuba under Fidel Castro remained unchanging holding aloft the banner of revolution. While standing up to the threats and bullying from Uncle Sam, Cuba has been paying enormous cost, politically and economically, for its defiant posture. The living conditions of the people are so poor that the government has to treat the whole country as a virtual prison for fear they would run away. The absence of a free Press and other democratic institutions may have helped Castro to rule with an iron fist but this does not detract from the fact that the Cuban system represents an anachronism.
Establishment of better diplomatic relations with the US will go a long way in removing much of the tensions under which Cuba has had to plough through all this while. Whatever be the propaganda, nothing will happen to Cuba if the people are given more personal liberty and opportunities to bring the best out of them. Raul Castro has a historic responsibility to ensure that changes that help the Cubans achieve their dreams are in place.

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The New York Times
Lipitor’s Pitchman Gets the Boot

Pfizer has been relying on the reputation of Dr. Robert Jarvik, one of the pioneers in designing artificial hearts, to bolster sales of Lipitor, its cholesterol-lowering drug. Now that a Congressional committee is investigating the credibility of those ads, the company has dropped Dr. Jarvik as its pitchman. It was a telling reminder that consumers, besieged by drug promotion ads on television and in print media, need to take what they see, hear and read with a very large grain of skepticism.
Pfizer turned to Dr. Jarvik because Lipitor, the world’s best-selling drug, is losing market share to Zocor, a generic competitor that costs a lot less. The company has spent more than $258 million advertising Lipitor since January 2006, most of it on the Jarvik campaign.
The trouble was, its very first TV commercial with Dr. Jarvik was downright deceptive. It suggested that he was rowing a racing shell across a mountain lake when he was not, in fact, rowing. A stunt double was at the oars. And while the commercials have Dr. Jarvik enthusing over Lipitor “as a doctor and a dad,” he is actually an inventor and researcher. He has a medical degree, but did not go through residency training and is not licensed to practice medicine or prescribe drugs.
The commercials also fail to note that Dr. Jarvik only started taking Lipitor about a month after he started touting its virtues under a contract that would pay him a minimum of $1.35 million over two years.
Rather than fight with the House Energy and Commerce Committee, Pfizer folded its tent and ended the ad campaign. The committee plans to continue its investigations of the Lipitor marketing campaign and of possible deception in other drug advertising aimed at consumers. We encourage the committee to delve deeply.
Meanwhile, drug companies would be wise to find pitchmen who have the credentials — and the athletic skill — to back up their claims, without having to rely on stunt doubles.

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The New York Times
Getting Real About the Rescue

Some big banks are supporting new proposals to rescue homeowners who owe more on their mortgages than their houses are worth, but let’s get one thing straight: the banks haven’t been struck by a sudden urge to help the needy. Rather, by advocating bailouts, the lending industry is trying to head off a possible change in the law that would let troubled borrowers modify their mortgages in bankruptcy court — where lenders, not taxpayers, would be stuck with the losses.
Congress must not kowtow to the lenders. It should insist that borrowers be given a chance to modify their mortgages under bankruptcy court protection before it even thinks of asking taxpayers to pick up the tab for the mortgage mess. Under current law, borrowers cannot rework the mortgages on primary homes in bankruptcy proceedings. Senate Democratic leaders are pushing a bill to let many at-risk homeowners do just that. The House Judiciary Committee has passed a similar measure. Republicans, who are balking, should get on board, or risk leaving their constituents without an effective way to save their homes.
If the bankruptcy provision becomes law, as it should, lenders will have a powerful incentive — which they currently do not have — to modify troubled loans voluntarily. If they can’t or won’t come to new terms with borrowers, then they would run the risk that a bankruptcy court would do the modifying for them.
So far, despite a lot of promises, the industry has been unable or unwilling to rework the junk loans of the bubble years in ways that come near addressing the enormity of the problem. In contrast, access to bankruptcy court would mean relief for some 600,000 homeowners — not by wiping out their debts, but by modifying the loan terms so borrowers can pay them off over time.
Lenders object that by giving homeowners the right to modify their mortgages under court supervision, the bankruptcy amendment would raise the cost of mortgages for everyone, forever. That concern is surely overstated, but not entirely without merit. To address it and other industry worries, lawmakers have proposed constraints, such as limiting the bankruptcy relief to junk mortgages of the past few years.
The bankruptcy amendment has another virtue: it could bolster a worthy rescue idea floated recently by the Treasury Department’s Office of Thrift Supervision, one of the nation’s bank regulators. The idea is that if lenders voluntarily agree to loan modifications, they would become entitled to a share of the house’s appreciation, if any, when the house is ultimately sold.
Like other Bush administration plans, this one suffers from its emphasis on voluntary cooperation, which has been shown to be inadequate. The bankruptcy amendment, however, would give lenders more incentive to go along, by providing a real downside to not acting voluntarily — losing control to a bankruptcy judge.
In the end, taxpayer-funded bailout proposals may make sense, but only if other prudent measures have been exhausted. That has not happened yet. There are two good, complementary ideas on the table — the carrot for lenders offered up by the Office of Thrift Supervision, and the stick provided by the bankruptcy amendment. Congress and the Bush administration should move forward quickly on both of them.

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The New York Times
Vladimir Putin’s Russia

The eight years of Vladimir Putin’s presidency have faithfully reflected his formative years in the Soviet secret police. Mr. Putin’s term ends this spring, but he is nearly certain to become prime minister. That means, we fear, that little will change. The next American president will have to deal with a Russia that is not only nuclear-armed but increasingly wealthy and increasingly authoritarian.
Mr. Putin has not tried to reimpose the bankrupt Communist economic system or reopen Stalin’s Gulag Archipelago. He has used the Kremlin’s full powers to quash all serious political opposition, recreating a virtual one-party state. That was the depressing message reported this week by our colleague Clifford J. Levy in an account of December’s parliamentary election contest in Nizhny Novgorod, a city once synonymous with Russia’s brightest hopes for democratic renewal.
It was there that an elderly Andrei Sakharov emerged from internal exile to wage his final campaign of speaking truth to power and urging those who held power to finally tell the Russian people the truth. And it was there that Boris Nemtsov, one of the most promising leaders of a new generation of Russian reformers, tried to build a new model of democratic governance.
Things are very different these days in Nizhny Novgorod. Mr. Putin’s allies have used threats of physical harm and other tactics — chillingly reminiscent of Soviet days — to crush rivals. A foreman warned workers that they risked punishment if they did not vote for Mr. Putin’s party. Children were told by their teachers that their grades could suffer unless they encouraged their parents to vote correctly.
Mr. Putin’s party would have triumphed without these tactics. The goal was to create a climate of permanent political intimidation. How like the credo Mr. Putin learned in his old K.G.B. days.
President Bush, and soon his successor, will have to come to terms with the authoritarian Russia that is — not the democratic Russia that recent American administrations had hoped would take root after Communism. They will have to deal pragmatically with the realities of Russian power, as the Nixon and George H.W. Bush administrations once did, seeking cooperation when possible over issues like Iran, Kosovo and arms control.
And, as in the Carter and Reagan administrations, America will need to champion Russia’s persecuted democrats, journalists and other embattled minorities: amplifying their voices and calling international attention to the very real dangers they face. Descending back into cold war rhetoric and reflexes will not help anyone. But neither will pretending that Mr. Putin and his allies are people of good will and democratic intentions.

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The New York Times
WHNT’s Technical Glitches

In 1955, when WLBT-TV, the NBC affiliate in Jackson, Miss., did not want to run a network report about racial desegregation, it famously hung up the sign: “Sorry, Cable Trouble.” Audiences in northern Alabama might have suspected the same tactics when WHNT-TV, the CBS affiliate, went dark Sunday evening during a “60 minutes” segment that strongly suggested that Don Siegelman, Alabama’s former Democratic governor, was wrongly convicted of corruption last year.
The report presented new evidence that the charges against Mr. Siegelman may have been concocted by politically motivated Republican prosecutors — and orchestrated by Karl Rove. Unfortunately, WHNT had “technical problems” that prevented it from broadcasting a segment (the problems were resolved in time for the next part of the show) that many residents of Alabama would no doubt have found quite interesting.
After initially blaming the glitch on CBS in New York, the affiliate said it learned “upon investigation,” and following a rebuke from the network, that “the problem was on our end.” It re-broadcast the segment at 10 p.m., pitting it against the Academy Awards on rival ABC, before Daniel Day-Lewis won the best actor Oscar. As public criticism grew, it ran it again at 6 p.m. on Monday.
Stan Pylant, WHNT’s president and general manager, assured viewers that “there was no intent whatsoever to keep anyone from seeing the broadcast.”
WHNT is owned by Oak Hill Capital Partners, a private equity firm whose lead investor is one of the Bass brothers of Texas. The brothers are former business partners of George W. Bush and generous contributors to Republican causes.
In 1969, the F.C.C. revoked the license of WLBT in Jackson after the commission established a systematic effort by the broadcaster to suppress information about the civil rights movement. Today, broadcast rules have changed, giving stations more leeway to decide what to air. Dropping a single report is unlikely to set the regulators in motion. Still, it would be deeply troubling if a partisan broadcaster could suppress information on the public airwaves and hide behind a technical fig leaf.
In this case, if the blackout was intentional, it may also have been counterproductive. Rather than take attention away from allegations that Mr. Siegelman was the victim of a partisan campaign, WHNT’s technical glitch seems to lend support to the charge.

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I. The News
Targeting friends

The dastardly attack by bearded gunmen on the office of an international NGO in Mansehra that had been engaged in relief work since the devastating earthquake of October 2005 is another indication of the extent of the militant madness sweeping across the country. The gunmen burst into the office after overpowering the security guard, opened fire on personnel killing at least five, hurled hand grenades and then set fire to relief goods intended for quake victims. Those injured in the attack have described scenes of terror and mayhem.
This is not the first of such perverse attacks on organizations attempting to bring succour to Pakistani people facing peril. Many NGOs, in Mansehra, Allai, Quetta and in other parts of NWFP and Balochistan have already closed down offices or reduced staff due to the threat they have faced. In parts of the country, workers of both international and local NGOs have faced harassment or threat. In Mansehra in particular, over the past two years, 'fatwas' have been issued against NGOs, which have absurdly been accused of serving 'Jewish interests' and warnings given that women workers be pulled out. The fact that many women no longer feel safe working in these areas has affected many areas of humanitarian work, including the polio vaccination drive.
The latest tragedy in Mansehra is a direct consequence of the failure in the past to deal with those making threats or ordering female workers to leave the region. Over the last year, authorities have permitted literature promoting such hatred to be circulated or displayed on walls. The clerics, who have in some cases named themselves in the edicts issued by them, have not been penalized. Nor was action taken against others delivering commands to drive out NGOs from mosque loudspeakers. The tolerance shown for such militant criminals, willing to misuse religion in an attempt to expand their own hold on people and keep them in an age of darkness, has led to their growing fearlessness and willingness to commit the most cold-blooded, dastardly act of murder. Among their latest victims is at least one woman.
The incident will, almost certainly, act to force other NGOs out of Pakistan, particularly its northern areas. This can have only a negative impact on the humanitarian situation where, even those who were not affected by the 2005 earthquake, live lives of abject deprivation. It will also mean that, in the future, when natural calamity walks Pakistan's way, international organizations may not be willing to bring their expertise and aid o the country, for fear that such efforts may lead to loss of life of their staff members.
For these reasons, and to alter the image of Pakistan as a nation that breeds militants, no efforts must be spared to track down those responsible for the latest attack. A strong message must be delivered against all those engaged in such acts of violence -- so NGOs and others engaged in humanitarian work can be assured that authorities are on their side, and not that of the militant killers.

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I. The News
PML-Q's problems

Defeated and demoralized after the lashing it received at the polls, the PML-Q has nevertheless decided to keep faith with the leadership of Chaudhry Shujaat Hussain, who himself failed to win a seat. More than loyalty, this is also an indication of the problems the party faces, with a potential split looming near. Former information minister, Shaikh Rashid Ahmed, one of the more charismatic leaders within the party, has made no bones about the fact that he is considering setting up his own party. He has already announced this in several interviews on television channels, though he has stated he is keeping his options open and will make a final decision during the coming few weeks. A new party, led by Shaikh Rashid, would almost certainly take more people away from the already depleted Chaudhry camp. Even before the polls, several key figures, including former ministers Jehangir Tareen, Hina Rabbani Khar and Zubaida Jalal had parted ways with the party, and the trend appears to be continuing.
This raises questions about the future viability of the PML-Q. The party was born as a direct consequence of the efforts of President Pervez Musharraf, who began the task of cobbling it together soon after his takeover of October 1999. A key purpose of these efforts, apart from the need to put together a base of support for himself, was to weaken the PML-N of his arch enemy Nawaz Sharif. Indeed, by luring, coercing and using organizations such as NAB and the secret agencies to push people towards the new party, an attempt was made to weaken the MPL-N forever. It has now been proved that forcing such change on people is no easy matter. Even as Chaudhry Shujaat continues to insist his party is the 'real' Muslim League, it is the N-faction that has swept the polls. Already, those elected as independents, particularly in Punjab, as well as some currently within the PML-Q camp, are said to be making plans to leave what they obviously see as a sinking ship and make an opportunistic leap towards Nawaz and Shahbaz Sharif.
The coming months will show whether the PML-Q has the resilience to survive the threat it is facing. Its leaders have said they will play a 'positive' role in the assemblies, but the cynical, negative tone adopted by Chaudhry Pervaiz Elahi, and to a slightly less extent by others in the party, belies these claims. The party must remember that it is this tone that in the first place contributed to the party's defeat. Also, the PML-Q should realize that it should not be just a matter of accepting the verdict of the people but of pondering why it was so decisively against it. Putting the blame for its defeat on the caretakers' mismanagement, as some of its leaders have done, which according to them led to the atta crisis, only shows that the party may now be in a state of denial -- and it needs to come out of this for its own sake. If it is to survive in Pakistan's changed political environment, the party must show greater maturity and sagacity -- otherwise it faces the risk of being left behind, on the wayside, like other parties set up in the past on the basis of a specific need rather than along the lines of broader ideological principles.

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Pakistan observer
Zardari’s pragmatic reconciliatory stance

ASIF Ali Zardari in an interview with US newspaper “The Wall Street Journal” has been quoted as saying that he would seek a working relationship with President Pervez Musharraf and that his party’s main objective is smooth transition to democracy. There is no doubt that in the charged political atmosphere after the elections, when there are calls from certain quarters for the President to call it a day, Asif Ali Zardari is showing political maturity and treading the path very carefully as the nation expects him to conduct himself like a statesman.
The political leadership is on trial and the next few days will show how it acts keeping in view the ground realities. It is heartening that PPP, PML(N) and ANP are moving along through dialogue for the formation of governments at the Centre and in the Provinces. However these parties must learn lesson from their confrontation in late 1980s and 1990s when elected governments were dismissed due to intrigues causing huge losses to the country and democracy. After emerging as the largest party at the national level the PPP has to shoulder greater burden by showing flexibility and understanding to the viewpoint of its partners and supporters in other parties and ensuring a working relationship with the President. The Co-Chairman of the PPP in his interview with the American Journal and during interaction with the media at home showed maturity and political sagacity by not adopting a confrontationist stance and it augurs well for the future of a sustainable democracy. It is a reality that President Pervez Musharraf was duly elected by the former Parliament, he enjoys an international stature and has developed a leadership acumen that deserves due weightage by all whether we like it or not. At this juncture Pakistan needs reconciliation and to achieve this every one must forget the attitudes of past politics of vendettas and victimization and work for a better future. We need politics of peace, understanding and tolerance and not confrontation as the people of Pakistan want more attention of their leaders to address their problems rather than indulging in acrimony and repeating the follies of the past.

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Pakistan observer
Extremists challenge the Army

A TEENAGE suicide bomber disguised as a beggar detonated an explosive vest next to the staff car carrying Lt. Gen. Mushtaq Ahmad Baig, Surgeon-General of Pakistan Army on Monday and the top officer of the Army Medical Corps joined the list of many others who have so far become victim to acts of terrorism in different areas of the country.
Incidents of terrorism are always condemned and rightly so but this one was more painful as the target was a personality devoted to the service of ailing humanity. The man who brought light to countless and hopeless people fell victim to blind pursuit by some misguided elements. The nation has lost an illustrious personality as General Mushtaq was not an ordinary ophthalmologist but also author of some two dozen papers on his speciality that speaks about his research capabilities and commitment to the cause. The way the attack was carried out clearly shows that it was meticulously planned and daringly executed. The question arises as to why terrorists are making the Army their target. There is only one probable explanation that it is reaction to the ongoing Army operation in FATA and Swat where some collateral damage also occurred. This is the cost that our valiant armed forces are paying for the sake of motherland but in view of the growing incidents of terrorism it is necessary that a multi-pronged approached should be adopted to deal with the problem, discarding overwhelming dependence on the use of force. We are confident that the new Government will pursue a more pragmatic approach focusing on negotiated solution of the issues involved. In the meantime, it is duty of our religious leadership to come forward and help change the perception of these misguided elements.

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Pakistan observer
Continuity of HEC initiatives

THE Federal Capital is rife with speculations that the new Government will carry out major shake up with a view to making almost a new beginning in various sectors. What is worth mentioning is that even the would-be coalition partners of the PPP, which is set to form Government at the Centre, have their own agendas.Of course, the new Government would be fully aware of the aspirations of the people and is, therefore, bound to deliver as per its election manifesto and commitment made with the nation. However, without going into details at this stage we would urge upon the incoming administration that in no case road blocks should be allowed especially in spheres where the country has had major successes. There is national consensus on some of the crucial policy issues and it is a fact that sectors like IT and telecom saw phenomenal growth during tenure of President Pervez Musharraf. Similarly, another success story is that of the higher education sector that has seen revolutionary changes in the last five years. Luckily, the leadership of the HEC was entrusted to a luminary who is bestowed with a broad vision and initiatives undertaken by him have transformed the higher education into a potent force for development. These include the launching of a massive foreign scholarship programme under which about 2500 students are presently studying for Ph.D. in top universities abroad. There has been 360% increase in research output from Pakistani universities in the last four years at international level. The new universities of engineering, science and technology being established with the cooperation of a number of technologically advanced countries such as Germany, represents one of the most important national projects ever undertaken since it promises to change the face of the higher sector and bring it quickly to top international standards. With all this in view, we would suggest that the ongoing initiatives of the HEC should not be disturbed and instead the new Government should enhance these efforts to redouble Pakistan’s transition from the present largely agricultural to knowledge-based economy. The new Government can, however, devote its attention to improve things at primary, middle and secondary levels to ensure sound foundations of education. We especially need to impart technical and skilled training to our children right from the early school with a view to supplementing efforts made at the higher level to effect a genuine change in the sector.

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